-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, EdlS47TzjZVGlkwPiSGAwTIaj2OR5WjbCB+65doHsf4bMtV+6F+m/L77wckm2bn0 gx38kYRxyoHgzjhTrvOw6w== 0000950152-94-000476.txt : 19940510 0000950152-94-000476.hdr.sgml : 19940510 ACCESSION NUMBER: 0000950152-94-000476 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANCASTER COLONY CORP CENTRAL INDEX KEY: 0000057515 STANDARD INDUSTRIAL CLASSIFICATION: 3060 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: 94526660 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 10-Q 1 LANCASTER COLONY CORP. 10-Q 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 March 31, 1994 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 March 31, 1994, there were 22,656,630 shares of common stock, no par value per share, outstanding. 1 of 9 2 LANCASTER COLONY CORPORATION AND SUBSIDIARIES INDEX
Page No. -------- Part I. Financial Information Consolidated Condensed Balance Sheets - March 31, 1994 and June 30, 1993 3 Consolidated Condensed Statements of Income - Three Months and Nine Months Ended March 31, 1994 and 1993 4 Consolidated Condensed Statements of Cash Flows - Nine Months Ended March 31, 1994 and 1993 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 6 - Exhibits and Reports on Form 8-K 8 Signatures 9
2 of 9 3 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
March 31 June 30 1994 1993 ------------ ------------ (Unaudited) ASSETS Current Assets: Cash and equivalents $ 24,155,000 $ 16,502,000 Receivables 87,535,000 70,844,000 Less allowance for doubtful accounts 3,664,000 2,870,000 ------------ ------------ Receivables - net 83,871,000 67,974,000 Inventories: Raw materials and supplies 27,343,000 22,331,000 Finished goods and work in process 78,024,000 72,900,000 ------------ ------------ Total inventories 105,367,000 95,231,000 Prepaid expenses and other current assets 9,289,000 8,483,000 ------------ ------------ Total current assets 222,682,000 188,190,000 Property, Plant and Equipment - At cost 262,352,000 249,801,000 Less Accumulated Depreciation 164,343,000 151,204,000 ------------ ------------ Property, plant and equipment - net 98,009,000 98,597,000 Other Assets 17,058,000 15,263,000 ------------ ------------ Total Assets $337,749,000 $302,050,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 1,551,000 $ 1,797,000 Accounts payable 33,186,000 26,334,000 Accrued liabilities 36,334,000 33,411,000 ------------ ------------ Total current liabilities 71,071,000 61,542,000 Long-Term Debt - Less current portion 33,501,000 34,586,000 Other Noncurrent Liabilities 8,980,000 8,852,000 Deferred Income Taxes 3,379,000 5,060,000 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 March 31, 1994 - no par value - 22,924,630 shares; June 30, 1993 - no par value - 22,830,680 shares 23,728,000 20,572,000 Retained earnings 211,861,000 179,835,000 Foreign currency translation adjustment 443,000 605,000 ------------ ------------ Total 236,032,000 201,012,000 Less: Common stock in treasury, at cost March 31, 1994 - 268,000 shares; June 30, 1993 - 114,000 shares 10,100,000 3,888,000 Amount due from ESOP 5,114,000 5,114,000 ------------ ------------ Total shareholders' equity 220,818,000 192,010,000 ------------ ------------ Total Liabilities and Shareholders' Equity $337,749,000 $302,050,000 ============ ============ See Notes to Consolidated Condensed Financial Statements
3 of 9 4 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended March 31 March 31 1994 1993 1994 1993 Net Sales $171,492,000 $148,795,000 $537,070,000 $471,870,000 Cost of Sales 117,634,000 104,118,000 366,602,000 323,653,000 ------------ ------------ ------------ ------------ Gross Margin 53,858,000 44,677,000 170,468,000 148,217,000 Selling, General and Administrative Expenses 31,497,000 28,263,000 99,802,000 93,156,000 ------------ ------------ ------------ ------------ Operating Income 22,361,000 16,414,000 70,666,000 55,061,000 Other Income (Expense): Interest expense (700,000) (928,000) (2,196,000) (2,907,000) Interest income and other - net 79,000 19,000 282,000 ------------ ------------ ----------- ------------ Income Before Income Taxes 21,740,000 15,505,000 68,752,000 52,154,000 Taxes Based on Income 8,501,000 5,878,000 26,976,000 19,949,000 ------------ ------------ ------------ ------------ Net Income $ 13,239,000 $ 9,627,000 $ 41,776,000 $ 32,205,000 ============ ============ ============ ============ Net Income Per Common Share $ .58 $ .42 $1.84 $1.41 Cash Dividends Per Common Share $ .15 $ .1275 $ .43 $ .3675 Weighted Average Common Shares Outstanding 22,774,086 22,894,136 22,763,121 22,876,188 ============ ============ ============ ============ See Notes to Consolidated Condensed Financial Statements
