netrashetty
Netra Shetty
Lancaster Colony (NASDAQ: LANC) primarily makes specialty foods like salad dressings, frozen breads, and fruit dips. The company also sells other products, like glassware and candles, but food makes up 87% of the company's revenue.[1] The company does most of its business within the United States; in 2009, domestic sales represented 90% of total sales.
In the early 2000s, the company decided to focus on growing its specialty foods segment. In line with this, the company divested from its previously owned automotive segment and has substantially shrunken its glassware and candles business. In the last decade, specialty foods has grown from 40% of net sales to nearly comprising the company's entire business.[2]
The 2008 recession hurt Lancaster Colony consumers cut back on spending and the demand for the company's products fell. As a result, the company's net income fell 18%. However the economy began its rebound in 2009 and as a result Lancaster had positive growth -- in 2009 the company's net income more than doubled.
Company Overview
Segments[3]
Lancaster Colony divides its sales into three different product segments:
Specialty Foods (87% of net sales) - the company produces a variety of products under this segment such as: salad dressings, sauces, croutons, fruit glazes, vegetable dips, fruit dips, frozen hearth-baked breads, yeast rolls, dry egg noodles, and caviar. Some of its brands include: Marzetti, Cardini’s, Pfeiffer, Mamma Bella, New York BRAND, Sister Schubert’s, Reames, Romanoff, and Inn Maid. These products are mainly produced at 15 different manufacturing facilities across the country.
Contents
1 Company Overview
1.1 Segments[3]
2 Business Growth
2.1 FY 2009 (ended June 30, 2009)[1]
3 Trends and Forces
3.1 Economic Recovery Spells Good News For Lancaster Colony
3.2 Lancaster's Sales Heavily Depend on Wal-Mart
4 Competitors
5 References
Glassware and Candles (13% of net sales)- the candle product line, sold under the brand Candle-lite, includes products such as candles, candle accessories, and other home fragrance products. The glass product line, sold under the Brody and Indiana Glass brands, includes tumblers, bowls, pitchers, jars, barware, and vases.
Business Growth
FY 2009 (ended June 30, 2009)[1]
Net income more than doubled from $37.6 million in 2008 to $89.1 million in 2009.
Net sales increased 7% to $1.05 billion compared to $981 million a year ago. Growth was driven by a 13% growth in the Specialty Foods segment, which grew to $910 million, but was offset by an 18% decline in the Glassware and Candles segment, which fell to $142 million . The Specialty Foods segment benefited both from pricing actions and higher sales volumes. The decrease in sales of the Glassware and Candles segment is primarily attributable to the November 2007 sale of the consumer and floral glass operations.
Trends and Forces
Economic Recovery Spells Good News For Lancaster Colony
When the the economy went into a recession in 2008, Lancaster felt the negative effects in its bottom line as consumers and business cut back on spending and bought fewer of Lancaster's products. Additionally, the company suffered from higher commodities and operational costs. As a result, the company's net income fell 18% to $37.6 million in 2008. However the economy started its rebound in 2009 and has continued into 2010. As the demand for Lancaster's products increase and the price of commodities falls, Lancaster has seen positive growth. In 2009, net income more than doubled to $89 million.[1]
Lancaster's Sales Heavily Depend on Wal-Mart
In 2009, 20% of Lancaster Colony's net sales were attributed to Wal-Mart and totaled $206 million. This was 3% higher than what was attributable in 2008.[4] This poses a risk on two fronts. First, if Wal-Mart ever decided to cancel its contract with Lancaster, the company would have to find some way to make up the 20% of revenue it lost. Second, because Wal-Mart contributes so much for Lancaster's net sales, if Wal-Mart's growth started to stagnate or decline (for example from the sluggish economy), Lancaster would be hurt because Wal-Mart would demand fewer of its products and thus reduce sales.
Competitors
Because Lancaster Colony makes a wide range of products selling in different markets, the company faces competition from both big companies with a diversified line of products and smaller narrowly-focused companies.
In the Major Diversified Food industry, Lancaster Colony competes with H.J. Heinz Company (HNZ) , Kraft Foods (KFT) , and Blyth (BTH) .
franchises and retailer of new and used vehicles and services. As of April 10, 2008, Lithia offered 30 brands of new vehicles and used vehicles in 109 stores in the United States and over the Internet.[1] The company sells new and used cars and light trucks; sells replacement parts; provides vehicle maintenance, warranty, paint and repair services; and arranges related financing, service contracts, protection products and credit insurance for its automotive customers.
Contents
1 Business Overview
2 Franchise Locations
3 The Industry
4 Financials
5 References
Lithia Motors was founded in 1946 and incorporated in 1968. It's two senior executives have managed the company for nearly 40 years. Since the initial public offering in 1996, Lithia has grown from 5 to 109 stores as of April 10, 2008, primarily through its acquisition program that has been accretive to earnings, increasing annual revenues from $143 million in 1996 to $3.2 billion in 2007. In addition, since initial public offering through December 31, 2007, Lithia has achieved compound annual growth rates of 33% per year for revenues and 23% per year for net income from continuing operations.
The company's current new vehicle revenue mix is weighted towards domestic brands at approximately 62%. Management's strategy is to target a more balanced mix between its domestic, import and luxury brands in the years ahead. Approximately 98% of acquisition revenues in 2007 were from import and luxury brands, contributing to an improvement in its import/domestic mix.
Lithia Motors currently offers several customer guarantees that management believes differentiates the company from other competitors in the marketplace. These guarantees are a culmination of several evolution cycles within Lithia that came to fruition in 2007.
For New Vehicles:
A low haggle “Drive it Now” price, always at or below Manufacturer’s Suggested Retail Price (MSRP);
Never any Additional Dealer Markup;
No Documentation Fees, except where state-mandated or controlled; and
For Used Vehicles
A low haggle “Drive it Now” price;
No Documentation Fees, except where state-mandated or controlled; and
A sixty-day, 3000 mile, “if it breaks, we fix it” warranty.
For Service Work
Service provided on your schedule with no appointment necessary;
A three-year, 50,000 mile warranty on all repair work, including parts and labor, to ensure a customer will never pay for the same repair twice; and
A guaranteed price based on the estimate given at the time the car was dropped off.
In 2007 Lithia opened three stand alone used car stores, called L2 Auto. L2 Auto is a web-based sales process that provides a new experience for consumers in the used car market. It offers transparency in every transaction including availability of a broad selection of popular late model used vehicles, clearly marked “negotiation-free” prices based on current market values, a 240 point inspection plan, a sixty-day, 3000 mile “if it breaks, we fix it” warranty, and a three day “no questions asked” return policy.
Franchise Locations
Franchise Name: Dealer: Street Address: City: State: Zip: Phone: Website:
BMW of Anchorage BMW 730 E. 5th Ave. Anchorage Alaska 99501 866-613-1939 http://www.bmwofanchorage.com/
Chevrolet Cadillac of Fairbanks Chevrolet 3300 S. Cushman St. Fairbanks Alaska 99701 866-648-7507 http://www.fairbankschevy.com/
Chevrolet of South Anchorage Chevrolet 9100 Old Seward Hwy Anchorage Alaska 99515 866-612-5667 http://www.anchoragechevrolet.com/
Chevrolet of Wasilla Chevrolet 3700 E Parks Hwy. Wasilla Alaska 99654 866-681-7841 http://www.wasillachevrolet.com/
Lithia Chrysler Jeep Dodge of South Anchorage Chrysler 9600 Old Seward Hwy. Anchorage Alaska 99515 866-648-7922 http://www.lithiachrysleranchorage.com/
Lithia Hyundai of Anchorage Hyundai 5400 Old Seward Hwy. Anchorage Alaska 99518 866-579-4144 http://www.lithiahyundaianchorage.com/
Saab of South Anchorage Saab 9100 Old Seward Hwy. Anchorage Alaska 99515 866-599-2349 http://www.anchoragesaab.com/
BMW of Monterey BMW 1 Geary Plaza. Seaside California 93955 866-681-6838 http://www.bmwmonterey.com/
Lithia Chevrolet of Redding Chevrolet 200 East Cypress Ave. Redding California 96002 866-681-7574 http://www.lithiachevroletredding.com/
Lithia Chrysler Jeep Dodge of Eureka Chrysler 4320 Broadway Eureka California 95503 866-681-8688 http://www.lithiaeureka.com/
Lithia Dodge of Fresno Dodge 6162 N Blackstone Ave Fresno California 93710 866-681-7818 http://www.lithiafresnododge.com/
Lithia Chrysler Jeep Dodge of Santa Rosa Chrysler 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiadodgesantarosa.com/
Lithia Chrysler Jeep Dodge of Concord Chrysler 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiadodgeconcord.com/
Lithia Ford of Fresno Ford 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiafordoffresno.com/
Lithia Hyundai of Fresno Hyundai 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiahyundaifresno.com/
Lithia Mazda of Fresno Mazda 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.fresnomazda.com/
Lithia Nissan of Fresno Nissan 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithianissanfresno.com/
Porsche of Monterey Porsche 730 E 5th Ave Anchorage California 99501 866-613-1939 http://monterey.porschedealer.com/service/index.php
Lithia Scion of Vacaville Scion 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiascionofvacaville.com/
Lithia Scion of Redding Scion 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.reddingscion.com/
Lithia Suzuki of Fresno Suzuki 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiasuzukioffresno.com/
Lithia Toyota of Redding Toyota 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiatoyotaredding.com/
Lithia Volkswagen of Thornton Volkswagen 730 E 5th Ave Anchorage Colorado 99501 866-613-1939 http://www.lithiavwthornton.com/
Chevrolet Cadillac of Twin Falls Chevrolet 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.twinfallschevrolet.com/
Chevrolet of Caldwell Chevrolet 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.caldwellchevrolet.com/
Lithia Chrysler Jeep Dodge of Pocatello Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiachryslerpocatello.com/
