Lancaster Colony Reports Higher Third Quarter Sales and Earnings

COLUMBUS, Ohio, April 29 /PRNewswire-FirstCall/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported higher sales, operating income and net income for the company's third fiscal quarter ended March 31, 2010 compared with the corresponding quarter a year ago. Highlights of the quarter:

• Net sales increased two percent to $250 million versus $246 million in the third quarter last year, reflecting sales growth in retail specialty food products and candles.
• Net income totaled $24,222,000 compared with $21,213,000 for the corresponding quarter a year ago. This growth was largely driven by increased operating income achieved by both business segments. Third quarter earnings per share totaled $.86 compared to $.76 a year ago.
• Specialty Foods sales declined slightly to $216 million due to continued softness in foodservice pricing and volumes. Retail food sales grew approximately six percent reflecting higher volumes, in part due to Easter occurring slightly earlier this year.  Operating income totaled $38.7 million compared to $35.9 million in the third quarter last year, primarily reflecting a stronger retail sales mix and lower commodity costs.  Marketing-related costs in the current-year quarter increased as a result of greater investments that were primarily directed toward consumers.
• Sales of the Glassware and Candles segment increased 16 percent to $33.9 million, primarily reflecting better unit volume of candles. With the additional benefits of lower paraffin wax costs and higher production levels, segment operating income improved to $1.7 million compared to an operating loss of approximately $0.9 million in the third quarter last year.
• The company's balance sheet remained strong with no debt outstanding at March 31, 2010.

For the nine-months ended March 31, 2010, net sales were $809 million compared to $798 million last year. Net income was $92,154,000, or $3.27 per diluted share. Net income for the nine months a year ago totaled $60,685,000, or $2.16 per diluted share.  Current year-to-date net income included pretax income of $0.9 million (two cents per share after taxes) from a second-quarter distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). In the prior year, net income included a pretax CDSOA distribution of $8.7 million (20 cents per share after taxes).

John B. Gerlach, Jr., chairman and CEO, said, "We were pleased with the continued bottom-line improvement in both operating segments.  Within Specialty Foods, our increased investments in consumer-directed marketing and promotional programs helped us maintain our retail sales strength.  We had somewhat better-than-anticipated candle growth, affirming our ability to deliver high-value, high-volume products to key customers in a challenging economy."  

Looking ahead, Mr. Gerlach said, "Coming off an improved third quarter, we foresee more challenging year-over-year comparisons in the fourth quarter as benefits from lower raw-material costs will likely subside further.  Although sales trends within the Specialty Foods segment are unclear, we believe foodservice volumes will remain weaker than year-ago levels.  We anticipate that marketing and consumer spending costs should be more in line with first-half levels.  We are hopeful that our candle operations, entering the seasonally slow fourth quarter, will continue to demonstrate improvement.  We are cautiously optimistic about the potential for fiscal 2011 top line improvements, but recognize that we may also face headwinds from moderately higher material costs."

Conference Call on the Web

The company's third quarter conference call is scheduled for this morning, April 29, 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. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements. 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