Exhibit 99.1
FOR IMMEDIATE RELEASE SYMBOL: LANC
Thursday, April 29, 2004 TRADED: Nasdaq
LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Apr. 29 -- Lancaster Colony Corporation (Nasdaq: LANC)
today reported net income of $16,045,000 or 45 cents per basic and diluted share
for the company's third fiscal quarter ended March 31, 2004. For the
corresponding quarter a year ago, net income totaled $18,047,000 or 50 cents per
basic and diluted share. Third quarter net sales increased four percent to $269
million versus net sales of $260 million in the third quarter last year.
Net income for the latest quarter included pretax income of $0.8
million (one cent 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 pretax benefit of $2.4
million (four cents per share after taxes).
For the nine months ended March 31, 2004, net income reached
$62,395,000 compared to $90,582,000 earned in the first nine months a year ago.
Diluted earnings per share were $1.74 compared to $2.49 a year ago. Nine months
net sales were $827 million compared to $843 million last year.
The most recent nine-months results included pretax income of $2.0
million (three cents per share after taxes) associated with a second quarter
distribution under the Continued Dumping and Subsidy Offset Act (CDSOA). In the
prior year, the pretax CDSOA distribution was $39.2 million (67 cents per share
after taxes). Also received in the current year's second quarter was a pretax
bad-debt recovery of $1.2 million (two cents per share after taxes). Pretax
LIFO-related income for the nine months totaled $3.4 million (six cents per
share after taxes) compared to $5.1 million (nine cents per share after taxes)
in the corresponding period a year ago. The prior year's nine months results
also included a pretax provision of $4.9 million (eight cents per share after
taxes) for the restructuring of the company's consumer glassware business.
John B. Gerlach, Jr., chairman and CEO, said, "We were pleased with the
third-quarter growth in sales and operating income that was achieved by our
Specialty Foods group. Consolidated results remained challenged by weaker
nonfood volumes and by higher materials costs, especially for soybean oil and
dairy-related ingredients."
Specialty Foods sales in the third quarter increased 11 percent to $157
million with both retail and foodservice volumes running ahead of the comparable
quarter a year earlier. Operating income was up three percent to $24.1 million.
Mr. Gerlach said, "Nearly a third of this segment's sales increase was
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PAGE 2 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
attributable to Warren Frozen Foods, Inc., acquired in December 2003.
Historically high costs of soybean oil adversely affected our dressings and
sauces margins and had an impact of more than $1 million in the third quarter
and over $4.5 million in the nine months."
Automotive sales declined seven percent to $57 million in the third
quarter. Operating income for the quarter declined to $2.0 million from $4.9
million a year ago. Mr. Gerlach stated, "Similar to the second quarter, our
sales were affected by the loss of an OEM program for aluminum accessories that
was not fully offset by other gains. Raw materials costs remained above year-ago
levels, and lower floormat production affected overhead absorption."
Glassware and Candles sales totaled $56 million, a three percent
decline. Operating income for the quarter declined to $1.1 million versus $2.3
million in the year-ago quarter. In addition to the varying amounts of
LIFO-related income, operating income comparisons for the third quarter were
affected by the $1.4 million prior-year impairment charge related to certain
glass molds. Mr. Gerlach stated, "Although retail candle demand remains
unsettled, our third quarter candle sales comparison was favorable. The prior
year's volume also benefited from the introduction of a broad new line of
Candle-lite candles. For this segment, lower production and competitive pricing
have led to compressed margins. We believe our candle operations are more
efficient than a year ago, and we continue our efforts to sustain improvement in
our consumer glassware manufacturing."
Mr. Gerlach concluded, "We were pleased to return to top-line growth in
the third quarter. A current concern is the continuing trend toward higher
materials costs, particularly food ingredients. Warren Foods performed to our
expectations, and we look forward to expanding the market presence of Warren
products. We continue to focus on new product development, and we recognize the
need to reduce our costs, especially in our nonfood operations where growth is
most challenging. Looking ahead, we believe our debt-free balance sheet and
solid cash flows provide a firm foundation for future growth."
The company's third quarter conference call is scheduled for this
morning, April 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. 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, or
limited, 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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PAGE 3 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2004 2003 2004 2003
-------------------------------------------------------
Net sales $ 269,463 $ 259,535 $ 827,311 $ 843,025
Cost of sales 219,659 205,962 656,649 657,534
--------- --------- --------- ---------
Gross margin 49,804 53,573 170,662 185,491
Selling, general & administrative expenses 24,401 24,629 73,473 75,751
Restructuring and impairment charge -- (84) -- 4,861
--------- --------- --------- ---------
Operating income 25,403 29,028 97,189 104,879
Interest income and other - net 457 (47) 3,283 40,407
--------- --------- --------- ---------
Income before income taxes 25,860 28,981 100,472 145,286
Taxes based on income 9,815 10,934 38,077 54,704
--------- --------- --------- ---------
Net income $ 16,045 $ 18,047 $ 62,395 $ 90,582
========= ========= ========= =========
Net income per common share:(a)
Basic $ .45 $ .50 $ 1.75 $ 2.49
Diluted $ .45 $ .50 $ 1.74 $ 2.49
Cash dividends per common share $ .23 $ .20 $ .66 $ .58
Weighted average common shares outstanding:
Basic 35,736 36,013 35,740 36,310
Diluted 35,814 36,064 35,814 36,366
(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,
2004 2003 2004 2003
-------------------------------------------------------
NET SALES
Specialty Foods $ 156,748 $ 140,959 $ 475,453 $ 452,908
Glassware and Candles 55,658 57,274 184,493 207,237
Automotive 57,057 61,302 167,365 182,880
--------- --------- --------- ---------
$ 269,463 $ 259,535 $ 827,311 $ 843,025
========= ========= ========= =========
OPERATING INCOME
Specialty Foods $ 24,085 $ 23,342 $ 81,494 $ 83,914
Glassware and Candles 1,147 2,279 11,017 12,252
Automotive 2,025 4,937 9,480 13,381
Corporate expenses (1,854) (1,530) (4,802) (4,668)
--------- --------- --------- ---------
$ 25,403 $ 29,028 $ 97,189 $ 104,879
========= ========= ========= =========
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PAGE 4 / LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, June 30,
2004 2003
------------------------
(Unaudited)
ASSETS
Current assets:
Cash and equivalents $159,377 $142,847
Receivables - net of allowance for doubtful
accounts 106,195 88,583
Total inventories 148,852 159,412
Deferred income taxes and other current assets 28,635 23,543
-------- --------
Total current assets 443,059 414,385
Net property, plant and equipment 163,665 161,111
Other assets 103,254 92,220
-------- --------
Total assets $709,978 $667,716
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,708 $ 41,983
Accrued liabilities 45,136 42,940
-------- --------
Total current liabilities 87,844 84,923
Other noncurrent liabilities and deferred income taxes 38,799 35,128
Shareholders' equity 583,335 547,665
-------- --------
Total liabilities and shareholders' equity $709,978 $667,716
======== ========
SUBJECT TO YEAR-END AUDIT.
# # # #
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