UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q Lancaster Colony Corporation (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) For the transition period from to For the quarterly period ended December 31, 2022 or Ohio 13-1955943 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of incorporation or orga ...

Lancaster Colony Corporation (NASDAQ:LANC) Q1 2023 Results Conference Call November 3, 2022 10:00 AM ET Company Participants Dale Ganobsik - Vice President, Investor Relations and Treasurer Dave Ciesinski - President, Chief Executive Officer Tom Pigott - Vice President, Chief Financial Officer Conference Call Participants Brian Holland - Cowen and Company Connor Rattigan - Consumer Edge Research Andrew Wolf - CL King Operator Good morning. My name is Rocco, and I will be your conference call facilitator tod ...

PART I – FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) These statements present the company's financial position, results of operations, and cash flows for the three months ended September 30, 2022, highlighting increased assets, sales, net income, and improved operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$1.131 billion** as of September 30, 2022, driven by higher inventories and property, plant, and equipment, with a corresponding rise in liabilities and shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | June 30, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $377,801 | $351,781 | | **Total Inventories** | $165,939 | $144,702 | | **Property, plant and equipment-net** | $468,086 | $451,368 | | **Total Assets** | **$1,131,233** | **$1,090,374** | | **Total Current Liabilities** | $190,915 | $165,585 | | **Total Shareholders' Equity** | $862,071 | $844,687 | | **Total Liabilities and Shareholders' Equity** | **$1,131,233** | **$1,090,374** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased **8.5%** to **$425.5 million** for the quarter, driving a **21.7%** rise in operating income and a **22.6%** increase in net income to **$37.6 million** Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2023 (ended Sep 30, 2022) | Q1 2022 (ended Sep 30, 2021) | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $425,537 | $392,056 | +8.5% | | **Gross Profit** | $99,055 | $92,367 | +7.2% | | **Operating Income** | $49,298 | $40,511 | +21.7% | | **Net Income** | $37,592 | $30,655 | +22.6% | | **Diluted EPS** | $1.36 | $1.11 | +22.5% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to **$50.9 million** for Q1 fiscal 2023, driven by higher net income and favorable working capital changes, while investing and financing cash uses decreased Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $50,864 | $(1,172) | | **Net cash used in investing activities** | $(23,481) | $(30,093) | | **Net cash used in financing activities** | $(23,447) | $(26,701) | | **Net change in cash and equivalents** | $3,936 | $(57,966) | - The **significant increase** in operating cash flow was driven by **higher net income** and **smaller negative impacts** from changes in inventories and receivables compared to the prior year[17](index=17&type=chunk)[79](index=79&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail financial statement presentation, segment performance, and accounting policies, highlighting **Foodservice sales growth** and a **$15 million** capital commitment for facility expansion - The company has a remaining commitment of approximately **$15 million** for a capacity expansion project at its dressing and sauce facility in Horse Cave, Kentucky[42](index=42&type=chunk) - Goodwill was stable at **$157.4 million** for the Retail segment and **$51.0 million** for the Foodservice segment as of September 30, 2022[43](index=43&type=chunk) Segment Net Sales (in thousands) | Segment | Q1 2023 (ended Sep 30, 2022) | Q1 2022 (ended Sep 30, 2021) | Change (%) | | :--- | :--- | :--- | :--- | | Retail | $223,216 | $223,889 | -0.3% | | Foodservice | $202,321 | $168,167 | +20.3% | | **Total** | **$425,537** | **$392,056** | **+8.5%** | Segment Operating Income (in thousands) | Segment | Q1 2023 (ended Sep 30, 2022) | Q1 2022 (ended Sep 30, 2021) | Change (%) | | :--- | :--- | :--- | :--- | | Retail | $42,900 | $48,178 | -11.0% | | Foodservice | $31,929 | $15,825 | +101.8% | | Corporate Expenses | $(25,531) | $(23,492) | +8.7% | | **Total** | **$49,298** | **$40,511** | **+21.7%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses record Q1 net sales driven by pricing actions offsetting cost inflation, strong Foodservice growth, improved operating income, and ongoing ERP and capacity expansion projects [Business Trends](index=16&type=section&id=Business%20Trends) The company continues to face **significant inflationary cost pressures** from commodities, packaging, freight, and labor, though demand volatility between Retail and Foodservice segments has subsided - The company experienced **unprecedented inflationary costs** for commodities (soybean oil, flour), packaging, freight, warehousing, and labor during fiscal 2022, which continued into Q1 2023[63](index=63&type=chunk) - **Demand volatility between Retail and Foodservice segments has subsided**, leading to a **more predictable and stable operating environment** compared to the prior two years[62](index=62&type=chunk) [Results of Consolidated Operations](index=16&type=section&id=Results%20of%20Consolidated%20Operations) Consolidated net sales increased **9%** to **$425.5 million**, despite a **10%** volume decline, with operating income surging **22%** due to effective pricing, improved efficiencies, and reduced SG&A Consolidated Operations Summary (in thousands) | Metric | Q1 2023 | Q1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $425,537 | $392,056 | 9% | | Gross Profit | $99,055 | $92,367 | 7% | | Operating Income | $49,298 | $40,511 | 22% | | Net Income | $37,592 | $30,655 | 23% | - Consolidated sales volumes, measured in pounds shipped, **decreased 10%** for the quarter[65](index=65&type=chunk) - SG&A expenses **decreased 4% to $49.8 million**, driven by lower consumer promotions, with Project Ascent (ERP initiative) expenses totaling **$9.2 million**[67](index=67&type=chunk) [Results of Operations - Segments](index=18&type=section&id=Results%20of%20Operations%20-%20Segments) Foodservice segment sales grew **20%** with operating income surging **102%**, while Retail sales were flat and operating income declined **11%** due to volume and ERP impacts - Retail segment net sales declined slightly, unfavorably impacted by an estimated **$11 million** in advance ordering ahead of the ERP go-live and the exit from certain product lines[72](index=72&type=chunk) - Retail operating income **fell 11% to $42.9 million** due to lower sales and production volumes, which reduced overhead recovery[72](index=72&type=chunk) - Foodservice net sales **grew 20% to $202.3 million**, driven by inflationary pricing and volume gains from select quick-service restaurant customers[73](index=73&type=chunk) - Foodservice operating income **more than doubled to $31.9 million** as pricing actions effectively offset inflationary costs and benefited from a more favorable sales mix[74](index=74&type=chunk) [Looking Forward](index=18&type=section&id=Looking%20Forward) The company anticipates Q2 Retail sales to benefit from licensing but face demand elasticity, while Foodservice growth continues, with cost inflation offset by pricing and cost savings - In Q2, Retail sales volumes are expected to **benefit from the licensing program** but **face offsets from consumer demand elasticity and product rationalization**[76](index=76&type=chunk) - **Cost inflation will remain a headwind** in Q2, but **pricing actions and cost savings initiatives are expected to help offset it**[77](index=77&type=chunk) - The implementation of Project Ascent (ERP system) will **continue throughout fiscal 2023**, with **full deployment expected in fiscal 2024**[78](index=78&type=chunk) [Financial Condition](index=19&type=section&id=Financial%20Condition) The company maintains a strong financial condition with **$50.9 million** in operating cash flow, an undrawn **$150 million** credit facility, and projected **$90-110 million** in fiscal 2023 capital expenditures - The company has an unsecured revolving credit facility of up to **$150 million**, with **no borrowings outstanding** at September 30, 2022[82](index=82&type=chunk) - Capital expenditures for fiscal 2023 are expected to be **between $90 million and $110 million**[85](index=85&type=chunk) - A significant portion of 2023 capital spending, **approximately $50 million**, is for the capacity expansion at the Horse Cave, Kentucky facility, expected to be **completed in Q2 fiscal 2023**[85](index=85&type=chunk)[88](index=88&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports **no material changes** to its market risks compared to those disclosed in the 2022 Annual Report on Form 10-K - There have been **no material changes** to market risks from those disclosed in the 2022 Annual Report on Form 10-K[93](index=93&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were **effective** as of September 30, 2022, with ERP system implementation ongoing and **no material adverse effect** on internal controls - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of September 30, 2022[94](index=94&type=chunk) - During the quarter, the company **began implementing its new ERP system** (Project Ascent) and updated internal controls as necessary, with **no material effect** on internal control over financial reporting[95](index=95&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company reports **no material environmental legal proceedings** requiring disclosure for the period - Applying a disclosure threshold of **$1 million** for potential monetary sanctions in environmental proceedings, the company reports **no matters to disclose**[98](index=98&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) There have been **no material changes** to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - **No material changes** to the risk factors disclosed in the 2022 Annual Report on Form 10-K have occurred[99](index=99&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **533 common shares** at an average of **$149.58** for tax withholding, with **1,225,012 shares** remaining authorized for future repurchase - As of September 30, 2022, **1,225,012 common shares** remained authorized for future repurchase under a plan approved in November 2010[100](index=100&type=chunk) Share Repurchases in Q1 Fiscal 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2022 | 42 | $132.38 | | August 2022 | 412 | $147.46 | | September 2022 | 79 | $169.80 | | **Total** | **533** | **$149.58** | [Exhibits](index=22&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed with the Form 10-Q, including **CEO and CFO certifications** and XBRL data files - The report includes **required CEO and CFO certifications** under Sections 302 and 906 of the Sarbanes-Oxley Act[103](index=103&type=chunk)

