Oct. 29, 2009 (PR Newswire) -- COLUMBUS, Ohio, Oct. 29 /PRNewswire-FirstCall/ - Lancaster Colony Corporation (Nasdaq: LANC) today reported lower sales but higher net income for its first fiscal quarter ended September 30, 2009:
-- Net sales reached $254 million, off nearly four percent from first
quarter sales of $264 million last year.
-- Specialty Foods net sales totaled $216.3 million, down two percent from
the year-ago record level, reflecting a decline in foodservice sales
that was not fully offset by solid growth in retail sales.
-- Glassware and Candles sales were $37.8 million, a decline of 12 percent
from the year-ago quarter, reflecting generally weaker retail markets,
competitive factors and the shifting of some seasonal sales to the
second fiscal quarter.
-- Net income of $28,405,000, or $1.01 per diluted share, increased from
the prior-year total of $11,020,000, or $.39 per diluted share.
-- The cash dividend was continued at the higher rate set in November 2008.
-- The company's strong balance sheet showed no debt outstanding at
September 30, 2009.
Chairman and CEO John B. Gerlach, Jr. said, "We are pleased that both business segments achieved substantial improvement in first quarter operating results, with Specialty Foods operating margins benefiting from the decline in ingredient costs from the prior-year's historically high levels."
Specialty Foods sales were lower as the foodservice channel was affected by generally weak consumer demand and reduced pricing due to lower commodity costs. In contrast, retail sales continued to grow, up approximately five percent from gains in both frozen and non-frozen products. Operating income of $43.2 million nearly doubled, reflecting over $17 million in lower raw-material costs as well as operational improvements and a greater retail sales mix. Plant closing costs associated with the consolidation of certain manufacturing facilities totaled approximately $0.9 million and $0.8 million in the current and prior-year's first quarter, respectively.
Net sales of candles and related products declined for the quarter due to several factors, including competitive market conditions and some shifting of seasonal sales to the second quarter. Segment operating income of $1.7 million improved by over $4.5 million, reflecting lower wax costs, higher operating levels and improved pricing.
Corporate expenses decreased $0.4 million, as the prior-year's quarter reflected approximately $0.8 million related to the razing of a former industrial glass operation.
The first-quarter's effective tax rate reflects income associated with the favorable resolution of certain previously-reserved state tax matters. These items totaled approximately $0.9 million before tax, or about $.03 per share, net of applicable income taxes.
"Looking at our current second quarter," Mr. Gerlach said, "we anticipate that both operating segments will continue to benefit from many of the factors that contributed to the improvement in first-quarter operating margins.
