LANCASTER COLONY CORPORATION 
COLUMBUS, Ohio, Jan. 26, 2012 /PRNewswire/ -- 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.
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.
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
Gross margin 69,859 78,244 125,289 136,315
Selling, general &
administrative
expenses 26,149 26,136 49,067 49,381
Operating income 43,710 52,108 76,222 86,934
Interest income
and other - net 2,739 1,040 2,735 1,056
Income before
income taxes 46,449 53,148 78,957 87,990
Taxes based on
income 16,076 18,285 27,326 30,360
Net income $30,373 $34,863 $51,631 $57,630
Net income per common
share:(a)
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:
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.
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
Specialty
Foods $266,225 $254,591 $503,172 $475,103
Glassware and
Candles 45,561 61,647 83,130 106,186
$311,786 $316,238 $586,302 $581,289
OPERATING
INCOME
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)
$43,710 $52,108 $76,222 $86,934
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
December
31, June 30,
2011 2011
ASSETS
Current assets:
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
Total current assets 359,273 333,196
Net property, plant and equipment 185,836 185,282
Other assets 103,626 103,611
Total assets $648,735 $622,089
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $37,196 $42,570
Accrued liabilities 35,944 33,586
Total current liabilities 73,140 76,156
Other noncurrent liabilities and
deferred income taxes 32,192 28,394
Shareholders' equity 543,403 517,539
Total liabilities and
shareholders' equity $648,735 $622,089
SOURCE Lancaster Colony Corporation
