Specialty Foods unit drives Lancaster earnings in Q1

by Eric Schroeder
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COLUMBUS, OHIO — Lower raw material costs combined with operational improvements and greater retail sales mix within its Specialty Foods business helped drive first-quarter earnings at Lancaster Colony Corp. The maker of New York garlic bread and Texas Garlic Toast and Sister Schubert’s frozen bread had income of $28,405,000 in the first quarter ended Sept. 30, equal to $1.01 per share on the common stock, up 158% from $11,020,000, or 39c per share, in the first quarter of fiscal 2009. Net sales totaled $254,160,000, down 4% from $263,837,000.

Driving company-wide growth was Lancaster’s Specialty Foods segment, which posted operating income of $43,152,000 in the first quarter ended Sept. 30, up 84% from $23,489,000 in the first quarter of fiscal 2009. Net sales in the division totaled $216,341,000, down from $220,786,000.

"Looking at our current second quarter, we anticipate that both operating segments will continue to benefit from many of the factors that contributed to the improvement in first-quarter operating margins," said John B. Gerlach Jr., chairman and chief executive officer. "In addition, although lower-margined, we expect seasonal candle sales to outpace last year’s levels. While consumer demand continues to be challenged by a weak economic environment, particularly in food service channels, we are again expecting comparative improvement in the quarter’s operating results. We are well positioned to support future growth, and we expect to carry our strong balance sheet into calendar 2010."

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