LANCASTER COLONY CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - LANCASTER COLONY CORP	c11281e8vk.htm

Exhibit 99.1


FOR IMMEDIATE RELEASE		SYMBOL: LANC
Thursday, January 27, 2011		TRADED: Nasdaq

LANCASTER COLONY REPORTS SECOND QUARTER SALES AND EARNINGS

COLUMBUS, Ohio, Jan. 27 — Lancaster Colony Corporation (Nasdaq: LANC) today reported higher sales for the company’s second fiscal quarter ended December 31, 2010 compared with the corresponding quarter a year ago. Highlights of the quarter:

•		Net sales increased four percent to $316 million versus $304 million in the second quarter last year.

•		Net income totaled $34,863,000 compared with a record $39,527,000 for the corresponding quarter a year ago. Net income per diluted share was $1.25 versus $1.40 in the year-ago quarter. The current year’s quarter included pretax income of approximately $1.0 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 $0.9 million (two cents per share after taxes).

•		Specialty Foods sales increased five percent in the quarter to $254.6 million, reflecting higher sales to both retail and foodservice channels. Retail sales growth benefited from increased volumes of frozen products. Sales of non-frozen retail products were aided by recently introduced items but adversely affected by the rationalization of product lines associated with last-year’s closing of one salad dressing facility. Foodservice sales improved primarily due to new programs with existing customers. Segment operating income totaled $51.4 million, off eight percent from last year’s record level as a result of increased raw material, distribution and consumer-directed marketing costs. The estimated unfavorable impact from raw material costs approximated one percent of net sales. Prior year second quarter results included approximately $1.3 million in facility closing costs.

•		Glassware and Candles sales increased one percent to $61.6 million, resulting from expanded product placements. Segment operating income totaled $4.4 million versus the prior year second quarter’s $6.1 million, primarily reflecting higher wax costs.

•		Corporate expenses in the current-year’s quarter increased approximately $0.5 million due to an increase in costs related to idle real estate that is currently held for sale.

•		The company’s balance sheet remained strong with no debt at December 31, 2010 as well as over $119 million in cash and equivalents.

•		The quarterly cash dividend was increased by 10 percent to $.33 per share.

For the six months ended December 31, 2010, net sales were $581 million compared to $558 million for the first half last year. Net income was $57,630,000, or $2.06 per diluted share. In the prior year, six-month net income totaled $67,932,000, or $2.41 per diluted share.

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Chairman and CEO John B. Gerlach, Jr. said, “We were especially pleased with the continued growth of our branded food products, but as expected marked increases in input costs impacted our operating income.”

Looking ahead, Mr. Gerlach said, “We expect that pricing actions being taken with many of our food products should help mitigate the impact of rising material costs beginning in the third quarter. We should also gain further leverage from our recently introduced Marzetti^® Otria™ Greek yogurt-based veggie dips and Marzetti^® Simply Dressed™ refrigerated salad dressings. However, we also expect increasing headwinds from wax and freight costs during the second half of the fiscal year, and consumer reaction to higher pricing is uncertain. While the second half comparisons to fiscal 2010 will likely continue to be challenging, our strong branded positioning, product development efforts and solid financial condition position the company well to support long-term growth.”

Conference Call on the Web

The company’s second quarter conference call is scheduled for this morning, January 27, 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. 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.

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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

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PAGE 3 / LANCASTER COLONY REPORTS SECOND QUARTER SALES AND 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,
	2010		2009		2010		2009
Net sales	$	316,238	$	304,115	$	581,289	$	558,275
Cost of sales		237,994		219,338		444,974		409,791

Gross margin		78,244		84,777		136,315		148,484
Selling, general & administrative expenses		26,136		24,400		49,381		44,868
Restructuring and impairment charges		—		1,216		—		2,046

Operating income		52,108		59,161		86,934		101,570
Interest income and other — net		1,040		927		1,056		952

Income before income taxes		53,148		60,088		87,990		102,522
Taxes based on income		18,285		20,561		30,360		34,590

Net income	$	34,863	$	39,527	$	57,630	$	67,932


Net income per common share:(a)

Net income — basic and diluted	$	1.25	$	1.40	$	2.06	$	2.41

Cash dividends per common share	$	.33	$	.30	$	.63	$	.585

Weighted average common shares outstanding:
Basic		27,758		28,147		27,886		28,114
Diluted		27,785		28,176		27,911		28,145

(a)

Based on the weighted average number of shares outstanding during each period.

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PAGE 4 / LANCASTER COLONY REPORTS SECOND QUARTER SALES AND EARNINGS

LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)


	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
NET SALES
Specialty Foods	$	254,591		$	243,099		$	475,103		$	459,440
Glassware and Candles		61,647			61,016			106,186			98,835

	$	316,238		$	304,115		$	581,289		$	558,275


OPERATING INCOME
Specialty Foods	$	51,388		$	56,146		$	89,361		$	99,298
Glassware and Candles		4,366			6,142			4,368			7,813
Corporate expenses		(3,646	)		(3,127	)		(6,795	)		(5,541	)

	$	52,108		$	59,161		$	86,934		$	101,570

LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)


	December 31,		June 30,
	2010		2010
ASSETS
Current assets:
Cash and equivalents	$	119,119	$	100,890
Receivables — net of allowance for doubtful accounts		87,934		67,766
Total inventories		93,721		121,509
Deferred income taxes and other current assets		21,884		27,234

Total current assets		322,658		317,399
Net property, plant and equipment		172,324		166,097
Other assets		103,570		102,957

Total assets	$	598,552	$	586,453


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	37,189	$	41,904
Accrued liabilities		35,461		36,049

Total current liabilities		72,650		77,953
Other noncurrent liabilities and deferred income taxes		25,389		23,592
Shareholders’ equity		500,513		484,908

Total liabilities and shareholders’ equity	$	598,552	$	586,453

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