Exhibit 99.1
| FOR IMMEDIATE RELEASE Monday, October 29, 2007 | SYMBOL: LANC TRADED: Nasdaq |
LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Oct. 29 — Lancaster Colony Corporation (Nasdaq: LANC) today reported improved results for the first fiscal quarter ended September 30, 2007:
| • | Net sales reached $286 million, up nine percent from first quarter sales of $262 million last year. |
| • | Specialty Foods sales totaled $184.8 million, up seven percent from the year-ago level, reflecting both higher retail and foodservice sales. |
| • | In nonfood segments, Glassware and Candles sales totaled $59.2 million, up nine percent from the year-ago quarter, and Automotive sales increased 18 percent from the prior-year first quarter to $41.6 million. |
| • | Income from continuing operations of $15,570,000, or 51 cents per diluted share, increased seven percent from the prior year’s total of $14,490,000 or 45 cents per diluted share. |
| • | Net income totaled $15,570,000, versus $13,781,000 in the year-ago first quarter, which included the results of discontinued operations. Net income per basic and diluted share was 51 cents versus 43 cents earned in the first quarter last year. |
Specialty Foods not only experienced solid growth in foodservice volumes, but also benefited from increased retail sales of produce dressings, salad croutons and frozen rolls; higher retail prices; and incremental sales from Marshall Biscuit following its acquisition in June 2007. Segment operating income of $23.8 million, down two percent from the year-ago level, reflects substantially higher material costs, which remain at unprecedented levels. Also hampering margins were competitive market conditions for frozen bread and higher depreciation and amortization.
Increased Glassware and Candles sales primarily resulted from the disposition of industrial glass inventories, as well as higher candle volume. Segment operating income of $2.4 million, versus an operating loss of $0.8 million in the year-ago quarter, reflects the higher sales level, improved candle pricing and the closing of the poorly-performing industrial glass operation.
Improved Automotive sales were largely derived from increased sales of aluminum accessories to original equipment manufacturers. Segment operating income increased $0.9 million to $1.4 million, primarily reflecting greater sales volume and somewhat higher pricing, but partially offset by further increases in material costs.
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John B. Gerlach, Jr., chairman and CEO of Lancaster Colony Corporation, said, “While pleased with the company’s improved performance, we remain challenged by the markedly higher food commodity costs. Greater sales volume and somewhat higher pricing allowed us to make headway in what was otherwise an uncertain economic environment.” Further affecting results was a $1.2 million increase in net interest expense reflecting a higher level of net debt outstanding in the current quarter.
“As we look at the current second quarter,” Mr. Gerlach said, “we expect continued Specialty Foods sales growth but remain confronted by broadly and sharply higher ingredient costs. Candle sales should benefit from holiday demand, but margins may remain constrained by higher wax prices and placement costs associated with several scheduled product resets. We expect Automotive sales to continue on an upward trend and may see some moderation in year-over-year material costs.”
Mr. Gerlach concluded, “We continue our strategic alternative review of nonfood operations, which we intend to complete by the fiscal year-end. While net debt has increased over the past year, we retain financial flexibility to support internal growth, consider complementary food acquisitions and provide appropriate cash returns to shareholders through cash dividends and share repurchases.”
Conference Call on the Web
The company’s first quarter conference call is scheduled for this morning, October 29, at 10:00 a.m. ET. You may access the call through a live webcast by using the link provided on the company’s internet home page at www.lancastercolony.com. The webcast will be archived and available on the company’s website.
About the Company
Lancaster Colony Corporation is a diversified manufacturer and marketer of consumer products including specialty foods for the retail and foodservice markets; glassware and candles for the retail, floral and foodservice markets; and automotive products for the original equipment market and aftermarket.
Forward-Looking Statements
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This news release contains various “forward—looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations, contain projections regarding future developments, operations or financial conditions, or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors 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 the strength of the economy, changes in the financial markets, slower than anticipated sales growth, the extent of operational efficiencies achieved, the success of new product introductions, price and product competition, and increases in energy and raw-material costs. Management believes these forward-looking statements to be reasonable; however, undue reliance should not be placed on such statements that are based on current expectations. We undertake no obligation to update such forward-looking statements. Specific influences relating to forward-looking statements are numerous, including the uncertainty regarding the effect or outcome of our decision to explore strategic alternatives among our nonfood operations. More detailed statements regarding significant events that could affect our financial results are included in our annual report onForm 10-K as filed with the Securities and Exchange Commission.
