Milling & Baking News - May 19, 2020 - 18

Financial Results

Frozen dinner rolls, garlic bread
boost Lancaster retail sales
WESTERVILLE, OHIO - Increased
retail demand for frozen garlic bread,
dinner rolls, shelf-stable dressings and
sauces sold under license agreements
helped to partially offset a slowdown
in foodservice sales at Lancaster Colony Corp. in the third quarter.
In the three months ended March
31, Lancaster Colony net income was
$22.43 million, equal to 82¢ per share
on the common stock, down 27% from
$30.6 million, or $1.11 per share, in the
third quarter last year. Net sales were
$321.36 million, up 1.1% from $317.88
million.
For the nine months ended March
31, net income totaled $106.6 million,
or $3.88 per share, down 10% from
$117.54 million, or $4.28 per share, in
the same period a year ago. Net sales
rose nearly 3% to $1.01 billion from
$984.12 million.
Operating income in the company's
Retail unit increased 23% to $29.61
million in the third quarter, while sales
spiked 11% to $169.41 million.
"Retail net sales benefited from

higher demand as the COVID-19 outbreak led to increased consumer demand that built upon solid base business performance," David A. Ciesinski, president and chief executive officer, said during a May 5 conference
call with analysts. "Third-quarter sales
also benefited from new product offerings, including Buffalo Wild Wings
sauces in single bottles and a promising start for regional pilot of Chick-filA sauces that we are supplying to grocery stores. Both Buffalo Wild Wings
and Chick-fil-A sauce are sold under
exclusive license agreements.
"Separately, sales trends for our New
York Bakery frozen garlic bread products remained favorable as the brand
continued to gain share. Olive Garden dressings posted share gains for
the quarter, and our Sister Schubert's
brand of frozen dinner rolls achieved
significant sales growth in the quarter
as well. It's notable that prior to the impact of COVID-19, our quarter-to-date
retail sales were up about 4% due to the
contributions from our new product

introductions and growth from our
core retail business."
Meanwhile, in the company's Foodservice segment, operating income
plummeted 46% to $9.19 million from
$17.12 million. Sales fell 8% to $151.95
million.
"Foodservice channel demand was
adversely impacted by COVID-19 beginning in mid-March as restaurant
dine-in purchases were eliminated,
and consumer purchase options were
limited to carryout, delivery and
drive-thru," Mr. Ciesinski said. "These
service restrictions in the foodservice
industry, combined with the stay-athome orders, led to reduced consumer
demand and lower sales for our Foodservice segment."
Thomas K. Pigott, vice president,
assistant secretary and chief financial
officer, said Lancaster expects capital
expenditures in fiscal 2020 to total approximately $90 million. He said the
company's year-to-date payments for
property additions of $72 million include investments to the recently completed capacity expansion project at its
frozen dinner roll facility in Horse Cave,
Ky., and the purchase of the Omni Baking facility that was previously leased. MBN

MGP Ingredients profit lifted by
wheat
starch and protein sales
ATCHISON, KAN. - Net income at fourteenth consecutive quarter of year-

and our recently rebranded ProTerra
line of textured proteins, continue to be
aligned with strong consumer trends,"
Mr. Griffin said.
David J. Colo, president and chief
MGP Ingredients, Inc. increased 1.2% in over-year sales growth," Mr. Griffin said. operating officer, said during the call
the first quarter ended March 31, rising to "We have been very pleased with the that MGPI has continued to see good
$9.78 million, equal to 57¢ per share on continued strength and momentum of growth in its Ingredients business
the common stock, up from $9.65 million, our Ingredients business over the past despite the coronavirus (COVID-19)
pandemic, primarily driven by
or 57¢ per share, in the same period
MGPI's well-positioned portfolio
a year ago. Net sales also increased,
MGP Ingredients share price
both on the wheat protein and the
rising 11% to $99.08 million from
$60
wheat starch side.
$89.1 million.
"I think what you're seeing is
"These results reflect strong cus$50
kind of a continuation of strong
tomer demand in both business
consumer demand as consumers
segments and improved effective$40
continue to migrate to a healthier
ness in our tactical execution,"
diet," he said. "And with our plantAugustus C. Griffin, president
$30
based protein in the Ingredient secand chief executive officer, said
tor, we really didn't see any anomaduring an April 30 conference call
$20
Nov. Dec.
Jan.
Feb. March April
May
lies, if you will, in Q1 in that busiwith analysts. "Our results for this
2019
2020
ness. I think we're just seeing good
quarter reflect growth in premium
Source: New York Stock Exchange
strong underlying consumer trends
beverage brown goods sales, as
with a well-positioned portfolio to
well as significant year-over-year
increases in sales of our specialty wheat several years, and we are encouraged by support those trends."
Despite the strong start to fiscal 2020, Mr.
the robust gross margins we were able to
starches and proteins."
Colo said MGPI remains cautious regardGross profit in the Ingredient Solu- achieve this quarter."
Specialty wheat starch sales grew ing its outlook for the remainder of the year.
tions segment increased to $5 million in
the first quarter of fiscal 2020, up sharply 48.4% during the quarter, and specialty He said the company has ample access to
from $1.4 million in the first quarter of wheat protein sales grew 43.3%, reflect- capital and is seeing encouraging customer
demand, but even so, the uncertainty of
fiscal 2019, while sales increased 31% to ing higher volume and prices.
"We believe our specialty starch portfo- COVID-19 makes it impossible to predict
$19.1 million.
"Our Ingredient Solutions posted its lio, particularly our line of fiber products what may transpire in the months ahead. MBN
18 / May 19, 2020

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Milling & Baking News - May 19, 2020

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