WESTERVILLE, Ohio, Feb. 4, 2020 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's fiscal second quarter ended December 31, 2019. Highlights for the quarter are as follows:
For the six months ended December 31, 2019, net sales increased 3.9% to $692.2 million compared to $666.2 million a year ago. Net income for the six-month period totaled $84.2 million, or $3.06 per diluted share, versus the prior-year amount of $86.9 million, or $3.15 per diluted share. In the current-year period, spend for the ERP initiative decreased net income by $5.8 million, or $0.21 per diluted share, and restructuring and impairment charges reduced net income by $0.7 million, or $0.02 per diluted share. The AB Adjustment increased prior-year net income by $7.4 million, or $0.27 per diluted share.
CEO David A. Ciesinski commented, "We were pleased to report another quarter of record sales and strong gross margin improvement. Cost-saving initiatives in strategic procurement, transportation and distribution along with lower commodity costs and improved net price realization helped drive our consolidated gross margin up 200 basis points to 28.1%."
"Looking ahead to the second half of our fiscal year, we will remain focused on our core strategic initiatives to grow our base business and reduce costs throughout our supply chain. We are also very excited to share that in the coming months we will be launching new products sold to the retail channel under license agreements with a growing number of our national chain restaurant customers. Finally, our ERP initiative is progressing as planned with design phase work well underway and initial deployment expected to commence in the first half of fiscal 2021."
Conference Call on the Web
The company's second quarter conference call is scheduled for this morning, February 4, at 10:00 a.m. ET. You may access a live webcast of the call through a link on the company's Internet home page at www.lancastercolony.com. A replay of the webcast will also be made available on the company website.
About the Company
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Forward-Looking Statements
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," "plan," "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, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.
LANCASTER COLONY CORPORATION | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
(In thousands except per-share amounts) | |||||||||||||||
Three Months EndedDecember 31, | Six Months EndedDecember 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | 355,117 | $ | 349,581 | $ | 692,171 | $ | 666,235 | |||||||
Cost of sales | 255,228 | 258,189 | 500,174 | 493,644 | |||||||||||
Gross profit | 99,889 | 91,392 | 191,997 | 172,591 | |||||||||||
Selling, general & administrative expenses | 45,747 | 39,842 | 85,202 | 71,921 | |||||||||||
Change in contingent consideration | 64 | (9,605) | 127 | (9,605) | |||||||||||
Restructuring and impairment charges | — | — | 886 | — | |||||||||||
Operating income | 54,078 | 61,155 | 105,782 | 110,275 | |||||||||||
Other, net | 877 | 1,039 | 2,304 | 2,353 | |||||||||||
Income before income taxes | 54,955 | 62,194 | 108,086 | 112,628 | |||||||||||
Taxes based on income | 11,531 | 14,287 | 23,917 | 25,693 | |||||||||||
Net income | $ | 43,424 | $ | 47,907 | $ | 84,169 | $ | 86,935 | |||||||
Net income per common share: (a) | |||||||||||||||
Basic | $ | 1.58 | $ | 1.74 | $ | 3.06 | $ | 3.16 | |||||||
Diluted | $ | 1.58 | $ | 1.73 | $ | 3.06 | $ | 3.15 | |||||||
Cash dividends per common share | $ | 0.70 | $ | 0.65 | $ | 1.35 | $ | 1.25 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 27,443 | 27,435 | 27,443 | 27,429 | |||||||||||
Diluted | 27,489 | 27,566 | 27,503 | 27,540 | |||||||||||
(a) | Based on the weighted average number of shares outstanding during each period. |
LANCASTER COLONY CORPORATION | |||||||||||||||
BUSINESS SEGMENT INFORMATION (Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Three Months EndedDecember 31, | Six Months EndedDecember 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
NET SALES | |||||||||||||||
Retail | $ | 186,210 | $ | 186,302 | $ | 352,287 | $ | 349,050 | |||||||
Foodservice | 168,907 | 163,279 | 339,884 | 317,185 | |||||||||||
Total Net Sales | $ | 355,117 | $ | 349,581 | $ | 692,171 | $ | 666,235 | |||||||
OPERATING INCOME | |||||||||||||||
Retail | $ | 39,017 | $ | 44,785 | $ | 74,452 | $ | 78,733 | |||||||
Foodservice | 23,416 | 19,405 | 47,205 | 38,266 | |||||||||||
Restructuring and Impairment Charges | — | — | (886) | — | |||||||||||
Corporate Expenses | (8,355) | (3,035) | (14,989) | (6,724) | |||||||||||
Total Operating Income | $ | 54,078 | $ | 61,155 | $ | 105,782 | $ | 110,275 |
LANCASTER COLONY CORPORATION | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
(In thousands) | |||||||
December 31,2019 | June 30,2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 202,226 | $ | 196,288 | |||
Receivables | 77,061 | 75,691 | |||||
Inventories | 90,483 | 86,072 | |||||
Other current assets | 10,503 | 10,518 | |||||
Total current assets | 380,273 | 368,569 | |||||
Net property, plant and equipment | 290,971 | 247,044 | |||||
Other assets | 312,459 | 289,786 | |||||
Total assets | $ | 983,703 | $ | 905,399 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 86,151 | $ | 76,670 | |||
Accrued liabilities | 47,135 | 43,036 | |||||
Total current liabilities | 133,286 | 119,706 | |||||
Noncurrent liabilities and deferred income taxes | 77,659 | 58,820 | |||||
Shareholders' equity | 772,758 | 726,873 | |||||
Total liabilities and shareholders' equity | $ | 983,703 | $ | 905,399 |
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SOURCE Lancaster Colony Corporation