Lancaster Colony Corp. : Lancaster Colony Reports Fiscal Year and Fourth Quarter Results
08/23/2012| 07:20am US/Eastern
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COLUMBUS, Ohio, Aug. 23, 2012 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's fiscal year ended June 30, 2012, including these highlights:
-- Net sales increased four percent to $1,131 million versus $1,090 million
last year.
-- Net income totaled $95.8 million or $3.51 per diluted share, compared to
the prior year's net income of $106.4 million, or $3.84 per diluted
share. For fiscal 2012, results included pretax income of $2.7 million
(approximately six cents per share after taxes) associated with a second
quarter distribution under the Continued Dumping and Subsidy Offset Act
(CDSOA). Fiscal 2011 results included pretax income of $14.4 million
(approximately 34 cents per share after taxes) associated with CDSOA
distributions in the second and fourth quarters.
-- The cash dividend was increased for the 49(th) consecutive year.
-- The balance sheet remained strong with no debt outstanding and over $191
million in cash and equivalents.
Fourth Quarter Results
Highlights of the fourth quarter ended June 30, 2012 included the following:
-- Net sales increased seven percent to $274 million versus $256 million in
the year ago quarter.
-- Specialty Foods net sales set a fourth-quarter record of $248 million,
up eight percent over the prior year's fourth quarter total. Both retail
and foodservice sales posted increases, reflecting higher pricing,
improved foodservice volume and lower trade and consumer-directed
promotional costs. Higher pricing contributed over 2% of the sales
growth. Retail sales were adversely affected by this year's early
Easter, but benefited from recent product introductions. Segment
operating income rose 23 percent to $42.0 million from $34.2 million a
year ago primarily due to improved pricing, higher sales volumes and
lower consumer-driven marketing and promotional costs. These costs
declined by approximately 2% of segment net sales, due in part to
various Easter programs falling in the third quarter. The above factors
were partially offset by a less favorable sales mix and higher material
costs, the increase of which approximated 2% of segment net sales.
Fourth quarter income also included approximately $1 million in vendor
recoveries associated with a fiscal 2010 product recall.
-- Glassware and Candles sales of $25.6 million were essentially even with
year ago levels. The segment's quarterly operating loss of $0.2 million
compared to a loss of $1.3 million a year ago. Results reflected an
improved sales mix and modestly improved wax input costs.
-- Fourth quarter net income totaled $26.0 million, or $.95 per diluted
share, versus the year ago net income of $29.3 million, or $1.07 per
diluted share. The year ago results included a pretax CDSOA distribution
of $13.4 million (approximately 33 cents per share after taxes).
Fiscal 2012 Commentary
Chairman and CEO John B. Gerlach, Jr. said, "We were pleased to conclude fiscal 2012 with solid fourth-quarter improvements in sales and operating income despite the year-long challenge of generally higher material costs. Throughout the year, Specialty Foods sales benefitted from our product innovation efforts across both retail and foodservice lines. New retail items helped our key product lines maintain or grow category shares. Similar to fiscal 2011, we were unable to offset the full material cost escalation through higher pricing. Glassware and Candles' reduced operating income reflected lower sales and higher wax costs, only partially mitigated by improved pricing and sales mix."
Fiscal 2013 Commentary
Mr. Gerlach added, "As we look at fiscal 2013, the key unknown in the current economic environment is how changes in future consumer sentiment will impact sales. Sales should continue to benefit from the rollout of new retail food products including Sister Schubert's® Sweet Hawaiian Rolls and Mini Loaves, New York brand® Hand-Tied Garlic Knots, and several varieties of Marzetti® Simply Dressed® & Light refrigerated salad dressings. We anticipate that Specialty Foods operating income may initially benefit from modestly higher pricing and from overall commodity costs beginning the year somewhat below year ago levels. In Glassware and Candles, we expect seasonal sales growth and higher production levels. We believe that the strength of our market positions, along with a solid and flexible balance sheet, leave us well positioned to support future growth."
Conference Call on the Web
The company's fiscal year and fourth quarter conference call is scheduled for this morning, August 23, 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 import 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).
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, except as required by law.
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended Fiscal Year Ended
June 30, June 30,
2012 2011 2012 2011
---- ---- ---- ----
Net sales $273,959 $256,034 $1,131,359 $1,089,946
Cost of
sales 212,939 202,454 891,248 847,517
------- ------- ------- -------
Gross
margin 61,020 53,580 240,111 242,429
Selling,
general &
administrative
expenses 21,909 22,984 96,824 95,425
------ ------ ------ ------
Operating
income 39,111 30,596 143,287 147,004
Interest
income and
other -
net (30) 13,392 2,744 14,502
--- ------ ----- ------
Income
before
income
taxes 39,081 43,988 146,031 161,506
Taxes based
on income 13,126 14,695 50,223 55,142
------ ------ ------ ------
Net income $25,955 $29,293 $95,808 $106,364
======= ======= ======= ========
Net income per common share:(a)
Net income
- basic
and
diluted $.95 $1.07 $3.51 $3.84
Cash
dividends
per common
share $.36 $.33 $1.41 $1.29
Weighted average common shares
outstanding:
Basic 27,222 27,391 27,233 27,664
Diluted 27,254 27,413 27,265 27,689
(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 Fiscal Year Ended
June 30, June 30,
2012 2011 2012 2011
---- ---- ---- ----
NET SALES
---------
Specialty Foods $248,333 $230,317 $988,937 $922,856
Glassware and
Candles 25,626 25,717 142,422 167,090
------ ------ ------- -------
$273,959 $256,034 $1,131,359 $1,089,946
======== ======== ========== ==========
OPERATING INCOME
(LOSS)
----------------
Specialty Foods $41,969 $34,193 $151,479 $155,218
Glassware and
Candles (167) (1,280) 2,105 3,764
Corporate expenses (2,691) (2,317) (10,297) (11,978)
------ ------ ------- -------
$39,111 $30,596 $143,287 $147,004
======= ======= ======== ========
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
June 30, June 30,
2012 2011
---- ----
ASSETS
------
Current assets
Cash and equivalents $191,636 $132,266
Receivables - net of
allowance for
doubtful accounts 73,326 63,762
Total inventories 109,704 111,885
Deferred income taxes
and other current
assets 17,073 25,283
------ ------
Total current assets 391,739 333,196
Net property, plant
and equipment 184,130 185,282
Other assets 106,766 103,611
------- -------
Total assets $682,635 $622,089
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
---------------------
Current liabilities:
Accounts payable $40,708 $42,570
Accrued liabilities 31,963 33,586
------ ------
Total current
liabilities 72,671 76,156
Other noncurrent
liabilities and
deferred income
taxes 45,697 28,394
Shareholders' equity 564,267 517,539
------- -------
Total liabilities and
shareholders' equity $682,635 $622,089
======== ========
SOURCE Lancaster Colony Corporation
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