Lancaster Colony Reports Third Quarter Sales And Earnings

COLUMBUS, Ohio, May 1, 2014 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's third fiscal quarter ended March 31, 2014. All prior-period financial results of the Glassware and Candles segment have been reclassified to discontinued operations due to the sale of effectively all the net operating assets of this segment on January 30, 2014.  Highlights of the quarter:

• Net sales decreased two percent to $242 million versus $247 million in the third quarter last year due to lower sales of frozen retail products, in part due to the influence of this year's later Easter.  Also impacting net sales was somewhat lower pricing to the foodservice channel and the effect of adverse winter weather on consumer demand.
• Income from continuing operations was $18,900,000 compared with $20,733,000 for the corresponding quarter a year ago, primarily reflecting lower sales, a less favorable sales mix and a higher effective tax rate. Earnings per share from continuing operations were 69 cents compared to 76 cents a year ago.
• Including the loss from discontinued operations of $29.3 million or $1.07 per share, which incorporated a pre-tax loss of approximately $44 million on the sale of the company's candle manufacturing and marketing operations, the reported net loss for the quarter totaled $10.4 million, or $.38 per share.  In the third quarter a year ago, net income totaled $21.8 million, or $.80 per share, inclusive of income from discontinued operations of $1.1 million, or $.04 per share.
• The company's balance sheet remained strong with no debt outstanding at March 31, 2014, and $201 million in cash and equivalents.
• The quarterly cash dividend was continued at the higher level of $.44 per share set last quarter, as Lancaster Colony has increased its regular cash dividend each year for 51 consecutive years.

For the nine months ended March 31, 2014, net sales were $782 million compared to $769 million a year ago. Income from continuing operations totaled $80,085,000 or $2.93 per share.  Net income was $53.7 million or $1.96 per diluted share. Net of tax, the loss from discontinued operations, including the loss on sale, totaled $26.4 million, or $.97 per share.  Income from continuing operations in the year ago nine-month period was $78,459,000, or $2.87 per share.  Income from discontinued operations totaled $5.3 million, or $.19 per diluted share.  Net income for the nine months last year totaled $83.8 million or $3.06 per share.

John B. Gerlach, Jr., chairman and CEO, said, "For the quarter, the benefit from lower net material costs was more than offset by the impact of lower net sales and a less-favorable sales mix as the segment's operating income declined seven percent.  Additionally, as influenced by the adverse weather conditions, we also experienced incremental costs associated with freight and operational downtime."

Looking ahead, Mr. Gerlach added, "We anticipate comparative results of the fourth quarter to be bolstered by the shift in Easter's timing, the continued favorability in material costs and modest benefit from new products being brought to market in both our retail and foodservice sales channels. However, we anticipate somewhat higher overall marketing costs and expect our investment in introductory costs associated with several of the new products to be significant.  We also remain generally cautious regarding consumer sentiment.  Regardless, our debt-free balance sheet allows us to retain a considerable amount of operating flexibility supportive of long-term future growth."

Conference Call on the Web
The company's third quarter conference call is scheduled for this morning, May 1, 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. Replays of the webcast will 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 markets.

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:

• the potential for loss of larger programs or key customer relationships;
• the effect of consolidation of customers within key market channels;
• the success and cost of new product development efforts;
• the lack of market acceptance of new products;
• the reaction of customers or consumers to the effect of price increases we may implement;
• changes in demand for our products, which may result from loss of brand reputation or customer goodwill;
• the possible occurrence of product recalls or other defective or mislabeled product costs;
• price and product competition;
• fluctuations in the cost and availability of raw materials;
• adverse changes in energy costs and other factors that may affect costs of producing, distributing or transporting our products;
• maintenance of competitive position with respect to other manufacturers;
• dependence on key personnel;
• stability of labor relations;
• dependence on contract copackers and limited or exclusive sources for certain goods;
• changes in estimates in critical accounting judgments;
• the outcome of any litigation or arbitration; and
• risks related to other factors described under "Risk Factors" in other reports and statements filed by us with the Securities and Exchange Commission, including without limitation our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (available at www.sec.gov).

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.

SOURCE Lancaster Colony Corporation