4 of 9 5 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended March 31 1994 1993 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $41,776,000 $32,205,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,009,000 16,244,000 Deferred income taxes and other noncash charges (753,000) (1,104,000) Loss (gain) on sale of property (13,000) 54,000 Changes in operating assets and liabilities: Receivables (15,897,000) (8,137,000) Inventories (8,471,000) 3,388,000 Prepaid expenses and other current assets (806,000) (1,312,000) Accounts payable 6,852,000 3,021,000 Accrued liabilities 2,923,000 (2,093,000) ----------- ----------- Net cash provided by operating activities 43,620,000 42,266,000 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Payments on property additions (15,460,000) (13,861,000) Acquisition (5,438,000) Proceeds from sale of property 144,000 30,000 Other - net (1,072,000) (1,004,000) ----------- ----------- Net cash used in investing activities (21,826,000) (14,835,000) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of dividends (9,750,000) (8,379,000) Payments on long-term debt (1,331,000) (5,878,000) Purchase of treasury stock (6,212,000) Common stock issued upon exercise of stock options including related tax benefits 3,156,000 380,000 Payments on short-term bank loans (9,500,000) ----------- ----------- Net cash used in financing activities (14,137,000) (23,377,000) ----------- ----------- Effect of exchange rate changes on cash (4,000) (93,000) ----------- ----------- Net change in cash and equivalents 7,653,000 3,961,000 Cash and equivalents at beginning of year 16,502,000 7,418,000 ----------- ----------- Cash and equivalents at end of period $24,155,000 $11,379,000 =========== =========== SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest $ 2,708,000 $ 3,433,000 =========== =========== Income taxes $30,811,000 $26,774,000 =========== =========== See Notes to Consolidated Condensed Financial Statements
5 of 9 6 LANCASTER COLONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED MARCH 31, 1994 AND 1993 (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. 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, 1993. (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. (3) As approved by its shareholders, the Company has an incentive stock option plan by which 2,718,751 common shares may be issued under options granted pursuant to terms of the plan. As of March 31, 1994, employee options for 1,975,169 shares have been granted and 1,755,497 have been exercised. (4) In July 1993, the Company acquired substantially all of the net operating assets and customer base of Romanoff International, a specialty food marketer of caviar and other specialty food products, for cash of approximately $5,438,000. Its results of operations have been included in the accompanying consolidated condensed financial statements since the date of acquisition and are immaterial in relation to the consolidated totals. 6 of 9 7 LANCASTER COLONY CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE PERIODS ENDED MARCH 31, 1994 AND 1993 RESULTS OF OPERATIONS The Company's consolidated net sales for the nine months ended March 31, 1994 totalled $537,070,000 which represented a 14% increase from the prior year's comparable sales total of $471,870,000. For the three months ended March 31, 1994, net sales increased 15% to $171,492,000 from the comparable 1993 total of $148,795,000. These increases reflect growth achieved within each of the Company's three operating segments. The net sales of specialty foods products grew primarily as a result of increased unit volume, although selective selling price increases have been implemented to at least partially offset the impact of significantly higher costs of soybean oil, a primary ingredient in several product lines of this segment. The Automotive segment has benefitted from the ongoing recovery in