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Lancaster Colony(LANC) - 2020 Q1 - Quarterly Report
2019-11-04 12:47
PART I – FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2020 show increased assets, equity, net sales, and net income, reflecting the adoption of new lease accounting guidance [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$962.3 million** and shareholders' equity to **$749.7 million** as of September 30, 2019, with new lease accounting impacting liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2019 | June 30, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and equivalents | $173,461 | $196,288 | | Total current assets | $368,651 | $368,569 | | Property, plant and equipment-net | $280,859 | $247,044 | | Operating lease right-of-use assets | $24,584 | $— | | **Total Assets** | **$962,341** | **$905,399** | | **Liabilities & Equity** | | | | Total current liabilities | $136,573 | $119,706 | | Noncurrent Operating Lease Liabilities | $19,638 | $— | | **Total Shareholders' Equity** | **$749,665** | **$726,873** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased **6.4%** to **$337.1 million**, driving gross profit up **13.4%** and net income rising **4.4%** to **$40.7 million** Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $337,054 | $316,654 | +6.4% | | Gross Profit | $92,108 | $81,199 | +13.4% | | Operating Income | $51,704 | $49,120 | +5.3% | | Net Income | $40,745 | $39,028 | +4.4% | | Diluted EPS | $1.48 | $1.42 | +4.2% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was **$40.1 million**, but investing activities used **$43.3 million**, primarily for property additions, leading to a net cash decrease Cash Flow Summary (in thousands) | Activity | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $40,095 | $40,860 | | Net cash used in investing activities | ($43,345) | ($9,811) | | Net cash used in financing activities | ($19,577) | ($18,866) | | **Net change in cash and equivalents** | **($22,827)** | **$12,183** | - The significant increase in cash used for investing activities was primarily due to payments for property additions, which rose to **$43.2 million** from **$9.7 million** year-over-year[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail new lease accounting adoption, recent acquisitions, contingent consideration valuation, and segment performance showing growth - The company adopted new lease guidance on July 1, 2019, recognizing a right-of-use asset of **$31.7 million** and a lease liability of **$33.5 million**, with no impact on operations or cash flows[29](index=29&type=chunk) - In fiscal 2019, the company acquired Omni Baking Company for **$22.3 million** and Bantam Bagels for a base price of **$33.1 million**, plus potential contingent consideration[30](index=30&type=chunk)[31](index=31&type=chunk) - Contingent consideration for the Bantam acquisition was valued at **$9.0 million** as of September 30, 2019, based on a Level 3 fair value measurement using a Monte Carlo simulation[36](index=36&type=chunk)[37](index=37&type=chunk) Segment Performance - Three Months Ended Sep 30 (in thousands) | Segment | Net Sales 2019 | Net Sales 2018 | Operating Income 2019 | Operating Income 2018 | | :--- | :--- | :--- | :--- | :--- | | Retail | $166,077 | $162,748 | $35,435 | $33,948 | | Foodservice | $170,977 | $153,906 | $23,789 | $18,861 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported record Q1 net sales of **$337.1 million**, up **6%**, with gross profit up **13%**, despite higher SG&A and restructuring charges [Results of Consolidated Operations](index=24&type=section&id=Results%20of%20Consolidated%20Operations) Consolidated net sales increased **6%** to **$337.1 million**, with gross profit up **13%**, but operating income growth was tempered by increased SG&A and restructuring Consolidated Operations Summary (in thousands) | Metric | Q1 2020 | Q1 2019 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $337,054 | $316,654 | $20,400 | 6% | | Gross Profit | $92,108 | $81,199 | $10,909 | 13% | | SG&A Expenses | $39,455 | $32,079 | $7,376 | 23% | | Operating Income | $51,704 | $49,120 | $2,584 | 5% | | Net Income | $40,745 | $39,028 | $1,717 | 4% | - Excluding sales from the Bantam and Omni acquisitions, consolidated net sales increased **3%** for the quarter[79](index=79&type=chunk) - SG&A expenses increased by **$7.4 million**, driven by a **$2.7 million** spend on the ERP initiative, increased consumer promotions, and incremental expenses from the Bantam acquisition[81](index=81&type=chunk)[82](index=82&type=chunk) - The company recorded **$0.9 million** in restructuring and impairment charges related to the closure of its frozen bread plant in Saraland, Alabama[84](index=84&type=chunk)[85](index=85&type=chunk) [Results of Operations - Segments](index=25&type=section&id=Results%20of%20Operations%20-%20Segments) Retail segment net sales grew **2%** and operating income **4%**, while Foodservice net sales surged **11%** and operating income **26%** - Retail segment net sales grew **2%**, or **1.5%** excluding the Bantam acquisition, driven by Marzetti® dressings and dips, frozen garlic bread, and licensed dressings[90](index=90&type=chunk) - Foodservice segment net sales grew **11%**, or **4%** excluding acquisitions, attributed to national chain restaurant accounts, branded products, and frozen pasta, with Omni acquisition contributing **$7.9 million**[92](index=92&type=chunk) - Foodservice operating income increased **26%**, benefiting from higher sales volumes and cost savings from the lean six sigma program[93](index=93&type=chunk) [Looking Forward](index=26&type=section&id=Looking%20Forward) The company anticipates a strong Q2 driven by holiday sales and product expansion, with elevated SG&A and moderately unfavorable commodity costs expected later - The second quarter is typically the strongest sales quarter due to the holiday season[95](index=95&type=chunk) - Anticipates continued sales growth for Bantam in both Retail and Foodservice segments, as retail distribution expands and foodservice trends with Starbucks® remain positive[95](index=95&type=chunk) - Commodity costs are expected to be similar to the prior year in Q2 but turn 'moderately unfavorable' in the second half of the fiscal year[95](index=95&type=chunk) [Financial Condition](index=26&type=section&id=Financial%20Condition) Operating cash flow was **$40.1 million**, with capital expenditures increasing to **$43.3 million** for capacity expansion, maintaining strong liquidity - Increased capital expenditures include spending on a capacity expansion project at the frozen dinner roll facility in Horse Cave, Kentucky, expected to be completed near the end of Q2[97](index=97&type=chunk) - The company expects capital expenditures for fiscal 2020 to total between **$80 million** and **$100 million**[102](index=102&type=chunk) - As of September 30, 2019, the company had no borrowings outstanding under its **$150 million** revolving credit facility and was in compliance with all covenants[99](index=99&type=chunk)[100](index=100&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to market risks from those disclosed in its 2019 Annual Report on Form 10-K - There were no material changes to market risks from the 2019 Annual Report on Form 10-K[107](index=107&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2019, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2019[108](index=108&type=chunk) - No material changes were made to internal control over financial reporting during the most recent fiscal quarter[109](index=109&type=chunk) PART II – OTHER INFORMATION [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its 2019 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the 2019 Annual Report on Form 10-K[112](index=112&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **10,279** common shares at **$142.49** per share, with **1,344,144** shares remaining authorized for future repurchase Common Stock Repurchases - Q1 2020 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 1-31, 2019 | 40 | $148.22 | | August 1-31, 2019 | 239 | $145.90 | | September 1-30, 2019 | 10,000 | $142.39 | | **Total** | **10,279** | **$142.49** | - As of September 30, 2019, **1,344,144** common shares remained authorized for future repurchase under the Board-approved plan[113](index=113&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section references the Index to Exhibits, listing certifications and XBRL data files submitted with the Form 10-Q
Lancaster Colony(LANC) - 2019 Q4 - Earnings Call Transcript
2019-08-27 17:50
