UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DCD.C. 20549
(Mark One)
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ý☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2017September 30, 2023
or
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¨☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 000-04065
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Lancaster Colony Corporation |
(Exact name of registrant as specified in its charter) |
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Ohio | | 13-1955943 | | | | | | | | | |
Ohio | | 13-1955943 |
(State or other jurisdiction of incorporation or organization)
| | (I.R.S. Employer Identification No.)
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380 Polaris Parkway | Suite 400 Westerville, Ohio
| | 43082 |
Westerville | Ohio | | 43082 |
(Address of principal executive offices) | | (Zip Code) |
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614-224-7141(614) | 224-7141 |
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock, without par value | LANC | NASDAQ Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | | ý | | Accelerated filer | | ¨☐ |
Non-accelerated filer | | o (Do not check if a smaller reporting company) ☐ | | Smaller reporting company | | ¨☐ |
| | | | Emerging growth company | | ¨☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ¨☐ No ý
As of January 18, 2018,October 13, 2023, there were 27,451,989approximately 27,517,000 shares of Common Stock, without par value, outstanding.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
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Item 1. | | |
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Item 2. | | |
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Item 3. | | |
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Item 4. | | |
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Item 1. | | |
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Item 1A. | | |
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Item 2. | | |
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Item 6. | | |
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PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | (Amounts in thousands, except share data) | December 31, 2017 | | June 30, 2017 | (Amounts in thousands, except share data) | September 30, 2023 | | June 30, 2023 |
ASSETS | ASSETS | ASSETS |
Current Assets: | | | | Current Assets: | |
Cash and equivalents | $ | 178,767 |
| | $ | 143,104 |
| Cash and equivalents | $ | 73,746 | | | $ | 88,473 | |
Receivables | 68,360 |
| | 69,922 |
| Receivables | 120,076 | | | 114,967 | |
Inventories: | | | | Inventories: | |
Raw materials | 34,679 |
| | 28,447 |
| Raw materials | 47,659 | | | 40,761 | |
Finished goods | 42,980 |
| | 47,929 |
| Finished goods | 130,149 | | | 117,504 | |
Total inventories | 77,659 |
| | 76,376 |
| Total inventories | 177,808 | | | 158,265 | |
Other current assets | 18,311 |
| | 11,744 |
| Other current assets | 14,628 | | | 12,758 | |
Total current assets | 343,097 |
| | 301,146 |
| Total current assets | 386,258 | | | 374,463 | |
Property, Plant and Equipment: | | | | Property, Plant and Equipment: | |
Land, buildings and improvements | 127,419 |
| | 124,673 |
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Machinery and equipment | 282,294 |
| | 272,582 |
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Total cost | 409,713 |
| | 397,255 |
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| Property, plant and equipment-gross | | Property, plant and equipment-gross | 871,290 | | | 853,709 | |
Less accumulated depreciation | 224,695 |
| | 216,584 |
| Less accumulated depreciation | 382,195 | | | 371,503 | |
Property, plant and equipment-net | 185,018 |
| | 180,671 |
| Property, plant and equipment-net | 489,095 | | | 482,206 | |
Other Assets: | | | | Other Assets: | |
Goodwill | 168,030 |
| | 168,030 |
| Goodwill | 208,371 | | | 208,371 | |
Other intangible assets-net | 58,189 |
| | 60,162 |
| Other intangible assets-net | 4,708 | | | 4,840 | |
Operating lease right-of-use assets | | Operating lease right-of-use assets | 23,073 | | | 24,743 | |
Other noncurrent assets | 10,142 |
| | 6,396 |
| Other noncurrent assets | 18,797 | | | 18,371 | |
Total | $ | 764,476 |
| | $ | 716,405 |
| Total | $ | 1,130,302 | | | $ | 1,112,994 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY |
Current Liabilities: | | | | Current Liabilities: | |
Accounts payable | $ | 52,579 |
| | $ | 41,353 |
| Accounts payable | $ | 120,337 | | | $ | 111,758 | |
Accrued liabilities | 32,490 |
| | 35,270 |
| Accrued liabilities | 46,871 | | | 56,994 | |
Total current liabilities | 85,069 |
| | 76,623 |
| Total current liabilities | 167,208 | | | 168,752 | |
Noncurrent Operating Lease Liabilities | | Noncurrent Operating Lease Liabilities | 15,286 | | | 16,967 | |
Other Noncurrent Liabilities | 43,531 |
| | 38,598 |
| Other Noncurrent Liabilities | 16,312 | | | 17,683 | |
Deferred Income Taxes | 14,867 |
| | 25,207 |
| Deferred Income Taxes | 52,728 | | | 47,325 | |
Commitments and Contingencies |
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| Commitments and Contingencies | |
Shareholders’ Equity: | | | | Shareholders’ Equity: | |
Preferred stock-authorized 3,050,000 shares; outstanding-none |
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| Preferred stock-authorized 3,050,000 shares; outstanding-none | |
Common stock-authorized 75,000,000 shares; outstanding-December-27,450,957 shares; June-27,448,424 shares | 117,203 |
| | 115,174 |
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Common stock-authorized 75,000,000 shares; outstanding-September-27,517,313 shares; June-27,527,550 shares | | Common stock-authorized 75,000,000 shares; outstanding-September-27,517,313 shares; June-27,527,550 shares | 146,439 | | | 143,870 | |
Retained earnings | 1,250,416 |
| | 1,206,671 |
| Retained earnings | 1,524,469 | | | 1,503,963 | |
Accumulated other comprehensive loss | (8,825 | ) | | (8,936 | ) | Accumulated other comprehensive loss | (9,289) | | | (9,365) | |
Common stock in treasury, at cost | (737,785 | ) | | (736,932 | ) | Common stock in treasury, at cost | (782,851) | | | (776,201) | |
Total shareholders’ equity | 621,009 |
| | 575,977 |
| Total shareholders’ equity | 878,768 | | | 862,267 | |
Total | $ | 764,476 |
| | $ | 716,405 |
| Total | $ | 1,130,302 | | | $ | 1,112,994 | |
See accompanying notes to condensed consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| | | Three Months Ended December 31, | | Six Months Ended December 31, | | | Three Months Ended September 30, |
(Amounts in thousands, except per share data) | 2017 | | 2016 | | 2017 | | 2016 | (Amounts in thousands, except per share data) | | 2023 | | 2022 |
Net Sales | $ | 319,665 |
| | $ | 326,773 |
| | $ | 618,581 |
| | $ | 618,134 |
| Net Sales | | $ | 461,572 | | | $ | 425,537 | |
Cost of Sales | 235,724 |
| | 233,034 |
| | 459,163 |
| | 443,761 |
| Cost of Sales | | 352,850 | | | 326,482 | |
Gross Profit | 83,941 |
| | 93,739 |
| | 159,418 |
| | 174,373 |
| Gross Profit | | 108,722 | | | 99,055 | |
Selling, General and Administrative Expenses | 36,676 |
| | 34,381 |
| | 67,827 |
| | 64,261 |
| Selling, General and Administrative Expenses | | 51,947 | | | 49,757 | |
| Operating Income | 47,265 |
| | 59,358 |
| | 91,591 |
| | 110,112 |
| Operating Income | | 56,775 | | | 49,298 | |
Other, Net | 412 |
| | 206 |
| | 770 |
| | 293 |
| Other, Net | | 857 | | | (270) | |
Income Before Income Taxes | 47,677 |
| | 59,564 |
| | 92,361 |
| | 110,405 |
| Income Before Income Taxes | | 57,632 | | | 49,028 | |
Taxes Based on Income | 1,757 |
| | 20,608 |
| | 17,055 |
| | 38,049 |
| Taxes Based on Income | | 13,681 | | | 11,436 | |
| Net Income | $ | 45,920 |
| | $ | 38,956 |
| | $ | 75,306 |
| | $ | 72,356 |
| Net Income | | $ | 43,951 | | | $ | 37,592 | |
| Net Income Per Common Share: | | | | | | | | Net Income Per Common Share: | | | | |
Basic | $ | 1.67 |
| | $ | 1.42 |
| | $ | 2.74 |
| | $ | 2.64 |
| Basic | | $ | 1.60 | | | $ | 1.37 | |
Diluted | $ | 1.67 |
| | $ | 1.42 |
| | $ | 2.74 |
| | $ | 2.63 |
| Diluted | | $ | 1.59 | | | $ | 1.36 | |
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Cash Dividends Per Common Share | $ | 0.60 |
| | $ | 0.55 |
| | $ | 1.15 |
| | $ | 1.05 |
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Weighted Average Common Shares Outstanding: | | | | | | | | Weighted Average Common Shares Outstanding: | | |
Basic | 27,396 |
| | 27,366 |
| | 27,396 |
| | 27,364 |
| Basic | | 27,449 | | | 27,450 | |
Diluted | 27,460 |
| | 27,441 |
| | 27,456 |
| | 27,435 |
| Diluted | | 27,473 | | | 27,458 | |
See accompanying notes to condensed consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
| | | Three Months Ended December 31, | | Six Months Ended December 31, | | | Three Months Ended September 30, |
(Amounts in thousands) | 2017 | | 2016 | | 2017 | | 2016 | (Amounts in thousands) | | 2023 | | 2022 |
Net Income | $ | 45,920 |
| | $ | 38,956 |
| | $ | 75,306 |
| | $ | 72,356 |
| Net Income | | $ | 43,951 | | | $ | 37,592 | |
Other Comprehensive Income: | | | | | | | | Other Comprehensive Income: | | |
Defined Benefit Pension and Postretirement Benefit Plans: | | | | | | | | Defined Benefit Pension and Postretirement Benefit Plans: | | |
Amortization of loss, before tax | 134 |
| | 168 |
| | 268 |
| | 338 |
