-----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, LGdUuuDWqI9IAeu/hzI4QEKank3g4ro3+PI/ch7uhjskekBwc7djfJW2A6XxzEXr ajhSdn6g7N50e9XrOPqAIQ== 0000950152-97-007661.txt : 19971107 0000950152-97-007661.hdr.sgml : 19971107 ACCESSION NUMBER: 0000950152-97-007661 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971106 SROS: NONE 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: SEC FILE NUMBER: 000-04065 FILM NUMBER: 97709109 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 10-Q 1 LANCASTER COLONY CORPORATION FORM 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 September 30, 1997 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 September 30, 1997, there were approximately 28,996,000 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 - September 30, 1997 and June 30, 1997 3 Consolidated Condensed Statements of Income - Three Months Ended September 30, 1997 and 1996 4 Consolidated Condensed Statements of Cash Flows - Three Months Ended September 30, 1997 and 1996 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
September 30 June 30 1997 1997 ------------ ------- (Unaudited) ASSETS Current Assets: Cash and equivalents $ 4,071,000 $ 32,109,000 Receivables - net of allowance for doubtful accounts 130,070,000 102,457,000 Inventories: Raw materials and supplies 46,677,000 42,339,000 Finished goods and work in process 127,584,000 118,912,000 ------------ ------------ Total inventories 174,261,000 161,251,000 Prepaid expenses and other current assets 14,176,000 12,966,000 ------------ ------------ Total current assets 322,578,000 308,783,000 Property, Plant and Equipment - At cost 350,995,000 337,301,000 Less Accumulated Depreciation 192,005,000 185,992,000 ------------ ------------ Property, plant and equipment - net 158,990,000 151,309,000 Goodwill - net of accumulated amortization 38,100,000 19,810,000 Other Assets 5,888,000 4,492,000 ------------ ------------ Total Assets $525,556,000 $484,394,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 545,000 $ 545,000 Accounts payable 50,892,000 33,203,000 Accrued liabilities 51,138,000 39,956,000 ------------ ------------ Total current liabilities 102,575,000 73,704,000 Long-Term Debt - Less current portion 30,485,000 30,685,000 Other Noncurrent Liabilities 7,853,000 7,895,000 Deferred Income Taxes 2,680,000 4,110,000 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 September 30, 1997 - no par value - 31,272,000 shares; June 30, 1997 - no par value - 31,247,000 shares 44,548,000 43,573,000 Retained earnings 420,133,000 404,783,000 Foreign currency translation adjustment 70,000 75,000 ------------ ------------ Total 464,751,000 448,431,000 Less: Common stock in treasury, at cost September 30, 1997 - 2,276,000 shares; June 30, 1997 - 2,230,000 shares 82,788,000 80,431,000 ------------ ------------ Total shareholders' equity 381,963,000 368,000,000 ------------ ------------ Total Liabilities and Shareholders' Equity $525,556,000 $484,394,000 ============ ============
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 September 30 1997 1996 ------------ ------------ Net Sales $237,174,000 $218,918,000 Cost of Sales 162,020,000 152,573,000 ------------ ------------ Gross Margin 75,154,000 66,345,000 Selling, General and Administrative Expenses 40,218,000 36,188,000 ------------ ------------ Operating Income 34,936,000 30,157,000 Other Income (Expense): Interest expense (657,000) (635,000) Interest income and other - net (147,000) 41,000 ------------ ------------ Income Before Income Taxes 34,132,000 29,563,000 Taxes Based on Income 13,271,000 11,304,000 ------------ ------------ Net Income $ 20,861,000 $ 18,259,000 ============ ============ Net Income Per Common Share $ .72 $ .62 ===== ===== Cash Dividends Per Common Share $ .19 $ .17 ===== ===== Weighted Average Common Shares Outstanding 29,065,000 29,528,000 ========== ==========
See Notes to Consolidated Condensed Financial Statements 4 of 9 5 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended September 30 1997 1996 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 20,861,000 $ 18,259,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,688,000 6,916,000 Deferred income taxes and other noncash charges (1,472,000) (384,000) Loss on sale of property 5,000 373,000 Changes in operating assets and liabilities: Receivables (25,848,000) (20,633,000) Inventories (11,699,000) (21,417,000) Prepaid expenses and other current assets (1,138,000) (2,324,000) Accounts payable 16,345,000 21,953,000 Accrued liabilities 10,302,000 11,830,000 ------------ ------------ Net cash provided by operating activities 15,044,000 14,573,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for acquisition, net of cash acquired (19,749,000) Payments on property additions (10,809,000) (8,873,000) Proceeds from sale of property 149,000 7,000 Other - net (2,052,000) (491,000) ------------ ------------ Net cash used in investing activities (32,461,000) (9,357,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (2,357,000) (5,087,000) Payment of dividends (5,511,000) (5,008,000) Payments on long-term debt, including payment of acquisition debt (3,723,000) (275,000) Common stock issued upon exercise of stock options including related tax benefits 975,000 514,000 ------------ ------------ Net cash used in financing activities (10,616,000) (9,856,000) ------------ ------------ Effect of exchange rate changes on cash (5,000) ------------ ------------ Net change in cash and equivalents (28,038,000) (4,640,000) Cash and equivalents at beginning of year 32,109,000 4,670,000 ------------ ------------ Cash and equivalents at end of period $ 4,071,000 $ 30,000 ============ ============ SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest $ 1,203,000 $ 1,176,000 ============ ============ Income taxes $ 744,000 $ 531,000 ============ ============
