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LANCASTER COLONY CORP - Quarter Report: 2015 December (Form 10-Q)




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549 
 
Form 10-Q
 
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2015
or 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                    
Commission file number 000-04065 
 
 
 
Lancaster Colony Corporation
(Exact name of registrant as specified in its charter)
 
 
 
 
Ohio
 
13-1955943
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
37 West Broad Street
Columbus, Ohio
 
43215
(Address of principal executive offices)
 
(Zip Code)
 
614-224-7141
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large Accelerated filer
 
ý
Accelerated filer
 
¨
Non-accelerated filer
 
o  (Do not check if a smaller reporting company)
Smaller Reporting Company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
As of January 22, 2016, there were 27,374,838 shares of Common Stock, without par value, outstanding.





LANCASTER COLONY CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 6.
 
 
 
 

2




PART I – FINANCIAL INFORMATION
 
Item 1. Condensed Consolidated Financial Statements
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands, except share data)
December 31, 
 2015
 
June 30, 
 2015
ASSETS
Current Assets:
 
 
 
Cash and equivalents
$
87,141

 
$
182,202

Receivables (less allowance for doubtful accounts, December-$172; June-$206)
60,752

 
62,437

Inventories:
 
 
 
Raw materials
34,277

 
30,655

Finished goods
46,194

 
47,244

Total inventories
80,471

 
77,899

Other current assets
8,032

 
7,672

Total current assets
236,396

 
330,210

Property, Plant and Equipment:
 
 
 
Land, buildings and improvements
113,862

 
113,844

Machinery and equipment
259,948

 
253,143

Total cost
373,810

 
366,987

Less accumulated depreciation
203,919

 
194,676

Property, plant and equipment-net
169,891

 
172,311

Other Assets:
 
 
 
Goodwill
143,788

 
143,788

Other intangible assets-net
46,248

 
47,771

Other noncurrent assets
7,574

 
8,076

Total
$
603,897

 
$
702,156

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
 
 
 
Accounts payable
$
43,506

 
$
38,823

Accrued liabilities
32,693

 
35,821

Total current liabilities
76,199

 
74,644

Other Noncurrent Liabilities
21,834

 
23,654

Deferred Income Taxes
23,258

 
22,940

Commitments and Contingencies

 

Shareholders’ Equity:
 
 
 
Preferred stock-authorized 3,050,000 shares; outstanding-none

 

Common stock-authorized 75,000,000 shares; outstanding – December-27,374,600 shares; June-27,360,581 shares
109,029

 
107,767

Retained earnings
1,118,119

 
1,219,119

Accumulated other comprehensive loss
(8,631
)
 
(10,057
)
Common stock in treasury, at cost
(735,911
)
 
(735,911
)
Total shareholders’ equity
482,606

 
580,918

Total
$
603,897

 
$
702,156

See accompanying notes to condensed consolidated financial statements.

3




LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
(Amounts in thousands, except per share data)
2015
 
2014
 
2015
 
2014
Net Sales
$
324,769

 
$
303,411

 
$
618,854

 
$
563,398

Cost of Sales
241,175

 
224,758

 
467,293

 
427,321

Gross Margin
83,594

 
78,653

 
151,561

 
136,077

Selling, General and Administrative Expenses
31,479

 
28,437

 
57,558

 
51,257

Operating Income
52,115

 
50,216

 
94,003

 
84,820

Other, Net
(205
)
 
(47
)
 
(83
)
 
(39
)
Income Before Income Taxes
51,910

 
50,169

 
93,920

 
84,781

Taxes Based on Income
17,399

 
17,215

 
31,781

 
29,066

Net Income
$
34,511

 
$
32,954

 
$
62,139

 
$
55,715

Net Income Per Common Share:
 
 
 
 
 
 
 
Basic
$
1.26

 
$
1.21

 
$
2.27

 
$
2.04

Diluted
$
1.25

 
$
1.20

 
$
2.26

 
$
2.04

 
 
 
 
 
 
 
 
Cash Dividends Per Common Share
$
5.50

 
$
0.46

 
$
5.96

 
$
0.90

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
27,328

 
27,294

 
27,324

 
27,290

Diluted
27,374

 
27,323

 
27,359

 
27,319

See accompanying notes to condensed consolidated financial statements.


