Lancaster Colony Reports Second Quarter Sales and Earnings
Summary
-
Consolidated net sales increased
4.8% to a second quarter record versus$509.3 million last year. Retail net sales grew$485.9 million 6.3% to while Foodservice net sales advanced$280.8 million 3.0% to .$228.5 million -
Consolidated gross profit increased
, or$11.3 million 9.3% , to a second quarter record .$132.8 million -
SG&A expenses increased
to$1.4 million . Note that SG&A expenses include$57.1 million in incremental expenditures attributed to the company’s planned acquisition of an$1.6 million Atlanta -based sauce and dressing production facility that we announced on November 18, 2024. We remain on track for this transaction to close during our fiscal third quarter ending March 31, 2025. -
Consolidated operating income increased
, or$9.9 million 15.1% , to a second quarter record .$75.7 million -
Consolidated income before income taxes declined
, which includes the unfavorable impact of a$3.9 million noncash settlement charge resulting from our decision to terminate all the company’s legacy pension plans.$14.0 million -
Net income was
per diluted share versus$1.78 per diluted share last year. The noncash settlement charge attributed to the termination of the company’s legacy pension plans reduced net income by$1.87 per diluted share and the incremental SG&A expenditures attributed to the pending sauce and dressing plant acquisition reduced net income by$0.39 per diluted share.$0.05
CEO David A. Ciesinski commented, “We were very pleased to complete the quarter with record sales, gross profit and operating income. The
“Our reported gross profit margin improved to
“Looking ahead to our fiscal third quarter, we project Retail sales will continue to benefit from our expanding licensing program and growth from investments in innovation for our own brands including New York BRAND® Bakery. In the Foodservice segment, we anticipate continued growth from select customers in our mix of national chain restaurant accounts.”
“We also look forward to completing the asset purchase transaction for the
Second Quarter Results
Consolidated net sales increased
Consolidated gross profit increased
SG&A expenses increased
Consolidated operating income grew
Income before income taxes fell
Net income declined
Fiscal Year-to-Date Results
For the six months ended December 31, 2024, net sales increased
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. 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 extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;
- price and product competition;
- changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill;
- the impact of customer store brands on our branded retail volumes;
- the impact of any regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government;
- adequate supply of labor for our manufacturing facilities;
- stability of labor relations;
- adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
- the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
- inflationary pressures resulting in higher input costs;
- fluctuations in the cost and availability of ingredients and packaging;
- capacity constraints that may affect our ability to meet demand or may increase our costs;
- dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business;
- dependence on key personnel and changes in key personnel;
- cyber-security incidents, information technology disruptions, and data breaches;
- the potential for loss of larger programs or key customer relationships;
- failure to maintain or renew license agreements;
- geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;
- 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 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;
- 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 estimates in critical accounting judgments; 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
|
|
Six Months Ended
|
||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
Net sales |
$ |
509,301 |
|
|
$ |
485,916 |
|
$ |
975,859 |
|
|
$ |
947,488 |
Cost of sales |
|
376,533 |
|
|
|
364,448 |
|
|
732,267 |
|
|
|
717,298 |
Gross profit |
|
132,768 |
|
|
|
121,468 |
|
|
243,592 |
|
|
|
230,190 |
Selling, general & administrative expenses |
|
57,107 |
|
|
|
55,714 |
|
|
112,067 |
|
|
|
107,661 |
Operating income |
|
75,661 |
|
|
|
65,754 |
|
|
131,525 |
|
|
|
122,529 |
Pension settlement charge |
|
(13,968 |
) |
|
|
— |
|
|
(13,968 |
) |
|
|
— |
Other, net |
|
1,541 |
|
|
|
1,425 |
|
|
3,560 |
|
|
|
2,282 |
Income before income taxes |
|
63,234 |
|
|
|
67,179 |
|
|
121,117 |
|
|
|
124,811 |
Taxes based on income |
|
14,241 |
|
|
|
15,695 |
|
|
27,423 |
|
|
|
29,376 |
Net income |
$ |
48,993 |
|
|
$ |
51,484 |
|
$ |
93,694 |
|
|
$ |
95,435 |
|
|
|
|
|
|
|
|
||||||
Net income per common share: (a) |
|
|
|
|
|
|
|
||||||
Basic and diluted |
$ |
1.78 |
|
|
$ |
1.87 |
|
$ |
3.40 |
|
|
$ |
3.47 |
|
|
|
|
|
|
|
|
||||||
Cash dividends per common share |
$ |
0.95 |
|
|
$ |
0.90 |
|
$ |
1.85 |
|
|
$ |
1.75 |
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||||
Basic |
|
27,480 |
|
|
|
27,425 |
|
|
27,468 |
|
|
|
27,437 |
Diluted |
|
27,495 |
|
|
|
27,440 |
|
|
27,487 |
|
|
|
27,457 |
(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
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
NET SALES |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
280,752 |
|
|
$ |
263,992 |
|
|
$ |
520,323 |
|
|
$ |
506,176 |
|
Foodservice |
|
228,549 |
|
|
|
221,924 |
|
|
|
455,536 |
|
|
|
441,312 |
|
Total Net Sales |
$ |
509,301 |
|
|
$ |
485,916 |
|
|
$ |
975,859 |
|
|
$ |
947,488 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
69,037 |
|
|
$ |
59,521 |
|
|
$ |
125,212 |
|
|
$ |
112,645 |
|
Foodservice |
|
30,324 |
|
|
|
27,145 |
|
|
|
54,633 |
|
|
|
53,778 |
|
Corporate Expenses |
|
(23,700 |
) |
|
|
(20,912 |
) |
|
|
(48,320 |
) |
|
|
(43,894 |
) |
Total Operating Income |
$ |
75,661 |
|
|
$ |
65,754 |
|
|
$ |
131,525 |
|
|
$ |
122,529 |
|
LANCASTER COLONY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
|||||
|
December 31,
|
|
June 30,
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and equivalents |
$ |
203,073 |
|
$ |
163,443 |
Receivables |
|
99,150 |
|
|
95,560 |
Inventories |
|
167,170 |
|
|
173,252 |
Other current assets |
|
11,579 |
|
|
11,738 |
Total current assets |
|
480,972 |
|
|
443,993 |
Net property, plant and equipment |
|
478,543 |
|
|
477,696 |
Other assets |
|
280,343 |
|
|
285,242 |
Total assets |
$ |
1,239,858 |
|
$ |
1,206,931 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
104,506 |
|
$ |
118,811 |
Accrued liabilities |
|
62,744 |
|
|
65,158 |
Total current liabilities |
|
167,250 |
|
|
183,969 |
Noncurrent liabilities and deferred income taxes |
|
92,742 |
|
|
97,190 |
Shareholders’ equity |
|
979,866 |
|
|
925,772 |
Total liabilities and shareholders’ equity |
$ |
1,239,858 |
|
$ |
1,206,931 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250203427227/en/
FOR FURTHER INFORMATION:
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