-----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, WpiSg3csQapLp0Y00uarPKZXvp2l92+2bawNbOlcBb368Waof/OvlNkyV5Srd4a/ INojMbBPxH51xOSsAWQBww== 0000950152-95-000922.txt : 19950512 0000950152-95-000922.hdr.sgml : 19950512 ACCESSION NUMBER: 0000950152-95-000922 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANCASTER COLONY CORP CENTRAL INDEX KEY: 0000057515 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [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: 95536550 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 10-Q 1 LANCASTER COLONY CORPORATION 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, 1995 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, 1995, there were 29,831,000 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, 1995 and June 30, 1994 3 Consolidated Condensed Statements of Income - Three Months and Nine Months Ended March 31, 1995 and 1994 4 Consolidated Condensed Statements of Cash Flows - Nine Months Ended March 31, 1995 and 1994 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 8 Exhibit 27 - Financial Data Schedule 9 2 of 9 3 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
March 31 June 30 1995 1994 ------------ ------------ (Unaudited) ASSETS Current Assets: Cash and equivalents $ 13,816,000 $ 30,423,000 Receivables 99,329,000 83,076,000 Less allowance for doubtful accounts 3,197,000 2,339,000 ------------ ------------ Receivables - net 96,132,000 80,737,000 Inventories: Raw materials and supplies 37,767,000 27,614,000 Finished goods and work in process 97,439,000 90,034,000 ------------ ------------ Total inventories 135,206,000 117,648,000 Prepaid expenses and other current assets 12,251,000 8,995,000 ------------ ------------ Total current assets 257,405,000 237,803,000 Property, Plant and Equipment - At cost 276,918,000 264,697,000 Less Accumulated Depreciation 169,328,000 163,127,000 ------------ ------------ Property, plant and equipment - net 107,590,000 101,570,000 Other Assets 15,137,000 16,072,000 ------------ ------------ Total Assets $380,132,000 $355,445,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 1,126,000 $ 1,301,000 Accounts payable 39,333,000 31,054,000 Accrued liabilities 35,709,000 41,902,000 ------------ ------------ Total current liabilities 76,168,000 74,257,000 Long-Term Debt - Less current portion 32,082,000 32,933,000 Other Noncurrent Liabilities 8,191,000 8,093,000 Deferred Income Taxes 1,695,000 3,315,000 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, 1995 - no par value - 30,742,000 shares; June 30, 1994 - no par value - 22,977,000 shares 27,708,000 25,437,000 Retained earnings 266,184,000 226,412,000 Foreign currency translation adjustment 468,000 440,000 ------------ ------------ Total 294,360,000 252,289,000 Less: Common stock in treasury, at cost March 31, 1995 - 911,000 shares; June 30, 1994 - 303,000 shares 28,528,000 11,606,000 Amount due from ESOP 3,836,000 3,836,000 ------------ ------------ Total shareholders' equity 261,996,000 236,847,000 ------------ ------------ Total Liabilities and Shareholders' Equity $380,132,000 $355,445,000 ============ ============ 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 1995 1994 1995 1994 ------------ ------------ ----------- ------------ Net Sales $191,975,000 $171,492,000 $606,353,000 $537,070,000 Cost of Sales 132,770,000 117,634,000 420,188,000 366,602,000 ------------ ------------ ------------ ------------ Gross Margin 59,205,000 53,858,000 186,165,000 170,468,000 Selling, General and Administrative Expenses 31,899,000 31,497,000 100,064,000 99,802,000 ------------ ------------ ------------ ------------ Operating Income 27,306,000 22,361,000 86,101,000 70,666,000 Other Income (Expense): Interest expense (672,000) (700,000) (2,060,000) (2,196,000) Interest income and other - net 197,000 79,000 423,000 282,000 ------------ ------------ ----------- ------------ Income Before Income Taxes 26,831,000 21,740,000 84,464,000 68,752,000 Taxes Based on Income 10,418,000 8,501,000 32,750,000 26,976,000 ------------ ------------ ------------ ------------ Net Income $ 16,413,000 $ 13,239,000 $ 51,714,000 $ 41,776,000 ============ ============ ============ ============ Net Income Per Common Share $ .55 $ .44 $1.72 $ 1.38 Cash Dividends Per Common Share $ .14 $ .1125 $ .40 $ .3225 Weighted Average Common Shares Outstanding 29,905,000 30,365,000 30,080,000 30,351,000 ============ ============ ============ ============ 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 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $51,714,000 $41,776,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,322,000 18,009,000 Deferred income taxes and other noncash charges (2,622,000) (753,000) Loss (gain) on sale of property 311,000 (13,000) Changes in operating assets and liabilities: Receivables (15,395,000) (15,897,000) Inventories (17,295,000) (8,471,000) Prepaid expenses and other current assets (2,086,000) (806,000) Accounts payable 8,279,000 6,852,000 Accrued liabilities (6,193,000) 2,923,000 ----------- ----------- Net cash provided by operating activities 34,035,000 43,620,000 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Payments on property additions (22,502,000) (15,460,000) Acquisition (554,000) (5,438,000) Proceeds from sale of property 439,000 144,000 Other - net (383,000) (1,072,000) ----------- ----------- Net cash used in investing activities (23,000,000) (21,826,000) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of dividends (12,012,000) (9,750,000) Payments on long-term debt (1,026,000) (1,331,000) Purchase of treasury stock (16,922,000) (6,212,000) Common stock issued upon exercise of stock options including related tax benefits 2,271,000 3,156,000 ----------- ----------- Net cash used in financing activities (27,689,000) (14,137,000) ----------- ----------- Effect of exchange rate changes on cash 47,000 (4,000) ----------- ----------- Net change in cash and equivalents (16,607,000) 7,653,000 Cash and equivalents at beginning of year 30,423,000 16,502,000 ----------- ----------- Cash and equivalents at end of period $13,816,000 $24,155,000 =========== =========== SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest $ 2,575,000 $ 2,708,000 =========== =========== Income taxes $41,541,000 $30,811,000 =========== =========== 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, 1995 AND 1994 (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, 1994. (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) On July 20, 1994, a four-for-three stock split was effected whereby one additional common share was issued for each three shares outstanding to shareholders of record on June 20, 1994. Accordingly, all per share data and the weighted average common shares outstanding for the three and nine month periods ended March 31, 1994 in the accompanying consolidated condensed financial statements have been retroactively adjusted for this split. (4) As approved by its shareholders, the Company has an incentive stock option plan by which 3,625,000 common shares may be issued under options granted pursuant to terms of the plan. During the third quarter of fiscal 1995, the Company granted approximately 210,000 options to employees and officers of the Company. As of March 31, 1995, options for approximately 2,840,000 shares have been granted and 2,518,000 have been exercised under the plan. 