Lancaster Colony Reports First Quarter Fiscal 2014 Results PR Newswire COLUMBUS, Ohio, Oct. 31, 2013 COLUMBUS, Ohio, Oct. 31, 2013 /PRNewswire/ --Lancaster Colony Corporation (Nasdaq: LANC) today reported results for its fiscal 2014 first quarter that ended September 30, 2013: oNet sales reached $286 million, off two percent from prior-year first quarter sales of $291 million. oSpecialty Foods net sales of $248 million were off slightly from the year-ago level, reflecting improved foodservice volumes offset by flat retail volumes and increased trade promotion costs. oGlassware and Candles net sales decreased ten percent from the year-ago quarter to $38 million, reflecting a decline in volume. oNet income of $24,801,000, or $.91 per diluted share, decreased from the prior-year's $26,662,000, or $.98 per diluted share. The lower sales, combined with higher trade promotion costs and a less favorable sales mix in the Specialty Foods segment, led to this decline. oCash dividends were continued at the higher rate set in May 2013. The company's debt-free balance sheet reflected $133 million in cash and equivalents at September 30, 2013. Chairman and CEO John B. Gerlach, Jr. said, "While pleased with our overall market positioning, we saw our first quarter's sales and results affected by a retail environment that remains challenged. We believe our additional investments in promotional support behind selected retail food categories such as refrigerated dressings, croutons and garlic toast helped solidify our product placement." Specialty Foods sales benefited from improved volumes of both foodservice and branded retail product lines, while sales of private label retail product lines decreased. Additionally, higher trade promotion costs adversely affected both the segment's net sales and operating results. Specialty Foods operating income of $39.5 million declined 7.5 percent. As further affected by the higher foodservice sales mix, segment operating income margins fell to 15.9 percent, compared to 17.2 percent in the prior year. The impact of fluctuations in product pricing and material costs was not significant. First quarter candle sales reflected challenging retail conditions, lower sales of contract-manufactured products and the impact of customer planogram changes in the prior year. Segment operating income of $1.2 million improved by approximately $0.6 million as a more favorable product mix offset the impact of lower net sales. Mr. Gerlach said, "Looking forward, we expect our seasonally stronger second quarter will reflect higher food volumes and modestly lower input costs. Sales of seasonal and contract-manufactured candles will likely reflect softening, although these product sales tend to be lower-margined in nature. We believe our continued balance sheet strength allows us considerable flexibility in supporting our future growth initiatives." Conference Call on the Web The company's first quarter conference call is scheduled for this morning, October 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: othe potential for loss of larger programs or key customer relationships; othe effect of consolidation of customers within key market channels; othe success and cost of new product development efforts; othe lack of market acceptance of new products; othe reaction of customers or consumers to the effect of price increases we may implement; ochanges in demand for our products, which may result from loss of brand reputation or customer goodwill; othe possible occurrence of product recalls or other defective or mislabeled product costs; oprice and product competition; ofluctuations in the cost and availability of raw materials; oadverse changes in energy costs and other factors that may affect costs of producing, distributing or transporting our products; omaintenance of competitive position with respect to other manufacturers, including global sources of production; odependence on key personnel; ostability of labor relations; othe uncertainty regarding the effect or outcome of any decision to explore further strategic alternativesfor our nonfood operation; odependence on contract copackers and limited or exclusive sources for certain goods; ochanges in estimates in critical accounting judgments; othe outcome of any litigation or arbitration; and orisks 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 September 30, 2013 2012 Net sales $ 285,856 $ 290,976 Cost of sales 224,218 225,259 Gross margin 61,638 65,717 Selling, general & administrative expenses 24,038 25,145 Operating income 37,600 40,572 Interest income and other – net (48) 14 Income before income taxes 37,552 40,586 Taxes based on income 12,751 13,924 Net income $ 24,801 $ 26,662 Net income per common share:(a) Net income – basic and diluted $ 0.91 $ 0.98 Cash dividends per common share $ 0.40 $ 0.36 Weighted average common shares outstanding: Basic 27,268 27,229 Diluted 27,312 27,264 (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, 2013 2012 NET SALES Specialty Foods $ 248,137 $ 248,881 Glassware and Candles 37,719 42,095 $ 285,856 $ 290,976 OPERATING INCOME Specialty Foods $ 39,543 $ 42,758 Glassware and Candles 1,169 608 Corporate expenses (3,112) (2,794) $ 37,600 $ 40,572 LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, June 30, 2013 2013 ASSETS Current assets: Cash and equivalents $ 133,075 $ 123,386 Receivables – net of allowance for doubtful 82,890 70,398 accounts Total inventories 113,047 109,151 Deferred income taxes and other current assets 18,360 23,123 Total current assets 347,372 326,058 Net property, plant and equipment 186,997 189,695 Other assets 104,111 104,211 Total assets $ 638,480 $ 619,964 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 41,772 $ 41,890 Accrued liabilities 41,789 35,287 Total current liabilities 83,561 77,177 Other noncurrent liabilities and deferred income 42,053 41,565 taxes Shareholders' equity 512,866 501,222 Total liabilities and shareholders' equity $ 638,480 $ 619,964 SOURCE Lancaster Colony Corporation Website: http://www.lancastercolony.com Contact: John L. Boylan, Vice President, Treasurer and CFO, or Dale N. Ganobsik, Director of Investor Relations, Lancaster Colony Corporation, Phone: 614/224?7141, Email: email@example.com
Lancaster Colony Reports First Quarter Fiscal 2014 Results
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