4




LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
(Amounts in thousands)
2015
 
2014
 
2015
 
2014
Net Income
$
34,511

 
$
32,954

 
$
62,139

 
$
55,715

Other Comprehensive Income:
 
 
 
 
 
 
 
Defined Benefit Pension and Postretirement Benefit Plans:
 
 
 
 
 
 
 
Prior service credit arising during the period, before tax
2,038

 

 
2,038

 

Amortization of loss, before tax
127

 
100

 
258

 
200

Amortization of prior service credit, before tax
(31
)
 
(1
)
 
(32
)
 
(2
)
Total Other Comprehensive Income, Before Tax
2,134

 
99

 
2,264

 
198

Tax Attributes of Items in Other Comprehensive Income:
 
 
 
 
 
 
 
Prior service credit arising during the period, tax
(753
)
 

 
(753
)
 

Amortization of loss, tax
(48
)
 
(37
)
 
(97
)
 
(73
)
Amortization of prior service credit, tax
12

 

 
12

 

Total Tax Expense
(789
)
 
(37
)
 
(838
)
 
(73
)
Other Comprehensive Income, Net of Tax
1,345

 
62

 
1,426

 
125

Comprehensive Income
$
35,856

 
$
33,016

 
$
63,565

 
$
55,840

See accompanying notes to condensed consolidated financial statements.


5




LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
Six Months Ended 
 December 31,
(Amounts in thousands)
2015
 
2014
Cash Flows From Operating Activities:
 
 
 
Net income
$
62,139

 
$
55,715

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
12,149

 
9,665

Deferred income taxes and other noncash changes
269

 
1,130

Stock-based compensation expense
1,353

 
1,519

Excess tax benefit from stock-based compensation
(411
)
 
(242
)
Pension plan activity
(148
)
 
(296
)
Changes in operating assets and liabilities:
 
 
 
Receivables
1,731

 
(1,227
)
Inventories
(2,572
)
 
5,635

Other current assets
51

 
7,033

Accounts payable and accrued liabilities
(115
)
 
4,060

Net cash provided by operating activities
74,446

 
82,992

Cash Flows From Investing Activities:
 
 
 
Cash paid for acquisition, net of cash acquired
(12
)
 

Payments for property additions
(7,362
)
 
(13,069
)
Other-net
(379
)
 
(945
)
Net cash used in investing activities
(7,753
)
 
(14,014
)
Cash Flows From Financing Activities:
 
 
 
Payment of dividends (including special dividend payment, 2016-$136,677; 2015-$0)
(163,139
)
 
(24,611
)
Excess tax benefit from stock-based compensation
411

 
242

Increase in cash overdraft balance
974

 

Net cash used in financing activities
(161,754
)
 
(24,369
)
Net change in cash and equivalents
(95,061
)
 
44,609

Cash and equivalents at beginning of year
182,202

 
211,539

Cash and equivalents at end of period
$
87,141

 
$
256,148

Supplemental Disclosure of Operating Cash Flows:
 
 
 
Cash paid during the period for income taxes
$
33,600

 
$
19,472

See accompanying notes to condensed consolidated financial statements.


6




LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto contained in our 2015 Annual Report on Form 10-K. Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example, 2016 refers to fiscal 2016, which is the period from July 1, 2015 to June 30, 2016.
Cash and Equivalents
We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The carrying amounts of our cash and equivalents, including money market funds and commercial paper, approximate fair value due to their short maturities and are considered level 1 investments, which have quoted market prices in active markets for identical assets. As a result of our cash management system, checks issued but not presented to the banks for payment may create negative book cash balances. When such negative balances exist, they are included in other accrued liabilities and reflected as a financing activity in the Condensed Consolidated Statements of Cash Flows.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation, except for those acquired as part of a business combination, which are stated at fair value at the time of purchase. Purchases of property, plant and equipment included in accounts payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows: 
 
December 31,
 
2015
 
2014
Construction in progress in accounts payable
$
476

 
$
1,055

Earnings Per Share
Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock and stock-settled stock appreciation rights) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock and stock-settled stock appreciation rights.


7


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


Basic and diluted net income per common share were calculated as follows:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Net income
$
34,511

 
$
32,954

 
$
62,139

 
$
55,715

Net income available to participating securities
(177
)
 
(57
)
 
(192
)
 
(95
)
Net income available to common shareholders
$
34,334

 
$
32,897

 
$
61,947

 
$
55,620

 
 
 
 
 
 
 
 
Weighted average common shares outstanding – basic
27,328

 
27,294

 
27,324

 
27,290

Incremental share effect from:
 
 
 
 
 
 
 
Nonparticipating restricted stock
3

 
3

 
4

 
4

Stock-settled stock appreciation rights
43

 
26

 
31

 
25

Weighted average common shares outstanding – diluted
27,374

 
27,323

 
27,359

 
27,319

 
 
 
 
 
 
 
 
Net income per common share – basic
$
1.26

 
$
1.21

 
$
2.27

 
$
2.04

Net income per common share – diluted
$
1.25

 
$
1.20

 
$
2.26

 
$
2.04

Accumulated Other Comprehensive Loss
The following table presents the amounts reclassified out of accumulated other comprehensive loss by component:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Accumulated other comprehensive loss at beginning of period
$
(9,976
)
 
$
(7,998
)
 
$
(10,057
)
 
$
(8,061
)
Defined Benefit Pension Plan Items:
 
 
 
 
 
 
 
