Lancaster Colony Reports Third Quarter Sales and Earnings

COLUMBUS, Ohio, April 28, 2011 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's third fiscal quarter ended March 31, 2011. Highlights of the quarter:

• Net sales increased one percent to $253 million versus $250 million in the third quarter last year, reflecting continued sales growth for both specialty foods and candles.

• Net income totaled $19,441,000 compared with $24,222,000 for the corresponding quarter a year ago, as both business segments faced significantly higher commodity costs. Third quarter net income per diluted share totaled $.71 compared to $.86 a year ago.

• Specialty Foods sales increased less than one percent to $217.4 million on higher pricing, but modestly lower volume. Retail food sales declined approximately nine percent, in part due to Easter occurring nearly three weeks later in April this year. Operating income totaled $31.7 million compared to the record $38.7 million in the third quarter last year.  Higher material and freight costs, along with a less favorable sales mix, were only partially offset by recently-implemented pricing actions which lagged the cost increases.

• Glassware and Candles sales increased four percent to $35.2 million on higher candle sales. Increased material costs led to segment operating income declining to $0.7 million from $1.7 million in the third quarter last year.

• The company's balance sheet remained strong with no debt outstanding at March 31, 2011.

• The quarterly cash dividend was continued at the higher level set last quarter.

For the nine months ended March 31, 2011, net sales were $834 million compared to $809 million last year. Net income was $77,071,000, or $2.77 per diluted share. Net income for the nine months a year ago totaled $92,154,000, or $3.27 per diluted share. Current year-to-date net income included pretax income of $1.0 million (two cents per share after taxes) from a second-quarter distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). In the prior year, net income included a pretax CDSOA distribution of $0.9 million (two cents per share after taxes).

John B. Gerlach, Jr., chairman and CEO, said, "We were pleased with the growth of foodservice sales, which led to record third quarter Specialty Foods sales.  However, our third quarter comparisons were difficult due to the strength of the prior-year quarter, this year's later Easter, a less favorable sales mix, higher commodity and freight costs, and lower production levels within our frozen roll operations.  While our key retail products generally maintained solid market positions and we saw good placement of recently introduced retail food products, we also experienced somewhat weaker than hoped retail food volumes."

Looking ahead, Mr. Gerlach said, "Fourth-quarter Specialty Foods volumes should benefit from the later Easter, as well as further contributions from newer product introductions.  The segment's net sales and margins should also reflect recently implemented pricing actions, which we anticipate should mitigate the impact of higher food commodity costs.  The seasonally slow fourth quarter for our candle operations will continue to be affected by higher wax costs while we work with our candle customers to adjust pricing."

Conference Call on the Web

The company's third quarter conference call is scheduled for this morning, April 28, 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. 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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