Financial Performance & Growth - Lancaster Colony's FY22 net sales reached $1.7 billion, primarily in the U S [6] - The company has a history of increasing regular cash dividends for 59 consecutive years [6, 32] - From fiscal year 1972 through fiscal year 2022, the company achieved an 11% compound annual growth rate [17] - Retail sales accounted for 55% of total net sales, while foodservice sales made up 45% [8, 9] - Net sales increased by 14% from 2021 to 2022, reaching $1,676 390 thousand in 2022 [26, 34] - Diluted net income per common share decreased by 37% from $5 16 in 2021 to $3 25 in 2022 [34] Retail Segment & Licensing - Retail sales consist of 36% frozen breads, 23% refrigerated dressings, dips & other, and 41% shelf-stable dressings, sauces & croutons [8] - Sales of licensed dressings and sauces in the retail channel totaled $333 million for the 52-week period ended 6/26/2022, a 47% increase over the previous year [11] Market Share - Marzetti holds a 23 2% market share in refrigerated dressings with sales of $113 1 million [42, 43] - Marzetti dominates the dips market with an 80 1% share and sales of $135 3 million [42, 48] - New York Brand Bakery leads the frozen garlic bread market with a 41 5% share and sales of $283 9 million [42, 53] - Sister Schubert's holds a 53 0% market share in the frozen roll market with sales of $147 4 million [42, 58]

Financial Data and Key Metrics Changes - Consolidated net sales increased by 17.3% to $452 million, while consolidated gross profit improved by 1.8% to $98.4 million [6][9] - Gross profit margin declined by 330 basis points due to unprecedented inflation and increased supply chain costs [10][14] - Fourth quarter diluted earnings per share decreased by $0.09 to $1.06, impacted by restructuring and impairment charges [14] Business Line Data and Key Metrics Changes - Retail segment net sales grew by 8.8%, driven by pricing actions and advanced ordering by customers [6] - Food Service segment net sales grew over 28%, with pricing accounting for over 24% of the sales increase [7] - Retail sales volumes measured in pounds declined by 2%, compared to a solid volume growth of 9% in the previous year's Q4 [6] Market Data and Key Metrics Changes - Sister Schubert's dinner rolls gained 300 basis points in market share, reaching 54.2% in frozen rolls [6] - Marzetti refrigerated dressings posted a share gain of 140 basis points, growing to a category-leading 24.8% [6] Company Strategy and Development Direction - The company is focused on leveraging its new SAP S/4 HANA ERP system and the Horse Cave expansion as part of its strategic transition to Lancaster Colony 3.0 [20][22] - The strategy includes accelerating core business growth, simplifying the supply chain, and expanding through focused M&A and strategic licensing [22] - The company plans to continue addressing inflationary cost increases through revenue growth management and productivity initiatives [16][19] Management's Comments on Operating Environment and Future Outlook - Management expects continued industry-leading sales growth in fiscal year 2023, driven by pricing and new product launches [18] - The company anticipates another year of significant inflation and plans to implement further price increases to offset rising costs [19] - Management acknowledges potential headwinds from consumer demand elasticity and a slowing economy [18] Other Important Information - The company completed a successful ERP system cutover with no unplanned disruptions in operations [5] - Capital expenditures for fiscal year 2022 totaled $132 million, with a forecast of approximately $100 million for fiscal year 2023 [15] - The company remains debt-free with $60 million in cash on the balance sheet [15] Q&A Session Summary Question: Expectations for gross margin improvement in fiscal '23 - Management feels confident about topline growth but expects some margin dilution due to pricing adjustments [26][29] Question: Contribution of licensed sauces in the quarter - Chick-fil-A Sauce contributed approximately $34 million in retail scanner sales, while Olive Garden contributed about $36 million [34] Question: Pricing discussions with retailers - Recent price increases were fact-based and constructive discussions were held with retailers regarding input costs [44] Question: SKU rationalization plans - The company does not expect significant further SKU rationalization, having already reduced SKUs by about 25% [46] Question: Outlook on commodity inflation and hedging - Despite some moderation in soybean oil prices, the company expects overall commodity costs to increase due to basis costs and other factors [60][63] Question: Inorganic growth opportunities - Management sees potential for both organic growth through licensing and inorganic growth through acquisitions enabled by the new ERP system [66]