Financial Data and Key Metrics Changes - Consolidated net sales increased by 5% to a record $323.7 million in Q4 2019 compared to $308.2 million last year, with a 1.3% increase excluding acquisitions [6] - Consolidated gross profit improved by $2 million to $78.2 million, but gross profit margin decreased by 50 basis points from 24.7% to 24.2% due to headwinds from recent acquisitions [10] - Net income for Q4 totaled $33 million, or $1.20 per diluted share, compared to $32.4 million, or $1.18 per diluted share last year [15] - For the full fiscal year, consolidated net income increased by 6.9% to a record $150.5 million, or $5.46 per diluted share [19] Business Line Data and Key Metrics Changes - Retail net sales declined by 1.4% to $154.5 million, with a 2.2% decline when excluding Bantam Bagels [7] - Foodservice net sales grew by 11.7% to $169.1 million, with a 4.8% increase in organic net sales [8] - Retail segment operating income increased by $2.4 million to $32.3 million, while foodservice segment operating income also increased by $2.4 million to $18.4 million [13][14] Market Data and Key Metrics Changes - Retail sales data indicated growth in four out of six categories, with share position increases in two categories [16] - The foodservice segment showed strong growth, particularly in national chain restaurant accounts and branded products [9] Company Strategy and Development Direction - The company completed two acquisitions in fiscal year 2019, which are expected to play a significant role in future growth [24][27] - The company is focused on improving operational efficiency through supply chain initiatives and automation projects [22] - The company plans to introduce new products in fiscal year 2020 to drive retail sales growth [44][46] Management's Comments on Operating Environment and Future Outlook - Management anticipates an uptick in commodity costs for fiscal year 2020, with pricing initiatives and cost-saving programs expected to offset these costs [48] - The company remains optimistic about the foodservice segment's performance despite potential economic challenges [75] Other Important Information - The company reported a 23% increase in operating cash flow to $198 million for fiscal year 2019 [35] - Capital expenditures for fiscal year 2020 are expected to remain elevated at $80 million to $100 million [40] Q&A Session Summary Question: Changes in retail sales and competition - Management noted that they gained share in two out of six categories, remained flat in three, and lost share in one category due to a retailer's merchandising decision [52] Question: Ongoing expenses related to Omni and Bantam Bagels - Management indicated that Bantam Bagels is expected to improve margins with a new automated line by the end of the calendar year, while Omni is incurring temporary overhead costs due to factory repairs [56][59] Question: Impact of commodity costs - Management highlighted broad-based commodity inflation concerns, estimating a 2-3% increase across various commodities [78]
Lancaster Colony(LANC) - 2019 Q4 - Annual Report
2019-08-27 11:57
PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Lancaster Colony Corporation manufactures and markets specialty food products across Retail and Foodservice segments, emphasizing brands, innovation, and acquisitions - Lancaster Colony Corporation manufactures and markets specialty food products for retail and foodservice channels, operating primarily in the United States[15](index=15&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - The company's financial results are presented in two reportable segments: Retail and Foodservice[19](index=19&type=chunk)[112](index=112&type=chunk) Net Sales by Segment (2017-2019) | Segment | 2019 (%) | 2018 (%) | 2017 (%) | | :--- | :--- | :--- | :--- | | Retail | 50% | 53% | 53% | | Foodservice | 50% | 47% | 47% | - Top five Retail customers accounted for **56% of segment net sales** in 2019, while top five Foodservice direct customers accounted for **59% of segment net sales** in 2019[22](index=22&type=chunk)[26](index=26&type=chunk) - Walmart Inc. accounted for **17% of consolidated net sales** for 2019, 2018, and 2017. McLane Company, Inc. accounted for **15% of consolidated net sales** in 2019 and 2018[30](index=30&type=chunk) - As of June 30, 2019, the majority of products were manufactured and packaged at **17 food plants** located throughout the United States[31](index=31&type=chunk) - As of June 30, 2019, the company had **3,200 employees**, with **27% represented under collective bargaining contracts**[35](index=35&type=chunk) [Item 1A. Risk Factors](index=7&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks from product safety, operational disruptions, market competition, customer concentration, cost volatility, and governance factors - Risks include product recalls, adverse publicity regarding food safety/quality, and potential business disruptions from real or perceived safety issues[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Production disruptions at single manufacturing sites or third-party manufacturers, as well as natural disasters or cyber attacks, could impact product availability and customer relationships[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The company operates in highly competitive markets, facing pressure on prices, and relies on brand recognition, product innovation, and marketing effectiveness[33](index=33&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Significant customer concentration risk exists with **Walmart (17% of consolidated net sales)** and **McLane (15% of consolidated net sales)**, and a single indirect national chain restaurant account (**14% of consolidated net sales**)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Reliance on brand value and license agreements (e.g., Olive Garden®, Buffalo Wild Wings®) poses risks if these relationships are not maintained or if negative online commentary affects brand image[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Increases in raw material (soybean oil, eggs, flour) and transportation costs, influenced by weather, disease, global demand, and fuel prices, could adversely affect profitability[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - The company is subject to federal, state, and local food safety and environmental regulations, with potential for material liabilities or increased compliance costs[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Risks include significant capital expenditures for aging infrastructure, manufacturing capacity constraints, and difficulties in implementing a new enterprise resource planning (ERP) system[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - Technology failures, cyber attacks, and data breaches could disrupt operations, lead to financial damage, and harm reputation[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - Challenges in successfully consummating or integrating acquisitions, or losses from divestitures, could adversely affect financial results[73](index=73&type=chunk)[74](index=74&type=chunk) - Inability to renegotiate collective bargaining contracts or prolonged work stoppages, as well as potential liabilities related to multiemployer pension plans, could negatively impact the business[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - The Executive Chairman, Mr. Gerlach, holds a **30% ownership interest**, giving him significant influence over shareholder votes and potentially discouraging change of control transactions[82](index=82&type=chunk)[83](index=83&type=chunk) - Anti-takeover provisions in charter documents and Ohio corporate law could make it more difficult for a third party to acquire the company, potentially affecting stock price[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Item 1B. Unresolved Staff Comments](index=13&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[87](index=87&type=chunk) [Item 2. Properties](index=14&type=section&id=Item%202.%20Properties) The company uses **2.2 million square feet** for operations, with **0.8 million square feet** leased, operating manufacturing plants and warehouses across the U.S - The company uses **2.2 million square feet** for operations, with **0.8 million square feet** leased[89](index=89&type=chunk) Principal Manufacturing Locations (as of June 30, 2019) | 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 | Leased | | Wareham, MA | Croutons | Retail and Foodservice | Leased | Principal Warehouses (as of June 30, 2019) | Location | Business Segment(s) | Terms of Occupancy | | :--- | :--- | :--- | | Altoona, IA | Retail and Foodservice | Leased | | Attalla, AL | Retail and Foodservice | Third-party service | | Columbus, OH | Retail and Foodservice | Leased | | Grove City, OH | Retail and Foodservice | Owned | | Horse Cave, KY | Retail and Foodservice | Owned | | Milpitas, CA | Retail and Foodservice | Leased | [Item 3. Legal Proceedings](index=14&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, but management believes their ultimate outcome will not materially affect consolidated financial statements, though unfavorable rulings could impact net income - The company is a party to various legal proceedings, but management believes the ultimate outcome will not have a material effect on consolidated financial statements[92](index=92&type=chunk) - Unfavorable rulings could include monetary damages or injunctions, potentially impacting net income[92](index=92&type=chunk) [Item 4. Mine Safety Disclosures](index=14&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company states that mine