US: Speciality food boosts Lancaster Colony Q1
- Net profit up 25.3%
- Operating profit grows 25%
- Net sales climbs 5.6%
Sales were boosted by revenues from the firm's speciality foods division
US food manufacturer Lancaster Colony has recorded an increase in first-quarter profits on the back of higher prices and lower input costs within its speciality food unit.
In the three months to the end of September, net income climbed 25.3% to US$26.7m, the company reported yesterday (25 October). Operating profit amounted to $40.6m, a 25% increase on the prior year period.
Sales were up 6% to $291m from last year. Turnover was boosted by revenues from the firm's speciality foods division, which recorded an increase of 5% to $249m. This reflected increases in both retail and foodservice sales.
Looking toward the second quarter, chairman and CEO John Gerlach said the company is "mindful that the general economic uncertainties facing both customers and consumers may challenge volumes".
COLUMBUS, Ohio, Oct. 25, 2012 /PRNewswire/ -- Lancaster Colony Corporation (LANC) today reported results for its fiscal 2013 first quarter that ended September 30, 2012:
Net sales reached $291 million, up six percent from first quarter sales of $275 million last year.
Specialty Foods net sales of $249 million were up five percent above the year-ago level, reflecting increases in both retail and foodservice sales.
Glassware and Candles sales increased 12 percent from the year-ago quarter to $42 million, reflecting volume growth.
Net income of $26,662,000, or $.98 per diluted share, increased from the prior-year's $21,258,000, or $.78 per diluted share. Generally improved volumes, combined with higher pricing and lower material costs in the Specialty Foods segment, led to this improvement.
Cash dividends were continued at the higher rate set in November 2011. The company's debt-free balance sheet showed $193 million in cash and equivalents at September 30, 2012.
Chairman and CEO John B. Gerlach, Jr. said, "We were pleased that our start to fiscal 2013 demonstrated strength at both the top and bottom lines."
Specialty Foods sales benefitted from higher pricing and volume improvements in both foodservice and branded retail lines. Pricing contributed nearly a third of the segment's sales growth. Retail sales also continued to benefit from recent product introductions and a lower level of coupon redemption costs. Specialty Foods operating income of $42.8 million improved over 21 percent. The combination of modestly lower material costs, higher pricing and growth in sales volumes helped operating margins expand to 17.2 percent. The favorable change in material costs totaled less than one percent of segment net sales.
First quarter candle sales reflected higher sales of seasonal products. Segment operating income improved by approximately $0.9 million. The benefits from a growth in sales, higher production levels and modestly favorable input costs were only partially offset by a less favorable product mix.
Mr. Gerlach said, "As we enter our seasonally stronger second fiscal quarter, we anticipate that we will see a continuation of several first quarter trends. However, we remain mindful that the general economic uncertainties facing both customers and consumers may challenge volumes."
"Looking into the back half of the fiscal year," Mr. Gerlach said, "we expect that material cost comparisons within our Specialty Foods segment may turn unfavorable, especially given the drought-driven pressures on a broad variety of food input costs. Regardless, we believe the ongoing strength of our market positions and debt-free balance sheet continues to leave us well-positioned to support our future growth."
Conference Call on the Web
The company's first quarter conference call is scheduled for this morning, October 25, 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.
Original source: Lancaster Colony
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