PART I – FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q3 2024 and 2023, detailing financial performance, position, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $1.172 billion as of March 31, 2024, primarily due to a rise in cash and equivalents, with shareholders' equity also growing | Balance Sheet Highlights (in thousands) | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $440,731 | $374,463 | | Cash and equivalents | $164,756 | $88,473 | | Property, plant and equipment-net | $483,662 | $482,206 | | **Total Assets** | **$1,172,012** | **$1,112,994** | | **Total Current Liabilities** | $189,786 | $168,752 | | **Total Shareholders' Equity** | **$912,852** | **$862,267** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales and net income increased for both the third quarter and nine-month period ended March 31, 2024, despite a restructuring and impairment charge | Income Statement (in thousands, except EPS) | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $471,446 | $464,935 | $1,418,934 | $1,367,866 | | **Gross Profit** | $104,494 | $94,237 | $334,684 | $295,394 | | **Operating Income** | $35,146 | $29,408 | $157,675 | $130,033 | | **Net Income** | $28,350 | $24,555 | $123,785 | $102,120 | | **Diluted EPS** | $1.03 | $0.89 | $4.50 | $3.71 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased for the nine months ended March 31, 2024, driven by higher net income, leading to a substantial increase in cash and equivalents | Cash Flow Summary (9 Months Ended, in thousands) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $217,454 | $184,151 | | **Net cash used in investing activities** | ($57,358) | ($78,921) | | **Net cash used in financing activities** | ($83,813) | ($82,652) | | **Net change in cash and equivalents** | $76,283 | $22,578 | | **Cash and equivalents at end of period** | $164,756 | $82,861 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting events, including restructuring charges for exiting bakery product lines, a new credit facility, and segment performance highlights - In Q3 2024, the company recorded a **$12.1 million** restructuring and impairment charge and a **$2.6 million** inventory write-down related to its decision to exit its perimeter-of-the-store bakery product lines (Flatout and Angelic Bakehouse)[25](index=25&type=chunk)[43](index=43&type=chunk)[72](index=72&type=chunk) - On March 6, 2024, the company entered into a new five-year, **$150 million** unsecured revolving credit facility, replacing the previous one. No borrowings were outstanding as of March 31, 2024[35](index=35&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) | Segment Performance (Q3 2024 vs Q3 2023, in thousands) | Net Sales | % Change | Operating Income | % Change | | :--- | :--- | :--- | :--- | :--- | | **Retail** | $248,054 | +0.3% | $47,313 | +28.1% | | **Foodservice** | $223,392 | +2.6% | $24,334 | +8.6% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses record Q3 net sales, improved profitability despite restructuring charges, and anticipates continued growth from expanding licensing programs [Results of Consolidated Operations](index=17&type=section&id=RESULTS%20OF%20CONSOLIDATED%20OPERATIONS) Consolidated net sales and gross profit increased in Q3 FY24, with operating income and diluted EPS rising despite significant restructuring and inventory write-down charges | Consolidated Operations (Q3 2024 vs Q3 2023) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $471.4M | $464.9M | +1.4% | | **Gross Profit** | $104.5M | $94.2M | +10.9% | | **Operating Income** | $35.1M | $29.4M | +19.5% | | **Diluted EPS** | $1.03 | $0.89 | +15.7% | - The **1.4%** increase in consolidated net sales was attributed to a **2.9%** volume/mix gain, partially offset by deflationary pricing in Foodservice and increased trade spending in Retail[65](index=65&type=chunk) - Costs related to exiting the perimeter-of-the-store bakery product lines reduced diluted EPS by a total of **$0.41** in Q3 2024[77](index=77&type=chunk) [Results of Operations - Segments](index=19&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20SEGMENTS) Both Retail and Foodservice segments reported net sales growth in Q3, with Retail operating income significantly increasing and Foodservice operating income also rising - Retail segment Q3 sales volume increased **1.5%**, driven by licensed sauces (Chick-fil-A, Subway, Texas Roadhouse) and Olive Garden dressings. Operating income grew **28.1%** due to favorable pricing net of commodity costs and cost savings programs[80](index=80&type=chunk) - Foodservice