LAN Lancer Cp

SAN ANTONIO, Nov. 4 /PRNewswire-FirstCall/ -- Lancer Corporation (AMEX:LAN) announced today its results of operations for the third quarter and nine months ended September 30, 2005. Net sales for the three months ended September 30, 2005 were $32.5 million, up 4% from $31.3 million in the third quarter of 2004. Third quarter net earnings were $2.4 million in 2005, compared to $5.8 million in 2004. Earnings per diluted share were $0.25 in the third quarter of 2005, versus $0.61 in the same period last year. Other income of $7.0 million from a settlement with a customer had a positive impact on 2004 results, and led to the decline in net earnings and earnings per diluted share in the third quarter and first three quarters of 2005. For the nine months ended September 30, 2005, net sales were $99.4 million, up 8% from sales in the first three quarters of 2004. Net earnings were $8.0 million in the first nine months of 2005, versus $8.2 million in the same period of 2004. Nine-month earnings per diluted share were $0.82 in 2005 and $0.86 in 2004. Currency fluctuations had a positive impact of 1% on sales during the third quarter of 2005. Lancer incurred $0.3 million of expense relating to its efforts to comply with the requirements of Section 404 of the Sarbanes- Oxley Act during the third quarter of 2005, and $0.9 million of expense relating to such compliance efforts through the first nine months of 2005. Christopher D. Hughes, Chief Executive Officer, commented: "2005 has been a good year for Lancer. As we enter the fourth quarter, we are sharpening our focus on those improvements that have contributed to our sales and operating profit growth during the year, and which are critical to our success in the future." 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. From time to time, the Company may make statements that predict or forecast future events or results, depend on future events for their accuracy or otherwise contain "forward-looking information." These statements are made based on management's expectations and beliefs concerning future events and are not guarantees of future performance. The Company cautions readers that actual results may differ materially as a result of various factors, some of which are beyond its control, including but not limited to: political or economic conditions; terrorist activities in the United States or escalation in the international war on terrorism; disruptions in business at the Company's manufacturing, distribution centers or offices; changes in the Company's relationships with key customers; litigation that may have an adverse effect on the Company's financial results or reputation; changes in the Company's relationships with customers or vendors; changes in foreign currency exchange rates; or changes in government or regulatory requirements increasing the Company's cost of operations. These and other factors that may adversely affect the Company's future performance or financial condition are contained in its Annual Report in Form 10-K and other reports filed with and available from the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. LANCER CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2005 2004 2005 2004 Net sales $32,460 $31,264 $99,445 $92,467 Cost of sales 21,535 22,368 66,840 64,772 Gross profit 10,925 8,896 32,605 27,695 Selling, general and administrative expenses 7,351 6,940 21,550 22,332 Other operating expense (income) 57 339 (119) 12 Operating income 3,517 1,617 11,174 5,351 Other income (expense): Interest expense (31) (204) (91) (457) Income from joint ventures 305 571 964 824 Settlement of development project --- 7,000 --- 7,000 Other income (expense), net (57) (93) 188 (102) 217 7,274 1,061 7,265 Income before income taxes 3,734 8,891 12,235 12,616 Income tax expense (benefit): Current 1,018 3,189 4,232 4,747 Deferred 297 (124) 11 (323) 1,315 3,065 4,243 4,424 Net income $2,419 $5,826 $7,992 $8,192 Common Shares Outstanding: Basic 9,504,473 9,380,558 9,486,463 9,371,993 Diluted 9,729,404 9,506,649 9,695,813 9,480,633 Earnings Per Share: Basic earnings $0.25 $0.62 $0.84 $0.87 Diluted earnings $0.25 $0.61 $0.82 $0.86 LANCER CORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands) ASSETS (Unaudited) (Audited) September 30, December 31, 2005 2004 Assets: Cash $5,870 $5,196 Net receivables 18,160 17,114 Total inventories 28,666 24,495 Other assets 40,960 38,682 Total assets $93,656 $85,487 LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31, 2005 2004 Liabilities: Accounts payable $7,853 $7,555 Debt 1,366 1,477 Other liabilities 13,761 13,440 Total liabilities $22,980 $22,472 Shareholders' equity 70,676 63,015 Total liabilities and shareholders' equity $93,656 $85,487 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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