Lancaster Colony Reports Higher First Quarter Fiscal 2010 Net Income

• Press Release
• Source: Lancaster Colony Corporation
• On 7:20 am EDT, Thursday October 29, 2009

COLUMBUS, Ohio, Oct. 29 /PRNewswire-FirstCall/ - Lancaster Colony Corporation (Nasdaq: LANC - News) today reported lower sales but higher net income for its first fiscal quarter ended September 30, 2009:

• Net sales reached $254 million, off nearly four percent from first quarter sales of $264 million last year.
• Specialty Foods net sales totaled $216.3 million, down two percent from the year-ago record level, reflecting a decline in foodservice sales that was not fully offset by solid growth in retail sales.
• Glassware and Candles sales were $37.8 million, a decline of 12 percent from the year-ago quarter, reflecting generally weaker retail markets, competitive factors and the shifting of some seasonal sales to the second fiscal quarter.
• Net income of $28,405,000, or $1.01 per diluted share, increased from the prior-year total of $11,020,000, or $.39 per diluted share.
• The cash dividend was continued at the higher rate set in November 2008.
• The company's strong balance sheet showed no debt outstanding at September 30, 2009.

Chairman and CEO John B. Gerlach, Jr. said, "We are pleased that both business segments achieved substantial improvement in first quarter operating results, with Specialty Foods operating margins benefiting from the decline in ingredient costs from the prior-year's historically high levels."

Specialty Foods sales were lower as the foodservice channel was affected by generally weak consumer demand and reduced pricing due to lower commodity costs. In contrast, retail sales continued to grow, up approximately five percent from gains in both frozen and non-frozen products. Operating income of $43.2 million nearly doubled, reflecting over $17 million in lower raw-material costs as well as operational improvements and a greater retail sales mix. Plant closing costs associated with the consolidation of certain manufacturing facilities totaled approximately $0.9 million and $0.8 million in the current and prior-year's first quarter, respectively.

Net sales of candles and related products declined for the quarter due to several factors, including competitive market conditions and some shifting of seasonal sales to the second quarter. Segment operating income of $1.7 million improved by over $4.5 million, reflecting lower wax costs, higher operating levels and improved pricing.

Corporate expenses decreased $0.4 million, as the prior-year's quarter reflected approximately $0.8 million related to the razing of a former industrial glass operation.

The first-quarter's effective tax rate reflects income associated with the favorable resolution of certain previously-reserved state tax matters. These items totaled approximately $0.9 million before tax, or about $.03 per share, net of applicable income taxes.

"Looking at our current second quarter," Mr. Gerlach said, "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. 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 foodservice 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."

Conference Call on the Web

The company's first quarter conference call is scheduled for this morning, October 29, at 10:00 a.m. ET. You may access the call through a live webcast by using the link provided on the company's Internet home page at www.lancastercolony.com. Replays of the webcast will be made available on the company website.

About the Company

Lancaster Colony Corporation is a diversified manufacturer and marketer of consumer products focusing primarily on specialty foods for the retail and foodservice markets.

Forward-Looking Statements

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). This news release contains various "forward-looking statements" within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "believe," "intend," "plan," "expect," "hope" or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward- looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on such statements that are based on current expectations. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements. More detailed statements regarding significant events that could affect our financial results are included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission and are available on our website at www.lancastercolony.com.

                          LANCASTER COLONY CORPORATION
                 CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                   (In thousands except per-share amounts)

                                                      Three Months Ended
                                                        September 30,
                                                       2009        2008

    Net sales                                      $ 254,160    $ 263,837
    Cost of sales                                    190,453      224,168


    Gross margin                                      63,707       39,669
    Selling, general & administrative expenses        20,468       20,261
    Restructuring and impairment charges                 830        1,614

    Operating income                                  42,409       17,794
    Interest expense                                       -         (491)
    Interest income and other - net                       25           75

    Income before income taxes                        42,434       17,378
    Taxes based on income                             14,029        6,358

    Net income                                     $  28,405    $  11,020

    Net income per common share:(a)
    Net income - basic and diluted                 $    1.01    $     .39

    Cash dividends per common share                $    .285    $     .28

    Weighted average common shares outstanding:
      Basic                                           28,081       28,262
      Diluted                                         28,115       28,264

    (a) Based on the weighted average number of shares outstanding during
        each period.




                          LANCASTER COLONY CORPORATION
                    BUSINESS SEGMENT INFORMATION (Unaudited)
                                 (In thousands)
                                                    Three Months Ended
                                                       September 30,
                                                      2009        2008
    NET SALES
      Specialty Foods                              $ 216,341   $ 220,786
      Glassware and Candles                           37,819      43,051

                                                   $ 254,160   $ 263,837

    OPERATING INCOME (LOSS)
      Specialty Foods                              $  43,152   $  23,489
      Glassware and Candles                            1,671      (2,862)
      Corporate expenses                              (2,414)     (2,833)

                                                   $  42,409   $  17,794



                          LANCASTER COLONY CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                                 (In thousands)

                                                  September 30, June 30,
                                                       2009       2009


    ASSETS
    Current assets:
      Cash and equivalents                          $  52,440   $  38,484
      Receivables - net of allowance
       for doubtful accounts                           78,195      61,152
      Total inventories                               110,605     102,523
      Deferred income taxes and other current assets   23,951      20,653

        Total current assets                          265,191     222,812
    Net property, plant and equipment                 168,304     170,900
    Other assets                                      104,156     104,769


          Total assets                              $ 537,651   $ 498,481

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                              $  42,674   $  41,180
      Accrued liabilities                              46,969      33,399

        Total current liabilities                      89,643      74,579
    Other noncurrent liabilities and
     deferred income taxes                             21,500      21,346
    Shareholders' equity                              426,508     402,556

          Total liabilities and
           shareholders' equity                     $ 537,651   $ 498,481

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