the sales of new vehicles, particularly that of light trucks. This cyclical improvement contributed to greater demand from original equipment manufacturers for automotive floormats, as well as higher aftermarket demand for light truck and van accessories. Significant increases in the sales of candles has led the growth in the Glassware and Candles segment. The 1994 consolidated gross margin percentages increased slightly compared to the corresponding periods of 1993. This improvement has been assisted by volume-driven efficiencies achieved within the Automotive and Glassware and Candles segments. Gross margins, however, within the Specialty Foods segment have been adversely affected by the higher commodity costs mentioned above. The Company anticipates that recently implemented increases in sales prices will help improve this segment's gross margins over the remainder of the fiscal year. As a percentage of net sales, operating expenses totalled 19% and 18% for the respective nine and three month periods ended March 31, 1994 compared to 20% and 19% of the corresponding periods of fiscal 1993. In a year with significant sales increases, this decline is affected by the semivariable nature of these expenses. The reduction in interest expense during the 1994 periods is largely attributable to lower average borrowings outstanding. As a result of the above factors, income before income taxes increased by 32% to $68,752,000 for the nine months ended March 31, 1994 and by 40% to $21,740,000 for the fiscal 1994 third quarter. The Company's overall effective tax rate for fiscal 1994 was effected by the August, 1993 enactment of the Omnibus Budget Reconciliation Act of 1993. This legislation increased the Company's Federal statutory rate from 34% to 35% during the current year and for future periods. Additionally, a charge of $400,000 was provided in August for the cumulative effect of the Act's retroactive provisions to July 1, 1993. The foregoing factors resulted in net income increasing by 30% and 38% to $41,776,000 and $13,239,000 for the respective nine and three month periods of fiscal 1994 compared to the 1993 comparable totals of $32,205,000 and $9,627,000. 7 of 9 8 FINANCIAL CONDITION Since June 30, the Company's net working capital has increased by 20% from $126,648,000 to $151,611,000 with the consolidated current ratio remaining essentially unchanged at 3.1:1.0. The Company's higher sales volume during fiscal 1994 has resulted in generally corresponding increased levels of accounts receivable and inventory. The March balance of accounts receivables was also affected by the relatively greater level of sales occurring in March, 1994 compared to June, 1993. The overall level of profitability contributed to the increase in cash and equivalents from $16,502,000 at June 30 to $24,155,000 at March 31. Net cash provided by operating activities for the nine months ended March 31, 1994 totalled $43,620,000 compared to $42,266,000 during the corresponding period of fiscal 1993. Significant nonoperating activities occurring during the current year included the expenditure of $5,438,000 in August for the operating assets of a specialty foods marketer, the repurchase of $6,212,000 of the Company's common stock and an increase in total dividend payments resulting from a higher effective declared dividend rate. The Company continues to maintain significant discretionary credit lines with commercial banks as a contingent source of short-term financing for future working capital or other temporary cash requirements. However, the overall proportion of debt to capitalization, including both short- and long-term debt within total capitalization, has declined from 16% at June 30, 1993 to 14% at March 31. PART II. OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (b) Reports on Form 8-K - There were no reports filed on Form 8-K for the three months ended March 31, 1994. 8 of 9 9 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: May 6, 1994 BY:/S/John B. Gerlach --------------------------- --------------------------- JOHN B. GERLACH President and Chief Financial Officer Date: May 6, 1994 BY:/S/John L. Boylan --------------------------- --------------------------- JOHN L. BOYLAN Treasurer and Assistant Secretary 9 of 9 -----END PRIVACY-ENHANCED MESSAGE-----