| Amortization of loss, before tax | | 144 | | | 169 | |
Amortization of prior service credit, before tax | (46 | ) | | (45 | ) | | (91 | ) | | (90 | ) | Amortization of prior service credit, before tax | | (45) | | | (45) | |
Total Other Comprehensive Income, Before Tax | 88 |
| | 123 |
| | 177 |
| | 248 |
| Total Other Comprehensive Income, Before Tax | | 99 | | | 124 | |
Tax Attributes of Items in Other Comprehensive Income: | | | | | | | | Tax Attributes of Items in Other Comprehensive Income: | | | | |
Amortization of loss, tax | (50 | ) | | (62 | ) | | (99 | ) | | (125 | ) | Amortization of loss, tax | | (34) | | | (40) | |
Amortization of prior service credit, tax | 17 |
| | 17 |
| | 33 |
| | 33 |
| Amortization of prior service credit, tax | | 11 | | | 11 | |
Total Tax Expense | (33 | ) | | (45 | ) | | (66 | ) | | (92 | ) | Total Tax Expense | | (23) | | | (29) | |
Other Comprehensive Income, Net of Tax | 55 |
| | 78 |
| | 111 |
| | 156 |
| Other Comprehensive Income, Net of Tax | | 76 | | | 95 | |
Comprehensive Income | $ | 45,975 |
| | $ | 39,034 |
| | $ | 75,417 |
| | $ | 72,512 |
| Comprehensive Income | | $ | 44,027 | | | $ | 37,687 | |
See accompanying notes to condensed consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | | Six Months Ended December 31, | | Three Months Ended September 30, |
(Amounts in thousands) | 2017 | | 2016 | (Amounts in thousands) | 2023 | | 2022 |
Cash Flows From Operating Activities: | | | | Cash Flows From Operating Activities: | | | |
Net income | $ | 75,306 |
| | $ | 72,356 |
| Net income | $ | 43,951 | | | $ | 37,592 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | Adjustments to reconcile net income to net cash provided by operating activities: | |
Impacts of noncash items: | | | | Impacts of noncash items: | |
Depreciation and amortization | 13,030 |
| | 11,943 |
| Depreciation and amortization | 13,592 | | | 11,203 | |
Change in acquisition-related contingent consideration | 993 |
| | 224 |
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| Deferred income taxes and other changes | (9,732 | ) | | (153 | ) | Deferred income taxes and other changes | 5,765 | | | 195 | |
Stock-based compensation expense | 2,313 |
| | 2,155 |
| Stock-based compensation expense | 2,569 | | | 2,465 | |
| Pension plan activity | (248 | ) | | (122 | ) | Pension plan activity | (64) | | | (493) | |
Changes in operating assets and liabilities: | | | | Changes in operating assets and liabilities: | |
Receivables | 1,561 |
| | (3,931 | ) | Receivables | (5,109) | | | (745) | |
Inventories | (1,283 | ) | | (3,589 | ) | Inventories | (19,543) | | | (21,237) | |
Other current assets | (6,705 | ) | | 918 |
| Other current assets | (1,870) | | | (102) | |
Accounts payable and accrued liabilities | 8,720 |
| | (3,679 | ) | Accounts payable and accrued liabilities | (3,676) | | | 21,986 | |
Net cash provided by operating activities | 83,955 |
| | 76,122 |
| Net cash provided by operating activities | 35,615 | | | 50,864 | |
Cash Flows From Investing Activities: | | | | Cash Flows From Investing Activities: | | | |
Cash paid for acquisitions, net of cash acquired | (318 | ) | | (34,997 | ) | |
Payments for property additions | (15,287 | ) | | (11,838 | ) | Payments for property additions | (18,331) | | | (24,585) | |
| Proceeds from sale of property | | Proceeds from sale of property | — | | | 1,159 | |
| Other-net | 11 |
| | 94 |
| Other-net | (1,412) | | | (55) | |
Net cash used in investing activities | (15,594 | ) | | (46,741 | ) | Net cash used in investing activities | (19,743) | | | (23,481) | |
Cash Flows From Financing Activities: | | | | Cash Flows From Financing Activities: | | | |
Payment of dividends | (31,561 | ) | | (28,794 | ) | Payment of dividends | (23,445) | | | (22,067) | |
Purchase of treasury stock | (853 | ) | | (8 | ) | Purchase of treasury stock | (6,650) | | | (84) | |
Tax withholdings for stock-based compensation | (284 | ) | | (152 | ) | Tax withholdings for stock-based compensation | — | | | (617) | |
| Principal payments for finance leases | | Principal payments for finance leases | (504) | | | (679) | |
Net cash used in financing activities | (32,698 | ) | | (28,954 | ) | Net cash used in financing activities | (30,599) | | | (23,447) | |
| Net change in cash and equivalents | 35,663 |
| | 427 |
| Net change in cash and equivalents | (14,727) | | | 3,936 | |
Cash and equivalents at beginning of year | 143,104 |
| | 118,080 |
| Cash and equivalents at beginning of year | 88,473 | | | 60,283 | |
Cash and equivalents at end of period | $ | 178,767 |
| | $ | 118,507 |
| Cash and equivalents at end of period | $ | 73,746 | | | $ | 64,219 | |
Supplemental Disclosure of Operating Cash Flows: | | | | Supplemental Disclosure of Operating Cash Flows: | | | |
Net cash payments for income taxes | $ | 32,457 |
| | $ | 37,383 |
| Net cash payments for income taxes | $ | 6,231 | | | $ | 7,544 | |
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See accompanying notes to condensed consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
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| | Three Months Ended September 30, 2023 |
(Amounts in thousands, except per share data) | | Common Stock Outstanding | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Shareholders’ Equity |
| Shares | | Amount | | | | | | | | |
Balance, June 30, 2023 | | 27,528 | | | $ | 143,870 | | | $ | 1,503,963 | | | $ | (9,365) | | | $ | (776,201) | | | $ | 862,267 | |
Net income | | | | | | 43,951 | | | | | | | 43,951 | |
Net pension and postretirement benefit gains, net of $23 tax effect | | | | | | | | 76 | | | | | 76 | |
Cash dividends - common stock ($0.85 per share) | | | | | | (23,445) | | | | | | | (23,445) | |
Purchase of treasury stock | | (40) | | | | | | | | | (6,650) | | | (6,650) | |
Stock-based plans | | 29 | | | — | | | | | | | | | — | |
Stock-based compensation expense | | | | 2,569 | | | | | | | | | 2,569 | |
Balance, September 30, 2023 | | 27,517 | | | $ | 146,439 | | | $ | 1,524,469 | | | $ | (9,289) | | | $ | (782,851) | | | $ | 878,768 | |
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(Amounts in thousands, except per share data) | | Common Stock Outstanding | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total Shareholders’ Equity |
| Shares | | Amount | | | | | | | | |
Balance, June 30, 2022 | | 27,520 | | | $ | 137,814 | | | $ | 1,485,045 | | | $ | (11,172) | | | $ | (767,000) | | | $ | 844,687 | |
Net income | | | | | | 37,592 | | | | | | | 37,592 | |
Net pension and postretirement benefit gains, net of $29 tax effect | | | | | | | | 95 | | | | | 95 | |
Cash dividends - common stock ($0.80 per share) | | | | | | (22,067) | | | | | | | (22,067) | |
Purchase of treasury stock | | — | | | | | | | | | (84) | | | (84) | |
Stock-based plans | | 34 | | | (617) | | | | | | | | | (617) | |
Stock-based compensation expense | | | | 2,465 | | | | | | | | | 2,465 | |
Balance, September 30, 2022 | | 27,554 | | | $ | 139,662 | | | $ | 1,500,570 | | | $ | (11,077) | | | $ | (767,084) | | | $ | 862,071 | |
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See accompanying notes to condensed consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Lancaster Colony Corporation and our wholly-owned subsidiaries, collectively referred to as “we,” “us,” “our,” “registrant” or the “Company” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. Intercompany transactions and accounts have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our 20172023 Annual Report on Form 10-K. Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example, 20182024 refers to fiscal 2018,2024, which is the period from July 1, 20172023 to June 30, 2018.
Effective July 1, 2017, David A. Ciesinski, our President and Chief Operating Officer, succeeded John B. Gerlach, Jr. as Chief Executive Officer (“CEO”). As President and CEO, Mr. Ciesinski became our principal executive officer and chief operating decision maker (“CODM”). This change resulted in modifications to the CODM’s approach to managing the business, assessing performance and allocating resources. Consequently, beginning on July 1, 2017, our segment reporting structure was amended to align with these changes, and our financial results are now presented as two reportable segments: Retail and Foodservice. See Note 8 for additional details. All historical information was retroactively conformed to the current presentation.2024.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, except for those acquired as part of a business combination, which are recorded at fair value at the time of purchase. We use the straight-line method of computing depreciation for financial reporting purposes based on the estimated useful lives of the corresponding assets. Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows:
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| December 31, |
| 2017 | | 2016 |
Construction in progress in Accounts Payable | $ | 446 |
| | $ | 1,298 |
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| September 30, |
| 2023 | | 2022 |
Construction in progress in Accounts Payable | $ | 10,165 | | | $ | 22,864 | |
Accrued Workers Compensation - Noncurrentand Employee Benefits
Accrued workers compensation and employee benefits included in Other NoncurrentAccrued Liabilities was $12.6$16.3 million and $8.5$26.3 million at December 31, 2017September 30, 2023 and June 30, 2017,2023, respectively.