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| FOR FURTHER INFORMATION: | John B. Gerlach, Jr., Chairman and CEO, or John L. Boylan, Vice President, Treasurer and CFO Lancaster Colony Corporation Phone: 614/224-7141 —or— Investor Relations Consultants, Inc. Phone: 727/781-5577 or E-mail: lanc@mindspring.com | |
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LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (b)
(In thousands except per-share amounts)
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (b)
(In thousands except per-share amounts)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2007 | 2006 | |||||||
| Net sales | $ | 285,570 | $ | 262,064 | ||||
| Cost of sales | 236,399 | 217,415 | ||||||
| Gross margin | 49,171 | 44,649 | ||||||
| Selling, general & administrative expenses | 23,940 | 22,203 | ||||||
| Restructuring and impairment charge | 136 | — | ||||||
| Operating income | 25,095 | 22,446 | ||||||
| Interest expense | (958 | ) | — | |||||
| Interest income and other — net | 162 | 362 | ||||||
| Income from continuing operations before income taxes | 24,299 | 22,808 | ||||||
| Taxes based on income | 8,729 | 8,318 | ||||||
| Income from continuing operations | 15,570 | 14,490 | ||||||
| Loss from discontinued operations, net of tax | — | (709 | ) | |||||
| Net income | $ | 15,570 | $ | 13,781 | ||||
| Net income (loss) per common share:(a) | ||||||||
| Continuing operations — basic and diluted | $ | .51 | $ | .45 | ||||
| Discontinued operations — basic and diluted | $ | — | $ | (.02 | ) | |||
| Net income — basic and diluted | $ | .51 | $ | .43 | ||||
| Cash dividends per common share | $ | .27 | $ | .26 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 30,412 | 31,919 | ||||||
| Diluted | 30,420 | 31,936 | ||||||
| (a) | Based on the weighted average number of shares outstanding during each period. | ||
| (b) | Certain automotive operations sold in the year ended June 30, 2007 have been reflected as discontinued operations. |
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PAGE 5 / LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited) (b)
(In thousands)
BUSINESS SEGMENT INFORMATION (Unaudited) (b)
(In thousands)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2007 | 2006 | |||||||
NET SALES | ||||||||
| Specialty Foods | $ | 184,789 | $ | 172,287 | ||||
| Glassware and Candles | 59,169 | 54,506 | ||||||
| Automotive | 41,612 | 35,271 | ||||||
| $ | 285,570 | $ | 262,064 | |||||
OPERATING INCOME | ||||||||
| Specialty Foods | $ | 23,774 | $ | 24,182 | ||||
| Glassware and Candles | 2,413 | (801 | ) | |||||
| Automotive | 1,441 | 563 | ||||||
| Corporate expenses | (2,533 | ) | (1,498 | ) | ||||
| $ | 25,095 | $ | 22,446 | |||||
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
| September 30, | June 30, | |||||||
| 2007 | 2007 | |||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,505 | $ | 8,318 | ||||
| Receivables — net of allowance for doubtful accounts | 114,610 | 92,635 | ||||||
| Total inventories | 153,221 | 149,717 | ||||||
| Deferred income taxes and other current assets | 25,456 | 28,241 | ||||||
| Total current assets | 307,792 | 278,911 | ||||||
| Net property, plant and equipment | 209,008 | 208,431 | ||||||
| Other assets | 111,126 | 111,155 | ||||||
| Total assets | $ | 627,926 | $ | 598,497 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | $ | 87,500 | $ | 42,500 | ||||
| Accounts payable | 47,175 | 48,423 | ||||||
| Accrued liabilities | 50,863 | 50,867 | ||||||
| Total current liabilities | 185,538 | 141,790 | ||||||
| Other noncurrent liabilities and deferred income taxes | 15,005 | 12,398 | ||||||
| Shareholders’ equity | 427,383 | 444,309 | ||||||
| Total liabilities and shareholders’ equity | $ | 627,926 | $ | 598,497 | ||||
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