COLUMBUS, Ohio, Jan. 26,
2017 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq:
LANC) today reported results for the company's second fiscal
quarter ended December 31, 2016. Highlights for the
quarter are as follows:
- Net sales increased 0.6% to $326.8
million versus $324.8 million
last year.
- In the retail channel, net sales increased 3% with Olive
Garden® dressings, New York BRAND® Bakery
frozen garlic bread products, Sister Schubert's® frozen
dinner rolls, Flatout® flatbreads and Reames®
frozen noodles contributing to growth. Retail sales gains were
impacted by increased trade promotions and product placement costs.
Net sales in the foodservice channel declined 2% reflecting both
our targeted business rationalization efforts and deflationary
pricing from lower egg costs, partially offset by a pickup in
limited time offer promotional programs with national chain
restaurants.
- Operating income increased $7.2
million to $59.4 million on
lower commodity costs, particularly eggs, and a more favorable
sales mix as partially offset by a greater investment in retail
trade and increased consumer promotions and product placement
costs.
- Net income was $39.0 million, or
$1.42 per diluted share compared to
$34.5 million or $1.25 per diluted share last year.
- The regular quarterly cash dividend paid on December 30, 2016 was $.55 per share, a ten percent increase from the
prior year's level excluding the special dividend paid in
December 2015. The company's balance
sheet remained debt free on December 31,
2016 with $118.5 million in
cash and equivalents.
For the six months ended December 31,
2016, net sales were essentially flat at $618.1 million compared to $618.9 million a year ago. Net income for
the six-month period totaled $72.4 million, or $2.63 per diluted share versus the prior-year
amount of $62.1 million, or
$2.26 per diluted share.
Note that as detailed in the company's 8-K filing issued on
January 24, 2017, the reported
financial results for the upcoming fiscal third quarter will
include the impact of a pre-tax charge of $17.7 million in settlement costs and
related expenses resulting from the company's withdrawal from an
underfunded multiemployer pension plan.
Chairman and CEO John B. Gerlach,
Jr. commented, "While the top line headwinds of customer
rationalization and deflationary pricing remained as expected for
our foodservice channel in the second quarter, we were pleased with
the uptick in retail channel sales from our frozen bread and pasta
products. Looking ahead, commodity costs are expected to turn
flat to modestly unfavorable in the back half of the fiscal
year. We also expect continued deflationary pricing in the
foodservice channel and ongoing softness in the foodservice
industry, particularly the casual dining segment, to impact fiscal
third quarter sales growth. In addition, this year's fiscal
third quarter will reflect some shifting of retail sales volumes to
our fiscal fourth quarter as a result of the later Easter
holiday.
With respect to our recent acquisition of Angelic Bakehouse, a manufacturer and marketer
of premium sprouted grain bakery products, the transaction closed
on November 17, 2016 and the
integration process is progressing well. We look forward to our
pursuit of future growth opportunities for that business."
Conference Call on the Web
The company's second quarter conference call is scheduled for
this morning, January 26, at 10:00 a.m.
ET. You may access a live webcast of the call via the
link on the company's Internet home page at
www.lancastercolony.com. A replay of the webcast will also be
made available on the company website.
About the Company
Lancaster Colony Corporation is a manufacturer and marketer of
specialty food products for the retail and foodservice
channels.
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 ability to successfully integrate the acquisition of
Angelic Bakehouse, Inc. and
subsequently grow the business;
- price and product competition;
- the impact of any regulatory matters affecting our food
business, including any required labeling changes and their impact
on consumer demand;
- the potential for loss of larger programs or key customer
relationships;
- the impact of customer store brands on our branded retail
volumes;
- fluctuations in the cost and availability of ingredients and
packaging;
- the reaction of customers or consumers to the effect of
price increases we may implement;
- 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 possible occurrence of product recalls or other
defective or mislabeled product costs;
- changes in demand for our products, which may result from
loss of brand reputation or customer goodwill;
- maintenance of competitive position with respect to other
manufacturers;
- adverse changes in freight, energy or other costs of
producing, distributing or transporting our products;
- capacity constraints that may affect our ability to meet
demand or may increase our costs;
- dependence on contract manufacturers;
- efficiencies in plant operations;
- stability of labor relations, including the impact of
contract negotiations with collective bargaining units;
- the outcome of any litigation or arbitration;
- the impact, if any, of certain contingent liabilities
associated with our withdrawal from a multiemployer pension
plan;
- the impact of fluctuations in our pension plan asset values
on funding levels, contributions required and benefit
costs;
- the extent to which future business acquisitions are
completed and acceptably integrated;
- dependence on key personnel and changes in key
personnel;
- changes in estimates in critical accounting judgments;
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).