Earnings Per Share
Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock, and stock-settled stock appreciation rights)rights and performance units) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock, and stock-settled stock appreciation rights.rights and performance units.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Basic and diluted net income per common share were calculated as follows:
| | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | | | 2023 | | 2022 |
Net income | | | | | $ | 43,951 | | | $ | 37,592 | |
Net income available to participating securities | | | | | (136) | | | (118) | |
Net income available to common shareholders | | | | | $ | 43,815 | | | $ | 37,474 | |
| | | | | | | |
Weighted average common shares outstanding – basic | | | | | 27,449 | | | 27,450 | |
Incremental share effect from: | | | | | | | |
Nonparticipating restricted stock | | | | | 3 | | | 4 | |
Stock-settled stock appreciation rights (1) | | | | | 11 | | | — | |
Performance units | | | | | 10 | | | 4 | |
Weighted average common shares outstanding – diluted | | | | | 27,473 | | | 27,458 | |
| | | | | | | |
Net income per common share – basic | | | | | $ | 1.60 | | | $ | 1.37 | |
Net income per common share – diluted | | | | | $ | 1.59 | | | $ | 1.36 | |
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Six Months Ended December 31, |
| 2017 | | 2016 | | 2017 | | 2016 |
Net income | $ | 45,920 |
| | $ | 38,956 |
| | $ | 75,306 |
| | $ | 72,356 |
|
Net income available to participating securities | (73 | ) | | (77 | ) | | (119 | ) | | (142 | ) |
Net income available to common shareholders | $ | 45,847 |
| | $ | 38,879 |
| | $ | 75,187 |
| | $ | 72,214 |
|
| | | | | | | |
Weighted average common shares outstanding – basic | 27,396 |
| | 27,366 |
| | 27,396 |
| | 27,364 |
|
Incremental share effect from: | | | | | | | |
Nonparticipating restricted stock | 3 |
| | 3 |
| | 4 |
| | 4 |
|
Stock-settled stock appreciation rights | 61 |
| | 72 |
| | 56 |
| | 67 |
|
Weighted average common shares outstanding – diluted | 27,460 |
| | 27,441 |
| | 27,456 |
| | 27,435 |
|
| | | | | | | |
Net income per common share – basic | $ | 1.67 |
| | $ | 1.42 |
| | $ | 2.74 |
| | $ | 2.64 |
|
Net income per common share – diluted | $ | 1.67 |
| | $ | 1.42 |
| | $ | 2.74 |
| | $ | 2.63 |
|
(1)Excludes the impact of the following weighted average stock-settled stock appreciation rights outstanding with an antidilutive effect: 0.1 million and 0.3 million for the three months ended September 30, 2023 and 2022, respectively.Accumulated Other Comprehensive Loss
The following table presents the amounts reclassified out of accumulated other comprehensive loss by component:
| | | Three Months Ended December 31, | | Six Months Ended December 31, | | | Three Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 | | | 2023 | | 2022 |
Accumulated other comprehensive loss at beginning of period | $ | (8,880 | ) | | $ | (11,272 | ) | | $ | (8,936 | ) | | $ | (11,350 | ) | Accumulated other comprehensive loss at beginning of period | | $ | (9,365) | | | $ | (11,172) | |
Defined Benefit Pension Plan Items: | | | | | | | | Defined Benefit Pension Plan Items: | | |
Amortization of unrecognized net loss | 143 |
| | 178 |
| | 286 |
| | 357 |
| Amortization of unrecognized net loss | | 159 | | | 181 | |
Postretirement Benefit Plan Items: | | | | | | | | Postretirement Benefit Plan Items: | | |
Amortization of unrecognized net gain | (9 | ) | | (10 | ) | | (18 | ) | | (19 | ) | Amortization of unrecognized net gain | | (15) | | | (12) | |
Amortization of prior service credit | (46 | ) | | (45 | ) | | (91 | ) | | (90 | ) | Amortization of prior service credit | | (45) | | | (45) | |
Total other comprehensive income, before tax | 88 |
| | 123 |
| | 177 |
| | 248 |
| Total other comprehensive income, before tax | | 99 | | | 124 | |
Total tax expense | (33 | ) | | (45 | ) | | (66 | ) | | (92 | ) | Total tax expense | | (23) | | | (29) | |
Other comprehensive income, net of tax | 55 |
| | 78 |
| | 111 |
| | 156 |
| Other comprehensive income, net of tax | | 76 | | | 95 | |
| Accumulated other comprehensive loss at end of period | $ | (8,825 | ) | | $ | (11,194 | ) | | $ | (8,825 | ) | | $ | (11,194 | ) | Accumulated other comprehensive loss at end of period | | $ | (9,289) | | | $ | (11,077) | |
Significant Accounting Policies
There were no changes to our Significant Accounting Policies from those disclosed in our 20172023 Annual Report on Form 10-K.
Recently IssuedRecent Accounting Standards
In March 2017, the Financial Accounting Standards Board (“FASB”)There are no recently issued newor adopted accounting guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost by disaggregating the service cost component from the other components of net periodic benefit cost. The amendments require an employer to present service cost in the same line item(s) as compensation costs for the pertinent employees whereas the other components of net periodic benefit cost must be reported separately from service cost and outside of income from operations. The amendments also allow only the service cost component to be eligible for capitalization. The amendments require retrospective application for the income statement presentation provisions and prospective application for the capitalization of the service cost component. However, as a result of prior years’ restructuring activities, we no longer have any active employees continuing to accrue service cost. Therefore, the service cost provisions are not applicable to us, and we expect only changes in classification on the income statement. The guidancestandards that will be effective for us in fiscal 2019 including interim periods.impact our consolidated financial statements.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
In May 2014, the FASB issued new accounting guidance for the recognition of revenue and issued subsequent clarifications of this new guidance in 2016 and 2017. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This model is based on a control approach rather than the current risks and rewards model. The new guidance would also require expanded disclosures. Since we do not plan to early adopt this standard, the guidance will be effective for us in fiscal 2019 including interim periods and will require either retrospective application to each prior period presented or modified retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the method of adoption but believe that we will apply the modified retrospective approach. We are currently assessing the impact that this standard will have on our accounting policies, processes, system requirements, internal controls and disclosures using internal resources and the assistance of a third party. We have established a project plan, completed an initial review of selected customer contracts and are evaluating the impact of the new standard on certain common practices currently employed by us and by other manufacturers of consumer products. We have not yet determined the impact that this standard will have on our financial position, results of operations and the related notes to the consolidated financial statements.
In February 2016, the FASB issued new accounting guidance to require lessees to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months. The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease). Both lease classifications require the lessee to record a right-of-use asset and a lease liability based upon the present value of the lease payments. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-of-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the consolidated financial statements. The guidance will be effective for us in fiscal 2020 including interim periods using a modified retrospective approach. We are currently evaluating the impact of this guidance.
Recently Adopted Accounting Standards
In March 2016, the FASB issued new accounting guidance to simplify the accounting for stock-based compensation. The amendments include changes to the accounting for share-based payment transactions, including: the inclusion of the tax consequences related to stock-based compensation within the computation of income tax expense versus equity; the classification of awards as either equity or liabilities; and the classification of share-based activity on the statement of cash flows. The adoption may result in increased volatility to our income tax expense and resulting net income in future periods dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards. We adopted the new guidance on July 1, 2017 and elected to continue to estimate forfeitures. The adoption of this guidance resulted in 1) the prospective recognition of windfall tax benefits and shortfall tax deficiencies in income tax expense; 2) the retrospective reclassification of windfall tax benefits on the Condensed Consolidated Statements of Cash Flows from financing activities to operating activities; and 3) the retrospective reclassification of employee tax withholdings on the Condensed Consolidated Statements of Cash Flows from operating activities to financing activities. There was no material impact on our condensed consolidated financial statements as a result of this adoption.
Note 2 – Acquisition
On November 17, 2016, we acquired substantially all of the assets of Angelic Bakehouse, Inc. (“Angelic”). Angelic, a privately owned manufacturer and marketer of premium sprouted grain bakery products, is based near Milwaukee, Wisconsin. The purchase price of $35.5 million was funded by cash on hand and includes immaterial post-closing adjustments, which were paid in April 2017 and July 2017, but excludes contingent consideration relating to an additional earn-out payment which is tied to performance-based conditions. In general, the terms of the acquisition specify that the sellers will receive an earn-out based upon a pre-determined multiple of the defined adjusted EBITDA of Angelic for fiscal 2021. We are unable to provide a range for the amount of this earn-out because it is based on the future adjusted EBITDA of Angelic, and the earn-out does not contain a minimum or maximum value. See further discussion of the earn-out in Note 3. Angelic is reported in our Retail segment, and its results of operations have been included in our condensed consolidated financial statements from the date of acquisition.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Note 3 – Fair Value
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. GAAP sets forth a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels are as follows:
Level 1 – defined as observable inputs, such as quoted market prices in active markets.
Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.
Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.
Our financial assets and liabilities consist principally of cash, accounts receivable, accounts payable and contingent consideration payable. The estimated fair value of cash, accounts receivable and accounts payable approximates their carrying value.
Our contingent consideration, which is measured at fair value on a recurring basis, is included in Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets. The following table summarizes our contingent consideration:
|
| | | | | | | | | | | | |
| Fair Value Measurements at December 31, 2017 |
| Level 1 | Level 2 | Level 3 | Total |
Acquisition-related contingent consideration | $ | — |
| $ | — |
| $ | 16,021 |
| $ | 16,021 |
|
| | | | |
| Fair Value Measurements at June 30, 2017 |
| Level 1 | Level 2 | Level 3 | Total |
Acquisition-related contingent consideration | $ | — |
| $ | — |
| $ | 15,028 |
| $ | 15,028 |
|
The contingent consideration resulted from the earn-out associated with our November 17, 2016 acquisition of Angelic. The purchase price did not include the future earn-out payment which is tied to performance-based conditions. In general, the terms of the acquisition specify that the sellers will receive an earn-out based upon a pre-determined multiple of the defined adjusted EBITDA of Angelic for fiscal 2021. The fair value of the contingent consideration was estimated using a present value approach, which incorporates factors such as business risks and projections, to estimate an expected value. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. Using this valuation technique, the fair value of the contingent consideration was determined to be $13.9 million at November 17, 2016.
The following table represents our Level 3 fair value measurements using significant other unobservable inputs for acquisition-related contingent consideration:
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Six Months Ended December 31, |
| 2017 | | 2016 | | 2017 | | 2016 |
Acquisition-related contingent consideration at beginning of period | $ | 15,516 |
| | $ | — |
| | $ | 15,028 |
| | $ | — |
|
Additions | — |
| | 13,872 |
| | — |
| | 13,872 |
|
Changes in fair value included in Selling, General and Administrative Expenses | 505 |
| | 224 |
| | 993 |
| | 224 |
|
Acquisition-related contingent consideration at end of period | $ | 16,021 |
| | $ | 14,096 |
| | $ | 16,021 |
| | $ | 14,096 |
|
Note 4 – Long-Term Debt
At December 31, 2017September 30, 2023 and June 30, 2017,2023, we had an unsecured credit facility (“Facility”) under which we could borrow, on a revolving credit basis, up to a maximum of $150$150 million at any one time, with potential to expand the total credit availability to $225$225 million subject to us obtaining based on consent of the issuing banks and certain other conditions. The Facility expires on April 8, 2021,March 19, 2025, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBORSOFR or an alternativealternate base rate defined in the Facility, at our option.Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
At December 31, 2017 and June 30, 2017, we had no borrowings outstanding under the Facility. At December 31, 2017, we had $5.1 million of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. We paid no interest for the three and six months ended December 31, 2017 and 2016.
The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated leverage ratio not greater than 33.5 to 1, at all times.subject to certain exceptions. The interest coverage ratio is calculated by dividing Consolidated EBIT by Consolidated Interest Expense, and the leverage ratio is calculated by dividing Consolidated Net Debt by Consolidated EBITDA. All financial terms used in the covenant calculations are defined more specifically in the Facility.