Table of Contents (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2022 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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-K (I.R.S. Employer Identification No.) (State or other jurisdiction of incorporation or organization) 380 Polaris Pa ...

Financial Data and Key Metrics Changes - Consolidated net sales grew 12.9% to a record $403 million, with Retail net sales up 7.4% and Foodservice net sales up 19.8% [5][21] - Consolidated gross profit decreased by $22.2 million to $68.3 million, with gross margins declining by 840 basis points due to significant inflationary impacts [22][34] - Third quarter diluted earnings per share decreased $1.22 to a loss of $0.17, driven by operating income decline and special charges related to Bantam Bagels [31][34] Business Line Data and Key Metrics Changes - Retail segment net sales growth was driven by pricing across the portfolio, with a 2% decline in retail sales volume compared to strong growth in the prior year [6][8] - Foodservice segment net sales growth of nearly 20% was influenced by inflationary pricing and increased demand, although total volume measured in pounds decreased by 2% [9][10] Market Data and Key Metrics Changes - Sister Schubert's dinner rolls gained 200 basis points in market share to 51.5%, while Marzetti brand refrigerated dressings increased by 90 basis points to 23.3% [7] - Licensed sauce platform sales at Retail more than tripled from $29 million to $89 million [8] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, reduce costs, and expand through focused M&A and strategic licensing [36][41] - Key initiatives include a sauce capacity expansion project and the opening of a new warehouse to improve operational efficiencies [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing inflationary pressures and supply chain challenges, indicating that pricing actions will continue to be a primary tool for managing costs [10][37] - The company expects to see continued sales gains in both Retail and Foodservice segments, despite anticipated headwinds from higher commodity and labor costs [37][41] Other Important Information - The company recorded a noncash restructuring and impairment charge of $22.7 million related to the Bantam Bagels business, which was not allocated to reportable segments [29] - Capital expenditures for the fiscal year are forecasted at approximately $150 million, including $90 million for the Horse Cave expansion project [32][34] Q&A Session Summary Question: Inflation outlook and repricing for fiscal 2023 - Management discussed the significant margin pressure due to rapid increases in freight and commodity costs, indicating that pricing actions will be necessary to manage these challenges [48][49] Question: Consumer elasticity and private label competition - Management noted that pricing actions have been accepted better than expected, with private label products also increasing in price, but consumers are still supporting branded products [58][59] Question: Volume trends in Foodservice and COVID impacts - Management explained that while transaction trends in Foodservice were affected by staffing challenges during the Omicron surge, overall sales continued to grow driven by pricing [63][64] Question: Opportunities in Retail business and licensing partnerships - Management highlighted upcoming product launches and expansions in licensing partnerships, particularly with Chick-fil-A and Buffalo Wild Wings, as key growth opportunities [68][70] Question: Margin outlook for Q4 and fiscal 2023 - Management indicated expectations for sequential improvement in margins for Q4, despite ongoing inflationary pressures [71]

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, 2022 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 ...

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, 2021 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 2022 Earnings Conference Call November 3, 2021 10:00 AM ET Company Participants Dale Ganobsik - VP of Investor Relations Dave Ciesinski - President and Chief Executive Officer Tom Pigott - Chief Financial Officer Conference Call Participants Ryan Bell - Consumer Edge Research Dale Ganobsik Hi, good morning, and sorry for the delay. Thank you, everyone, for joining us today for Lancaster Colony's Fiscal Year 2022 First Quarter Conference Call. Our discussion this ...