Amortization of unrecognized net loss (1)
135

 
107

 
270

 
214

Postretirement Benefit Plan Items:
 
 
 
 
 
 
 
Prior service credit arising during the period (2)
2,038

 

 
2,038

 

Amortization of unrecognized net gain (1)
(8
)
 
(7
)
 
(12
)
 
(14
)
Amortization of prior service credit (1)
(31
)
 
(1
)
 
(32
)
 
(2
)
Total other comprehensive income, before tax
2,134

 
99

 
2,264

 
198

Total tax expense
(789
)
 
(37
)
 
(838
)
 
(73
)
Other comprehensive income, net of tax
1,345

 
62

 
1,426

 
125

Accumulated other comprehensive loss at end of period
$
(8,631
)
 
$
(7,936
)
 
$
(8,631
)
 
$
(7,936
)
(1) Included in the computation of net periodic benefit income/cost. See Notes 9 and 10 for additional information.
(2) Due to a negative plan amendment and subsequent remeasurement. See Note 10 for additional information.
Significant Accounting Policies
There were no changes to our Significant Accounting Policies from those disclosed in our 2015 Annual Report on Form 10-K.
Recently Issued Accounting Standards
In July 2015, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which requires entities to measure most inventory “at the lower of cost or net realizable value,” thereby simplifying current guidance. Under current guidance an entity must measure inventory at the lower of cost or market, where market is defined as one of three different measures, one of which is net realizable value. The guidance will be effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are currently evaluating this guidance, but do not believe it will have a material impact on our consolidated financial statements.

8


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


In May 2014, the FASB issued new accounting guidance for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” Following a one-year deferral of the effective date, the guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the impact of this guidance.
Recently Adopted Accounting Standards
In November 2015, the FASB issued new accounting guidance which requires deferred tax assets and liabilities, as well as any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will only have one net noncurrent deferred tax asset or liability. This guidance may be applied on either a prospective or retrospective basis and is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. We are adopting this guidance effective December 31, 2015 using a retrospective basis of adoption. With the adoption, our net deferred tax liability for all periods presented in the Condensed Consolidated Balance Sheets has been classified as noncurrent. For June 30, 2015, the reclassification of $12.8 million of current deferred tax assets to noncurrent liabilities caused the Other Current Assets line to change from $20.5 million to $7.7 million and the Deferred Income Taxes line to change from $35.7 million to $22.9 million. As this guidance only relates to balance sheet classification, there was no statement of income impact.
In September 2015, the FASB issued new accounting guidance which allows entities to prospectively reflect adjustments made to provisional amounts recognized for a business combination during the measurement period. Under the current guidance these adjustments need to be reflected retrospectively as if the accounting had been completed at the acquisition date. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 but can be adopted early if financial statements have not been issued. We adopted this guidance effective July 1, 2015, and it did not have a material impact on our consolidated financial statements.
Note 2 – Acquisition
On March 13, 2015, we acquired all of the issued and outstanding capital stock of Flatout Holdings, Inc. (“Flatout”), a privately owned manufacturer and marketer of flatbread wraps and pizza crusts based in Saline, Michigan. The purchase price, net of cash acquired, was $92.2 million and was funded by cash on hand. Flatout is reported in our Specialty Foods segment, and its results of operations have been included in our consolidated financial statements from the date of acquisition.
The following preliminary purchase price allocation is based on the fair value of the net assets acquired:
Balance Sheet Captions
Allocation

Receivables
$
2,479

Inventories
3,748

Other current assets
212

Property, plant and equipment
6,937

Goodwill (not tax deductible)
53,948

Other intangible assets
44,000

Current liabilities
(2,445
)
Deferred tax liabilities
(16,651
)
Net assets acquired
$
92,228

Further adjustments may occur to the allocation above as certain tax aspects of the transaction are finalized during the measurement period.

9


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


Note 3 – Long-Term Debt
At December 31, 2015 and June 30, 2015, we had an unsecured credit facility (“Facility”) under which we may borrow, on a revolving credit basis, up to a maximum of $120 million at any one time, with potential to expand the total credit availability to $200 million subject to us obtaining consent of the issuing banks and certain other conditions. The Facility expires on April 18, 2017, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the credit agreement, at our option. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. When we have outstanding borrowings under this Facility, they will be classified as long-term debt due to the long-term nature of this Facility.
At December 31, 2015 and June 30, 2015, we had no borrowings outstanding under this Facility. At December 31, 2015, we had $4.7 million of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. We paid no interest for the three and six months ended December 31, 2015 and 2014.
The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated leverage ratio not greater than 3 to 1 at all times. The interest coverage ratio is calculated by dividing Consolidated EBIT (as defined more specifically in the credit agreement) by Consolidated Interest Expense (as defined more specifically in the credit agreement), and the leverage ratio is calculated by dividing Consolidated Debt (as defined more specifically in the credit agreement) by Consolidated EBITDA (as defined more specifically in the credit agreement).
Note 4 – Commitments and Contingencies
At December 31, 2015, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition will not have a material effect on our consolidated financial statements.
Note 5 – Goodwill and Other Intangible Assets
Goodwill attributable to the Specialty Foods segment was $143.8 million at December 31, 2015 and June 30, 2015.
 
