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| 8-K - FORM 8-K - LANCASTER COLONY CORP | d289315d8k.htm |
Exhibit 99.1
Lancaster Colony Corporation
37 West Broad Street
Columbus, Ohio 43215
614/224-7141
| FOR IMMEDIATE RELEASE |
SYMBOL: LANC | |
| Thursday, January 26, 2012 |
TRADED: Nasdaq |
LANCASTER COLONY REPORTS SECOND QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Jan. 26 — Lancaster Colony Corporation (Nasdaq: LANC) today reported the following highlights for the company’s second fiscal quarter ended December 31, 2011:
| • | Net sales decreased one percent to $312 million versus $316 million in the second quarter last year. |
| • | Net income totaled $30,373,000 compared with $34,863,000 for the corresponding quarter a year ago. Net income per diluted share was $1.11 versus $1.25 in the year-ago quarter. The current year’s quarter included pretax income of approximately $2.7 million (six 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 $1.0 million (two cents per share after taxes). |
| • | Specialty Foods sales increased five percent in the quarter to a record $266.2 million, reflecting higher sales to both retail and foodservice channels. Retail sales growth benefited from higher pricing and from recently introduced products. Foodservice sales improved primarily due to higher pricing. Segment operating income totaled $44.8 million, off 13 percent from last year’s level primarily due to increased raw material, distribution and promotional costs not offset by higher pricing. The estimated unfavorable impact from raw material costs approximated six percent of segment net sales. The greater investment in product promotion included support for recently introduced products and expansion into new geographic markets. |
| • | Glassware and Candles sales declined 26 percent to $45.6 million, largely reflecting the exiting of several lower margin programs. While these lower sales volumes influenced the segment’s operating income decline to $1.6 million from the prior year second quarter’s $4.4 million, higher pricing was also offset by higher material costs and less favorable production levels. |
| • | Corporate expenses in the current year’s quarter decreased approximately $1.0 million primarily due to reduced costs associated with idle real estate held for sale. |
| • | The company’s balance sheet remained strong with no debt at December 31, 2011 as well as over $162 million in cash and equivalents. |
| • | The quarterly cash dividend was increased during the quarter by nine percent to $.36 per share. |
For the six months ended December 31, 2011, net sales were $586 million compared to $581 million for the first half last year. Net income was $51,631,000, or $1.89 per diluted share. In the prior year, six-month net income totaled $57,630,000, or $2.06 per diluted share.
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PAGE 2 / LANCASTER COLONY REPORTS SECOND QUARTER SALES AND EARNINGS
Chairman and CEO John B. Gerlach, Jr. said, “Our food segment grew its top line in the face of very unsettled consumer spending patterns. As expected, marked increases in input costs and lower candle sales impacted our operating income.”
Looking ahead, Mr. Gerlach said, “We believe that Specialty Foods sales and operating results should benefit from pricing actions taken this month on many retail products. Recently introduced products such as our New York BRAND® Hand-Tied Garlic Knots and Sister Schubert’s® Soft Pretzel Rolls should also help sales. Should commodity costs stabilize near current levels, our recent unfavorable cost comparisons will become progressively less pronounced over the remainder of the fiscal year. Key uncertainties are consumer reaction to higher pricing and broad, persistent economic challenges. The company’s path to long-term growth is well supported by our strong brand positioning, product development efforts and solid financial condition.”
Conference Call on the Web
The company’s second quarter conference call is scheduled for this morning, January 26, 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, except as required by law. 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, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 311,786 | $ | 316,238 | $ | 586,302 | $ | 581,289 | ||||||||
| Cost of sales |
241,927 | 237,994 | 461,013 | 444,974 | ||||||||||||
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| Gross margin |
69,859 | 78,244 | 125,289 | 136,315 | ||||||||||||
| Selling, general & administrative expenses |
26,149 | 26,136 | 49,067 | 49,381 | ||||||||||||
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| Operating income |
43,710 | 52,108 | 76,222 | 86,934 | ||||||||||||
| Interest income and other – net |
2,739 | 1,040 | 2,735 | 1,056 | ||||||||||||
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| Income before income taxes |
46,449 | 53,148 | 78,957 | 87,990 | ||||||||||||
| Taxes based on income |
16,076 | 18,285 | 27,326 | 30,360 | ||||||||||||
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| Net income |
$ | 30,373 | $ | 34,863 | $ | 51,631 | $ | 57,630 | ||||||||
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| Net income per common share:(a) |
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| Net income – basic and diluted |
$ | 1.11 | $ | 1.25 | $ | 1.89 | $ | 2.06 | ||||||||
| Cash dividends per common share |
$ | .36 | $ | .33 | $ | .69 | $ | .63 | ||||||||
| Weighted average common shares outstanding: |
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| Basic |
27,206 | 27,758 | 27,248 | 27,886 | ||||||||||||
| Diluted |
27,240 | 27,785 | 27,277 | 27,911 | ||||||||||||
| (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, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| NET SALES |
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| Specialty Foods |
$ | 266,225 | $ | 254,591 | $ | 503,172 | $ | 475,103 | ||||||||
| Glassware and Candles |
45,561 | 61,647 | 83,130 | 106,186 | ||||||||||||
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| $ | 311,786 | $ | 316,238 | $ | 586,302 | $ | 581,289 | |||||||||
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| OPERATING INCOME |
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| Specialty Foods |
$ | 44,750 | $ | 51,388 | $ | 79,949 | $ | 89,361 | ||||||||
| Glassware and Candles |
1,636 | 4,366 | 1,299 | 4,368 | ||||||||||||
| Corporate expenses |
(2,676 | ) | (3,646 | ) | (5,026 | ) | (6,795 | ) | ||||||||
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| $ | 43,710 | $ | 52,108 | $ | 76,222 | $ | 86,934 | |||||||||
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LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
| December 31, | June 30, | |||||||
| 2011 | 2011 | |||||||
| ASSETS |
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| Current assets: |
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| Cash and equivalents |
$ | 162,381 | $ | 132,266 | ||||
| Receivables – net of allowance for doubtful accounts |
84,246 | 63,762 | ||||||
| Total inventories |
93,303 | 111,885 | ||||||
| Deferred income taxes and other current assets |
19,343 | 25,283 | ||||||
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| Total current assets |
359,273 | 333,196 | ||||||
| Net property, plant and equipment |
185,836 | 185,282 | ||||||
| Other assets |
103,626 | 103,611 | ||||||
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| Total assets |
$ | 648,735 | $ | 622,089 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 37,196 | $ | 42,570 | ||||
| Accrued liabilities |
35,944 | 33,586 | ||||||
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| Total current liabilities |
73,140 | 76,156 | ||||||
| Other noncurrent liabilities and deferred income taxes |
32,192 | 28,394 | ||||||
| Shareholders’ equity |
543,403 | 517,539 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 648,735 | $ | 622,089 | ||||
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