Lithia Chrysler Jeep Dodge of Twin Falls Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.twinfallsdodge.com
Lithia Ford Lincoln Mercury of Boise Ford 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiafordboise.com/
Audi Boise Audi 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.audiofboise.com/
Honda of Pocatello Honda 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.hondaofpocatello.com/
Lithia Hyundai of Pocatello Hyundai 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiahyundaipocatello.com/
L2 Auto of Boise Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.l2autoofboise.com/
Acura of Johnston Acura 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.acuraofjohnston.com/
Audi Des Moines Audi 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.audiofdesmoines.com/
BMW of Des Moines BMW 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.bmwdesmoinesiowa.com/
Honda of Ames Honda 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.ameshonda.com/
Kia of Cedar Rapids Kia 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.kiaofcedarrapids.com/
Mercedes-Benz of Des Moines Mercedes-Benz 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.mbzofdesmoines.com/
Lithia Nissan of Ames Nissan 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.amesnissan.com/
Assured Used Car and Truck Misc. 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.assuredusedcarandtruckstore.com/
Lithia Volkswagen of Des Moines Volkswagen 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.lithiavwofdesmoines.com/
Buick GMC Cadillac of Cedar Rapids GM 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.buickofhiawatha.com/
Chevrolet of Helena Chevrolet 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.chevrolethelena.com/
Lithia Chrysler Jeep Dodge of Great Falls Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslergreatfalls.com/
Lithia Chrysler Jeep Dodge of Missoula Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslermissoula.com/
Lithia Chrysler Jeep Dodge of Helena Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslerhelena.com/
Lithia Chrysler Jeep Dodge of Billings Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiadodgebillings.com/
Honda of Great Falls Honda 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.greatfallshonda.com/
Lithia Value Autos of Omaha Chrysler 730 E 5th Ave Anchorage Nebraska 99501 866-613-1939 http://www.lithiavalueautosomaha.com/
Lithia Hyundai of Reno Hyundai 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiahyundaireno.com/
Lithia Chrysler Jeep of Reno Chrysler 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiachryslerreno.com/
Lithia Lincoln Mercury of Reno GM 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithialincolnreno.com/
Reno Audi Audi 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiaaudireno.com/
Lithia Reno Subaru Subaru 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiasubarureno.com/
Lithia Suzuki of Reno Suzuki 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiasuzukireno.com/
Lithia Volkswagen of Reno Volkswagen 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiavwreno.com/
Lithia Chrysler Jeep Dodge of Santa Fe Chrysler 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.lithiasantafe.com/
Lithia Chrysler Jeep Dodge of Grand Forks Chrysler 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.chryslerjeepdodgeofgrandforks.com/
Lithia Ford Lincoln Mercury of Grand Forks Ford 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.lithiaflmofgrandforks.com/
Lithia Scion of Grand Forks Scion 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.scionofgrandforks.com/
Medford BMW BMW 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.medfordbmw.com/
Lithia Chrysler Jeep Dodge of Roseburg Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiadodgeroseburg.com/
Lithia Chrysler Jeep Dodge of Klamath Falls Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiaklamathfalls.com/
Lithia Chrysler Jeep Dodge of Medford Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiachryslermedford.com/
Lithia Chrysler Jeep Dodge of Grants Pass Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiagrantspass.com/
Lithia Chrysler Jeep Dodge of Eugene Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiadodgeeugene.com/
Lithia Ford Lincoln Mercury of Roseburg Ford 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiafordroseburg.com/
Lithia Honda of Medford Honda 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiahondamedford.com/
Lithia Nissan of Eugene Nissan 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithianissaneugene.com/
Lithia Nissan of Medford Nissan 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithianissanmedford.com/
Saturn of Southwest Oregon Saturn 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.saturnofsouthwestoregon.com/
Lithia Scion of Springfield Scion 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiaspringfieldscion.com/
Lithia Scion of Medford Scion 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.medfordscion.com/
Lithia Subaru of Oregon City Subaru 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiasubaruoregoncity.com/
Lithia Toyota of Springfield Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotaspringfield.com/
Klamath Falls Toyota Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotaklamathfalls.com/
Lithia Toyota of Medford Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotamedford.com/
Lithia Volkswagen of Medford Volkswagen 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiavwmedford.com/
