Lancaster Colony: improved 2Q 2008 sales and earnings

Lancaster Colony Corporation on 29 January 2009 reported higher sales, operating income and net income for the company“s second fiscal quarter ended 31 December 2008 compared with the corresponding q…

Lancaster Colony Corporation on 29 January 2009 reported higher sales, operating income and net income for the company“s second fiscal quarter ended 31 December 2008 compared with the corresponding quarter in 2007. Consolidated quarterly net sales increased 7% to USD 288 million versus USD 269 million in the 2Q 2007 while income from continuing operations totaled USD 28,452,000 compared with USD 15,274,000 for the year-ago quarter. The current year“s quarter included pretax income of approximately USD 8.7 million (USD 0.20 per share after tax) associated with a distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). In the previous year quarter, 2Q results from continuing operations included a pretax CDSOA distribution of approximately USD 2.5 million (USD 0.05 per share after taxes), as well as a USD 5.7 million pretax loss (USD 0.12 per share after taxes) on the sale of consumer and floral glass operations and a non-cash pension settlement charge to corporate expenses of USD 3.0 million. For the six months ended 31 December 2008, net sales were USD 552 million compared to USD 513 million for the first six months in the previous year. Net income was USD 39,472,000, or USD 1.40 per diluted share. Glassware and Candles sales declined 21% to USD 42.8 million, reflecting softer demand for candles and the mid-November 2007 divestiture of certain glassware operations. Sales of the sold operations totaled approximately USD 7.6 million in the prior-year period. The segment“s operating loss in the most recent quarter totaled USD 1.0 million, compared to a prior-year loss of USD 0.8 million, including a USD 5.7 million loss on the divestitures. Current year performance was adversely affected by higher material costs, lower sales volumes and reduced capacity utilization. John B. Gerlach, Jr., chairman and CEO, said, “We were pleased with the quarter“s consolidated results given the many economic challenges faced by our customers and consumers.” Looking ahead, Mr. Gerlach said, “Glassware and Candles operating performance is likely to remain challenged in the near-term … It remains unclear how the currently unsettled market conditions will impact sales across both segments”.