At September 30, 2023 and June 30, 2023, we had no borrowings outstanding under the Facility. At September 30, 2023 and June 30, 2023, we had $2.2 million and $2.8 million, respectively, of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. We paid no interest for the three months ended September 30, 2023 and 2022. Note 53 – Commitments and Contingencies
At December 31, 2017,September 30, 2023, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition willis not expected to have a material effect on our consolidated financial statements.
With our acquisition of Angelic, we have a contingent liability recorded for the earn-out associated with the transaction. See further discussion in Note 3.
Note 64 – Goodwill and Other Intangible Assets
As described in Notes 1 and 8, we changed our reportable segments as of July 1, 2017 when our organizational structure changed. Using a relative fair value approach, we reassigned our existing goodwill balance to the two new reporting units that directly align with our new Retail and Foodservice reportable segments. Based on this approach, goodwillGoodwill attributable to the Retail and Foodservice segments was $119.3$157.4 million and $48.7$51.0 million, respectively, at December 31, 2017September 30, 2023 and June 30, 2017.
The following table summarizes our identifiable other intangible assets.assets:
| | | | | | | | | | | |
| September 30, 2023 | | June 30, 2023 |
| | | |
| | | |
Tradenames (20 to 30-year life) | | | |
Gross carrying value | $ | 4,100 | | | $ | 4,100 | |
Accumulated amortization | (244) | | | (181) | |
Net carrying value | $ | 3,856 | | | $ | 3,919 | |
| | | |
| | | |
| | | |
| | | |
Customer Relationships (10-year life) | | | |
Gross carrying value | $ | 287 | | | $ | 287 | |
Accumulated amortization | (198) | | | (190) | |
Net carrying value | $ | 89 | | | $ | 97 | |
Technology / Know-how (10-year life) | | | |
Gross carrying value | $ | 2,450 | | | $ | 2,450 | |
Accumulated amortization | (1,687) | | | (1,626) | |
Net carrying value | $ | 763 | | | $ | 824 | |
| | | |
| | | |
| | | |
| | | |
Total net carrying value | $ | 4,708 | | | $ | 4,840 | |
Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows:
| | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | | | 2023 | | 2022 |
Amortization expense | | | | | $ | 132 | | | $ | 629 | |
|
| | | | | | | |
| December 31, 2017 | | June 30, 2017 |
Tradenames (20 to 30-year life) | | | |
Gross carrying value | $ | 50,321 |
| | $ | 50,321 |
|
Accumulated amortization | (4,100 | ) | | (3,130 | ) |
Net carrying value | $ | 46,221 |
| | $ | 47,191 |
|
Trademarks (27-year life) | | | |
Gross carrying value | $ | 370 |
| | $ | 370 |
|
Accumulated amortization | (286 | ) | | (241 | ) |
Net carrying value | $ | 84 |
| | $ | 129 |
|
Customer Relationships (10 to 15-year life) | | | |
Gross carrying value | $ | 14,207 |
| | $ | 14,207 |
|
Accumulated amortization | (7,722 | ) | | (7,160 | ) |
Net carrying value | $ | 6,485 |
| | $ | 7,047 |
|
Technology / Know-how (10-year life) | | | |
Gross carrying value | $ | 6,350 |
| | $ | 6,350 |
|
Accumulated amortization | (1,364 | ) | | (1,047 | ) |
Net carrying value | $ | 4,986 |
| | $ | 5,303 |
|
Non-compete Agreements (5-year life) | | | |
Gross carrying value | $ | 791 |
| | $ | 791 |
|
Accumulated amortization | (378 | ) | | (299 | ) |
Net carrying value | $ | 413 |
| | $ | 492 |
|
Total net carrying value | $ | 58,189 |
| | $ | 60,162 |
|
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows:
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Six Months Ended December 31, |
| 2017 | | 2016 | | 2017 | | 2016 |
Amortization expense | $ | 1,006 |
| | $ | 846 |
| | $ | 1,973 |
| | $ | 1,537 |
|
Total annual amortization expense for each of the next five years is estimated to be as follows:
| | | | | |
| |
2025 | $ | 527 | |
2026 | $ | 527 | |
2027 | $ | 343 | |
2028 | $ | 251 | |
2029 | $ | 251 | |
|
| | | |
| |
2019 | $ | 3,858 |
|
2020 | $ | 3,823 |
|
2021 | $ | 3,738 |
|
2022 | $ | 3,664 |
|
2023 | $ | 3,105 |
|
Note 75 – Income Taxes
The Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law on December 22, 2017 with an effective date of January 1, 2018. Most notably, the Tax Act reduced the statutory federal income tax rate for corporations from 35% to 21%. Since we file our tax return based on our fiscal year, the statutory tax rate for our 2018 tax return will be a blended rate of approximately 28.1%. In addition to the effect of the lower overall federal tax rate, the Tax Act resulted in a $9 million one-time benefit for the preliminary re-measurement of our net deferred tax liability in the quarter ended December 31, 2017.
The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 allows for a measurement period in which companies can either use provisional estimates for changes resulting from the Tax Act or apply the tax laws that were in effect immediately prior to the Tax Act being enacted if estimates cannot be determined at the time of the preparation of the financial statements until the actual impacts can be determined. We have recorded an estimate of the impact of the Tax Act within our December 31, 2017 financial statements, including the impact of items recorded within accumulated other comprehensive loss and do not expect material changes to the amounts initially recorded. However, we will continue to evaluate the impacts of the Tax Act and record adjustments, as needed, based on changes to our estimates. The FASB has proposed new accounting guidance regarding the treatment of the impact of the Tax Act on those items recorded within accumulated other comprehensive loss, but this guidance has not been finalized.
Prepaid federal income taxes of $10.9$2.5 million and $6.1$3.3 million were included in Other Current Assets at December 31, 2017September 30, 2023 and June 30, 2017,2023, respectively. Accrued state and local income taxes of $0.4 million were included in Accrued Liabilities at September 30, 2023. Prepaid state and local income taxes of $1.1 million and $0.9$0.8 million were included in Other Current Assets at December 31, 2017 and June 30, 2017, respectively.2023.
Note 86 – Business Segment Information
Effective July 1, 2017, David A. Ciesinski, our President and Chief Operating Officer, succeeded John B. Gerlach, Jr. as CEO. As President and CEO, Mr. Ciesinski became our principal executive officer and CODM. This change resulted in modifications to the CODM’s approach to managing the business, assessing performance and allocating resources. Consequently, beginning on July 1, 2017, our segment reporting structure was amended to align with these changes, and ourOur financial results are now presented as two reportable segments: Retail and Foodservice. Costs that are directly attributable to either Retail or Foodservice are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied. All historical information was retroactively conformed to the current presentation. These segment changes had no effect on previously reported consolidated net sales, operating income, net income or earnings per share.
Retail - The vast majority of the products we sell in the Retail segment are sold through sales personnel, food brokers and distributors.distributors in the United States. We have placement of products in U.S. grocery produce departments through our refrigerated salad dressings, vegetable dips and fruit dips, and croutons.dips. Our flatbread products and sprouted grain bakery products are generally placed in the specialty bakery/deli section of the grocery store. We also have products typically marketed in the shelf-stable section of the grocery store, which include salad dressing,dressings, slaw dressing, dry egg noodlessauces and croutons. Within the frozen food section of the grocery store, we also have prominent market positions of frozensell yeast rolls and garlic breads and egg noodles.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
breads.
Foodservice - The vast majority of the products we sell in the Foodservice segment are sold through sales personnel, food brokers and distributors. Productsdistributors in the United States. Most of the products we sell in the Foodservice segment are often custom-formulated and include salad dressings, sandwich and dipping sauces, frozen breads and yeast rolls. The majority of our Foodservice sales are products sold under branded and private label to distributorsrestaurants. We also manufacture and restaurants primarily in the United States. Additionally, a portionsell various branded Foodservice products to distributors.
As many of our salesproducts are dressing packets, frozen specialty noodles, pasta and flatbreads sold to industrial customers for use as ingredients or components in their products.
Withinsimilar between our organization,two segments, our procurement, manufacturing, warehousing and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity, as many of our products are similar between the two segments.productivity. Consequently, we do not prepare, and the CODMour Chief Operating Decision Maker does not review, separate balance sheets for the reportable segments. As such, our external reporting willdoes not include the presentation of identifiable assets by reportable segment. The composition of our identifiable assets at December 31, 2017September 30, 2023 is generally consistent with that of June 30, 2017.2023.
We continue to evaluate our Retail and Foodservice segments based on net sales and operating income. income which follow:
| | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | | | 2023 | | 2022 |
Net Sales | | | | | | | |
Retail | | | | | $ | 242,184 | | | $ | 223,216 | |
Foodservice | | | | | 219,388 | | | 202,321 | |
Total | | | | | $ | 461,572 | | | $ | 425,537 | |
Operating Income | | | | | | | |
Retail | | | | | $ | 53,124 | | | $ | 42,900 | |
Foodservice | | | | | 26,633 | | | 31,929 | |
| | | | | | | |
Corporate Expenses | | | | | (22,982) | | | (25,531) | |
Total | | | | | $ | 56,775 | | | $ | 49,298 | |
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
The following summarytable sets forth net sales disaggregated by class of financial information reflects the results ofsimilar products for the Retail and Foodservice segments:
| | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | | | 2023 | | 2022 |
Retail | | | | | | | |
Shelf-stable dressings, sauces and croutons | | | | | $ | 98,581 | | | $ | 91,038 | |
Frozen breads | | | | | 79,630 | | | 72,858 | |
Refrigerated dressings, dips and other | | | | | 63,973 | | | 59,320 | |
Total Retail net sales | | | | | $ | 242,184 | | | $ | 223,216 | |
Foodservice | | | | | | | |
Dressings and sauces | | | | | $ | 165,271 | | | $ | 151,060 | |
Frozen breads and other | | | | | 54,117 | | | 51,261 | |
| | | | | | | |
Total Foodservice net sales | | | | | $ | 219,388 | | | $ | 202,321 | |
Total net sales | | | | | $ | 461,572 | | | $ | 425,537 | |
The following table provides an additional disaggregation of Foodservice net sales by type of customer:
| | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | | | 2023 | | 2022 |
Foodservice | | | | | | | |
National accounts | | | | | $ | 171,586 | | | $ | 160,192 | |
Branded and other | | | | | 47,802 | | | 42,129 | |
| | | | | | | |
Total Foodservice net sales | | | | | $ | 219,388 | | | $ | 202,321 | |
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Six Months Ended December 31, |
| 2017 | | 2016 | | 2017 | | 2016 |
Net Sales | | | | | | | |
Retail | $ | 179,286 |
| | $ | 182,794 |
| | $ | 341,430 |
| | $ | 335,456 |
|
Foodservice | 140,379 |
| | 143,979 |
| | 277,151 |
| | 282,678 |
|
Total | $ | 319,665 |
| | $ | 326,773 |
| | $ | 618,581 |
| | $ | 618,134 |
|
Operating Income | | | | | | | |
Retail | $ | 37,316 |
| | $ | 42,905 |
| | $ | 70,183 |
| | $ | 77,711 |
|
Foodservice | 13,409 |
| | 19,147 |
| | 28,097 |
| | 39,166 |
|
Corporate Expenses | (3,460 | ) | | (2,694 | ) | | (6,689 | ) | | (6,765 | ) |
Total | $ | 47,265 |
| | $ | 59,358 |
| | $ | 91,591 |
| | $ | 110,112 |
|
Note 97 – Stock-Based Compensation
There have been no changes to our stock-based compensation plans from thoseplan as disclosed in our 20172023 Annual Report on Form 10-K.