 

10


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


The following table summarizes our identifiable other intangible assets, all included in the Specialty Foods segment:
 
December 31, 
 2015
 
June 30, 
 2015
Tradename (30-year life)
 
 
 
Gross carrying value
$
34,500

 
$
34,500

Accumulated amortization
(910
)
 
(365
)
Net carrying value
$
33,590

 
$
34,135

Trademarks (40-year life)
 
 
 
Gross carrying value
$
370

 
$
370

Accumulated amortization
(228
)
 
(223
)
Net carrying value
$
142

 
$
147

Customer Relationships (10 to 15-year life)
 
 
 
Gross carrying value
$
18,020

 
$
18,020

Accumulated amortization
(9,600
)
 
(8,882
)
Net carrying value
$
8,420

 
$
9,138

Technology / Know-how (10-year life)
 
 
 
Gross carrying value
$
3,900

 
$
3,900

Accumulated amortization
(309
)
 
(114
)
Net carrying value
$
3,591

 
$
3,786

Non-compete Agreements (5-year life)
 
 
 
Gross carrying value
$
600

 
$
600

Accumulated amortization
(95
)
 
(35
)
Net carrying value
$
505

 
$
565

Total net carrying value
$
46,248

 
$
47,771

Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Amortization expense
$
777

 
$
236

 
$
1,523

 
$
472

Total annual amortization expense for each of the next five years is estimated to be as follows:
 
 
2017
$
2,764

2018
$
2,764

2019
$
2,764

2020
$
2,729

2021
$
2,644

Note 6 – Income Taxes
Prepaid Federal income taxes of $4.9 million and $3.8 million were included in Other Current Assets at December 31, 2015 and June 30, 2015, respectively. Prepaid state and local income taxes of $0.8 million and $0.6 million were included in Other Current Assets at December 31, 2015 and June 30, 2015, respectively.
The gross tax contingency reserve at December 31, 2015 was $1.5 million and consisted of estimated tax liabilities of $1.0 million and interest and penalties of $0.5 million. We have not classified any of the gross tax contingency reserve at December 31, 2015 as a current liability as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $1.5 million was included in other noncurrent liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations. We recognize interest and penalties related to these tax liabilities in income tax expense.

11


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


Note 7 – Business Segment Information
The December 31, 2015 identifiable assets by reportable segment are generally consistent with that of June 30, 2015. However, the amount of Corporate assets declined because of the decrease in cash, which is treated as a Corporate asset, due to the payment of the December 2015 special dividend. The following summary of financial information is consistent with the basis of segmentation and measurement of segment profit or loss presented in our June 30, 2015 consolidated financial statements:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Net Sales
$
324,769

 
$
303,411

 
$
618,854

 
$
563,398

Operating Income
 
 
 
 
 
 
 
Specialty Foods
$
55,429

 
$
53,240

 
$
100,390

 
$
90,739

Corporate Expenses
(3,314
)
 
(3,024
)
 
(6,387
)
 
(5,919
)
Total
$
52,115

 
$
50,216

 
$
94,003

 
$
84,820

Note 8 – Stock-Based Compensation
Our shareholders previously approved the adoption of and subsequent amendments to the Lancaster Colony Corporation 2005 Stock Plan (the “2005 Plan”). The 2005 Plan reserved 2,000,000 common shares for issuance to our employees and directors. As the 2005 Plan expired in May 2015, we obtained shareholder approval of the 2015 Omnibus Incentive Plan (the “2015 Plan”) at our November 2015 Annual Meeting of Shareholders. The 2015 Plan did not affect any currently outstanding equity awards granted under the 2005 Plan. The 2015 Plan reserved 1,500,000 common shares for issuance to our employees and directors. All awards granted under these plans will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under these plans varies as to the type of award granted, but generally these awards have a maximum term of five years.
We recognize compensation expense over the requisite service period of the grant. Compensation expense is reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We record tax benefits and excess tax benefits related to stock-settled stock appreciation rights (“SSSARs”) and restricted stock awards. These excess tax benefits are included in the financing section of the Condensed Consolidated Statements of Cash Flows.
Stock-Settled Stock Appreciation Rights
We use periodic grants of SSSARs as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. We calculate the fair value of SSSARs grants using the Black-Scholes option-pricing model. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized.
 
 
 
 
The following table summarizes our SSSARs compensation expense recorded:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Compensation expense
$
191

 
$
231

 
$
538

 
$
585

 
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2015, there was $1.3 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 2 years.
Restricted Stock
We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value.
 
