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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______ to______
Commission file number 0-4065-1
LANCASTER COLONY CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 13-1955943
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
37 WEST BROAD STREET, COLUMBUS, OHIO 43215
(Address of principal executive offices)
(Zip Code)
614-224-7141
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of September 30, 1994, there were approximately 30,046,000 shares of
common stock, no par value per share, outstanding.
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<TABLE>
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
INDEX
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Consolidated Condensed Balance Sheets -
September 30, 1994 and June 30, 1994 3
Consolidated Condensed Statements of Income -
Three Months Ended September 30, 1994 and 1993 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended September 30, 1994 and 1993 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of the Results
of Operations and Financial Condition 7-8
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K 8
Signatures 8
Exhibit 27 - Financial Data Schedule 9
</TABLE>
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<TABLE>
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
September 30 June 30
1994 1994
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 8,145,000 $ 30,423,000
Receivables 101,074,000 83,076,000
Less allowance for doubtful accounts 2,591,000 2,339,000
------------ ------------
Receivables - net 98,483,000 80,737,000
Inventories:
Raw materials and supplies 34,546,000 27,614,000
Finished goods and work in process 101,400,000 90,034,000
------------ ------------
Total inventories 135,946,000 117,648,000
Prepaid expenses and other current assets 9,484,000 8,995,000
------------ ------------
Total current assets 252,058,000 237,803,000
Property, Plant and Equipment - At cost 272,076,000 264,697,000
Less Accumulated Depreciation 168,349,000 163,127,000
------------ ------------
Property, plant and equipment - net 103,727,000 101,570,000
Other Assets 15,917,000 16,072,000
------------ ------------
Total Assets $371,702,000 $355,445,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,218,000 $ 1,301,000
Accounts payable 40,409,000 31,054,000
Accrued liabilities 45,840,000 41,902,000
------------ ------------
Total current liabilities 87,467,000 74,257,000
Long-Term Debt - Less current portion 32,613,000 32,933,000
Other Noncurrent Liabilities 8,125,000 8,093,000
Deferred Income Taxes 1,685,000 3,315,000
Shareholders' Equity:
Preferred stock - authorized 2,650,000 shares
issuable in series; Class A - $1.00 par value,
authorized 350,000 shares; Class B and C -
no par value, authorized 1,150,000 shares each;
outstanding - none
Common stock - authorized 35,000,000 shares;
issued September 30, 1994 - no par value -
30,645,000 shares; June 30, 1994 -
no par value - 22,977,000 shares 25,683,000 25,437,000
Retained earnings 238,088,000 226,412,000
Foreign currency translation adjustment 513,000 440,000
------------ ------------
Total 264,284,000 252,289,000
Less:
Common stock in treasury, at cost
September 30, 1994 - 599,000 shares;
June 30, 1994 - 303,000 shares 18,636,000 11,606,000
Amount due from ESOP 3,836,000 3,836,000
------------ ------------
Total shareholders' equity 241,812,000 236,847,000
------------ ------------
Total Liabilities and Shareholders' Equity $371,702,000 $355,445,000
============ ============
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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<TABLE>
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30
1994 1993
------------ ------------
<S> <C> <C>
Net Sales $189,130,000 $172,821,000
Cost of Sales 132,114,000 118,413,000
------------ ------------
Gross Margin 57,016,000 54,408,000
Selling, General and
Administrative Expenses 31,574,000 31,848,000
------------ ------------
Operating Income 25,442,000 22,560,000
Other Income (Expense):
Interest expense (715,000) (694,000)
Interest income and other - net 409,000 19,000
------------ ------------
Income Before Income Taxes 25,136,000 21,885,000
Taxes Based on Income 9,816,000 8,865,000
------------ ------------
Net Income $ 15,320,000 $ 13,020,000
============ ============
Net Income Per Common Share $ .51 $ .43
===== =====
Cash Dividends Per Common Share $ .12 $ .0975
===== =======
Weighted Average Common
Shares Outstanding 30,254,000 30,337,000
========== ==========
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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<TABLE>
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30
1994 1993
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,320,000 $13,020,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,953,000 5,877,000
Deferred income taxes and other noncash charges (1,289,000) (236,000)
Loss (gain) on sale of property 17,000 (7,000)
Changes in operating assets and liabilities:
Receivables (17,746,000) (22,584,000)
Inventories (18,298,000) (11,366,000)
Prepaid expenses and other current assets (819,000) (154,000)
Accounts payable 9,355,000 11,878,000
Accrued liabilities 3,938,000 4,954,000
----------- -----------
Net cash (used in) provided by operating
activities (3,569,000) 1,382,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments on property additions (7,626,000) (4,669,000)
Acquisition (5,438,000)
Proceeds from sale of property 45,000 75,000
Other - net (333,000) (1,151,000)
----------- -----------
Net cash used in investing activities (7,914,000) (11,183,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (7,030,000) (3,372,000)
Payment of dividends (3,623,000) (2,947,000)
Payments on long-term debt (403,000) (537,000)
Common stock issued upon exercise of stock
options including related tax benefits 246,000 386,000
----------- -----------
Net cash used in financing activities (10,810,000) (6,470,000)
----------- -----------
Effect of exchange rate changes on cash 15,000 2,000
----------- -----------
Net change in cash and equivalents (22,278,000) (16,269,000)
Cash and equivalents at beginning of year 30,423,000 16,502,000
----------- -----------
Cash and equivalents at end of period $ 8,145,000 $ 233,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS:
Cash paid during the period for:
Interest $ 1,214,000 $ 1,301,000
=========== ===========
Income taxes $ 3,864,000 $ 3,013,000
=========== ===========
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
(1) The interim consolidated condensed financial statements are unaudited
but, in the opinion of management, reflect all adjustments necessary
for a fair presentation of the results of operations and financial
position for such periods. All such adjustments reflected in the
interim consolidated condensed financial statements are considered to
be of a normal recurring nature. The results of operations for any
interim period are not necessarily indicative of results for the full
year. These financial statements should be read in conjunction with
the financial statements and notes thereto contained in the Company's
annual report on Form 10-K for the year ended June 30, 1994.
