Exhibit 99.1
FOR IMMEDIATE RELEASE SYMBOL: LANC
Thursday, October 28, 2004 TRADED: Nasdaq
LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Oct. 28 -- Lancaster Colony Corporation (Nasdaq: LANC)
today reported record net sales of $281 million for the first fiscal quarter
ended September 30, 2004, a six-percent increase over first quarter sales of
$267 million last year. Net income was $18,378,000 versus $19,700,000 in the
corresponding quarter a year ago. Current year results included pretax income of
approximately $0.4 million (one cent per share after taxes) related to the
liquidation of LIFO inventories carried at substantially lower prior years'
costs, compared to $1.6 million (three cents per share after taxes) in the
comparable quarter a year ago. Basic and diluted earnings per share were 52
cents versus 55 cents earned in the first quarter last year.
John B. Gerlach, Jr., chairman and CEO of Lancaster Colony Corporation,
said, "We were encouraged to achieve net sales growth in each segment. Operating
earnings, however, were again adversely affected by higher raw material costs
and a business environment that allows little pricing flexibility."
Specialty Foods sales totaled $161 million, up four percent from the
year-ago level. Segment operating income totaled $27.4 million, up four percent
over the year-ago level. Mr. Gerlach said, "Both retail and foodservice sales
showed modest growth and Warren Frozen Foods, acquired last December,
contributed over $4 million to the higher first quarter sales. Operating income
was again constrained by higher costs of soybean oil and cream, as the adverse
impact of all commodities exceeded $1 million in the quarter."
Automotive sales were $57 million for the quarter, up three percent
from the prior year's first quarter total. Segment operating income totaled $2.3
million, or approximately four percent of sales, after a charge of approximately
$0.4 million for costs incurred with the previously announced closing of a
floor mat facility. Segment income in the year-ago quarter totaling $3.7 million
included approximately $0.4 million from a gain on the sale of an idle facility.
Mr. Gerlach noted, "Sales of original equipment products benefited from growth
in aluminum accessories, partially offset by lower floor mat volume. Operating
margins remain adversely affected by markedly higher material costs for
aluminum, steel and synthetic rubber."
Glassware and Candles sales totaled $64 million, up 14 percent for the
quarter, and segment operating income was $1.1 million, $2.0 million below the
year-ago level. Mr. Gerlach said,
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PAGE 2 / LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
"For the third consecutive quarter, candle sales have posted year-over-year
increases, growing both through the addition of new customers and gains among
existing customers. Segment operating income reflects lower LIFO-related income
as well as higher material and product costs. Candle production has increased to
meet demand in recent months, and manufacturing efficiencies at our largest
glassware facility have also improved."
Mr. Gerlach concluded, "We continue to believe that our best
opportunity to improve operating results lies in the second half of the current
fiscal year. Lancaster Colony remains debt-free with solid cash flows, and we
ended the past quarter with more than $168 million in cash and equivalents."
The company's first quarter conference call is scheduled for this
morning, October 28, 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.
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 FIRST QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended
September 30,
2004 2003
-------- --------
Net sales $281,484 $266,652
Cost of sales 227,467 210,845
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Gross margin 54,017 55,807
Selling, general & administrative expenses 24,776 24,169
Restructuring and impairment charge 442 --
-------- --------
Operating income 28,799 31,638
Interest income and other - net 627 346
-------- --------
Income before income taxes 29,426 31,984
Taxes based on income 11,048 12,284
-------- --------
Net income $ 18,378 $ 19,700
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Net income per common share:(a)
Basic and diluted $ .52 $ .55
Cash dividends per common share $ .23 $ .20
Weighted average common shares outstanding:
Basic 35,355 35,763
Diluted 35,408 35,831
(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
September 30,
2004 2003
-------- --------
NET SALES
Specialty Foods $160,609 $154,817
Glassware and Candles 63,732 56,126
Automotive 57,143 55,709
-------- --------
$281,484 $266,652
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OPERATING INCOME
Specialty Foods $27,379 $ 26,313
Glassware and Candles 1,079 3,106
Automotive 2,256 3,651
Corporate expenses (1,915) (1,432)
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$28,799 $ 31,638
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PAGE 4 / LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, June 30,
2004 2004
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(Unaudited)
ASSETS
Current assets:
Cash and equivalents $168,136 $178,503
Receivables - net of allowance for doubtful
accounts 115,764 94,623
Total inventories 154,093 155,076
Deferred income taxes and other current assets 26,774 22,803
-------- --------
Total current assets 464,767 451,005
Net property, plant and equipment 155,200 159,494
Other assets 105,453 102,388
-------- --------
Total assets $725,420 $712,887
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,974 $ 47,383
Accrued liabilities 58,447 45,348
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Total current liabilities 105,421 92,731
Other noncurrent liabilities and deferred income taxes 34,153 33,371
Shareholders' equity 585,846 586,785
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Total liabilities and shareholders' equity $725,420 $712,887
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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
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