 
 
 

12


LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)


 
 
 
 
The following table summarizes our restricted stock compensation expense recorded:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Compensation expense
$
377

 
$
477

 
$
815

 
$
934

 
 
 
 
 
 
 
 
At December 31, 2015, there was $1.9 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 1 year.
Note 9 – Pension Benefits
We sponsor multiple defined benefit pension plans that covered certain workers under collective bargaining contracts. However, as a result of prior-years’ restructuring activities, for all periods presented, we no longer have any active employees continuing to accrue service cost or otherwise eligible to receive plan benefits. Benefits being paid under the plans are primarily based on negotiated rates and years of service. We contribute to these plans at least the minimum amount required by regulation.
The following table summarizes the components of net periodic benefit income for our pension plans:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Components of net periodic benefit income
 
 
 
 
 
 
 
Interest cost
$
421

 
$
403

 
$
842

 
$
806

Expected return on plan assets
(630
)
 
(658
)
 
(1,260
)
 
(1,316
)
Amortization of unrecognized net loss
135

 
107

 
270

 
214

Net periodic benefit income
$
(74
)
 
$
(148
)
 
$
(148
)
 
$
(296
)
For the three and six months ended December 31, 2015, we made no pension plan contributions and we do not expect to make any contributions to our pension plans during 2016.
Note 10 – Postretirement Benefits
We and certain of our operating subsidiaries provide multiple postretirement medical and life insurance benefit plans. We recognize the cost of benefits as the employees render service. Postretirement benefits are funded as incurred.
In the quarter ended December 31, 2015, we terminated the medical benefits offered under the plans. The reduction in these benefits was accounted for as a negative plan amendment and resulted in the subsequent remeasurement of our benefit obligation. The remeasurement reduced the net periodic benefit cost for 2016 compared to the amount expected prior to the remeasurement.
The following table summarizes the components of net periodic benefit (income) cost for our postretirement plans:
 
Three Months Ended 
 December 31,
 
Six Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Components of net periodic benefit (income) cost
 
 
 
 
 
 
 
Service cost
$
6

 
$
8

 
$
13

 
$
16

Interest cost
17

 
27

 
47

 
54

Amortization of unrecognized net gain
(8
)
 
(7
)
 
(12
)
 
(14
)
Amortization of prior service credit
(31
)
 
(1
)
 
(32
)
 
(2
)
Net periodic benefit (income) cost
$
(16
)
 
$
27

 
$
16

 
$
54


13





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 2016 refers to fiscal 2016, which is the period from July 1, 2015 to June 30, 2016.
The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto, all included elsewhere in this report. The forward-looking statements in this section and other parts of this report involve risks, uncertainties and other factors, including statements regarding our plans, objectives, goals, strategies, and financial performance. Our actual results could differ materially from the results anticipated in these forward-looking statements due to these factors. For more information, see the section below entitled “Forward-Looking Statements.”
OVERVIEW
Business Overview
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice markets.
In March 2015 we acquired all of the issued and outstanding capital stock of Flatout Holdings, Inc. (“Flatout”), a privately owned manufacturer and marketer of flatbread wraps and pizza crusts based in Saline, Michigan. The purchase price was $92.2 million, net of cash acquired. This transaction is discussed in further detail in Note 2 to the condensed consolidated financial statements.
Part of our future growth may result from acquisitions. We continue to review potential acquisitions that we believe will complement our existing product lines, enhance our gross margins and/or offer good expansion opportunities in a manner that fits our overall strategic goals.
Our operations are organized into one reportable segment: “Specialty Foods.” Our sales are predominately domestic.
Our business has the potential to achieve future growth in sales and profitability due to attributes such as:
leading retail market positions in several product categories with a high-quality perception;
recognized innovation in retail products;
a broad customer base in both retail and foodservice accounts;
well-regarded culinary expertise among foodservice accounts;
recognized leadership in foodservice product development;
experience in integrating complementary business acquisitions; and
historically strong cash flow generation that supports growth opportunities.
Our goal is to grow both retail and foodservice sales over time by:
leveraging the strength of our retail brands to increase current product sales;
introducing new retail products and expanding distribution;
growing our foodservice sales through the strength of our reputation in product development and quality; and
pursuing acquisitions that meet our strategic criteria.
We have made substantial capital investments to support our existing food operations and future growth opportunities. For example, in 2015 we completed a significant processing capacity expansion at our Horse Cave, Kentucky dressing facility to help meet demand for our dressing products. Based on our current plans and expectations, we believe our capital expenditures for 2016 could total approximately $15 to $20 million. We anticipate we will be able to fund all of our capital needs in 2016 with cash generated from operations.
RESULTS OF CONSOLIDATED OPERATIONS
Net Sales and Gross Margin
 
Three Months Ended 
 December 31,
 
 
 
 
 
Six Months Ended 
 December 31,
 
 
 
 
(Dollars in thousands)
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Net Sales
$
324,769

