LAN Lancer Cp

Lancer Reports Third Quarter Results SAN ANTONIO, Nov. 5 /PRNewswire-FirstCall/ -- Lancer Corporation (AMEX:LAN) announced results of operations for the third quarter and nine months ended September 30, 2004. Net sales for the three months ended September 30, 2004 were $31.3 million, up 3% from sales in the third quarter of 2003. Net earnings in the third quarter were $5.8 million, up from $0.6 million in the same period of 2003. Earnings per diluted share were $0.61 in the third quarter of 2004, compared to $0.06 in the same period last year. In the nine months ended September 30, 2004, net sales were $92.5 million, up 7% from sales in the same period of 2003. Net earnings in the first three quarters of 2004 were $8.2 million, or $0.86 per diluted share, compared to $0.5 million, or $0.05 per diluted share, in the same period last year. During the third quarter of 2004, Lancer received $7.0 million from a settlement relating to a development project. Additionally, currency exchange rate fluctuations in 2004 had a positive impact on sales of 2% in the third quarter, and 3% in the nine months. Christopher D. Hughes, Chief Executive Officer, commented: "Our business in the third quarter was good in Europe and the Asia/Pacific region, down slightly in North America, and weak in Latin America. In addition to the impact of the $7.0 million settlement, manufacturing cost reductions and improved efficiency drove our improved profitability." Mr. Hughes continued: "Overall demand remains somewhat modest as we enter the fourth quarter, which is often our weakest. Our order levels are relatively firm this year, however, suggesting that the year-end seasonal revenue softness may be less pronounced this year than at times in the past." 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, including expectations for sales in the fourth quarter, 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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share data) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2004 2003 2004 2003 Net sales $31,264 $30,237 $92,467 $86,481 Cost of sales 22,368 21,855 64,772 64,615 Gross profit 8,896 8,382 27,695 21,866 Selling, general and administrative expenses 7,168 7,722 22,560 20,996 Operating income 1,728 660 5,135 870 Other (income) expense: Interest expense 204 103 457 427 (Income) loss from joint ventures (571) (427) (824) 60 Settlement proceeds (7,000) --- (7,000) --- Other income, net 204 20 (115) (206) (7,163) (304) (7,482) 281 Income from continuing operations before income taxes 8,891 964 12,617 589 Income tax expense (benefit): Current 3,189 447 4,747 1,328 Deferred (124) (90) (323) (616) 3,065 357 4,424 712 Income (loss) from continuing operations 5,826 607 8,193 (123) Discontinued operations: Loss from operations of discontinued Brazilian subsidiary --- 40 --- 160 Income tax benefit --- (7) --- (770) (Income) loss from discontinued operations --- 33 --- (610) Net earnings $5,826 $574 $8,193 $487 Common Shares Outstanding: Basic 9,380,558 9,360,893 9,371,993 9,353,912 Diluted 9,506,649 9,431,772 9,480,633 9,460,611 Earnings Per Share: Basic Earnings (loss) from continuing operations $0.62 $0.07 $0.87 $(0.01) Earnings (loss) from discontinued operations $--- $(0.01) $--- $0.06 Net earnings $0.62 $0.06 $0.87 $0.05 Diluted Earnings (loss) from continuing operations $0.61 $0.07 $0.86 $(0.01) Earnings (loss) from discontinued operations $--- $(0.01) $--- $0.06 Net earnings $0.61 $0.06 $0.86 $0.05 LANCER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) ASSETS September 30, December 31, 2004 2003 (Unaudited) Assets: Cash $10,478 $1,129 Net receivables 17,970 14,749 Total inventories 25,365 24,502 Other assets 38,988 41,898 Total assets $92,801 $82,278 LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31, 2004 2003 (Unaudited) Liabilities: Accounts payable $7,677 $6,609 Debt 9,850 12,003 Other liabilities 15,195 11,703 Total liabilities $32,722 $30,315 Shareholders' equity 60,079 51,963 Total liabilities and shareholders' equity $92,801 $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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