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8-K - FORM 8-K - LANCASTER COLONY CORP | c05054e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
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SYMBOL: LANC | |
Thursday, August 19, 2010
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TRADED: Nasdaq |
LANCASTER COLONY REPORTS FISCAL YEAR AND FOURTH QUARTER RESULTS
COLUMBUS, Ohio, Aug. 19 Lancaster Colony Corporation (Nasdaq: LANC) today reported results
for the companys fiscal year ended June 30, 2010, including these highlights:
| Net sales increased 0.5 percent to $1,057 million versus $1,051 million last year. |
| Net income totaled a record $115.0 million or $4.07 per diluted share. Prior year net income totaled $89.1 million, or $3.17 per diluted share. Fiscal 2010 results included pretax income of $0.9 million (two cents per share after taxes) associated with a second quarter distribution under the Continued Dumping and Subsidy Offset Act (CDSOA). In fiscal 2009, the pretax CDSOA distribution was $8.7 million (20 cents per share after taxes). |
| The cash dividend was increased for the 47th consecutive year, and 80,000 shares were repurchased at a cost of approximately $4.4 million. |
| The balance sheet remained strong with no debt outstanding. The companys $160 million unsecured revolving credit facility was unused and fully available. |
Fourth Quarter Results
Highlights of the fourth quarter ended June 30, 2010 included the following:
| Net sales decreased two percent to $248 million versus $253 million in the year ago quarter. |
| Specialty Foods sales totaled $217.3 million, a decline of four percent from last years record fourth quarter total. This decline was primarily due to weaker foodservice volume and cost-driven price decreases. Retail sales declined slightly, with the earlier Easter this year shifting sales to the third fiscal quarter. Lower sales volumes, greater investment in trade support for certain frozen lines, increased freight and somewhat less efficient operations contributed to segment operating income declining by 18 percent to $38.2 million from the prior years record of $46.8 million. |
| Glassware and Candles sales increased 15 percent to $30.7 million primarily due to higher candle sales to the mass market. The segments quarterly operating loss improved to less than $0.1 million compared to $0.9 million a year ago. The benefits from higher sales and greater production volumes were mitigated by higher input costs, especially for paraffin wax. |
| Fourth quarter net income totaled $22.8 million, or $0.81 per diluted share, versus the year ago net income of $28.4 million, or $1.01 per diluted share. |
Chairman and CEO John B. Gerlach, Jr. said, Persistent economic weakness continues to
challenge consumer spending, especially for food consumed away from home. The Easter timing
MORE. . .
PAGE 2 / LANCASTER COLONY REPORTS FISCAL YEAR AND 4TH QUARTER RESULTS
was also an issue for our fourth quarter retail food sales. Although our fourth quarter is one of
seasonal candle weakness, we were pleased to see further increased sales of our high-quality,
value-oriented candles. The quarters operating income was impacted by softer food sales and
increased trade promotional activities in addition to our planned consumer-focused marketing
efforts, which are part of our long-term investment in our branded retail food products.
Fiscal 2010 Commentary
Mr. Gerlach said, For the year, we achieved record operating income and net income, with
meaningful bottom-line improvement in both operating segments. Better Specialty Foods results led
this increase as we enjoyed higher retail sales volumes and lower average material costs despite
higher consumer marketing and trade promotional investments. We were also pleased with the
improvement in our candle operations.
Fiscal 2011 Commentary
Mr. Gerlach continued, We begin the new year with well-positioned food brands, balance sheet
flexibility and future growth potential from new product development and greater geographic
penetration. New Specialty Foods retail products include Marzetti Otria Greek yogurt-based
vegetable dips, New York brand Ciabatta garlic loaf, and Sister Schuberts soft
multi-grain frozen rolls. We believe that sales growth is achievable in fiscal 2011, but our
earnings optimism is tempered by economic hurdles faced by consumers, planned expansion of
marketing activities, rising paraffin wax costs and potentially higher food commodity and packaging
costs. Our unwavering focus on efficiently providing consumer-pleasing products and strong
customer service should help yield continued strong shareholder returns.
Conference Call on the Web
The companys fiscal year and fourth quarter conference call is scheduled for this morning,
August 19, at 10:00 a.m. ET. You may access the call through a live webcast by using the link
provided on the companys Internet home page at www.lancastercolony.com. Replays of the webcast
will be made available on the company website.
About the Company
Lancaster Colony Corporation is a diversified manufacturer and marketer of consumer products
focusing primarily on specialty foods for the retail and foodservice markets.
MORE. . .
PAGE 3 / LANCASTER COLONY REPORTS FISCAL YEAR AND 4TH QUARTER RESULTS
Forward-Looking Statements
We desire to take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the PSLRA). This news release contains various forward-looking
statements within the meaning of the PSLRA and other applicable securities laws. Such statements
can be identified by the use of the forward-looking words anticipate, estimate, project,
believe, intend, plan, expect, hope or similar words. These statements discuss future
expectations; contain projections regarding future developments, operations or financial
conditions; or state other forward-looking information. Such statements are based upon assumptions
and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other
factors we believe to be appropriate. These forward-looking statements involve various important
risks, uncertainties and other factors that could cause our actual results to differ materially
from those expressed in the forward-looking statements. Actual results may differ as a result of
factors over which we have no, or limited, control. Management believes these forward-looking
statements to be reasonable; however, you should not place undue reliance on such statements that
are based on current expectations. Forward-looking statements speak only as of the date they are
made, and we undertake no obligation to update such forward-looking statements. More detailed
statements regarding significant events that could affect our financial results are included in our
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the Securities and
Exchange Commission and are available on our website at www.lancastercolony.com.