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, 1995 AND 1994 RESULTS OF OPERATIONS Consolidated net sales of $606,353,000 and $191,975,000 for the respective nine and three months ended March 31, 1995 increased 13% and 12% over the corresponding totals of $537,070,000 and $171,492,000 of fiscal 1994. The sales of the Glassware and Candles segment contributed most prominently to this increase with sales of the segment's candle products experiencing significant growth throughout fiscal 1995. For the nine month period, Automotive segment sales benefitted from a generally increased level of domestic new vehicle sales, particularly with respect to light trucks and vans. The implementation of certain cost-driven price increases during this period also contributed to progressively increased sales revenues. Within the Specialty Foods segment, greater foodservice volumes led to an increase in sales for each of the comparable periods presented. Consolidated gross margins have been adversely affected throughout 1995 by certain increased raw material costs. The impact of increased raw material costs has been most pronounced within the Automotive segment where aluminum, rubber and resin-based plastic materials have undergone increases in excess of the segment's ability to increase related sales prices. Impacting the nine month results were increased costs for soybean oil, a major ingredient of the Specialty Foods segment. The increased foodservice mix within the Specialty Foods segment also reduced consolidated gross margins during fiscal 1995. Finally, all segments have experienced significantly higher corrugated costs during fiscal 1995. The foregoing factors were partially offset by certain productivity improvements, particularly in the Glassware and Candles segment, where increased volume, recent capital expenditures and process improvements combined to enhance this segment's margins. Selling, general and administrative expenses of $100,064,000 and $31,899,000 for the respective nine and three month periods ended March 31, 1995 increased less than 2% from the totals recorded during the comparable periods of 1994. Mitigating the increase in such costs were efforts to reduce promotional costs in the Specialty Foods segment as well as issues involving changes in sales mix. Additionally, the fixed portion of such operating costs generally serves to hold the fluctuations of these costs below that of net sales. As a percentage of net sales, income before income taxes and net income for both periods of fiscal 1995 were approximately 14% and 9%, respectively, compared to 13% and 8% during the comparable fiscal 1994 periods. The provision for income taxes for the nine-month period ended March 31, 1994 was impacted by a first-quarter charge of approximately $400,000 to record the effect of the August 1993 enactment of the Omnibus Budget Reconciliation Act of 1993. FINANCIAL CONDITION As of March 31, the Company's balance sheet reflected net working capital of $181,237,000 and a current ratio of 3.4:1.0. As of June 30, 1994, the respective comparable totals were $163,546,000 and 3.2:1.0. Cash flows from operations through March 1995 totaled $34,035,000 compared to $43,620,000 during the nine months ended March 1994. Contributing to the increase in accounts receivable at March 31 was the higher level of sales occurring in March 1995 compared to June 1994. Inventories were impacted by the general increase in sales volumes, rising material costs and contingency stocks built in anticipation of certain labor negotiations. 7 of 9 8 FINANCIAL CONDITION (CONTINUED) Significant nonoperating uses of cash during the nine months ended March 1995 included $16,922,000 for the repurchase of common stock, $22,502,000 for capital expenditures and $12,012,000 for common stock dividends. The latter amount reflects the increased dividend rate which totaled $.40 versus $.32 for the nine months ended March 31, 1995 and 1994, respectively. Through March 31, the Company's capital structure remains generally unchanged with debt (including the short-term portion) comprising 11% of capitalization at March 31 compared to 13% at June 30. The Company continues to maintain discretionary bank lines of credit in excess of $150,000,000 as a contingent source of short-term financing for future capital or other temporary cash requirements. However, absent a significant business acquisition or other unforeseen events, management currently believes that cash internally generated from operating activities will be sufficient to meet foreseeable cash requirements for the remainder of fiscal 1995. PART II. OTHER INFORMATION 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 March 31, 1995. 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 10, 1995 BY: /S/John B. Gerlach ---------------------- --------------------------- JOHN B. GERLACH Chairman, Chief Executive Officer and Principal Financial Officer Date: May 10, 1995 BY: /S/John L. Boylan ---------------------- --------------------------- JOHN L. BOYLAN Treasurer and Assistant Secretary 8 of 9 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S CONSOLIDATED CONDENSED BALANCE SHEET AND STATEMENT OF INCOME FOR THE NINE-MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1995 MAR-31-1995 13,816 0 99,329 3,197 135,206 257,405 276,918 169,328 380,132 76,168 32,082 27,708 0 0 234,288 380,132 606,353 606,353 420,188 420,188 0 0 2,060 84,464 32,750 51,714 0 0 0 51,714 1.72 0
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