LANCASTER COLONY CORP
For the period ended Mar 31, 2024. Filed May 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 2, 2024
MZTI$104.93-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-01.
0000057515-24-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0000057515-24-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 119 current paragraphs.
85 unchanged; 29 reworded; 5 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Restructuring and Impairment Charges
Current report
In the quarter ended March 31, 2024, we committed to a plan to exit our perimeter-of-the-store bakery product lines and close our Flatout flatbread facility in Saline, Michigan and our Angelic Bakehouse sprouted grain bakery facility in Cudahy, Wisconsin. Due to a lack of scale and direct-to-store distribution capabilities for these products, we were not able to achieve the desired operational or financial performance. Production at these facilities ceased in March 2024, and we are now working to divest the real estate and manufacturing equipment at these locations. Certain facility clean-up and closure activities are continuing into the quarter ending June 30, 2024. The operations of these facilities have not been classified as discontinued operations as the closures do not represent a strategic shift that would have a major effect on our operations or financial results. For the three and nine months ended March 31, 2024, we recorded restructuring and impairment charges of $12.1 million related to these closures, as well as $2.6 million recorded in Cost of Sales for the write-down of inventories. The restructuring and impairment charges, which consisted of impairment charges for fixed assets and intangible assets, one-time termination benefits and other closing costs, were not allocated to our two reportable segments due to their unusual nature whereas the $2.6 million write-down of inventories was recorded in our Retail segment.
Current report
Operating income increased $27.6 million to $157.7 million for the nine months ended March 31, 2024 driven by the increase in gross profit, as partially offset by the restructuring and impairment charges.
Current report
For the three months ended March 31, 2024, Retail segment net sales increased 0.3% to $248.1 million from the prior-year total of $247.2 million. The increase in Retail segment net sales was driven by volume gains for our licensing program, led by Chick-fil-A® sauces and dressings; our newly introduced Subway® sandwich sauces and Texas Roadhouse® steak sauces; and Olive Garden® dressings. Retail segment sales volumes, measured in pounds shipped, increased 1.5%, outpacing the sales dollar growth as we invested in trade spending that supported household penetration growth and new items. Excluding the impacts of a recent value engineering initiative and all sales attributed to our perimeter-of-the-store bakery product lines that we exited during the quarter ended March 31, 2024, Retail sales volumes increased 2.8%.
Current report
For the three months ended March 31, 2024, Foodservice segment operating income increased 8.6% to $24.3 million driven by favorability in our pricing net of commodity costs and the beneficial impact of higher sales volumes.
Removed paragraphs (9)
Previous report
BUSINESS TRENDS
Previous report
Dating back to the onset of the COVID-19 pandemic in 2020, the effects of COVID-19 on consumer behavior have impacted the relative demand for our Retail and Foodservice products. More specifically, beginning in March 2020, consumer demand shifted towards increased at-home food consumption and away from in-restaurant dining. Over the course of the following two years, while this shift in demand was inconsistent and volatile, on balance it positively impacted our Retail segment sales volumes and negatively impacted our Foodservice segment sales volumes. From an operations standpoint, the shift in demand over the two-year period, combined with other COVID-19-related issues, unfavorably impacted the operating results of both our segments. Beginning near the end of 2022, the volatility and shifts in demand between our Retail and Foodservice products subsided and our operating environment became more predictable and stable.
Previous report
The inflationary cost environment we experienced during 2022 resulted in significantly higher input costs for our business. During 2022, we endured unprecedented inflationary costs for commodities, particularly soybean oil and flour, in addition to notably higher costs for packaging, freight and warehousing, and labor. This cost inflation was attributed to numerous factors such as the impacts of the COVID-19 pandemic, the war in Ukraine, climate and weather conditions, supply chain disruptions, including some raw material and packaging shortages, a tight labor market, and government policy decisions.
Previous report
We continued to experience significant cost inflation through 2023, particularly for soybean oil, eggs and flour. However, our pricing actions served to offset these inflationary costs. In addition, the operating environment stabilized as we did not experience the supply chain disruptions and demand swings of the preceding years.
Previous report
Near the end of 2023, cost inflation began to diminish notably, and we completed the first half of 2024 with our input costs, in aggregate, at levels below the prior year.
