LANC - Earnings call transcript Q4 2020 | Lancaster Colony Corporation

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Operator

Good morning. My name is Megan and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation, Fiscal Year 2020 Fourth Quarter Conference Call. Conducting today's call will be Dave Ciesinski, President and CEO and Tom Pigott, CFO. All lines have been placed on mute to prevent any background noise. completed remarks, have a will speakers period. question-and-answer the their there prepared be After you. Thank Instructions] [Operator And the Treasurer to President Corporation. now begin of Ganobsik, is Investor Vice Dale Relations and for Colony conference Lancaster call, here

Dale Ganobsik

you, us for quarter joining conference Thank you XXXX fiscal today Good and Lancaster morning thank Megan. for year call. Colony's fourth everyone

filings XXXX. subject discussion morning may Securities subject a Harbor Safe statements the afternoon. the risks risks this that include available Also, Private are note and with are materially obligation no these based Our this to could of results these subsequent provisions that the discussion Reform and the Litigation These audio events. update call and number contained A of of cause Act archived lancastercolony.com to undertakes replay will company to to forward-looking statements is be website statements later of company's the detailed uncertainties and of uncertainties this which differ actual on SEC. upon the company's our in

At today's call the of and Once we will turn comments appreciate again, Lancaster President our will will the remarks, provide we’ll this any have. may business I’ll outlook Dave overview be to our with a our results. now financial CEO, ‘XX. conclusion for and fiscal prepared Dave. Colony's to your of you happy and some Tom then to Dave Ciesinski. our questions respond over morning. highlights For President participation begin update CFO, the an CEO then quarter. Ciesinski, share Dave the call, Pigott, for regarding

Dave Ciesinski

line the COVID-XX everyone. of for by Lancaster past as review here Colony the impact for XXXX. like fiscal extremely morning tremendous coronavirus at throughout distribution our in the sincere fixed. to good centers, fourth business. mission their team the demands steadfast front entire begin onset a It's and we we’ve be today am all confronted and the pulled workers the results the during of meet cause common pleasure our we together shifting that worked a you to and the proud months, with we to pandemic. of the From efforts From year I leaders pandemic, five I'd of thank our associates quarter as remained how business, our to extending you plants Dale our and to Thanks is

consumption. in food impacts Buffalo growth Chick-fil-A Wings in selling retail Wild and fil-A declined single Wild points. at-home Buffalo supply regional contributed and Both product are sales contributors offering demand growth. Notable being a are recent has with our First, basis of our service to exclusive billion completed QX new to were sold to and agreements. our health, under segments the percentage XXXX provide record included sales bottle from for uncertainty We continue net XX drove profit Despite higher obstacles chain. In reported consolidated that and segments and COVID-XX to of second, Chick Retail Florida. net sales food fiscal benefited to our our the net of safety fourth COVID-XX XX.X%. to that our as sauces XX.X%, role sales, our our retail record sales we sales play $XXX of and business, we X.X $X.X sauces welfare grew all in quarter, over vital the fiscal of our that points we grew segment pleased teammates; country's excluding year on million. ensure Gap] [Audio see test that Wings separately net sales gross in the while about our license Net sauces increased food imposed pilot introductions

segment and trends our sales frozen frontline fourth robust and CFO service employees, food particularly account over in investments but all weight turn dressings. quick recovered retail York top In Following QX quarter remained our XX.X%. our rolls service $XX.X our COVID-XX, gross sales within of was programs promote retail. at Garden safe our segment, keeping gross favorable facilities. included restaurant increases quarter by Sister financial his impacted on COVID-XX, much mix, I'll month price bakery for our dinner adversely million. bread, savings led notably to XX.X% consolidated in the we strong Schubert's of Olive June record to profit The or and for our in third to $XX.X fourth food the with priority, sales, now profit cost unfavorable improved call frozen a the of net and offsets in to fourth April, attributed sales Pigott, gross declined customers results. quarter, service grew our New by excluding The garlic to Despite our base. driven for in improvement the national May million a omni-baking the realization by net our fourth profit by all influences quarter deserved was rate Tom Notable commentary quarter the operations COVID-XX

