Lancaster Colony Reports Second Quarter Sales and Earnings
Summary
-
Consolidated net sales increased 1.8% to a second quarter record
$485.9 million versus$477.4 million last year. Retail net sales grew 2.0% to$264.0 million while Foodservice net sales advanced 1.5% to$221.9 million . -
Consolidated gross profit increased
$19.4 million , or 19.0%, to a second quarter record$121.5 million . -
Consolidated operating income increased
$14.4 million , or 28.1%, to a second quarter record$65.8 million . -
Net income was
$1.87 per diluted share versus$1.45 per diluted share last year.
CEO
“Our reported gross profit margin improved to 25.0%, an increase of 360 basis points versus last year, which reflects favorable pricing net of commodity costs, or PNOC, following two years of unprecedented inflation, in addition to the positive impacts of our cost savings initiatives.”
“Looking ahead to our fiscal third quarter, we project Retail sales will continue to benefit from our expanding licensing program while, in the Foodservice segment, we expect sustained volume growth from select quick-service restaurant customers. We anticipate continued favorability in our pricing net of commodity costs, but at a sequentially lower level compared to our fiscal second quarter. Deflationary pricing is expected to remain a headwind to Foodservice segment net sales.”
Second Quarter Results
Consolidated net sales increased 1.8% to a second quarter record
Consolidated gross profit increased
SG&A expenses rose
Consolidated operating income grew
Net income increased
Fiscal Year-to-Date Results
For the six months ended
Conference Call on the Web
The company’s second quarter conference call is scheduled for this morning,
About the Company
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;
- the impact of customer store brands on our branded retail volumes;
- adequate supply of labor for our manufacturing facilities;
- adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
- inflationary pressures resulting in higher input costs;
- 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 changes in consumer behavior or 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.
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||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
||||||||||||
(In thousands except per-share amounts) |
||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
|||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||
Net sales |
$ |
485,916 |
|
$ |
477,394 |
|
$ |
947,488 |
|
$ |
902,931 |
|
Cost of sales |
|
364,448 |
|
|
375,292 |
|
|
717,298 |
|
|
701,774 |
|
Gross profit |
|
121,468 |
|
|
102,102 |
|
|
230,190 |
|
|
201,157 |
|
Selling, general & administrative expenses |
|
55,714 |
|
|
50,775 |
|
|
107,661 |
|
|
100,532 |
|
Operating income |
|
65,754 |
|
|
51,327 |
|
|
122,529 |
|
|
100,625 |
|
Other, net |
|
1,425 |
|
|
478 |
|
|
2,282 |
|
|
208 |
|
Income before income taxes |
|
67,179 |
|
|
51,805 |
|
|
124,811 |
|
|
100,833 |
|
Taxes based on income |
|
15,695 |
|
|
11,832 |
|
|
29,376 |
|
|
23,268 |
|
Net income |
$ |
51,484 |
|
$ |
39,973 |
|
$ |
95,435 |
|
$ |
77,565 |
|
|
|
|
|
|
|
|
|
|||||
Net income per common share: (a) |
|
|
|
|
|
|
|
|||||
Basic |
$ |
1.87 |
|
$ |
1.45 |
|
$ |
3.47 |
|
$ |
2.82 |
|
Diluted |
$ |
1.87 |
|
$ |
1.45 |
|
$ |
3.47 |
|
$ |
2.81 |
|
|
|
|
|
|
|
|
|
|||||
Cash dividends per common share |
$ |
0.90 |
|
$ |
0.85 |
|
$ |
1.75 |
|
$ |
1.65 |
|
|
|
|
|
|
|
|
|
|||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||
Basic |
|
27,425 |
|
|
27,471 |
|
|
27,437 |
|
|
27,460 |
|
Diluted |
|
27,440 |
|
|
27,493 |
|
|
27,457 |
|
|
27,476 |
|
(a) Based on the weighted average number of shares outstanding during each period. |
|
||||||||||||||||
BUSINESS SEGMENT INFORMATION (Unaudited) |
||||||||||||||||
(In thousands) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
|
|||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Retail |
$ |
263,992 |
|
|
$ |
258,763 |
|
|
$ |
506,176 |
|
|
$ |
481,979 |
|
|
Foodservice |
|
221,924 |
|
|
|
218,631 |
|
|
|
441,312 |
|
|
|
420,952 |
|
|
Total |
$ |
485,916 |
|
|
$ |
477,394 |
|
|
$ |
947,488 |
|
|
$ |
902,931 |
|
|
|
|
|
|
|
|
|
|
|||||||||
OPERATING INCOME |
|
|
|
|
|
|
|
|||||||||
Retail |
$ |
59,521 |
|
|
$ |
49,352 |
|
|
$ |
112,645 |
|
|
$ |
92,252 |
|
|
Foodservice |
|
27,145 |
|
|
|
26,696 |
|
|
|
53,778 |
|
|
|
58,625 |
|
|
Corporate Expenses |
|
(20,912 |
) |
|
|
(24,721 |
) |
|
|
(43,894 |
) |
|
|
(50,252 |
) |
|
Total Operating Income |
$ |
65,754 |
|
|
$ |
51,327 |
|
|
$ |
122,529 |
|
|
$ |
100,625 |
|
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
||||
2023 |
2023 |
|||||
ASSETS |
|
|
||||
Current assets: |
|
|
||||
Cash and equivalents |
$ |
133,848 |
$ |
88,473 |
||
Receivables |
|
100,188 |
|
114,967 |
||
Inventories |
|
158,192 |
|
158,265 |
||
Other current assets |
|
13,171 |
|
12,758 |
||
Total current assets |
|
405,399 |
|
374,463 |
||
Net property, plant and equipment |
|
490,391 |
|
482,206 |
||
Other assets |
|
253,135 |
|
256,325 |
||
Total assets |
$ |
1,148,925 |
$ |
1,112,994 |
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|||||
Current liabilities: |
|
|||||
Accounts payable |
$ |
104,114 |
|
$ |
111,758 |
|
Accrued liabilities |
|
59,262 |
|
|
56,994 |
|
Total current liabilities |
|
163,376 |
|
|
168,752 |
|
Noncurrent liabilities and deferred income taxes |
|
77,223 |
|
|
81,975 |
|
Shareholders’ equity |
|
908,326 |
|
|
862,267 |
|
Total liabilities and shareholders’ equity |
$ |
1,148,925 |
|
$ |
1,112,994 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240131029981/en/
Dale N. Ganobsik
Vice President, Corporate Finance and Investor Relations
Phone: 614/224-7141
Email: ir@lancastercolony.com
Source: