Lancaster Colony Reports First Quarter Sales and Earnings
COLUMBUS, Ohio, Oct. 28, 2004 -- Lancaster Colony Corporation today reported record net sales of $281 million for the first fiscal quarter ended September 30, 2004, a six-percent increase over first quarter sales of $267 million last year. Net income was $18,378,000 versus $19,700,000 in the corresponding quarter a year ago. Current year results included pretax income of approximately $0.4 million (one cent per share after taxes) related to the liquidation of LIFO inventories carried at substantially lower prior years' costs, compared to $1.6 million (three cents per share after taxes) in the comparable quarter a year ago. Basic and diluted earnings per share were 52 cents versus 55 cents earned in the first quarter last year.
John B. Gerlach, Jr., chairman and CEO of Lancaster Colony Corporation, said, "We were encouraged to achieve net sales growth in each segment. Operating earnings, however, were again adversely affected by higher raw material costs and a business environment that allows little pricing flexibility."
Specialty Foods sales totaled $161 million, up four percent from the year- ago level. Segment operating income totaled $27.4 million, up four percent over the year-ago level. Mr. Gerlach said, "Both retail and foodservice sales showed modest growth and Warren Frozen Foods, acquired last December, contributed over $4 million to the higher first quarter sales. Operating income was again constrained by higher costs of soybean oil and cream, as the adverse impact of all commodities exceeded $1 million in the quarter."
Automotive sales were $57 million for the quarter, up three percent from the prior year's first quarter total. Segment operating income totaled $2.3 million, or approximately four percent of sales, after a charge of approximately $0.4 million for costs incurred with the previously announced closing of a floor mat facility. Segment income in the year-ago quarter totaling $3.7 million included approximately $0.4 million from a gain on the sale of an idle facility. Mr. Gerlach noted, "Sales of original equipment products benefited from growth in aluminum accessories, partially offset by lower floor mat volume. Operating margins remain adversely affected by markedly higher material costs for aluminum, steel and synthetic rubber."
Glassware and Candles sales totaled $64 million, up 14 percent for the quarter, and segment operating income was $1.1 million, $2.0 million below the year-ago level. Mr. Gerlach said, "For the third consecutive quarter, candle sales have posted year-over-year increases, growing both through the addition of new customers and gains among existing customers. Segment operating income reflects lower LIFO-related income as well as higher material and product costs. Candle production has increased to meet demand in recent months, and manufacturing efficiencies at our largest glassware facility have also improved."
Mr. Gerlach concluded, "We continue to believe that our best opportunity to improve operating results lies in the second half of the current fiscal year. Lancaster Colony remains debt-free with solid cash flows, and we ended the past quarter with more than $168 million in cash and equivalents."
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended
September 30,
2004 2003
Net sales $ 281,484 $ 266,652
Cost of sales 227,467 210,845
Gross margin 54,017 55,807
Selling, general & administrative expenses 24,776 24,169
Restructuring and impairment charge 442 --
Operating income 28,799 31,638
Interest income and other - net 627 346
Income before income taxes 29,426 31,984
Taxes based on income 11,048 12,284
Net income $ 18,378 $ 19,700
Net income per common share:(a)
Basic and diluted $ 0.52 $ 0.55
Cash dividends per common share $ 0.23 $ 0.20
Weighted average common shares outstanding:
Basic 35,355 35,763
Diluted 35,408 35,831
(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,
2004 2003
NET SALES
Specialty Foods $ 160,609 $ 154,817
Glassware and Candles 63,732 56,126
Automotive 57,143 55,709
$ 281,484 $ 266,652
OPERATING INCOME
Specialty Foods $ 27,379 $ 26,313
Glassware and Candles 1,079 3,106
Automotive 2,256 3,651
Corporate expenses (1,915) (1,432)
$ 28,799 $ 31,638
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, June 30,
2004 2004
(Unaudited)
ASSETS
Current assets:
Cash and equivalents $ 168,136 $ 178,503
Receivables - net of allowance for doubtful
accounts 115,764 94,623
Total inventories 154,093 155,076
Deferred income taxes and other
current assets 26,774 22,803
Total current assets 464,767 451,005
Net property, plant and equipment 155,200 159,494
Other assets 105,453 102,388
Total assets $ 725,420 $ 712,887
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,974 $ 47,383
Accrued liabilities 58,447 45,348
Total current liabilities 105,421 92,731
Other noncurrent liabilities and
deferred income taxes 34,153 33,371
Shareholders' equity 585,846 586,785
Total liabilities and
shareholders' equity $ 725,420 $ 712,887
SUBJECT TO YEAR-END AUDIT.