Exhibit 99.4
FOR IMMEDIATE RELEASE SYMBOL: LANC
Thursday, May 1, 2003 TRADED: Nasdaq
LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, May 1 -- Lancaster Colony Corporation (Nasdaq: LANC) today
reported net income of $18,047,000 for the company's third fiscal quarter ended
March 31, 2003. Net income totaled $28,807,000 for the corresponding quarter of
a year ago when the company benefited from a pre-tax distribution of $15.6
million (26 cents per share after taxes) received under the Continued Dumping
and Subsidy Offset Act (CDSOA). Basic and diluted earnings per share for the
fiscal 2003 third quarter were 50 cents per share compared to 78 cents in the
year-ago quarter. Third quarter net sales were $260 million, a four percent
decline from net sales of $271 million in the third quarter last year.
Net income for the latest quarter also included pre-tax income of $2.4
million (four cents per share after taxes) related to the liquidation of LIFO
inventories carried at substantially lower prior years' costs. In the third
quarter last year, net income included a similar LIFO pre-tax benefit of $0.4
million (one cent per share after taxes).
For the nine months ended March 31, 2003, net income reached $90,582,000,
compared to $66,571,000 earned in the first nine months a year ago. Basic and
diluted earnings per share were $2.49 compared to $1.80 a year ago. Nine-month
net sales were $843 million compared to $848 million last year.
The most recent nine-month results included CDSOA pre-tax income of $39.2
million (67 cents per share after taxes), a pre-tax restructuring charge of $4.9
million (eight cents per share after taxes) related to the company's consumer
glassware operations, and pre-tax income of $5.1 million (nine cents per share
after taxes) associated with the liquidation of LIFO inventories carried at
substantially lower prior years' costs. The year-ago nine-month results
included, in addition to the third quarter's CDSOA and LIFO income, a pre-tax
provision of $14.3 million (24 cents per share after taxes) for accounts
receivable reserves related to Kmart Corporation's bankruptcy. Income related to
CDSOA has been recorded in the accompanying financial statements as other
income.
Goodwill amortization, which ceased upon the company's adoption of
Statement of Financial Accounting Standards No. 142 effective the beginning of
the current fiscal year, on a pre-tax basis, totaled $0.7 million (two cents per
share after taxes) for the prior year's third quarter and $2.0 million (five
cents per share after taxes) for the nine months.
PAGE 2 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
John B. Gerlach, Jr., chairman and CEO, said, "With the CDSOA remittances
falling in the second quarter this year and the third quarter last year, our
quarterly comparisons were somewhat skewed. Disruptive winter weather, concerns
over the conflict in Iraq and rising energy costs hampered consumer spending and
contributed to our lower earnings."
Specialty Foods sales declined slightly during the third quarter. Mr.
Gerlach said, "Less than expected Specialty Food volume was impacted by
unusually severe winter weather that affected many national chain restaurant
customers. Retail markets were influenced by increased competitive conditions
and the later Easter. Margins in our dressing and sauces operations were
adversely affected by a marked increase in soybean oil costs and a less
favorable sales mix."
Automotive sales during the third quarter were up three percent from the
prior year level. Operating income increased nearly five percent. Mr. Gerlach
stated, "This segment benefited from new aluminum accessory programs with
original equipment manufacturers. Automotive margins improved on a more
favorable sales mix despite higher petroleum-driven material costs."
"Our Glassware and Candles sales declined almost 16 percent for the
quarter," Mr. Gerlach stated. "This segment encountered weak consumer demand,
difficult pricing conditions and costs associated with the introduction of a
broad new line of Candle-lite brand candles. We believe this investment in new
products is necessary to maintain our leading presence in the market channels we
serve. Segment operating results, which included the LIFO income, were also
impacted by a provision totaling in excess of $1 million for the impairment of
certain glass molds as we further reduce our product lines. We have been
encouraged by the progress made to date in integrating our consumer glassware
operations, although much still needs to be accomplished."
Commenting on the company's fourth quarter, Mr. Gerlach said, "In this
unusual economic environment, it is difficult to forecast top line demand.
