Flowers Foods reported financial results for the first quarter ended April 23, 2016.
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As compared to the prior year first quarter, consolidated EBITDA increased by 1.7%. Unallocated corporate expenses decreased as compared to year ago quarter, primarily due to increased overhead charges to the segments.
Depreciation and amortization increased due primarily to the DKB and Alpine acquisitions. Interest expense increased primarily due to higher average debt balances driven by recent acquisitions and the ASR. Interest income decreased primarily due to lower average notes receivable balances. Income tax expense as a percentage of pre-tax income increased primarily due to benefits for state tax incentives recognized in fiscal 2015.
During the quarter, cash flow from operating activities was $120.7 million, capital expenditures were $23.9 million, dividends paid were $31.2 million, and share repurchases, including those made pursuant to the ASR, were $126.3 million.
The board of directors will review the dividend at its next regularly scheduled meeting. Any action taken will be announced following that meeting.
During the quarter, the company made $126.3 million of share repurchases, including previously announced stock repurchases under the ASR, reducing the shares outstanding by approximately 6.0 million shares.
There are 7.7 million shares remaining on the company's current share repurchase authorization, prior to the settlement of the ASR, which we expect to occur by the end of our second quarter.
President and CEO Allen Shiver said, "During the first quarter, the team delivered on our priorities as we continued to execute on our strategic plans to drive profitable growth. We realized higher prices for our core white loaf and soft variety bread brands, and added production and distribution support to drive growth of our organic brands, Dave's Killer Bread and Alpine Valley.
"While a competitive marketplace, unseasonable weather, and costs associated with the Tuscaloosa conversion pressured our earnings this quarter, we are confident we are taking the right steps to position Flowers for continued long-term success.
"For example, with Nature's Own, our largest brand, we simplified the ingredients in key items, and launched a new marketing campaign emphasizing the brand's 'Good & Simple' positioning.
"The Tuscaloosa bakery is now operational, and early in our second quarter, we introduced the DKB brand to more than 9,000 new stores through our Direct-Store-Delivery (DSD) network. With this introduction and less reliance on co-manufacturing, we expect to begin realizing improved profitability on sales of organic breads while capitalizing on strong consumer demand for organic bakery foods." ■
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