10-Q 1 l96928ae10vq.txt LANCASTER COLONY * FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549-1004 ------------ FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002 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 incorporation or organization) Identification No.) 37 WEST BROAD STREET 43215 COLUMBUS, OHIO (Zip Code) (Address of principal executive offices) 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 September 30, 2002, there were approximately 36,507,000 shares of Common Stock, no par value per share, outstanding. LANCASTER COLONY CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets - September 30, 2002 and June 30, 2002 Condensed Consolidated Statements of Income - Three Months Ended September 30, 2002 and 2001 Condensed Consolidated Statements of Cash Flows - Three Months Ended September 30, 2002 and 2001 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of the Results of Operations and Financial Condition Item 4. Controls and Procedures PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Signatures Certifications Index to Exhibits 2 PART I - FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30 JUNE 30 2002 2002 -------------- ------------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash and equivalents.......................................................... $ 89,556,000 $ 83,378,000 Receivables - net of allowance for doubtful accounts.......................... 109,424,000 109,350,000 Inventories: Raw materials and supplies.................................................. 50,962,000 43,670,000 Finished goods and work in process.......................................... 111,957,000 104,581,000 ------------- ------------- Total inventories......................................................... 162,919,000 148,251,000 Prepaid expenses and other current assets..................................... 27,211,000 25,121,000 ------------- ------------- Total current assets...................................................... 389,110,000 366,100,000 PROPERTY, PLANT AND EQUIPMENT - at cost.......................................... 459,808,000 453,671,000 Less Accumulated Depreciation................................................. 294,802,000 287,728,000 ------------- ------------- Property, plant and equipment - net....................................... 165,006,000 165,943,000 GOODWILL - net of accumulated amortization....................................... 72,212,000 72,212,000 INTANGIBLE ASSETS................................................................ 458,000 465,000 OTHER ASSETS..................................................................... 13,615,000 13,985,000 ------------- ------------- TOTAL ASSETS..................................................................... $ 640,401,000 $ 618,705,000 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable.............................................................. $ 47,880,000 $ 43,258,000 Accrued liabilities........................................................... 52,370,000 46,046,000 ------------- ------------- Total current liabilities................................................. 100,250,000 89,304,000 OTHER NONCURRENT LIABILITIES..................................................... 16,873,000 15,890,000 DEFERRED INCOME TAXES............................................................ 12,336,000 12,234,000 SHAREHOLDERS' EQUITY: Preferred stock - authorized 3,050,000 shares issuable in series; Class A - $1.00 par value, authorized 750,000 shares; Class B and C - no par value, authorized 1,150,000 shares each; outstanding - none Common stock - authorized 75,000,000 shares; issued September 30, 2002 - no par value - 47,558,400 shares; June 30, 2002 - no par value - 47,484,253 shares........................................................... 64,414,000 61,919,000 Retained earnings............................................................. 766,508,000 752,534,000 Accumulated other comprehensive income........................................ (2,745,000) (2,752,000) ------------- ------------- Total..................................................................... 828,177,000 811,701,000 Common stock in treasury, at cost September 30, 2002 - 11,051,014 shares; June 30, 2002 - 10,886,014 shares........................ (317,235,000) (310,424,000) ------------- ------------- Total shareholders' equity................................................ 510,942,000 501,277,000 ------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY....................................... $ 640,401,000 $ 618,705,000 ============= =============
