PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)%3A) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%93%20March%2031%2C%202022%20and%20June%2030%2C%202021) Condensed Consolidated Balance Sheet Highlights (Amounts in thousands) | Item | March 31, 2022 | June 30, 2021 | Change | % Change | | :-------------------------- | :------------- | :------------ | :------- | :------- | | Cash and equivalents | $67,085 | $188,055 | $(120,970) | -64.3% | | Total current assets | $361,579 | $423,481 | $(61,902) | -14.6% | | Property, plant and equipment-net | $438,289 | $364,622 | $73,667 | 20.2% | | Total assets | $1,103,624 | $1,101,285 | $2,339 | 0.2% | | Total current liabilities | $179,477 | $173,923 | $5,554 | 3.2% | | Total shareholders' equity | $838,622 | $843,147 | $(4,525) | -0.5% | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%E2%80%93%20Three%20and%20Nine%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Income Highlights (Amounts in thousands, except per share data) | Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Change | % Change | | :---------------------------------- | :------------------------------ | :------------------------------ | :------- | :------- | | Net Sales | $403,494 | $357,249 | $46,245 | 12.9% | | Gross Profit | $68,332 | $90,550 | $(22,218) | -24.5% | | Operating (Loss) Income | $(7,617) | $37,388 | $(45,005) | -120.4% | | Net (Loss) Income | $(4,483) | $28,897 | $(33,380) | -115.5% | | Diluted Net (Loss) Income Per Common Share | $(0.17) | $1.05 | $(1.22) | -116.2% | | Item | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | Change | % Change | | :---------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Net Sales | $1,223,977 | $1,081,501 | $142,476 | 13.2% | | Gross Profit | $257,301 | $290,049 | $(32,748) | -11.3% | | Operating Income | $78,200 | $144,934 | $(66,734) | -46.0% | | Net Income | $60,542 | $110,606 | $(50,064) | -45.3% | | Diluted Net Income Per Common Share | $2.20 | $4.01 | $(1.81) | -45.1% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%E2%80%93%20Three%20and%20Nine%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Comprehensive Income Highlights (Amounts in thousands) | Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :------------------------ | :------------------------------ | :------------------------------ | | Net (Loss) Income | $(4,483) | $28,897 | | Other Comprehensive Income, Net of Tax | $43 | $94 | | Comprehensive (Loss) Income | $(4,440) | $28,991 | | Item | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :------------------------ | :----------------------------- | :----------------------------- | | Net Income | $60,542 | $110,606 | | Other Comprehensive Income, Net of Tax | $126 | $282 | | Comprehensive Income | $60,668 | $110,888 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Nine%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Item | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | Change | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Net cash provided by operating activities | $58,651 | $138,699 | $(80,048) | -57.7% | | Net cash used in investing activities | $(105,065) | $(56,162) | $(48,903) | 87.1% | | Net cash used in financing activities | $(74,556) | $(69,689) | $(4,867) | 7.0% | | Net change in cash and equivalents | $(120,970) | $12,848 | $(133,818) | -1041.6% | | Cash and equivalents at end of period | $67,085 | $211,121 | $(144,036) | -68.2% | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20%E2%80%93%20Nine%20Months%20Ended%20March%2031%2C%202022%20and%202021) Shareholders' Equity Changes (Nine Months Ended March 31, 2022, Amounts in thousands) | Item | Amount | | :-------------------------------- | :----- | | Balance, June 30, 2021 | $843,147 | | Net income | $60,542 | | Cash dividends - common stock | $(64,736) | | Purchase of treasury stock | $(7,485) | | Stock-based compensation expense | $7,384 | | Balance, March 31, 2022 | $838,622 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation and key accounting policies for the interim financial statements - The financial statements are prepared in accordance with **U.S. GAAP** for interim financial information and SEC Article 10 of Regulation S-X[24](index=24&type=chunk) Deferred Software Costs Capitalized (Nine Months Ended March 31, Amounts in thousands) | Year | Amount | | :--- | :----- | | 2022 | $1,600 | | 2021 | $3,200 | - An impairment charge of **$6.8 million** was recorded for property, plant and equipment related to the Bantam Bagels, LLC business[26](index=26&type=chunk) Net (Loss) Income Per Common Share (Diluted) | Period | 2022 | 2021 | | :-------------------------- | :----- | :----- | | Three Months Ended March 31 | $(0.17) | $1.05 | | Nine Months Ended March 31 | $2.20 | $4.01 | [Note 2 – Fair