2014

Lancaster Colony Reports Second Quarter Sales And Earnings

COLUMBUS, Ohio, Jan. 31, 2013 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported the following highlights for the company's second fiscal quarter ended December 31, 2012:

  • Net sales increased five percent to $326 million versus $312 million in the second quarter last year.
  • Net income increased 16 percent to $35,277,000 compared with $30,373,000 for the corresponding quarter a year ago. Net income per diluted share was $1.28 versus $1.11 in the year-ago quarter. Pretax income included approximately $0.3 million (one cent per share after taxes) from a Continued Dumping and Subsidy Offset Act (CDSOA) distribution, while the year ago second quarter results included a pretax CDSOA distribution of approximately $2.7 million (six cents per share after taxes).
  • Specialty Foods sales increased two percent in the quarter to a record $272.6 million, reflecting higher sales to both retail and foodservice channels. Overall volumes were approximately level with that of a year ago, with retail volumes affected by lower garlic bread shipments. Retail sales growth resulted from higher pricing, the success of recently introduced products and a lower level of trade and consumer promotions.  Foodservice sales improved primarily due to higher volume. Segment operating income totaled $50.4 million, up 13 percent from last year's level, primarily reflecting higher pricing and modestly reduced raw-material costs. The estimated favorable impact from raw-material costs was less than one percent of segment net sales.
  • Glassware and Candles sales increased 17 percent to $53.5 million, reflecting expanded sales of seasonal products.  Benefiting from higher sales and production volumes, segment operating income improved to $5.6 million compared with $1.6 million in the prior year second quarter. 
  • Corporate expenses in the current year's quarter increased approximately $0.7 million, primarily due to higher costs associated with previously idled held-for-sale real estate.
  • The company's balance sheet remained strong with no debt at December 31, 2012 as well as over $92 million in cash and equivalents.
  • In addition to the December 2012 payment of a special dividend of $5.00 per share, the quarterly cash dividend was increased by six percent to $.38 per share.  

For the six months ended December 31, 2012, net sales were $617 million compared to $586 million for the first half last year. Net income was $61,939,000, or $2.26 per diluted share. In the prior year, six-month net income totaled $51,631,000, or $1.89 per diluted share.

Chairman and CEO John B. Gerlach, Jr. said, "We were pleased that both of our operating segments achieved growth in sales and income.  Consolidated net income also grew despite a lower level of CDSOA distributions."

Looking ahead, Mr. Gerlach said, "We anticipate that third quarter Specialty Foods sales will continue to benefit from recent product introductions.  We are also excited about the longer-term potential of Marzetti® Simply Dressed® Vinaigrettes and our repackaged Veggie Dips. We remain generally cautious regarding consumer sentiment, and we expect to see progressively less favorable net food commodity costs over the balance of fiscal 2013.  We also anticipate increased marketing investments within selected retail categories, and we foresee limited benefit from pricing actions.  Regardless, our solid financial condition allows us considerable flexibility to make investments supporting future growth." 

Conference Call on the Web    
The company's second quarter conference call is scheduled for this morning, January 31, at 10:00 a.m. ET. You may access the call through a live webcast by using the link provided on the company's Internet home page at www.lancastercolony.com. Replays of the webcast will be made available on the company website.

About the Company  
Lancaster Colony Corporation is a diversified manufacturer and marketer of consumer products focusing primarily on specialty foods for the retail and foodservice markets.

Forward-Looking Statements    
We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). This news release contains various "forward-looking statements" within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "believe," "intend," "plan," "expect," "hope" or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:

  • the potential for loss of larger programs or key customer relationships;
  • the effect of consolidation of customers within key market channels;
  • the success and cost of new product development efforts;
  • the lack of market acceptance of new products;
  • the reaction of customers or consumers to the effect of price increases we may implement;
  • changes in demand for our products, which may result from loss of brand reputation or customer goodwill;
  • the possible occurrence of product recalls or other defective or mislabeled product costs;
  • price and product competition;
  • fluctuations in the cost and availability of raw materials;
  • adverse changes in energy costs and other factors that may affect costs of producing, distributing or transporting our products;
  • maintenance of competitive position with respect to other manufacturers, including global sources of production;
  • dependence on key personnel;
  • stability of labor relations;
  • dependence on contract copackers and limited or exclusive sources for certain goods;
  • changes in estimates in critical accounting judgments;
  • the outcome of any litigation or arbitration; and
  • risks related to other factors described under "Risk Factors" in other reports and statements filed by us with the Securities and Exchange Commission, including without limitation our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (available at www.sec.gov).

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.

 


LANCASTER COLONY CORPORATION






CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)






(In thousands except per-share amounts)













 Three Months Ended

Six Months Ended





 December 31,

 December 31,





2012

2011

2012

2011


Net sales      

$    326,155

$    311,786

$    617,131

$    586,302


Cost of sales     

244,499

241,927

469,758

461,013


Gross margin     

81,656

69,859

147,373

125,289


Selling, general & administrative expenses  

29,031

26,149

54,176

49,067


Operating income  

52,625

43,710

93,197

76,222


Interest income and other – net   

254

2,739

268

2,735


Income before income taxes  

52,879

46,449

93,465

78,957


Taxes based on income    

17,602

16,076

31,526

27,326


Net income    

$      35,277

$     30,373

$     61,939

$     51,631








Net income per common share:(a)












Net income – basic    

$         1.29

$         1.11

$         2.26

$         1.89


Net income – diluted    

$         1.28

$         1.11

$         2.26

$         1.89








Cash dividends per common share  

$         5.38

$          .36

$         5.74

$          .69








Weighted average common shares outstanding:






     Basic

27,243

27,206

27,236

27,248


     Diluted

27,273

27,240

27,268

27,277








 

     (a)  Based on the weighted average number of shares outstanding during each period.






 

 

LANCASTER COLONY CORPORATION

BUSINESS SEGMENT INFORMATION (Unaudited)

(In thousands)





Three Months Ended

 Six Months Ended


December 31,

December 31,


2012

2011

2012

2011

NET SALES 





     Specialty Foods 

$    272,634

$    266,225

$    521,515

$    503,172

     Glassware and Candles 

53,521

45,561

95,616

83,130


$    326,155

$    311,786

$    617,131

$     586,302

OPERATING INCOME

     Specialty Foods 

$     50,384

$     44,750

$     93,142

$     79,949

     Glassware and Candles 

5,614

1,636

6,222

1,299

     Corporate expenses       

(3,373)

(2,676)

(6,167)

(5,026)


$     52,625

$     43,710

$     93,197

$     76,222

 

                                                                                                                           

LANCASTER COLONY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)





December 31,

June 30,


2012

2012

ASSETS



Current assets:

     Cash and equivalents       

$       92,521

$     191,636

     Receivables – net of allowance for doubtful accounts  

90,927

73,326

     Total inventories       

100,544

109,704

     Deferred income taxes and other current assets     

20,486

17,073

          Total current assets     

304,478

391,739

Net property, plant and equipment    

188,375

184,130

Other assets        

104,894

106,766

               Total assets       

$     597,747

$     682,635


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

     Accounts payable        

$       47,527

$       40,708

     Accrued liabilities       

33,715

31,963

          Total current liabilities        

81,242

72,671

Other noncurrent liabilities and deferred income taxes 

45,350

45,697

Shareholders' equity      

471,155

564,267

               Total liabilities and shareholders' equity    

$     597,747

$     682,635

 

SOURCE Lancaster Colony Corporation



RELATED LINKS
http://www.lancastercolony.com

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