See Notes to Condensed Consolidated Financial Statements 3 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30 2002 2001 ------------- -------------- NET SALES..................................... $ 275,821,000 $ 264,929,000 COST OF SALES................................. 218,135,000 205,612,000 ------------- ------------- GROSS MARGIN.................................. 57,686,000 59,317,000 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.. 24,886,000 25,664,000 ------------- ------------- OPERATING INCOME.............................. 32,800,000 33,653,000 OTHER INCOME (EXPENSE): Interest Expense........................... (54,000) Interest Income and Other - Net............ 397,000 (584,000) ------------- ------------- INCOME BEFORE INCOME TAXES.................... 33,197,000 33,015,000 TAXES BASED ON INCOME......................... 12,641,000 12,674,000 ------------- ------------- NET INCOME.................................... $ 20,556,000 $ 20,341,000 ============= ============= NET INCOME PER COMMON SHARE: Basic and Diluted.......................... $ .56 $ .55 CASH DIVIDENDS PER COMMON SHARE............... $ .18 $ .17 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic...................................... 36,562,000 37,181,000 Diluted.................................... 36,629,000 37,230,000
See Notes to Condensed Consolidated Financial Statements 4 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income.............................................. $ 20,556,000 $ 20,341,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization......................... 8,143,000 8,741,000 Provision for losses on accounts receivable........... 195,000 840,000 Deferred income taxes and other noncash charges....... 1,085,000 (1,296,000) (Gain) loss on sale of property....................... (4,000) 110,000 Changes in operating assets and liabilities: Receivables......................................... (269,000) (21,571,000) Inventories......................................... (14,668,000) 1,541,000 Prepaid expenses and other current assets........... (2,090,000) (1,554,000) Accounts payable.................................... 4,622,000 4,368,000 Accrued liabilities................................. 6,664,000 17,988,000 ------------ ------------ Net cash provided by operating activities............. 24,234,000 29,508,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Payments on property additions.......................... (6,469,000) (4,400,000) Proceeds from sale of property.......................... 5,000 3,000 Other - net............................................. (361,000) (222,000) ------------ ------------ Net cash used in investing activities................. (6,825,000) (4,619,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock.............................. (6,811,000) (7,605,000) Payment of dividends.................................... (6,582,000) (6,318,000) Net change in short-term bank loans..................... (4,500,000) Payments on long-term debt.............................. (1,700,000) Common stock issued upon exercise of stock options...... 2,155,000 1,364,000 ------------ ------------ Net cash used in financing activities................. (11,238,000) (18,759,000) ------------ ------------ Effect of exchange rate changes on cash.................... 7,000 10,000 ------------ ------------ Net change in cash and equivalents......................... 6,178,000 6,140,000 Cash and equivalents at beginning of year.................. 83,378,000 4,873,000 ------------ ------------ Cash and equivalents at end of period...................... $ 89,556,000 $ 11,013,000 ============ ============ SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest............................................ $ -- $ 58,000 ============ ============ Income taxes........................................ $ 1,451,000 $ 958,000 ============ ============
See Notes to Condensed Consolidated Financial Statements 5 LANCASTER COLONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) The interim condensed consolidated 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 condensed consolidated 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, 2002. (2) Comparative first quarter unaudited results by segment are as follows: THREE MONTHS ENDED SEPTEMBER 30 (DOLLARS IN THOUSANDS) 2002 2001 ---------------------- --------- ---------- NET SALES Specialty Foods................... $ 147,633 $ 135,820 Glassware and Candles............. 68,210 78,657 Automotive........................ 59,978 50,452 --------- --------- Total........................... $ 275,821 $ 264,929 ========= ========= OPERATING INCOME Specialty Foods................... $ 26,276 $ 28,300 Glassware and Candles............. 4,077 5,396 Automotive........................ 3,903 1,500 Corporate expenses................ (1,456) (1,543) --------- --------- Total........................... $ 32,800 $ 33,653 ========= ========= (3) Effective July 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 specifies that, among other things, goodwill and intangible assets with an indefinite useful life will no longer be amortized. Thus, in accordance with SFAS No. 142, goodwill is no longer being amortized. Intangible assets with lives restricted by contractual, legal or other means will continue to be amortized over their useful lives. SFAS No. 142 also requires goodwill to be tested for impairment on at least an annual basis and written down to fair value if considered impaired. Accordingly, management has completed its initial asset impairment assessment and such analysis indicated that there is no impairment. The following table summarizes the Company's identifiable intangible assets as of September 30, 2002 and June 30, 2002:
(DOLLARS IN THOUSANDS) SEPTEMBER 30, 2002 JUNE 30, 2002 --------------------- ----------------------- ----------------------- GROSS GROSS INTANGIBLE ASSETS CARRYING ACCUMULATED CARRYING ACCUMULATED SUBJECT TO AMORTIZATION AMOUNT AMORTIZATION AMOUNT AMORTIZATION ----------------------- -------- ------------ -------- ------------ Specialty Foods - Trademarks............. $350 $ 85 $350 $ 83 Glassware & Candles - Customer Lists..... 250 57 250 52 ---- ---- ---- ---- Total................................. $600 $142 $600 $135 ==== ==== ==== ====
Amortization expense relating to these assets was approximately $7,000 and $30,000 for the quarter ended September 30, 2002 and the year ended June 30, 2002, respectively. The amortization expense is estimated to be approximately $30,000 for each of the five fiscal years to end June 30, 2003, 2004, 2005, 2006 and 2007. Goodwill attributable to the Specialty Foods and Automotive segments is $71.2 million and $1 million, respectively. 6 The following is a reconciliation assuming goodwill and other intangible assets had been accounted for in accordance with the provisions of SFAS No. 142 in the three months ended September 30, 2001: THREE MONTHS ENDED SEPTEMBER 30 (DOLLARS IN THOUSANDS) 2002 2001 ---------------------- ------- ------- Reported Net Income.................................. $20,556 $20,341 Add back amortization of goodwill, net of taxes...... 624 ------- ------- Adjusted Net Income.................................. $20,556 $20,965 ======= ======= Reported Basic and Diluted Earnings Per Share........ $ .56 $ .55 Adjusted Basic and Diluted Earnings Per Share........ $ .56 $ .56 (4) Effective July 1, 2002, the Company adopted the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" and SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets to be held and used, to be disposed of other than by sale, and to be disposed of by sale. SFAS No. 145 amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. The adoption of these Statements did not have a material impact on the Company's results of operations or financial condition. (5) In November 2002, the Company announced that the glass manufacturing operations of its Indiana Glass Company facility in Dunkirk, Indiana would be consolidated over the next several months into that of the Indiana Glass facility located in Sapulpa, Oklahoma. This action is expected to result in a substantial improvement in overall capacity utilization, and the Sapulpa facility will gain the capability to manufacture pressed glassware. The number of jobs to be adversely affected at the Dunkirk facility is approximately 240. Warehousing and certain other ancillary functions will continue to be maintained at Dunkirk. In connection with this consolidation, it is anticipated that a pretax charge for restructuring somewhat in excess of $4 million, or approximately $.08 per share after taxes, will be recorded against earnings of the quarter to end December 31, 2002. The accounting for this restructuring will be in accordance with Emerging Issues Task Force No. 94-3. Of this charge, approximately $3 million is expected to be associated with the write-down of property, plant and equipment expected to no longer be of use as a result of this manufacturing consolidation. The manufacturing of pressed glass is expected to begin in Sapulpa during the quarter ended March 31, 2003. Transitional start-up costs associated with this relocated production may be significant and could persist through the balance of the current fiscal year. Accordingly, it is anticipated that the benefits of this restructuring will not become fully evident until the fiscal year beginning July 1, 2003. (6) Certain prior year amounts have been reclassified to conform with the current year presentation. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION LANCASTER COLONY CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30 (DOLLARS IN THOUSANDS) 2002 2001 ---------------------- -------- -------- NET SALES Specialty Foods.................. $147,633 $135,820 Glassware and Candles............ 68,210 78,657 Automotive....................... 