Previous report
For the three months ended December 31, 2023, Retail segment net sales increased 2.0% to $264.0 million from the prior-year total of $258.8 million, including the favorable impact of our 2023 pricing actions that have not fully lapped. Key contributors to the increase in Retail segment net sales included our licensing program, most notably Chick-fil-A® sauces and dressings; our New York BRAND® Bakery frozen garlic bread products; and our Reames® frozen egg noodles. Retail segment sales volumes, measured in pounds shipped, decreased 1.9%. Excluding the impacts of a recent value engineering initiative and our reduced commitment to private label bread, Retail sales volumes increased 1.2%.
Previous report
For the three months ended December 31, 2023, Retail segment operating income increased 20.6% to $59.5 million due to favorability in our pricing net of commodity costs and our cost savings programs.
Previous report
For the three months ended December 31, 2023, Foodservice segment operating income increased 1.7% to $27.1 million driven by the impact of the higher sales volumes and our cost savings programs.
Previous report
•the ability to successfully grow acquired businesses;
Reworded paragraphs (29)
Previous wording
Consolidated net sales for the three months ended December 31, 2023 increased 1.8% to a second quarter record $485.9 million versus $477.4 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by last year’s pricing actions for the Retail segment that have not fully lapped and volume gains for the Foodservice segment. Deflationary pricing was a headwind to Foodservice segment sales growth. Breaking down the 1.8% increase in consolidated net sales, approximately 1.5% is attributed to volume/mix impacts and the remainder pricing. Consolidated sales volumes, measured in pounds shipped, increased 1.9% for the three months ended December 31, 2023. Excluding the impacts of a recent value engineering initiative and our reduced commitment to private label bread, consolidated sales volumes increased 3.3%.
Current wording
Consolidated net sales for the three months ended March 31, 2024 increased 1.4% to a third quarter record $471.4 million versus $464.9 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by volume gains. Deflationary pricing was a headwind to Foodservice segment sales growth. Breaking down the 1.4% increase in consolidated net sales, approximately 2.9% is attributed to volume/mix impacts offset by a combination of deflationary pricing in Foodservice and increased trade spending in Retail. Consolidated sales volumes, measured in pounds shipped, increased 2.9% for the three months ended March 31, 2024.
Previous wording
Consolidated net sales for the six months ended December 31, 2023 increased 4.9% to $947.5 million versus $902.9 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by volume gains. Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior year were unfavorably impacted by an estimated $25 million in net sales attributed to advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live that commenced on July 1, 2022. Breaking down the 4.9% increase in consolidated net sales, approximately 2.8% is attributed to the ERP go-live sales shift, approximately 1.3% is attributed to volume/mix impacts and the remainder pricing. Consolidated sales volumes, measured in pounds shipped, increased 4.8% for the six months ended December 31, 2023. Excluding the impact of last year’s shift in sales due to our ERP go-live, in addition to the impacts of a recent value engineering initiative and our reduced commitment to private label bread, consolidated sales volumes increased 2.5%.
Current wording
Consolidated net sales for the nine months ended March 31, 2024 increased 3.7% to $1,418.9 million versus $1,367.9 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by volume gains. Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior year were unfavorably impacted by an estimated $25 million in net sales attributed to advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live that commenced on July 1, 2022. Breaking down the 3.7% increase in consolidated net sales, approximately 1.8% is attributed to the ERP go-live sales shift, approximately 1.8% is attributed to volume/mix impacts and the remainder is net pricing. Consolidated sales volumes, measured in pounds shipped, increased 4.1% for the nine months ended March 31, 2024. Excluding the impact of last year’s shift in sales due to our ERP go-live, consolidated sales volumes increased 2.0%.
Previous wording
Consolidated gross profit for the three months ended December 31, 2023 increased $19.4 million to a second quarter record $121.5 million driven by continued favorability in pricing net of commodity costs and our cost savings programs. Partial offsets to these positive factors included higher labor costs and increased depreciation expense. In aggregate, the input costs for our commodity basket were below last year’s level.