segment Q3 sales volume increased **3.9%**, driven by demand from national chain restaurant customers. Operating income grew **8.6%** due to favorable pricing net of commodity costs and higher volumes[82](index=82&type=chunk)[83](index=83&type=chunk) [Financial Condition and Liquidity](index=20&type=section&id=FINANCIAL%20CONDITION) Operating cash flow increased for the nine months ended March 31, 2024, and the company renewed its $150 million credit facility, ensuring sufficient liquidity for future needs - Net cash from operating activities for the nine months ended March 31, 2024, increased to **$217.5 million** from **$184.2 million** in the prior year, mainly due to higher net income[88](index=88&type=chunk) - The company renewed its **$150 million** unsecured revolving credit facility in March 2024, which expires in March 2029. The company was in compliance with all covenants as of March 31, 2024[91](index=91&type=chunk)[92](index=92&type=chunk) - Projected capital expenditures for fiscal 2024 are estimated to be **$65 million**[94](index=94&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risks since the 2023 Annual Report on Form 10-K - There have been no material changes to the company's market risks since the 2023 Annual Report on Form 10-K[100](index=100&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[101](index=101&type=chunk) - No changes were made to internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[102](index=102&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings, including environmental matters above a $1 million disclosure threshold - The company reports no environmental matters to disclose, using a materiality threshold of **$1 million** for proceedings involving a governmental authority[105](index=105&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the 2023 Annual Report on Form 10-K[106](index=106&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased common stock during the quarter, primarily for tax obligations, with a significant number of shares remaining authorized for future repurchase | Share Repurchases (Q3 2024) | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | **Total** | 4,664 | $199.18 | - As of March 31, 2024, **1,131,690** common shares remained authorized for future repurchase under the company's share repurchase authorization[107](index=107&type=chunk) [Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the new Credit Agreement, CEO/CFO certifications, and XBRL data files - Key exhibits filed include a new Credit Agreement, CEO and CFO certifications pursuant to the Sarbanes-Oxley Act, and Inline XBRL documents[110](index=110&type=chunk)

Summary FOR IMMEDIATE RELEASE SYMBOL: LANC May 2, 2024 TRADED: Nasdaq Exhibit 99.1 LANCASTER COLONY REPORTS THIRD QUARTER SALES AND EARNINGS WESTERVILLE, Ohio, May 2 - Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's fiscal third quarter ended March 31, 2024. CEO David A. Ciesinski commented, "We completed our fiscal third quarter with record net sales of $471.4 million. In the Retail segment, net sales increased 0.3% to $248.1 million driven by volume gains for our succe ...

Lancaster Colony Corporation (NASDAQ:LANC) Q2 2024 Earnings Conference Call February 1, 2024 10:00 AM ET Company Participants Dale Ganobsik - Vice President, Corporate Finance & Investor Relations Dave Ciesinski - President & Chief Executive Officer Tom Pigott - Chief Financial Officer Conference Call Participants Jim Salera - Stephens Alton Stump - Loop Capital Robert Dickerson - Jefferies Brian Holland - D.A. Davidson Andrew Wolf - CL King Todd Brooks - The Benchmark Company Operator Good morning. My na ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2023 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 000-04065 Lancaster Colony Corporation (Exact name of registrant as specified in its charter) Ohio 13-1955943 (State or other juri ...

Lancaster Colony Corporation (NASDAQ:LANC) Q1 2024 Earnings Conference Call November 2, 2023 10:00 AM ET Company Participants Dale Ganobsik - IR Dave Ciesinski - President and CEO Tom Pigott - CFO Conference Call Participants Jim Salera - Stephens Connor Rattigan - Consumer Edge Andrew Wolf - C.L. King Todd Brooks - The Benchmark Company Operator Good morning. My name is Lauren, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corpo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 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 000-04065 Lancaster Colony Corporation 380 Polaris Parkway Suite 400 Westerville Ohio 43082 (Address of principal executive offic ...

