LAN Lancer Cp

SAN ANTONIO, Aug. 4 /PRNewswire-FirstCall/ -- Lancer Corporation (AMEX:LAN) announced results of operations for the second quarter and six months ended June 30, 2005. Net sales for the three months ended June 30, 2005 were $35.4 million, up 12% from $31.7 million in the second quarter of 2004. Second quarter net earnings were $3.0 million in 2005, compared to $1.4 million in 2004. Earnings per diluted share were $0.31 in the second quarter of 2005, up from $0.15 in the same period last year. For the six months ended June 30, 2005, net sales were $67.0 million, up 9% from sales in the first half of 2004. Net earnings were $5.6 million in the first half of 2005, versus $2.4 million in the same period of 2004. Earnings per diluted share were $0.58 in the first six months of 2005, up from $0.25 in the first half of 2004. Most of the sales improvement in the second quarter of 2005 occurred in the North America region, where sales rose 11%. Currency fluctuations had a positive impact of 2% on sales during the quarter. Lancer incurred $0.4 million of costs relating to compliance with the requirements of Section 404 of the Sarbanes-Oxley Act during the second quarter, and $0.6 million in the six-month period. Christopher D. Hughes, Chief Executive Officer, commented: "Lancer produced good results during the second quarter. Our continued success in expanding our customer base was a key to our sales growth during the period. Our margins remained strong, due to the benefits of higher manufacturing volumes and an ongoing focus on controlling costs." 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 that employs 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 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2005 2004 2005 2004 Net sales $35,362 $31,696 $66,985 $61,203 Cost of sales 23,862 21,499 45,305 42,405 Gross profit 11,500 10,197 21,680 18,798 Selling, general and administrative expenses 7,252 7,880 14,199 15,392 Other operating expense (income) 81 --- (176) (327) Operating income 4,167 2,317 7,657 3,733 Other income (expense): Interest expense (31) (144) (60) (253) Income from joint ventures 405 100 659 253 Other income (expense), net 20 (34) 245 (8) 394 (78) 844 (8) Income before income taxes 4,561 2,239 8,501 3,725 Income tax expense (benefit): Current 1,625 953 3,214 1,557 Deferred (83) (136) (286) (199) 1,542 817 2,928 1,358 Net income $3,019 $1,422 $5,573 $2,367 Common Shares Outstanding: Basic 9,491,181 9,367,895 9,477,308 9,367,664 Diluted 9,687,205 9,460,051 9,675,229 9,465,304 Earnings Per Share: Basic earnings $0.32 $0.15 $0.59 $0.25 Diluted earnings $0.31 $0.15 $0.58 $0.25 LANCER CORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands) ASSETS (Unaudited) (Audited) June 30, December 31, 2005 2004 Assets: Cash $5,123 $5,196 Net receivables 19,859 17,114 Total inventories 25,984 24,495 Other assets 39,920 38,682 Total assets $90,886 $85,487 LIABILITIES AND SHAREHOLDERS' EQUITY June 30, December 31, 2005 2004 Liabilities: Accounts payable $7,968 $7,555 Debt 1,404 1,477 Other liabilities 13,177 13,440 Total liabilities $22,549 $22,472 Shareholders' equity 68,337 63,015 Total liabilities and shareholders' equity $90,886 $85,487 DATASOURCE: Lancer Corporation CONTACT: Scott Adams of Lancer Corporation, +1-210-310-7065 Web site: http://www.lancercorp.com/

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