Lancaster Colony Corporation (NASDAQ:LANC) Files An 8-K Other Events

On January 21, 2017 the employees at the Lancaster Colony Corporation (the “Company”) Bedford Heights, Ohio plant voted to ratify a new collective bargaining agreement to replace the agreement that expired on April 30, 2016. The new collective bargaining agreement will expire on April 30, 2020.

Among other terms, the new agreement provides for the Company to completely withdraw from the Cleveland Bakers and Teamsters Pension Fund, a multiemployer pension fund referenced in Note 14 to the consolidated financial statements included in the Company’s most recent Form 10-K. In lieu of contributions to the pension fund, the Company will make non-elective contributions for the employees at the Bedford Heights, Ohio plant into a union-sponsored 401(k) plan.

As settlement of the Company’s portion of underfunded pension benefits of the multiemployer plan, the Company has agreed to pay $17.0 million for a full withdrawal from the plan. This is expected to be paid in the fourth quarter of fiscal 2017. The Company will pay an additional $0.7 million to initially fund the 401(k) plan, and this payment is also expected to occur in the fourth quarter of fiscal 2017.

The recording of these charges is predicated upon when the liability is probable in occurrence. Due to the fact that the new collective bargaining agreement was contingent upon ratification by the employees, the probability of occurrence was not satisfied until the vote on January 21, 2017. Therefore, the Company will record a one-time charge of $17.7 million for the multiemployer pension settlement and other benefit-related costs in the quarter ended March 31, 2017.

Certain future events related to the Cleveland Bakers and Teamsters Pension Fund could result in incremental pension-related costs. The likelihood of these events occurring and the amount of the potential incremental costs are indeterminate at this time.

About Lancaster Colony Corporation (NASDAQ:LANC)
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels. The Company’s food products include Salad dressings and sauces, Vegetable dips and fruit dips, Frozen garlic breads, Frozen Parkerhouse style yeast rolls and dinner rolls, Premium dry egg noodles, Frozen specialty noodles, Croutons and salad toppings, Flatbread wraps and pizza crusts, and Caviar. Its brands include Marzetti, Marzetti Simply Dressed, Cardini’s, Girard’s, Katherine’s Kitchen, New York BRAND Bakery, Mamma Bella’s, Sister Schubert’s, Mary B’s, Inn Maid, Amish Kitchen, Reames, Aunt Vi’s, Flatout and Romanoff. It manufactures and sells other products pursuant to brand license agreements, including Olive Garden dressing, Jack Daniel’s mustards and Hungry Girl flatbreads. A portion of its sales are dressing packets, frozen specialty noodles, pasta and flatbreads sold to industrial customers for use as ingredients or components in their products. Lancaster Colony Corporation (NASDAQ:LANC) Recent Trading Information
Lancaster Colony Corporation (NASDAQ:LANC) closed its last trading session up +5.68 at 145.02 with 78,455 shares trading hands.