Exhibit 99.1
Lancaster Colony Reports Fourth Quarter And Fiscal Year Results
COLUMBUS, Ohio, Aug. 21 /PRNewswire/ -- Lancaster Colony Corporation
(Nasdaq: LANC) today reported that net income for the fiscal year ended June 30,
2003 reached a record high of $112,546,000 compared to $91,940,000 earned a year
ago. Diluted earnings per share were $3.11 versus $2.49 last year. Net sales
were $1,106,800,000, a two percent decrease from $1,129,687,000 reported a year
ago.
Fourth quarter net income of $21,964,000 compares with $25,369,000 earned
in the corresponding quarter a year ago. Diluted earnings per share were 61
cents versus 69 cents in the year-ago fourth quarter. Net sales were $264
million, a six percent decline from $282 million in the fourth quarter last
year.
Net income for the latest quarter included pretax income of approximately
$1.9 million (three cents per share after taxes) related to the liquidation of
LIFO inventories carried at substantially lower prior years' costs. In the
fourth quarter last year, net income included a similar LIFO pretax benefit of
approximately $2.9 million (five cents per share after taxes).
The fiscal 2003 results included pretax income of $39.2 million (67 cents
per share after taxes) associated with a distribution received from the U.S.
Customs Service under the Continued Dumping and Subsidy Offset Act ("CDSOA"), a
pretax restructuring charge of $4.9 million (eight cents per share after taxes)
related to the company's consumer glassware operations, and pretax income of
approximately $7.0 million (12 cents per share after taxes) associated with the
liquidation of LIFO inventories. The year-ago results included a pretax benefit
of $15.6 million (26 cents per share after taxes) related to a distribution made
pursuant to CDSOA, a pretax provision of $14.3 million (24 cents per share after
taxes) for accounts receivable reserves related to Kmart Corporation's
bankruptcy and pretax income of approximately $3.3 million (five cents per share
after taxes) associated with the liquidation of LIFO inventories. 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, totaled on a pretax basis $0.7 million (two cents per
share after taxes) for the prior year's fourth quarter and $2.7 million (seven
cents per share after taxes) for the full 2002 fiscal year.
John B. Gerlach, Jr., chairman and CEO, said, "Fiscal 2003 was a year of
record earnings and cash flow. Our balance sheet remained debt-free at June 30,
2003 and reflected over $142 million in cash and over $547 million in
shareholders' equity. We also repurchased 948,000 common shares and we marked
our 40th consecutive year of increased cash dividends. However, our operating
performance was adversely affected by a weak economy and a highly competitive
marketplace. Our fourth quarter results were impacted by weaker non-food sales
combined with higher average ingredient costs for Specialty Foods."
Sales of Specialty Foods increased five percent for the year. During the
fourth quarter, frozen food products led a four percent improvement in sales,
which further benefited from Easter occurring later in calendar 2003. Segment
operating income rose two percent for the year and four percent for the quarter.
Mr. Gerlach said, "We were pleased with this segment's quarterly performance
given the strong comparisons of a year ago and increased ingredient costs.
Soybean oil costs remained well above fiscal 2002 levels and adversely affected
fourth quarter comparisons by more than $1.5 million. Offsetting a portion of
this challenge was a better sales mix and the operating efficiencies we have
achieved." He noted that all of the segment's top-line growth was internally
generated and that a number of exciting new products were introduced over the
last year, including certified organic salad dressing sold into produce
departments.
Automotive sales increased four percent for the year but declined seven
percent during the fourth quarter compared to prior-year levels. Operating
income increased 12 percent for the year but decreased 31 percent in the
quarter. Mr. Gerlach stated, "Our Automotive segment ended the year with several
new platforms for original equipment manufacturers as well as new manufacturing
capabilities resulting from relatively modest investments in production
equipment. Aftermarket conditions, however, remained very competitive and
overall demand was weak. Higher petroleum-related material costs also
contributed to the lower fourth quarter operating results."
Net sales of the Glassware and Candles segment declined 20 percent for the
year and 31 percent for the quarter. Segment operating income increased 18
percent, or $1.9 million, for the year but declined $5.4 million during the
quarter. Comparative results of this segment were affected by LIFO-related
income, the restructuring charge and the prior year's bad debt provision for
Kmart Corporation. Mr. Gerlach said, "Our Glassware and Candles segment launched
its newly redesigned retail candle line and we feel we are well-poised to meet
the challenges and opportunities of fiscal 2004. Fourth quarter Glassware and
Candles results were affected by a continued weak retail environment, very
competitive pricing, the LIFO credits and significant promotional costs
associated with the placement of our new candle line. While we remain committed
to achieving the full benefit of our glass plant consolidation announced earlier
this year, lower sales volume led to less fixed cost absorption."
Looking forward, Mr. Gerlach stated, "We enter the new fiscal year with
hopes of a strengthening economy. We are excited about new opportunities in the
coming year although we also face a number of hurdles including lackluster
demand for glassware and candles and increasingly competitive OEM market
conditions. For at least the first half of the fiscal year, Specialty Food
margins will likely feel the pressure of current soybean oil pricing. Capital
expenditures for this segment will be higher than historic levels in order to
expand capacity for dressings and sauces. On the whole, we are optimistic about
our fiscal 2004 results."
The company's fourth quarter conference call is scheduled for this
morning, August 21, 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. Replays 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.
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per-share amounts)
Three Months Ended Fiscal Year Ended
June 30, June 30,
2003 2002 2003 2002
Net sales $263,775 $281,973 $1,106,800 $1,129,687
Cost of sales 205,406 215,602 862,940 876,122
Gross margin 58,369 66,371 243,860 253,565
Selling, general &
administrative
expenses 23,281 25,143 99,032 119,196
Restructuring and
impairment charge 24 -- 4,885 --
Operating income 35,064 41,228 139,943 134,369
Other income (expense):
Interest expense -- -- -- (54)
Interest income and
other - net 451 (234) 40,858 15,027
Income before income
taxes 35,515 40,994 180,801 149,342
Taxes based on income 13,551 15,625 68,255 57,402
Net income $21,964 $25,369 $112,546 $91,940
Net income per common
share: (a)
Basic $.61 $.69 $3.11 $2.49
Diluted $.61 $.69 $3.11 $2.49
Cash dividends per
common share $.20 $.18 $.78 $.71
Weighted average common
shares outstanding:
Basic 35,808 36,626 36,184 36,850
Diluted 35,873 36,700 36,243 36,910
(a) Based on the weighted average number of shares outstanding during each
period.
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION
(In thousands)
Three Months Ended Fiscal Year Ended
June 30, June 30,
2003 2002 2003 2002
NET SALES
Specialty Foods $157,086 $150,967 $609,994 $579,940
Glassware and Candles 44,200 64,020 251,437 314,591
Automotive 62,489 66,986 245,369 235,156
$263,775 $281,973 $1,106,800 $1,129,687
OPERATING INCOME
Specialty Foods $32,154 $30,894 $116,068 $113,710
Glassware and Candles 180 5,547 12,432 10,547
Automotive 3,970 5,764 17,351 15,489
Corporate expenses (1,240) (977) (5,908) (5,377)
$35,064 $41,228 $139,943 $134,369
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, June 30,
2003 2002
ASSETS
Current assets:
Cash and equivalents $142,847 $83,378
Receivables - net of
allowance for doubtful accounts 88,583 109,350
Total inventories 159,412 148,251
Prepaid expenses and other
current assets 23,543 25,121
Total current assets 414,385 366,100
Net property, plant and equipment 161,111 165,943
Other assets 92,220 86,662
Total assets $667,716 $618,705
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $41,983 $42,988
Accrued liabilities 42,940 46,316
Total current liabilities 84,923 89,304
Other noncurrent liabilities and
deferred taxes 35,128 28,124
Shareholders' equity 547,665 501,277
Total liabilities and
shareholders' equity $667,716 $618,705
SOURCE Lancaster Colony Corporation
- -0- 08/21/2003
/CONTACT: John B. Gerlach, Jr., Chairman and CEO, or John L. Boylan,
Vice President, Treasurer and CFO, both of Lancaster Colony Corporation,
+1-614-224-7141; or Investor Relations Consultants, +1-727-781-5577 or e-mail,
lanc@mindspring.com, for Lancaster Colony/