-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M8XQ9C3bFpaNbhuCtaTl7YYbbTyC24QS4jZOvap0SkMOswmZw58mjT/PCszzEByP etzYNCt3JUnJwyJHCwIKog== 0000950152-97-000783.txt : 19970221 0000950152-97-000783.hdr.sgml : 19970221 ACCESSION NUMBER: 0000950152-97-000783 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANCASTER COLONY CORP CENTRAL INDEX KEY: 0000057515 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FROZEN & PRESERVED FRUIT, VEG & FOOD SPECIALTIES [2030] IRS NUMBER: 131955943 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04065 FILM NUMBER: 97524460 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 10-Q 1 LANCASTER COLONY 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 0-4065-1 LANCASTER COLONY CORPORATION (Exact name of registrant as specified in its charter) OHIO 13-1955943 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 37 WEST BROAD STREET, COLUMBUS, OHIO 43215 (Address of principal executive offices) (Zip Code) 614-224-7141 (Registrant's telephone number, including area code) NONE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of December 31, 1996, there were approximately 29,450,000 shares of common stock, no par value per share, outstanding. 1 of 10 2 LANCASTER COLONY CORPORATION AND SUBSIDIARIES INDEX
Page No. -------- Part I. Financial Information Consolidated Condensed Balance Sheets - December 31, 1996 and June 30, 1996 3 Consolidated Condensed Statements of Income - Three Months and Six Months Ended December 31, 1996 and 1995 4 Consolidated Condensed Statements of Cash Flows - Six Months Ended December 31, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6 Management's Discussion and Analysis of the Results of Operations and Financial Condition 7-8 Part II. Other Information Item 4 - Submission of Matters to a Vote of Security Holders 8 Item 6 - Exhibits and Reports on Form 8-K 9 Signatures 9 Exhibit 27 - Financial Data Schedule 10
2 of 10 3 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
December 31 June 30 1996 1996 ------------ ------------ (Unaudited) ASSETS Current Assets: Cash and equivalents $ 25,580,000 $ 4,670,000 Receivables - net of allowance for doubtful accounts 113,402,000 105,403,000 Inventories: Raw materials and supplies 42,848,000 33,148,000 Finished goods and work in process 112,740,000 118,447,000 ------------ ------------ Total inventories 155,588,000 151,595,000 Prepaid expenses and other current assets 14,542,000 11,674,000 ------------ ------------ Total current assets 309,112,000 273,342,000 Property, Plant and Equipment - At cost 330,800,000 316,895,000 Less Accumulated Depreciation 182,911,000 177,800,000 ------------ ------------ Property, plant and equipment - net 147,889,000 139,095,000 Goodwill - net of accumulated amortization 20,441,000 20,715,000 Other Assets 3,678,000 2,207,000 ------------ ------------ Total Assets $481,120,000 $435,359,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 545,000 $ 610,000 Accounts payable 42,844,000 34,303,000 Accrued liabilities 45,569,000 34,441,000 ------------ ------------ Total current liabilities 88,958,000 69,354,000 Long-Term Debt - Less current portion 30,825,000 31,230,000 Other Noncurrent Liabilities 7,855,000 7,714,000 Deferred Income Taxes 1,198,000 3,498,000 Shareholders' Equity: Preferred stock - authorized 2,650,000 shares issuable in series; Class A - $1.00 par value, authorized 350,000 shares; Class B and C - no par value, authorized 1,150,000 shares each; outstanding - none Common stock - authorized 35,000,000 shares; issued December 31, 1996 - no par value - 31,198,000 shares; June 30, 1996 - no par value - 31,102,000 shares 41,851,000 38,491,000 Retained earnings 370,539,000 337,153,000 Foreign currency translation adjustment 101,000 75,000 ------------ ------------ Total 412,491,000 375,719,000 Less: Common stock in treasury, at cost December 31, 1996 - 1,748,000 shares; June 30, 1996 - 1,538,000 shares 58,928,000 50,877,000 Amount due from ESOP 1,279,000 1,279,000 ------------ ------------ Total shareholders' equity 352,284,000 323,563,000 ------------ ------------ Total Liabilities and Shareholders' Equity $481,120,000 $435,359,000 ============ ============