Our stock-settled stock appreciation rights (“SSSARs”) compensation expense was $0.5$0.3 million and $0.4$0.7 million for the three months ended December 31, 2017September 30, 2023 and 2016,2022, respectively. Year-to-date SSSARs compensation expense was $1.1 million for the current-year period compared to $0.9 million for the prior-year period. At December 31, 2017,September 30, 2023, there was $3.0$0.5 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 2 years.1 year.
Our restricted stock compensation expense was $0.6$1.2 million and $1.3 million for the three months ended December 31, 2017September 30, 2023 and 2016 and $1.2 million for the six months ended December 31, 2017 and 2016.2022, respectively. At December 31, 2017,September 30, 2023, there was $2.9$8.8 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years.
Our performance units compensation expense was $1.1 million and $0.5 million for the three months ended September 30, 2023 and 2022, respectively. At September 30, 2023, there was $7.5 million of unrecognized compensation expense related to performance units that we will recognize over a weighted-average period of 2 years.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 20182024 refers to fiscal 2018,2024, which is the period from July 1, 20172023 to June 30, 2018.2024.
The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto, all included elsewhere in this report.report, and our 2023 Annual Report on Form 10-K. The forward-looking statements in this section and other parts of this report involve risks, uncertainties and other factors, including statements regarding our plans, objectives, goals, strategies, and financial performance. Our actual results could differ materially from the results anticipated in these forward-looking statements due to these factors. For more information, see the section below entitled “Forward-Looking Statements.”
OVERVIEW
Business Overview
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Effective July 1, 2017, David A. Ciesinski, our President and Chief Operating Officer, succeeded John B. Gerlach, Jr. as our Chief Executive Officer (“CEO”). As President and CEO, Mr. Ciesinski became our principal executive officer and chief operating decision maker (“CODM”). This change resulted in modifications to the CODM’s approach to managing the business, assessing performance and allocating resources. Consequently, beginning on July 1, 2017, our segment reporting structure was amended to align with these changes, and ourOur financial results are now presented as two reportable segments: Retail and Foodservice. Costs that are directly attributable to either Retail or Foodservice are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied. All historical information was retroactively conformed
Over 95% of our products are sold in the United States. Foreign operations and export sales have not been significant in the past and are not expected to be significant in the current presentation. These segment changes had no effect on previously reported consolidated net sales, operating income, net income or earnings per share. See Note 8 tofuture based upon existing operations. We do not have any fixed assets located outside of the condensed consolidated financial statements for further information about our segments.
Our sales are predominately domestic.United States.
Our business has the potential to achieve future growth in sales and profitability due to attributes such as:
•leading Retail market positions in several product categories with a high-quality perception;
•recognized innovation in Retail products;
•a broad customer base in both Retail and Foodservice accounts;
•well-regarded culinary expertise among Foodservice customers;
•long-standing Foodservice customer relationships that help to support strategic licensing opportunities in Retail;
•recognized leadership in Foodservice product development;
•experience in integrating complementary business acquisitions; and
•historically strong cash flow generation that supports growth opportunities.
Our goal is to grow both Retail and Foodservice segment sales over time by:
•introducing new products and expanding distribution;
•leveraging the strength of our Retail brands to increase current product sales;
introducing new products and •expanding distribution; andRetail growth through strategic licensing agreements;
•continuing to rely upon the strength of our reputation in Foodservice product development and quality.quality; and
Part•acquiring complementary businesses.
With respect to long-term growth, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, IT platforms and other initiatives to support and strengthen our operations. Recent examples of resulting investments include:
•a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that reached substantial completion in March 2023;
•a capacity expansion project for one of our future growth may result from acquisitions. We continue to review potential acquisitionsMarzetti dressing and sauce facilities in Columbus, Ohio that we believe will complementwas completed in January 2022;
•a significant infrastructure improvement and capacity expansion project for our existing product lines, enhance frozen pasta facility in Altoona, Iowa that was completed in March 2022; and
•our profitability and/or offer good expansion opportunities in a mannerenterprise resource planning system (“ERP”) project and related initiatives, Project Ascent, that fits our overall strategic goals.
Consistent with this acquisition strategy, in November 2016 we acquired substantially allreached completion of the assetsimplementation phase in August 2023.
Project Ascent entailed the replacement of Angelic Bakehouse, Inc. (“Angelic”), a manufacturerour primary customer and marketermanufacturing transactional systems, warehousing systems, and financial systems with an integrated SAP S/4HANA system. Implementation of premium sprouted grain bakerythis system began in July 2022 and continued throughout fiscal 2023. Customer fulfillment levels remained strong before and after the initial system cutover with no unplanned disruptions in receiving orders, producing products based near Milwaukee, Wisconsin. This transaction is discussedor shipping orders. During fiscal 2023, we progressed through our ERP implementation with no major disruptions. We completed the final wave of the implementation phase in further detail in Note 2August 2023 as planned and have shifted our focus towards leveraging the capabilities of our new ERP system.
BUSINESS TRENDS
Dating back to the condensed consolidated financial statements.
Weonset of the COVID-19 pandemic in 2020, the effects of COVID-19 on consumer behavior have made substantial capital investments to support our existing food operations and future growth opportunities. For example, we recently started a project to expand processing and warehousing capacity at Angelic to help meet anticipated growth inimpacted the relative demand for our sprouted grain bakeryRetail and Foodservice products. BasedMore specifically, beginning in March 2020, consumer demand shifted towards increased at-home food consumption and away from in-restaurant dining. Over the course of the following two years, while this shift in demand was inconsistent and volatile, on balance it positively impacted our current plansRetail segment sales volumes and expectations,negatively impacted our Foodservice segment sales volumes. From an operations standpoint, the shift in demand over the two-year period, combined with other COVID-19-related issues, unfavorably impacted the operating results of both our segments. Beginning near the end of 2022, the volatility and shifts in demand between our Retail and Foodservice products subsided and our operating environment became more predictable and stable.
The inflationary cost environment we believeexperienced during 2022 resulted in significantly higher input costs for our capital expendituresbusiness. During 2022, we endured unprecedented inflationary costs for 2018 could approximate $30 million. commodities, particularly soybean oil and flour, in addition to notably higher costs for packaging, freight and warehousing, and labor. This cost inflation was attributed to numerous factors such as the impacts of the COVID-19 pandemic, the war in Ukraine, climate and weather conditions, supply chain disruptions, including some raw material and packaging shortages, a tight labor market, and government policy decisions.
We anticipatecontinued to experience significant cost inflation through 2023, particularly for soybean oil, eggs and flour. However, our pricing actions served to offset these inflationary costs. In addition, the operating environment stabilized as we will be abledid not experience the supply chain disruptions and demand swings of the preceding years.
Near the end of 2023, cost inflation began to fund alldiminish notably, and we completed the first quarter of 2024 with our capital needsinput costs, in 2018 with cash generated from operations.
aggregate, at levels similar to the prior year.
RESULTS OF CONSOLIDATED OPERATIONS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands, except per share data) | | | | | | | Three Months Ended September 30, | | | | |
| | | | | | 2023 | | 2022 | | Change |
Net Sales | | | | | | | | | $ | 461,572 | | | $ | 425,537 | | | $ | 36,035 | | | 8.5 | % |
Cost of Sales | | | | | | | | | 352,850 | | | 326,482 | | | 26,368 | | | 8.1 | % |
Gross Profit | | | | | | | | | 108,722 | | | 99,055 | | | 9,667 | | | 9.8 | % |
Gross Margin | | | | | | | | | 23.6 | % | | 23.3 | % | | | | |
Selling, General and Administrative Expenses | | | | | | | | | 51,947 | | | 49,757 | | | 2,190 | | | 4.4 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Operating Income | | | | | | | | | 56,775 | | | 49,298 | | | 7,477 | | | 15.2 | % |
Operating Margin | | | | | | | | | 12.3 | % | | 11.6 | % | | | | |
Other, Net | | | | | | | | | 857 | | | (270) | | | 1,127 | | | 417.4 | % |
Income Before Income Taxes | | | | | | | | | 57,632 | | | 49,028 | | | 8,604 | | | 17.5 | % |
Taxes Based on Income | | | | | | | | | 13,681 | | | 11,436 | | | 2,245 | | | 19.6 | % |
Effective Tax Rate | | | | | | | | | 23.7 | % | | 23.3 | % | | | | |
Net Income | | | | | | | | | $ | 43,951 | | | $ | 37,592 | | | $ | 6,359 | | | 16.9 | % |
Diluted Net Income Per Common Share | | | | | | | | | $ | 1.59 | | | $ | 1.36 | | | $ | 0.23 | | | 16.9 | % |
Net Sales and Gross Profit
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | | | | | Six Months Ended December 31, | | | | |
(Dollars in thousands) | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Net Sales | | | | | | | | | | | | |
| |
|
Retail | $ | 179,286 |
| | $ | 182,794 |
| | $ | (3,508 | ) | | (2 | )% | | $ | 341,430 |
| | $ | 335,456 |
| | $ | 5,974 |
| | 2 | % |
Foodservice | 140,379 |
| | 143,979 |
| | (3,600 | ) | | (3 | )% | | 277,151 |
| | 282,678 |
| | (5,527 | ) | | (2 | )% |
Total | $ | 319,665 |
| | $ | 326,773 |
| | $ | (7,108 | ) | | (2 | )% | | $ | 618,581 |
| | $ | 618,134 |
| | $ | 447 |
| | — | % |
Gross Profit | $ | 83,941 |
| | $ | 93,739 |
| | $ | (9,798 | ) | | (10 | )% | | $ | 159,418 |
| | $ | 174,373 |
| | $ | (14,955 | ) | | (9 | )% |
Gross Margin | 26.3 | % | | 28.7 | % | | | | | | 25.8 | % | | 28.2 | % | | | | |
In November 2016, we acquired Angelic and its results of operations have been included in our condensed consolidated financial statements from the date of acquisition in the Retail segment.
