ITEM 1. BUSINESS
The Registrant manufactures and sells snack foods and bakery products directly and through its subsidiaries, Midwest Biscuit Company and Vista Bakery, Inc.
The Registrant manufactures, distributes and sells packaged snack and bread basket items primarily under the LANCE label. The principal snack items are cracker sandwiches, cookie sandwiches, peanuts, potato chips, corn chips, popcorn, cakes, cookies, candies, chewing gum, beef snacks and sausages. The principal new snack items introduced in 1994 include the Swiss Roll, Fat Free Apple Bar, Fat Free Cranberry Bar, Reduced Fat Toastchee and Reduced Fat Gold-N-Chees. During the year, the Registrant discontinued its line of chewing gum and began distributing Wrigley's Chewing Gum(R). The principal bread basket items are wafers, crackers and bread sticks, individually packaged and sold to restaurants and similar institutions.
The Registrant's products are sold under various trade names and registered trademarks that it owns, including TOASTCHEE, LANCHEE, RYE CHEE, CHOC-O-LUNCH, VAN-O-LUNCH, NEKOT, GOLD-N-CHEES, BIG TOWN and CAPTAIN'S WAFERS.
The Registrant packages several of its most popular snack and bread basket items in convenience packs and distributes them to grocers and supermarkets. In addition, the Registrant distributes large bags of potato chips and large size bags and boxes of its snack and bread basket items to grocers and supermarkets. Various items that are purchased from others and resold by the Registrant account for 21% of net sales and other operating revenue.
Midwest Biscuit Company manufactures and sells cookies and crackers, through its own sales representatives and brokers, to wholesale grocers, supermarkets and distributors throughout the United States and portions of Canada, under customer private labels and the VISTA label. Vista Bakery, Inc. manufactures cookies and crackers which are sold through Midwest Biscuit Company under customer private labels and the VISTA label.
The following table shows the approximate percentages of the Registrant's net sales and other operating revenue for 1994, 1993 and 1992 contributed by snack items and bread basket items:
The principal raw materials and supplies used in the manufacture of snack foods and bakery products are flour, peanuts, oils and shortenings, potatoes, shelled corn and popcorn, cornmeal, pork skins, tree nuts, starch, sugar, cheese, corn syrup, cocoa, fig paste, seasonings and packaging materials. These raw materials and supplies are generally available in adequate quantities in the open market either from sources in the United States or from other countries and are generally contracted for a season in advance.
The principal supplies of energy used in the manufacture of these products are electricity, natural and propane gas, fuel oil and diesel fuel, all of which are currently available in adequate quantities.
The Registrant sells its products through its own sales organization to convenience stores, independent and chain supermarkets, discount stores, restaurants, military commissaries and exchanges, schools, hospitals, caterers, industrial, recreational and commercial establishments, and similar customers in 36 states and the District of Columbia. The Registrant's distribution operations are administered through 27 sales districts which are divided into 350 sales areas, each under the direction of a branch manager. There are 2,309 sales territories, each serviced by one sales representative. In 1994, the Registrant continued the development of its distributor and broker network, principally in the Western United States.
The Registrant owns a fleet of tractors and trailers, which make weekly deliveries of its products to the sales territories. The Registrant provides sales representatives with stockroom space for their inventory requirements. The sales representatives load their own trucks from these stockrooms for delivery to their customers.
A significant portion of the Registrant's total sales is through vending machines, which are made available to its customers on a rental, commission or sales basis. The machines are not designed or manufactured specifically for the Registrant, and their use is not limited to any particular sales area or class of customer.
Caronuts, Inc., a subsidiary of the Registrant, owns a peanut buying facility that purchases peanuts directly from growers and sells all of its peanuts to the Registrant. The facility is operated on a seasonal basis, during the peanut harvest.
All of the Registrant's products are sold in highly competitive markets in which there are many competitors. In the case of many of its products, the Registrant competes with manufacturers with greater total revenues and greater resources than the Registrant. The principal methods of competition are price, delivery, service and product quality. Generally, the Registrant believes that it is competitive in these methods as a whole. The methods of competition and the Registrant's competitive position varies according to the locality, the particular products and the policies of its competitors. Although reliable statistics are unavail-
able as to production and sales by others in the industry, the Registrant believes that in its areas of distribution it is one of the largest producers of peanut butter filled cracker sandwiches.
On December 31, 1994, the Registrant and its subsidiaries had 5,818 employees.
ITEM 2.

ITEM 2. PROPERTIES
The Registrant's principal plant and general offices are located in Charlotte, North Carolina on a 288 acre tract owned by the Registrant. The main facility is an air-conditioned and sprinklered plant, office building and cafeteria of brick and steel containing approximately 670,000 square feet. The manufacturing plant houses seven oven lines and is equipped with storage facilities to handle many of the Registrant's raw materials in bulk. Adjacent to the main facility is an air-conditioned and sprinklered plant of brick and steel used for the processing of potato chips, corn chips and similar products containing approximately 140,000 square feet. Both plants are operated on two eight-hour shifts. Also adjacent to the main facility are a 70,400 square foot precast concrete building, which houses a vending machine repair and maintenance facility, an 11,000 square foot brick and steel building, which houses vehicle maintenance operations, 40,000 square foot and 13,000 square foot metal warehouse buildings and a 5,500 square foot brick veneer office building.