See Notes to Consolidated Condensed Financial Statements 3 of 10 4 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended December 31 December 31 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net Sales $ 259,023,000 $ 239,055,000 $ 477,941,000 $ 439,957,000 Cost of Sales 176,733,000 163,434,000 329,306,000 305,017,000 ------------- ------------- ------------- ------------- Gross Margin 82,290,000 75,621,000 148,635,000 134,940,000 Selling, General and Administrative Expenses 40,716,000 37,945,000 76,904,000 71,369,000 ------------- ------------- ------------- ------------- Operating Income 41,574,000 37,676,000 71,731,000 63,571,000 Other Income (Expense): Interest expense (673,000) (843,000) (1,308,000) (1,559,000) Interest income and other - net (194,000) 41,000 (109,000) ------------- ------------- ------------- ------------- Income Before Income Taxes 40,901,000 36,639,000 70,464,000 61,903,000 Taxes Based on Income 15,496,000 14,270,000 26,799,000 24,126,000 ------------- ------------- ------------- ------------- Net Income $ 25,405,000 $ 22,369,000 $ 43,665,000 $ 37,777,000 ============= ============= ============= ============= Net Income Per Common Share $ .86 $ .75 $ 1.48 $ 1.27 Cash Dividends Per Common Share $ .18 $ .17 $ .35 $ .32 Weighted Average Common Shares Outstanding 29,496,000 29,800,000 29,512,000 29,762,000 ============= ============= ============= =============
See Notes to Consolidated Condensed Financial Statements 4 of 10 5 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended December 31 1996 1995 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 43,665,000 $ 37,777,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,453,000 11,987,000 Deferred income taxes and other noncash charges (2,123,000) (1,192,000) Loss on sale of property 51,000 56,000 Changes in operating assets and liabilities: Receivables (7,999,000) (27,613,000) Inventories (3,993,000) 2,189,000 Prepaid expenses and other current assets (2,868,000) (1,280,000) Accounts payable 8,541,000 10,437,000 Accrued liabilities 11,128,000 8,671,000 ------------ ------------ Net cash provided by operating activities 59,855,000 41,032,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Payments on property additions (21,267,000) (20,140,000) Proceeds from sale of property 8,000 1,737,000 Other - net (2,236,000) (205,000) ------------ ------------ Net cash used in investing activities (23,495,000) (18,608,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (8,051,000) (9,911,000) Payment of dividends (10,315,000) (9,510,000) Payments on long-term debt (470,000) (689,000) Common stock issued upon exercise of stock options including related tax benefits 3,360,000 738,000 ------------ ------------ Net cash used in financing activities (15,476,000) (19,372,000) ------------ ------------ Effect of exchange rate changes on cash 26,000 68,000 ------------ ------------ Net change in cash and equivalents 20,910,000 3,120,000 Cash and equivalents at beginning of year 4,670,000 8,239,000 ------------ ------------ Cash and equivalents at end of period $ 25,580,000 $ 11,359,000 ============ ============ SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest $ 1,315,000 $ 1,581,000 ============ ============ Income taxes $ 24,446,000 $ 20,041,000 ============ ============
See Notes to Consolidated Condensed Financial Statements 5 of 10 6 LANCASTER COLONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 1996 AND 1995 (1) The interim consolidated condensed financial statements are unaudited but, in the opinion of management, 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 consolidated condensed financial statements are considered to be of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's annual report on Form 10-K for the year ended June 30, 1996. (2) Net income per common share is computed based on the weighted average number of shares of common stock and common stock equivalents (stock options) outstanding during each period. 6 of 10 7 LANCASTER COLONY CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE PERIODS ENDED DECEMBER 31, 1996 AND 1995 RESULTS OF OPERATIONS Consolidated net sales increased to $477,941,000 and $259,023,000 for the respective six and three month periods ended December 31, 1996, reflecting a nine and eight percent increase over the $439,957,000 and $239,055,000 recorded in the corresponding periods of 1995. Continuing the trend from the first quarter, candle-related products remained a primary contributor to the increased sales in the second quarter. This sales growth was achieved not only through increases in sales to existing customers, but also through the acquisition of new customer accounts during calendar 1996. The Automotive segment's sales improved modestly as a result of increased sales of light truck and van accessories. The Specialty Foods segment achieved increased sales through the continued success of retail produce-related products, the prior year's acquisition of the Cardini brand of upscale salad dressings and through the successful introduction of new products. Consolidated gross margin percentages of 31.1% and 31.8% for the six and three month periods ended December 31, 1996, showed improvement as compared