Current wording
Consolidated gross profit for the three months ended March 31, 2024 increased $10.3 million to a third quarter record $104.5 million driven by continued favorability in pricing net of commodity costs, our cost savings programs and volume growth. In aggregate, the input costs for our commodity basket were below last year’s level. Consolidated gross profit was unfavorably impacted by a $2.6 million inventory write-down resulting from our decision to exit our perimeter-of-the-store bakery product lines, specifically our Flatout® and Angelic Bakehouse® brands.
Previous wording
Consolidated gross profit for the six months ended December 31, 2023 increased $29.0 million to $230.2 million as influenced by favorability in pricing net of commodity costs, the higher sales volumes and our cost savings programs. In the prior year, gross profit was unfavorably impacted by an estimated $5 million due to the aforementioned shift of net sales into the quarter ended June 30, 2022 ahead of our ERP go-live.
Current wording
Consolidated gross profit for the nine months ended March 31, 2024 increased $39.3 million to $334.7 million as influenced by favorability in pricing net of commodity costs, the higher sales volumes and our cost savings programs. In the prior year, gross profit was unfavorably impacted by an estimated $5 million due to the aforementioned shift of net sales into the quarter ended June 30, 2022 ahead of our ERP go-live.
Previous wording
Selling, general and administrative (“SG&A”) expenses for the three months ended December 31, 2023 increased 9.7% to $55.7 million compared to $50.8 million in the prior-year period. This increase reflects higher expenditures to support the continued growth of our business, including a more normalized level of consumer promotions and higher brokerage costs. These higher costs were partially offset by lower expenditures for Project Ascent, our ERP initiative. Project Ascent expenses totaled $2.0 million in the current-year quarter versus $7.5 million last year.
Current wording
Selling, general and administrative (“SG&A”) expenses for the three months ended March 31, 2024 decreased 11.8% to $57.2 million compared to $64.8 million in the prior-year period. This decline reflects lower expenditures for Project Ascent, our ERP initiative, and the impact of nonrecurring legal charges for closed operations in the prior-year quarter. Project Ascent expenses totaled $1.9 million in the current-year quarter versus $7.6 million last year.
Previous wording
SG&A expenses for the six months ended December 31, 2023 increased 7.1% to $107.7 million compared to $100.5 million in the prior year. Consistent with the cost drivers noted for the three months ended December 31, 2023, this increase reflects higher expenditures to support the continued growth of our business, including a more normalized level of consumer promotions, higher brokerage costs and investments in personnel, as partially offset by lower expenditures for Project Ascent. Project Ascent expenses totaled $5.8 million for the six months ended December 31, 2023 compared to $16.7 million in the prior-year period.
Current wording
SG&A expenses for the nine months ended March 31, 2024 decreased 0.3% to $164.9 million compared to $165.4 million in the prior year. This decline reflects lower expenditures for Project Ascent, largely offset by higher expenditures to support the continued growth of our business, including a more normalized level of consumer promotions, higher brokerage costs and investments in personnel. Project Ascent expenses totaled $7.7 million for the nine months ended March 31, 2024 compared to $24.3 million in the prior-year period.
Previous wording
Project Ascent expenses are included within Corporate Expenses. A portion of the costs that have been classified as Project Ascent expenses represent ongoing costs that will continue subsequent to the completion of our ERP implementation.
Current wording
Project Ascent expenses are included within Corporate Expenses. A portion of the costs classified as Project Ascent expenses represent ongoing costs that have continued subsequent to the completion of our ERP implementation.
Previous wording
Operating income increased $14.4 million to a second quarter record $65.8 million for the three months ended December 31, 2023 driven by the increase in gross profit, as partially offset by the increase in SG&A expenses.
Current wording
Operating income increased $5.7 million to $35.1 million for the three months ended March 31, 2024 driven by the increase in gross profit and lower SG&A expenses, as partially offset by the restructuring and impairment charges.
Previous wording
Our effective tax rate was 23.5% and 23.1% for the six months ended December 31, 2023 and 2022, respectively. For the six months ended December 31, 2023 and 2022, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
Current wording
Our effective tax rate was 23.5% and 22.0% for the nine months ended March 31, 2024 and 2023, respectively. For the nine months ended March 31, 2024 and 2023, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
Previous wording
We include the tax consequences related to stock-based compensation within the computation of income tax expense. We may experience increased volatility to our income tax expense and resulting net income dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards. For the six months ended December 31, 2023 and 2022, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by less than 0.1% and 0.4%, respectively.