Value](index=12&type=section&id=Note%202%20%E2%80%93%20Fair%20Value) This note details the fair value hierarchy and the measurement of contingent consideration from the Bantam acquisition - Fair value is defined as the exit price, with a three-level hierarchy, and contingent consideration from the Bantam acquisition is measured at **Level 3**[34](index=34&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) Change in Bantam Contingent Consideration (Amounts in thousands) | Period | 2022 | 2021 | | :------------------------------------------------ | :----- | :----- | | Change in contingent consideration (3 months) | $(1,300) | $0 | | Change in contingent consideration (9 months) | $(3,470) | $(5,687) | | Contingent consideration at end of period (3 months) | $0 | $3,470 | | Contingent consideration at end of period (9 months) | $0 | $3,470 | - The **$1.3 million reduction** in Bantam's contingent consideration was due to lower projected sales for its Foodservice business[39](index=39&type=chunk) [Note 3 – Long-Term Debt](index=13&type=section&id=Note%203%20%E2%80%93%20Long-Term%20Debt) The company maintains a **$150 million** unsecured revolving credit facility expiring in March 2025 - The company has an unsecured credit facility allowing borrowings up to **$150 million**, expiring on March 19, 2025[44](index=44&type=chunk) - **No borrowings were outstanding** under the facility at March 31, 2022, or June 30, 2021[46](index=46&type=chunk) - The facility contains restrictive covenants, including an interest coverage ratio not less than **2.5 to 1** and a consolidated leverage ratio not greater than **3.5 to 1**[45](index=45&type=chunk) [Note 4 – Commitments and Contingencies](index=13&type=section&id=Note%204%20%E2%80%93%20Commitments%20and%20Contingencies) The company has routine legal matters and a significant capital commitment for a facility expansion - The company has a significant remaining commitment of approximately **$46 million** for a capacity expansion project in Horse Cave, Kentucky[48](index=48&type=chunk) - Various claims and litigation matters are **not expected to have a material effect** on the consolidated financial statements[47](index=47&type=chunk) [Note 5 – Goodwill and Other Intangible Assets](index=14&type=section&id=Note%205%20%E2%80%93%20Goodwill%20and%20Other%20Intangible%20Assets) This note details goodwill allocation and a **$12.3 million** impairment charge for Bantam's intangible assets Goodwill by Segment (Amounts in thousands) | Segment | March 31, 2022 | June 30, 2021 | | :-------- | :------------- | :------------ | | Retail | $157,400 | $157,400 | | Foodservice | $51,000 | $51,000 | - An impairment charge of **$12.3 million** was recorded to write off the net carrying value of Bantam's intangible assets[51](index=51&type=chunk) Total Net Carrying Value of Other Intangible Assets (Amounts in thousands) | Date | Amount | | :----------- | :----- | | March 31, 2022 | $41,969 | | June 30, 2021 | $58,766 | [Note 6 – Income Taxes](index=15&type=section&id=Note%206%20%E2%80%93%20Income%20Taxes) This note provides details on prepaid federal, state, and local income taxes included in Other Current Assets Prepaid Income Taxes (Amounts in thousands) | Type | March 31, 2022 | June 30, 2021 | | :-------------------- | :------------- | :------------ | | Prepaid federal income taxes | $6,500 | $5,100 | | Prepaid state and local income taxes | $1,700 | $1,100 | [Note 7 – Business Segment Information](index=15&type=section&id=Note%207%20%E2%80%93%20Business%20Segment%20Information) The company operates in two reportable segments, Retail and Foodservice, with both showing sales growth but declining operating income - The company's financial results are presented as two reportable segments: **Retail** and **Foodservice**[59](index=59&type=chunk) Segment Net Sales (Amounts in thousands) | Segment | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :---------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Retail | $213,128 | $198,358 | $682,102 | $614,653 | | Foodservice | $190,366 | $158,891 | $541,875 | $466,848 | | Total | $403,494 | $357,249 | $1,223,977 | $1,081,501 | Segment Operating Income (Amounts in thousands) | Segment | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :---------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Retail | $22,213 | $41,179 | $119,997 | $144,557 | | Foodservice | $18,556 | $21,088 | $52,690 | $66,845 | | Nonallocated Restructuring and Impairment Charges | $(22,723) | $0 | $(23,749) | $0 | | Corporate Expenses | $(25,663) | $(24,879) | $(70,738) | $(66,468) | | Total | $(7,617) | $37,388 | $78,200 | $144,934 | [Note 8 – Stock-Based Compensation](index=17&type=section&id=Note%208%20%E2%80%93%20Stock-Based%20Compensation) This note details