to 30.7% and 31.6% for the corresponding periods of one year ago. The Specialty Foods segment contributed higher margins for both the six and three month periods as a result of modestly higher selling prices, a more favorable shift in the mix of retail product sales and some relief in raw material costs. The Automotive segment's margins were affected by year-to-date improvements associated with increased production efficiencies as well as relief in certain raw material costs. Gross margin percentages within the Glassware and Candles segment declined for both the year-to-date and quarterly periods primarily as a result of production inefficiencies associated with the shutdown of glass melting tanks and product rework believed to be of a nonrecurring nature. Consolidated selling, general and administrative expenses totaled $76,904,000 and $40,716,000 for the respective six and three month periods ended December 31, 1996, representing an eight and seven percent increase from the corresponding periods of 1995. Such increases are primarily attributable to the increased sales volume. Overall, consolidated operating income increased to $71,731,000 and $41,574,000, a 13% and 10% increase over the $63,571,000 and $37,676,000 realized for the respective six and three month periods ended December 31, 1995. Consolidated net income also increased to $43,665,000 and $25,405,000 for the six and three month periods ending December 31, 1996, resulting in a 16% and 14% increase from the prior year's corresponding six and three month period totals of $37,777,000 and $22,369,000. FINANCIAL CONDITION Improved net income and working capital utilization were primarily responsible for cash flows from operating activities improving to $59,855,000 for the six months ended December 31, 1996, as compared to $41,032,000 provided in the corresponding period of fiscal 1996. Net working capital as of December 31, 1996, totaled $220,154,000 as compared to $203,988,000 at June 30, 1996. The working capital ratio, however, decreased slightly to 3.5:1.0 from 3.9:1.0 at June 30. Significant financing activities of the Company during the first six months of fiscal 1997 included the purchase of treasury stock totaling $8,051,000 and the payment of dividends on common stock of $10,315,000. The latter total reflects a dividend payout rate of $.35 per common share through December 31, 1996, as compared to $.32 paid during the corresponding 7 of 10 8 period of a year ago. Management anticipates that cash provided from future operating activities and from the currently available discretionary bank credit lines will be adequate to meet the Company's foreseeable cash requirements over the remainder of fiscal 1997. The Company's total indebtedness at December 31, 1996, continues to be less than 10% of total capitalization as no new long-term indebtedness has been incurred by the Company since fiscal 1992. The Company's return on average shareholder equity for the 1996 calendar year was approximately 25% as compared to approximately 26% for calendar 1995. PART II. OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders The registrant held its annual meeting of the shareholders on November 18, 1996. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934. There were no matters discussed or voted upon at the annual meeting, except for the election of the following three directors whose term will expire in 1999.
Shares Shares Voted Shares Not "For" "Withheld" Voted ----- ---------- ----- Robert L. Fox 26,374,434 217,802 2,845,615 John B. Gerlach, Jr. 26,369,049 223,187 2,845,615 Edward H. Jennings 26,372,980 219,256 2,845,615
As of November 18, 1996, the following individuals also continued to serve as directors of the registrant: Frank W. Batsch Richard R. Murphy, Jr. John B. Gerlach Henry M. O'Neill, Jr. Morris S. Halpern David J. Zuver Robert S. Hamilton 8 of 10 9 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-K - There were no reports filed on Form 8-K for the three months ended December 31, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LANCASTER COLONY CORPORATION Date: February 7, 1997 BY:/S/John B. Gerlach, Jr. --------------------------- ----------------------- JOHN B. GERLACH, JR. President Date: February 7, 1997 BY:/S/John L. Boylan --------------------------- ----------------------- JOHN L. BOYLAN Treasurer, Assistant Secretary and Chief Financial Officer 9 of 10 EX-27 2 EXHIBIT 27
5 1,000 6-MOS JUN-30-1997 DEC-31-1996 25,580 0 116,593 3,191 155,588 309,112 330,800 182,911 481,120 88,958 30,825 41,851 0 0 310,433 481,120 477,941 477,941 329,306 329,306 0 0 1,308 70,464 26,799 43,665 0 0 0 43,665 1.48 0
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