EX-99.1 2 c07232exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(LETTERHEAD)
     
FOR IMMEDIATE RELEASE
  SYMBOL: LANC
Thursday, October 28, 2010
  TRADED: Nasdaq
LANCASTER COLONY REPORTS FIRST QUARTER FISCAL 2011 RESULTS
COLUMBUS, Ohio, Oct. 28 — Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the first fiscal quarter ended September 30, 2010:
•   Net sales reached $265 million, up four percent from first quarter sales of $254 million last year.
•   Specialty Foods net sales of $220.5 million were up two percent above the year-ago level, reflecting an increase in foodservice sales.
•   Glassware and Candles sales increased 18 percent from the year-ago quarter to $44.5 million, primarily reflecting higher unit volume.
•   Net income of $22,767,000, or $.81 per diluted share, while the company’s second highest totals for a first quarter, decreased from the prior-year record of $28,405,000, or $1.01 per diluted share. The latest quarter’s results were affected by higher material and food-related marketing costs. In the prior year, the approximately $0.9 million cost of consolidating food manufacturing facilities was largely offset by income from the favorable resolution of previously-reserved state tax matters.
•   The cash dividend was continued at the higher rate set in November 2009. The company’s debt-free balance sheet showed $87.4 million in cash at September 30, 2010.
Chairman and CEO John B. Gerlach, Jr. said, “While we posted higher first quarter sales, increased material and other costs challenged our margins when comparing to record-high net income a year ago.”
Specialty Foods sales increased in the foodservice channel on expanded volumes associated with new customer programs, despite somewhat lower pricing. Overall retail sales declined by less than one percent, with growth achieved in some non-frozen lines largely offset by softness within the frozen garlic bread category. Operating income of $38.0 million declined 12 percent. The segment’s 17.2 percent operating margin reflected a less favorable sales mix and higher ingredient and packaging costs, which impacted margins by approximately one percent of segment net sales. Margins were also affected by greater investments in consumer-directed marketing and increased freight costs.
First quarter candle sales increased due to the addition of new accounts and solid consumer takeaway of the company’s high-quality, value-priced candles. Segment operating income was about breakeven and declined by approximately $1.7 million, primarily reflecting higher wax prices, which impacted gross margin by over $2 million.
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PAGE 2 / LANCASTER COLONY REPORTS FIRST QUARTER FISCAL 2011 RESULTS
“We are encouraged,” Mr. Gerlach said, “by the early customer reception of our retail food products that are currently being introduced into grocery produce departments. Marzetti® Otria™ Greek yogurt-based veggie dips began shipping in the first quarter. In the second quarter we began shipping Marzetti® Simply Dressed™ refrigerated salad dressings, which address the current consumer nutritional/wellness focus on natural, preservative-free foods. We expect to see modest candle sales growth in the second quarter. While we have successfully implemented price increases on a limited basis, we anticipate that margins will continue to see pressure from higher input costs. The weak economic environment also leaves consumer spending uncertain during our current second fiscal quarter, which is a seasonally important contributor to our full-year results. With our strong balance sheet, we are well-positioned to support future growth.”
Conference Call on the Web
The company’s first quarter conference call is scheduled for this morning, October 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.
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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 FIRST QUARTER FISCAL 2011 RESULTS
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
                 
    Three Months Ended  
    September 30,  
    2010     2009  
Net sales
   $ 265,051     $ 254,160  
 
                
Cost of sales
     206,980       190,453  
 
            
 
                
Gross margin
     58,071       63,707  
 
                
Selling, general & administrative expenses
     23,245       20,468  
 
                
Restructuring and impairment charges
     —       830  
 
            
 
                
Operating income
     34,826       42,409  
 
                
Interest income and other — net
     16       25  
 
            
 
                
Income before income taxes
     34,842       42,434  
 
                
Taxes based on income
     12,075       14,029  
 
            
 
                
Net income
   $ 22,767     $ 28,405  
 
            
 
                
Net income per common share: (a)
                
 
                
Net income — basic and diluted
   $ .81     $ 1.01  
 
                
Cash dividends per common share
   $ .30     $ .285  
 
                
Weighted average common shares outstanding:
                
Basic
     28,014       28,081  
Diluted
     28,037       28,115  
     
(a)   Based on the weighted average number of shares outstanding during each period.
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PAGE 4 / LANCASTER COLONY REPORTS FIRST QUARTER FISCAL 2011 RESULTS
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)
                 
    Three Months Ended  
    September 30,  
    2010     2009  
NET SALES
                
Specialty Foods
   $ 220,512     $ 216,341  
Glassware and Candles
     44,539       37,819  
 
            
 
   $ 265,051     $ 254,160  
 
            
OPERATING INCOME
                
Specialty Foods
   $ 37,973     $ 43,152  
Glassware and Candles
     2       1,671  
Corporate expenses
     (3,149 )     (2,414 )
 
            
 
   $ 34,826     $ 42,409  
 
            
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
                 
    September 30,     June 30,  
    2010     2010  
 
                
ASSETS
                
Current assets:
                
Cash and equivalents
   $ 87,430     $ 100,890  
Receivables — net of allowance for doubtful accounts
     82,927       67,766  
Total inventories
     131,258       121,509  
Deferred income taxes and other current assets
     25,814       27,234  
 
            
Total current assets
     327,429       317,399  
Net property, plant and equipment
     168,802       166,097  
Other assets
     102,010       102,957  
 
            
Total assets
   $ 598,241     $ 586,453  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 45,233     $ 41,904  
Accrued liabilities
     38,969       36,049  
 
            
Total current liabilities
     84,202       77,953  
Other noncurrent liabilities and deferred income taxes
     24,829       23,592  
Shareholders’ equity
     489,210       484,908  
 
            
Total liabilities and shareholders’ equity
   $ 598,241     $ 586,453  
 
            
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