Making our comparisons all the more challenging will be increased material
costs, particularly for soybean oil, as well as additional rollout costs for our
new candle products. Along with most companies, we are seeing energy and
employee benefit costs rise above year-ago levels. While early in the quarter,
we are encouraged that our food volumes appear to be comparing positively in
April. Looking at the full fiscal year, we continue to expect a record bottom
line aided by the CDSOA funding and believe we remain well-positioned to benefit
from any upturn in the economy as our balance sheet remains debt-free."
PAGE 3 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
The company's third quarter conference call is scheduled for this morning,
May 1, at 10:00 a.m. EDT. 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. A replay of the webcast will be made available on the
company website.
This news release contains forward-looking statements related to future
growth and earnings opportunities. Such statements are based upon certain
assumptions and assessments made by management of the company in light of its
experience and perception of historical trends, current conditions, expected
future developments and other factors it believes to be appropriate. Actual
results may differ as a result of factors over which the company has no control
including the strength of the economy, slower than anticipated sales growth, the
extent of operational efficiencies achieved, the success of new product
introductions, price and product competition, and increases in raw materials
costs. Management believes these forward-looking statements to be reasonable;
however, undue reliance should not be placed on such statements, which are based
on current expectations. The company undertakes no obligation to publicly update
such forward-looking statements. More detailed statements regarding significant
events which could affect the company's financial results are included in the
company's Forms 10-K and 10-Q 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
PAGE 4 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONSOLIDATED SUMMARY OF SALES AND EARNINGS (UNAUDITED)
(In thousands except per-share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2003 2002 2003 2002
--------------------------------------------------------------
Net sales $ 259,535 $ 270,912 $ 843,025 $ 847,714
Cost of sales 205,962 213,388 657,534 660,520
--------- --------- ---------- ---------
Gross margin 53,573 57,524 185,491 187,194
Selling, general & administrative expenses 24,629 26,030 75,751 94,053
Restructuring and impairment charge (84) -- 4,861 --
--------- --------- ---------- ---------
Operating income 29,028 31,494 104,879 93,141
Other income (expense):
Interest expense -- -- -- (54)
Interest income and other - net (47) 15,383 40,407 15,261
--------- --------- ---------- ---------
Income before income taxes 28,981 46,877 145,286 108,348
Taxes based on income 10,934 18,070 54,704 41,777
--------- --------- ---------- ---------
Net income $ 18,047 $ 28,807 $ 90,582 $ 66,571
========= ========= ========== =========
Net income per common share:(a)
Basic and diluted $ .50 $ .78 $ 2.49 $ 1.80
Cash dividends per common share $ .20 $ .18 $ .58 $ .53
Weighted average common shares outstanding:
Basic 36,013 36,712 36,310 36,924
Diluted 36,064 36,777 36,366 36,980
(a) Based on the weighted average number of shares outstanding during each
period.
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (UNAUDITED)
(In thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
2003 2002 2003 2002
----------------------------------------------------------
NET SALES
Specialty Foods $ 140,959 $143,425 $452,908 $428,973
Glassware and Candles 57,274 67,988 207,237 250,571
Automotive 61,302 59,499 182,880 168,170
--------- -------- -------- --------
$ 259,535 $270,912 $843,025 $847,714
========= ======== ======== ========
OPERATING INCOME
Specialty Foods $ 23,342 $ 25,910 $ 83,914 $ 82,816
Glassware and Candles 2,279 2,291 12,252 5,000
Automotive 4,937 4,720 13,381 9,725
Corporate expenses (1,530) (1,427) (4,668) (4,400)
--------- -------- -------- --------
$ 29,028 $ 31,494 $104,879 $ 93,141
========= ======== ======== ========
PAGE 5 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, June 30,
2003 2002
---------------------
(Unaudited)
ASSETS
Current assets:
Cash and equivalents $131,357 $ 83,378
Receivables - net of allowance for doubtful
accounts 101,520 109,350
Total inventories 153,136 148,251
Prepaid expenses and other current assets 27,022 25,121
-------- --------
Total current assets 413,035 366,100
Net property, plant and equipment 159,855 165,943
Other assets 88,554 86,662
-------- --------
Total assets $661,444 $618,705
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,730 $ 43,258
Accrued liabilities 48,108 46,046
-------- --------
Total current liabilities 90,838 89,304
Other noncurrent liabilities and deferred taxes 28,445 28,124
Shareholders' equity 542,161 501,277
-------- --------
Total liabilities and shareholders' equity $661,444 $618,705
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