Good day, and welcome to the Flowers Foods Inc. Twenty twenty one Annual Meeting of Shareholders. I would now like to turn the conference over to George Steece, Chairman of the Board of Directors. Please go ahead.
Thank you, Grant. It is my pleasure to call this meeting to order and to welcome those joining us today to the Flowers Foods Annual Meeting of Shareholders. As always, we appreciate your interest in Flowers. In addition to our President and Chief Executive Officer, Rod McMullen, the other Flowers Board members joining the meeting today are Rhonda Gass, Ben Griswold, Margaret Lewis, Jim Spear, Mel Stiff, Marty Wood. There are also four board members who are attending their first annual meeting as directors.
They are Ed Casey, Tom Chubb, Terry Thomas. Ed, Tom and Terry all were elected to the Board this past August. And Jameson McFadden, Jameson joined the Board in January. Also attending today's meetings are Steve Kinsey, Chief Financial Officer and Chief Accounting Officer Stephanie Tillman, Chief Legal Counsel and Lisa Hay, Manager of Shareholder Relations. Thank you for joining us today.
As I look back, last year was a very difficult operating year with many disruptions and challenges to businesses everywhere. However, in spite of those challenges, the efforts of the senior leadership at Flowers and the entire Flowers team went above and beyond the call of duty. On behalf of the Board, I would like to express our sincere gratitude to the team for their outstanding performance and the results over the past year. Thank you so much. At this time, I will turn the meeting over to Stephanie Tillman for the business portion of the session today.
Stephanie?
Thank you, George. Good morning and welcome. As a reminder, the rules of conduct may be accessed via the rules of conduct link on your screen. They describe the procedures outlined for voting and also for any technical issues during the meeting. Shareholder questions that were properly submitted in advance may be addressed at the end of the meeting during the Q and A session.
Also, please note that the meeting is being recorded by Flowers. However, recording the meeting or copying materials presented at the meeting by any other person, including screenshots, is prohibited. As Secretary of the company, I have submitted the following documents for this meeting. The notice of meeting, which was mailed to all shareholders of record as of the close of business on 03/23/2021. An affidavit of the distribution of that notice, which began on 04/13/2021 and a certified list of the shareholders of record as of 03/23/2021.
Broadridge Financial Solutions is the official proxy tabulator for the meeting and Lisa Hay will be serving as our Inspector of the Election. The Inspector of the Election has reported to me that we have a quorum. Voting today is by proxy and electronic ballot. Before we proceed, I'd like to point out that shareholders who have submitted proxies or who have previously voted do not need to vote again today. However, they may choose to do so by following the link on the virtual meeting website and their vote today will supersede any previous vote.
The votes cast during this meeting will be included by the Inspector of Election in her final report. It is recommended that the reading of the minutes of the twenty twenty Annual Meeting of Shareholders be waived and that such minutes stand approved. May we have a motion to that effect?
I so move. Second.
All in favor, please indicate by saying aye. Aye. All opposed? The motion carries. There are four proposals duly submitted to be voted upon.
The first is the election of 12 director nominees to serve for a term of one year. The second, an advisory vote on the compensation of the company's named executive officers. Third, ratification of the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending 01/01/2022 fourth, a shareholder proposal regarding political contribution disclosure. There are no other proposals to be presented or vote at this meeting. If you are voting through the virtual meeting site, please submit your final votes now.
By now, all shareholders have had a chance to vote. I now declare the polls closed. The first order of business is the election of the director nominees. The Nominating and Governance Committee and the Board of Directors have nominated the following persons for election as directors of the company, each to serve for a term of one year. Mr.
Edward J. Casey, Jr. Mr. Thomas C. Chubb III Mr.
George E. Deese miss Rhonda O. Gas, mister Benjamin H. Griswold the fourth, miss Margaret G. Lewis, mister W.
Jamison McFadden, Mr. A. Riles McMullen, Mr. James T. Speer, Doctor.
Melvin T. Stith, Mr. Terry S. Thomas, and Mr. C.
Martin Wood III. May we have a motion on these nominations?
Madam Secretary, I move that the 12 director nominees as submitted in the proxy statement be nominated for election. Second.
