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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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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, 1995, there were approximately 29,584,000 shares of
common stock, no par value per share, outstanding.
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Part I. Financial Information
Consolidated Condensed Balance Sheets -
September 30, 1995 and June 30, 1995 3
Consolidated Condensed Statements of Income -
Three Months Ended September 30, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended September 30, 1995 and 1994 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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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 June 30
1995 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 476,000 $ 8,239,000
Receivables - net of allowance for
doubtful accounts 114,862,000 88,416,000
Inventories:
Raw materials and supplies 39,669,000 34,020,000
Finished goods and work in process 112,968,000 107,866,000
------------ ------------
Total inventories 152,637,000 141,886,000
Prepaid expenses and other current assets 11,050,000 11,226,000
------------ ------------
Total current assets 279,025,000 249,767,000
Property, Plant and Equipment - At cost 291,856,000 282,525,000
Less Accumulated Depreciation 174,663,000 169,338,000
------------ ------------
Property, plant and equipment - net 117,193,000 113,187,000
Other Assets 16,618,000 16,950,000
------------ ------------
Total Assets $412,836,000 $379,904,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term bank loans $ 12,500,000
Current portion of long-term debt 983,000 $ 1,026,000
Accounts payable 36,891,000 26,322,000
Accrued liabilities 41,686,000 33,164,000
------------ ------------
Total current liabilities 92,060,000 60,512,000
Long-Term Debt - Less current portion 31,565,000 31,840,000
Other Noncurrent Liabilities 8,273,000 8,223,000
Deferred Income Taxes 1,524,000 2,181,000
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, 1995 - no par value -
30,770,000 shares; June 30, 1995 -
no par value - 30,765,000 shares 28,242,000 28,086,000
Retained earnings 291,531,000 280,538,000
Foreign currency translation adjustment 570,000 501,000
------------ ------------
Total 320,343,000 309,125,000
Less:
Common stock in treasury, at cost
September 30, 1995 - 1,186,000 shares;
June 30, 1995 - 936,000 shares 38,372,000 29,420,000
Amount due from ESOP 2,557,000 2,557,000
------------ ------------
Total shareholders' equity 279,414,000 277,148,000
------------ ------------
Total Liabilities and Shareholders' Equity $412,836,000 $379,904,000
============ ============
</TABLE>
See Notes to Consolidated Condensed Financial Statements
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1995 1994
--------------- --------------
<S> <C> <C>
Net Sales $200,902,000 $189,130,000
Cost of Sales 141,583,000 132,114,000
------------ ------------
Gross Margin 59,319,000 57,016,000
Selling, General and
Administrative Expenses 33,424,000 31,574,000
------------ ------------
Operating Income 25,895,000 25,442,000
Other Income (Expense):
Interest expense (716,000) (715,000)
Interest income and other - net 85,000 409,000
------------ ------------
Income Before Income Taxes 25,264,000 25,136,000
Taxes Based on Income 9,856,000 9,816,000
------------ ------------
Net Income $ 15,408,000 $ 15,320,000
============ ============
Net Income Per Common Share $ .52 $ .51
===== =====
Cash Dividends Per Common Share $ .15 $ .12
===== =====
Weighted Average Common
Shares Outstanding 29,709,000 30,254,000
========== ==========
</TABLE>
See Notes to Consolidated Condensed Financial Statements
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,408,000 $15,320,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,913,000 5,953,000
Deferred income taxes and other noncash charges (584,000) (1,289,000)
Loss on sale of property 18,000 17,000
Changes in operating assets and liabilities:
Receivables (26,446,000) (17,746,000)
Inventories (10,751,000) (18,298,000)
Prepaid expenses and other current assets 176,000 (819,000)
Accounts payable 10,569,000 9,355,000
Accrued liabilities 8,522,000 3,938,000
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Net cash provided by (used in) operating
activities 2,825,000 (3,569,000)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Payments on property additions (9,474,000) (7,626,000)
Proceeds from sale of property 36,000 45,000
Other - net (126,000) (333,000)
----------- -----------
Net cash used in investing activities (9,564,000) (7,914,000)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (8,952,000) (7,030,000)
Payment of dividends (4,437,000) (3,623,000)
Payments on long-term debt (318,000) (403,000)
Net proceeds from short-term bank loans 12,500,000
Common stock issued upon exercise of stock
options including related tax benefits 156,000 246,000
----------- -----------
Net cash used in financing activities ( 1,051,000) (10,810,000)
----------- -----------
Effect of exchange rate changes on cash 27,000 15,000
----------- -----------
Net change in cash and equivalents (7,763,000) (22,278,000)
Cash and equivalents at beginning of year 8,239,000 30,423,000
----------- -----------
Cash and equivalents at end of period $ 476,000 $ 8,145,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS:
Cash paid during the period for:
Interest $ 1,253,000 $ 1,214,000
=========== ===========
Income taxes $ 369,000 $ 3,864,000
=========== ===========
</TABLE>
See Notes to Consolidated Condensed Financial Statements
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(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, 1995.
