|Company looks to expand New York Texas Toast and Marzetti brands with a range of new products.|
COLUMBUS, OHIO — Product innovation promises to be an important growth avenue for Lancaster Colony Corp. as the maker of specialty food products heads into fiscal 2015. The company hopes the new introductions will help boost earnings, which fell 32% in fiscal 2014 to $74,986,000, equal to $2.75 per share on the common stock, down from $109,249,000, or $4 per share, in fiscal 2013.
“Looking to fiscal 2015, we are pleased to have new products getting initial distribution, including Reames Presto Pasta, New York Brand Soft Pull Aparts garlic bread and Whole Grain Texas Toast,” Jay Gerlach, chairman, president and chief executive officer, said during an Aug. 21 conference call with analysts. “Our expanded salad topping line under the Marzetti, Chatham Village and New York Texas Toast brands include crispy onion and whole grains already introduced with gluten-free croutons coming soon as well. We are also shortly introducing super grain baked croutons made with ancient grains under the Simply Dressed label.”
Mr. Gerlach said Lancaster expects the introductory costs of the new products to be “significant” in the first half of fiscal 2015, but hopes to offset the investment by moderating the level of promotional support on other products.
Lancaster’s largest expenditure during fiscal 2014 related to an expansion of its dressing and sauce capacity in Kentucky. The company expects the project to be completed later this fall.
“Not only will this expansion provide us some much-needed capacity to support future growth, it will also allow us to gain better efficiencies and reduce a variety of incremental costs that affected our results in the back half of fiscal 2014,” said Doug Fell, vice-president, chief financial officer and treasurer. “Although we remain in the process of evaluating several projects, we expect fiscal 2015 capital expenditures to total roughly $20 million.”Net sales at Lancaster Colony totaled $1,041,075,000 in the year ended June 30, up from $1,031,803,000 in fiscal 2013.