EX-99.1 2 c95017exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
(IMAGE)    
     
FOR IMMEDIATE RELEASE
  SYMBOL: LANC
Thursday, January 28, 2010
  TRADED: Nasdaq
LANCASTER COLONY REPORTS IMPROVED SECOND QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Jan. 28 — 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.
MORE. . .          

 

 

 

PAGE 2 / LANCASTER COLONY REPORTS IMPROVED 2ND QUARTER SALES & EARNINGS
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.
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.
# # # #
MORE. . .          

 

 

 

PAGE 3 / LANCASTER COLONY REPORTS IMPROVED 2ND QUARTER SALES & EARNINGS
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.
MORE. . .          

 

 

 

PAGE 4 / LANCASTER COLONY REPORTS IMPROVED 2ND QUARTER SALES & EARNINGS
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  
 
            
# # # #
     
FOR FURTHER INFORMATION:
  John B. Gerlach, Jr., Chairman and CEO, or
 
  John L. Boylan, Vice President, Treasurer and CFO
 
  Lancaster Colony Corporation
 
  Phone: 614/224-7141
 
  —or—
 
  Investor Relations Consultants, Inc.
 
  Phone: 727/781-5577 or E-mail: lanc@mindspring.com