safety disclosures are not applicable to its operations - Mine Safety Disclosures are not applicable[93](index=93&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=15&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Common stock trades on NASDAQ, with a history of increasing dividends and ongoing share repurchases, detailed in a five-year shareholder return graph - Common stock trades on The NASDAQ Global Select Market under the symbol **LANC**[95](index=95&type=chunk) - The company has increased its regular cash dividends for **56 consecutive years**[96](index=96&type=chunk) Issuer Purchases of Equity Securities (Q4 2019) | Period | Total Number of Shares Purchased | Average Price Paid Per Share ($) | Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet be Purchased Under the Plans | | :--- | :--- | :--- | :--- | :--- | | April 1-30, 2019 | 927 | $155.25 | 927 | 1,369,473 | | May 1-31, 2019 | 15,050 | $148.52 | 15,050 | 1,354,423 | | June 1-30, 2019 | — | — | — | 1,354,423 | | Total | 15,977 | $148.91 | 15,977 | 1,354,423 | - As of June 30, 2019, **1,354,423 common shares** remained authorized for future repurchases under a November 2010 authorization[97](index=97&type=chunk) Five-Year Cumulative Total Shareholder Return (June 30, 2014 - June 30, 2019) | | 6/14 (%) | 6/15 (%) | 6/16 (%) | 6/17 (%) | 6/18 (%) | 6/19 (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lancaster Colony Corporation | 100.00 | 97.41 | 145.47 | 142.07 | 163.42 | 178.28 | | S&P Midcap 400 | 100.00 | 106.40 | 107.81 | 127.83 | 145.09 | 147.07 | | Dow Jones U.S. Food Producers | 100.00 | 111.61 | 132.65 | 127.30 | 124.72 | 129.37 | [Item 6. Selected Financial Data](index=17&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year financial summary for Lancaster Colony Corporation, highlighting key operational and financial position metrics from 2015 to 2019, including net sales, gross profit, net income, EPS, and total assets Five-Year Financial Summary (Years Ended June 30, 2015-2019) | (Thousands Except Per Share Figures) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | 2016 (in thousands) | 2015 (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Operations** | | | | | | | Net Sales | $1,307,787 | $1,222,925 | $1,201,842 | $1,191,109 | $1,104,514 | | Gross Profit | $326,198 | $303,506 | $318,780 | $299,633 | $257,667 | | Percent of Net Sales (%) | 24.9% | 24.8% | 26.5% | 25.2% | 23.3% | | Income Before Income Taxes | $195,542 | $174,203 | $175,516 | $184,633 | $154,552 | | Percent of Net Sales (%) | 15.0% | 14.2% | 14.6% | 15.5% | 14.0% | | Net Income | $150,549 | $135,314 | $115,314 | $121,764 | $101,686 | | Percent of Net Sales (%) | 11.5% | 11.1% | 9.6% | 10.2% | 9.2% | | Diluted Net Income Per Common Share ($) | $5.46 | $4.92 | $4.20 | $4.44 | $3.72 | | Cash Dividends Per Common Share - Regular ($) | $2.55 | $2.35 | $2.15 | $1.96 | $1.82 | | **Financial Position** | | | | | | | Total Assets | $905,399 | $804,491 | $716,405 | $634,732 | $702,156 | | Property, Plant and Equipment-Net | $247,044 | $190,813 | $180,671 | $169,595 | $172,311 | | Property Additions | $70,880 | $31,025 | $27,005 | $16,671 | $18,298 | | Shareholders' Equity | $726,873 | $652,282 | $575,977 | $513,598 | $580,918 | | Per Common Share ($) | $26.44 | $23.73 | $20.98 | $18.73 | $21.23 | | Weighted Average Common Shares Outstanding-Diluted | 27,537 | 27,459 | 27,440 | 27,373 | 27,327 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's Discussion and Analysis covers the company's business overview, consolidated and segment financial results, outlook, financial condition, and accounting policies [Overview](index=18&type=section&id=Overview) Lancaster Colony is a specialty food manufacturer aiming for growth through new products, expanded distribution, brand leverage, strategic licensing, and complementary acquisitions - The company's goal is to grow both Retail and Foodservice segment sales by introducing new products, expanding distribution, leveraging brand strength, strategic licensing, and acquiring complementary businesses[113](index=113&type=chunk) - Recent investments include a significant capacity expansion project for Sister Schubert's frozen dinner roll facility (expected completion mid-2020), a new R&D center (completed late 2019), and the establishment of a Transformation Program Office for capital and integration efforts, including an ERP system[113](index=113&type=chunk) - In November 2018, the company acquired Omni Baking Company LLC for **$22.3 million**. In October 2018, it acquired Bantam Bagels, LLC, for **$33.1 million**[114](index=114&type=chunk) [Results of Consolidated Operations](index=19&type=section&id=Results%20of%20Consolidated%20Operations) Consolidated net sales increased **7%** in 2019 to **$1,308 million**, driven by segment growth and acquisitions, with operating income benefiting from contingent consideration and lower taxes Consolidated Operations Summary (Years Ended June 30, 2017-2019) | (Dollars in thousands, except per share data) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | Change 2019 vs. 2018 | Change 2018 vs. 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,307,787 | $1,222,925 | $1,201,842 | $84,862 (7%) | $21,083 (2%) | | Cost of Sales | 981,589 | 919,419 | 883,062 | 62,170 (7%) | 36,357 (4%) | | Gross Profit | 326,198 | 303,506 | 318,780 | 22,692 (7%) | (15,274) (-5%) | | Gross Margin (%) | 24.9% | 24.8% | 26.5% | | | | Selling, General and Administrative Expenses | 149,811 | 129,906 | 125,635 | 19,905 (15%) | 4,271 (3%) | | Change in Contingent Consideration | (16,180) | 2,052 | 1,156 | (18,232) (N/M) | 896 (78%) | | Restructuring and Impairment Charges | 1,643 | — | — | 1,643 (N/M) | — (N/M) | | Operating Income | 190,924 | 171,548 | 174,354 | 19,376 (11%) | (2,806) (-2%) | | Operating Margin (%) | 14.6% | 14.0% | 14.5% | | | | Income Before Income Taxes | 195,542 | 174,203 | 175,516 | 21,339 (12%) | (1,313) (-1%) | | Taxes Based on Income | 44,993 | 38,889 | 60,202 | 6,104 (16%) | (21,313) (-35%) | | Effective Tax Rate (%) | 23.0% | 22.3% | 34.3% | | | | Net Income | $150,549 | $135,314 | $115,314 | $15,235 (11%) | $20,000 (17%) | | Diluted Net Income Per Common Share ($) | $5.46 | $4.92 | $4.20 | $0.54 (11%) | $0.72 (17%) | - Consolidated net sales increased **7%** to **$1,308 million** in 2019, driven by increases in both Retail and Foodservice net sales, with a **5%** increase excluding acquisitions[116](index=116&type=chunk) - Gross profit increased to **$326.2 million** in 2019, driven by increased Foodservice sales volumes, lean six sigma cost savings, and improved net price realization, partially offset by acquisition-related costs and higher warehousing costs[118](index=118&type=chunk) - SG&A expenses increased **15%** in 2019 due to investments in personnel, business initiatives (including ERP expenses), and the impact of two acquisitions[119](index=119&type=chunk)[120](index=120&type=chunk) - A net benefit of **$16.2 million** from the change in contingent consideration in 2019 primarily reflects a **$17.1 million** reduction in the fair value of Angelic's contingent consideration liability[121](index=121&type=chunk)[122](index=122&type=chunk) - Restructuring and impairment charges of **$1.6 million** were recorded in 2019 due to the closure of the Saraland, Alabama frozen bread manufacturing plant[123](index=123&type=chunk)[124](index=124&type=chunk) - Operating income increased **11%** in 2019, influenced by gross profit growth and the contingent consideration benefit, offset by higher SG&A and restructuring charges[125](index=125&type=chunk) - The effective tax rate was **23.0%** in 2019, favorably impacted by the Tax Cuts and Jobs Act of 2017, which reduced the statutory federal income tax rate to **21%**[126](index=126&type=chunk) - Diluted net income per share increased to **$5.46** in 2019 from **$4.92** in 2018, primarily due to the Angelic contingent consideration benefit and the Tax Act's impact in the prior year[129](index=129&type=chunk)[130](index=130&type=chunk) [Results of Operations - Segments](index=22&type=section&id=Results%20of%20Operations%20-%20Segments) Retail segment net sales increased **1%** while Foodservice net sales rose **14%**, with both segments' operating income influenced by acquisitions, cost savings, and pricing Retail Segment Performance (Years Ended June 30, 2017-2019) | (Dollars in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | Change 2019 vs. 2018 | Change 2018 vs. 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $656,621 | $650,234 | $641,417 | $6,387 (1%) | $8,817 (1%) | | Operating Income | $135,093 | $126,400 | $138,489 | $8,693 (7%) | $(12,089) (-9%) | | Operating Margin (%) | 20.6% | 19.4% | 21.6% | | | - Retail net sales increased **1%** in 2019, with a **0.5%** improvement excluding Bantam sales, driven by volume gains in licensed shelf-stable dressings/sauces, improved net price realization, and lower coupon expense, offset by flatbread volume declines and exiting low-margin private-label business[131](index=131&type=chunk) - Retail segment operating income was favorably impacted by a **$17.1 million** reduction in Angelic's contingent consideration liability. Excluding this, operating income declined due to Omni operations costs, Retail leadership team investments, and Bantam distribution expansion spending[132](index=132&type=chunk) Foodservice Segment Performance (Years Ended June 30, 2017-2019) | (Dollars in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | Change 2019 vs. 2018 | Change 2018 vs. 