59,978 50,452 -------- -------- Total.......................... $275,821 $264,929 ======== ======== As reflected above, consolidated net sales for the three months ended September 30, 2002 reached a first quarter record total of $275,821,000, which is a 4% increase over the $264,929,000 for the three months ended September 30, 2001. The Specialty Foods segment contributed the most growth in dollars as such sales totaled $147,633,000, a 9% increase over the comparable fiscal 2002 total of $135,820,000. This segment's increased sales were derived from internally generated growth, primarily through sauces and dressings sold to large national restaurant accounts, and also from greater sales of frozen bread products into the retail channel. The Automotive segment's sales totaled $59,978,000, a 19% increase from the prior year's first quarter total of $50,452,000. Increased sales of aluminum light truck accessories to original equipment manufacturers led this improvement. Sales of the Glassware and Candles segment totaled $68,210,000, a 13% decline from sales levels that totaled $78,657,000 a year ago. This decline is primarily attributable to lower sales of candles. Factors influencing this decline include the extent of competitive market conditions, the prior year's quarter containing a large placement of private-label candles at a large mass merchandiser and generally unsettled economic conditions combined with lackluster consumer demand for candles. As a percentage of sales, the Company's consolidated gross margins for the three months ended September 30, 2002 totaled 20.9% compared to 22.4% achieved during the comparable period of 2001. Margins within the Specialty Foods segment declined as influenced by factors involving a less favorable sales mix, somewhat higher promotional costs for frozen breads and increased overhead costs in certain dressing operations. Gross margins of the Glassware and Candles segment also declined as affected by a less favorable sales mix, competitive pricing conditions and less fixed cost absorption on lower manufacturing levels. Despite pricing pressures impacting many of its product lines, margins in the Automotive segment improved due to the implementation of manufacturing cost reduction initiatives and some moderation in material costs. Consolidated selling, general and administrative costs of $24,886,000 for the three months ended September 30, 2002 decreased 3% from the $25,664,000 incurred for the three months ended September 30, 2001 and declined as a percentage of sales from 9.7% to 9.0%. Contributing to this decrease were changes in sales mix and a lower provision for bad debts. The foregoing factors contributed to consolidated operating income totaling $32,800,000 for the three months ended September 30, 2002, a decrease of 3% from the corresponding fiscal 2002 total of $33,653,000. By segment, the Company's operating income can be summarized as follows: THREE MONTHS ENDED SEPTEMBER 30 (DOLLARS IN THOUSANDS) 2002 2001 ---------------------- -------- -------- OPERATING INCOME Specialty Foods.................. $ 26,276 $ 28,300 Glassware and Candles............ 4,077 5,396 Automotive....................... 3,903 1,500 Corporate expenses............... (1,456) (1,543) -------- -------- Total.......................... $ 32,800 $ 33,653 ======== ======== 8 With the effective income tax rate of 38.1% for the quarter ended September 30, 2002 being slightly lower than the 38.4% of the comparable period of 2001, net income of $20,556,000 was essentially even with the preceding year's net income for the quarter of $20,341,000. Earnings per share for the fiscal 2003 quarter was influenced by the Company's share repurchase program and totaled $.56 per share on a basic and diluted basis compared to $.55 recorded in the prior year. FINANCIAL CONDITION For the three months ended September 30, 2002, net cash provided by operating activities totaled $24,234,000 which compares to $29,508,000 provided in the comparable period of 2001. This decrease primarily results from relative changes in working capital components. Total working capital at September 30, 2002 of $288,860,000 increased by $12,064,000 over the $276,796,000 present this past June 30. In particular, inventories in the current year's quarter increased $14,668,000 as the result of seasonal builds of candles and certain food products. Accrued liabilities also increased by $6,324,000 since June 30 primarily as a result of an increase in accruals for corporate income taxes. Significant investment activities conducted during the three months ended September 30, 2002 included $6,469,000 expended for payments on property additions. Financing activities of note consisted of $6,811,000 expended for the purchase of treasury stock and $6,582,000 related to the payment of dividends. Approximately 1,566,000 shares remain authorized for future buyback at September 30, 2002. The dividends paid during the current quarter increased approximately 4% due to the effects a 6% increase in the stated dividend rate being somewhat offset by the extent of share repurchases. Management believes that cash provided from