stock-based compensation expenses and unrecognized costs for various equity awards Stock-Based Compensation Expense (Amounts in thousands) | Type | Three Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2022 | | :-------------------------- | :------------------------------ | :----------------------------- | | SSSARs compensation expense | $900 | $2,900 | | Restricted stock compensation expense | $1,300 | $3,700 | | Performance units compensation expense | $300 | $800 | - An initial grant of performance units was made in **August 2021**, with a vesting period of **3 years**[67](index=67&type=chunk) - At March 31, 2022, unrecognized compensation expense totaled **$3.9 million** for SSSARs, **$7.3 million** for restricted stock, and **$2.9 million** for performance units[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook [OVERVIEW](index=18&type=section&id=OVERVIEW) - Lancaster Colony Corporation manufactures and markets specialty food products, with **over 95% of products sold in the United States**[74](index=74&type=chunk)[76](index=76&type=chunk) - The company's growth strategy includes new products, distribution expansion, strategic licensing, and complementary acquisitions[76](index=76&type=chunk) - Significant investments include a capacity expansion in Kentucky and an ongoing ERP system replacement, **Project Ascent**[77](index=77&type=chunk) [RECENT EVENTS](index=19&type=section&id=RECENT%20EVENTS) - The company's two major priorities during the COVID-19 pandemic are **employee health and safety** and maintaining the food supply chain[80](index=80&type=chunk) - COVID-19 has shifted consumer demand towards **at-home food consumption**, impacting segment sales differently[82](index=82&type=chunk) - Operational results have been unfavorably impacted by **higher wage rates**, increased PPE costs, and lower efficiency due to COVID-19[82](index=82&type=chunk) [RESULTS OF CONSOLIDATED OPERATIONS](index=20&type=section&id=RESULTS%20OF%20CONSOLIDATED%20OPERATIONS) Consolidated Financial Performance (Amounts in thousands, except per share data) | Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Change | % Change | | :---------------------------------- | :------------------------------ | :------------------------------ | :------- | :------- | | Net Sales | $403,494 | $357,249 | $46,245 | 13% | | Gross Profit | $68,332 | $90,550 | $(22,218) | (25)% | | Operating (Loss) Income | $(7,617) | $37,388 | $(45,005) | (120)% | | Net (Loss) Income | $(4,483) | $28,897 | $(33,380) | (116)% | | Diluted Net (Loss) Income Per Common Share | $(0.17) | $1.05 | $(1.22) | (116)% | | Item | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | Change | % Change | | :---------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Net Sales | $1,223,977 | $1,081,501 | $142,476 | 13% | | Gross Profit | $257,301 | $290,049 | $(32,748) | (11)% | | Operating Income | $78,200 | $144,934 | $(66,734) | (46)% | | Net Income | $60,542 | $110,606 | $(50,064) | (45)% | | Diluted Net Income Per Common Share | $2.20 | $4.01 | $(1.81) | (45)% | - Consolidated gross profit decreased due to **unprecedented inflationary costs** for commodities, packaging, freight, and labor[88](index=88&type=chunk)[89](index=89&type=chunk) - Operating income for Q3 2022 was negatively impacted by **$22.7 million in restructuring and impairment charges**[96](index=96&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) [RESULTS OF OPERATIONS - SEGMENTS](index=23&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20SEGMENTS) [Retail Segment](index=23&type=section&id=Retail%20Segment) Retail sales grew due to pricing, but operating income declined significantly as cost inflation outpaced price increases Retail Segment Performance (Amounts in thousands) | Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Sales | $213,128 | $198,358 | $682,102 | $614,653 | | Operating Income | $22,213 | $41,179 | $119,997 | $144,557 | | Operating Margin | 10.4% | 20.8% | 17.6% | 23.5% | - Retail segment sales were driven by pricing actions and volume gains for **Chick-fil-A sauces** and **Sister Schubert's rolls**[106](index=106&type=chunk) - Retail operating income decreased due to **increased commodity, packaging, freight, and labor costs**, with pricing actions lagging cost inflation[106](index=106&type=chunk)[107](index=107&type=chunk) [Foodservice Segment](index=23&type=section&id=Foodservice%20Segment) Foodservice sales grew from pricing and demand, but operating income fell due to higher costs and supply chain challenges Foodservice Segment Performance (Amounts in thousands) | Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Sales | $190,366 | $158,891 | $541,875 | $466,848 | | Operating Income | $18,556 | $21,088 | $52,690 | $66,845 | | Operating Margin | 9.7% | 13.3% | 9.7% | 14.3% | - Foodservice net sales grew due to **inflationary pricing** and increased demand, despite a **2% decrease in sales volume** for the quarter[109](index=109&type=chunk) - Foodservice operating income decreased, reflecting **increased commodity, packaging, freight, and labor costs**[111](index=111&type=chunk)[112](index=112&type=chunk) [Corporate Expenses](index=24&type=section&id=Corporate%20Expenses) Corporate expenses increased due to higher investments in personnel and the company's ERP initiative, Project Ascent Corporate Expenses (Amounts in thousands) | Period | 2022 | 2021 | | :-------------------------- | :----- | :----- | | Three Months Ended March 31 | $25,663 | $24,879 | | Nine Months Ended March 31 | $70,738 | $66,468 | Project Ascent Expenses (Amounts in thousands) | Period | 2022 | 2021 | | :-------------------------- | :----- | :----- | | Three Months Ended March 31 | $10,300 | $10,800 | | Nine Months Ended March 31 | $28,300 | $27,600 | - The increase in corporate expenses reflects increased investments in **personnel** and higher expenditures for **Project Ascent**[113](index=113&type=chunk)[114](index=114&type=chunk) [LOOKING FORWARD](index=24&type=section&id=LOOKING%20FORWARD) - Net sales are expected to continue benefiting from **pricing actions** in both Retail and Foodservice segments[115](index=115&type=chunk) - The **inflationary environment** and broad-based supply chain challenges are anticipated to persist[115](index=115&type=chunk) - The impact of the **COVID-19 pandemic** on financial results remains difficult to forecast[116](index=116&type=chunk) [FINANCIAL CONDITION](index=24&type=section&id=FINANCIAL%20CONDITION) [Cash Flows](index=24&type=section&id=Cash%20Flows) Operating cash flow decreased significantly due to working capital changes and lower net income, while investing cash use increased Cash Flow Summary (Nine Months Ended March 31, Amounts in thousands) | Activity | 2022 | 2021 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $58,651 | $138,699 | $(80,048) | | Net cash used in investing activities | $(105,065) | $(56,162) | $(48,903) | | Net cash used in financing activities | $(74,556) | $(69,689) | $(4,867) | - The decrease in operating cash flow was primarily due to changes in **net working capital** and lower net income[117](index=117&type=chunk) - Increased cash used in investing activities reflects a higher level of payments for **property additions**, including capacity expansion projects[118](index=118&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company believes existing cash, operating cash flows, and its credit facility are sufficient to meet liquidity needs - The company has an unsecured revolving credit facility of up to **$150 million**, with no outstanding borrowings[120](index=120&type=chunk) - The company was **in compliance with all applicable financial covenants** of its credit facility at March 31, 2022[121](index=121&type=chunk) - Liquidity is expected to be adequate for needs including projected capital expenditures of approximately **$150 million** for fiscal 2022[123](index=123&type=chunk)[124](index=124&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=25&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) - There have been **no changes** in critical accounting policies from those disclosed in the company's 2021 Annual Report on Form 10-K[127](index=127&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=25&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - There are **no recently issued or adopted accounting standards** that will impact the company's consolidated financial statements[128](index=128&type=chunk) [FORWARD-LOOKING STATEMENTS](index=25&type=section&id=FORWARD-LOOKING%20STATEMENTS) - Forward-looking statements are subject to risks including the **COVID-19 pandemic**, inflationary pressures, and supply chain disruptions[129](index=129&type=chunk)[130](index=130&type=chunk) - The company undertakes **no obligation to update** such forward-looking statements, except as required by law[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks have not materially changed from those disclosed in its 2021 Annual Report on Form 10-K - The company's market risks have **not changed materially** from those disclosed in its 2021 Annual Report on Form 10-K[130](index=130&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2022[131](index=131&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the most recent fiscal quarter[132](index=132&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company has no environmental matters to disclose in this Form 10-Q - Applying a **$1 million threshold**, there are no environmental matters to disclose in this Form 