Consolidated net sales for the three months ended December 31, 2017 decreased 2% asSeptember 30, 2023 increased 8.5% to a first quarter record $461.6 million versus $425.5 million last year, reflecting higher net sales for both the Retail and Foodservice segments experienceddriven primarily by volume gains. Sales in the prior-year first quarter were unfavorably impacted by an estimated $25 million in net sales declines.attributed to advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live that commenced on July 1, 2022. Consolidated net sales for the six months ended December 31, 2017 were flat as compared to the prior year-to-date period as higher Retail segment net sales were largely offset by a declinevolumes, measured in Foodservice segment net sales.
Consolidated gross profit and related margins declinedpounds shipped, increased 8.0% for the three and six months ended December 31, 2017, driven by the impact of increased commodity costs, most notably eggs, soybean oil, dairy ingredients and garlic, in addition to higher freight costs and the lower second quarter sales volume. These costs were partially offset by supply chain savings realized from our lean six sigma program and modest inflationary pricing in our Foodservice segment.September 30, 2023. Excluding the impact of pricing, total raw-material costs were estimatedlast year’s shift in sales due to have negatively affected our gross margins by 2% and less than 2%ERP go-live, consolidated sales volumes increased 1.4%. See discussion of consolidated net sales by segment following the discussion of “Earnings Per Share” below.
Gross Profit
Consolidated gross profit for the three and six months ended December 31, 2017, respectively. Higher freightSeptember 30, 2023 increased $9.7 million to $108.7 million driven by the higher sales volumes, some continued favorability in pricing net of commodity costs, and our cost savings programs. Partial offsets to these positive factors included higher labor costs and increased depreciation expense. In aggregate, the input costs for our commodity basket were generally consistent with last year’s level. In last year’s first quarter, gross profit was unfavorably impacted by an estimated $5 million due to have negatively affected our gross margins by less than 1%the aforementioned shift of net sales for both the three and six months ended December 31, 2017. The prior-year results for bothinto the quarter and year-to-date periods reflected a notable benefit from significantly lower ingredient costs with only a modest offsetended June 30, 2022 ahead of deflationary pricing.our ERP go-live.
Selling, General and Administrative Expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | | | | | Six Months Ended December 31, | | | | |
(Dollars in thousands) | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
SG&A Expenses | $ | 36,676 |
| | $ | 34,381 |
| | $ | 2,295 |
| | 7 | % | | $ | 67,827 |
| | $ | 64,261 |
| | $ | 3,566 |
| | 6 | % |
SG&A Expenses as a Percentage of Net Sales | 11.5 | % | | 10.5 | % | | | | | | 11.0 | % | | 10.4 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended September 30, | | | | |
(Dollars in thousands) | | | | | | | 2023 | | 2022 | | Change |
SG&A Expenses - Excluding Project Ascent | | | | | | | | | $ | 48,114 | | | $ | 40,538 | | | $ | 7,576 | | | 18.7 | % |
Project Ascent Expenses | | | | | | | | | 3,833 | | | 9,219 | | | (5,386) | | | (58.4) | % |
Total SG&A Expenses | | | | | | | | | $ | 51,947 | | | $ | 49,757 | | | $ | 2,190 | | | 4.4 | % |
| | | | | | | | | | | | | | | |
Selling, general and administrative (“SG&A”) expenses increased 7% and 6% for the three and six months ended December 31, 2017, respectively. TheSeptember 30, 2023 increased 4.4% to $51.9 million compared to $49.8 million in the prior-year period. This increase in these costs reflectedreflects higher expenditures to support the continued growth of our business, including a more normalized level of consumer promotions, investments in personnel and strategic business initiatives to support our future growth and incremental amortization expense and other recurring noncash charges attributed to Angelic.higher brokerage costs associated with the increased sales. These increaseshigher costs were partially offset by a lower levelexpenditures for Project Ascent, our ERP initiative. Project Ascent expenses totaled $3.8 million in the current-year quarter versus $9.2 million last year.
Project Ascent expenses are included within Corporate Expenses. A portion of promotional spending. Additionally, the prior-year’s second quarter corporatecosts that have been classified as Project Ascent expenses included a favorable non-recurring item relatedrepresent ongoing costs that will continue subsequent to closed business operations.
the completion of our ERP implementation.
Operating Income
The foregoing factors contributedOperating income increased $7.5 million to consolidated operating income totaling $47.3 million and $91.6$56.8 million for the three and six months ended December 31, 2017, respectively. Our operating income can be summarizedSeptember 30, 2023 driven by the increase in gross profit, as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | | | | | Six Months Ended December 31, | | | | |
(Dollars in thousands) | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Operating Income | | | | | | | | | | | | | | | |
Retail | $ | 37,316 |
| | $ | 42,905 |
| | $ | (5,589 | ) | | (13 | )% | | $ | 70,183 |
| | $ | 77,711 |
| | $ | (7,528 | ) | | (10 | )% |
Foodservice | 13,409 |
| | 19,147 |
| | (5,738 | ) | | (30 | )% | | 28,097 |
| | 39,166 |
| | (11,069 | ) | | (28 | )% |
Corporate Expenses | (3,460 | ) | | (2,694 | ) | | (766 | ) | | 28 | % | | (6,689 | ) | | (6,765 | ) | | 76 |
| | (1 | )% |
Total | $ | 47,265 |
| | $ | 59,358 |
| | $ | (12,093 | ) | | (20 | )% | | $ | 91,591 |
| | $ | 110,112 |
| | $ | (18,521 | ) | | (17 | )% |
Operating Margin | | | | | | | | | | | | | | | |
Retail | 20.8 | % | | 23.5 | % | | | | | | 20.6 | % | | 23.2 | % | | | | |
Foodservice | 9.6 | % | | 13.3 | % | | | | | | 10.1 | % | | 13.9 | % | | | | |
Total | 14.8 | % | | 18.2 | % | | | | | | 14.8 | % | | 17.8 | % | | | | |
partially offset by the increase in SG&A expenses. See discussion of operating results by segment following the discussion of “Net Income”“Earnings Per Share” below.
Income Before Income Taxes
As impacted by the factors discussed above, income before income taxes for the three months ended December 31, 2017 decreased by $11.9 million to $47.7 million from the prior-year total of $59.6 million. Income before income taxes for the six months ended December 31, 2017 and 2016 was $92.4 million and $110.4 million, respectively.
Taxes Based on Income
Our effective tax rate was 18.5%23.7% and 34.5%23.3% for the sixthree months ended December 31, 2017September 30, 2023 and 2016,2022, respectively. The current-yearFor the three months ended September 30, 2023 and 2022, our effective tax rate was impacted by the Tax Cuts and Jobs Act of 2017 (“Tax Act”), which was signed into law on December 22, 2017 with an effective date of January 1, 2018. Most notably, the Tax Act reducedvaried from the statutory federal income tax rate for corporations from 35% to 21%. Since we file our tax return based on our fiscal year, the statutory tax rate for our 2018 tax return will beas a blended rate of approximately 28.1%. In addition to the effect of the lower overall federal tax rate, the Tax Act resulted in a $9 million one-time benefit for the preliminary re-measurement of our net deferred tax liability in the quarter ended December 31, 2017. Excluding the impact of this one-time benefit, our effective tax rate was 28.3% for the six months ended December 31, 2017, and we expect our effective tax rate to remain at approximately 28.3% for the remainder of our fiscal year. Looking ahead to 2019, we expect an effective tax rate of approximately 24%.
Our taxes based on income for the current year consistresult of the following components:factors:
| | | | | | | | | | | |
| Three Months Ended September 30, |
| 2023 | | 2022 |
Statutory rate | 21.0 | % | | 21.0 | % |
State and local income taxes | 2.6 | | | 2.5 | |
Net windfall tax benefits - stock-based compensation | — | | | — | |
Other | 0.1 | | | (0.2) | |
Effective rate | 23.7 | % | | 23.3 | % |
|
| | | | | | | | | | | | | |
(Dollars in thousands) | Three Months Ended December 31, 2017 | | Six Months Ended December 31, 2017 |
One-time benefit on preliminary re-measurement of net deferred tax liability | $ | (8,878 | ) | | (18.6 | )% | | $ | (8,878 | ) | | (9.6 | )% |
Net windfall tax benefits - stock-based compensation | (101 | ) | | (0.2 | )% | | (180 | ) | | (0.2 | )% |
Federal, state and local provision | 10,736 |
| | 22.5 | % | | 26,113 |
| | 28.3 | % |
Taxes Based on Income | $ | 1,757 |
| | 3.7 | % | | $ | 17,055 |
| | 18.5 | % |
The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 allows for a measurement period in which companies can either use provisional estimates for changes resulting from the Tax Act or applyWe include the tax laws that were in effect immediately priorconsequences related to the Tax Act being enacted if estimates cannot be determined at the time of the preparation of the financial statements until the actual impacts can be determined. We have recorded an estimate of the impact of the Tax Act within our December 31, 2017 financial statements, including the impact of items recorded within accumulated other comprehensive loss and do not expect material changes to the amounts initially recorded. However, we will continue to evaluate the impacts of the Tax Act and record adjustments, as needed, based on changes to our estimates. The Financial Accounting Standards Board has proposed new accounting guidance regarding the treatment of the impact of the Tax Act on those items recorded within accumulated other comprehensive loss, but this guidance has not been finalized.
On July 1, 2017, we adopted new accounting guidance for stock-based compensation that, among other things, requireswithin the recognitioncomputation of windfall tax benefits and shortfall tax deficiencies in our income tax expense, instead of equity. For the six months ended December 31, 2017, the impact of net windfall tax benefits reduced our effective tax rate by 0.2%. Going forward, this adoptionexpense. We may result inexperience increased volatility to our income tax expense and resulting net income dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards. This adoption is discussed in further detail in Note 1 toFor the condensed consolidated financial statements.three months ended September 30, 2023 and 2022, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by less than 0.1%.