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
December 31,
|
|
Six Months Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
$
|
326,773
|
|
|
$
|
324,769
|
|
|
$
|
618,134
|
|
|
$
|
618,854
|
|
Cost of
sales
|
233,034
|
|
|
241,175
|
|
|
443,761
|
|
|
467,293
|
|
Gross
profit
|
93,739
|
|
|
83,594
|
|
|
174,373
|
|
|
151,561
|
|
Selling, general
& administrative expenses
|
34,381
|
|
|
31,479
|
|
|
64,261
|
|
|
57,558
|
|
Operating
income
|
59,358
|
|
|
52,115
|
|
|
110,112
|
|
|
94,003
|
|
Other, net
|
206
|
|
|
(205)
|
|
|
293
|
|
|
(83)
|
|
Income before income
taxes
|
59,564
|
|
|
51,910
|
|
|
110,405
|
|
|
93,920
|
|
Taxes based on
income
|
20,608
|
|
|
17,399
|
|
|
38,049
|
|
|
31,781
|
|
Net income
|
$
|
38,956
|
|
|
$
|
34,511
|
|
|
$
|
72,356
|
|
|
$
|
62,139
|
|
|
|
|
|
|
|
|
|
Net income per common
share: (a)
|
|
|
|
|
|
|
|
Basic
|
$
|
1.42
|
|
|
$
|
1.26
|
|
|
$
|
2.64
|
|
|
$
|
2.27
|
|
Diluted
|
$
|
1.42
|
|
|
$
|
1.25
|
|
|
$
|
2.63
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
$
|
0.55
|
|
|
$
|
5.50
|
|
|
$
|
1.05
|
|
|
$
|
5.96
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
27,366
|
|
|
27,328
|
|
|
27,364
|
|
|
27,324
|
|
Diluted
|
27,441
|
|
|
27,374
|
|
|
27,435
|
|
|
27,359
|
|
|
|
|
|
(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
December 31,
|
|
Six Months Ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
NET SALES - Specialty
Foods
|
|
$
|
326,773
|
|
|
$
|
324,769
|
|
|
$
|
618,134
|
|
|
$
|
618,854
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
|
|
Specialty
Foods
|
|
$
|
62,052
|
|
|
$
|
55,429
|
|
|
$
|
116,877
|
|
|
$
|
100,390
|
|
Corporate
expenses
|
|
(2,694)
|
|
|
(3,314)
|
|
|
(6,765)
|
|
|
(6,387)
|
|
Total Operating
Income
|
|
$
|
59,358
|
|
|
$
|
52,115
|
|
|
$
|
110,112
|
|
|
$
|
94,003
|
|
LANCASTER COLONY
CORPORATION
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
December 31,
2016
|
|
June 30,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
equivalents
|
|
$
|
118,507
|
|
|
$
|
118,080
|
|
Receivables – net of
allowance for doubtful accounts
|
|
71,438
|
|
|
66,006
|
|
Inventories
|
|
80,115
|
|
|
76,097
|
|
Other current
assets
|
|
6,899
|
|
|
7,644
|
|
Total current
assets
|
|
276,959
|
|
|
267,827
|
|
Net property, plant
and equipment
|
|
176,925
|
|
|
169,595
|
|
Other
assets
|
|
237,574
|
|
|
197,310
|
|
Total
assets
|
|
$
|
691,458
|
|
|
$
|
634,732
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
39,420
|
|
|
$
|
39,931
|
|
Accrued
liabilities
|
|
30,425
|
|
|
33,072
|
|
Total current
liabilities
|
|
69,845
|
|
|
73,003
|
|
Other noncurrent
liabilities and deferred income taxes
|
|
62,130
|
|
|
48,131
|
|
Shareholders'
equity
|
|
559,483
|
|
|
513,598
|
|
Total liabilities and
shareholders' equity
|
|
$
|
691,458
|
|
|
$
|
634,732
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lancaster-colony-reports-second-quarter-sales-and-earnings-300397293.html
SOURCE Lancaster Colony Corporation