All American Chevrolet of San Angelo Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletsanangelo.com/
All American Chevrolet of Midland Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletmidland.com/
All American Chevrolet of Odessa Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletodessa.com/
All American Chrysler Jeep Dodge of San Angelo Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchryslersanangelo.com/
All American Chrysler Jeep Dodge of Odessa Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchryslerodessa.com/
Lithia CJD of Bryan/College Station Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiacjdofbryan.com/
Lithia Dodge of Corpus Christi Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiadodgeofcorpuschristi.com/
All American Chrysler Jeep Dodge of Midland Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericandodgemidland.com/
Honda of San Angelo Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hondaofsanangelo.com/
Honda of Midland Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiahondamidland.com/
Honda of Abilene Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hondaofabilene.com/
Lithia Hyundai of Odessa Hyundai 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hyundaiofodessa.com/
Lithia Scion of Odessa Scion 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.odessascion.com/
Lithia Toyota of Odessa Toyota 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.odessatoyota.com/
Lithia Toyota of Abilene Toyota 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.toyotaabilene.com/
Lithia Scion of Abilene Scion 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.abilenescion.com/
L2 Auto of Amarillo Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.l2autoofamarillo.com/
L2 Auto of Lubbock Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.l2autooflubbock.com/
Camp BMW BMW 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.campbmw.com/
BMW Seattle BMW 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.bmwseattle.com/
Camp Chevrolet Cadillac Chevrolet 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.campchevrolet.com/
Lithia Chrysler Jeep Dodge of Renton Chrysler 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiachryslerrenton.com/
Lithia Chrysler Jeep Dodge of Tri-Cities Chrysler 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiadodgetricities.com/
Lithia Ford Ford 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiaford.com/
Honda of Tri-Cities Honda 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.hondaoftricities.com/
Lithia Hyundai of Renton Hyundai 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.rentonhyundai.com/
Mercedes-Benz of Spokane Mercedes-Benz 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.spokanemercedes.com/
Camp Subaru Subaru 215 E. Montgomery Ave. Spokane Washington 99207 866-681-9741 http://www.campsubaru.com/
The Industry
At approximately $1.0 trillion in annual sales, automotive retailing is the largest retail trade sector in the U.S. and comprises roughly 7% of the GDP. The industry is highly fragmented with the 100 largest automotive retailers generating approximately 13% of total industry revenues in 2006. The number of franchised stores in the U.S. has declined in the last 10 years from approximately 22,427 stores in 1997 to approximately 21,761 in 2006. In addition to these new vehicle outlets, used vehicles are sold by approximately 50,000 independent used vehicle dealers and through private (person to person) transactions. New vehicles can only be sold through automotive retail stores franchised by automotive manufacturers. These franchise stores have designated trade territories under state franchise law protection, which limits the number of new stores that can be opened in any given area.
Consolidation is expected to continue as many smaller automotive retailers are now considering selling or joining forces with larger retailer groups, given the large capital requirements necessary to operate in today’s retail environment. With many owners reaching retirement age, often without clear succession plans, larger, well-capitalized automotive retailers provide an attractive exit strategy. The recent slowdown in the economy and in retail sales is expected to increase the number of sellers.
Unlike many other retailing segments, automotive manufacturers provide unparalleled support to the automotive retailer. Manufacturers often bear the burden of markdown risks on slow-moving inventory as they provide aggressive dealer and customer incentives to clear aged inventory in order to free the inventory pipeline for new purchases. In addition, an automotive retailer’s cash investment in inventory is relatively small, given floorplan financing from manufacturers. Furthermore, manufacturers provide low-cost financing for working capital and acquisitions and credit to consumers to finance vehicle purchases, as well as pay market-rate prices to their dealers for servicing vehicles under manufacturers’ warranties.
In the early 2000s, the company decided to focus on growing its specialty foods segment. In line with this, the company divested from its previously owned automotive segment and has substantially shrunken its glassware and candles business. In the last decade, specialty foods has grown from 40% of net sales to nearly comprising the company's entire business.[2]
The 2008 recession hurt Lancaster Colony consumers cut back on spending and the demand for the company's products fell. As a result, the company's net income fell 18%. However the economy began its rebound in 2009 and as a result Lancaster had positive growth -- in 2009 the company's net income more than doubled.