Will the Inspector of Election please report the results of the election? Madam Secretary, each director nominee has received a favorable vote of at least 168,132,425 shares, which represents 95.1% of votes cast on this proposal. Thank you, Ms. Hay. I declare that the director nominees have been duly elected.
The next order of business is an advisory vote on the compensation of the company's named executive officers. The compensation committee and the Board of Directors evaluate both performance and compensation to ensure that the company maintains its ability to attract and retain the most qualified executives. In accordance with the Dodd Frank Act, Proposal two, this year's advisory say on pay vote gives shareholders the opportunity to express their views on the compensation of the company's named executives. Although the vote is advisory and will not be binding, the Board values the opinions of the company's shareholders and will take into account the outcome of the vote when considering executive compensation arrangements. May we have a motion regarding the advisory vote on the compensation of the company's named executive officers?
Madam Secretary, I move that the compensation of the company's named executive officers as disclosed in the proxy statement be approved. Second.
Will the Inspector of Election please report the results of the advisory vote? Madam Secretary, the proposal to approve the compensation of the company's named executive officers has received a favorable vote of 173,399,831 shares, which represents 98.1% of the votes cast on this proposal. Thank you, Ms. Hay. I hereby declare that the compensation of the company's named executive officers is approved.
The next order of business is the ratification of the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending on 01/01/2022. The Audit Committee and the Board of Directors have appointed PricewaterhouseCoopers and the Board recommends that this appointment be ratified. May we have a motion regarding the ratification of the appointment of the company's independent registered public accountant?
Madam Secretary, I move that the appointment of PricewaterhouseCoopers be ratified. Second.
Will the Inspector of Election please report the results of the votes? Madam Secretary, the proposal to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending 01/01/2022 has received a favorable vote of 192,299,757 shares, which represents 97.9% of the votes cast on this proposal. Thank you, Ms. Hay. I hereby declare that the appointment of PricewaterhouseCoopers has
been ratified. The final order
of business is consideration of a shareholder proposal submitted by International Brotherhood of Teamsters General Fund regarding political contribution disclosure. The full text of this proposal is set forth in the proxy statement. I understand that International Brotherhood of Teamsters General Fund is virtually represented today at this meeting by Mr. Michael Price Jones. At this time, I'd like to invite Mr.
Price Jones to present the proposal, and I ask that he limit his presentation to five minutes.
Hello, everyone. Can you hear me okay?
Yes. Yes.
Great. I move proposal number four that simply requests the company disclose its direct and indirect political spending. Unfortunately, notwithstanding the company's claims, this proposal will bring the company in line with many of its key peers, in fact, of its aspirational peers, and offer shareholders meaningful and cost effective disclosures on how their assets are being used to influence the political system. There's actually no basis to the company's claim that such disclosure will place the company disadvantage. It's also difficult to believe that the cost of preparing this report would be burdensome to the company given that it is presumably already reporting the information to the board.
The additional cost of publishing that information on the website would surely be de minimis. The fact that the board's response recycles boilerplate from other companies that have since gone on to provide the disclosure suggests there is no valid reason for the board to oppose this proposal. And although polls have been officially closed here, I do suggest that everyone support this resolution. Thank you.
Thank you, Mr. Price Jones. As set forth in the proxy statement, the board of directors recommends a vote against this proposal. Will the inspector of election please report the results of the vote? Madam secretary, the proposal submitted by International Brotherhood of Teamsters general fund has received a vote of 64,840,549 shares for the proposal and 105,469,764 shares against the proposal with 6,400,396 shares abstained.
Thank you, Ms. Hay. I hereby declare that the shareholder proposal is not approved. This concludes the business portion of the meeting. I now turn the meeting over to our President and Chief Executive Officer, Riles McMullen.
Thank you, Stephanie. On behalf of Flowers, I want to thank you for joining us today.
We're off to a strong start in 2021, but I'd like to begin by highlighting some of our accomplishments from 2020. We'll look at this past year through the lens of our four strategic priorities: developing our team, focusing on our brands, prioritizing margins and pursuing smart M and A. Starting with our team, I am proud to report that in a year of tremendous challenges, disruptions and uncertainties, Flowers Foods generated record sales and adjusted earnings, thanks in large part to the incredible perseverance and dedication of our team, particularly our frontline workers. Despite the ongoing global pandemic, they have shown great courage and a devotion to ensuring that our consumers have the products they need. Our company remains committed to doing everything in our power to provide a healthy and safe work environment for all of our team members.