10-Q[134](index=134&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2021 Annual Report - There have been **no material changes** to the risk factors disclosed in the company's 2021 Annual Report on Form 10-K[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 13,386 shares in February 2022 under its authorized share repurchase program - As of March 31, 2022, **1,226,096 common shares remained authorized** for future repurchases[136](index=136&type=chunk) Common Stock Repurchases (February 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------ | :----------------------------- | :--------------------------- | | February 1-28, 2022 | 13,386 | $160.38 | [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section refers to the Index to Exhibits for a complete list of documents filed with the report - A complete list of exhibits is provided in the **Index to Exhibits**[137](index=137&type=chunk) [SIGNATURES](index=28&type=section&id=SIGNATURES) - The report was signed on **May 5, 2022**, by the CEO and CFO[141](index=141&type=chunk)[142](index=142&type=chunk) [INDEX TO EXHIBITS](index=29&type=section&id=INDEX%20TO%20EXHIBITS) - The index lists various exhibits, including **Sarbanes-Oxley certifications** and XBRL documents[144](index=144&type=chunk)

Financial Data and Key Metrics Changes - Consolidated net sales grew 14.2% to a record $428 million, with retail net sales up 10.1% and Foodservice net sales up 20.3% [5][17] - Consolidated gross profit decreased by $10.2 million to $96.6 million, with gross margins declining by 600 basis points due to high commodity inflation and increased supply chain costs [18][26] - Diluted earnings per share decreased $0.37 to $1.25, primarily driven by the decline in operating income [27] Business Line Data and Key Metrics Changes - Retail net sales growth of 10% was driven by pricing and volume growth, particularly from the licensing program and Sister Schubert's frozen dinner rolls [6][11] - Foodservice segment net sales growth of 20% was driven by inflationary pricing and volume growth with quick-service restaurant (QSR) customers [12][22] Market Data and Key Metrics Changes - Strong share gains for frozen breads, with Sister Schubert's dinner rolls up 150 basis points to 54.1% and New York Bakery garlic bread up 230 basis points to 42.5% [8] - The licensed sauce platform grew from $22 million in sales to $78 million, an increase of 250% [10] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain to reduce costs, and expand through focused M&A and strategic licensing [33] - Significant investments are being made in production capacity and infrastructure to support growth, including a major expansion at the Horse Cave facility [36][71] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing cost pressures from inflation, supply chain disruptions, and increased labor costs, but expressed confidence in the company's long-term positioning [34][38] - The company is implementing actions to improve margins and operational efficiency, including leveraging new warehouse locations and optimizing throughput [15][31] Other Important Information - The company plans to close its frozen garlic bread facility in Baldwin Park, California, due to low profitability, resulting in restructuring impairment charges [25] - The quarterly cash dividend was increased by 7% to $0.80 per share, maintaining a 59-year streak of annual dividend increases [29][30] Q&A Session Summary Question: Can you discuss the strength in Foodservice? - Management noted that the growth was driven by branded products and strong performance from QSR customers, particularly Chick-fil-A and Domino's [45] Question: How did Omicron impact margin pressures? - Management indicated that while Omicron did not significantly impact Q2 margins, there were increased costs related to labor and supply chain disruptions in January [46][53] Question: Can you elaborate on capacity expansion efforts? - The company is expanding its Horse Cave facility to increase production capacity, which is expected to be completed in the first half of fiscal 2023 [71] Question: What is the outlook for gross margins? - Management expects that pricing actions will help recover costs, and they anticipate that gross margins may stabilize as supply chain issues are addressed [75][76] Question: What are the implications of Project Ascent? - The implementation of Project Ascent is expected to enhance productivity and streamline operations, facilitating future acquisitions [78][80] Question: Can you provide details on the Chick-fil-A barbecue sauce? - The barbecue sauce is a significant category with a market size of approximately $500 million, and it is expected to contribute materially to the company's growth [85]

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 ...