Tom Pigott

reflective consolidated a impacts is the address $XXX.X The by quarter taken Overall strongly. million. challenging the Dave. decreased outbreak the results Fourth performance focus the key maintained XX and actions net our Thanks COVID-XX business basis quarter's sales April to the exceeded of objectives. on many our the to they After of points employees expectations. recovered

quarter, sales Omni of Excluding $X.X XX prior by net year in points. the basis sales quarter, million $X.X million Baking increased and year the current in consolidated

grew worker will and sales related during to supply including comes the to sales a recall, $X temporary agreement nearly commodity These retail to are or realization the Baking our incremental an net two million your in decline cost XX%. million attributed costs. continue quarter. agreement. expenses in pay, These second frontline end a as partially the other supply general Omni increase by fiscal were As to growth million, $XX.X by points. by operation Consolidated increase. driven gross increased the margins profit as revenue XXX drivers million segment, or price were the basis XX.X% behind The retail and impacts lower was facilities. strong our as gross safe in items, and Selling, savings COVID-XX favorable increased improved of There offset costs, programs, $X.X ensuring well our administrative main $XX.X

First, the entitled million was the program in for accounted investment increase. our ERP Ascent, $X.X we're making Project of which

The capitalized second main our costs Cave decision $X.X cancel related million project. driver previously expansion the write-off a of to engineering to Horse was

It’s design the in seeing. incremental $X.X year programs. mentioned ERP strong income Note prior operating strong a the different the project million to share As results we important on discussed a that savings to to we performance, elected Key include with in items favorable cost million. $X.X we current and our growth to line included declined capacity prior mix the $XX.X the rapid longer note of demand the call, excluding million are and operating contingent drivers expansion change our above. this in adjustment versus favorable term include and cancel an reassess million needs QX possibility in project call. Consolidated expenses COVID-XX and to have future, results more the consideration items that the the remains these year top upcoming $X.X income plans a for and we'll these given

$X.XX of XXXX. rate Our prior decline. Increased XX.X% for quarter Project in ‘XX the our $X.XX tax Ascent this diluted accounted The additions ‘XX fiscal share. fourth estimate $X.XX the fiscal the per to expenditures the fiscal of year XX.X% which for XX%. regards our of property rate $X.XX. from quarter versus We totaled per share capital tax to Fourth in change was payment decreased the effective be consideration, quarter tax rate earnings for million. With to $XX.X for quarter benefitted fourth totaled expenditures, contingent

the that previously roll project purchase ‘XX for investment Our the facility frozen expansion dinner leased. our in fiscal expenditures capacity of was Omni-Baking included and

Looking forward in and place. on ’XX, we to are million $XX based plans $XX total expenditures forecasting currently capital million year between fiscal

the These process be are projects We’ll this plans growth evaluating developed. for with We of to potentially will rapid demand to added investments more provide fully additional our our are on updates and in once products. meet in future the you significant forecast. they

the funds shareholder. investing to addition business, returned in we also In to

dividend $X.XX prior an share, per increase amount. from quarterly X% on cash year the was paid June XX Our

the streak of balance longstanding Our level investment financial we years Despite finished increased free this sheet. higher dividend on and position dividend the annual payments, our December. the debt past of with increases strong cash reached XX as $XXX million quarter very remains

food now investing his Thank back commentary, turn continues of demand the our Dave for to products and this monitor term in the increased by and to to impacts sales growth. trends The up underlying consumer will service my wrap quarter COVID-XX highlighted segment. for closing while longer adjust performance, strong I over for outbreak, improving you. remarks. to So it retail business our featured

Dave Ciesinski

Thanks Tom.

consumer As fiscal contingent food spread the shelf-stable both a we That which said, duration Wild our the agreements, top towards subject COVID-XX. license will the on of retail pandemic service, and will XXXX, anticipate environment. in service shifts remain of over represents Olive XX% behavior. remain resulting for sauces to in resulting Wings we extent notably impacts line upon look segments service the Buffalo business related total growth current restaurant, mix to dressings unpredictable our demand heavier in The service sauces Chick-fil-A from retail food and sales of ahead In and effects and sales and sauces, positive year dressings. segment the from are and continued food the under segments the quick future most sold the of Garden® virus

a projecting On coming commodities the year following in rise in moderate we're fiscal favorable the XXXX. a front, year

realization Ascent, as commodity design and to test programs the initiative, and and recently build our phase. offset will planned ERP are With respect we now net that phase We favorable cost into our Project expect price help cost completed inflation. savings the

