Lancaster Colony Reports Fiscal Year and Fourth Quarter Results

COLUMBUS, Ohio, Aug. 18, 2011 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's fiscal year ended June 30, 2011, including these highlights:

• Net sales increased three percent to $1,090 million versus $1,057 million last year.
• Net income totaled $106.4 million or $3.84 per diluted share, compared to the prior year's record net income of $115.0 million, or $4.07 per diluted share. Fiscal 2011 results included pretax income of $14.4 million (approximately 34 cents per share after taxes) associated with second and fourth quarter distributions under the Continued Dumping and Subsidy Offset Act (CDSOA). In fiscal 2010, a second quarter pretax CDSOA distribution totaled $0.9 million (approximately two cents per share after taxes).
• The cash dividend was increased for the 48th consecutive year, and shares were repurchased at a cost of approximately $43.1 million.
• The balance sheet remained strong with no debt outstanding and over $132 million in cash and equivalents.

Fourth Quarter Results

Highlights of the fourth quarter ended June 30, 2011 included the following:

• Net sales increased three percent to $256 million versus $248 million in the year ago quarter.
• Specialty Foods net sales totaled a fourth quarter record of $230 million, an increase of six percent above the prior year's fourth quarter total. Contributing to this improvement were greater foodservice volumes, this year's later Easter, the success of recently introduced retail products and both retail and foodservice pricing increases. Retail sales were constrained by factors such as challenging economic conditions faced by consumers and higher levels of trade promotions. Higher material and freight costs, along with a less favorable sales mix, contributed to segment operating income declining by 10 percent to $34.2 million from $38.2 million a year ago.
• Glassware and Candles sales of $25.7 million declined due to lower candle sales.  The segment's quarterly operating loss of $1.3 million compared to a loss of less than $0.1 million a year ago. Higher paraffin wax costs and lower sales and production volumes primarily accounted for the decline.  
• Fourth quarter net income totaled $29.3 million, or $1.07 per diluted share, versus the year ago net income of $22.8 million, or $.81 per diluted share.  The quarter's results included a pretax CDSOA distribution of $13.4 million (approximately 33 cents per share after taxes).

Fiscal 2011 Commentary

Chairman and CEO John B. Gerlach, Jr. said, "Fiscal 2011 earnings per share were the second highest in company history, following our record high fiscal 2010.  Significantly higher material costs and continuing economic weakness challenged our comparative results for both the full year and fourth quarter. Helping support our top-line growth this past year was the introduction of several new retail non-frozen food products, including our Marzetti® Simply Dressed™ line of refrigerated salad dressings and Marzetti® Otria™ Greek yogurt-based vegetable dips. Candle sales benefitted from additional product placement. We were able to implement higher pricing to mitigate, although not fully offset, materials cost inflation encountered by both operating segments."  

Fiscal 2012 Commentary

Mr. Gerlach added, "Fiscal 2012 sales should continue to benefit from the rollout of new retail food products and generally higher pricing. New food product emphasis this year is focused on frozen items. Among products expected to add sales in the first half of fiscal 2012 are New York BRAND® Garlic Knots and Sister Schubert's® soft pretzel rolls and mini-baguettes. Many material costs will likely remain markedly above year-ago levels for at least the first half of fiscal 2012. We also elected not to pursue lower-margin holiday candle sales due to the lack of acceptable returns at current input costs.  Overall results will depend upon sales volumes, material cost trends and operational improvements."

He also said, "We remain well-positioned to support future growth given the strength of our market positions and a solid and flexible balance sheet."

Conference Call on the Web

The company's fiscal year and fourth quarter conference call is scheduled for this morning, August 18, 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 that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on such statements that are based on current expectations. For example, fluctuations in material and freight costs, over which we have limited control, may significantly influence our financial results. 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. More detailed statements regarding significant events that could affect our financial results are included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission and are available on our website at www.lancastercolony.com.

SOURCE Lancaster Colony Corporation