LANCASTER COLONY CORPORATION 
COLUMBUS, Ohio, Jan. 31, 2013 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported the following highlights for the company's second fiscal quarter ended December 31, 2012:
-- Net sales increased five percent to $326 million versus $312 million in
the second quarter last year.
-- Net income increased 16 percent to $35,277,000 compared with $30,373,000
for the corresponding quarter a year ago. Net income per diluted share
was $1.28 versus $1.11 in the year-ago quarter. Pretax income included
approximately $0.3 million (one cent per share after taxes) from a
Continued Dumping and Subsidy Offset Act (CDSOA) distribution, while the
year ago second quarter results included a pretax CDSOA distribution of
approximately $2.7 million (six cents per share after taxes).
-- Specialty Foods sales increased two percent in the quarter to a record
$272.6 million, reflecting higher sales to both retail and foodservice
channels. Overall volumes were approximately level with that of a year
ago, with retail volumes affected by lower garlic bread shipments.
Retail sales growth resulted from higher pricing, the success of
recently introduced products and a lower level of trade and consumer
promotions. Foodservice sales improved primarily due to higher volume.
Segment operating income totaled $50.4 million, up 13 percent from last
year's level, primarily reflecting higher pricing and modestly reduced
raw-material costs. The estimated favorable impact from raw-material
costs was less than one percent of segment net sales.
-- Glassware and Candles sales increased 17 percent to $53.5 million,
reflecting expanded sales of seasonal products. Benefiting from higher
sales and production volumes, segment operating income improved to $5.6
million compared with $1.6 million in the prior year second quarter.
-- Corporate expenses in the current year's quarter increased approximately
$0.7 million, primarily due to higher costs associated with previously
idled held-for-sale real estate.
-- The company's balance sheet remained strong with no debt at December 31,
2012 as well as over $92 million in cash and equivalents.
-- In addition to the December 2012 payment of a special dividend of $5.00
per share, the quarterly cash dividend was increased by six percent to
$.38 per share.
For the six months ended December 31, 2012, net sales were $617 million compared to $586 million for the first half last year. Net income was $61,939,000, or $2.26 per diluted share. In the prior year, six-month net income totaled $51,631,000, or $1.89 per diluted share.
Chairman and CEO John B. Gerlach, Jr. said, "We were pleased that both of our operating segments achieved growth in sales and income. Consolidated net income also grew despite a lower level of CDSOA distributions."
Looking ahead, Mr. Gerlach said, "We anticipate that third quarter Specialty Foods sales will continue to benefit from recent product introductions. We are also excited about the longer-term potential of Marzetti® Simply Dressed® Vinaigrettes and our repackaged Veggie Dips. We remain generally cautious regarding consumer sentiment, and we expect to see progressively less favorable net food commodity costs over the balance of fiscal 2013. We also anticipate increased marketing investments within selected retail categories, and we foresee limited benefit from pricing actions. Regardless, our solid financial condition allows us considerable flexibility to make investments supporting future growth."
Conference Call on the Web
The company's second quarter conference call is scheduled for this morning, January 31, at 10:00 a.m. ET. You may access the call through a live webcast by using the link provided on the company's 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.
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, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:
-- the potential for loss of larger programs or key customer relationships;
-- the effect of consolidation of customers within key market channels;
-- the success and cost of new product development efforts;
-- the lack of market acceptance of new products;
-- the reaction of customers or consumers to the effect of price increases
we may implement;
-- changes in demand for our products, which may result from loss of brand
reputation or customer goodwill;
-- the possible occurrence of product recalls or other defective or
mislabeled product costs;
-- price and product competition;
-- fluctuations in the cost and availability of raw materials;
-- adverse changes in energy costs and other factors that may affect costs
of producing, distributing or transporting our products;
-- maintenance of competitive position with respect to other manufacturers,
including global sources of production;
-- dependence on key personnel;
-- stability of labor relations;
-- dependence on contract copackers and limited or exclusive sources for
certain goods;
-- changes in estimates in critical accounting judgments;
-- the outcome of any litigation or arbitration; and
-- risks related to other factors described under "Risk Factors" in other
reports and statements filed by us with the Securities and Exchange
Commission, including without limitation our Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q (available at www.sec.gov).
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
2012 2011 2012 2011
---- ---- ---- ----
Net sales $326,155 $311,786 $617,131 $586,302
Cost of sales 244,499 241,927 469,758 461,013
------- ------- ------- -------
Gross margin 81,656 69,859 147,373 125,289
Selling, general & administrative expenses 29,031 26,149 54,176 49,067
------ ------ ------ ------
Operating income 52,625 43,710 93,197 76,222
Interest income and other - net 254 2,739 268 2,735
--- ----- --- -----
Income before income taxes 52,879 46,449 93,465 78,957
Taxes based on income 17,602 16,076 31,526 27,326
------ ------ ------ ------
Net income $35,277 $30,373 $61,939 $51,631
======= ======= ======= =======
Net income per common share:(a)
Net income - basic $1.29 $1.11 $2.26 $1.89
Net income - diluted $1.28 $1.11 $2.26 $1.89
Cash dividends per common share $5.38 $.36 $5.74 $.69
Weighted average common shares outstanding:
Basic 27,243 27,206 27,236 27,248
Diluted 27,273 27,240 27,268 27,277
(a) Based on the weighted average number of shares outstanding during each period.
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)
Three Months Ended Six Months Ended
December 31, December 31,
2012 2011 2012 2011
---- ---- ---- ----
NET SALES
---------
Specialty Foods $272,634 $266,225 $521,515 $503,172
Glassware and Candles 53,521 45,561 95,616 83,130
------ ------ ------ ------
$326,155 $311,786 $617,131 $586,302
======== ======== ======== ========
OPERATING INCOME
----------------
Specialty Foods $50,384 $44,750 $93,142 $79,949
Glassware and Candles 5,614 1,636 6,222 1,299
Corporate expenses (3,373) (2,676) (6,167) (5,026)
------ ------ ------ ------
$52,625 $43,710 $93,197 $76,222
======= ======= ======= =======
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
December 31, June 30,
2012 2012
---- ----
ASSETS
Current
assets:
Cash and
equivalents $92,521 $191,636
Receivables
- net of
allowance
for
doubtful
accounts 90,927 73,326
Total
inventories 100,544 109,704
Deferred
income
taxes
and
other
current
assets 20,486 17,073
------ ------
Total
current
assets 304,478 391,739
Net
property,
plant
and
equipment 188,375 184,130
Other
assets 104,894 106,766
------- -------
Total
assets $597,747 $682,635
======== ========
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable $47,527 $40,708
Accrued
liabilities 33,715 31,963
------ ------
Total
current
liabilities 81,242 72,671
Other
noncurrent
liabilities
and
deferred
income
taxes 45,350 45,697
Shareholders'
equity 471,155 564,267
------- -------
Total
liabilities
and
shareholders'
equity $597,747 $682,635
======== ========
SOURCE Lancaster Colony Corporation