we and to core. three growth and the number the plans. near finish number phase. pillars simple ahead three, business strategy deployment to our fiscal our to to and our end the M&A to growth; leverage base margins; simplify identify by cost the as to Number phase accelerate two, combined our our followed continue strength in grow the sheet complementary one, of supply look XXXX, of our to expect grow of of we execute our reduce team, support Strategically, balance We fiscal to test and operating chain, will our XXXX our

some have eradicate the in and to communities to do to and to like to a take vision Before you to to the keeping actions share with now our better be few company, underway here racism inclusion that opening we the Lancaster up where our moments part call diversity, and workplace in the with commit I'd information in belonging, regarding discrete food at questions, Colony we, both operate.

responsibility First, new and a we Vice social of and Affairs programs. to oversight Clarence’s provide to Government sustainability government, hiring citizenship, our to drive and role Mingo of announce the local XX. and the organization, and of position our to initiative. effective Corporate I'm in Relations pleased diversity August and this inclusion plans established leadership company's corporate also include position within will developing President state Clarence executing engagement

Second, Rooney diverse as the candidates of new a I'm backgrounds, reinforces well happy in share we candidates Colony and to with formally consider statement, pool commitment to diversity positions. the has qualified adopted leadership experiences as known highly highly and minority our Lancaster for Rule, qualified hiring candidates, women which including skills that as otherwise

here with provides partnership School Third, study low Cristo we've a excited students model into announce I'm education from Cristo for provide Rey work partners Columbus of inception. of students nursing Rey corporate High to families, income was and tuition that a in High been entered School Rey in whereby mentorship work the students. since sponsors their alike study for its established support XXXX, growth and and it's Cristo Ohio.

Fund. events support an team Finally, assist will will at our program financial this hardship. that tragic encounter we life here our establishing Relief Lancaster The that purpose be result in employees Colony, be of to of members Employee in

in to and our In donations. fiscal challenges. again employees at them their make success, have. to also opportunities This all we'd for the our will suppliers that shareholders and beyond. to ahead stakeholders, our the XXXX the other done I Colony fund entire forward have I this their like the for to for including contribution look an might to plans to a annual here We support. to the customers prepared like unprecedented fund, have team While would to of our happy with opportunity the despite closing, pursue through questions answer also and ongoing remarks concludes the support partnering any thank to day and all you help be make XXXX lie thank they Lancaster would personal company fiscal

Operator

question and first is Company. Instructions] Davidson with Holland D.A. [Operator Brian from Our

Your line open. is

Brian Holland

congratulations! and morning Good Thanks.

Dave Ciesinski

Good morning Brian.

Tom Pigott

Hey Brian! Good morning.

Brian Holland

context food XQ. those trends service sort segment how on that Maybe today? the quickly to you down trending is in XX% some So, Can for around provide where start, quarter? progressed of

Dave Ciesinski

know that’s great you Yeah, a question.

So all look a tough was across at of away-from dining, you you month. April April, know Brian if very, home very

If you down across all dining, segments casual XX%. look it midscale probably was QSR

and May notably. Probably let's As coming the volumes of Crust we June [ph] looking order somewhere June it out that were down progressed, transaction improved at of, in from were say XX%. MPD

again to probably the into transaction is seeing now around and early June July [ph] through March running down MPD August, of is As what remainder we’ve continued volume XX%. and we're from Crust

and is the slightly Chick fil-A notably that cases the at sales size some if are of layer some that, QSR, others What sales. you looking that’s and handful Now are positive are include It doesn't that actually than we're comps posting check. record there customers in a and better Pizza of onto transaction.