Current wording
We include the tax consequences related to stock-based compensation within the computation of income tax expense. We may experience increased volatility to our income tax expense and resulting net income dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards. For the nine months ended March 31, 2024 and 2023, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by less than 0.1% and 0.4%, respectively.
Previous wording
As influenced by the factors discussed above, diluted net income per share for the second quarter of 2024 totaled $1.87, as compared to $1.45 per diluted share in the prior year. Expenditures for Project Ascent reduced diluted earnings per share by $0.06 and $0.21 for the three months ended December 31, 2023 and 2022, respectively.
Current wording
As influenced by the factors discussed above, diluted net income per share for the third quarter of 2024 totaled $1.03, as compared to $0.89 per diluted share in the prior year. For the three months ended March 31, 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.41. These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.34, and the inventory write-down, which reduced diluted earnings per share by $0.07. Expenditures for Project Ascent reduced diluted earnings per share by $0.05 and $0.21 for the three months ended March 31, 2024 and 2023, respectively. Diluted earnings per share in the prior-year quarter benefited from final adjustments related to the filing of tax returns for fiscal 2022, including a favorable adjustment related to closed operations.
Previous wording
For the six months ended December 31, 2023, diluted net income per share totaled $3.47, as compared to $2.81 per diluted share in the prior year. For the six months ended December 31, 2023 and 2022, expenditures for Project Ascent reduced diluted earnings per share by $0.16 and $0.47, respectively.
Current wording
For the nine months ended March 31, 2024, diluted net income per share totaled $4.50, as compared to $3.71 per diluted share in the prior year. For the nine months ended March 31, 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.41. These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.34, and the inventory write-down, which reduced diluted earnings per share by $0.07. Expenditures for Project Ascent reduced diluted earnings per share by $0.22 and $0.68 for the nine months ended March 31, 2024 and 2023, respectively.
Previous wording
For the six months ended December 31, 2023, Retail segment net sales increased 5.0% to $506.2 million compared to the prior-year total of $482.0 million, including the favorable impact of last year’s pricing actions and higher sales volumes. Sales in the prior year were unfavorably impacted by advance orders accounting for an estimated $11 million in Retail net sales that were made near the end of fiscal 2022 ahead of our ERP go-live, which commenced on July 1, 2022. Retail segment sales volumes, measured in pounds shipped, increased 2.0%. Retail sales volume growth was driven by the continued success of our program for licensed dressings and sauces. Our New York BRAND® Bakery frozen garlic bread products also contributed to the increase in the Retail sales volumes. Excluding the impact of last year’s shift in sales due to our ERP go-live, in addition to the impacts of a recent value engineering initiative and our reduced commitment to private label bread, Retail segment sales volumes increased 1.8%.
Current wording
For the nine months ended March 31, 2024, Retail segment net sales increased 3.4% to $754.2 million compared to the prior-year total of $729.2 million, including the favorable impact of last year’s pricing actions and higher sales volumes. Sales in the prior year were unfavorably impacted by advance orders accounting for an estimated $11 million in Retail net sales near the end of fiscal 2022 ahead of our ERP go-live, which commenced on July 1, 2022. Retail segment sales volumes for the nine months ended March 31, 2024, measured in pounds shipped, increased 1.8%. Retail sales volume growth was driven by the continued success of our program for licensed dressings and sauces. Our New York BRAND® Bakery frozen garlic bread products also contributed to the increase in the Retail sales volumes. Excluding the impact of last year’s shift in sales due to our ERP go-live, in addition to the impacts of a recent value engineering initiative, our reduced commitment to private label bread and all sales attributed to our perimeter-of-the-store bakery product lines, Retail segment sales volumes increased 2.2%.
Previous wording
For the six months ended December 31, 2023, Retail segment operating income increased 22.1% to $112.6 million due to favorability in our pricing net of commodity costs, our cost savings programs and the beneficial impact of higher sales volumes.
