COLUMBUS, Ohio, Jan. 28 /PRNewswire-FirstCall/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported higher sales, operating income and net income for the company's second fiscal quarter ended December 31, 2009 compared with the corresponding quarter a year ago. Highlights of the quarter:
- Consolidated net sales increased six percent to $304 million versus $288 million in the second quarter last year.
- Net income totaled $39,527,000 compared with $28,452,000 for the corresponding quarter a year ago. Net income per diluted share was $1.40 versus $1.02 in the year-ago quarter. The current year's quarter included pretax income of approximately $0.9 million (two cents per share after taxes) from a distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). A year ago, second quarter results included a pretax CDSOA distribution of approximately $8.7 million (20 cents per share after taxes).
- Specialty Foods sales decreased one percent in the quarter to $243.1 million, which reflected a decrease in foodservice sales, largely offset by sales growth in the retail channel. Contributing to the retail sales growth were volume increases among both frozen and non-frozen products. Similar to fiscal first quarter comparisons, foodservice sales declined due to weaker volumes and reduced pricing due to lower commodity costs. Operating income of $56.1 million, up 42 percent from the year-ago level, reflected a stronger retail sales mix, improvements in operational efficiencies and an estimated favorable impact in excess of $13 million from raw-material cost reductions. The quarter's results absorbed more than $1 million in costs associated with the previously announced closing of a salad dressing facility.
- Glassware and Candles sales increased 42 percent to $61.0 million, which reflected improved consumer demand for high-quality value-priced candles, increased placement of seasonal items and customers shifting certain seasonal purchases from the fiscal first quarter. Segment operating income totaled $6.1 million, compared to a prior-year second quarter operating loss of $1.0 million. Current-year performance reflects higher sales, lower material costs and improved capacity utilization.
- The company's balance sheet remained strong with no debt at December 31, 2009, as well as over $91 million in cash and equivalents.
For the six months ended December 31, 2009, net sales were $558 million compared to $552 million for the first half last year. Net income was $67,932,000, or $2.41 per diluted share. In the prior year, six-month net income totaled $39,472,000, or $1.40 per diluted share.
John B. Gerlach, Jr., chairman and CEO, said, "For both the quarter and six months ended December 31, we were very pleased with the bottom line progress made by both of our operating segments in what clearly remains a challenging economic environment."
Looking ahead, Mr. Gerlach said, "Our key retail brands are benefiting from our enhanced marketing efforts. However, we believe second half year-over-year comparative results will be less robust than the first-half comparisons as we face further pressure on foodservice sales, substantially less benefit from lower ingredient costs, and the seasonal dip in food and candle retail sales dynamics. For the long-term we will continue to leverage our food and candle new product development efforts aimed at providing sustainable top-line growth."
Conference Call on the Web
The company's second quarter conference call is scheduled for this morning, January 28, 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.
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.
LANCASTER COLONY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands except per-share amounts) Three Months Ended Six Months Ended December 31, December 31, 2009 2008 2009 2008 Net sales $304,115 $288,242 $558,275 $552,079 Cost of sales 219,338 230,079 409,791 454,247 Gross margin 84,777 58,163 148,484 97,832 Selling, general & administrative expenses 24,400 21,917 44,868 42,178 Restructuring and impairment charges 1,216 (8) 2,046 1,606 Operating income 59,161 36,254 101,570 54,048 Interest expense - (639) - (1,130) Interest income and other – net 927 8,425 952 8,500 Income before income taxes 60,088 44,040 102,522 61,418 Taxes based on income 20,561 15,588 34,590 21,946 Net income $ 39,527 $ 28,452 $ 67,932 $ 39,472 Net income per common share:(a) Net income- basic and diluted $1.40 $1.02 $2.41 $1.40 Cash dividends per common share $.30 $.285 $.585 $.565 Weighted average common shares outstanding: Basic 28,147 27,948 28,114 28,105 Diluted 28,176 27,955 28,145 28,110 (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, 2009 2008 2009 2008 NET SALES Specialty Foods $243,099 $245,393 $459,440 $466,179 Glassware and Candles 61,016 42,849 98,835 85,900 $304,115 $288,242 $558,275 $552,079 OPERATING INCOME (LOSS) Specialty Foods $ 56,146 $ 39,651 $ 99,298 $ 63,140 Glassware and Candles 6,142 (1,007) 7,813 (3,869) Corporate expenses (3,127) (2,390) (5,541) (5,223) $ 59,161 $ 36,254 $101,570 $ 54,048 LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) December 31, June 30, 2009 2009 ASSETS Current assets: Cash and equivalents $ 91,391 $ 38,484 Receivables – net of allowance for doubtful accounts 85,484 61,152 Total inventories 82,296 102,523 Deferred income taxes and other current assets 23,231 20,653 Total current assets 282,402 222,812 Net property, plant and equipment 164,959 170,900 Other assets 103,894 104,769 Total assets $551,255 $498,481 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 37,643 $ 41,180 Accrued liabilities 32,695 33,399 Total current liabilities 70,338 74,579 Other noncurrent liabilities and deferred income taxes 21,971 21,346 Shareholders' equity 458,946 402,556 Total liabilities and shareholders' equity $551,255 $498,481
SOURCE Lancaster Colony Corporation