(2) Net income per common share is computed based on the weighted average
number of shares of common stock and common stock equivalents (stock
options) outstanding during each period.
(3) On July 20, 1994, a four-for-three stock split was effected whereby
one additional common share was issued for each three shares
outstanding to shareholders of record on June 20, 1994. Accordingly,
all per share data and the weighted average common shares outstanding
for the period ended September 30, 1993 in the accompanying
consolidated condensed financial statements has been retroactively
adjusted for this split.
(4) As approved by its shareholders, the Company has an incentive stock
option plan by which 3,625,000 common shares may be issued under
options granted pursuant to terms of the plan. As of September 30,
1994, employee options for 2,633,542 shares have been granted and
2,420,113 have been exercised.
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FOR THE PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
RESULTS OF OPERATIONS
Net sales for the three months ended September 30, 1994 totalled
$189,130,000, which represented an increase of 9% over net sales of
$172,821,000 recorded during the comparable 1993 period. This increase
resulted primarily from greater unit sales. Sales growth was achieved within
each of the Company's three operating segments although sales of the Glassware
and Candles segment were affected by customers shifting the timing of certain
recurring seasonal product sales to the second quarter of fiscal 1995.
Foodservice sales led growth in the Specialty Foods segment as did light truck
and van accessories sales in the Automotive segment.
Changes in sales mix contributed to the decline in the consolidated
gross profit margin from 31.5% in the 1993 quarter compared to 30.1% in 1994.
Adversely affecting gross margins were increases in raw material costs,
particularly those experienced by the Specialty Foods and Automotive segments.
The Company continues to attempt to mitigate the effect of such increases by
increasing, where possible, sales prices on affected product lines. Also of
note was the greater proportion of foodservice sales included within the 1994
total. Such sales typically yield a lower gross margin than do that of retail
food sales.
Operating expenses of $31,574,000 during the 1994 quarter decreased
1% from the prior year's comparable total of $31,848,000. The planned
reduction of certain promotional costs within the Specialty Foods segment
contributed to this decline.
Consolidated income before income taxes rose by 15% to $25,136,000
for the three months ended September 30, 1994 compared to $21,885,000 recorded
in the year-ago period. Similarly, net income increased 18% to $15,320,000 in
1994 compared to $13,020,000 in the 1993 quarter. The overall effective tax
rate declined by approximately 1.5% as a result of a provision recorded in the
preceding year's quarter of approximately $400,000 to reflect certain
retroactive provisions brought about by the August 1993 enactment of the
Omnibus Budget Reconciliation Act of 1993.
FINANCIAL CONDITION
Cash used to support operating activities for the three months ended
September 30, 1994 totalled $3,569,000 compared to cash provided for such
activities of $1,382,000 during the three months ended September 30, 1993.
Consolidated net current assets increased by $1,045,000 from June 30, 1994 to
September 30, 1994 while the working capital ratio declined from approximately
3.2:1 at June 30 to 2.9:1 at September 30.
Notable changes in working capital components since June 30, 1994
included a decrease in cash and equivalents of $22,278,000, an increase in net
accounts receivable of $17,746,000 and an increase in inventories of
$18,298,000. Cash was utilized to support the increase in accounts receivable
and inventory as well as to pay for the repurchase of common stock outstanding
which totalled $7,030,000 during the quarter. The increase in accounts
receivable reflects the seasonally strong shipment pattern which occurs in the
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latter half of the Company's first fiscal quarter. Similarly, the increase in
inventories results primarily from a planned seasonal build in inventories
within the Glassware and Candles segment.
Including both short- and long-term debt within total capitalization,
such debt was 12% of total capitalization at September 30 compared to 13% as of
June 30. The Company continues to maintain discretionary bank lines of credit
in excess of $150,000,000 as a contingent source of short-term financing for
future capital or other temporary cash requirements.
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - There were no reports filed on Form 8-K
for the three months ended September 30, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANCASTER COLONY CORPORATION
Date: November 8, 1994 BY:/S/John B. Gerlach
----------------------- ----------------------------
JOHN B. GERLACH
Chairman, Chief Executive
Officer and Principal
Financial Officer
Date: November 8, 1994 BY:/S/John L. Boylan
----------------------- ----------------------------
JOHN L. BOYLAN
Treasurer and
Assistant Secretary
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONSOLIDATED CONDENSED BALANCE SHEET AND STATEMENT OF INCOME FOR
THE QUARTER ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> SEP-30-1994
<CASH> 8,145
<SECURITIES> 0
<RECEIVABLES> 101,074
<ALLOWANCES> 2,591
<INVENTORY> 135,946
<CURRENT-ASSETS> 252,058
<PP&E> 272,076
<DEPRECIATION> 168,349
<TOTAL-ASSETS> 371,702
<CURRENT-LIABILITIES> 87,467
<BONDS> 32,613
<COMMON> 25,683
0
0
<OTHER-SE> 216,129
<TOTAL-LIABILITY-AND-EQUITY> 371,702
<SALES> 189,130
<TOTAL-REVENUES> 189,130
<CGS> 132,114
<TOTAL-COSTS> 132,114
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 715
<INCOME-PRETAX> 25,136
<INCOME-TAX> 9,816
<INCOME-CONTINUING> 15,320
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,320
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