Current wording
For the three months ended March 31, 2024, Retail segment operating income increased 28.1% to $47.3 million due to favorability in our pricing net of commodity costs, including pricing impacts from investments in trade spending; our cost savings programs; and the beneficial impact of higher sales volumes. These favorable factors were partially offset by the $2.6 million inventory write-down resulting from our decision to exit our perimeter-of-the-store bakery product lines.
Previous wording
Operating income increased $21.9 million to $122.5 million for the six months ended December 31, 2023 driven by the same factors noted for the three months ended December 31, 2023.
Current wording
For the nine months ended March 31, 2024, Retail segment operating income increased 23.8% to $160.0 million due to the same factors noted for the three months ended March 31, 2024.
Previous wording
For the three months ended December 31, 2023, Foodservice segment net sales grew 1.5% to $221.9 million compared to $218.6 million in the prior-year period driven by increased demand from several of our national chain restaurant account customers and growth for our branded Foodservice products. Deflationary pricing was a headwind to Foodservice segment sales growth. Foodservice segment sales volumes, measured in pounds shipped, increased 4.6%.
Current wording
For the three months ended March 31, 2024, Foodservice segment net sales grew 2.6% to $223.4 million compared to $217.7 million in the prior-year period driven by increased demand from several of our national chain restaurant account customers and growth for our Marzetti® branded Foodservice products. Deflationary pricing was a headwind to Foodservice segment sales growth. Foodservice segment sales volumes, measured in pounds shipped, increased 3.9%.
Previous wording
For the six months ended December 31, 2023, Foodservice segment net sales increased 4.8% to $441.3 million from the prior-year total of $421.0 million driven by increased demand from several of our national chain restaurant account customers and growth for our branded Foodservice products. Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior-year first quarter were unfavorably impacted by the advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live, which reduced Foodservice net sales in the prior-year period by an estimated $14 million. Foodservice segment sales volumes, measured in pounds shipped, increased 6.6%. Excluding the impact of last year’s shift in sales due to our ERP go-live, Foodservice segment sales volumes increased 3.0%.
Current wording
For the nine months ended March 31, 2024, Foodservice segment net sales increased 4.1% to $664.7 million from the prior-year total of $638.7 million driven by increased demand from several of our national chain restaurant account customers and growth for our branded Foodservice products. Deflationary pricing was a headwind to Foodservice segment sales growth. Sales in the prior year were unfavorably impacted by the advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live, which reduced Foodservice net sales in the prior-year period by an estimated $14 million. Foodservice segment sales volumes, measured in pounds shipped, increased 5.7%. Excluding the impact of last year’s shift in sales due to our ERP go-live, Foodservice segment sales volumes increased 3.3%.
Previous wording
For the six months ended December 31, 2023, Foodservice segment operating income decreased 8.3% to $53.8 million driven by higher supply chain costs, as partially offset by the benefit of increased sales volumes, a more favorable sales mix and our cost savings programs.
Current wording
For the nine months ended March 31, 2024, Foodservice segment operating income decreased 3.6% to $78.1 million driven by higher supply chain costs, as partially offset by favorability in our pricing net of commodity costs and the beneficial impact of higher sales volumes.
Previous wording
For the three months ended December 31, 2023 and 2022, corporate expenses totaled $20.9 million and $24.7 million, respectively. This decrease primarily reflects a decline in Project Ascent expenses, as partially offset by increased investments in personnel. Expenditures for Project Ascent totaled $2.0 million and $7.5 million for the three months ended December 31, 2023 and 2022, respectively.
Current wording
For the three months ended March 31, 2024 and 2023, corporate expenses totaled $24.4 million and $29.9 million, respectively. This decrease primarily reflects a decline in Project Ascent expenses, as well as the impact of nonrecurring legal charges for closed operations in the prior-year quarter. Expenditures for Project Ascent totaled $1.9 million and $7.6 million for the three months ended March 31, 2024 and 2023, respectively.
Previous wording
For the six months ended December 31, 2023 and 2022, corporate expenses totaled $43.9 million and $50.3 million, respectively. This decrease reflects the same factors noted for the three months ended December 31, 2023. Expenditures for Project Ascent totaled $5.8 million and $16.7 million for the six months ended December 31, 2023 and 2022, respectively.