Company Overview
Segments[3]
Lancaster Colony divides its sales into three different product segments:
Specialty Foods (87% of net sales) - the company produces a variety of products under this segment such as: salad dressings, sauces, croutons, fruit glazes, vegetable dips, fruit dips, frozen hearth-baked breads, yeast rolls, dry egg noodles, and caviar. Some of its brands include: Marzetti, Cardini’s, Pfeiffer, Mamma Bella, New York BRAND, Sister Schubert’s, Reames, Romanoff, and Inn Maid. These products are mainly produced at 15 different manufacturing facilities across the country.
Contents
1 Company Overview
1.1 Segments[3]
2 Business Growth
2.1 FY 2009 (ended June 30, 2009)[1]
3 Trends and Forces
3.1 Economic Recovery Spells Good News For Lancaster Colony
3.2 Lancaster's Sales Heavily Depend on Wal-Mart
4 Competitors
5 References
Glassware and Candles (13% of net sales)- the candle product line, sold under the brand Candle-lite, includes products such as candles, candle accessories, and other home fragrance products. The glass product line, sold under the Brody and Indiana Glass brands, includes tumblers, bowls, pitchers, jars, barware, and vases.
Business Growth
FY 2009 (ended June 30, 2009)[1]
Net income more than doubled from $37.6 million in 2008 to $89.1 million in 2009.
Net sales increased 7% to $1.05 billion compared to $981 million a year ago. Growth was driven by a 13% growth in the Specialty Foods segment, which grew to $910 million, but was offset by an 18% decline in the Glassware and Candles segment, which fell to $142 million . The Specialty Foods segment benefited both from pricing actions and higher sales volumes. The decrease in sales of the Glassware and Candles segment is primarily attributable to the November 2007 sale of the consumer and floral glass operations.
Trends and Forces
Economic Recovery Spells Good News For Lancaster Colony
When the the economy went into a recession in 2008, Lancaster felt the negative effects in its bottom line as consumers and business cut back on spending and bought fewer of Lancaster's products. Additionally, the company suffered from higher commodities and operational costs. As a result, the company's net income fell 18% to $37.6 million in 2008. However the economy started its rebound in 2009 and has continued into 2010. As the demand for Lancaster's products increase and the price of commodities falls, Lancaster has seen positive growth. In 2009, net income more than doubled to $89 million.[1]
Lancaster's Sales Heavily Depend on Wal-Mart
In 2009, 20% of Lancaster Colony's net sales were attributed to Wal-Mart and totaled $206 million. This was 3% higher than what was attributable in 2008.[4] This poses a risk on two fronts. First, if Wal-Mart ever decided to cancel its contract with Lancaster, the company would have to find some way to make up the 20% of revenue it lost. Second, because Wal-Mart contributes so much for Lancaster's net sales, if Wal-Mart's growth started to stagnate or decline (for example from the sluggish economy), Lancaster would be hurt because Wal-Mart would demand fewer of its products and thus reduce sales.
Competitors
Because Lancaster Colony makes a wide range of products selling in different markets, the company faces competition from both big companies with a diversified line of products and smaller narrowly-focused companies.
In the Major Diversified Food industry, Lancaster Colony competes with H.J. Heinz Company (HNZ) , Kraft Foods (KFT) , and Blyth (BTH) .
franchises and retailer of new and used vehicles and services. As of April 10, 2008, Lithia offered 30 brands of new vehicles and used vehicles in 109 stores in the United States and over the Internet.[1] The company sells new and used cars and light trucks; sells replacement parts; provides vehicle maintenance, warranty, paint and repair services; and arranges related financing, service contracts, protection products and credit insurance for its automotive customers.
Contents
1 Business Overview
2 Franchise Locations
3 The Industry
4 Financials
5 References
Lithia Motors was founded in 1946 and incorporated in 1968. It's two senior executives have managed the company for nearly 40 years. Since the initial public offering in 1996, Lithia has grown from 5 to 109 stores as of April 10, 2008, primarily through its acquisition program that has been accretive to earnings, increasing annual revenues from $143 million in 1996 to $3.2 billion in 2007. In addition, since initial public offering through December 31, 2007, Lithia has achieved compound annual growth rates of 33% per year for revenues and 23% per year for net income from continuing operations.