I think we've got the best team in the industry, and the additions we made in 2020 have only strengthened. We've elected four new Board members who bring a wide range of skills and experience that will be invaluable in guiding the company forward. We added a new Chief Supply Chain Officer and a Chief Procurement Officer to help drive operational improvements. We also created new structures to help improve performance, including our strategic organizational realignment to drive brand growth and product innovation, which consolidated our two business units into a single function under the leadership of Mark Courtney, who is named Chief Brand Officer. As part of that realignment, David Roche was named President of Cake Operations to drive crucial operational improvements in that part of the business.
And we created a transformation office headed by Heath Vardino, who was named Chief Transformation Officer to implement key cross functional initiatives. Our second strategic priority is focusing on our brands, and it's at the heart of our growth strategy and the strength of our leading brands has been essential to our success in 2020. Our brands are among the strongest in the industry, Nature's Own, Dave's Killer Bread and Canyon Bakehouse each holding leading shares in their respective categories. That brand strength drove strong results in 2020 with annual sales growth excluding the fifty third week of 17%, 3136% respectively. Our portfolio strategy prioritizes our branded products and and promotes our third strategic priority, margins.
The increased prevalence of at home eating caused by the pandemic demonstrates the importance of our portfolio strategy. Despite volume declines in 2020 of 2.9%, our profitability increased markedly with EBITDA margins rising 160 basis points to 11.9% as we're now seeing the true power of focusing on our brands. Further to margin improvement, our portfolio optimization initiative that was launched in 2020 delivered approximately $22,000,000 in cost savings, above our original goal of 10,000,000 to $20,000,000 And the conversion of our Lindsberg bakery to a higher margin organic production will further help margins by reducing transport costs and increasing the quality and service levels to the important Mid Atlantic and Northeast markets. Our fourth priority is smart M and A, and we remain proactive in the deal space while maintaining our long established disciplined approach. M and A has been and will continue to be an important part of our growth story.
Our criteria for M and A candidates are those that can enhance our branded portfolio, extend our geographic presence, are a strong cultural fit and bring enhanced capabilities to our company. We believe our strong balance sheet gives us the flexibility to pursue a wide range of deals and when the right one comes along, we'll be ready. More important than our accomplishments in 2020 is what we're doing to capitalize on the current environment and to position ourselves for long term success. We remain focused on driving growth, improving operations and containing costs. We announced a digital strategy initiative, which contains elements of all three goals and is designed to transform how we operate our business and we expect it will serve as a key enabler of our overall strategic priorities.
Successful implementation of digital will support our brand efforts, bringing us ever closer to the consumer, increase our efficiencies and operations and deliver high quality real time insights to the team, which in turn support faster high quality business decisions. We're in the early stages of implementing this digital strategy and we plan to update you relative to the timing and amount of the expected benefits of these initiatives, which we expect to materialize over the next few years. Simultaneously, we will continue to focus on improving operations, particularly at our underperforming bakeries. Enhancing performance represents an achievable and material profit improvement to the company as a whole. Regarding cost containment, our talent additions, particularly our new Chief Supply Chain Officer and Chief Procurement Officer, are expected to drive efficiencies and reduce costs.
Those initiatives are especially important given some of the cost inflation we're seeing in freight and commodities. And our portfolio optimization efforts are anticipated to deliver additional benefits in 2021. We currently expect savings primarily in the first half of the year to be between 30,000,000 and $40,000,000 That all these changes are coming during a period of strength highlights the fact that we're not resting on our laurels. Our culture emphasizes continuous improvement and we're determined to position ourselves to succeed in any market environment. Before I turn the call over to Steve, I would like to announce that the Flowers Foods Board of Directors has declared a quarterly dividend of $0.21 per share, an increase of 5% over the same quarter last year.