Lancaster Colony Corporation (NASDAQ:LANC) Q4 2023 Earnings Conference Call August 23, 2023 10:00 AM ET Corporate Participants Dale Ganobsik - Investor Relations Dave Ciesinski - President and Chief Executive Officer Tom Pigott - Chief Financial Officer Conference Call Participants Todd Brooks - The Benchmark Company Andrew Wolf - CL King Alton Stump - Loop Capital Connor Rattigan - Consumer Edge Operator Good morning. My name is Tanya, and I will be your conference call facilitator today. At this time, I w ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) Lancaster Colony Corporation manufactures and markets specialty food products across Retail and Foodservice segments, focusing on strategic growth through base business acceleration, supply chain simplification, and expansion via licensing and acquisitions - The company's strategic growth plan focuses on accelerating base business growth, simplifying the supply chain for cost reduction and margin growth, and expanding the core business through licensing and M&A[20](index=20&type=chunk) - The business operates in two reportable segments: **Retail (53% of FY2023 sales)** and **Foodservice (47% of FY2023 sales)**[19](index=19&type=chunk)[158](index=158&type=chunk) - As of June 30, 2023, the company employed **3,400 individuals**, with **23%** covered by collective bargaining agreements[35](index=35&type=chunk) Net Sales by Product Class (% of Total Net Sales) | Class of Products | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Retail Segment:** | | | | | Shelf-stable dressings, sauces and croutons | 23% | 22% | 21% | | Frozen breads | 19% | 20% | 21% | | Refrigerated dressings, dips and other | 11% | 13% | 15% | | **Foodservice Segment:** | | | | | Dressings and sauces | 35% | 34% | 32% | | Frozen breads and other | 12% | 11% | 11% | - Significant customer relationships include **Walmart (18% of consolidated net sales)**, **McLane (11%)**, and **Chick-fil-A (26%)**[29](index=29&type=chunk)[30](index=30&type=chunk) [Retail Segment](index=4&type=section&id=Retail%20Segment) The Retail segment manufactures and sells branded products, including frozen breads, dressings, and dips, primarily through U.S. grocery channels, with significant sales from licensed brands Key Retail Brands and Products | Products | Brand Names | | :--- | :--- | | **Frozen Breads** | | | Frozen garlic breads | New York BRAND Bakery | | Frozen Parkerhouse style yeast rolls and dinner rolls | Sister Schubert's | | **Refrigerated Dressings and Dips** | | | Salad dressings | Marzetti, Marzetti Simply | | Vegetable dips and fruit dips | Marzetti | | **Shelf-Stable Dressings and Croutons** | | | Salad dressings | Marzetti, Cardini's, Girard's | | Croutons and salad toppings | New York BRAND Bakery, Chatham Village, Marzetti | - The company manufactures and sells products under license agreements for brands including Chick-fil-A®, Olive Garden®, and Buffalo Wild Wings®[21](index=21&type=chunk) - The top five retail customers accounted for **59% of the segment's total net sales in FY2023**, an increase from **57% in FY2022** and **55% in FY2021**[22](index=22&type=chunk) [Foodservice Segment](index=5&type=section&id=Foodservice%20Segment) The Foodservice segment primarily sells custom-formulated private label products to restaurants, with growth driven by existing customer volume gains and new product development - The majority of Foodservice sales are private label products for restaurants, focusing on custom-formulated dressings, sauces, and frozen breads[25](index=25&type=chunk) - The top five Foodservice direct customers accounted for **58% of the segment's net sales** in both FY2023 and FY2022[26](index=26&type=chunk) [Human Capital](index=6&type=section&id=Human%20Capital) The company's human capital strategy prioritizes Health and Safety, Talent Acquisition, Total Rewards, Employee Engagement, DEI, and Community Engagement, showing progress in workforce diversity - The human capital strategy emphasizes Health and Safety, Talent Acquisition, Total Rewards, Employee Engagement, DEI, and Community Engagement[37](index=37&type=chunk) - In FY2023, the workforce comprised **36% female** and **44% minority races or ethnicities**[43](index=43&type=chunk) - From January 2020 to January 2023, the percentage of women at VP level and above increased by **58%**, and non-white representation for director and above positions nearly doubled[44](index=44&type=chunk) [Risk Factors](index=7&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including food safety, operational challenges from inflation and labor, brand reputation, customer concentration, cybersecurity, extensive regulation, and significant ownership influence [Risks Related to Health and Food