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FOR FURTHER INFORMATION: | John B. Gerlach, Jr., Chairman and CEO, or John L. Boylan, Vice President, Treasurer and CFO Lancaster Colony Corporation Phone: 614/224-7141 or Investor Relations Consultants, Inc. Phone: 727/781-5577 or E-mail: lanc@mindspring.com |
PAGE 4 / LANCASTER COLONY REPORTS FISCAL YEAR AND 4TH QUARTER RESULTS
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
(In thousands except per-share amounts)
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 248,005 | $ | 253,385 | $ | 1,056,608 | $ | 1,051,491 | ||||||||
Cost of sales |
188,080 | 188,367 | 786,276 | 835,999 | ||||||||||||
Gross margin |
59,925 | 65,018 | 270,332 | 215,492 | ||||||||||||
Selling, general & administrative expenses |
24,625 | 21,905 | 93,821 | 84,238 | ||||||||||||
Restructuring and impairment charges |
179 | | 2,312 | 1,606 | ||||||||||||
Operating income |
35,121 | 43,113 | 174,199 | 129,648 | ||||||||||||
Interest expense |
| (23 | ) | | (1,217 | ) | ||||||||||
Interest income and other net |
(7 | ) | 10 | 939 | 8,575 | |||||||||||
Income before income taxes |
35,114 | 43,100 | 175,138 | 137,006 | ||||||||||||
Taxes based on income |
12,299 | 14,699 | 60,169 | 47,920 | ||||||||||||
Net income |
$ | 22,815 | $ | 28,401 | $ | 114,969 | $ | 89,086 | ||||||||
Net income per common share:(a)(b) |
||||||||||||||||
Basic |
$ | .81 | $ | 1.01 | $ | 4.08 | $ | 3.17 | ||||||||
Diluted |
$ | .81 | $ | 1.01 | $ | 4.07 | $ | 3.17 | ||||||||
Cash dividends per common share |
$ | .30 | $ | .285 | $ | 1.185 | $ | 1.135 | ||||||||
Weighted average common shares outstanding(b): |
||||||||||||||||
Basic |
28,176 | 27,990 | 28,144 | 28,033 | ||||||||||||
Diluted |
28,205 | 28,017 | 28,174 | 28,044 |
(a) | Based on the weighted average number of shares outstanding during each period. | |
(b) | Prior year diluted net income per common share and diluted weighted average common shares outstanding were restated to reflect the impact of the adoption of new accounting guidance about participating securities contained within Accounting Standards Codification Topic 260. |
MORE...
PAGE 5 / LANCASTER COLONY REPORTS FISCAL YEAR AND 4TH QUARTER RESULTS
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
NET SALES |
||||||||||||||||
Specialty Foods |
$ | 217,345 | $ | 226,824 | $ | 893,256 | $ | 909,897 | ||||||||
Glassware and Candles |
30,660 | 26,561 | 163,352 | 141,594 | ||||||||||||
$ | 248,005 | $ | 253,385 | $ | 1,056,608 | $ | 1,051,491 | |||||||||
OPERATING INCOME (LOSS) |
||||||||||||||||
Specialty Foods |
$ | 38,194 | $ | 46,798 | $ | 176,194 | $ | 145,848 | ||||||||
Glassware and Candles |
(40 | ) | (875 | ) | 9,445 | (5,671 | ) | |||||||||
Corporate expenses |
(3,033 | ) | (2,810 | ) | (11,440 | ) | (10,529 | ) | ||||||||
$ | 35,121 | $ | 43,113 | $ | 174,199 | $ | 129,648 | |||||||||
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
(In thousands)
June 30, | June 30, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and equivalents |
$ | 100,890 | $ | 38,484 | ||||
Receivables net of allowance for doubtful accounts |
67,766 | 61,152 | ||||||
Total inventories |
121,509 | 102,523 | ||||||
Deferred income taxes and other current assets |
27,234 | 20,653 | ||||||
Total current assets |
317,399 | 222,812 | ||||||
Net property, plant and equipment |
166,097 | 170,900 | ||||||
Other assets |
102,957 | 104,769 | ||||||
Total assets |
$ | 586,453 | $ | 498,481 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 41,904 | $ | 41,180 | ||||
Accrued liabilities |
36,049 | 33,399 | ||||||
Total current liabilities |
77,953 | 74,579 | ||||||
Other noncurrent liabilities and deferred income taxes |
23,592 | 21,346 | ||||||
Shareholders equity |
484,908 | 402,556 | ||||||
Total liabilities and shareholders equity |
$ | 586,453 | $ | 498,481 | ||||
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