WESTERVILLE, OHIO — Strong organic growth in the company’s food service unit combined with the completion of two acquisitions in the second quarter helped drive an 11% increase in earnings in fiscal 2019 at Lancaster Colony Corp.

Net income in the year ended June 30 totaled $150,549,000, equal to $5.48 per share on the common stock, up from $135,314,000, or $4.93 per share, in the same period a year ago. This year’s results included the favorable impact of a $17.1 million non-cash reduction to the fair value of the acquisition-related contingent consideration for Angelic Bakehouse, partially offset by a $900,000 increase in a similar consideration for Bantam Bagels.

Net sales increased to $1,307,787,000, up 7% from $1,222,925,000.

In the fourth quarter ended June 30, net income was $33,010,000, or $1.20 per share, up 2% from $32,387,000, or $1.18 per share, in the same period a year ago. Net sales totaled $323,670,000, up from $308,170,000.

“We are pleased to report record net sales for fiscal year 2019 driven by strong organic performance in our Foodservice segment,” David A. Ciesinski, president and chief executive officer, said during an Aug. 27 conference call with analysts. “Our supply chain team completed another successful year of reducing costs and improving operational efficiencies. Specific examples included numerous end-of-line automation projects, the launch of our new transportation management system, improved material yield and process controls and tactical procurement initiatives, including should-cost modeling and more extensive competitive bidding. The recent closure of one of our frozen bread facilities will also result in a better-optimized manufacturing footprint going forward.”

The frozen bread facility that Mr. Ciesinski referred to is located in Saraland, Ala. He said production at the plant ceased in mid-July and was subsequently moved to other facilities within Lancaster’s manufacturing network. The company incurred a restructuring and impairment charge of $1.6 million in the fourth quarter as a result of the decision to close the facility, he said.

Operating income in the Retail segment totaled $135,093,000 in fiscal 2019, up nearly 7% from $126,400,000 in fiscal 2018. Sales, meanwhile, increased to $656,621,000 from $650,234,000.

“While the financial results for our Retail segment did not meet our expectations this past year, I am confident that the new leadership we now have in place and other strategic initiatives completed in fiscal year 2019, including our new innovation center, will position the Retail segment for improved performance going forward,” Mr. Ciesinski said.

In the Foodservice unit, operating income in fiscal 2019 surged 26% to $73,828,000 from $58,440,000 while sales increased to $651,166,000 from $572,691,000.

Lancaster invested $55 million in completing its acquisitions of Bantam Bagels and Omni Baking Co. during fiscal 2019. Mr. Ciesinski said the company has spent the past two quarters implementing upgrades and automation at Omni’s plant, a move designed to help ensure it will bring “a source of reliable and scalable supply for many years to come.”

Bantam Bagels, meanwhile, delivered strong top-line growth, but in the fourth quarter sustained an operating loss of approximately $1.5 million as Lancaster invested in the future of the business.

“We expect this drag on operating income to continue until we move them to a new automated line that is underway and planned to be complete around the end of calendar year 2019,” Mr. Ciesinski said. “Although these two acquisitions are creating short-term dilution on our business, we believe both will serve as important cornerstones for our long-term growth.”

Looking ahead to fiscal 2020, Mr. Ciesinski said retail sales should benefit from new product introductions, including New York Bakery 3-Cheese Cheese Sticks and Sister Schubert’s sweet rolls in a variety of new flavors, including pumpkin spice and lemon blueberry. The company also plans to reformulate its Marzetti refrigerated dip line with shorter and cleaner ingredient labels.

The company has forecast fiscal 2020 capital expenditures at $80 million to $100 million.

“This includes $33 million for the completion of the expansion project at our frozen dinner roll facility in Horse Cave, Ky.,” said Thomas K. Pigott, vice-president and chief financial officer. “We are also investing to add capacity for our recently acquired Bantam Bagels business to support further growth — and to support further growth in the food service dressing category. In addition, we recently completed the purchase of the Omni Baking land and building for $11 million.”