The Registrant owns a plant located on a 105 acre tract in Greenville, Texas. The plant is an air-conditioned and sprinklered building of brick and steel containing approximately 290,000 square feet. The plant houses two oven lines and storage facilities that can handle many of the Registrant's raw materials in bulk. Both of the oven lines are operated on two eight-hour shifts. Adjacent to the plant is a building of steel construction which contains approximately 29,000 square feet of vending repair, office and garage space.
These facilities, unless otherwise noted, are used to produce both snack and bread basket items.
The Registrant leases office space and most of its stockroom space in various towns and cities, mainly on month-to-month tenancies. The Registrant currently owns 188 stockroom locations with steel frame buildings, which range in size from 400 to 6,400 square feet and contain an aggregate of 988 stockroom spaces.
Midwest Biscuit Company owns a plant located on an 18.5 acre tract in Burlington, Iowa. The plant is of masonry and steel and contains approximately 230,000 square feet. This plant houses six oven lines and is operated on two eight-hour shifts. Adjacent to the plant is a steel storage building of approximately 10,000 square feet.
Vista Bakery, Inc. owns a 243,000 square foot plant on a 137 acre tract in Columbia, South Carolina. The plant is of brick and steel construction and houses three oven lines and is operated on two eight-hour shifts.
The Registrant believes that it has sufficient production capacity to meet foreseeable increases in demand in 1995.
The peanut buying facility owned by Caronuts, Inc. is located on a 20 acre tract in Boykins, Virginia. The facility consists of six peanut storage tanks and related metal buildings and sheds.
SEPARATE ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
Information as to executive officers of the Registrant who are directors or nominees of the Registrant is incorporated herein by reference to the section captioned Election of Directors in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held April 21, 1995. Information as to each executive officer of the Registrant who is not a director or a nominee is as follows:
All the Company's executive officers were appointed to their current positions at the Annual Meeting of the Board of Directors on April 15, 1994, except Mr. Duggan who was appointed at a Special Meeting of the Board of Directors on July 12, 1994. In addition, at the Meeting of the Board of Directors on February 21, 1995, Thomas B. Horack and Gerald K. Smith were elected Executive Vice Presidents, Earl D. Leake was elected Vice President and Mr. Helms was elected Treasurer. All of the Registrant's executive officers' terms of office extend until the next Annual Meeting of the Board of Directors and until their successors shall have been duly elected and qualified.
Items 3 and 4 are inapplicable and have been omitted.
PART II
Items 5 through 8 are incorporated herein by reference to pages 10 through 27 of the Registrant's 1994 Annual Report to Stockholders.
Item 9

Item 9 is inapplicable and has been omitted.
PART III
Items 10 through 13 are incorporated herein by reference to the sections captioned Principal Stockholders and Holdings of Management, Election of Directors, Compensation/Stock Option Committee Interlocks and Insider Participation, Executive Officer Compensation and Director Compensation in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held April 21, 1995 and to the Separate Item in Part I of this Annual Report captioned Executive Officers of the Registrant.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. Financial Statements.
See Table of Contents to Financial Statements filed herewith as a separate part of this Annual Report.
2. Financial Schedules.
Schedules have been omitted because of the absence of conditions under which they are required or because information required is included in financial statements or the notes thereto.
3. Exhibits.
3.1 Restated Charter of Lance, Inc. incorporated herein by reference to Exhibit 3(a) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 26, 1992.
3.2 Bylaws of Lance, Inc. incorporated herein by reference to Exhibit 3(ii) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 25, 1993.
4 See 3.1 and 3.2 above.
10.1 Lance, Inc. 1991 Stock Option Plan incorporated herein by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, Registration No. 33-41866.
10.2 The Lance, Inc. Key Executive Employee Benefit Plan incorporated herein by reference to Exhibit 10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1983.
10.3 Form of Executive Employment Agreement between Lance, Inc. and the Key Executives incorporated herein by reference to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 26, 1992.
10.4 Lance, Inc. 1983 Incentive Stock Option Plan incorporated herein by reference to Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 26, 1987.
10.5 Lance, Inc. Key Executive Employee Benefit Plan Trust, dated December 3, 1993, between Lance, Inc. and First Union National Bank of North Carolina incorporated herein by reference to Exhibit 10(v) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 25, 1993.
13 The Registrant's 1994 Annual Report to Stockholders. This Annual Report to Stockholders is furnished for the information of the Commission only and, except for the parts thereof incorporated by reference in this Report on Form 10-K, is not to be deemed "filed" as a part of this filing.
21 List of the Subsidiaries of the Registrant incorporated herein by reference to Exhibit 22 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 26, 1992.
23 Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule. (Filed in electronic format only. Pursuant to Rule 402 of Regulation S-T, this schedule shall not be deemed filed for purposes of Section 11 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934.)
(b) Reports on Form 8-K
There were no reports on Form 8-K required to be filed by the Registrant during the 17 weeks ended December 31, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
LANCE, INC.
Dated: March 29, 1995 By: /s/ E. D. Leake ---------------------------- E. D. Leake Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C.
FORM 10-K FOR CORPORATIONS
ITEM 14(a) - FINANCIAL STATEMENTS
FINANCIAL STATEMENTS AND SCHEDULES OMITTED
The above listed financial statements are presented on only a consolidated basis since the Company is primarily an operating company and its subsidiaries included for the periods presented in the consolidated financial statements are totally-held subsidiaries. Schedules have been omitted because of the absence of conditions under which they are required or because information required is included in financial statements or the notes thereto.
SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
EXHIBITS Item 14(a)(3)
FORM 10-K ANNUAL REPORT
For the fiscal year ended Commission File Number December 31, 1994 0-398
LANCE, INC.
EXHIBIT INDEX