UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On January 30, 2014, Lancaster Colony Corporation announced that it had sold effectively all of the net operating assets of its candle manufacturing and marketing operations to an affiliate of Centre Lane Partners, LLC, a New York private investment firm for approximately $28 million in cash, subject to customary post-closing adjustments. For future financial presentation purposes, the operating results of the sold operations will be presented as discontinued operations.
The unaudited pro forma condensed consolidated financial statements present the pro forma financial position and results of operations derived from the audited financial statements for the periods ended June 30, 2013, 2012 and 2011 and the unaudited financial statement for the period ended September 30, 2013. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2013, gives effect to the disposal transaction as if it occurred on September 30, 2013. The unaudited pro forma condensed consolidated statements of income for the three months ended September 30, 2013 and the years ended June 30, 2013, 2012 and 2011 give effect to the disposal transaction as if it occurred on July 1, 2013, 2012, 2011 and 2010, respectively.
The unaudited pro forma condensed consolidated financial statements described above should be read in conjunction with the historical financial statements and notes thereto. The unaudited pro forma financial information is not necessarily indicative of the financial position or results of operations that may have actually occurred if the disposition transaction had been consummated on the dates indicated or of the financial position or operating results that may be obtained in the future. The actual adjustments to be made to the financial statements may differ from the amounts presented herein. Assumptions underlying the pro forma adjustments are described in the following footnotes to the pro forma condensed consolidated financial statements and should be read in conjunction with the unaudited pro forma condensed consolidated financial statements:
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| a | These adjustments remove the sold operations’ financial results from the historical financial results. |
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| b | Includes an adjustment of $27 million for the proceeds from the sale. |
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| c | Includes an adjustment of approximately $18.6 million for the tax impact of the loss on the sale. |
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| d | This adjustment reflects the loss on the sale, as calculated using the gross sale price of approximately $25 million plus an initial working capital adjustment of approximately $3 million, less approximately $1.3 in estimated transaction related closing costs, net of tax, at an appropriate effective tax rate. The loss calculated for this presentation is based on the September 30, 2013 value of the net assets sold and will not correspond to the ultimate loss on the sale, which is expected to approximate $43 to $45 million, pretax, pending post-closing adjustments. |
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| Lancaster Colony Corporation | | | | | |
| Unaudited Pro Forma Condensed Consolidated Balance Sheet | | | | |
| As of September 30, 2013 | | | | | |
| | | | | | |
| In Thousands | | | | | |
| | Historical Balance Sheet | | Pro Forma Adjustments | | Pro Forma Balance Sheet |
| Cash | $ | 133,075 |
| | $ | 26,684 |
| a,b | $ | 159,759 |
|
| Net Accounts Receivable | 82,890 |
| | (28,173 | ) | a | 54,717 |
|
| Total Inventories | 113,047 |
| | (38,618 | ) | a | 74,429 |
|
| Deferred Income Taxes and Other Current Assets | 18,360 |
| | 11,979 |
| a,c | 30,339 |
|
| Total Current Assets | 347,372 |
| | (28,128 | ) | | 319,244 |
|
| Total Net Property | 186,997 |
| | (21,274 | ) | a | 165,723 |
|
| Goodwill | 89,840 |
| | — |
| | 89,840 |
|
| Other Assets | 14,271 |
| | (1,210 | ) | a | 13,061 |
|
| Total Assets | $ | 638,480 |
| | $ | (50,612 | ) | | $ | 587,868 |
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| | | | | | |
| Accounts Payable | $ | 41,772 |
| | $ | (4,751 | ) | a | $ | 37,021 |
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| Accrued Liabilities | 41,789 |
| | (8,558 | ) | a,c | 33,231 |
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| Total Current Liabilities | 83,561 |
| | (13,309 | ) | | 70,252 |
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| Long Term Debt | — |
| | — |
| | — |
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| Deferred Income Taxes and Other | | | | | |
| Noncurrent Liabilities | 42,053 |
| | — |
| | 42,053 |
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| | | | | | |
| Common Stock | 103,282 |
| | — |
| | 103,282 |
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| Ending Retained Earnings | 1,153,087 |
| | (37,303 | ) | d | 1,115,784 |
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| Accumulated Other Comprehensive Loss | (8,324 | ) | | — |
| | (8,324 | ) |
| Treasury Stock | (735,179 | ) | | — |
| | (735,179 | ) |
| Total Shareholders' Equity | 512,866 |
| | (37,303 | ) | | 475,563 |
|
| Total Liabilities and Shareholders' Equity | $ | 638,480 |
| | $ | (50,612 | ) | | $ | 587,868 |
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| | | | | | |
| See accompanying notes to pro forma condensed consolidated financial statements. | | |
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| Lancaster Colony Corporation | | | | | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | | | |
| For the Three Months Ended September 30, 2013 | | | | | |
| | | | | | |
| In thousands, except per share amounts | | | | | |
| | Historical Statement of Income | | Pro Forma Adjustments | | Pro Forma Statement of Income |
| Net Sales | $ | 285,856 |
| | $ | (37,719 | ) | a | $ | 248,137 |
|
| Cost of Sales | 224,218 |
| | (33,252 | ) | a | 190,966 |
|
| Gross Margin | 61,638 |
| | (4,467 | ) | | 57,171 |
|