 
$
303,411

 
$
21,358

 
7
%
 
$
618,854

 
$
563,398

 
$
55,456

 
10
%
Gross Margin
$
83,594

 
$
78,653

 
$
4,941

 
6
%
 
$
151,561

 
$
136,077

 
$
15,484

 
11
%
Gross Margin as a Percentage of Net Sales
25.7
%
 
25.9
%
 
 
 
 
 
24.5
%
 
24.2
%
 
 
 
 

14




In March 2015 we acquired Flatout and its results of operations have been included in our consolidated financial statements from the date of acquisition with Flatout contributing approximately $9 million and $20 million in net sales to our results for the three and six months ended December 31, 2015, respectively.
Net sales for the three and six months ended December 31, 2015 increased 7% and 10%, respectively. The growth was primarily driven by the contribution from Flatout, as well as increased foodservice volumes on our existing national account business. Net pricing actions relating to our ingredient cost changes and lower new product placement costs also contributed to our net sales growth. Retail net sales increased 7% and 11% during the three and six months ended December 31, 2015, respectively, on the addition of Flatout and higher sales of certain product lines including Olive Garden® retail dressings, Marzetti® Simply Dressed® refrigerated dressings and New York BRAND® croutons and salad toppings. In the second quarter, increased spending on retail trade promotions and continued softness in our frozen roll business combined to limit retail sales growth. Foodservice net sales improved 7% and 9% for the quarter and year-to-date periods, respectively, as demand from national chain restaurants remained strong and pricing actions were taken in response to higher egg costs. Our overall sales volume, as measured by pounds shipped, improved by 4% and 6% for the three and six months ended December 31, 2015, respectively. In general, the net impact of higher pricing represented 2% and more than 1% of net sales for the quarter and year-to-date periods, respectively.
Excluding sales contributed by Flatout, net sales increased 4% and 6% for the three and six months ended December 31, 2015, respectively.
Gross margin percentages were relatively unchanged for the three and six months ended December 31, 2015 as the benefits from lower freight costs, lower new product placement costs and lower soybean oil and dairy-based ingredient costs were offset by higher egg costs attributed to the avian influenza outbreak, increased retail trade spending and a less favorable sales mix. Excluding any pricing actions, total ingredient costs negatively affected our gross margins by less than 1% of net sales for the quarter and 1% of net sales for the year-to-date period.
Selling, General and Administrative Expenses
 
Three Months Ended 
 December 31,
 
 
 
 
 
Six Months Ended 
 December 31,
 
 
 
 
(Dollars in thousands)
2015
 
2014
 
Change
 
2015
 
2014
 
Change
SG&A Expenses
$
31,479

 
$
28,437

 
$
3,042

 
11
%
 
$
57,558

 
$
51,257

 
$
6,301

 
12
%
SG&A Expenses as a Percentage of Net Sales
9.7
%
 
9.4
%
 
 
 
 
 
9.3
%
 
9.1
%
 
 
 
 
Selling, general and administrative expenses increased 11% and 12% for the three and six months ended December 31, 2015, respectively, but were relatively consistent as a percentage of net sales for the comparative second quarter and first half of 2016 and 2015. In general, the increase in these costs reflects the influence of overall higher sales volumes, consumer and trade activities related to Flatout and amortization expense attributable to the Flatout intangible assets.
Operating Income
The foregoing factors contributed to consolidated operating income totaling $52.1 million and $94.0 million for the three and six months ended December 31, 2015, respectively. Our operating income can be summarized as follows:
 
Three Months Ended 
 December 31,
 
 
 
 
 
Six Months Ended 
 December 31,
 
 
 
 
(Dollars in thousands)
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Operating Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Specialty Foods
$
55,429

 
$
53,240

 
$
2,189

 
4
%
 
$
100,390

 
$
90,739

 
$
9,651

 
11
%
Corporate Expenses
(3,314
)
 
(3,024
)
 
(290
)
 
10
%
 
(6,387
)
 
(5,919
)
 
(468
)
 
8
%
Total
$
52,115

 
$
50,216

 
$
1,899

 
4
%
 
$
94,003

 
$
84,820

 
$
9,183

 
11
%
Operating Income as a Percentage of Net Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Specialty Foods
17.1
%
 
17.5
%
 
 
 
 
 
16.2
%
 
16.1
%
 
 
 
 
Total
16.0
%
 
16.6
%
 
 
 
 
 
15.2
%
 
15.1
%
 
 
 
 

Looking forward, similar to 2015, third quarter results for 2016 will include the impact of the Easter holiday. Assuming no recurrence of a widespread avian influenza outbreak, we anticipate pricing actions taken during the first half of our fiscal year will fully offset higher egg costs in the third quarter with egg prices now trending down from their recent peaks. Other