(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.
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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, 1995 AND 1994
RESULTS OF OPERATIONS
For the quarter ended September 30, 1995, net sales totaled
$200,902,000 compared to $189,130,000 recorded in the corresponding period of
1994. This 6% increase primarily resulted from the continuing growth of the
Glassware and Candles segment. The Specialty Foods segment also reflected
increased net sales as led by a greater volume of foodservice products. Total
net sales of the Automotive segment declined as a result of a weakening in the
markets for both original equipment and aftermarket products.
On a consolidated basis, the gross margin percentage for the 1995
period of 29.5% declined from the 30.1% recorded during the comparable 1994
quarter. The overall decline reflects improved margins in the Glassware and
Candles segment, offset by declining margins in the Automotive and Specialty
Foods segments. The improved margins in the Glassware and Candles segment were
achieved as a result of a more profitable sales mix and the contribution of
volume-driven efficiencies. However, the Automotive segment experienced
notably reduced margins as generally higher unit costs of production resulted
from the presence of greater raw material prices and the effects of curtailed
production schedules on overhead absorption. Certain of these increased raw
materials costs have moderated going into the quarter ending December 31, 1995.
The increasing proportion of foodservice sales within the Specialty Foods
segment continues to adversely impact the gross margins of this segment.
Selling, general and administrative expenses for the three months
ended September 1995 totaled $33,424,000 or 16.6% of net sales compared to
$31,574,000 or 16.7% of net sales for the three months ended September 1994.
Growth in the Glassware and Candles segment contributed to the overall increase
in these expenses.
On a consolidated basis, the foregoing factors combined to generate
pretax net income of $25,264,000 for the three months ended September 1995
compared to $25,136,000 in the corresponding period of 1994. With the
effective tax rate remaining essentially unchanged from that of the prior year,
net income for the 1995 quarter totaled $15,408,000 compared to $15,320,000 in
1994.
FINANCIAL CONDITION
For the three months ended September 30, 1995, net cash provided by
operating activities totaled $2,825,000 compared to $3,569,000 used in
operating activities during the corresponding period of 1994. During the 1995
period, cash was required to support increased levels of accounts receivable
and inventory resulting primarily from the growth and certain seasonal
requirements of the Glassware and Candles segment. A portion of the overall
increase in accounts receivable and inventory was funded by corporate
short-term bank borrowings that totaled $12,500,000 as of September 30.
Other significant uses of cash during the most recent quarter
included $8,952,000 for the repurchase of common stock as well as $9,474,000
for capital expenditures. The most significant of the latter expenditures
related to the construction of expanded and enhanced distribution facilities at
the Company's candle manufacturing facility in Leesburg, Ohio. Management
anticipates that cash from future operating activities and cash available
from the currently
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available discretionary bank credit lines will be adequate to meet the
Company's foreseeable cash requirements over the balance of fiscal 1996.
Cash utilized for the payment of dividends in the most recent
quarter totaled $4,437,000 compared to $3,623,000 in the corresponding 1994
quarter. This increase was the result of cash dividends per share increasing
from $.12 per share to $.15 per share.
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, 1995.
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 9, 1995 BY:/S/John B. Gerlach
------------------------- ---------------------------
JOHN B. GERLACH
Chairman, Chief Executive
Officer and Principal
Financial Officer
Date: November 9, 1995 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, 1995 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-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 476
<SECURITIES> 0
<RECEIVABLES> 117,324
<ALLOWANCES> 2,462
<INVENTORY> 152,637
<CURRENT-ASSETS> 279,025
<PP&E> 291,856
<DEPRECIATION> 174,663
<TOTAL-ASSETS> 412,836
<CURRENT-LIABILITIES> 92,060
<BONDS> 31,565
<COMMON> 28,242
0
0
<OTHER-SE> 251,172
<TOTAL-LIABILITY-AND-EQUITY> 412,836
<SALES> 200,902
<TOTAL-REVENUES> 200,902
<CGS> 141,583
<TOTAL-COSTS> 141,583
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 716
<INCOME-PRETAX> 25,264
<INCOME-TAX> 9,856
<INCOME-CONTINUING> 15,408
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,408
<EPS-PRIMARY> .52
<EPS-DILUTED> 0
</TABLE>
