Marzetti maker praises cold foods
For the record, officials said net sales increased three percent to $1,090 million versus $1,057 million during the year ended June 30, 2011. Fiscal 2011 net income totaled $106.4 million or $3.84 per diluted share, compared to the prior year's record net income of $115.0 million, or $4.07 per diluted share.
Lancaster Colony said fourth quarter highlights included:
•Net sales increased three percent to $256 million versus $248 million in the year ago quarter.
•Specialty Foods net sales totaled a fourth quarter record of $230 million, an increase of six percent above the prior year's fourth quarter total. Contributing to this improvement were greater foodservice volumes, this year's later Easter, the success of recently introduced retail products and both retail and foodservice pricing increases. Retail sales were constrained by factors such as challenging economic conditions faced by consumers and higher levels of trade promotions. Higher material and freight costs, along with a less favorable sales mix, contributed to segment operating income declining by 10 percent to $34.2 million from $38.2 million a year ago.
•Glassware and Candles sales of $25.7 million declined due to lower candle sales. The segment's quarterly operating loss of $1.3 million compared to a loss of less than $0.1 million a year ago. Higher paraffin wax costs and lower sales and production volumes primarily accounted for the decline.
•Fourth quarter net income totaled $29.3 million, or $1.07 per diluted share, versus the year ago net income of $22.8 million, or $.81 per diluted share. The quarter's results included a pretax CDSOA distribution of $13.4 million (approximately 33 cents per share after taxes).
Said Chairman and CEO John B. Gerlach, Jr., "Fiscal 2011 earnings per share were the second highest in company history, following our record high fiscal 2010. Significantly higher material costs and continuing economic weakness challenged our comparative results for both the full year and fourth quarter. Helping support our top-line growth this past year was the introduction of several new retail non-frozen food products, including our Marzetti® Simply Dressed™ line of refrigerated salad dressings and Marzetti® Otria™ Greek yogurt-based vegetable dips. Candle sales benefitted from additional product placement. We were able to implement higher pricing to mitigate, although not fully offset, materials cost inflation encountered by both operating segments."
Addressing fiscal 2012, Gerlach added, "Fiscal 2012 sales should continue to benefit from the rollout of new retail food products and generally higher pricing. New food product emphasis this year is focused on frozen items. Among products expected to add sales in the first half of fiscal 2012 are New York BRAND® Garlic Knots and Sister Schubert's® soft pretzel rolls and mini-baguettes. Many material costs will likely remain markedly above year-ago levels for at least the first half of fiscal 2012. We also elected not to pursue lower-margin holiday candle sales due to the lack of acceptable returns at current input costs. Overall results will depend upon sales volumes, material cost trends and operational improvements."