Safety](index=8&type=section&id=RISKS%20RELATED%20TO%20HEALTH%20AND%20FOOD%20SAFETY) The company faces risks from real or perceived food safety issues, potentially leading to costly product recalls, legal claims, and damage to brand image and sales - The company may face business disruptions, product recalls, or claims for real or perceived safety issues, leading to significant financial loss and damaged customer sentiment[53](index=53&type=chunk) - Negative publicity concerning the food industry or the company's products can increase operational costs and reduce demand if consumer concerns are not adequately addressed[55](index=55&type=chunk)[56](index=56&type=chunk) [Risks Related to Our Operations](index=9&type=section&id=RISKS%20RELATED%20TO%20OUR%20OPERATIONS) Operational risks include increased costs and limited availability of raw materials, labor shortages, production disruptions, cybersecurity threats, manufacturing capacity constraints, and climate change impacts - The company faces risks from increased costs and limited availability of key raw materials like soybean oil, packaging, and flour due to inflation, geopolitical events, and climate change[58](index=58&type=chunk)[63](index=63&type=chunk) - Labor shortages, increased labor costs, and high turnover could adversely impact production, shipping, and overall financial results[67](index=67&type=chunk) - Cyber attacks, data breaches, or other information security system failures could cause operational disruptions, significant expenses, and reputational damage[74](index=74&type=chunk) - Manufacturing capacity constraints may lead to an inability to meet customer demand, potentially resulting in long-term loss of product placement[81](index=81&type=chunk)[82](index=82&type=chunk) [Risks Related to the Brands We Sell and Customer Demand for Our Products](index=13&type=section&id=RISKS%20RELATED%20TO%20THE%20BRANDS%20WE%20SELL%20AND%20CUSTOMER%20DEMAND%20FOR%20OUR%20PRODUCTS) The company's business is highly dependent on brand reputation, licensing agreements, and key customer relationships, with concentration risks from major partners like Walmart, Chick-fil-A, and McLane - The company's business could be harmed by the failure to maintain its brand reputation or renew key brand license agreements, such as those for Chick-fil-A®, Olive Garden®, and Buffalo Wild Wings® sauces[91](index=91&type=chunk)[95](index=95&type=chunk) - **Walmart** is the largest retail customer, accounting for **18% of consolidated net sales in FY2023**, and its loss would have a material adverse effect[100](index=100&type=chunk) - Sales to **Chick-fil-A** in the Foodservice segment represented **20% of consolidated net sales in FY2023**, and its loss would materially impact sales and profitability[101](index=101&type=chunk) - **McLane** is the largest Foodservice customer, accounting for **11% of consolidated net sales in FY2023**, serving as a distributor to national chain restaurants[103](index=103&type=chunk) [Risks Related to Regulatory and Legal Matters](index=16&type=section&id=RISKS%20RELATED%20TO%20REGULATORY%20AND%20LEGAL%20MATTERS) The company is subject to extensive federal, state, and local regulations, including food safety, environmental, and data privacy laws, with potential liabilities from a multiemployer pension plan - Operations are subject to stringent food production, packaging, quality, and labeling standards, and non-compliance with evolving privacy laws like CCPA could increase costs and liability[112](index=112&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company contributes to a multiemployer pension plan and could face increased contributions or withdrawal liability, materially affecting financial results[119](index=119&type=chunk) [Risks Related to Investments in Our Common Stock](index=17&type=section&id=RISKS%20RELATED%20TO%20INVESTMENTS%20IN%20OUR%20COMMON%20STOCK) Investment risks include the significant ownership interest of the Executive Chairman and family trusts, granting them substantial influence, alongside anti-takeover provisions that could deter acquisitions - As of June 30, 2023, Executive Chairman Mr. Gerlach and family trusts owned or controlled approximately **28% of the company's outstanding common stock**, granting them significant influence on shareholder votes[121](index=121&type=chunk) - Anti-takeover provisions in the company's charter and Ohio corporate law may hinder third-party acquisition, potentially affecting the stock price[123](index=123&type=chunk)[124](index=124&type=chunk) [Unresolved Staff Comments](index=17&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[127](index=127&type=chunk) [Properties](index=17&type=section&id=Item%202.