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, 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 jur ...

Lancaster Colony Corporation (NASDAQ:LANC) Q4 2021 Earnings Conference Call August 26, 2021 10:00 AM ET Company Participants Dale Ganobsik - VP of IR Dave Ciesinski - President and CEO Tom Pigott - CFO Conference Call Participants Todd Brooks - CL King & Associates Greg Pendy - Sidoti Ryan Bell - Consumer Edge Research Operator Good morning. My name is Andrea, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation Fiscal Year 2021 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-K (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, 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) (State or other jurisdiction o ...

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, 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 jurisdi ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section covers the company's unaudited financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, comprehensive income statements, cash flow statements, and statements of shareholders' equity, along with detailed notes on accounting policies, fair value measurements, debt, commitments, intangible assets, income taxes, business segments, and stock-based compensation [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's unaudited condensed consolidated balance sheets for the specified periods **Condensed Consolidated Balance Sheet Highlights (Amounts in thousands):** | Item | December 31, 2020 | June 30, 2020 | | :-------------------------- | :------------------ | :------------ | | Cash and equivalents | $216,381 | $198,273 | | Total inventories | $109,047 | $85,048 | | Total current assets | $426,264 | $385,612 | | Property, plant and equipment-net | $314,630 | $293,288 | | Goodwill | $208,371 | $208,371 | | Total Assets | $1,054,310 | $993,353 | | Total current liabilities | $140,628 | $126,259 | | Total shareholders' equity | $826,360 | $783,300 | | Total Liabilities and Shareholders' Equity | $1,054,310 | $993,353 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the company's unaudited condensed consolidated statements of income for the specified periods **Condensed Consolidated Statements of Income Highlights (Amounts in thousands, except per share data):** | Item | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :---------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net Sales | $375,015 | $355,117 | $724,252 | $692,171 | | Gross Profit | $106,845 | $99,889 | $199,499 | $191,997 | | Operating Income | $58,598 | $54,078 | $107,546 | $105,782 | | Net Income | $44,630 | $43,424 | $81,709 | $84,169 | | Basic Net Income Per Common Share | $1.62 | $1.58 | $2.97 | $3.06 | | Diluted Net Income Per Common Share | $1.62 | $1.58 | $2.96 | $3.06 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's unaudited condensed consolidated statements of comprehensive income for the specified periods **Condensed Consolidated Statements of Comprehensive Income Highlights (Amounts in thousands):** | Item | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :----------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net Income | $44,630 | $43,424 | $81,709 | $84,169 | | Other Comprehensive Income, Net of Tax | $94 | $69 | $188 | $139 | | Comprehensive Income | $44,724 | $43,493 | $81,897 | $84,308 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's unaudited condensed consolidated statements of cash flows for the specified periods **Condensed Consolidated Statements of Cash Flows Highlights (Amounts in thousands):** | Item | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :---------------------------------- | :---------------------------- | :---------------------------- | | Net cash provided by operating activities | $90,856 | $105,379 | | Net cash used in investing activities | $(29,918) | $(57,922) | | Net cash used in financing activities | $(42,830) | $(41,519) | | Net change in cash and equivalents | $18,108 | $5,938 | | Cash and equivalents at end of period | $216,381 | $202,226 | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section presents the company's unaudited condensed consolidated statements of shareholders' equity for the specified periods **Condensed Consolidated Statements of Shareholders' Equity Highlights (Amounts in thousands):** | Item | December 31, 2020 | December 31, 2019 | | :-------------------------- | :------------------ | :------------------ | | Balance, June 30 | $783,300 | $726,873 | | Net income (6 months) | $81,709 | $84,169 | | Cash dividends - common stock (6 months) | $(39,925) | $(37,114) | | Purchase