Current wording
For the nine months ended March 31, 2024 and 2023, corporate expenses totaled $68.3 million and $80.2 million, respectively. This decrease reflects lower expenditures for Project Ascent, as partially offset by higher expenditures to support the continued growth of our business, including investments in personnel. Expenditures for Project Ascent totaled $7.7 million and $24.3 million for the nine months ended March 31, 2024 and 2023, respectively.
Previous wording
Looking forward to our fiscal third quarter, we project Retail sales will continue to benefit from our expanding licensing program while, in the Foodservice segment, we expect sustained volume growth from select quick-service restaurant customers. We anticipate continued favorability in our pricing net of commodity costs, but at a sequentially lower level compared to our fiscal second quarter. Deflationary pricing is expected to remain a headwind to Foodservice segment net sales in our fiscal third quarter.
Current wording
Looking forward to our fiscal fourth quarter, we project Retail sales will continue to benefit from our expanding licensing program, including incremental growth from the recent additions of Subway and Texas Roadhouse sauces. In the Foodservice segment, we expect continued volume growth from select quick-service restaurant customers and our branded Foodservice products, while deflationary pricing is projected to remain a headwind to Foodservice segment net sales. We anticipate reduced favorability in our pricing net of commodity costs when compared sequentially to our fiscal third quarter.
Previous wording
For the six months ended December 31, 2023, net cash provided by operating activities totaled $141.5 million, as compared to $140.4 million in the prior-year period. This increase was primarily due to higher net income and an increase in noncash depreciation and amortization expenses, as partially offset by the year-over-year changes in net working capital, particularly accounts payable. The prior-year results reflected the favorable cash flow impact of higher accounts payable, as adjusted to exclude construction in progress amounts, due to increased commodity costs as well as the timing of payments.
Current wording
For the nine months ended March 31, 2024, net cash provided by operating activities totaled $217.5 million, as compared to $184.2 million in the prior-year period. This increase was primarily due to higher net income, as well as noncash restructuring and impairment charges in the current year.
Previous wording
Cash used in investing activities for the six months ended December 31, 2023 was $40.2 million, as compared to $55.8 million in the prior year. This decrease primarily reflects a lower level of payments for property additions in the current year as the capacity expansion project at our dressing and sauce facility in Horse Cave, Kentucky reached substantial completion in March 2023.
Current wording
Cash used in investing activities for the nine months ended March 31, 2024 was $57.4 million, as compared to $78.9 million in the prior year. This decrease primarily reflects a lower level of payments for property additions in the current year as the capacity expansion project at our dressing and sauce facility in Horse Cave, Kentucky reached substantial completion in March 2023.
Previous wording
Cash used in financing activities for the six months ended December 31, 2023 of $55.9 million increased from the prior-year total of $49.5 million. This increase reflects higher levels of share repurchases and dividend payments.
Current wording
Cash used in financing activities for the nine months ended March 31, 2024 of $83.8 million increased from the prior-year total of $82.7 million. This increase reflects higher dividend payments, as partially offset by lower levels of share repurchases and tax withholdings for stock-based compensation.
Previous wording
Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $150 million at any one time. We had no borrowings outstanding under the Facility at December 31, 2023. At December 31, 2023, we had $2.2 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. The Facility expires in March 2025, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to SOFR or an alternate base rate defined in the Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
Current wording
Under our unsecured revolving credit facility (“Facility”), which we renewed in March 2024, we may borrow up to a maximum of $150 million at any one time. We had no borrowings outstanding under the Facility at March 31, 2024. At March 31, 2024, we had $2.2 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. The Facility expires in March 2029, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to SOFR or an alternate base rate defined in the Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
Previous wording
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, 2023, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At December 31, 2023, there were no events that would constitute a default under this facility.
Current wording
The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage. At March 31, 2024, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At March 31, 2024, there were no events that would constitute a default under this facility.
Previous wording
We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments. If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2024 could total between $70 and $80 million.
Current wording
We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments. If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2024 will total an estimated $65 million.
Previous wording
•the impact of any regulatory matters affecting our food business, including any required labeling changes and their impact on consumer demand;
Current wording
•the impact of any regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government;
Previous wording
•the extent to which business acquisitions are completed and acceptably integrated;
Current wording
•the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;