15




commodity costs and freight costs are expected to remain modestly favorable in the third quarter. An initiative to selectively rationalize some of our foodservice business in the coming quarters is expected to slow future sales growth in that channel. Finally, we anticipate an increase in product placement, marketing and promotional costs in the second half of our fiscal year to support new product introductions.
Income Before Income Taxes
As impacted by the factors discussed above, income before income taxes for the three months ended December 31, 2015 increased by $1.7 million to $51.9 million from the prior-year total of $50.2 million. Income before income taxes for the six months ended December 31, 2015 and 2014 was $93.9 million and $84.8 million, respectively.
Taxes Based on Income
Our effective tax rate was 33.8% for the six months ended December 31, 2015 and was lower than the prior-year rate of 34.3%. The decrease in the 2016 effective rate was influenced by an increased deduction for dividends paid to our frozen ESOP Plan due to the $5.00 per share special dividend paid in December 2015.
Net Income
Second quarter net income for 2016 of $34.5 million increased from the preceding year’s net income for the quarter of $33.0 million, as influenced by the factors noted above. Year-to-date net income of $62.1 million was higher than the prior year-to-date total of $55.7 million. Diluted weighted average shares outstanding have remained relatively stable. As a result, and due to the change in net income for each year, net income per share for the second quarter of 2016 totaled $1.25 per diluted share, as compared to net income of $1.20 per diluted share in the prior year. Year-to-date net income per share was $2.26 per diluted share, as compared to $2.04 per diluted share for the prior-year period.
FINANCIAL CONDITION
For the six months ended December 31, 2015, net cash provided by operating activities totaled $74.4 million, as compared to $83.0 million in the prior-year period. The decrease was due to higher working capital requirements as partially offset by the increase in net income and depreciation and amortization. In general, the increased levels of working capital requirements reflect higher sales volumes, the influence of higher egg costs on inventory and the impact of our Flatout acquisition. Additionally, the changes in other current assets and accounts payable and accrued liabilities reflect the timing of estimated tax payments and the favorable tax impact of the loss on sale of discontinued operations in prior years. The increase in depreciation and amortization reflects the amortization of intangibles relating to the Flatout acquisition and the related depreciation on its acquired fixed assets, as well as additional depreciation on recent capital expenditures.
Cash used in investing activities for the six months ended December 31, 2015 was $7.8 million, as compared to $14.0 million in the prior year. This decrease reflected a planned lower level of capital expenditures in 2016. Our 2015 capital expenditures included a processing capacity expansion project at our Horse Cave, Kentucky dressing facility which was essentially complete at December 31, 2014.
Cash used in financing activities for the six months ended December 31, 2015 of $161.8 million increased from the prior-year total of $24.4 million. This increase was due to higher dividend payments, including the $5.00 per share special dividend that was paid in December 2015. The special dividend payment, which totaled $136.7 million, led to the decline in retained earnings since June 30, 2015 and also resulted in the decrease of Corporate assets from that presented in the business segment information disclosed in our 2015 Annual Report on Form 10-K. There were no share repurchases in the six months ended December 31, 2015 and 2014. At December 31, 2015, 1,419,682 shares remained authorized for future buyback under the existing share repurchase program.
Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $120 million at any one time. Loans may be used for general corporate purposes. We had no borrowings outstanding under this Facility at December 31, 2015. At December 31, 2015, we had $4.7 million of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. The Facility expires in April 2017, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the credit agreement, at our option. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. When we have outstanding borrowings under this Facility, they will be classified as long-term debt due to the long-term nature of this Facility.
The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage. At December 31, 2015, we were in compliance with all

16




applicable provisions and covenants of the Facility, and we exceeded the requirements of the financial covenants by substantial margins.
We expect to remain in compliance with the Facility’s covenants for the foreseeable future. However, a default under the Facility could accelerate the repayment of any outstanding indebtedness and limit our access to additional credit available under the Facility. Such an event could require a reduction in or curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise impact our ability to meet our obligations when due. At December 31, 2015, we were not aware of any event that would constitute a default under the Facility.
We believe that internally generated funds and our existing balances in cash and equivalents, in addition to our currently available bank credit arrangements, should be adequate to meet our cash requirements through 2016. If we were to borrow outside of our Facility under current market terms, our average interest rate may increase significantly and have an adverse effect on our results of operations.
CONTRACTUAL OBLIGATIONS
We have various contractual obligations that are appropriately recorded as liabilities in our condensed consolidated financial statements. Certain other items, such as purchase obligations, are not recognized as liabilities in our condensed consolidated financial statements. Examples of items not recognized as liabilities in our condensed consolidated financial statements are commitments to purchase raw materials or packaging inventory that has not yet been received as of December 31, 2015 and future minimum lease payments for the use of property and equipment under operating lease agreements. Aside from expected changes in raw-material needs due to changes in product demand and the impact of commodity prices, there have been no significant changes to the contractual obligations disclosed in our 2015 Annual Report on Form 10-K.
CRITICAL ACCOUNTING POLICIES
There have been no changes in critical accounting policies from those policies disclosed in our 2015 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements and their impact on our consolidated financial statements are disclosed in Note 1 to the condensed consolidated financial statements.
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 Quarterly Report on Form 10-Q 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 including, without limitation, the specific influences outlined below. Management believes these forward-looking statements to be reasonable; however, one 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, except as required by law.
Items which could impact these forward-looking statements include, but are not limited to:
the potential for another large outbreak of avian influenza in the U.S. and the resulting fluctuations in the cost and availability of egg-based ingredients;
our ability to successfully implement an initiative to selectively rationalize business within our foodservice channel;
fluctuations in the cost and availability of other raw materials and packaging;
the reaction of customers or consumers to the effect of price increases we may implement;
the potential for loss of larger programs or key customer relationships;
the effect of consolidation of customers within key market channels;
price and product competition;