operations and the currently available bank credit arrangements should be adequate to meet the Company's foreseeable cash requirements over the remainder of fiscal 2003. In November 2002, the Company announced that the glass manufacturing operations of its Indiana Glass Company facility in Dunkirk, Indiana would be consolidated over the next several months into that of the Indiana Glass facility located in Sapulpa, Oklahoma. This action is expected to result in a substantial improvement in overall capacity utilization, and the Sapulpa facility will gain the capability to manufacture pressed glassware. The number of jobs to be adversely affected at the Dunkirk facility is approximately 240. Warehousing and certain other ancillary functions will continue to be maintained at Dunkirk. In connection with this consolidation, it is anticipated that a pretax charge for restructuring somewhat in excess of $4 million, or approximately $.08 per share after taxes, will be recorded against earnings of the quarter to end December 31, 2002. The accounting for this restructuring will be in accordance with Emerging Issues Task Force No. 94-3. Of this charge, approximately $3 million is expected to be associated with the write-down of property, plant and equipment expected to no longer be of use as a result of this manufacturing consolidation. The manufacturing of pressed glass is expected to begin in Sapulpa during the quarter ended March 31, 2003. Transitional start-up costs associated with this relocated production may be significant and could persist through the balance of the current fiscal year. Accordingly, it is anticipated that the benefits of this restructuring will not become fully evident until the fiscal year beginning July 1, 2003. There have been no changes in critical accounting policies from those disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2002. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Form 10-Q contains forward-looking statements related to future growth and earnings opportunities. Such statements are based upon certain assumptions and assessments made by management of the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. Actual results may differ as a result of factors over which the Company has no control including the strength of the economy, slower than anticipated sales growth, the extent of operational efficiencies achieved, the success of new product introductions, price and product competition, and increases in raw materials costs. Management believes these forward-looking statements to be reasonable; however, undue reliance should not be placed on such statements, which are based on current expectations. The Company undertakes no obligation to publicly update such forward-looking statements. More detailed statements regarding significant events which could affect the Company's financial results are included in the Company's Form 10-K filed with the Securities and Exchange Commission. 9 ITEM 4. CONTROLS AND PROCEDURES The Company's Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation within 90 days prior to the filing date of this report, that the Company's disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-14(c) and 15d-14(c)) are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - See Index to Exhibits following Certifications. (b) Reports on Form 8-K - There were no reports filed on Form 8-K for the three months ended September 30, 2002. 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 (REGISTRANT) Date: November 12, 2002 By: /s/JOHN B. GERLACH, JR. ---------------------- -------------------------------------- John B. Gerlach, Jr. Chairman, Chief Executive Officer, President and Director Date: November 12, 2002 By: /s/JOHN L. BOYLAN ---------------------- -------------------------------------- John L. Boylan Treasurer, Vice President, Assistant Secretary and Chief Financial Officer (Principal Financial and Accounting Officer) 10 CERTIFICATION BY CHIEF EXECUTIVE OFFICER I, John B. Gerlach, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Lancaster Colony Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 By: /s/JOHN B. GERLACH, JR. ----------------------- John B. Gerlach, Jr. Chief Executive Officer 11 CERTIFICATION BY CHIEF FINANCIAL OFFICER I, John L. Boylan, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Lancaster Colony Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 By: /s/JOHN L. BOYLAN ----------------- John L. Boylan Chief Financial Officer 12 LANCASTER COLONY CORPORATION AND SUBSIDIARIES FORM 10-Q SEPTEMBER 30, 2002 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION LOCATED AT ------ ----------- ---------- 99.1 Certification of CEO under Section 906 of the Sarbanes-Oxley Act of 2002........ Filed herewith 99.2 Certification of CFO under Section 906 of the Sarbanes-Oxley Act of 2002........ Filed herewith
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