COLUMBUS, Ohio, April 27,
2017 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq:
LANC) today reported results for the company's third fiscal quarter
ended March 31, 2017. Highlights for the quarter are as
follows:
- Total net sales increased 2.1% to a third quarter record
$293.8 million versus $287.8 million last year.
- In the retail channel, excluding contributions from the Angelic
Bakehouse business acquired in November
2016, net sales were up 0.8%. New York BRAND®
Bakery frozen garlic toast products and Reames® frozen
noodles performed well, but retail growth was slowed by the
anticipated shift of some Easter holiday sales into the fiscal
fourth quarter and ongoing heightened competition in the
refrigerated dressings category. Coupon expense was lower, due in
part to the timing of Easter promotions, while retail trade
spending and product placement costs were comparable to the
prior-year quarter.
- Net sales in the foodservice channel overcame the impact of
both deflationary pricing from lower egg costs and our targeted
business rationalization efforts to post a 1.3% increase as sales
volumes to certain national chain restaurant customers
improved.
- Operating income decreased from $43.9
million to $22.0 million.
Excluding the pre-tax charge of $17.6
million resulting from the company's withdrawal from an
underfunded multiemployer pension plan as detailed in the company's
8-K filing issued on January 24,
2017, operating income declined 9.8% from $43.9 million to $39.6
million. Despite the higher sales volume, the $1.0 million decrease in gross profit primarily
reflects the net impact of deflationary foodservice pricing. The
$3.3 million rise in selling, general
and administrative expenses was driven by recent investments in
additional personnel and business initiatives to support future
growth, and increased amortization expense and other recurring
non-cash charges attributed to the Angelic Bakehouse business that
was acquired in November 2016. These
costs were offset in part by a lower level of spend for consumer
promotions.
- Including the costs resulting from the company's withdrawal
from the underfunded multiemployer pension plan, net income was
$14.5 million or $.53 per diluted share compared to $29.0 million or $1.06 per diluted share last year. The estimated
impact of the pension costs on net income was $11.5 million or $.42 per diluted share.
- The regular quarterly cash dividend paid on March 31, 2017 was continued at the higher amount
of $.55 per share set in November 2016. The company's balance sheet
remained debt free on March 31, 2017
with $124.8 million in cash and
equivalents.
For the nine months ended March 31,
2017, net sales increased to $912.0 million compared to $906.6 million a year ago. Including the
costs resulting from the company's withdrawal from the underfunded
multiemployer pension plan, net income for the nine-month period
totaled $86.8 million, or
$3.16 per diluted share versus the
prior-year amount of $91.1 million, or $3.32 per diluted share.
Chairman and CEO John B. Gerlach,
Jr. commented, "We were encouraged by the sales growth in
the foodservice channel and the positive contributions from select
areas within retail as well. Looking forward to the final
quarter of our fiscal year, commodity costs are expected to swing
slightly unfavorable from a generally flat third quarter. We
also foresee a diminishing level of deflationary pricing in the
foodservice channel and anticipate retail sales volumes to benefit
modestly from this year's later Easter holiday."
Conference Call on the Web
The company's third quarter
conference call is scheduled for this morning, April 27, 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;
- 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 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;
- 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;
- 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
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
293,834
|
|
|
$
|
287,765
|
|
|
$
|
911,968
|
|
|
$
|
906,619
|
|
Cost of
sales
|
221,929
|
|
|
214,841
|
|
|
665,690
|
|
|
682,134
|
|
Gross
profit
|
71,905
|
|
|
72,924
|
|
|
246,278
|
|
|
224,485
|
|
Selling, general
& administrative expenses
|
32,253
|
|
|
28,980
|
|
|
96,514
|
|
|
86,538
|
|
Multiemployer pension
settlement and related costs
|
17,639
|
|
|
—
|
|
|
17,639
|
|
|
—
|
|
Operating
income
|
22,013
|
|
|
43,944
|
|
|
132,125
|
|
|
137,947
|
|
Other, net
|
144
|
|
|
125
|
|
|
437
|
|
|
42
|
|
Income before income
taxes
|
22,157
|
|
|
44,069
|
|
|
132,562
|
|
|
137,989
|
|
Taxes based on
income
|
7,686
|
|
|
15,058
|
|
|
45,735
|
|
|
46,839
|
|
Net income
|
$
|
14,471
|
|
|
$
|
29,011
|
|
|
$
|
86,827
|
|
|
$
|
91,150
|
|
|
|
|
|
|
|
|
|
Net income per common
share: (a)
|
|
|
|
|
|
|
|
Basic
|
$
|
0.53
|
|
|
$
|
1.06
|
|
|
$
|
3.17
|
|
|
$
|
3.33
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
1.06
|
|
|
$
|
3.16
|
|
|
$
|
3.32
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
$
|
0.55
|
|
|
$
|
0.50
|
|
|
$
|
1.60
|
|
|
$
|
6.46
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
27,379
|
|
|
27,338
|
|
|
27,369
|
|
|
27,329
|
|
Diluted
|
27,442
|
|
|
27,376
|
|
|
27,438
|
|
|
27,365
|
|
|
|
(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
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
NET SALES - Specialty
Foods
|
$
|
293,834
|
|
|
$
|
287,765
|
|
|
$
|
911,968
|
|
|
$
|
906,619
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
|
Specialty
Foods
|
$
|
25,080
|
|
|
$
|
46,476
|
|
|
$
|
141,957
|
|
|
$
|
146,866
|
|
Corporate
expenses
|
(3,067)
|
|
|
(2,532)
|
|
|
(9,832)
|
|
|
(8,919)
|
|
Total Operating
Income
|
$
|
22,013
|
|
|
$
|
43,944
|
|
|
$
|
132,125
|
|
|
$
|
137,947
|
|
LANCASTER COLONY
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In
thousands)
|
|
|
March 31,
2017
|
|
June 30,
2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
|
124,751
|
|
|
$
|
118,080
|
|
Receivables – net of
allowance for doubtful accounts
|
75,056
|
|
|
66,006
|
|
Inventories
|
79,634
|
|
|
76,097
|
|
Other current
assets
|
15,881
|
|
|
7,644
|
|
Total current
assets
|
295,322
|
|
|
267,827
|
|
Net property, plant
and equipment
|
180,439
|
|
|
169,595
|
|
Other
assets
|
236,248
|
|
|
197,310
|
|
Total
assets
|
$
|
712,009
|
|
|
$
|
634,732
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
41,840
|
|
|
$
|
39,931
|
|
Accrued
liabilities
|
50,470
|
|
|
33,072
|
|
Total current
liabilities
|
92,310
|
|
|
73,003
|
|
Other noncurrent
liabilities and deferred income taxes
|
60,519
|
|
|
48,131
|
|
Shareholders'
equity
|
559,180
|
|
|
513,598
|
|
Total liabilities and
shareholders' equity
|
$
|
712,009
|
|
|
$
|
634,732
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lancaster-colony-reports-third-quarter-sales-and-earnings-300447077.html
SOURCE Lancaster Colony Corporation