The company's current new vehicle revenue mix is weighted towards domestic brands at approximately 62%. Management's strategy is to target a more balanced mix between its domestic, import and luxury brands in the years ahead. Approximately 98% of acquisition revenues in 2007 were from import and luxury brands, contributing to an improvement in its import/domestic mix.
Lithia Motors currently offers several customer guarantees that management believes differentiates the company from other competitors in the marketplace. These guarantees are a culmination of several evolution cycles within Lithia that came to fruition in 2007.
For New Vehicles:
A low haggle “Drive it Now” price, always at or below Manufacturer’s Suggested Retail Price (MSRP);
Never any Additional Dealer Markup;
No Documentation Fees, except where state-mandated or controlled; and
For Used Vehicles
A low haggle “Drive it Now” price;
No Documentation Fees, except where state-mandated or controlled; and
A sixty-day, 3000 mile, “if it breaks, we fix it” warranty.
For Service Work
Service provided on your schedule with no appointment necessary;
A three-year, 50,000 mile warranty on all repair work, including parts and labor, to ensure a customer will never pay for the same repair twice; and
A guaranteed price based on the estimate given at the time the car was dropped off.
In 2007 Lithia opened three stand alone used car stores, called L2 Auto. L2 Auto is a web-based sales process that provides a new experience for consumers in the used car market. It offers transparency in every transaction including availability of a broad selection of popular late model used vehicles, clearly marked “negotiation-free” prices based on current market values, a 240 point inspection plan, a sixty-day, 3000 mile “if it breaks, we fix it” warranty, and a three day “no questions asked” return policy.
Franchise Locations
Franchise Name: Dealer: Street Address: City: State: Zip: Phone: Website:
BMW of Anchorage BMW 730 E. 5th Ave. Anchorage Alaska 99501 866-613-1939 http://www.bmwofanchorage.com/
Chevrolet Cadillac of Fairbanks Chevrolet 3300 S. Cushman St. Fairbanks Alaska 99701 866-648-7507 http://www.fairbankschevy.com/
Chevrolet of South Anchorage Chevrolet 9100 Old Seward Hwy Anchorage Alaska 99515 866-612-5667 http://www.anchoragechevrolet.com/
Chevrolet of Wasilla Chevrolet 3700 E Parks Hwy. Wasilla Alaska 99654 866-681-7841 http://www.wasillachevrolet.com/
Lithia Chrysler Jeep Dodge of South Anchorage Chrysler 9600 Old Seward Hwy. Anchorage Alaska 99515 866-648-7922 http://www.lithiachrysleranchorage.com/
Lithia Hyundai of Anchorage Hyundai 5400 Old Seward Hwy. Anchorage Alaska 99518 866-579-4144 http://www.lithiahyundaianchorage.com/
Saab of South Anchorage Saab 9100 Old Seward Hwy. Anchorage Alaska 99515 866-599-2349 http://www.anchoragesaab.com/
BMW of Monterey BMW 1 Geary Plaza. Seaside California 93955 866-681-6838 http://www.bmwmonterey.com/
Lithia Chevrolet of Redding Chevrolet 200 East Cypress Ave. Redding California 96002 866-681-7574 http://www.lithiachevroletredding.com/
Lithia Chrysler Jeep Dodge of Eureka Chrysler 4320 Broadway Eureka California 95503 866-681-8688 http://www.lithiaeureka.com/
Lithia Dodge of Fresno Dodge 6162 N Blackstone Ave Fresno California 93710 866-681-7818 http://www.lithiafresnododge.com/
Lithia Chrysler Jeep Dodge of Santa Rosa Chrysler 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiadodgesantarosa.com/
Lithia Chrysler Jeep Dodge of Concord Chrysler 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiadodgeconcord.com/
Lithia Ford of Fresno Ford 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiafordoffresno.com/
Lithia Hyundai of Fresno Hyundai 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiahyundaifresno.com/
Lithia Mazda of Fresno Mazda 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.fresnomazda.com/
Lithia Nissan of Fresno Nissan 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithianissanfresno.com/
Porsche of Monterey Porsche 730 E 5th Ave Anchorage California 99501 866-613-1939 http://monterey.porschedealer.com/service/index.php
Lithia Scion of Vacaville Scion 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiascionofvacaville.com/
Lithia Scion of Redding Scion 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.reddingscion.com/
Lithia Suzuki of Fresno Suzuki 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiasuzukioffresno.com/
Lithia Toyota of Redding Toyota 730 E 5th Ave Anchorage California 99501 866-613-1939 http://www.lithiatoyotaredding.com/
Lithia Volkswagen of Thornton Volkswagen 730 E 5th Ave Anchorage Colorado 99501 866-613-1939 http://www.lithiavwthornton.com/
Chevrolet Cadillac of Twin Falls Chevrolet 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.twinfallschevrolet.com/
Chevrolet of Caldwell Chevrolet 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.caldwellchevrolet.com/
Lithia Chrysler Jeep Dodge of Pocatello Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiachryslerpocatello.com/
Lithia Chrysler Jeep Dodge of Twin Falls Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.twinfallsdodge.com
Lithia Ford Lincoln Mercury of Boise Ford 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiafordboise.com/
