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Lancaster Colony Reports Third Quarter Sales and Earnings

COLUMBUS, Ohio, April 26, 2012 /PRNewswire/ -- Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company's third fiscal quarter ended March 31, 2012. Highlights of the quarter:

    --  Net sales increased seven percent to $271 million versus $253 million in
        the third quarter last year, reflecting strong sales growth in the
        Specialty Foods segment.
    --  Net income totaled $18,222,000 compared with $19,441,000 for the
        corresponding quarter a year ago, primarily reflecting higher costs
        experienced within the Specialty Foods segment. Third quarter net income
        per diluted share totaled $.67 compared to $.71 a year ago.
    --  Specialty Foods sales increased nine percent to a third quarter record
        of $237 million on higher volume and pricing. Both retail and
        foodservice sales volumes improved, with this year's earlier Easter
        helping retail sales. Pricing contributed approximately half the
        quarter's increase in sales. The segment's operating income totaled
        $29.6 million compared to $31.7 million in the third quarter last year.
        Increased material, freight and marketing costs were only partially
        offset by improved pricing.
    --  Glassware and Candles sales declined four percent to $34 million on
        lower candle volume. However, the segment's operating income increased
        to $1.0 million from $0.7 million in the third quarter last year. 
        Modest pricing improvement and a better sales mix helped offset lower
        sales.
    --  The company's balance sheet remained strong with no debt outstanding at
        March 31, 2012, and $168 million in cash and equivalents.
    --  The quarterly cash dividend was continued at the higher level of $.36
        per share set last quarter.

For the nine months ended March 31, 2012, net sales were $857 million compared to $834 million a year ago. Net income was $69,853,000, or $2.56 per diluted share. Net income for the nine months last year totaled $77,071,000, or $2.77 per diluted share. Current year-to-date net income included pretax income of $2.7 million (six cents per share after taxes) from a second-quarter distribution received under the Continued Dumping and Subsidy Offset Act (CDSOA). In the prior year, net income included a pretax CDSOA distribution of $1.0 million (two cents per share after taxes).

John B. Gerlach, Jr., chairman and CEO, said, "We were pleased with the improvement in Specialty Foods sales, given the widely reported challenges faced by consumers. Our quarterly results were affected by the timing of certain marketing expenditures, as well as higher material and freight costs."

Looking ahead, Mr. Gerlach added, "We anticipate that retail food sales during our fiscal fourth quarter will be affected by the earlier Easter timing and continued economic pressures on consumers. Our Specialty Foods segment should benefit from ongoing success with recent retail product introductions, somewhat higher average pricing, lower marketing costs and less unfavorable commodity cost comparisons. In a seasonally slower fourth quarter, our Glassware and Candles segment will likely experience a continuation of third quarter trends. We believe that throughout fiscal 2012 we have maintained a solid base upon which to build further growth in fiscal 2013."

Conference Call on the Web

The company's third quarter conference call is scheduled for this morning, April 26, 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. For example, fluctuations in material and freight costs, over which we have limited control, may significantly influence our financial results. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. 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       Nine Months Ended
                                                          March 31,               March 31,
                                                        2012       2011       2012       2011

    Net sales                                       $271,098   $252,623   $857,400   $833,912
    Cost of sales                                    217,296    200,089    678,309    645,063

    Gross margin                                      53,802     52,534    179,091    188,849
    Selling, general &
     administrative
     expenses                                         25,848     23,060     74,915     72,441

    Operating income                                  27,954     29,474    104,176    116,408
    Interest income and
     other - net                                          39         54      2,774      1,110

    Income before income
     taxes                                            27,993     29,528    106,950    117,518
    Taxes based on income                              9,771     10,087     37,097     40,447

    Net income                                       $18,222    $19,441    $69,853    $77,071

    Net income per common share:(a)
    Net income - basic and
     diluted                                            $.67       $.71      $2.56      $2.77

    Cash dividends per
     common share                                       $.36       $.33      $1.05       $.96

    Weighted average common shares
      outstanding:
      Basic                                           27,216     27,494     27,237     27,755
      Diluted                                         27,251     27,520     27,268     27,781

    (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      Nine Months Ended
                                                      March 31,               March 31,
                                                    2012        2011      2012        2011

    NET SALES
      Specialty Foods                           $237,432    $217,436  $740,604    $692,539
      Glassware and Candles                       33,666      35,187   116,796     141,373

                                                $271,098    $252,623  $857,400    $833,912

    OPERATING INCOME
      Specialty Foods                            $29,561     $31,664  $109,510    $121,025
      Glassware and Candles                          973         676     2,272       5,044
      Corporate expenses                          (2,580)     (2,866)   (7,606)     (9,661)

                                                 $27,954     $29,474  $104,176    $116,408

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

                                                                   March 31,       June 30,
                                                                              2012            2011
    ASSETS
    Current assets:
      Cash and equivalents                                                $167,960        $132,266
      Receivables - net of
       allowance for doubtful
       accounts                                                             86,495          63,762
      Total inventories                                                    100,284         111,885
      Deferred income taxes and
       other current assets                                                 24,021          25,283

        Total current assets                                               378,760         333,196
    Net property, plant and
     equipment                                                             184,017         185,282
    Other assets                                                           103,297         103,611

          Total assets                                                    $666,074        $622,089

    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current liabilities:
      Accounts payable                                                     $43,489         $42,570
      Accrued liabilities                                                   37,360          33,586

    Total current liabilities                                               80,849          76,156
    Other noncurrent liabilities
     and deferred income taxes                                              32,695          28,394
    Shareholders' equity                                                   552,530         517,539
          Total liabilities and
           shareholders' equity                                           $666,074        $622,089

SOURCE Lancaster Colony Corporation

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