| Selling, General and Administrative Expenses | 24,038 |
| | (3,298 | ) | a | 20,740 |
|
| Operating Income | 37,600 |
| | (1,169 | ) | | 36,431 |
|
| Other Income | (48 | ) | | 10 |
| a | (38 | ) |
| Income Before Income Taxes | 37,552 |
| | (1,159 | ) | | 36,393 |
|
| Income Taxes | 12,751 |
| | (410 | ) | a | 12,341 |
|
| Income From Continuing Operations | $ | 24,801 |
| | $ | (749 | ) | | $ | 24,052 |
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| | | | | | |
| Net Income Per Common Share from | | | | | |
| Continuing Operations: | | | | | |
| Basic and Diluted | $ | 0.91 |
| | | | $ | 0.88 |
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| | | | | | |
| Weighted Average Common Shares Outstanding: | | | | | |
| Basic | 27,268 |
| | | | 27,268 |
|
| Diluted | 27,312 |
| | | | 27,312 |
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| | | | | | |
| See accompanying notes to pro forma condensed consolidated financial statements. | | |
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| Lancaster Colony Corporation | | | | | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | | | |
| For the Twelve Months Ended June 30, 2013 | | | | | |
| | | | | | |
| In thousands, except per share amounts | | | | | |
| | Historical Statement of Income | | Pro Forma Adjustments | | Pro Forma Statement of Income |
| Net Sales | $ | 1,165,909 |
| | $ | (152,106 | ) | a | $ | 1,013,803 |
|
| Cost of Sales | 898,800 |
| | (129,704 | ) | a | 769,096 |
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| Gross Margin | 267,109 |
| | (22,402 | ) | | 244,707 |
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| Selling, General and Administrative Expenses | 105,203 |
| | (14,419 | ) | a | 90,784 |
|
| Operating Income | 161,906 |
| | (7,983 | ) | | 153,923 |
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| Other Income | 77 |
| | (182 | ) | a | (105 | ) |
| Income Before Income Taxes | 161,983 |
| | (8,165 | ) | | 153,818 |
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| Income Taxes | 52,734 |
| | (2,776 | ) | a | 49,958 |
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| Income From Continuing Operations | $ | 109,249 |
| | $ | (5,389 | ) | | $ | 103,860 |
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| | | | | | |
| Net Income Per Common Share from | | | | | |
| Continuing Operations: | | | | | |
| Basic | $ | 4.00 |
| | | | $ | 3.80 |
|
| Diluted | $ | 3.99 |
| | | | $ | 3.79 |
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| | | | | | |
| Weighted Average Common Shares Outstanding: | | | | | |
| Basic | 27,252 |
| | | | 27,252 |
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| Diluted | 27,285 |
| | | | 27,285 |
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| See accompanying notes to pro forma condensed consolidated financial statements. | | |
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| Lancaster Colony Corporation | | | | | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | | | |
| For the Twelve Months Ended June 30, 2012 | | | | | |
| | | | | | |
| In thousands, except per share amounts | | | | | |
| | Historical Statement of Income | | Pro Forma Adjustments | | Pro Forma Statement of Income |
| Net Sales | $ | 1,131,359 |
| | $ | (142,422 | ) | a | $ | 988,937 |
|
| Cost of Sales | 891,248 |
| | (125,739 | ) | a | 765,509 |
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| Gross Margin | 240,111 |
| | (16,683 | ) | | 223,428 |
|
| Selling, General and Administrative Expenses | 96,824 |
| | (14,578 | ) | a | 82,246 |
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| Operating Income | 143,287 |
| | (2,105 | ) | | 141,182 |
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| Other Income | 2,744 |
| | (2,710 | ) | a | 34 |
|
| Income Before Income Taxes | 146,031 |
| | (4,815 | ) | | 141,216 |
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| Income Taxes | 50,223 |
| | (1,356 | ) | a | 48,867 |
|
| Income From Continuing Operations | $ | 95,808 |
| | $ | (3,459 | ) | | $ | 92,349 |
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| | | | | | |
| Net Income Per Common Share from | | | | | |
| Continuing Operations: | | | | | |
| Basic and Diluted | $ | 3.51 |
| | | | $ | 3.38 |
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| | | | | | |
| Weighted Average Common Shares Outstanding: | | | | | |
| Basic | 27,233 |
| | | | 27,233 |
|
| Diluted | 27,265 |
| | | | 27,265 |
|
| | | | | | |
| See accompanying notes to pro forma condensed consolidated financial statements. | | |
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| Lancaster Colony Corporation | | | | | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | | | |
| For the Twelve Months Ended June 30, 2011 | | | | | |
| | | | | | |
| In thousands, except per share amounts | | | | | |
| | Historical Statement of Income | | Pro Forma Adjustments | | Pro Forma Statement of Income |
| Net Sales | $ | 1,089,946 |
| | $ | (167,090 | ) | a | $ | 922,856 |
|
| Cost of Sales | 847,517 |
| | (148,446 | ) | a | 699,071 |
|
| Gross Margin | 242,429 |
| | (18,644 | ) | | 223,785 |
|
| Selling, General and Administrative Expenses | 95,425 |
| | (14,880 | ) | a | 80,545 |
|
| Operating Income | 147,004 |
| | (3,764 | ) | | 143,240 |
|
| Other Income | 14,502 |
| | (14,454 | ) | a | 48 |
|
| Income Before Income Taxes | 161,506 |
| | (18,218 | ) | | 143,288 |
|
| Income Taxes | 55,142 |
| | (6,234 | ) | a | 48,908 |
|
| Income From Continuing Operations | $ | 106,364 |
| | $ | (11,984 | ) | | $ | 94,380 |
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| | | | | | |
| Net Income Per Common Share from | | | | | |
| Continuing Operations: | | | | | |
| Basic | $ | 3.84 |
| | | | $ | 3.41 |
|
| Diluted | $ | 3.84 |
| | | | $ | 3.40 |
|
| | | | | | |
| Weighted Average Common Shares Outstanding: | | | | | |
| Basic | 27,664 |
| | | | 27,664 |
|
| Diluted | 27,689 |
| | | | 27,689 |
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| | | | | | |
| See accompanying notes to pro forma condensed consolidated financial statements. | | |