So say and that nicely the down, then let's the was transaction know digits, in continuum. single rebounded pacing somewhere sort in single started It But still the of high level very, we're on thereafter. April very a you digit. low

Brian Holland

national one and food you've been given evidence single high notability you that mix digit the so I'm thinking favorable you about you Okay, business, landscape and than down than and the of at look that know if I better know exposure maybe clear dollars has if your chain. is think more QSR today more got things key the the broader slightly service then

level? fair that referring maybe even just So little a to trending assume better industry what from than you're you're bit an to

Dave Ciesinski

than ever so better know that. You maybe slightly

large think I of over I [ph] lot just give development at provide our region that food and a food stats you that service within then that for also fact QSRs, gets the benefit. the

Brian Holland

appreciate I perfect. Okay, color. the

want the new initiatives, products. of etcetera. expansion to myriad because side, from I have On I X.X% contribution market clear, through retail just channel coming a products think you you mentioned be new and

So refer there referencing? or specifically Chick fil-A most Wild mix other does you're contributors to notably licensed that that comment Buffalo are Wings that products, and to the

Dave Ciesinski

and I'll step of mentioned, provide Tastefully then on Wild then from ones contributions and its we item little is Buffalo It’s of the items retail even you like the a Dressed. called sauces segment. smaller Maybe context own launched this Wings, Bibibop Chick fil-A just what do some and great broader kind our back

back over really We the retail same as we period So April, off the saw spike of as enjoyed time, in we saw a spike. food service recognize that segment really well. obviously

as for food you from now in what we're IRI. multi-outlet of proceed the seeing all sort Now categories data forward,

data, are that our XX%, scanner is to include food and etcetera. you through about all that etcetera, seeing you merchants take in that. What I we we're the running plus would So food again, this plus saw in, retail these days is don't and are maybe playing necessarily than mass XX% that, performing categories given have better we

new our next out fil-A continued we we strength is just picks Garden service of What the the little forward, we're and great one so is, how us nice little sort growth a retail bit, are a and off and of of little more honestly items, industry give going revert is questions to know a a to that’s of as the in to across industry i.e., you norms, that we year. expect bit BWW something trying the peers sauces, traditional to Chick behind in when the began Olive with bit. food predict keeping As our backs tailwind look to look continue up particularly organic does

Brian Holland

that. back appreciate I’ll one hop and in queue. Okay, from I the me then Last

a have particular. maybe brands here, think a characteristics, Olive Just kind brand $XXX be conversation you because these a and at there lot fil-A always over as to folks awareness bigger are the know which brand in Buffalo there’s I etcetera. the Wild of the years to talk the of big million of potential context replicate Garden know there. items can I and you are Garden is been big other Olive of around Chick or that The pace out given eight as about there which that, than both picture in category wondering, you that’s is period the progressed market Wings

can to Olive as faster that maybe So build of you reasons marker know at just and or through puts kind the behind, continue specifically million think about $XXX walk at go or and the you happen the pace takes can same faster you materially pace Garden? that or these it would using which

Dave Ciesinski

great we’re capture that digits. on is It question double was a with Maybe very been it’s to right. building that finding we're larger your Garden. actually and it’s that COVID. $XXX continuing and, business Sure, the nicely, users of benefits new Olive million We're exactly business; just than growing strong

possibly in project. be and into some tell moved then if into started and Garden and years. know places and I first necessarily we're the channels retail you to faster. Olive seven I like you the seen everything the Now Wings, first important both belief affirm fiscal question second and big to the Olive to that continue absolutely than be the had our on today and we the Chick-fil-A will timing least it expanded would we've and as table club, I of in in Wild now quarter, we've about dollar Garden, it quarter, Buffalo don't fourth space quite taking those retail, our potential likely bigger that in of drug that It – that. the would have and items been through at around channels more that

quickly. expect understand to to look going opportunity what on we're more the now more you we is that that growth capitalize completely, think can I

that's fold. those the operators Brian, it. considerably I But the of would way gives our a velocity execute the that the two can I that really that I food you they at shelf. lot items think retail power and of the are other data and off revenue. the other know brands category, played considerably, them generate it's the that you’re if brands to we One, one points is into about of out, are these strength retail are look partners source move thing relevance there other the and their is are is, another that on have, than of optimism the seeing service in point on the to big higher which the all of the potential if in us items, seeing

Brian Holland

I it. of Best appreciate Thanks. luck.

Tom Pigott

Thanks Brian.

Dave Ciesinski

Thank you, Brian.

Operator

next Your Edge Consumer Research. from Bell question is Ryan from

Your open. line is

Ryan Bell

Good morning, everyone.

Dave Ciesinski

Good morning, Ryan.

Tom Pigott

Good morning, Ryan.