Net IncomeEarnings Per Share
As influenced by the factors noteddiscussed above, particularly the impact of the Tax Act, second quarterdiluted net income for 2018 of $45.9 million increased from the preceding year’s net incomeper share for the first quarter of $39.0 million and year-to-date net income of $75.3 million was higher than2024 totaled $1.59, as compared to $1.36 per diluted share in the prior year-to-date total of $72.4 million.year. Expenditures for Project Ascent reduced diluted earnings per share by $0.11 and $0.26 for the three months ended September 30, 2023 and 2022, respectively. Diluted weighted average common shares outstanding have remained relatively stable for the current and prior-year periods ended December 31. As a result, and due to the change in net income for each year, net income per share for the second quarter of 2018 totaled $1.67 per diluted share, as compared to net income of $1.42 per diluted share in the prior year. Year-to-date net income per share was $2.74 per diluted share, as compared to $2.63 per diluted share for the prior-year period. The estimated favorable impact of the Tax Act on second quarter and year-to-date net income was $14.5 million, or $.53 per diluted share, which includes the cumulative effect of a lower federal income tax rate and a $9 million one-time benefit from the preliminary re-measurement of our net deferred tax liability.September 30.
RESULTS OF OPERATIONS - SEGMENTS
Retail Segment
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended September 30, | | | | |
(Dollars in thousands) | | | | | | | 2023 | | 2022 | | Change |
Net Sales | | | | | | | | | $ | 242,184 | | | $ | 223,216 | | | $ | 18,968 | | | 8.5 | % |
Operating Income | | | | | | | | | $ | 53,124 | | | $ | 42,900 | | | $ | 10,224 | | | 23.8 | % |
Operating Margin | | | | | | | | | 21.9 | % | | 19.2 | % | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | | | | | Six Months Ended December 31, | | | | |
(Dollars in thousands) | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Net Sales | $ | 179,286 |
| | $ | 182,794 |
| | $ | (3,508 | ) | | (2 | )% | | $ | 341,430 |
| | $ | 335,456 |
| | $ | 5,974 |
| | 2 | % |
Operating Income | $ | 37,316 |
| | $ | 42,905 |
| | $ | (5,589 | ) | | (13 | )% | | $ | 70,183 |
| | $ | 77,711 |
| | $ | (7,528 | ) | | (10 | )% |
Operating Margin | 20.8 | % | | 23.5 | % | | | | | | 20.6 | % | | 23.2 | % | | | | |
For the three months ended December 31, 2017,September 30, 2023, Retail segment net sales decreased 2% as growthincreased 8.5% to $242.2 million from Olive Garden® dressings,the prior-year total of $223.2 million, including the favorable impact of higher sales volumes and, to a full quarter contribution from Angelic, reduced trade spending and lower coupon redemptions were more than offset by disruptionslesser extent, our 2023 pricing actions that have not fully lapped. Sales in the production and supplyprior-year first quarter were unfavorably impacted by advance orders accounting for an estimated $11 million in Retail net sales that were made near the end of fiscal 2022 ahead of our ERP go-live, which commenced on July 1, 2022. Retail segment sales volumes, measured in pounds shipped, increased 7.1%. Retail sales volume growth was driven by the continued success of our program for licensed dressings and sauces. Our New York BRAND® Bakery frozen garlic bread products and a slowdownalso contributed to the increase in late-December outbound shipmentsthe Retail sales volumes. Excluding the impact of last year’s shift in sales due to insufficient freight capacity. The impact of pricing on Retail net sales was minimal.
Year-to-date net sales for theour ERP go-live, Retail segment reached $341.4 million, a 2% increase from the prior-year total of $335.5 million driven by growth from our Olive Garden® dressings and Sister Schubert’s® frozen dinner rolls and incremental sales from Angelic.volumes increased 1.4%.
For the three and six months ended December 31, 2017,September 30, 2023, Retail segment operating income and related margins decreasedincreased 23.8% to $53.1 million due to our previous pricing actions, our cost savings programs and the favorable impact of lower second quarterhigher sales increased commodity and freight costs, recent investments in personnel and business growth initiatives and incremental amortization expense and other recurring noncash charges attributed to Angelic. These higher costs were partially offset by supply chain savings realized from our lean six sigma program and lower consumer promotional spending. The prior-year operating income and related margins reflected a significant benefit from lower ingredient costs.volumes.
Foodservice Segment
| | | Three Months Ended December 31, | | | | | | Six Months Ended December 31, | | | | | | | Three Months Ended September 30, | |
(Dollars in thousands) | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change | (Dollars in thousands) | | 2023 | | 2022 | | Change |
Net Sales | $ | 140,379 |
| | $ | 143,979 |
| | $ | (3,600 | ) | | (3 | )% | | $ | 277,151 |
| | $ | 282,678 |
| | $ | (5,527 | ) | | (2 | )% | Net Sales | | $ | 219,388 | | | $ | 202,321 | | | $ | 17,067 | | | 8.4 | % |
Operating Income | $ | 13,409 |
| | $ | 19,147 |
| | $ | (5,738 | ) | | (30 | )% | | $ | 28,097 |
| | $ | 39,166 |
| | $ | (11,069 | ) | | (28 | )% | Operating Income | | $ | 26,633 | | | $ | 31,929 | | | $ | (5,296) | | | (16.6) | % |
Operating Margin | 9.6 | % | | 13.3 | % | | | | | | 10.1 | % | | 13.9 | % | | | | | Operating Margin | | 12.1 | % | | 15.8 | % | |
For the three and six months ended December 31, 2017,September 30, 2023, Foodservice segment net sales decreased 3% and 2%, respectively, reflecting continued overall softnessgrew 8.4% to $219.4 million compared to $202.3 million in the restaurant industry resulting in a decline in sales toprior-year period driven by increased demand from several of our national chain restaurant accounts, including limited-time-offer programs, as compared to the prior year. As discussedaccount customers and growth for our branded Foodservice products. Sales in the Retailprior-year first quarter were unfavorably impacted by the advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live, which reduced Foodservice net sales in the prior-year period by an estimated $14 million. Foodservice segment a slowdownsales volumes, measured in late-December outbound shipmentspounds shipped, increased 8.6%. Excluding the impact of last year’s shift in sales due to insufficient freight capacity also hindered sales. These declines were
partially offset by a modest level of inflationary pricing totaling less than 1% of netour ERP go-live, Foodservice segment sales for both the three and six months ended December 31, 2017.volumes increased 1.4%.
For the three and six months ended December 31, 2017, the declines inSeptember 30, 2023, Foodservice segment operating income and related margins weredecreased 16.6% to $26.6 million driven by the impact of lower sales volumes, increased commodity and freighthigher supply chain costs, and recent investments in personnel and business growth initiatives. These higher costs wereas partially offset by supply chain savings realized from our lean six sigma programthe benefit of increased sales volumes and inflationary pricing.a more favorable sales mix. The Foodservice segment’s operating margin compares to strong results in the prior-year operating incomeperiod.
Corporate Expenses
For the three months ended September 30, 2023 and related margins reflected2022, corporate expenses totaled $23.0 million and $25.5 million, respectively. This decrease primarily reflects a significant benefit from lower ingredient costs that was onlydecline in Project Ascent expenses, as partially offset by deflationary pricing.
With regard toincreased investments in personnel. Expenditures for Project Ascent totaled $3.8 million and $9.2 million for the impact of commodity costs on Foodservice segment operating income, most of our supply contracts with national chain restaurant accounts incorporate pricing adjustments to account for changes in ingredient costs. These supply contracts may vary by customer with regard to the time lapse between the actual change in ingredient costs we incurthree months ended September 30, 2023 and the effective date of the associated price increase or decrease. As a result, the reported operating margins of the Foodservice segment are subject to increased volatility during periods of rapidly rising or falling ingredient costs because at least some portion of the change in ingredient costs is reflected in the segment’s results prior to the impact of any associated change in pricing. In addition, the Foodservice segment has an inherently higher degree of margin volatility from changes in ingredient costs when compared to the Retail segment due to its overall lower margin profile and higher ratio of ingredient pounds to net sales.2022, respectively.
LOOKING FORWARD
Looking forward we expectto our fiscal thirdsecond quarter, netwe anticipate Retail sales will continue to be favorably impacted bybenefit from our expanding licensing program, including incremental growth from the earlier Easter holidaynew products, flavors and sizes we introduced in the current year. We expect volume-driven growth in our Retail segment with support from recent and upcoming new product introductions. Price increases were taken in the Retail segment early in the third quarter as we try to recover the increases in commodity and freight costs we have seen in the first half of the year. To address the disruptions in the production and supply of our frozen garlic bread products, we are implementing corrective actions to recover and meet demand, but expect these sales to remain constrained through the third quarter.fiscal 2023. In the Foodservice segment, we anticipate sales growth will remain challenged byexpect continued sluggish sales throughout the restaurant industry. However, projected volume growth from select customers in our mix of national chain restaurant accounts,accounts. Regarding inflation, while our input costs remain high, in total we do not anticipate a modest level ofsignificant impact from inflationary pricing and additional Foodservice segment price increases implemented earlycosts in the thirdupcoming quarter versus the prior-year period. External factors, including U.S. economic performance and potential changes in responseconsumer sentiment, may impact demand.
With respect to higher commodity and freight costs should help to overcome industry headwinds.
Based on current market conditions,Project Ascent, we foresee some abatement in commodity and freight costs starting incompleted the third quarter, but still expect these costs to remain above last year’s level for the balancefinal wave of the fiscal year. Supply chain efficiency gains, cost savings fromimplementation phase in August 2023 as planned and have shifted towards leveraging the capabilities of our lean six sigma program andnew ERP system to improve execution.
We will continue to periodically reassess our pricing actions will help offset these higher costs.allocation of capital to ensure that we maintain adequate operating flexibility while providing appropriate levels of cash returns to our shareholders.
FINANCIAL CONDITION
Cash Flows
For the sixthree months ended December 31, 2017,September 30, 2023, net cash provided by operating activities totaled $84.0$35.6 million, as compared to $76.1$50.9 million in the prior-year period. This increasedecrease was primarily due to higherthe year-over-year changes in net income, increases in noncash charges for depreciationworking capital, particularly accrued liabilities and amortization, an increaseaccounts payable. Accrued liabilities reflect the unfavorable cash flow impact of a current-year decrease in the noncash acquisition-related contingent considerationaccruals for compensation and loweremployee benefits. The favorable cash flow impact of higher accounts payable, as adjusted to exclude construction in progress amounts, was more pronounced in the prior year due to increased commodity costs as well as the timing of payments. These changes in net working capital requirements,were partially offset by the decrease in deferred income taxes as a result of the Tax Act. The lower level of working capital requirements occurred primarily within accounts payable and accrued liabilities, due to extended payment terms, and receivables, as a result of the timing of shipments and related payment terms to major customers, offset somewhat by other current assets due to the timing of estimated tax payments and the favorable impact of the Tax Act.higher net income.