of treasury stock (6 months) | $(19) | $(1,472) | | Balance, December 31 | $826,360 | $772,758 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies and specific financial statement line items [Note 1 – Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and policies applied in preparing financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** for interim financial information and **SEC Article 10 of Regulation S-X**[24](index=24&type=chunk) - The company capitalized **$2.8 million** of deferred software costs related to cloud computing arrangements for the six months ended December 31, 2020[25](index=25&type=chunk) - Earnings per share (EPS) is computed using the **two-class method**, including unvested restricted stock as participating securities[29](index=29&type=chunk) - There were no changes to significant accounting policies from those disclosed in the **2020 Annual Report on Form 10-K**[32](index=32&type=chunk) - The company adopted new guidance on fair value measurement disclosures on July 1, 2020, with **no impact** on financial position or results of operations[34](index=34&type=chunk) [Note 2 – Fair Value](index=12&type=section&id=Note%202%20%E2%80%93%20Fair%20Value) This note details the company's fair value measurements and related hierarchy for financial instruments - Fair value measurements are categorized into a **three-level hierarchy**: Level 1 (quoted market prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[36](index=36&type=chunk)[37](index=37&type=chunk) **Contingent Consideration Fair Value (Amounts in thousands):** | Item | December 31, 2020 | June 30, 2020 | | :-------------------------- | :------------------ | :------------ | | Contingent consideration - Bantam | $3,470 | $9,157 | | Contingent consideration - Angelic | $0 | $0 | | Total contingent consideration | $3,470 | $9,157 | - A **$5.7 million reduction** in the fair value of Bantam's contingent consideration was recorded for the six months ended December 31, 2020, due to changes in forecasted adjusted EBITDA reflecting a SKU rationalization by a Foodservice customer[40](index=40&type=chunk)[41](index=41&type=chunk) - No liability was recorded for Angelic's contingent consideration at December 31, 2020, or June 30, 2020, based on current projections[42](index=42&type=chunk) [Note 3 – Long-Term Debt](index=13&type=section&id=Note%203%20%E2%80%93%20Long-Term%20Debt) This note describes the company's long-term debt arrangements, including credit facilities and covenants - The company has an unsecured credit facility of up to **$150 million**, with potential to expand to **$225 million**, expiring on March 19, 2025[43](index=43&type=chunk) - There were **no borrowings outstanding** under the facility at December 31, 2020, or June 30, 2020[45](index=45&type=chunk) - Standby letters of credit outstanding totaled **$2.8 million** at December 31,

PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended September 30, 2020, and 2019, detailing financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$1.024 billion** from **$993.4 million** as of September 30, 2020, driven by higher inventories and property, plant, and equipment | (Amounts in thousands) | September 30, 2020 | June 30, 2020 | | :--- | :--- | :--- | | **Total current assets** | $408,407 | $385,612 | | **Property, plant and equipment-net** | $299,477 | $293,288 | | **Total Assets** | **$1,024,368** | **$993,353** | | **Total current liabilities** | $139,819 | $126,259 | | **Total shareholders' equity** | $801,106 | $783,300 | | **Total Liabilities and Shareholders' Equity** | **$1,024,368** | **$993,353** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased to **$349.2 million** for the three months ended September 30, 2020, but operating income and net income declined, resulting in lower diluted EPS | (Amounts in thousands, except per share data) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net Sales** | $349,237 | $337,054 | | **Gross Profit** | $92,654 | $92,108 | | **Operating Income** | $48,948 | $51,704 | | **Net Income** | $37,079 | $40,745 | | **Basic and diluted EPS** | $1.35 | $1.48 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the quarter ended September 30, 2020, decreased to **$37.2 million** from **$40.8 million** in the prior year, primarily due to lower net income | (Amounts in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net Income** | $37,079 | $40,745 | | **Other Comprehensive Income, Net of Tax** | $94 | $70 | | **Comprehensive Income** | **$37,173** | **$40,815** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$23.6 million** for the three months