This is the seventy fifth consecutive quarterly dividend paid by the company and is payable on 06/24/2021 to shareholders of record on 06/10/2021. This action increases the annualized dividend rate to $0.84 per share from $0.80 per share at this time last year. The Board and management team remain confident in the company's strategic priorities and its ability to generate consistent results over time, including in this uncertain environment. We will continue to allocate cash flow with a focus on maximizing return on invested capital and growing shareholder value. Now I'd like to ask Steve Kinsey, our Chief Financial Officer and Chief Accounting Officer, to give a brief financial review.
Steve?
Thanks, Ryals. Before I get started, I must remind you that our presentation today may include forward looking statements about our company's performance and other matters such as the impact of the COVID-nineteen pandemic. Although we believe these statements to be reasonable, they are subject to risks and uncertainties that could cause actual results to differ materially. In addition to matters we will discuss during the presentation, important factors relating to Flowers Foods business are detailed fully in our SEC filings. Finally, in addition to our financial results as reported under GAAP, we will also discuss results that have been adjusted for certain items affecting comparability.
The reconciliations of these adjusted figures to our reported results can be found in the Investor Center on flowersfoods.com. I'd like to echo Ryals' comments and express my sincere thanks to our incredible team whose efforts have been nothing short of outstanding. As I am sure most of you are aware, we reported our results for the first quarter twenty twenty one last week. The pandemic remained a significant though moderating influence. As a reminder, the 2020 contained the peak of pandemic buying during the pandemic.
Today's sales declined 3.5% I'm sorry, total sales declined 3.5% from the prior year period, but increased 3% compared to the first quarter of twenty nineteen. GAAP diluted EPS for the quarter was $0.34 per share. Excluding the items affecting comparability, adjusted diluted EPS in the quarter was $0.41 per share, unchanged from the prior year period. Our financial position remains strong. At quarter end, net debt to trailing twelve month adjusted EBITDA stood at approximately 1.2x, down from 1.3x at twenty twenty year end.
Importantly, we issued $500,000,000 in 2031 notes, the proceeds of which we were partially used to redeem our $400,000,000 notes that were set to mature in 2022. We are pleased with the pricing of the notes and the strong investor interest in the offering, which we believe demonstrates the confidence of the capital markets in our company and our strategic plans. All told, we have been pleased with how the business has performed in this uncertain environment, and we continue to see opportunities to grow shareholder value. Now turning to our outlook for the rest of 2021. We are forecasting fiscal twenty twenty one sales to decline between 2% to 3.5%.
On the bottom line, we expect adjusted EPS to be in the range of $1.1 to $1.17 As a reminder, 2021 shifts back to fifty two weeks, one less week than 2020. The additional week in 2020 contributed 1.8% to full year sales and approximately $02 to EPS. We announced new long term financial targets at our Investor Day in August that include growing revenues 1% to 2%, EBITDA 4% to 6% and earnings per share 7% to 9%. Our performance exceeded those levels in 2020. And while the targets are not intended as annual guidance, we expect to generate performance in line with or better than those levels over time.
It's important to highlight that our 2021 guidance, even at the low end, is in line with our long term targets using 2019 as the base year. We expect continued strong free cash flow generation and our capital allocation priorities and philosophies remain consistent with our focus on maximizing return on invested capital and growing shareholder value. Thank you. And now I'll turn the call back to Ryals.
Thank you, Steve. Every year presents its own unique challenges and this year is no different. But the Flowers team has never been better positioned to meet these challenges. As Steve highlighted, pandemic continues to have a significant though moderating impact on our results. We're seeing strong branded retail performance, improving demand in foodservice and continued weakness in store brand products.
By continuing to execute against our four strategic priorities, we believe we can meet or exceed our long term financial goals. So while the future is impossible to predict, we believe that no matter what the operating environment is, we have the right strategies in place to thrive. We've got a portfolio of top brands and we're focused on allocating resources to support those brands. We're focused on those things we can control and working hard to develop strategies that we believe will best position our company for success. Most importantly, I can promise you that the thousands of Flowers team members who give us their best every day are working hard to optimize our performance.
Facing the uncertainty, changes and challenges of the pandemic, the women and men of Flowers team have performed their jobs with the professionalism and dedication that is recognized as the best in the industry. I know I speak for all of our Board members when I say thank you for your service and commitment to excellence. Also, thank you, our shareholders, for your continued support. Thank you to all for joining today's meeting. The meeting is now adjourned.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.