Lancaster Colony Corp. : Lancaster Colony Reports Third Quarter Sales and Earnings
04/26/2012| 07:20am US/Eastern
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COLUMBUS, Ohio, April 26, 2012 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's third fiscal quarter ended March 31, 2012. Highlights of the quarter:
-- Net sales increased seven percent to $271 million versus $253 million in
the third quarter last year, reflecting strong sales growth in the
Specialty Foods segment.
-- Net income totaled $18,222,000 compared with $19,441,000 for the
corresponding quarter a year ago, primarily reflecting higher costs
experienced within the Specialty Foods segment. Third quarter net income
per diluted share totaled $.67 compared to $.71 a year ago.
-- Specialty Foods sales increased nine percent to a third quarter record
of $237 million on higher volume and pricing. Both retail and
foodservice sales volumes improved, with this year's earlier Easter
helping retail sales. Pricing contributed approximately half the
quarter's increase in sales. The segment's operating income totaled
$29.6 million compared to $31.7 million in the third quarter last year.
Increased material, freight and marketing costs were only partially
offset by improved pricing.
-- Glassware and Candles sales declined four percent to $34 million on
lower candle volume. However, the segment's operating income increased
to $1.0 million from $0.7 million in the third quarter last year.
Modest pricing improvement and a better sales mix helped offset lower
sales.
-- The company's balance sheet remained strong with no debt outstanding at
March 31, 2012, and $168 million in cash and equivalents.
-- The quarterly cash dividend was continued at the higher level of $.36
per share set last quarter.
For the nine months ended March 31, 2012, net sales were $857 million compared to $834 million a year ago. Net income was $69,853,000, or $2.56 per diluted share. Net income for the nine months last year totaled $77,071,000, or $2.77 per diluted share. Current year-to-date net income included pretax income of $2.7 million (six cents per share after taxes) from a second-quarter distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). In the prior year, net income included a pretax CDSOA distribution of $1.0 million (two cents per share after taxes).
John B. Gerlach, Jr., chairman and CEO, said, "We were pleased with the improvement in Specialty Foods sales, given the widely reported challenges faced by consumers. Our quarterly results were affected by the timing of certain marketing expenditures, as well as higher material and freight costs."
Looking ahead, Mr. Gerlach added, "We anticipate that retail food sales during our fiscal fourth quarter will be affected by the earlier Easter timing and continued economic pressures on consumers. Our Specialty Foods segment should benefit from ongoing success with recent retail product introductions, somewhat higher average pricing, lower marketing costs and less unfavorable commodity cost comparisons. In a seasonally slower fourth quarter, our Glassware and Candles segment will likely experience a continuation of third quarter trends. We believe that throughout fiscal 2012 we have maintained a solid base upon which to build further growth in fiscal 2013."
Conference Call on the Web
The company's third quarter conference call is scheduled for this morning, April 26, 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 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. For example, fluctuations in material and freight costs, over which we have limited control, may significantly influence our financial results. 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. 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.
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2012 2011 2012 2011
Net sales $271,098 $252,623 $857,400 $833,912
Cost of sales 217,296 200,089 678,309 645,063
Gross margin 53,802 52,534 179,091 188,849
Selling, general &
administrative
expenses 25,848 23,060 74,915 72,441
Operating income 27,954 29,474 104,176 116,408
Interest income and
other - net 39 54 2,774 1,110
Income before income
taxes 27,993 29,528 106,950 117,518
Taxes based on income 9,771 10,087 37,097 40,447
Net income $18,222 $19,441 $69,853 $77,071
Net income per common share:(a)
Net income - basic and
diluted $.67 $.71 $2.56 $2.77
Cash dividends per
common share $.36 $.33 $1.05 $.96
Weighted average common shares
outstanding:
Basic 27,216 27,494 27,237 27,755
Diluted 27,251 27,520 27,268 27,781
(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 Nine Months Ended
March 31, March 31,
2012 2011 2012 2011
NET SALES
Specialty Foods $237,432 $217,436 $740,604 $692,539
Glassware and Candles 33,666 35,187 116,796 141,373
$271,098 $252,623 $857,400 $833,912
OPERATING INCOME
Specialty Foods $29,561 $31,664 $109,510 $121,025
Glassware and Candles 973 676 2,272 5,044
Corporate expenses (2,580) (2,866) (7,606) (9,661)
$27,954 $29,474 $104,176 $116,408
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
March 31, June 30,
2012 2011
ASSETS
Current assets:
Cash and equivalents $167,960 $132,266
Receivables - net of
allowance for doubtful
accounts 86,495 63,762
Total inventories 100,284 111,885
Deferred income taxes and
other current assets 24,021 25,283
Total current assets 378,760 333,196
Net property, plant and
equipment 184,017 185,282
Other assets 103,297 103,611
Total assets $666,074 $622,089
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $43,489 $42,570
Accrued liabilities 37,360 33,586
Total current liabilities 80,849 76,156
Other noncurrent liabilities
and deferred income taxes 32,695 28,394
Shareholders' equity 552,530 517,539
Total liabilities and
shareholders' equity $666,074 $622,089
SOURCE Lancaster Colony Corporation
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