Lancaster Colony Reports Fourth Quarter and Fiscal Year Results
- Q4 net sales increased 0.5%
- Retail segment net sales grew 1.3%
- CEO anticipates volume growth in Retail segment in fiscal 2024
- Foodservice segment net sales declined 0.4%
- Q4 gross profit decreased $5.2 million
- Q4 operating income declined $22.2 million
Summary
-
Consolidated fourth quarter net sales increased
0.5% to a fourth quarter record$454.7 million 1.3% in the quarter to$236.2 million 0.4% to$218.5 million $25 million 6% of the quarter’s total sales, attributed to advance customer orders ahead of our July 1, 2022 ERP go-live date. -
Consolidated fourth quarter gross profit decreased
$5.2 million $93.2 million $5 million Horse Cave, Kentucky ; temporary production inefficiencies associated with our ERP implementation; and costs associated with a Retail product line that was discontinued. -
Consolidated fourth quarter operating income declined
$22.2 million $11.5 million $25.0 million $10.5 million -
Fourth quarter net income was
$0.33 $1.06 $0.70 $0.29
CEO David A. Ciesinski commented, “We reported another quarter of record sales. In addition to inflationary pricing, the
“The fourth quarter gross profit results fell short of our expectations as we experienced some transitory costs associated with our long-term strategic investments in production capacity and our ERP network. These issues have now been remedied, and we look forward to the many benefits these investments will provide our business in the years ahead.”
“Looking ahead to fiscal 2024, we anticipate Retail segment sales will benefit from volume growth led by our licensing program, including incremental growth from the new products, flavors and sizes we introduced in fiscal 2023. We are also excited to share our plans to add Texas RoadhouseTM steak sauces to our licensing program with a spring launch date. In addition, we foresee continued positive momentum for our New York BRAND® Bakery frozen garlic bread products. In Foodservice, we expect sales volumes to be led by growth from select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including
“We project the impact of inflationary costs to subside notably in the coming year. The pricing actions we have implemented along with our cost savings initiatives will help to offset remaining inflationary costs. With respect to our ERP initiative, Project Ascent, we completed the final wave of the implementation phase as planned and will devote our attention to leveraging the new system to strengthen our execution in fiscal 2024.”
Fourth Quarter Results
Consolidated net sales increased
Consolidated gross profit decreased
SG&A expenses increased
Impairment charges totaling
Consolidated operating income declined
Net income decreased
Fiscal Year Results
For the fiscal year ended June 30, 2023, net sales increased
Conference Call on the Web
The company’s fourth quarter and fiscal year-end conference call is scheduled for this morning, August 23, at 10:00 a.m. ET. Access to a live webcast of the call is available 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’s 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:
- efficiencies in plant operations and our overall supply chain network;
- the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
- price and product competition;
- adequate supply of labor for our manufacturing facilities;
- the impact of customer store brands on our branded retail volumes;
- inflationary pressures resulting in higher input costs;
- adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
- fluctuations in the cost and availability of ingredients and packaging;
- dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business;
- stability of labor relations;
- dependence on key personnel and changes in key personnel;
- cyber-security incidents, information technology disruptions, and data breaches;
- capacity constraints that may affect our ability to meet demand or may increase our costs;
-
geopolitical events, such as Russia’s invasion of
Ukraine , that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy; - the potential for loss of larger programs or key customer relationships;
- failure to maintain or renew license agreements;
- significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks;
- 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;
- the success and cost of new product development efforts;
- the lack of market acceptance of new products;
- the extent to which business acquisitions are completed and acceptably integrated;
- the ability to successfully grow acquired businesses;
- the effect of consolidation of customers within key market channels;
- maintenance of competitive position with respect to other manufacturers;
- the outcome of any litigation or arbitration;
- changes in estimates in critical accounting judgments;
- the impact of any regulatory matters affecting our food business, including any required labeling changes and their impact on consumer demand;
- the impact of fluctuations in our pension plan asset values on funding levels, contributions required and benefit costs; 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.
LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands except per-share amounts)
|
||||||||||||
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net sales |
$ |
454,661 |
|
$ |
452,413 |
|
$ |
1,822,527 |
|
$ |
1,676,390 |
|
Cost of sales |
|
361,487 |
|
|
353,995 |
|
|
1,433,959 |
|
|
1,320,671 |
|
Gross profit |
|
93,174 |
|
|
98,418 |
|
|
388,568 |
|
|
355,719 |
|
Selling, general & administrative expenses |
|
56,730 |
|
|
54,178 |
|
|
222,091 |
|
|
212,098 |
|
Change in contingent consideration |
|
— |
|
|
— |
|
|
— |
|
|
(3,470 |
) |
Restructuring and impairment charges |
|
24,969 |
|
|
10,529 |
|
|
24,969 |
|
|
35,180 |
|
Operating income |
|
11,475 |
|
|
33,711 |
|
|
141,508 |
|
|
111,911 |
|
Other, net |
|
974 |
|
|
227 |
|
|
1,789 |
|
|
477 |
|
Income before income taxes |
|
12,449 |
|
|
33,938 |
|
|
143,297 |
|
|
112,388 |
|
Taxes based on income |
|
3,283 |
|
|
4,894 |
|
|
32,011 |
|
|
22,802 |
|
Net income |
$ |
9,166 |
|
$ |
29,044 |
|
$ |
111,286 |
|
$ |
89,586 |
|
|
|
|
|
|
|
|
|
|||||
Net income per common share: (a) |
|
|
|
|
|
|
|
|||||
Basic |
$ |
0.33 |
|
$ |
1.06 |
|
$ |
4.04 |
|
$ |
3.26 |
|
Diluted |
$ |
0.33 |
|
$ |
1.06 |
|
$ |
4.04 |
|
$ |
3.25 |
|
|
|
|
|
|
|
|
|
|||||
Cash dividends per common share |
$ |
0.85 |
|
$ |
0.80 |
|
$ |
3.35 |
|
$ |
3.15 |
|
|
|
|
|
|
|
|
|
|||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||
Basic |
|
27,461 |
|
|
27,447 |
|
|
27,462 |
|
|
27,448 |
|
Diluted |
|
27,490 |
|
|
27,453 |
|
|
27,482 |
|
|
27,472 |
|
(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
|
|
Fiscal Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
NET SALES |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
236,183 |
|
|
$ |
233,108 |
|
|
$ |
965,370 |
|
|
$ |
915,210 |
|
Foodservice |
|
218,478 |
|
|
|
219,305 |
|
|
|
857,157 |
|
|
|
761,180 |
|
Total Net Sales |
$ |
454,661 |
|
|
$ |
452,413 |
|
|
$ |
1,822,527 |
|
|
$ |
1,676,390 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
10,269 |
|
|
$ |
31,630 |
|
|
$ |
139,464 |
|
|
$ |
151,627 |
|
Foodservice |
|
25,319 |
|
|
|
30,055 |
|
|
|
106,349 |
|
|
|
82,745 |
|
Nonallocated Restructuring and Impairment Charges |
|
— |
|
|
|
(1,758 |
) |
|
|
— |
|
|
|
(25,507 |
) |
Corporate Expenses |
|
(24,113 |
) |
|
|
(26,216 |
) |
|
|
(104,305 |
) |
|
|
(96,954 |
) |
Total Operating Income |
$ |
11,475 |
|
|
$ |
33,711 |
|
|
$ |
141,508 |
|
|
$ |
111,911 |
|
LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
|||||
|
June 30,
|
|
June 30,
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and equivalents |
$ |
88,473 |
|
$ |
60,283 |
Receivables |
|
114,967 |
|
|
135,496 |
Inventories |
|
158,265 |
|
|
144,702 |
Other current assets |
|
12,758 |
|
|
11,300 |
Total current assets |
|
374,463 |
|
|
351,781 |
Net property, plant and equipment |
|
482,206 |
|
|
451,368 |
Other assets |
|
256,325 |
|
|
287,225 |
Total assets |
$ |
1,112,994 |
|
$ |
1,090,374 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
111,758 |
|
$ |
114,972 |
Accrued liabilities |
|
56,994 |
|
|
50,613 |
Total current liabilities |
|
168,752 |
|
|
165,585 |
Noncurrent liabilities and deferred income taxes |
|
81,975 |
|
|
80,102 |
Shareholders’ equity |
|
862,267 |
|
|
844,687 |
Total liabilities and shareholders’ equity |
$ |
1,112,994 |
|
$ |
1,090,374 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230822874485/en/
Dale N. Ganobsik
Vice President, Corporate Finance and Investor Relations
Lancaster Colony Corporation
Phone: 614/224-7141
Email: ir@lancastercolony.com
Source: Lancaster Colony Corporation