17




the success and cost of new product development efforts;
the lack of market acceptance of new products;
the possible occurrence of product recalls or other defective or mislabeled product costs;
changes in demand for our products, which may result from loss of brand reputation or customer goodwill;
maintenance of competitive position with respect to other manufacturers;
adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
capacity constraints that may affect our ability to meet demand or may increase our costs;
dependence on contract manufacturers;
efficiencies in plant operations;
stability of labor relations;
the outcome of any litigation or arbitration;
the impact of fluctuations in our pension plan asset values on funding levels, contributions required and benefit costs;
the ability to successfully grow the Flatout business;
the extent to which future business acquisitions are completed and acceptably integrated;
dependence on key personnel;
changes in financial markets;
access to any required financing;
changes in estimates in critical accounting judgments; and
certain other factors, including the information disclosed in our discussion of risk factors under Item 1A of our 2015 Annual Report on Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our market risks have not changed materially from those disclosed in our 2015 Annual Report on Form 10-K.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of management, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2015 to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is 1) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and 2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting. No changes were made to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

18





PART II – OTHER INFORMATION
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed under Item 1A in our 2015 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) In November 2010, our Board of Directors approved a share repurchase authorization of 2,000,000 shares, of which 1,419,682 shares remained authorized for future repurchases at December 31, 2015. This share repurchase authorization does not have a stated expiration date. In the second quarter, we did not repurchase any of our common stock.
Period
Total
Number of
Shares
Purchased
 
Average
Price Paid
Per Share
 
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans
 
Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Plans
October 1-31, 2015

 
$

 

 
1,419,682

November 1-30, 2015

 
$

 

 
1,419,682

December 1-31, 2015

 
$

 

 
1,419,682

Total

 
$

 

 
1,419,682

 
Item 6. Exhibits
See Index to Exhibits following Signatures.


19




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
LANCASTER COLONY CORPORATION
 
 
 
 
 
(Registrant)
Date:
February 5, 2016
 
By:
 
/s/ JOHN B. GERLACH, JR.
 
 
 
 
 
John B. Gerlach, Jr.
 
 
 
 
 
    Chairman, Chief Executive Officer,
 
 
 
 
 
    President and Director
 
 
 
 
 
    (Principal Executive Officer)
 
 
 
 
 
 
Date:
February 5, 2016
 
By:
 
/s/ DOUGLAS A. FELL
 
 
 
 
 
Douglas A. Fell
 
 
 
 
 
    Treasurer, Vice President,
 
 
 
 
 
    Assistant Secretary and
 
 
 
 
 
    Chief Financial Officer
 
 
 
 
 
    (Principal Financial and Accounting Officer)


20




LANCASTER COLONY CORPORATION AND SUBSIDIARIES
FORM 10-Q
DECEMBER 31, 2015
INDEX TO EXHIBITS
 
 
 
 
 
 
Exhibit
Number
  
Description
  
Located at
 
 
 
 
 
31.1
  
Certification of CEO under Section 302 of the Sarbanes-Oxley Act of 2002
  
Filed herewith
 
 
 
 
31.2
  
Certification of CFO under Section 302 of the Sarbanes-Oxley Act of 2002
  
Filed herewith
 
 
 
 
32
  
Certification of CEO and CFO under Section 906 of the Sarbanes-Oxley Act of 2002
  
Furnished herewith
 
 
 
 
101.INS
  
XBRL Instance Document
  
Filed herewith
 
 
 
 
101.SCH
  
XBRL Taxonomy Extension Schema Document
  
Filed herewith
 
 
 
 
101.CAL
  
XBRL Taxonomy Extension Calculation Linkbase Document
  
Filed herewith
 
 
 
 
101.DEF
  
XBRL Taxonomy Extension Definition Linkbase Document
  
Filed herewith
 
 
 
 
101.LAB
  
XBRL Taxonomy Extension Label Linkbase Document
  
Filed herewith
 
 
 
 
101.PRE
  
XBRL Taxonomy Extension Presentation Linkbase Document
  
Filed herewith

21