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-- Net sales reached $254 million, off nearly four percent from first
quarter sales of $264 million last year.
-- Specialty Foods net sales totaled $216.3 million, down two percent from
the year-ago record level, reflecting a decline in foodservice sales
that was not fully offset by solid growth in retail sales.
-- Glassware and Candles sales were $37.8 million, a decline of 12 percent
from the year-ago quarter, reflecting generally weaker retail markets,
competitive factors and the shifting of some seasonal sales to the
second fiscal quarter.
-- Net income of $28,405,000, or $1.01 per diluted share, increased from
the prior-year total of $11,020,000, or $.39 per diluted share.
-- The cash dividend was continued at the higher rate set in November 2008.
-- The company's strong balance sheet showed no debt outstanding at
September 30, 2009.
Chairman and CEO John B. Gerlach, Jr. said, "We are pleased that both business segments achieved substantial improvement in first quarter operating results, with Specialty Foods operating margins benefiting from the decline in ingredient costs from the prior-year's historically high levels."
Specialty Foods sales were lower as the foodservice channel was affected by generally weak consumer demand and reduced pricing due to lower commodity costs. In contrast, retail sales continued to grow, up approximately five percent from gains in both frozen and non-frozen products. Operating income of $43.2 million nearly doubled, reflecting over $17 million in lower raw-material costs as well as operational improvements and a greater retail sales mix. Plant closing costs associated with the consolidation of certain manufacturing facilities totaled approximately $0.9 million and $0.8 million in the current and prior-year's first quarter, respectively.
Net sales of candles and related products declined for the quarter due to several factors, including competitive market conditions and some shifting of seasonal sales to the second quarter. Segment operating income of $1.7 million improved by over $4.5 million, reflecting lower wax costs, higher operating levels and improved pricing.
Corporate expenses decreased $0.4 million, as the prior-year's quarter reflected approximately $0.8 million related to the razing of a former industrial glass operation.
The first-quarter's effective tax rate reflects income associated with the favorable resolution of certain previously-reserved state tax matters. These items totaled approximately $0.9 million before tax, or about $.03 per share, net of applicable income taxes.
"Looking at our current second quarter," Mr. Gerlach said, "we anticipate that both operating segments will continue to benefit from many of the factors that contributed to the improvement in first-quarter operating margins. In addition, although lower-margined, we expect seasonal candle sales to outpace last year's levels. While consumer demand continues to be challenged by a weak economic environment, particularly in foodservice channels, we are again expecting comparative improvement in the quarter's operating results. We are well-positioned to support future growth, and we expect to carry our strong balance sheet into calendar 2010."
Conference Call on the Web
The company's first quarter conference call is scheduled for this morning, October 29, 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. 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.
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended
September 30,
2009 2008
Net sales $ 254,160 $ 263,837
Cost of sales 190,453 224,168
Gross margin 63,707 39,669
Selling, general & administrative expenses 20,468 20,261
Restructuring and impairment charges 830 1,614
Operating income 42,409 17,794
Interest expense - (491)
Interest income and other - net 25 75
Income before income taxes 42,434 17,378
Taxes based on income 14,029 6,358
Net income $ 28,405 $ 11,020
Net income per common share:(a)
Net income - basic and diluted $ 1.01 $ .39
Cash dividends per common share $ .285 $ .28
Weighted average common shares outstanding:
Basic 28,081 28,262
Diluted 28,115 28,264
(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
September 30,
2009 2008
NET SALES
Specialty Foods $ 216,341 $ 220,786
Glassware and Candles 37,819 43,051
$ 254,160 $ 263,837
OPERATING INCOME (LOSS)
Specialty Foods $ 43,152 $ 23,489
Glassware and Candles 1,671 (2,862)
Corporate expenses (2,414) (2,833)
$ 42,409 $ 17,794
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
September 30, June 30,
2009 2009
ASSETS
Current assets:
Cash and equivalents $ 52,440 $ 38,484
Receivables - net of allowance
for doubtful accounts 78,195 61,152
Total inventories 110,605 102,523
Deferred income taxes and other current assets 23,951 20,653
Total current assets 265,191 222,812
Net property, plant and equipment 168,304 170,900
Other assets 104,156 104,769
Total assets $ 537,651 $ 498,481
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,674 $ 41,180
Accrued liabilities 46,969 33,399
Total current liabilities 89,643 74,579
Other noncurrent liabilities and
deferred income taxes 21,500 21,346
Shareholders' equity 426,508 402,556
Total liabilities and
shareholders' equity $ 537,651 $ 498,481
SOURCE Lancaster Colony Corporation
http://www.lancastercolony.com
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