Ryan Bell

are XXXX in there now, more commodity negative moving your the food retail expecting? could that outlook. business, for a would fiscal but of more recovery you a then expectations that right lot a the and the cadence about little of pressures appreciate I parts highlight be your you speak of could bit service detail some What you're the bit

Dave Ciesinski

why pivot commodity Tom So, take to I’ll I on second the and the for the outlook. part, part don’t first

So that time. little sort of that Well, data quite a we tradition, some our we seeing running don't the what higher. all XX. and now. moderated data, maybe the provide I'll you’ll for same around your bit plus anecdotally it’s XX; what multi-outfit you a we’re there lot some it’s into with is know for of right but about guidance, scanner Ryan, is in scanner It's of you same I running keeping know tracking just with share been are food not

more to we've to continue. continue it know you we our big see simply we to home, just to begin to to workplace with view therapeutic seen we a the we as start outlook return predict stronger COVID see a see trends to The way that You continuing is vaccine retail long do the that those allows more that we moderate. date been aggressively, thing is people as know can't to start do when to eat aggressively at more continue is, like and we've and to than running quite eating return trends that something see the to people out or the

he’ll… continue though, they opportunity Talk]. and retail. over as start very going of I'll Maybe provide size moderate, it's to given us in to top tailwind strength just the it is a items to [Cross Our items, the do turn line new growth to belief of the the for Tom those of nice new and

Tom Pigott

outlook. a Yeah, margin about I’ll talk bit the little

the So the that a long a from to Certainly was QX, users to to try the shift growth depends spending continues mix the feel got product we've that to of which certainly how outlook, that some the retail about some of segment. in on key margin benefited we users. and pipeline experienced good driver we we new the and growth are repeat new retail, really doing of convert certainly lot

other the do headwinds, a we – based year. the You sweeteners, lot in kind commodities know where we on it fiscal hedging expect little in took more a companies in terms previously of the be We that to bit of have unaffordability we felt did of oil, we last see of inflationary. do the positions not in feel some

As that And do costs those I’ll initiatives to the COVID expect fiscal higher related into coverage we we higher some we off, continuing you offset expect said, is, have to this going expenses piece savings and do programs other know then revenue of help management the That forward, commodities. some year. impact mention and have do cost there. wears

Ryan Bell

the other what from percentage bit food maybe business your that recovering seemed business Thanks be better Can little for the and be that and business. QSRs with exposed talk between food your a the little we’ve of bit parts the might this the more a drilling to the the come recovery And color. parts sales might margin differences slower? about to pretty of QSRs the into maybe in of seen service be heavily and business, you QSR QSRs service

Dave Ciesinski

business talk Sure, in well food know about the just don’t service we general and you trend. why the

those chains, concepts is of numbers. well, as of well business. service That are that of are, include QSR, that would food which are of a into our food the QSR fil-A. QSR as traditional QSR of segment, period was performing business, service which and most look if as Chick Pizza in posting folks roughly significant quite them sort at benefit like So some is of lot half Pizza a record really our coming well for as and you XX% this

the As business dining about there's of at let rebounding our another and include national pretty pieces, which there's XX% is Casual would other we back XX% of other look up, – casual that’s in our dining. actually me accounts, about mid-scale nicely as well.

look that Wings figuring keep and at to it's many Buffalo and their sites, a to up they folks and range floating, in you or how their quite not businesses, and cases but local do are to just where organization performing growing. of way the it provide deliver As food like under operate now can also they they out pick in Wild in the are and an to managers others, the a testament that well run really leaders circumstances those amazing

the industry remained to piece It's is Now there’s schools, the universities, probably sort business. That's be a a to last categorize recover, branded. in honestly tends and That has part food products of as of began really stuff – in that's a and where somewhere then just of XX% the would non-commercial the portion likely of to not portion smaller our we’re that quite we manufactures robust. that. like selling other that range, industrial business

it XX% bullish did April or There's but continue and leave very early know of even in not, us the May. but well. to little that again rate about very, even continues maybe food doing XX% said, you that's XX% that's even service. we to simply business We're to our see not put to going relatively back a there's probably that So higher, together, nearly headwinds, at

Ryan Bell

on part, Thanks, could any there still seeing. we’re magnitude a very And little portion, is the of branded helpful. detail way that's that bit the of declines the you sort about of give smaller

I think out that's we’d the that's other that less from market? bit in a have little visibility the data part

