WESTERVILLE, Ohio, May 5, 2020 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's fiscal third quarter ended March 31, 2020. Highlights for the quarter are as follows:
For the nine months ended March 31, 2020, net sales increased 3.0% to $1,013.5 million compared to $984.1 million last year. Net income for the nine-month period totaled $106.6 million, or $3.87 per diluted share, versus the prior-year amount of $117.5 million, or $4.26 per diluted share. In the current-year period, the impact of the Foodservice inventory write-down and bonuses paid to front-line employees were as noted above for the fiscal third quarter while the spend for the ERP initiative decreased net income by $9.5 million, or $0.34 per diluted share, and restructuring and impairment charges reduced net income by $0.7 million, or $0.02 per diluted share. Prior-year net income includes a favorable non-cash reduction to the fair value of the acquisition-related contingent consideration for Angelic Bakehouse, Inc. in the amount of $7.4 million, or $0.27 per diluted share.
CEO David A. Ciesinski commented, "Like the rest of the food supply chain, our business is undergoing unprecedented shifts in demand as we confront the impact of COVID-19. As we navigate through this pandemic, our top priorities are the health, safety and welfare of our team members and continuing to play our part in the country's vital food supply chain. I extend my sincerest thanks to every one of our dedicated team members for all their hard work and efforts during this extraordinary time."
"In addition to the well-deserved bonuses paid to our front-line employees, our fiscal third quarter results also reflect a notable shift in sales from Foodservice to Retail and a write-down of Foodservice inventory which are directly attributed to the impact of COVID-19. While the influences of COVID-19 will persist into our fiscal fourth quarter and beyond, our financial position remains strong. The fact that our Foodservice segment includes successful quick-serve restaurant and pizza chains is also a positive in the current environment. We will continue to address and adapt to the near-term impacts posed by the pandemic while also maintaining our strategic focus on long-term growth opportunities."
Conference Call on the Web
The company's third quarter conference call is scheduled for this morning, May 5, 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 and could be amplified by the COVID-19 pandemic, 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 Ended March 31, | Nine Months Ended March 31, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net sales | $ | 321,363 | $ | 317,882 | $ | 1,013,534 | $ | 984,117 | |||
Cost of sales | 244,401 | 242,485 | 744,575 | 736,129 | |||||||
Gross profit | 76,962 | 75,397 | 268,959 | 247,988 | |||||||
Selling, general & administrative expenses | 46,907 | 37,981 | 132,109 | 109,902 | |||||||
Change in contingent consideration | 65 | 88 | 192 | (9,517) | |||||||
Restructuring and impairment charges | — | — | 886 | — | |||||||
Operating income | 29,990 | 37,328 | 135,772 | 147,603 | |||||||
Other, net | 727 | 1,329 | 3,031 | 3,682 | |||||||
Income before income taxes | 30,717 | 38,657 | 138,803 | 151,285 | |||||||
Taxes based on income | 8,288 | 8,053 | 32,205 | 33,746 | |||||||
Net income | $ | 22,429 | $ | 30,604 | $ | 106,598 | $ | 117,539 | |||
Net income per common share: (a) | |||||||||||
Basic | $ | 0.82 | $ | 1.11 | $ | 3.88 | $ | 4.28 | |||
Diluted | $ | 0.81 | $ | 1.11 | $ | 3.87 | $ | 4.26 | |||
Cash dividends per common share | $ | 0.70 | $ | 0.65 | $ | 2.05 | $ | 1.90 | |||
Weighted average common shares outstanding: | |||||||||||
Basic | 27,457 | 27,448 | 27,447 | 27,436 | |||||||
Diluted | 27,501 | 27,549 | 27,502 | 27,543 |
(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 March 31, | Nine Months Ended March 31, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
NET SALES | |||||||||||
Retail | $ | 169,414 | $ | 153,038 | $ | 521,701 | $ | 502,088 | |||
Foodservice | 151,949 | 164,844 | 491,833 | 482,029 | |||||||
Total Net Sales | $ | 321,363 | $ | 317,882 | $ | 1,013,534 | $ | 984,117 | |||
OPERATING INCOME | |||||||||||
Retail | $ | 29,609 | $ | 24,082 | $ | 104,061 | $ | 102,815 | |||
Foodservice | 9,185 | 17,124 | 56,390 | 55,390 | |||||||
Restructuring and Impairment Charges | — | — | (886) | — | |||||||
Corporate Expenses | (8,804) | (3,878) | (23,793) | (10,602) | |||||||
Total Operating Income | $ | 29,990 | $ | 37,328 | $ | 135,772 | $ | 147,603 |
LANCASTER COLONY CORPORATION | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
(In thousands) | |||||
March 31, 2020 | June 30, 2019 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and equivalents | $ | 177,798 | $ | 196,288 | |
Receivables | 87,649 | 75,691 | |||
Inventories | 96,259 | 86,072 | |||
Other current assets | 20,269 | 10,518 | |||
Total current assets | 381,975 | 368,569 | |||
Net property, plant and equipment | 296,435 | 247,044 | |||
Other assets | 314,642 | 289,786 | |||
Total assets | $ | 993,052 | $ | 905,399 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | $ | 90,818 | $ | 76,670 | |
Accrued liabilities | 46,328 | 43,036 | |||
Total current liabilities | 137,146 | 119,706 | |||
Noncurrent liabilities and deferred income taxes | 82,622 | 58,820 | |||
Shareholders' equity | 773,284 | 726,873 | |||
Total liabilities and shareholders' equity | $ | 993,052 | $ | 905,399 |
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SOURCE Lancaster Colony Corporation