Audi Boise Audi 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.audiofboise.com/
Honda of Pocatello Honda 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.hondaofpocatello.com/
Lithia Hyundai of Pocatello Hyundai 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.lithiahyundaipocatello.com/
L2 Auto of Boise Chrysler 730 E 5th Ave Anchorage Idaho 99501 866-613-1939 http://www.l2autoofboise.com/
Acura of Johnston Acura 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.acuraofjohnston.com/
Audi Des Moines Audi 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.audiofdesmoines.com/
BMW of Des Moines BMW 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.bmwdesmoinesiowa.com/
Honda of Ames Honda 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.ameshonda.com/
Kia of Cedar Rapids Kia 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.kiaofcedarrapids.com/
Mercedes-Benz of Des Moines Mercedes-Benz 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.mbzofdesmoines.com/
Lithia Nissan of Ames Nissan 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.amesnissan.com/
Assured Used Car and Truck Misc. 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.assuredusedcarandtruckstore.com/
Lithia Volkswagen of Des Moines Volkswagen 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.lithiavwofdesmoines.com/
Buick GMC Cadillac of Cedar Rapids GM 730 E 5th Ave Anchorage Iowa 99501 866-613-1939 http://www.buickofhiawatha.com/
Chevrolet of Helena Chevrolet 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.chevrolethelena.com/
Lithia Chrysler Jeep Dodge of Great Falls Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslergreatfalls.com/
Lithia Chrysler Jeep Dodge of Missoula Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslermissoula.com/
Lithia Chrysler Jeep Dodge of Helena Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiachryslerhelena.com/
Lithia Chrysler Jeep Dodge of Billings Chrysler 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.lithiadodgebillings.com/
Honda of Great Falls Honda 730 E 5th Ave Anchorage Montana 99501 866-613-1939 http://www.greatfallshonda.com/
Lithia Value Autos of Omaha Chrysler 730 E 5th Ave Anchorage Nebraska 99501 866-613-1939 http://www.lithiavalueautosomaha.com/
Lithia Hyundai of Reno Hyundai 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiahyundaireno.com/
Lithia Chrysler Jeep of Reno Chrysler 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiachryslerreno.com/
Lithia Lincoln Mercury of Reno GM 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithialincolnreno.com/
Reno Audi Audi 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiaaudireno.com/
Lithia Reno Subaru Subaru 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiasubarureno.com/
Lithia Suzuki of Reno Suzuki 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiasuzukireno.com/
Lithia Volkswagen of Reno Volkswagen 730 E 5th Ave Anchorage Nevada 99501 866-613-1939 http://www.lithiavwreno.com/
Lithia Chrysler Jeep Dodge of Santa Fe Chrysler 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.lithiasantafe.com/
Lithia Chrysler Jeep Dodge of Grand Forks Chrysler 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.chryslerjeepdodgeofgrandforks.com/
Lithia Ford Lincoln Mercury of Grand Forks Ford 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.lithiaflmofgrandforks.com/
Lithia Scion of Grand Forks Scion 730 E 5th Ave Anchorage North Dakota 99501 866-613-1939 http://www.scionofgrandforks.com/
Medford BMW BMW 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.medfordbmw.com/
Lithia Chrysler Jeep Dodge of Roseburg Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiadodgeroseburg.com/
Lithia Chrysler Jeep Dodge of Klamath Falls Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiaklamathfalls.com/
Lithia Chrysler Jeep Dodge of Medford Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiachryslermedford.com/
Lithia Chrysler Jeep Dodge of Grants Pass Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiagrantspass.com/
Lithia Chrysler Jeep Dodge of Eugene Chrysler 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiadodgeeugene.com/
Lithia Ford Lincoln Mercury of Roseburg Ford 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiafordroseburg.com/
Lithia Honda of Medford Honda 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiahondamedford.com/
Lithia Nissan of Eugene Nissan 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithianissaneugene.com/
Lithia Nissan of Medford Nissan 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithianissanmedford.com/
Saturn of Southwest Oregon Saturn 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.saturnofsouthwestoregon.com/
Lithia Scion of Springfield Scion 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiaspringfieldscion.com/
Lithia Scion of Medford Scion 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.medfordscion.com/
Lithia Subaru of Oregon City Subaru 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiasubaruoregoncity.com/
Lithia Toyota of Springfield Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotaspringfield.com/
Klamath Falls Toyota Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotaklamathfalls.com/
Lithia Toyota of Medford Toyota 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiatoyotamedford.com/
