Lancaster Colony Reports First Quarter Fiscal 2012 Results

COLUMBUS, Ohio, Oct. 27, 2011 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the first quarter fiscal 2012 ended September 30, 2011:

• Net sales reached $275 million, up four percent from first quarter sales of $265 million last year.
• Specialty Foods net sales of $236.9 million were up over seven percent above the year-ago level, reflecting an increase in both retail and foodservice sales.
• Glassware and Candles sales declined 16 percent from the year-ago quarter to $37.6 million, reflecting lower unit volume.
• Net income of $21,258,000, or $.78 per diluted share, decreased from the prior-year's $22,767,000, or $.81 per diluted share. Following the recent trend, first quarter results were affected by higher material costs not fully offset by generally higher pricing.
• Cash dividends were continued at the higher rate set in November 2010. The company's debt-free balance sheet showed $128.3 million in cash and equivalents at September 30, 2011.

Chairman and CEO John B. Gerlach, Jr. said, "Despite increased first quarter consolidated sales driven by our Specialty Foods segment, operating income was again challenged by substantially higher material costs."

Specialty Foods sales benefitted from higher pricing and volume improvements in both foodservice and branded retail lines, notably in frozen breads. Recent product introductions also contributed to increased retail sales, which improved by approximately four percent. Operating income of $35.2 million declined seven percent. The segment's 14.9 percent operating margin reflected higher ingredient and packaging costs, which impacted margins by approximately seven percent of segment net sales. Mitigating this impact was higher pricing amounting to approximately five percent of net sales.

First quarter candle sales declined due to exiting several lower-margin programs, including some seasonal candle sales. Segment operating income declined by approximately $0.3 million. Higher pricing and a better sales mix helped offset the impact of the sales decline and higher wax costs, which impacted gross margin by approximately $1 million.

Mr. Gerlach said, "Although economic challenges facing consumers add to the level of uncertainty, we anticipate second quarter top-line trends similar to that of the first quarter, including solid growth in our Specialty Foods segment. Sales of candles will again reflect lower sales volumes, including the loss of certain lower-margin seasonal volumes. We anticipate that operating income will be impacted by the effects of these lower candle volumes as well as higher material costs still not being fully offset by pricing actions and other initiatives. Provided current market conditions persist, we expect to see less impact from higher input costs during the second half of the fiscal year. Regardless, we remain well-positioned to support future growth given the ongoing strength of our market positions and balance sheet."

Conference Call on the Web

The company's first quarter conference call is scheduled for this morning, October 27, 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 diversified manufacturer and marketer of consumer products focusing primarily on specialty foods 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 that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on such statements that are based on current expectations. For example, fluctuations in material and freight costs, over which we have limited control, may significantly influence our financial results. 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. More detailed statements regarding significant events that could affect our financial results are included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission and are available on our website at www.lancastercolony.com.

SOURCE Lancaster Colony Corporation

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