%20Properties) The company utilizes **2.6 million square feet** of operational space, with **0.7 million leased**, operating principal manufacturing facilities across nine U.S. locations for both segments - The company uses **2.6 million square feet** of space for operations, with **0.7 million square feet** being leased[128](index=128&type=chunk) Principal Manufacturing Locations | Location | Principal Products Produced | Business Segment(s) | Terms of Occupancy | | :--- | :--- | :--- | :--- | | Altoona, IA | Frozen pasta | Retail and Foodservice | Owned | | Bedford Heights, OH | Frozen breads | Retail and Foodservice | Owned | | Columbus, OH | Sauces, dressings, dips | Retail and Foodservice | Owned | | Cudahy, WI | Sprouted grain bakery products | Retail | Owned | | Horse Cave, KY | Sauces, dressings, frozen rolls | Retail and Foodservice | Owned | | Luverne, AL | Frozen rolls | Retail and Foodservice | Owned | | Milpitas, CA | Sauces and dressings | Retail and Foodservice | Owned | | Saline, MI | Flatbread products | Retail and Foodservice | Owned | | Vineland, NJ | Frozen breads | Retail and Foodservice | Owned | | Wareham, MA | Croutons | Retail and Foodservice | Leased | [Legal Proceedings](index=17&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially affect financial statements, with no material environmental matters exceeding its $1 million disclosure threshold - The company is involved in routine legal proceedings but does not expect them to have a material effect on its financial statements[130](index=130&type=chunk) - There are no environmental matters to disclose that meet the company's reporting threshold of **$1 million**[131](index=131&type=chunk) [Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[132](index=132&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under LANC, with a **60-year history of increasing cash dividends** and an active share repurchase authorization - Common stock trades on the NASDAQ Global Select Market under the symbol **LANC**[134](index=134&type=chunk) - The company has increased its regular cash dividends for **60 consecutive years**[135](index=135&type=chunk) - As of June 30, 2023, **1,176,739 common shares** remained authorized for future repurchase under a plan approved in November 2010[136](index=136&type=chunk) [Reserved](index=20&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2023, net sales grew **9% to $1.82 billion** driven by pricing, with gross profit up **9%** and operating income up **26%**, while the company completed its ERP implementation and ended the year with **$88 million in cash** and no debt Fiscal 2023 Consolidated Financial Highlights | Metric | FY 2023 | FY 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,822.5M | $1,676.4M | 9% | | Gross Profit | $388.6M | $355.7M | 9% | | Operating Income | $141.5M | $111.9M | 26% | | Net Income | $111.3M | $89.6M | 24% | | Diluted EPS | $4.04 | $3.25 | 24% | - Consolidated net sales increased **9%** due to pricing actions, while consolidated sales volume decreased **5%**[157](index=157&type=chunk) - Project Ascent, the company's new ERP system, completed its implementation in August 2023 after a phased rollout during fiscal 2023 with no major disruptions[150](index=150&type=chunk) - The company ended FY2023 with **$88 million in cash and equivalents** and no debt[182](index=182&type=chunk) [Results of Consolidated Operations](index=23&type=section&id=Results%20of%20Consolidated%20Operations) In FY2023, consolidated net sales increased **9% to $1.82 billion**, gross profit rose **9% to $388.6 million**, and operating income grew **26% to $141.5 million**, despite increased SG&A and impairment charges - Gross profit increased **9% to $388.6 million** in FY2023, with the gross margin holding steady at **21.3%**, as pricing actions effectively offset significant inflationary costs[159](index=159&type=chunk) - SG&A expenses increased **5% to $222.1 million**, driven by investments in personnel, IT, and higher brokerage costs, partially offset by a **$9.5 million decrease** in Project Ascent expenses[160](index=160&type=chunk) - The company recorded **$25.0 million in impairment charges** in FY2023 related to the intangible assets of Flatout, Inc., reflected in the Retail segment[163](index=163&type=chunk) - The effective tax rate increased to **22.3% in FY2023** from **20.3% in FY2022**[170](index=170&type=chunk) [Segment Results](index=25&type=section&id=Segment%20Results) In FY2023, Retail segment net sales grew **5%** but operating income declined **8%** due to impairment charges, while Foodservice net sales increased **13%** and operating income surged **29%** due to pricing and stable operations Retail Segment Performance (FY2023 vs. FY2022) | Metric | FY 2023 | FY 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $965.4M | $915.2M | 5% | | Operating Income | $139.5M | $151.6M | (8)% | | Operating Margin | 14.4% | 16.6% | -220 bps | Foodservice Segment Performance (FY2023 vs. FY2022) | Metric | FY 2023 | FY 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $857.2M | $761.2M | 13% | | Operating Income | $106.3M | $82.7M | 29% | | Operating Margin | 12.4% | 10.9% | +150 bps | - Retail operating income was negatively impacted by **$25.0 million in impairment charges** for Flatout intangible assets in FY2023, compared to **$9.7 million in charges** in FY2022[175](index=175&type=chunk) [Financial Condition and Cash Flows](index=27&type=section&id=Financial%20Condition%20and%20Cash%20Flows) The company ended FY2023 with **$88 million in cash** and no debt, with cash from operations significantly increasing to **$225.9 million** due to favorable working capital changes - The company has a **$150 million unsecured revolving credit facility** expiring in March 2025, with no borrowings outstanding at June 30, 2023[183](index=183&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Provided By Operating Activities | $225,901 | $101,813 | | Used In Investing Activities | $(90,782) | $(132,240) | | Used In Financing Activities | $(106,929) | $(97,345) | - The **122% increase in cash from operations** was primarily due to favorable changes in working capital, particularly receivables and accrued liabilities[191](index=191&type=chunk) - Capital expenditures for FY2024 are projected to be between **$70 million and $80 million**[186](index=186&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk stems from fluctuating raw material prices, managed through forward purchasing and fixed-price contracts, with no significant interest rate exposure due to the absence of borrowings - The main market risk is from fluctuating prices of raw materials such as soybean oil and flour[207](index=207&type=chunk) - The company manages commodity price risk through a structured forward purchasing program and fixed-price arrangements, not through derivative instruments[207](index=207&type=chunk) [Financial Statements and Supplementary Data](index=30&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for FY2021-2023, including balance sheets, income statements, and cash flows, with an unqualified opinion from Deloitte & Touche LLP on both financial statements and internal controls - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the consolidated financial statements and the company's internal control over financial reporting as of June 30, 2023[210](index=210&type=chunk)[211](index=211&type=chunk) - The auditor identified the valuation of long-lived assets and other intangible assets as a critical audit matter due to significant management judgment in assessing impairment indicators[215](index=215&type=chunk)[216](index=216&type=chunk) [Consolidated Balance Sheets](index=33&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets were **$1.113 billion**, driven by higher cash and property, plant, and equipment, with total liabilities at **$250.7 million** and shareholders' equity at **$862.3 million** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and equivalents | $88,473 | $60,283 | | Total current assets | $374,463 | $351,781 | | Property, plant and equipment-net | $482,206 | $451,368 | | Goodwill | $208,371 | $208,371 | | **Total Assets** | **$1,112,994** | **$1,090,374** | | **Liabilities & Equity** | | | | Total current liabilities | $168,752 | $165,585 | | Total liabilities | $250,727 | $245,687 | | Total shareholders' equity | $862,267 | $844,687 | | **Total Liabilities & Equity** | **$1,112,994** | **$1,090,374** | [Note 6 – Goodwill and Other Intangible Assets](index=47&type=section&id=Note%206%20%E2%80%93%20Goodwill%20and%20Other%20Intangible%20Assets) As of June 30, 2023, goodwill remained stable at **$208.4 million**, while the net carrying value of other intangible assets significantly decreased to **$4.8 million** due to a **$25.0 million impairment charge** related to Flatout, Inc - In FY2023, the company recorded impairment charges of **$25.0 million** related to the intangible assets of Flatout, Inc. due to lowered expectations for sales and profitability[301](index=301&type=chunk) - In FY2022, the company recorded impairment charges of **$13.2 million** for Bantam's intangible assets and **$8.8 million** for Angelic's tradename intangible asset[303](index=303&type=chunk)[304](index=304&type=chunk) - Amortization expense for other intangible assets was **$2.5 million in FY2023**, down from **$4.4 million in FY2022**[306](index=306&type=chunk) [Note 10 – Stock-Based Compensation](index=53&type=section&id=Note%2010%20%E2%80%93%20Stock-Based%20Compensation) The company grants stock-based awards under its 2015 Omnibus