Summary Of Significant Accounting Policies

9 Months Ended

Mar. 31, 2023

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Lancaster Colony Corporation and our wholly-owned subsidiaries, collectively referred to as “we,” “us,” “our,” “registrant” or the “Company” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. Intercompany transactions and accounts have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our 2022 Annual Report on Form 10-K. Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example, 2023 refers to fiscal 2023, which is the period from July 1, 2022 to June 30, 2023.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, except for those acquired as part of a business combination, which are recorded at fair value at the time of purchase. We use the straight-line method of computing depreciation for financial reporting purposes based on the estimated useful lives of the corresponding assets. Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows:


	March 31,
	2023		2022
Construction in progress in Accounts Payable	$	9,281	$	21,256

In the three months ended March 31, 2022, we recorded an impairment charge of $6.8 million for certain property, plant and equipment related to the Bantam Bagels, LLC (“Bantam”) business. This charge resulted from our decision to explore strategic alternatives for this business, which triggered impairment testing, and represented the excess of the carrying value over the fair value. The fair value was based on estimated selling prices for these assets, which represented a Level 3 measurement within the fair value hierarchy. The impairment charge was reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature.

Accrued Compensation and Employee Benefits

Accrued compensation and employee benefits included in Accrued Liabilities was $27.2 million and $16.3 million at March 31, 2023 and June 30, 2022, respectively.

Accrued Distribution

Accrued distribution included in Accrued Liabilities was $8.4 million and $11.9 million at March 31, 2023 and June 30, 2022, respectively.

Earnings Per Share

Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock, stock-settled stock appreciation rights and performance units) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock, stock-settled stock appreciation rights and performance units.

Basic and diluted net income per common share were calculated as follows:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Net income (loss)	$	24,555	$	(4,483)	$	102,120	$	60,542
Net income available to participating securities	(43)		(52)		(246)		(168)
Net income (loss) available to common shareholders	$	24,512	$	(4,535)	$	101,874	$	60,374

Weighted average common shares outstanding – basic	27,465		27,442		27,462		27,448
Incremental share effect from:
Nonparticipating restricted stock	1		—		2		3
Stock-settled stock appreciation rights (1)	19		—		12		26
Performance units	2		—		3		1
Weighted average common shares outstanding – diluted	27,487		27,442		27,479		27,478

Net income (loss) per common share – basic and diluted	$	0.89	$	(0.17)	$	3.71	$	2.20

(1)Excludes the impact of the following weighted average stock-settled stock appreciation rights outstanding with an antidilutive effect: 0.3 million for the three months ended March 31, 2022; and 0.1 million and 0.2 million for the nine months ended March 31, 2023 and 2022, respectively.

Accumulated Other Comprehensive Loss

The following table presents the amounts reclassified out of accumulated other comprehensive loss by component:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Accumulated other comprehensive loss at beginning of period	$	(10,982)	$	(8,170)	$	(11,172)	$	(8,253)
Defined Benefit Pension Plan Items:
Amortization of unrecognized net loss	181		107		544		321
Postretirement Benefit Plan Items:
Amortization of unrecognized net gain	(11)		(6)		(34)		(20)
Amortization of prior service credit	(45)		(45)		(136)		(136)
Total other comprehensive income, before tax	125		56		374		165
Total tax expense	(28)		(13)		(87)		(39)
Other comprehensive income, net of tax	97		43		287		126

Accumulated other comprehensive loss at end of period	$	(10,885)	$	(8,127)	$	(10,885)	$	(8,127)

Significant Accounting Policies

There were no changes to our Significant Accounting Policies from those disclosed in our 2022 Annual Report on Form 10-K.

Recent Accounting Standards

There are no recently issued or adopted accounting standards that will impact our consolidated financial statements.