Dave Ciesinski

off know double you are digits. still Yeah, they

to would share begin XX% affected. pop I you and interesting. probably with the in do to the be know seeing big say schools mom do what And and I'll anecdotally, open, You which X-factor somewhere you Ryan, operators those know range. begin how is if when But we're also is

to and those that out to cases and flowing As in chains. is demand pop actually affected mom what struggling their open, national finding are some operators is we're back

is that in home in as we is trusted we the the we're seeing that consumers know just away you if data, brands, are digging retail, into others. One neighborhood of lot finding have we from are a go and as Wings, hypothesis a as to Garden, tail to place back wind and of are is open, their going stay diners, a we're places struggling like a chains the event Wild range that to back as bigger Olive that consequence of into seeing Applebee's® as a Buffalo

looking against to it's segment the at So you're is static would demand somewhat is at that maybe chains. and I back as you what moving as into see that, likely you and caution that look fungible

Ryan Bell

food That’s appreciate service business. it on I color the the Thanks. me. from

Dave Ciesinski

you. Okay, thank

Tom Pigott

Brian. you, Thank

Operator

question is next C.L. Your with King Associates. & Todd from Brooks

is open. Your line

Todd Brooks

Congratulations quarter. Hey, on good morning the guys.

Dave Ciesinski

Todd. you, Thank

Todd Brooks

for you. questions A few

the time, temporarily if the service quarter trying believe I production a there’s in our as you retail between retail service mix food business just you rising quarter, are above that you business spike expected friction well to the in to maybe and talk and retail. I I the balancing impaired same guess versus food in the element margin know gross was performance which and all, of about service, that First with but can at expectations

make not that can about sort to dealing right as we as have you the think how with of friction about, way If we're Lancaster's talk in what's assumption normalizes to to for and – in mix, gross ‘XX margin fiscal potential the taking and then really business. gross keep want we’re But if for to service. margin delivering just a I where just food up you’re and between this cost think also step savings potential you structurally retail understand an

Tom Pigott

Yeah I Tom, is excellent – this so question.

then seeing outsized the you an QX you unabsorbed you felt and business and demand recover the kind retail next food know mentioned overheads as in food end certainly service that were the reductions talked in began an strong, year. item But being growth don't call overheads item It in we into service going know revenue friction remained April. about fiscal really we of that quarter April food see and we unabsorbed in service at that. and of and our then the was month we So our to away – went towards the the point of

savings project initiatives, the job because have so mentioned how to into focused at retail in offsetting items in And do key Commodities growth, look more driver. service certainly year. key differential cost the of terms of the an then that food you the revenue and at done us it's week, fiscal but become as really a that inflationary, that into I is levels retail continue then the really between ’XX, as So next we're margin teams that out we consistent management. on outstanding with fiscal

So overall, forward, new they and we mentioned. retail driven our by feel really very the prospects margin the had revenue items growth good going about

Todd Brooks

That’s great. great, that’s

of that the develop Secondly wanting partners revenue you retail category that broadly, – the alternate on maybe on food streams more to and I restaurant magnified desire out is mean talked pandemic. about

your from growth is either promote awareness. during call bringing going the not market seeing as coming has you retail forward. you the velocity Can of for business offering type customers relaters existing extent that talk kind well. add of with about partners products other doing expertise build to potentially insight products developed standpoint? that The the recognizing development outside pipeline foodservice with this you seeing a brands customer or expectations Lancaster in today to the these want that some of a Are kind are did You these engine better, to themselves now, and you you are to

Dave Ciesinski

the answer yes. guess I yes short and is

We have the and are at seeing last have in at us just both, as interest the able of brands think of as closer could being to look express then vertically. partnerships opportunities. grow them course new the concepts you sort of quarter, we laterally But out these to reached in, we to looking that with, over that

into channels introduce flavors. move and other exists of opportunity the then new laterally trade that know to us beyond You vertically for to

and different occasions. that's that of can particularly in it just into and Wings you exciting move Buffalo of about to range as think sauce is it, play things flavors about allows different fil-A the us Wild One Chick the they

point, and make sure and then think retail restaurants So the to on time willing fair played your out was Darden amount that was wanted on We that look their in were cannibalize the it data play their forward credit both that and all to to for out, this and we has, lean restaurant there we this they I opportunity goes as to and in at have the to of to the large it together. it's going minded confidence business you a play early and at beneficial wasn't it space. this at other a I business and opportunity benefited, know the exciting agreed operators out continued to think to company take given it's to team of more it that and saw and an restaurants partnered open chance the business, and