ended September 30, 2020, primarily due to increased inventories, with shifts in investing and financing activities | (Amounts in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $23,643 | $40,095 | | **Net cash used in investing activities** | ($14,548) | ($43,345) | | **Net cash used in financing activities** | ($21,280) | ($19,577) | | **Net change in cash and equivalents** | ($12,185) | ($22,827) | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity increased to **$801.1 million** as of September 30, 2020, driven by **$37.1 million** in net income, partially offset by **$19.3 million** in cash dividends - For the three months ended September 30, 2020, shareholders' equity increased by **$17.8 million**, reflecting **$37.1 million** in net income less **$19.3 million** in cash dividends (**$0.70 per share**)[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, fair value measurements, and segment performance, highlighting a **$5.7 million** reduction in contingent consideration and a **$1.2 million** impairment charge, alongside COVID-19 impacts on Retail and Foodservice - A **$5.7 million** reduction in the fair value of Bantam's contingent consideration was recorded, reflecting the impact of a SKU rationalization by a Foodservice customer[37](index=37&type=chunk) - Impairment charges of **$1.2 million** were recorded related to certain tradename and technology/know-how intangible assets for Bantam due to the loss of future sales to a Foodservice customer[47](index=47&type=chunk) | (Amounts in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Retail Net Sales** | $193,725 | $166,077 | | **Foodservice Net Sales** | $155,512 | $170,977 | | **Total Net Sales** | **$349,237** | **$337,054** | | **Retail Operating Income** | $42,658 | $39,016 | | **Foodservice Operating Income** | $27,421 | $26,975 | | **Total Operating Income** | **$48,948** | **$51,704** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Consolidated net sales grew **4%** to **$349.2 million**, driven by Retail segment growth offset by Foodservice decline, while operating income decreased **5%** to **$48.9 million** due to higher SG&A and manufacturing costs - Retail segment net sales increased **17%** to **$193.7 million**, driven by higher demand for at-home food consumption due to the COVID-19 outbreak[86](index=86&type=chunk) - Foodservice segment net sales decreased **9%** to **$155.5 million** as demand remained constrained by the impacts of COVID-19 on the restaurant industry[87](index=87&type=chunk) - SG&A expenses increased **22%** to **$48.2 million**, primarily due to a **$5.6 million** increase in expenditures for the Project Ascent ERP implementation, totaling **$8.3 million** for the quarter[75](index=75&type=chunk) - A favorable adjustment of **$5.7 million** related to Bantam's contingent consideration increased Foodservice operating income and diluted EPS by **$0.16** for the quarter[78](index=78&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) - The company expects capital expenditures for fiscal 2021 to be between **$70 million** and **$90 million**[97](index=97&type=chunk) [Item 3. 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 2020 Annual Report on Form 10-K - There have been no material changes to market risks since the 2020 Annual Report on Form 10-K[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2020, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[104](index=104&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[105](index=105&type=chunk) PART II – OTHER INFORMATION [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its 2020 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2020 Annual Report on Form 10-K[107](index=107&type=chunk) [Item 2. 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 **86** shares at an average price of **$171.22** per share, primarily for tax withholding, with **1,315,825** shares remaining authorized for future repurchase as of September 30, 2020 | Period | Total Number of Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | July 1-31, 2020 | — | $ — | | August 1-31, 2020 | 42 | $168.66 | | September 1-30, 2020 | 44 | $173.66 | | **Total** | **86** | **$171.22** | - As of September 30, 2020, **1,315,825** common shares remained authorized for future repurchases under the company's share repurchase authorization[108](index=108&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under the Sarbanes-Oxley Act and XBRL data files - The exhibits filed with this report include certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002, along with Inline XBRL documents[116](index=116&type=chunk)