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $651,166 | $572,691 | $560,425 | $78,475 (14%) | $12,266 (2%) | | Operating Income | $73,828 | $58,440 | $66,234 | $15,388 (26%) | $(7,794) (-12%) | | Operating Margin (%) | 11.3% | 10.2% | 11.8% | | | - Foodservice net sales increased **14%** in 2019, with **9%** growth excluding Bantam and Omni acquisitions, driven by national chain restaurant accounts, branded products, and frozen pasta[133](index=133&type=chunk) - Foodservice operating income and margins increased due to higher sales volumes, cost savings from the lean six sigma program, and inflationary pricing, partially offset by higher packaging and warehousing costs[134](index=134&type=chunk) - Corporate expenses increased to **$16.4 million** in 2019 from **$13.3 million** in 2018, driven by ERP expenses, professional fees, and increased personnel investments[135](index=135&type=chunk) [Looking Forward](index=22&type=section&id=Looking%20Forward) The company anticipates sales growth from acquisitions and new products, with incremental costs for operational improvements and ERP, and projected capital expenditures of **$80-100 million** - For 2020, Retail segment sales are expected to benefit from incremental Bantam sales, continued growth from licensed shelf-stable dressings and sauces, and new product introductions[136](index=136&type=chunk) - Foodservice segment anticipates continued volume growth from national chain restaurant accounts, branded products, and sales from Omni and Bantam acquisitions[136](index=136&type=chunk) - Incremental costs are expected for Omni operational improvements and facility upgrades, and SG&A expenses will reflect increased investments in strategic initiatives, including ERP[136](index=136&type=chunk) - An uptick in commodity costs is anticipated for 2020, which will be offset by pricing initiatives, lean six sigma savings, and other cost-out projects[139](index=139&type=chunk) - Capital expenditures for 2020 are projected to be between **$80 million and $100 million**, including **$33 million** for a capacity expansion project at the Horse Cave, Kentucky frozen dinner roll facility[147](index=147&type=chunk) [Financial Condition](index=23&type=section&id=Financial%20Condition) The company maintained strong financial strength with **$196 million** in cash and no debt, with operating cash flow increasing **23%** to **$197.6 million**, funding investing and financing activities - As of June 30, 2019, the company had **$196 million** in cash and equivalents, **$727 million** in shareholders' equity, and no debt[143](index=143&type=chunk) - The company has an unsecured revolving credit facility of up to **$150 million**, with no outstanding borrowings at June 30, 2019, and was in compliance with all covenants[144](index=144&type=chunk)[145](index=145&type=chunk) Cash Flows Summary (Years Ended June 30, 2017-2019) | (Dollars in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | Change 2019 vs. 2018 | Change 2018 vs. 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Provided By Operating Activities | $197,598 | $160,714 | $146,385 | $36,884 (23%) | $14,329 (10%) | | Used In Investing Activities | $(126,861) | $(31,452) | $(60,608) | $(95,409) (N/M) | $29,156 (48%) | | Used In Financing Activities | $(80,201) | $(66,614) | $(60,753) | $(13,587) (-20%) | $(5,861) (-10%) | - Cash provided by operating activities increased **23%** to **$197.6 million** in 2019, driven by higher net income, deferred income tax benefits, and changes in net working capital[149](index=149&type=chunk) - Cash used in investing activities significantly increased to **$126.9 million** in 2019, primarily due to cash paid for the acquisitions of Bantam and Omni, and higher capital expenditures (**$70.9 million**)[150](index=150&type=chunk) - Financing activities used **$80.2 million** in net cash in 2019, reflecting dividend payments (**$2.55 per share**) and share repurchases[151](index=151&type=chunk) [Off-Balance Sheet Arrangements, Contractual Obligations and Commitments](index=24&type=section&id=Off-Balance%20Sheet%20Arrangements%2C%20Contractual%20Obligations%20and%20Commitments) The company has no material off-balance sheet arrangements, with contractual obligations primarily for leases and purchases, mostly due within one year - The company does not have off-balance sheet arrangements, financings, or relationships with unconsolidated entities that have a material effect on its financial condition[155](index=155&type=chunk) Contractual Obligations (as of June 30, 2019) | Contractual Obligations | Total (in thousands) | Less than 1 Year (in thousands) | 1-3 Years (in thousands) | 3-5 Years (in thousands) | More than 5 Years (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Capital Lease Obligations | $2,129 | $505 | $1,010 | $614 | $— | | Operating Lease Obligations | $38,254 | $8,261 | $13,481 | $9,611 | $6,901 | | Purchase Obligations | $239,014 | $218,848 | $15,238 | $4,498 | $430 | | Other Noncurrent Liabilities (as reflected on Consolidated Balance Sheet) | $11,317 | $— | $2,314 | $9,003 | $— | | Total | $290,714 | $227,614 | $32,043 | $23,726 | $7,331 | - Other noncurrent liabilities of **$23.1 million**, largely consisting of underfunded defined benefit pension liability, post-employment benefits, and tax liabilities, are excluded from the contractual obligations table as their due dates are not certain[159](index=159&type=chunk) [Impact of Inflation](index=25&type=section&id=Impact%20of%20Inflation) The company's results are influenced by raw material, packaging, and freight costs, mitigated by contracts and systems, with an anticipated uptick in commodity costs for 2020 - The company mitigates raw material inflation through longer-term fixed-price contracts for soybean oil and flour, and grain-based pricing contracts for eggs[160](index=160&type=chunk) - Freight cost exposure is reduced by adding dedicated carriers and implementing a transportation management system[160](index=160&type=chunk) - In 2019, commodity cost inflation moderated to nearly flat, while packaging and freight costs were modestly inflationary. For 2020, inflation is foreseen in commodities, packaging, and freight, with commodities and packaging posing the greatest headwind[161](index=161&type=chunk)[162](index=162&type=chunk) - The Foodservice segment has higher margin volatility from changes in ingredient costs compared to the Retail segment due to its lower margin profile and higher ratio of ingredient pounds to net sales[164](index=164&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation requires significant estimates for allowances, asset impairments, and self-insurance, with key policies for goodwill and intangible asset amortization - Critical accounting policies involve significant judgments and estimates, including allowances for customer deductions, inventory valuation, useful lives for depreciation/amortization, distribution accruals, pension/postretirement assumptions, and self-insurance accruals[165](index=165&type=chunk) - Goodwill is evaluated annually for impairment, and other intangible assets are amortized on a straight-line basis over their estimated useful lives[167](index=167&type=chunk) [Recent Accounting Pronouncements](index=26&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 1 of the consolidated financial statements for disclosures on recent accounting pronouncements and their impact - Recent accounting pronouncements and their impact are disclosed in Note 1 to the consolidated financial statements[168](index=168&type=chunk) [Forward-Looking Statements](index=26&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements based on management's assumptions, which involve various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on management's assumptions and involve risks and uncertainties that could cause actual results to differ materially[169](index=169&type=chunk) - Key factors impacting forward-looking statements include the ability to grow acquired businesses, ERP system implementation, cybersecurity incidents, price and product competition, cost fluctuations (freight, energy, ingredients), customer store brands, dependence on third parties, new product development, key personnel changes, customer consolidation, product recalls, and regulatory matters[170](index=170&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is from changes in raw material prices. It does not use derivative financial instruments to hedge these risks but manages them through forward purchasing programs and fixed-price arrangements for key materials. The company has no exposure to interest rate