Cash used in investing activities for the sixthree months ended December 31, 2017September 30, 2023 was $15.6$19.7 million, as compared to $46.7$23.5 million in the prior year. This decrease primarily reflects cash paid for the acquisition of Angelic in November 2016, as partially offset by a higherlower level of capital expenditurespayments for property additions in 2018, with the largest amounts spent on new equipment to increasecurrent year as the capacity and/or improve operational efficiencies.expansion project at our dressing and sauce facility in Horse Cave, Kentucky reached substantial completion in March 2023.
Cash used in financing activities for the sixthree months ended December 31, 2017September 30, 2023 of $32.7$30.6 million increased from the prior-year total of $29.0$23.4 million. This increase was primarily due toreflects higher dividend payments in the current year. There was also an increase inlevels of share repurchases of $0.8 million in the six months ended December 31, 2017. At December 31, 2017, 1,404,289 shares remained authorized for future buyback under the existing share repurchase program.and dividend payments.
Liquidity and Capital Resources
Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $150 million at any one time. We had no borrowings outstanding under the Facility at December 31, 2017.September 30, 2023. At December 31, 2017,September 30, 2023, we had $5.1$2.2 million of standby letters of credit outstanding, which reduced the amount available for borrowing onunder the Facility. The Facility expires in April 2021,March 2025, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBORSOFR or an alternativealternate base rate defined in the Facility, at our option.Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage. At December 31, 2017,September 30, 2023, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At December 31, 2017, weSeptember 30, 2023, there were not aware of any eventno events that would constitute a default under this facility.
We currently expect to remain in compliance with the Facility’s covenants for the foreseeable future. However, a default under the Facility could accelerate the repayment of any then outstanding indebtedness and limit our access to $75 million of additional credit available under the Facility. Such an event could require a reduction in or curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise impact our ability to meet our obligations when due.
We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our cash requirements through 2018.liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments. If we were to borrow outside of the Facility under current market terms, our average interest rate may increase significantly and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2024 could total between $70 and $80 million.
CONTRACTUAL OBLIGATIONSBeyond the next 12 months, we expect that cash provided by operating activities will be the primary source of liquidity. This source, combined with our existing balances in cash and equivalents and amounts available under the Facility, is expected to be sufficient to meet our overall cash requirements.
We have various contractual and other obligations that are appropriately recorded as liabilities in our condensed consolidated financial statements. Certain other contractual obligations are not recognized as liabilities in our condensed consolidated financial statements. Examples of such itemsobligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of December 31, 2017September 30, 2023, as well as purchase orders and future minimum lease payments for the use of property and equipment under operating lease agreements. Aside from expected changes in raw-material costs associated with changes in product demand or pricing, there have been no significant changeslonger-term purchase arrangements related to the contractualprocurement of services, including IT service agreements, and property, plant and equipment. The majority of these obligations disclosed in our 2017 Annual Report on Form 10-K.is expected to be due within one year.
CRITICAL ACCOUNTING POLICIES
There have been no changes in critical accounting policies from those policies disclosed in our 20172023 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements and their impact on our consolidated financial statements are disclosed in Note 1 to the condensed consolidated financial statements.
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 Quarterly Report on Form 10-Q 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 including, without limitation, the specific influences outlined below. Management believes these forward-looking statements to be reasonable; however, one 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, except as required by law.
Items which could impact these forward-looking statements include, but are not limited to:
•efficiencies in plant operations and our overall supply chain network;
•the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
•price increases we may implement;and product competition;
•the impact of customer store brands on our branded retail volumes;
•adequate supply of labor for our manufacturing facilities;
•adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
•inflationary pressures resulting in higher input costs;
•fluctuations in the cost and availability of ingredients and packaging;
•dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business;
•stability of labor relations;
•dependence on key personnel and changes in key personnel;
•cyber-security incidents, information technology disruptions, and data breaches;
•capacity constraints that may affect our ability to meet demand or may increase our costs;
dependence on contract manufacturers, distributors•geopolitical events, such as Russia’s invasion of Ukraine, that could create unforeseen business disruptions and freight transporters;
fluctuations inimpact the cost andor availability of ingredientsraw materials and packaging;energy;
adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
price and product competition;
the impact of customer store brands on our branded retail volumes;
the success and cost of new product development efforts;
dependence on key personnel and changes in key personnel;
the effect of consolidation of customers within key market channels;
the lack of market acceptance of new products;
the ability to successfully grow recently acquired businesses;
the extent to which future business acquisitions are completed and acceptably integrated;
the possible occurrence of product recalls or other defective or mislabeled product costs;
•the potential for loss of larger programs or key customer relationships;
•failure to maintain or renew license agreements;
•significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks;
•changes in demand for our products, which may result from loss of brand reputation or customer goodwill;
•the possible occurrence of product recalls or other defective or mislabeled product costs;
•the success and cost of new product development efforts;
•the lack of market acceptance of new products;
•the extent to which business acquisitions are completed and acceptably integrated;
•the ability to successfully grow acquired businesses;
•the effect of consolidation of customers within key market channels;
•maintenance of competitive position with respect to other manufacturers;
efficiencies•the outcome of any litigation or arbitration;
•changes in plant operations;estimates in critical accounting judgments;
•the impact of any regulatory matters affecting our food business, including any required labeling changes and their impact on consumer demand;
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; and
changes in estimates in critical accounting judgments; and
•certain other factors, including the information disclosed in our discussion of risk factors under Item 1A of our 20172023 Annual Report on Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our market risks have not changed materially from those disclosed in our 20172023 Annual Report on Form 10-K.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2017September 30, 2023 to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is 1) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and 2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting. No changes were made to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are required to disclose certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will be in excess of an applied threshold not to exceed $1 million. We are using a threshold of $1 million as we believe this amount is reasonably designed to result in disclosure of such proceedings that are material to our business or financial condition. Applying this threshold, there are no environmental matters to disclose in this Form 10-Q.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed under Item 1A in our 20172023 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) In November 2010, our Board of Directors approved a share repurchase authorization of 2,000,000 common shares, of which 1,404,2891,136,608 common shares remained authorized for future repurchases at December 31, 2017.September 30, 2023. This share repurchase authorization does not have a stated expiration date. In the secondfirst quarter, we made the following repurchases of our common stock:
| | | | | | | | | | | | | | | | | | | | | | | |
Period | Total Number of Shares Purchased | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans | | Maximum Number of Shares that May Yet be Purchased Under the Plans |
July 1-31, 2023 | — | | | $ | — | | | — | | | 1,176,739 | |
August 1-31, 2023 (1) | 16,057 | | | $ | 166.22 | | | 16,057 | | | 1,160,682 | |
September 1-30, 2023 (1) | 24,074 | | | $ | 165.35 | | | 24,074 | | | 1,136,608 | |
Total | 40,131 | | | $ | 165.70 | | | 40,131 | | | 1,136,608 | |
(1)Includes 57 shares in August 2023 and 74 shares in September 2023 that were repurchased in satisfaction of tax withholding obligations arising from the vesting of restricted stock granted to employees under the Lancaster Colony Corporation 2015 Omnibus Incentive Plan.
|
| | | | | | | | | | | | |
Period | Total Number of Shares Purchased | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans | | Maximum Number of Shares that May Yet be Purchased Under the Plans |
October 1-31, 2017 | — |
| | $ | — |
| | — |
| | 1,404,320 |
|
November 1-30, 2017 | — |
| | $ | — |
| | — |
| | 1,404,320 |
|
December 1-31, 2017 (1) | 31 |
| | $ | 133.37 |
| | 31 |
| | 1,404,289 |
|
Total | 31 |
| | $ | 133.37 |
| | 31 |
| | 1,404,289 |
|
| |
(1) | Represents shares that were repurchased in satisfaction of tax withholding obligations arising from the vesting of restricted stock granted to employees under the Lancaster Colony Corporation 2015 Omnibus Incentive Plan. |
Item 6. Exhibits
See Index to Exhibits following Signatures.below.
INDEX TO EXHIBITS
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Exhibit Number | | Description |
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101.INS(a) | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH(a) | | Inline XBRL Taxonomy Extension Schema Document |
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101.CAL(a) | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF(a) | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB(a) | | Inline XBRL Taxonomy Extension Label Linkbase Document |
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Exhibit Number | | Description |
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101.PRE(a) | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104(a) | | The cover page of Lancaster Colony Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (included within Exhibit 101 attachments) |
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(a) | | Filed herewith |
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(b) | | Furnished herewith |
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(c) | | Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| | | LANCASTER COLONY CORPORATION |
| | | | | (Registrant) |
Date: | January 30, 2018 | | By: | | /s/ DAVID A. CIESINSKI |
| | | | | David A. Ciesinski |
| | | | | President, Chief Executive Officer |
| | | | | and Director |
| | | | | (Principal Executive Officer) |
| | | | | |
Date: | January 30, 2018 | | By: | | /s/ DOUGLAS A. FELL |
| | | | | Douglas A. Fell |
| | | | | Treasurer, Vice President, |
| | | | | Assistant Secretary and |
| | | | | Chief Financial Officer |
| | | | | (Principal Financial and Accounting Officer) |
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
FORM 10-Q
DECEMBER 31, 2017
INDEX TO EXHIBITS
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| | | | |
| | | | (Registrant) |
Exhibit
Number Date: | November 2, 2023 | Description | By: | Located at | /s/ DAVID A. CIESINSKI |
| | | | | David A. Ciesinski |
| | | | | President, Chief Executive Officer |
| | | | | and Director |
| | | | | (Principal Executive Officer) |
| | | | | |
Date: | November 2, 2023 | | By: | | /s/ THOMAS K. PIGOTT |
| | | | | Thomas K. Pigott |
101.INS | | XBRL Instance Document | | Filed herewith | Vice President, Chief Financial Officer |
| | | | | and Assistant Secretary |
101.SCH | | XBRL Taxonomy Extension Schema Document | | Filed herewith |
| | | |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document | | Filed herewith |
| | | |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document | | Filed herewith |
| | | |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document | | Filed herewith |
| | | |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document | | Filed herewith(Principal Financial and Accounting Officer) |