Todd Brooks

can for quick look And us color phase Ascent. like kind for Okay, the more you there ERP? One, ones Project me. talked fiscal testing on cost phase moving give ‘XX what of the during two year-long Is great. any into you for this then about for should

Dave Ciesinski

Sure.

give start couple financial outlook. more bit and overview a you turn just give I'll maybe little Tom about the and comments maybe of So to you over and he it a I’ll info can

partners partnering and our out they've that. very, functional business, travel together and or within figure step make to in throes tell first closely you that you, had any you due the ready traveling build do as right. without functionality how to to site and what do would back work out and They they've our You extensively the how be it's because team I regularly do figure to expect, board closely to to integration back to and able ERP work go is design credit technology. sure on were clustered in being very this would the pandemic, of this might had drawing designing our to people this know they these Ordinarily to Capgemini, safely to done and great a verticals take exactly

a and pieces couple take to on the to going related how blueprint is after else, did that beginning closely how this us really do core, to testing the year large So into of fiscal of the the year. bit company during of aren’t operations to the this team on at fiscal a of small a design, testing our itself. we've it provide then say and the a remotely, out of that to the plan very now. go-live just of that of business and during us the and course on won't whole credit But the to build jeopardize core live moved they're you I system order thing for They're deserves and to doing expect we test we complete the the great everything that cash past handles see the next now course to same of wanted amount the year the figuring can complete see did the

Now of pacing spend, let that. to Tom, you far as the I’ll speak the maybe as

Tom Pigott

So the spend $X.X portion P&L. look of a $X million. was you as A gross the hit capitalized little QX, that and million at over was

phase next next year and higher done, go being into the a what implementation. is the as fiscal the you'll go you completed work system As into the slightly of and the design be we’d charge moving won't with we've capitalize P&L spend see up we The year, fiscal capitalizing going we’re so ERP towards the will design slightly, much. on as bigger, design

Todd Brooks

market, can Garden. out than more you. success But launch timing. look also Olive the about Chick-fil-A maybe and is fiscal the obvious the The Florida pilot sauces to so that thank – the of we the Okay, maybe that's just this final as And helpful, then in question, of we can ’XX. expectations great, we regional then talked of talked talk distribution about of as category, how you national that broadly about you more touching points as launching initial far from program goes rollouts, here

think So this of size fiscal launch for can – how about maybe meaningful on great. be anywhere that as anyway fiscal you we’re would right be, Thank can our expectation this business this ’XX, starting help kind you. to ’XX,

Dave Ciesinski

just pacing you we're how of and maybe about the sort So it. help of I'll talk going dimentionalizing to first think go-to-market about

we're going a out month roll they're in a of catering to begin next bottle have their to that going national So restaurants.

across that October year, of You calendar can know partnership going it in their south towards that eight the after with going that’s to States, it you across they're it retail. later swap United the a a south we’ll they fiscal lot year, we’re locations what tubs, out on national see that In the and we're of then the of our to of the their out begin some to the that distribution weeks another of bigger then initiative about. the of by have catering, in excited off-site of in have end first with beginning all is take And we’re bottles; take and away partners. very expect heels going there And the swap end retail we’re roll the out so today the to business, east full the them in their an have regions in business roll they east, about take to converting bottles. restaurants of

for three into Olive it’s been first up two we’re years make into at doing Garden given two comparison a ramp we’ve So the fast Olive before been We what the least with retail. retail, with going to Garden. to be years to probably relatively we’ve before wouldn’t club

we’re opportunity which thereafter. going bigger other is after going Club then and retail, be at and considerably So here, looking distribution points of the faster to

Todd Brooks

again. the Okay, for color Thanks congratulations great. and

Dave Ciesinski

Thank you.

Operator

closing are call for there will questions, Ciesinski we no to now comments. further If the Mr. turn back

David Ciesinski

forward morning. results We first early November. in Thank our sharing you, Megan, and thank you quarter you everyone to with look for participating this

Operator

conference call. today’s concludes This

may now disconnect. You

Lancaster Colony (LANC) 27 Aug 202020 Q4 Earnings call transcript