changes due to the absence of borrowings - Primary market risk exposure is from changes in raw material prices (soybean oil, flour, eggs, dairy-based materials)[171](index=171&type=chunk)[172](index=172&type=chunk) - The company does not use derivative financial instruments but manages commodity price risk through forward purchasing programs and short-term fixed-price arrangements[172](index=172&type=chunk) - Supply contracts with foodservice customers often incorporate pricing adjustments for ingredient and freight costs, helping to stabilize margins[172](index=172&type=chunk) - Due to the absence of borrowings, the company has not had exposure to changes in interest rates[171](index=171&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=28&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements of Lancaster Colony Corporation, including the balance sheets, statements of income, comprehensive income, shareholders' equity, and cash flows for the periods ended June 30, 2019. It also includes the report of the independent registered public accounting firm and detailed notes to the consolidated financial statements, covering significant accounting policies, acquisitions, fair value measurements, debt, commitments, contingencies, goodwill, liabilities, income taxes, business segments, stock-based compensation, and pension/defined contribution plans [Report of Independent Registered Public Accounting Firm](index=28&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on Lancaster Colony Corporation's consolidated financial statements for the three years ended June 30, 2019, and on the effectiveness of its internal control over financial reporting as of June 30, 2019. A critical audit matter identified was the fair value measurement of Level 3 contingent consideration liabilities due to complex models and unobservable inputs - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements for the three years ended June 30, 2019[174](index=174&type=chunk) - An unqualified opinion was also expressed on the company's internal control over financial reporting as of June 30, 2019[175](index=175&type=chunk) - A critical audit matter was identified regarding the fair value of Level 3 contingent consideration liabilities (Bantam Bagels and Angelic Bakehouse) due to the complex proprietary models and unobservable inputs used in their estimation[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Consolidated Balance Sheets](index=30&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the financial position of Lancaster Colony Corporation as of June 30, 2019, and 2018, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (as of June 30, 2019 and 2018) | (Amounts in thousands, except share data) | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and equivalents | $196,288 | $205,752 | | Receivables | $75,691 | $72,960 | | Total inventories | $86,072 | $90,861 | | Total current assets | $368,569 | $378,877 | | Property, plant and equipment-net | $247,044 | $190,813 | | Goodwill | $208,371 | $168,030 | | Other intangible assets-net | $70,277 | $56,176 | | Total Assets | $905,399 | $804,491 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Accounts payable | $76,670 | $57,978 | | Accrued liabilities | $43,036 | $35,789 | | Total current liabilities | $119,706 | $93,767 | | Other Noncurrent Liabilities | $35,938 | $41,638 | | Deferred Income Taxes | $22,882 | $16,804 | | Total shareholders' equity | $726,873 | $652,282 | | Total Liabilities and Shareholders' Equity | $905,399 | $804,491 | [Consolidated Statements of Income](index=31&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income detail the company's financial performance for the years ended June 30, 2019, 2018, and 2017, showing net sales, gross profit, operating income, net income, and earnings per share Consolidated Statements of Income (Years Ended June 30, 2019, 2018, and 2017) | (Amounts in thousands, except per share data) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Net Sales | $1,307,787 | $1,222,925 | $1,201,842 | | Cost of Sales | 981,589 | 919,419 | 883,062 | | Gross Profit | 326,198 | 303,506 | 318,780 | | Selling, General and Administrative Expenses | 149,811 | 129,906 | 125,635 | | Change in Contingent Consideration | (16,180) | 2,052 | 1,156 | | Restructuring and Impairment Charges | 1,643 | — | — | | Multiemployer Pension Settlement and Related Costs | — | — | 17,635 | | Operating Income | 190,924 | 171,548 | 174,354 | | Other, Net | 4,618 | 2,655 | 1,162 | | Income Before Income Taxes | 195,542 | 174,203 | 175,516 | | Taxes Based on Income | 44,993 | 38,889 | 60,202 | | Net Income | $150,549 | $135,314 | $115,314 | | Net Income Per Common Share: | | | | | Basic ($) | $5.48 | $4.93 | $4.21 | | Diluted ($) | $5.46 | $4.92 | $4.20 | | Weighted Average Common Shares Outstanding: | | | | | Basic | 27,438 | 27,403 | 27,376 | | Diluted | 27,537 | 27,459 | 27,440 | [Consolidated Statements of Comprehensive Income](index=32&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The consolidated statements of comprehensive income present the net income and other comprehensive income (loss) components for the years ended June 30, 2019, 2018, and 2017, primarily reflecting adjustments related to defined benefit pension and postretirement benefit plans Consolidated Statements of Comprehensive Income (Years Ended June 30, 2019, 2018, and 2017) | (Amounts in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Net Income | $150,549 | $135,314 | $115,314 | | Other Comprehensive (Loss) Income, Net of Tax | (2,049) | 2,566 | 2,414 | | Comprehensive Income | $148,500 | $137,880 | $117,728 | - Other comprehensive income (loss) primarily includes net loss/gain arising during the period, amortization of loss, and amortization of prior service credit related to defined benefit pension and postretirement benefit plans, net of tax[191](index=191&type=chunk) [Consolidated Statements of Cash Flows](index=33&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows provide a breakdown of cash generated from operating activities, cash used in investing activities, and cash used in financing activities for the years ended June 30, 2019, 2018, and 2017 Consolidated Statements of Cash Flows (Years Ended June 30, 2019, 2018, and 2017) | (Amounts in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $197,598 | $160,714 | $146,385 | | Net cash used in investing activities | $(126,861) | $(31,452) | $(60,608) | | Net cash used in financing activities | $(80,201) | $(66,614) | $(60,753) | | Net change in cash and equivalents | $(9,464) | $62,648 | $25,024 | | Cash and equivalents at beginning of year | $205,752 | $143,104 | $118,080 | | Cash and equivalents at end of year | $196,288 | $205,752 | $143,104 | - Net cash provided by operating activities increased to **$197.6 million** in 2019, up from **$160.7 million** in 2018[194](index=194&type=chunk) - Net cash used in investing activities significantly increased to **$126.9 million** in 2019, compared to **$31.5 million** in 2018, primarily due to acquisitions and property additions[194](index=194&type=chunk) - Net cash used in financing activities increased to **$80.2 million** in 2019, from **$66.6 million** in 2018, mainly due to dividend payments and treasury stock purchases[194](index=194&type=chunk) [Consolidated Statements of Shareholders' Equity](index=34&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) The consolidated statements of shareholders' equity present the changes in common stock, retained earnings, accumulated other comprehensive loss, and treasury stock for the years ended June 30, 2019, 2018, and 2017 Consolidated Statements of Shareholders' Equity (Years Ended June 30, 2019, 2018, and 2017) | (Amounts in thousands, except per share data) | Common Stock Outstanding (Shares) | Common Stock (Amount in thousands) | Retained Earnings (in thousands) | Accumulated Other Comprehensive Loss (in thousands) | Treasury Stock (in thousands) | Total Shareholders' Equity (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance, June 30, 2016 | 27,424 | $110,677 | $1,150,337 | $(11,350) | $(736,066) | $513,598 | | Net income | | | 115,314 | | | 115,314 | | Net pension and postretirement benefit gains, net of tax | | | | 2,414 | | 2,414 | | Cash dividends - common stock | | | (58,980) | | | (58,980) | | Purchase of treasury stock | (6) | | | | (866) | (866) | | Stock-based plans, including excess tax benefits | 30 | 249 | | | | 249 | | Stock-based compensation expense | | 4,248 | | | | 4,248 | | Balance, June 30, 2017 | 27,448 | 115,174 | 1,206,671 | (8,936) | (736,932) | 575,977 | | Net income | | | 135,314 | | | 135,314 | | Net pension and postretirement benefit gains, net of tax | | | | 2,566 | | 2,566 | | Tax Cuts and Jobs Act of 2017, Reclassification | | | 1,889 | (1,889) | | — | | Cash dividends - common stock | | | (64,531) | | | (64,531) | | Purchase of treasury stock | (9) | | | | (1,102) | (1,102) | | Stock-based plans | 49 | (981) | | | | (981) | | Stock-based compensation expense | | 5,039 | | | | 5,039 | | Balance, June 30, 2018 | 27,488 | 119,232 | 1,279,343 | (8,259) | (738,034) | 652,282 | | Net income | | | 150,549 | | | 150,549 | | Net pension and postretirement benefit losses, net of tax | | | | (2,049) | | (2,049) | | Cash dividends - common stock | | | (70,110) | | | (70,110) | | Purchase of treasury stock | (48) | | | | (7,411) | (7,411) | | Stock-based plans | 51 | (2,360) | | | | (2,360) | | Stock-based compensation expense | | 5,972 | | | | 5,972 | | Balance, June 30, 2019 | 27,491 | $122,844 | $1,359,782 | $(10,308) | $(745,445) | $726,873 | [Notes to Consolidated Financial Statements](index=35&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information on the company's accounting policies, financial statement components, and specific disclosures regarding acquisitions, debt, and employee plans [Note 1 – Summary of Significant Accounting Policies](index=35&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, covering consolidation, estimates, asset valuation, revenue recognition, expenses, stock-based compensation, income taxes, and recent accounting standards - The consolidated financial statements include Lancaster Colony Corporation and its wholly-owned subsidiaries, with a fiscal year ending June 30[199](index=199&type=chunk) - Estimates are used for allowances for customer deductions, inventory valuation, depreciation/amortization, distribution accruals, pension/postretirement assumptions, and self-insurance accruals[200](index=200&type=chunk) - Inventories are valued at the lower of cost or net realizable value, using FIFO, and allowances are made for slow-moving, obsolete, or excess items[204](index=204&type=chunk) - Property, plant and equipment are recorded at cost (or fair value for acquisitions) and depreciated using the straight-line method over estimated useful lives (**10-40 years for buildings, 3-15 years for machinery, 3-5 years for technology**)[205](index=205&type=chunk) - Goodwill is not amortized but is evaluated annually for impairment. Other intangible assets are amortized on a straight-line basis to SG&A expenses[210](index=210&type=chunk) - Revenue is recognized when control of products transfers to customers, typically upon delivery or pickup, with variable consideration (discounts, promotions, rebates) treated as a reduction in revenue[216](index=216&type=chunk)[219](index=219&type=chunk) - Advertising and research and development costs are expensed as incurred[227](index=227&type=chunk)[228](index=228&type=chunk) - The company adopted new accounting guidance for leases on July 1, 2019, expecting to recognize **$30 million to $40 million** in right-of-use assets and lease liabilities, with no impact on results of operations or cash flows[241](index=241&type=chunk)[244](index=244&type=chunk) - New accounting guidance for revenue recognition was adopted on July 1, 2018, using a modified retrospective approach, with no material impact on financial position or results of operations[246](index=246&type=chunk) [Note 2 – Acquisitions](index=43&type=section&id=Note%202%20%E2%80%93%20Acquisitions) This note details the acquisitions of Omni Baking Company LLC in November 2018 for **$22.3 million** and Bantam Bagels, LLC in October 2018 for **$33.1 million** (excluding contingent consideration). Omni's acquisition focused on production capabilities and workforce, while Bantam's acquisition was driven by future earnings potential, brand recognition, and innovation opportunities. Both acquisitions were funded with cash on hand and their results are included in consolidated financial statements from acquisition dates, allocated between Retail and Foodservice segments - On November 16, 2018, the company acquired substantially all assets of Omni Baking Company LLC for **$22.3 million** in cash[251](index=251&type=chunk) Omni Baking Company LLC Purchase Price Allocation | Inventories (in thousands) | $809 | | :--- | :--- | | Other current assets (in thousands) | $86 | | Machinery and equipment (in thousands) | $4,777 | | Goodwill (tax deductible) (in thousands) | $19,664 | | Current liabilities (in thousands) | $(3,083) | | Net assets acquired (in thousands) | $22,253 | - On October 19, 2018, the company acquired all assets of Bantam Bagels, LLC for a base purchase price of **$33.1 million** in cash, excluding contingent consideration[256](index=256&type=chunk) Bantam Bagels, LLC Purchase Price Allocation | Consideration | (in thousands) | | :--- | :--- | | Cash paid for acquisition | $33,111 | | Contingent consideration - fair value of earn-out at date of closing | $8,000 | | Fair value of total consideration | $41,111 | | **Purchase Price Allocation** | | | Receivables | $1,937 | | Inventories | $684 | | Other current assets | $95 | | Machinery and equipment | $1,896 | | Goodwill (tax deductible) | $20,677 | | Other intangible assets | $18,700 | | Current liabilities | $(2,256) | | Other noncurrent liabilities | $(622) | | Net assets acquired | $41,111 | - Goodwill for Bantam reflects future earnings and cash flow potential, brand recognition, and innovation opportunities, with specific intangible assets valued for tradename, customer relationships, and technology/know-how[261](index=261&type=chunk)[262](index=262&type=chunk) - On November 17, 2016, the company acquired Angelic Bakehouse, Inc. for **$35.5 million** in cash, also excluding contingent consideration tied to fiscal 2021 adjusted EBITDA[263](index=263&type=chunk) [Note 3 – Fair Value](index=44&type=section&id=Note%203%20%E2%80%93%20Fair%20Value) This note defines fair value and the three-level hierarchy, focusing on Level 3 liabilities for contingent consideration from the Bantam and Angelic acquisitions. Bantam's contingent consideration was **$8.9 million** at June 30, 2019, valued using a Monte Carlo simulation. Angelic's contingent consideration was reduced to zero in 2019 due to a **$17.1 million** reduction in fair value, based on revised forecasted adjusted EBITDA - Fair value is defined as the exit price in an orderly transaction, categorized into Level 1 (observable inputs), Level 2 (indirectly observable inputs), and Level 3 (unobservable inputs)[264](index=264&type=chunk)[265](index=265&type=chunk) Contingent Consideration Fair Value (as of June 30, 2019 and 2018) | | Fair Value Measurements at June 30, 2019 (in thousands) | | | :--- | :--- | :--- | | | Level 3 | Total | | Contingent consideration - Bantam | $8,900 | $8,900 | | Contingent consideration - Angelic | $— | $— | | Total contingent consideration | $8,900 | $8,900 | | | Fair Value Measurements at June 30, 2018 (in thousands) | | | | Level 3 | Total | | Contingent consideration - Angelic | $17,080 | $17,080 | - Bantam's contingent consideration, initially **$8.0 million**, increased to **$8.9 million** at June 30, 2019, and is measured using a Monte Carlo simulation with unobservable inputs (Level 3)[269](index=269&type=chunk)[270](index=270&type=chunk) - Angelic's contingent consideration, initially **$13.9 million**, was reduced by **$17.1 million** in 2019 to zero, based on a change in forecasted adjusted EBITDA for fiscal 2021, and is also a Level 3 measurement[271](index=271&type=chunk)[272](index=272&type=chunk) [Note 4 – Long-Term Debt](index=47&type=section&id=Note%204%20%E2%80%93%20Long-Term%20Debt) The company has an unsecured revolving credit facility of up to **$150 million**, expiring in April 2021, with no outstanding borrowings at June 30, 2019. It was in compliance with all restrictive and financial covenants, including interest coverage and leverage ratios - The company has an unsecured revolving credit facility of up to **$150 million**, expiring April 8, 2021[275](index=275&type=chunk) - No borrowings were outstanding under the facility at June 30, 2019, and **$5.1 million** of standby letters of credit were outstanding[276](index=276&type=chunk) - The company was in compliance with all restrictive covenants, including interest coverage (not less than **2.5 to 1**) and consolidated leverage (not greater than **3 to 1**) ratios, by substantial margins[277](index=277&type=chunk) [Note 5 – Commitments](index=47&type=section&id=Note%205%20%E2%80%93%20Commitments) The company has various operating and capital lease commitments, with total minimum payments for operating leases of **$38.3 million** and capital leases of **$2.1 million**. Total rent expense for 2019 was **$9.9 million**. Capital leases primarily consist of machinery and equipment Future Minimum Rental Commitments (as of June 30, 2019) | | Operating Leases (in thousands) | Capital Leases (in thousands) | | :--- | :--- | :--- | | 2020 | $8,261 | $505 | | 2021 | $7,136 | $505 | | 2022 | $6,345 | $505 | | 2023 | $4,992 | $493 | | 2024 | $4,619 | $121 | | Thereafter | $6,901 | $— | | Total minimum payments | $38,254 | $2,129 | | Less amount representing interest | | $(178) | | Present value of capital lease obligations | | $1,951 | Total Rent Expense (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Operating leases: Minimum rentals | $8,258 | $6,663 | $6,529 | | Short-term cancelable leases | $1,665 | $1,257 | $1,508 | | Total | $9,923 | $7,920 | $8,041 | - Capital