Lithia Volkswagen of Medford Volkswagen 730 E 5th Ave Anchorage Oregon 99501 866-613-1939 http://www.lithiavwmedford.com/
All American Chevrolet of San Angelo Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletsanangelo.com/
All American Chevrolet of Midland Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletmidland.com/
All American Chevrolet of Odessa Chevrolet 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchevroletodessa.com/
All American Chrysler Jeep Dodge of San Angelo Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchryslersanangelo.com/
All American Chrysler Jeep Dodge of Odessa Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericanchryslerodessa.com/
Lithia CJD of Bryan/College Station Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiacjdofbryan.com/
Lithia Dodge of Corpus Christi Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiadodgeofcorpuschristi.com/
All American Chrysler Jeep Dodge of Midland Chrysler 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.allamericandodgemidland.com/
Honda of San Angelo Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hondaofsanangelo.com/
Honda of Midland Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.lithiahondamidland.com/
Honda of Abilene Honda 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hondaofabilene.com/
Lithia Hyundai of Odessa Hyundai 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.hyundaiofodessa.com/
Lithia Scion of Odessa Scion 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.odessascion.com/
Lithia Toyota of Odessa Toyota 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.odessatoyota.com/
Lithia Toyota of Abilene Toyota 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.toyotaabilene.com/
Lithia Scion of Abilene Scion 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.abilenescion.com/
L2 Auto of Amarillo Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.l2autoofamarillo.com/
L2 Auto of Lubbock Misc. 730 E 5th Ave Anchorage Texas 99501 866-613-1939 http://www.l2autooflubbock.com/
Camp BMW BMW 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.campbmw.com/
BMW Seattle BMW 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.bmwseattle.com/
Camp Chevrolet Cadillac Chevrolet 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.campchevrolet.com/
Lithia Chrysler Jeep Dodge of Renton Chrysler 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiachryslerrenton.com/
Lithia Chrysler Jeep Dodge of Tri-Cities Chrysler 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiadodgetricities.com/
Lithia Ford Ford 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.lithiaford.com/
Honda of Tri-Cities Honda 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.hondaoftricities.com/
Lithia Hyundai of Renton Hyundai 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.rentonhyundai.com/
Mercedes-Benz of Spokane Mercedes-Benz 730 E 5th Ave Anchorage Washington 99501 866-613-1939 http://www.spokanemercedes.com/
Camp Subaru Subaru 215 E. Montgomery Ave. Spokane Washington 99207 866-681-9741 http://www.campsubaru.com/
The Industry
At approximately $1.0 trillion in annual sales, automotive retailing is the largest retail trade sector in the U.S. and comprises roughly 7% of the GDP. The industry is highly fragmented with the 100 largest automotive retailers generating approximately 13% of total industry revenues in 2006. The number of franchised stores in the U.S. has declined in the last 10 years from approximately 22,427 stores in 1997 to approximately 21,761 in 2006. In addition to these new vehicle outlets, used vehicles are sold by approximately 50,000 independent used vehicle dealers and through private (person to person) transactions. New vehicles can only be sold through automotive retail stores franchised by automotive manufacturers. These franchise stores have designated trade territories under state franchise law protection, which limits the number of new stores that can be opened in any given area.
Consolidation is expected to continue as many smaller automotive retailers are now considering selling or joining forces with larger retailer groups, given the large capital requirements necessary to operate in today’s retail environment. With many owners reaching retirement age, often without clear succession plans, larger, well-capitalized automotive retailers provide an attractive exit strategy. The recent slowdown in the economy and in retail sales is expected to increase the number of sellers.
Unlike many other retailing segments, automotive manufacturers provide unparalleled support to the automotive retailer. Manufacturers often bear the burden of markdown risks on slow-moving inventory as they provide aggressive dealer and customer incentives to clear aged inventory in order to free the inventory pipeline for new purchases. In addition, an automotive retailer’s cash investment in inventory is relatively small, given floorplan financing from manufacturers. Furthermore, manufacturers provide low-cost financing for working capital and acquisitions and credit to consumers to finance vehicle purchases, as well as pay market-rate prices to their dealers for servicing vehicles under manufacturers’ warranties.
Last edited: