EX-99.1 3 e15547ex99_1.txt PRESS RELEASE Exhibit 99.1 Lancaster Colony Reports Fourth Quarter And Fiscal Year Results COLUMBUS, Ohio, Aug. 21 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported that net income for the fiscal year ended June 30, 2003 reached a record high of $112,546,000 compared to $91,940,000 earned a year ago. Diluted earnings per share were $3.11 versus $2.49 last year. Net sales were $1,106,800,000, a two percent decrease from $1,129,687,000 reported a year ago. Fourth quarter net income of $21,964,000 compares with $25,369,000 earned in the corresponding quarter a year ago. Diluted earnings per share were 61 cents versus 69 cents in the year-ago fourth quarter. Net sales were $264 million, a six percent decline from $282 million in the fourth quarter last year. Net income for the latest quarter included pretax income of approximately $1.9 million (three cents per share after taxes) related to the liquidation of LIFO inventories carried at substantially lower prior years' costs. In the fourth quarter last year, net income included a similar LIFO pretax benefit of approximately $2.9 million (five cents per share after taxes). The fiscal 2003 results included pretax income of $39.2 million (67 cents per share after taxes) associated with a distribution received from the U.S. Customs Service under the Continued Dumping and Subsidy Offset Act ("CDSOA"), a pretax restructuring charge of $4.9 million (eight cents per share after taxes) related to the company's consumer glassware operations, and pretax income of approximately $7.0 million (12 cents per share after taxes) associated with the liquidation of LIFO inventories. The year-ago results included a pretax benefit of $15.6 million (26 cents per share after taxes) related to a distribution made pursuant to CDSOA, a pretax provision of $14.3 million (24 cents per share after taxes) for accounts receivable reserves related to Kmart Corporation's bankruptcy and pretax income of approximately $3.3 million (five cents per share after taxes) associated with the liquidation of LIFO inventories. Income related to CDSOA has been recorded in the accompanying financial statements as other income. Goodwill amortization, which ceased upon the company's adoption of Statement of Financial Accounting Standards No. 142 effective the beginning of the current fiscal year, totaled on a pretax basis $0.7 million (two cents per share after taxes) for the prior year's fourth quarter and $2.7 million (seven cents per share after taxes) for the full 2002 fiscal year. John B. Gerlach, Jr., chairman and CEO, said, "Fiscal 2003 was a year of record earnings and cash flow. Our balance sheet remained debt-free at June 30, 2003 and reflected over $142 million in cash and over $547 million in shareholders' equity. We also repurchased 948,000 common shares and we marked our 40th consecutive year of increased cash dividends. However, our operating performance was adversely affected by a weak economy and a highly competitive marketplace. Our fourth quarter results were impacted by weaker non-food sales combined with higher average ingredient costs for Specialty Foods." Sales of Specialty Foods increased five percent for the year. During the fourth quarter, frozen food products led a four percent improvement in sales, which further benefited from Easter occurring later in calendar 2003. Segment operating income rose two percent for the year and four percent for the quarter. Mr. Gerlach said, "We were pleased with this segment's quarterly performance given the strong comparisons of a year ago and increased ingredient costs. Soybean oil costs remained well above fiscal 2002 levels and adversely affected fourth quarter comparisons by more than $1.5 million. Offsetting a portion of this challenge was a better sales mix and the operating efficiencies we have achieved." He noted that all of the segment's top-line growth was internally generated and that a number of exciting new products were introduced over the last year, including certified organic salad dressing sold into produce departments. Automotive sales increased four percent for the year but declined seven percent during the fourth quarter compared to prior-year levels. Operating income increased 12 percent for the year but decreased 31 percent in the quarter. Mr. Gerlach stated, "Our Automotive segment ended the year with several new platforms for original equipment manufacturers as well as new manufacturing capabilities resulting from relatively modest investments in production equipment. Aftermarket conditions, however, remained very competitive and overall demand was weak. Higher petroleum-related material costs also contributed to the lower fourth quarter operating results." Net sales of the Glassware and Candles segment declined 20 percent for the year and 31 percent for the quarter. Segment operating income increased 18 percent, or $1.9 million, for the year but declined $5.4 million during the quarter. Comparative results of this segment were affected by LIFO-related income, the restructuring charge and the prior year's bad debt provision for Kmart Corporation. Mr. Gerlach said, "Our Glassware and Candles segment launched its newly redesigned retail candle line and we feel we are well-poised to meet the challenges and opportunities of fiscal 2004. Fourth quarter Glassware and Candles results were affected by a continued weak retail environment, very competitive pricing, the LIFO credits and significant promotional costs associated with the placement of our new candle line. While we remain committed to achieving the full benefit of our glass plant consolidation announced earlier this year, lower sales volume led to less fixed cost absorption." Looking forward, Mr. Gerlach stated, "We enter the new fiscal year with hopes of a strengthening economy. We are excited about new opportunities in the coming year although we also face a number of hurdles including lackluster demand for glassware and candles and increasingly competitive OEM market conditions. For at least the first half of the fiscal year, Specialty Food margins will likely feel the pressure of current soybean oil pricing. Capital expenditures for this segment will be higher than historic levels in order to expand capacity for dressings and sauces. On the whole, we are optimistic about our fiscal 2004 results." The company's fourth quarter conference call is scheduled for this morning, August 21, 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. This news release contains forward-looking statements related to future growth and earnings opportunities. Such statements are based upon certain assumptions and assessments made by management of the company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. Actual results may differ as a result of factors over which the company has no control including the strength of the economy, slower than anticipated sales growth, the extent of operational efficiencies achieved, the success of new product introductions, price and product competition, and increases in raw materials costs. Management believes these forward-looking statements to be reasonable; however, undue reliance should not be placed on such statements, which are based on current expectations. The company undertakes no obligation to publicly update such forward-looking statements. More detailed statements regarding significant events which could affect the company's financial results are included in the company's Forms 10-K and 10-Q filed with the Securities and Exchange Commission. LANCASTER COLONY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands except per-share amounts)
Three Months Ended Fiscal Year Ended June 30, June 30, 2003 2002 2003 2002 Net sales $263,775 $281,973 $1,106,800 $1,129,687 Cost of sales 205,406 215,602 862,940 876,122 Gross margin 58,369 66,371 243,860 253,565 Selling, general & administrative expenses 23,281 25,143 99,032 119,196 Restructuring and impairment charge 24 -- 4,885 -- Operating income 35,064 41,228 139,943 134,369 Other income (expense): Interest expense -- -- -- (54) Interest income and other - net 451 (234) 40,858 15,027 Income before income taxes 35,515 40,994 180,801 149,342 Taxes based on income 13,551 15,625 68,255 57,402 Net income $21,964 $25,369 $112,546 $91,940 Net income per common share: (a) Basic $.61 $.69 $3.11 $2.49 Diluted $.61 $.69 $3.11 $2.49 Cash dividends per common share $.20 $.18 $.78 $.71 Weighted average common shares outstanding: Basic 35,808 36,626 36,184 36,850 Diluted 35,873 36,700 36,243 36,910
(a) Based on the weighted average number of shares outstanding during each period. LANCASTER COLONY CORPORATION BUSINESS SEGMENT INFORMATION (In thousands) Three Months Ended Fiscal Year Ended June 30, June 30, 2003 2002 2003 2002 NET SALES Specialty Foods $157,086 $150,967 $609,994 $579,940 Glassware and Candles 44,200 64,020 251,437 314,591 Automotive 62,489 66,986 245,369 235,156 $263,775 $281,973 $1,106,800 $1,129,687 OPERATING INCOME Specialty Foods $32,154 $30,894 $116,068 $113,710 Glassware and Candles 180 5,547 12,432 10,547 Automotive 3,970 5,764 17,351 15,489 Corporate expenses (1,240) (977) (5,908) (5,377) $35,064 $41,228 $139,943 $134,369 LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, June 30, 2003 2002 ASSETS Current assets: Cash and equivalents $142,847 $83,378 Receivables - net of allowance for doubtful accounts 88,583 109,350 Total inventories 159,412 148,251 Prepaid expenses and other current assets 23,543 25,121 Total current assets 414,385 366,100 Net property, plant and equipment 161,111 165,943 Other assets 92,220 86,662 Total assets $667,716 $618,705 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $41,983 $42,988 Accrued liabilities 42,940 46,316 Total current liabilities 84,923 89,304 Other noncurrent liabilities and deferred taxes 35,128 28,124 Shareholders' equity 547,665 501,277 Total liabilities and shareholders' equity $667,716 $618,705 SOURCE Lancaster Colony Corporation -0- 08/21/2003 /CONTACT: John B. Gerlach, Jr., Chairman and CEO, or John L. Boylan, Vice President, Treasurer and CFO, both of Lancaster Colony Corporation, +1-614-224-7141; or Investor Relations Consultants, +1-727-781-5577 or e-mail, lanc@mindspring.com, for Lancaster Colony/