leases, primarily for machinery and equipment, had a net carrying value of **$2.05 million** at June 30, 2019[278](index=278&type=chunk) [Note 6 – Contingencies](index=48&type=section&id=Note%206%20%E2%80%93%20Contingencies) The company is involved in routine claims and litigation, which are not expected to materially affect financial statements. Contingent consideration for the Angelic and Bantam acquisitions is also noted. A collective bargaining contract for the Bedford Heights, Ohio plant, covering **5%** of employees, is set to expire in April 2020 - The company is a party to various claims and litigation matters arising in the ordinary course of business, not expected to have a material effect on current-year results or consolidated financial statements[280](index=280&type=chunk) - Contingent consideration provisions exist for the earn-outs associated with the Angelic and Bantam acquisitions[281](index=281&type=chunk) - The labor contract for the Bedford Heights, Ohio plant, representing **5%** of employees, will expire on April 30, 2020[282](index=282&type=chunk) [Note 7 – Goodwill and Other Intangible Assets](index=48&type=section&id=Note%207%20%E2%80%93%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$208.4 million** at June 30, 2019, from **$168.0 million** in 2018, primarily due to the Bantam and Omni acquisitions. Other identifiable intangible assets, including tradenames, customer relationships, and technology/know-how, totaled **$70.3 million** net, with amortization expense of **$4.6 million** in 2019 - Goodwill increased to **$208.4 million** at June 30, 2019, from **$168.0 million** in 2018, with **$157.4 million** attributable to Retail and **$51.0 million** to Foodservice[283](index=283&type=chunk) Goodwill Rollforward by Segment (June 30, 2018 to June 30, 2019) | | Retail (in thousands) | Foodservice (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | | Goodwill at beginning of year | $119,301 | $48,729 | $168,030 | | Goodwill acquired during the year - Bantam | $18,431 | $2,246 | $20,677 | | Goodwill acquired during the year - Omni | $19,664 | $— | $19,664 | | Goodwill at end of year | $157,396 | $50,975 | $208,371 | Identifiable Other Intangible Assets (as of June 30, 2019 and 2018) | | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Tradenames (20 to 30-year life) Net carrying value | $55,786 | $45,250 | | Customer Relationships (10 to 15-year life) Net carrying value | $7,866 | $5,924 | | Technology / Know-how (10-year life) Net carrying value | $6,449 | $4,668 | | Non-compete Agreements (5-year life) Net carrying value | $176 | $334 | | Total net carrying value | $70,277 | $56,176 | - Amortization expense for other intangible assets was **$4.6 million** in 2019, **$4.0 million** in 2018, and **$3.5 million** in 2017[284](index=284&type=chunk) [Note 8 – Liabilities](index=49&type=section&id=Note%208%20%E2%80%93%20Liabilities) Accrued liabilities totaled **$43.0 million** at June 30, 2019, primarily for compensation and employee benefits. Other noncurrent liabilities amounted to **$35.9 million**, including workers' compensation, acquisition-related contingent consideration, deferred compensation, and pension/postretirement benefit liabilities Accrued Liabilities (as of June 30, 2019 and 2018) | | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Compensation and employee benefits | $28,672 | $23,135 | | Distribution | $7,730 | $8,579 | | Other taxes | $1,219 | $1,306 | | Marketing | $561 | $485 | | Other | $4,854 | $2,284 | | Total accrued liabilities | $43,036 | $35,789 | Other Noncurrent Liabilities (as of June 30, 2019 and 2018) | | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Workers compensation | $11,732 | $12,850 | | Acquisition-related contingent consideration | $8,900 | $17,080 | | Deferred compensation and accrued interest | $4,740 | $4,611 | | Pension benefit liability | $2,043 | $1,312 | | Postretirement benefit liability | $1,075 | $926 | | Gross tax contingency reserve | $942 | $1,298 | | Other | $6,506 | $3,561 | | Total other noncurrent liabilities | $35,938 | $41,638 | [Note 9 – Income Taxes](index=49&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) The Tax Cuts and Jobs Act of 2017 significantly impacted income taxes, reducing the statutory federal rate to **21%** for fiscal 2019. The effective tax rate was **23.0%** in 2019, down from **34.3%** in 2017. Deferred tax assets and liabilities are detailed, with a net deferred tax liability of **$22.9 million** in 2019. The gross tax contingency reserve was **$1.7 million** at June 30, 2019, with **$0.8 million** expected to be resolved within 12 months - The Tax Cuts and Jobs Act of 2017 reduced the statutory federal income tax rate from **35%** to **21%**, impacting the company's effective tax rate[288](index=288&type=chunk) Taxes Based on Income (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Currently payable: Federal | $30,220 | $40,766 | $51,524 | | Currently payable: State and local | $8,070 | $7,355 | $6,319 | | Total current provision | $38,290 | $48,121 | $57,843 | | Deferred federal, state and local provision (benefit) | $6,703 | $(9,232) | $2,359 | | Total taxes based on income | $44,993 | $38,889 | $60,202 | Effective Tax Rate Reconciliation (Years Ended June 30, 2017-2019) | | 2019 (%) | 2018 (%) | 2017 (%) | | :--- | :--- | :--- | :--- | | Statutory rate | 21.0 % | 28.1 % | 35.0 % | | State and local income taxes | 3.5 | 3.0 | 2.4 | | Net windfall tax benefits - stock-based compensation | (0.8) | (0.4) | — | | ESOP dividend deduction | (0.1) | (0.1) | (0.1) | | One-time benefit on re-measurement of net deferred tax liability | — | (5.5) | — | | Domestic manufacturing deduction for qualified income | — | (2.3) | (2.8) | | Other | (0.6) | (0.5) | (0.2) | | Effective rate | 23.0 % | 22.3 % | 34.3 % | Net Deferred Tax Liability (as of June 30, 2019 and 2018) | | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Deferred tax assets: Total | $12,521 | $12,540 | | Deferred tax liabilities: Total | $(35,403) | $(29,344) | | Net deferred tax liability | $(22,882) | $(16,804) | - The gross tax contingency reserve was **$1.7 million** at June 30, 2019, with **$0.8 million** expected to be resolved within the next 12 months[294](index=294&type=chunk)[295](index=295&type=chunk) [Note 10 – Business Segment Information](index=51&type=section&id=Note%2010%20%E2%80%93%20Business%20Segment%20Information) This note provides disaggregated financial information for the Retail and Foodservice segments, including net sales by product class and customer type. It also details operating income, identifiable assets, property additions, and depreciation/amortization for each segment and corporate, noting that many activities are integrated. Significant customer concentrations with Walmart and McLane are highlighted - The company's financial results are presented in two reportable segments: Retail and Foodservice, evaluated based on net sales and operating income[298](index=298&type=chunk) Net Sales by Class of Similar Products (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | **Retail** | | | | | Frozen breads | $259,290 | $252,186 | $253,965 | | Refrigerated dressings, dips and other | $219,614 | $226,276 | $221,422 | | Shelf-stable dressings and croutons | $177,717 | $171,772 | $166,030 | | Total Retail net sales | $656,621 | $650,234 | $641,417 | | **Foodservice** | | | | | Dressings and sauces | $467,364 | $430,944 | $427,017 | | Frozen breads and other | $164,438 | $141,747 | $133,408 | | Other roll products | $19,364 | $— | $— | | Total Foodservice net sales | $651,166 | $572,691 | $560,425 | | Total net sales | $1,307,787 | $1,222,925 | $1,201,842 | Foodservice Net Sales by Customer Type (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | **Foodservice** | | | | | National accounts | $480,249 | $430,680 | $421,858 | | Branded and other | $151,553 | $142,011 | $138,567 | | Other roll products | $19,364 | $— | $— | | Total Foodservice net sales | $651,166 | $572,691 | $560,425 | Segment Operating Income (Years Ended June 30, 2017-2019) | Operating Income (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Retail | $135,093 | $126,400 | $138,489 | | Foodservice | $73,828 | $58,440 | $66,234 | | Restructuring and Impairment Charges | $(1,643) | $— | $— | | Multiemployer Pension Settlement and Related Costs | $— | $— | $(17,635) | | Corporate Expenses | $(16,354) | $(13,292) | $(12,734) | | Total | $190,924 | $171,548 | $174,354 | Net Sales to Major Customers (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Net sales to Walmart | $222,171 | $209,860 | $201,484 | | As a percentage of consolidated net sales (%) | 17% | 17% | 17% | | Net sales to McLane | $195,907 | $185,226 | $198,153 | | As a percentage of consolidated net sales (%) | 15% | 15% | 16% | Accounts Receivable from Major Customers (as of June 30, 2019 and 2018) | | 2019 (%) | 2018 (%) | | :--- | :--- | :--- | | Walmart | 28% | 28% | | McLane | 9% | 11% | [Note 11 – Stock-Based Compensation](index=55&type=section&id=Note%2011%20%E2%80%93%20Stock-Based%20Compensation) This