LAN Lancer Cp

Lancer Reports Second Quarter Results SAN ANTONIO, Aug. 12 /PRNewswire-FirstCall/ -- Lancer Corporation (AMEX:LAN) announced results of operations for the second quarter and six months ended June 30, 2004. Net sales for the three months ended June 30, 2004 were $31.7 million, up 8% from sales in the second quarter of 2003. Net earnings for the second quarter were $1.4 million, compared to $0.2 million in the same period last year. Second quarter earnings per diluted share rose to $0.15 in 2004 from $0.02 in 2003. In the six months ended June 30, 2004, net sales were $61.2 million, up 9% from sales in the same period of 2003. Net earnings in the first half of 2004 were $2.4 million, or $0.25 per diluted share, compared to a loss of $0.1 million, or $0.01 per share, in the first half of 2003. During the second quarter of 2004, sales growth was centered in the Europe and Asia/Pacific regions. Currency fluctuations added 2% to sales in the quarter. The higher sales, plus manufacturing cost reductions and the benefits of higher factory output, caused most of the improvement in profitability during the second quarter of 2004. Professional fees in the second quarter of 2004 rose $0.8 million from the second quarter of 2003, driven by the cost of the re-audit of financial statements for prior years. Christopher D. Hughes, Chief Executive Officer, commented: "Business was good in the Europe and Asia/Pacific regions during the second quarter, but demand was generally flat in North America. We are, however, seeing a growing number of orders for our Flavor Select line of fountain dispensers from convenience retailers in North America. Our Lancer FBD joint venture is also enjoying widespread acceptance of its line of frozen beverage dispensers. "I am pleased with the solid improvement in our second quarter performance. Our focus on manufacturing costs and efficiency is beginning to pay off, and that focus will continue as we develop new sales opportunities." Lancer Corporation is a leading innovator, manufacturer and marketer of beverage dispensing systems serving customers worldwide. Headquartered in San Antonio, Texas, Lancer also maintains facilities in Mexico, Australia, Belgium, New Zealand and the United Kingdom. Lancer is a vertically integrated manufacturer with 2003 sales of $113 million, and employing approximately 1,200 people. Lancer designs and manufacturers a complete range of fountain soft drink dispensers, frozen beverage dispensers, dispensing valves, beer dispensing equipment, and an extensive line of beverage dispensing parts and accessories, which are marketed through a network of Company sales representatives and authorized distributors. This press release contains various forward-looking statements and information that are based on management's belief as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements contain certain risks, uncertainty and assumptions. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. LANCER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share data) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2004 2003 2004 2003 Net sales $31,696 $29,370 $61,203 $56,244 Cost of sales 21,499 21,680 42,404 42,760 Gross profit 10,197 7,690 18,799 13,484 Selling, general and administrative expenses 7,880 6,692 15,392 13,274 Operating income 2,317 998 3,407 210 Other (income) expense: Interest expense 144 156 253 324 (Income) loss from joint ventures (100) 261 (253) 487 Other income, net 34 (25) (319) (226) 78 392 (319) 585 Income (loss) from continuing operations before income taxes 2,239 606 3,726 (375) Income tax expense (benefit): Current 953 1,020 1,558 881 Deferred (136) (694) (199) (526) 817 326 1,359 355 Income (loss) from continuing operations 1,422 280 2,367 (730) Discontinued operations: Loss from operations of discontinued Brazilian subsidiary --- 76 --- 120 Income tax benefit --- (26) --- (763) (Income) loss from discontinued operations --- 50 --- (643) Net earnings (loss) $1,422 $230 $2,367 $(87) Common Shares Outstanding: Basic 9,367,893 9,353,706 9,367,662 9,349,542 Diluted 9,460,049 9,449,974 9,465,302 9,349,542 Earnings Per Share: Basic Earnings (loss) from continuing operations $0.15 $0.03 $0.25 $(0.08) Earnings from discontinued operations $--- $(0.01) $--- $0.07 Net earnings $0.15 $0.02 $0.25 $(0.01) Diluted Earnings (loss) from continuing operations $0.15 $0.03 $0.25 $(0.08) Earnings from discontinued operations $--- $(0.01) $--- $0.07 Net earnings $0.15 $0.02 $0.25 $(0.01) LANCER CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) ASSETS June 30, December 31, 2004 2003 (Unaudited) (Unaudited) Assets: Cash $4,689 $1,129 Net receivables 17,716 14,749 Total inventories 24,962 24,502 Other assets 41,515 41,898 Total assets $88,882 $82,278 LIABILITIES AND SHAREHOLDERS' EQUITY June 30, December 31, 2004 2003 (Unaudited) (Unaudited) Liabilities: Accounts payable $9,191 $6,609 Debt 13,235 12,003 Other liabilities 12,788 11,703 Total liabilities $35,214 $30,315 Minority interest --- --- Shareholders' equity 53,668 51,963 Total liabilities and shareholders' equity $88,882 $82,278 CONTACT: Scott Adams of Lancer Corporation, +1-210-310-7065. DATASOURCE: Lancer Corporation CONTACT: Scott Adams of Lancer Corporation, +1-210-310-7065 Web site: http://www.lancercorp.com/

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