Exhibit 99.1
FOR IMMEDIATE RELEASE SYMBOL: LANC
Friday, October 28, 2005 TRADED: Nasdaq
LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
COLUMBUS, Ohio, Oct. 28 -- Lancaster Colony Corporation (Nasdaq: LANC)
today reported that net sales rose two percent to a record $286 million for the
first fiscal quarter ended September 30, 2005 compared with first quarter sales
of $281 million last year. Net income was $18,046,000 versus $18,378,000 in the
corresponding quarter a year ago. Benefiting from the company's share
repurchases, basic and diluted earnings per share were 53 cents versus 52 cents
earned in the first quarter last year.
John B. Gerlach, Jr., chairman and CEO of Lancaster Colony Corporation,
said, "While we were pleased with our Specialty Foods sales growth, consolidated
sales and earnings were below our expectations."
Specialty Foods sales totaled $170 million, up nearly six percent from
the year-ago level, reflecting solid growth in several retail product lines.
Foodservice sales increased in the face of menu changes and weaker same-store
sales at several national restaurant chains. Despite the segment's higher volume
and modestly lower commodity costs, operating income was adversely affected by
higher freight and other operational costs, as well as by promotional costs for
the recently redesigned refrigerated salad dressings. Segment operating income
totaled $25.8 million, down six percent from the year-ago level.
Automotive sales were $56 million, down two percent from the prior-year
first quarter, as higher aluminum accessory volume could not fully offset
significantly lower floor mat sales. Operating margins remained adversely
affected by higher costs for aluminum and petroleum-related materials. Start-up
costs and inefficiencies were experienced with a significant new aluminum
accessory program launch, but these costs subsided as the quarter progressed.
Segment operating income totaled $1.1 million, or approximately two percent of
sales.
Glassware and Candles sales totaled $60 million, down five percent from
the year-ago quarter, reflecting weaker candle volumes, particularly at dollar
stores, and a strong year-ago quarter that benefited from placing product into
additional retail outlets. Segment operating income was $2.2 million, double the
year-ago level, as influenced by better glassware capacity utilization and
operating efficiencies at the Oklahoma glassware facility.
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PAGE 2 / LANCASTER COLONY REPORTS FIRST QUARTER SALES AND EARNINGS
Addressing future expectations, Mr. Gerlach stated, "Over the balance
of the fiscal year, we anticipate further sales growth in our Specialty Foods
segment as we build on our first quarter momentum. With our new aluminum program
in place, we expect sales of automotive accessories to improve through the
remainder of the fiscal year. Sales of the Glassware and Candles segment will be
heavily influenced by the success of the holiday season."
He cautioned, "The company will likely incur higher than previously
anticipated costs for freight, natural gas, petroleum wax, synthetic rubber and
plastic packaging due to the impact of the recent Gulf Coast hurricanes. The
magnitude and duration of this trend remains unclear, although our Glassware and
Candles segment will undoubtedly be the most sensitive to these changes. We are
striving to implement selected price increases as well as further reduce costs,
but these efforts may lag the adverse effect of higher energy-related costs."
Mr. Gerlach concluded, "Our balance sheet strength continues to provide
substantial financial flexibility as we remain debt free with solid cash flows.
We also ended the past quarter with more than $155 million in cash, cash
equivalents and short-term investments."
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.
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," "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, 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 materials 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 publicly update such forward-looking
statements. More detailed statements regarding significant events that could
affect our financial results are included in our annual report on Form 10-K for
the year ended June 30, 2005 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,
2005 2004
-------- --------
Net sales $285,915 $281,484
Cost of sales 232,674 227,467
-------- --------
Gross margin 53,241 54,017
Selling, general & administrative expenses 26,034 24,776
Restructuring and impairment charge 24 442
-------- --------
Operating income 27,183 28,799
Interest income and other - net 1,386 627
-------- --------
Income before income taxes 28,569 29,426
Taxes based on income 10,523 11,048
-------- --------
Net income $ 18,046 $ 18,378
======== ========
Net income per common share:(a)
Basic and diluted $ .53 $ .52
Cash dividends per common share $ .25 $ .23
Weighted average common shares outstanding:
Basic 34,220 35,355
Diluted 34,287 35,408
(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,
2005 2004
-------- --------
NET SALES
Specialty Foods $169,534 $160,609
Glassware and Candles 60,275 63,732
Automotive 56,106 57,143
-------- --------
$285,915 $281,484
======== ========
OPERATING INCOME
Specialty Foods $ 25,844 $ 27,379
Glassware and Candles 2,203 1,079
Automotive 1,134 2,256
Corporate expenses (1,998) (1,915)
-------- --------
$ 27,183 $ 28,799
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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,
2005 2005
-------- --------
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $155,733 $184,580
Receivables - net of allowance for doubtful accounts 121,086 100,351
Total inventories 175,459 164,365
Deferred income taxes and other current assets 28,861 25,109
-------- --------
Total current assets 481,139 474,405
Net property, plant and equipment 165,532 154,147
Other assets 101,483 102,726
-------- --------
Total assets $748,154 $731,278
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 50,583 $ 51,014
Accrued liabilities 67,311 52,832
-------- --------
Total current liabilities 117,894 103,846
Other noncurrent liabilities and deferred income taxes 38,836 39,706
Shareholders' equity 591,424 587,726
-------- --------
Total liabilities and shareholders' equity $748,154 $731,278
======== ========
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