Incentive Plan, with total compensation expense of **$9.1 million in FY2023**, shifting to performance units for long-term incentives based on shareholder return and revenue growth - Total stock-based compensation expense was **$9.1 million in FY2023**, **$9.6 million in FY2022**, and **$7.1 million in FY2021**[268](index=268&type=chunk)[233](index=233&type=chunk) - Beginning in FY2022, the company began granting performance units, which vest based on relative total shareholder return and revenue growth, as a primary long-term incentive vehicle instead of SSSARs[337](index=337&type=chunk) - At June 30, 2023, **$10.1 million of total unrecognized compensation expense** related to all stock-based awards is to be recognized over a weighted-average period of approximately **2 years**[332](index=332&type=chunk)[336](index=336&type=chunk)[341](index=341&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=60&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[361](index=361&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2023, with the SAP S/4HANA ERP system implementation having no material adverse effect - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[363](index=363&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2023, based on the COSO framework[365](index=365&type=chunk) - The phased implementation of the new SAP S/4HANA ERP system during fiscal 2023 did not have a material adverse effect on the company's internal control over financial reporting[367](index=367&type=chunk) [Other Information](index=62&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[376](index=376&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=62&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[377](index=377&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the November 2023 Annual Meeting of Shareholders proxy statement - Information is incorporated by reference from the company's 2023 Proxy Statement[378](index=378&type=chunk)[380](index=380&type=chunk) [Executive Compensation](index=62&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive officer and director compensation is incorporated by reference from the November 2023 Annual Meeting of Shareholders proxy statement - Information is incorporated by reference from the company's 2023 Proxy Statement[381](index=381&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=62&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners, management, and equity compensation plans is incorporated by reference from the November 2023 Annual Meeting of Shareholders proxy statement - Information is incorporated by reference from the company's 2023 Proxy Statement[382](index=382&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=62&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related transactions and director independence is incorporated by reference from the November 2023 Annual Meeting of Shareholders proxy statement - Information is incorporated by reference from the company's 2023 Proxy Statement[383](index=383&type=chunk) [Principal Accountant Fees and Services](index=62&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on fees paid to and services provided by the independent registered public accounting firm, including Audit Committee pre-approval policies, is incorporated by reference from the November 2023 Annual Meeting of Shareholders proxy statement - Information is incorporated by reference from the company's 2023 Proxy Statement[384](index=384&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=63&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K, including consolidated financial statements, governance documents, and required certifications - Lists the consolidated financial statements included in Item 8 and all exhibits filed with the report, such as the Credit Agreement, incentive plans, and CEO/CFO certifications[385](index=385&type=chunk)[388](index=388&type=chunk) [Form 10-K Summary](index=64&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[390](index=390&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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 000-04065 Lancaster Colony Corporation (Exact name of registrant as specified in its charter) Ohio 13-1955943 (State or other jurisdi ...

Lancaster Colony Corporation (NASDAQ:LANC) Q2 2023 Earnings Conference Call February 2, 2023 10:00 AM ET Company Participants Dale Ganobsik - Vice President, Investor Relations & Treasurer David Ciesinski - President & Chief Executive Officer Tom Pigott - Chief Financial Officer Conference Call Participants Andrew Wolf - CL King Brian Holland - Cowen Todd Brooks - The Benchmark Company Connor Rattigan - Consumer Edge Research Operator Good morning. My name is Anita, and I will be your conference call facili ...