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 SEPTEMBER 30, 1997 AND 1996 (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, 1997. (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. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" which when adopted, will replace the current methodology for calculating and presenting earnings per share as prescribed by the Accounting Principles Board ("APB") Opinion No. 15, "Earnings per Share." Under SFAS No. 128, companies with complex capital structures will be required to present basic earnings per share and diluted earnings per share while companies with simple capital structures will only be required to present basic earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed similarly to the current computation of fully diluted earnings per share required under APB No. 15. The standard, which is effective for financial statements for periods ending after December 15, 1997, including interim periods, requires restatement of all prior-period earnings per share data. Earlier application is not permitted. The presentation required by SFAS No. 128 will not materially differ from the current presentation of earnings per share. (3) During the first quarter ended September 30, 1997, the Company acquired for cash, the Chatham Village salad crouton business. Such transaction was accounted for under the purchase method of accounting. The results of operations of this entity have been included in the consolidated financial statements from 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 SEPTEMBER 30, 1997 AND 1996 RESULTS OF OPERATIONS For the three months ended September 30, 1997, consolidated net sales totaled $237,174,000, an 8% increase above the $218,918,000 reported for the comparable period of 1996. The majority of this increase was provided by the Company's Specialty Foods segment. Contributing to this segment's increase were increased foodservice sales, growth in the sales of refrigerated and frozen retail lines, and the July acquisition of the Chatham Village crouton business. The Glassware and Candles segment also continued its growth as led by the sales of candles and related products. Weaker aftermarket demand in 1997 resulted in Automotive segment sales being relatively flat compared to the year-ago results. The Company's consolidated gross margin percentage during the three months ending September 30, 1997 was 31.7% compared to 30.3% in the preceding year's comparable quarter. This improvement was attributable to higher margins achieved in the Specialty Foods segment. Generally lower material costs and a more favorable sales mix were largely responsible for this improvement. Somewhat offsetting these gains were lower margins in the Glassware and Candles segment resulting from higher wax costs, production inefficiencies at the glass plants and a less favorable sales mix. Automotive margins were also adversely affected, particularly by competitive pressures present in the aftermarket for light truck bed liners. Total selling, general and administrative costs for the quarter ended September 30, 1997 were $40,218,000 which is an 11% increase above the prior year's comparable total of $36,188,000. As a percentage of net sales, these costs totaled 17.0% in 1997 compared to 16.5% in 1996. This increase reflects a higher proportion of consolidated 1997 sales being attributable to the Specialty Foods segment. The Specialty Foods segment also incurred greater than normal selling costs during this period which were needed to support selected retail sales efforts. As affected by the foregoing factors, consolidated income before income taxes totaled $34,132,000 for the three months ended September 30, 1997 and increased 15% over the comparable 1996 total of $29,563,000. After reflecting the effects of a slightly higher income tax rate, the Company's net income also increased by 14% to total $20,861,000 compared to $18,259,000 in 1996. With the average shares outstanding being reduced by the Company's repurchase of shares, net income per share increased 16% from $.62 in 1996 to $.72 in 1997. FINANCIAL CONDITION For the three months ended September 30, 1997, net cash provided by operating activities totaled $15,044,000 compared to $14,573,000 reported for the three months ended September 30, 1996. Seasonal working capital requirements and the July acquisition of Chatham Village contributed to the $28,038,000 reduction in cash since June 30, 1997. These factors also affected the Company's working capital ratio which decreased from 4.2:1.0 at June 30 to 3.1:1.0 at September 30. Significant investing activities for the quarter ended September 30, 1997 included $19,749,000 expended to acquire the Chatham Village crouton business and $10,809,000 for payments on property additions. These amounts were financed through the use of internally generated funds. Among the Company's significant financing activities for the three months ended September 30, 1997, was the payment of $5,511,000 in dividends which compared 7 of 9 8 to $5,008,000 paid during the comparable period of 1996. The increase is due to the dividend rate per common share increasing from $.17 per share to $.19 per share between these two periods. Another financing activity involved the payment of $3,723,000 of third party debt, principally consisting of the assumed debt of Chatham Village which was prepaid. Management anticipates that cash provided from operations 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 1998. 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 September 30, 1997. 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: November 7, 1997 BY:/S/John B. Gerlach, Jr. ----------------------------- ----------------------- JOHN B. GERLACH, JR. Chairman, Chief Executive Officer and President Date: November 7, 1997 BY:/S/John L. Boylan ----------------------------- ----------------------- JOHN L. BOYLAN Treasurer, Vice President, Assistant Secretary and Chief Financial Officer (Principal Financial and Accounting Officer) 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 QUARTER ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JUN-30-1998 SEP-30-1997 4,071 0 133,585 3,515 174,261 322,578 350,995 192,005 525,556 102,575 30,485 0 0 44,548 337,415 525,556 237,174 237,174 162,020 162,020 0 0 657 34,132 13,271 20,861 0 0 0 20,861 .72 0
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