note details the company's stock-based compensation plans, including Stock-Settled Stock Appreciation Rights (SSSARs) and Restricted Stock grants. SSSARs are granted to employees with a weighted average grant date fair value of **$23.55** in 2019, resulting in **$3.1 million** in compensation expense. Restricted stock is granted to employees and nonemployee directors, with a weighted average grant date fair value of **$154.66** for employees in 2019, leading to **$2.9 million** in compensation expense. Unrecognized compensation expense for SSSARs and restricted stock totals **$5.1 million** and **$3.7 million**, respectively - The company uses Stock-Settled Stock Appreciation Rights (SSSARs) and Restricted Stock grants as long-term incentives for employees and directors[311](index=311&type=chunk)[313](index=313&type=chunk)[318](index=318&type=chunk) SSSARs Grants and Fair Value (Years Ended June 30, 2017-2019) | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | SSSARs granted | 157 | 185 | 166 | | Weighted average grant date fair value per right ($) | $23.55 | $17.85 | $17.59 | | Weighted average assumptions used in fair value calculations: Risk-free interest rate (%) | 2.43% | 2.39% | 1.36% | | Weighted average assumptions used in fair value calculations: Dividend yield (%) | 1.68% | 1.98% | 1.64% | | Weighted average assumptions used in fair value calculations: Volatility factor (%) | 21.77% | 22.57% | 22.41% | | Weighted average assumptions used in fair value calculations: Expected life in years | 3.04 | 2.85 | 2.47 | SSSARs Compensation Expense and Tax Benefits (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Compensation expense | $3,074 | $2,455 | $1,882 | | Tax benefits | $646 | $690 | $659 | | Intrinsic value of exercises | $6,008 | $2,381 | $2,281 | - At June 30, 2019, **$5.1 million** of unrecognized compensation expense related to SSSARs is expected to be recognized over a weighted-average period of **2 years**[317](index=317&type=chunk) Restricted Stock Grants and Fair Value (Employees, Years Ended June 30, 2017-2019) | Employees | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Restricted stock granted | 13 | 27 | 12 | | Grant date fair value (in thousands) | $2,030 | $3,218 | $1,591 | | Weighted average grant date fair value per award ($) | $154.66 | $121.09 | $134.07 | Restricted Stock Compensation Expense and Tax Benefits (Years Ended June 30, 2017-2019) | | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Compensation expense | $2,898 | $2,584 | $2,366 | | Tax benefits | $609 | $726 | $828 | - At June 30, 2019, **$3.7 million** of unrecognized compensation expense related to restricted stock is expected to be recognized over a weighted-average period of **2 years**[322](index=322&type=chunk) [Note 12 – Pension Benefits](index=58&type=section&id=Note%2012%20%E2%80%93%20Pension%20Benefits) The company sponsors defined benefit pension plans, though no active employees accrue service cost. Plan liabilities are discounted using an assumed rate (**3.35%** in 2019). Plan assets, totaling **$36.6 million** in 2019, are diversified across cash, equity, and fixed income securities, with a target allocation of **30%-70%** for both equity and fixed income. The plans had a net accrued benefit cost (underfunded status) of **$1.75 million** in 2019. Net periodic benefit income was **$(0.59) million** in 2019 - The company sponsors defined benefit pension plans, but no active employees accrue service cost or are eligible for plan benefits due to prior restructuring activities[323](index=323&type=chunk) Weighted-Average Pension Assumptions (as of June 30, 2019 and 2018) | | 2019 (%) | 2018 (%) | | :--- | :--- | :--- | | Discount rate | 3.35% | 4.07% | Pension Plan Asset Allocations (as of June 30, 2019 and 2018) | Asset Category | Target Percentage of Plan Assets at June 30, 2019 (%) | Actual Percentage of Plan Assets 2019 (%) | Actual Percentage of Plan Assets 2018 (%) | | :--- | :--- | :--- | :--- | | Cash and equivalents | 0%-10% | 2% | 5% | | Equity securities | 30%-70% | 53% | 51% | | Fixed income | 30%-70% | 45% | 44% | | Total | | 100% | 100% | Pension Plan Assets Fair Value (as of June 30, 2019 and 2018) | Asset Category | June 30, 2019 Total (in thousands) | June 30, 2018 Total (in thousands) | | :--- | :--- | :--- | | Cash and equivalents | $559 | $547 | | Money market funds | $113 | $1,331 | | U.S. government obligations | $2,600 | $3,344 | | Municipal obligations | $37 | $36 | | Corporate obligations | $3,440 | $3,176 | | Mortgage obligations | $3,613 | $2,354 | | Mutual funds fixed income | $6,907 | $7,044 | | Mutual funds equity | $19,359 | $18,881 | | Total | $36,628 | $36,713 | Pension Plan Funded Status (as of June 30, 2019 and 2018) | | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Benefit obligation at end of year | $38,382 | $36,892 | | Fair value of plan assets at end of year | $36,628 | $36,713 | | Funded status - net accrued benefit cost | $(1,754) | $(179) | Net Periodic Benefit Income (Years Ended June 30, 2017-2019) | Components of net periodic benefit income (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Interest cost | $1,453 | $1,463 | $1,457 | | Expected return on plan assets | $(2,487) | $(2,491) | $(2,416) | | Amortization of unrecognized net loss | $447 | $572 | $715 | | Settlement charge | $— | $42 | $— | | Net periodic benefit income | $(587) | $(414) | $(244) | [Note 13 – Defined Contribution and Other Employee Plans](index=61&type=section&id=Note%2013%20%E2%80%93%20Defined%20Contribution%20and%20Other%20Employee%20Plans) The company contributed **$2.6 million** to its sponsored defined contribution plans in 2019. It also participates in multiemployer pension plans, having fully withdrawn from the Cleveland Bakers and Teamsters Pension Fund in 2017 with a **$17.0 million** settlement payment. Contributions to multiemployer health and welfare plans were **$3.2 million** in 2019. A deferred compensation plan for select employees had a liability of **$4.7 million** in 2019 - Costs related to company-sponsored defined contribution plans were **$2.6 million** in 2019, an increase from **$1.4 million** in 2018, partly due to an increased employer matching contribution percentage[334](index=334&type=chunk) - In 2017, the company fully withdrew from the underfunded multiemployer Cleveland Bakers and Teamsters Pension Fund, paying a **$17.0 million** settlement[336](index=336&type=chunk) Multiemployer Pension Plan Contributions (Fiscal Years 2017-2019) | Plan Name | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Cleveland Bakers and Teamsters Pension Fund | $— | $— | $2,098 | | Western Conference of Teamsters Pension Plan | $388 | $356 | $409 | | Total contributions to multiemployer plans | $388 | $356 | $2,507 | - Contributions to multiemployer health and welfare plans were **$3.2 million** in 2019[341](index=341&type=chunk) - The liability for the deferred compensation plan for select employees was **$4.7 million** at June 30, 2019[343](index=343&type=chunk) [Note 14 – Selected Quarterly Financial Data (Unaudited)](index=64&type=section&id=Note%2014%20%E2%80%93%20Selected%20Quarterly%20Financial%20Data%20(Unaudited)) This note provides unaudited selected quarterly financial data for fiscal years 2019 and 2018, including net sales, gross profit, net income, and diluted net income per common share for each quarter. It highlights significant impacts such as the reduction in Angelic's contingent consideration liability and ERP/restructuring expenses in 2019, and the one-time deferred tax benefit from the Tax Act in 2018 Selected Quarterly Financial Data (Unaudited, 2019) | 2019 | First Quarter (in thousands) | Second Quarter (in thousands) | Third Quarter (in thousands) | Fourth Quarter (in thousands) | Fiscal Year (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $316,654 | $349,581 | $317,882 | $323,670 | $1,307,787 | | Gross Profit | $81,199 | $91,392 | $75,397 | $78,210 | $326,198 | | Net Income | $39,028 | $47,907 | $30,604 | $33,010 | $150,549 | | Diluted Net Income Per Common Share ($) | $1.42 | $1.73 | $1.11 | $1.20 | $5.46 | Selected Quarterly Financial Data (Unaudited, 2018) | 2018 | First Quarter (in thousands) | Second Quarter (in thousands) | Third Quarter (in thousands) | Fourth Quarter (in thousands) | Fiscal Year (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $298,916 | $319,665 | $296,174 | $308,170 | $1,222,925 | | Gross Profit | $75,475 | $83,939 | $67,911 | $76,181 | $303,506 | | Net Income | $29,386 | $45,920 | $27,621 | $32,387 | $135,314 | | Diluted Net Income Per Common Share ($) | $1.07 | $1
Lancaster Colony(LANC) - 2019 Q3 - Quarterly Report
2019-04-30 15:04
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 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 of incorpor ...
Lancaster Colony(LANC) - 2019 Q2 - Quarterly Report
2019-02-06 20:51
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2018 or 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 of incorporation or organization) 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 (Address o ...