LAN Lancer Cp

Lancer Reports Unaudited and Unreviewed Results for 2003 and First Quarter 2004; Lancer Common Stock to Resume Trading SAN ANTONIO, May 19 /PRNewswire-FirstCall/ -- Lancer Corporation announced unaudited and unreviewed results of operations for the year ended December 31, 2003 and the quarter ended March 31, 2004. Form 8-K Filing and Trading of Lancer Shares Securities regulations require that annual financial statements contained in a Form 10-K be audited by an independent auditor, and that interim financial statements contained in a Form 10-Q be reviewed by an independent auditor. Lancer's independent auditor, BDO Seidman, LLP, has not yet completed its audit of Lancer's financial statements for the years 2000, 2001, 2002 and 2003, or its review of applicable quarterly periods, including the first quarter of 2004. Pursuant to the terms agreed upon with the American Stock Exchange to regain compliance, Lancer has filed the unaudited and unreviewed results of operations as exhibits to a Form 8-K. Lancer intends to file its Form 10-K and Form 10-Q when the audit and the review have been completed. The filing of the Form 8-K does not make Lancer current in its filing requirements with the Securities and Exchange Commission, and the information contained in the Form 8-K does not meet the requirements which are set forth pursuant to Form 10-K or Form 10-Q and should not be interpreted to be a substitute for the information that would normally be included in such forms. Lancer notes that the audits and reviews being conducted by the Company's independent auditor could result in material changes to the information contained in this news release and the Form 8-K. Based on Lancer's disclosure in the Form 8-K, the American Stock Exchange has indicated that it intends to open trading of Lancer's common stock on Thursday, May 20, 2004. 2003 Operating Results Sales for the year ended December 31, 2003 were $113.5 million, down 18% from sales in the same period of 2002. Loss from continuing operations was $1.6 million in 2003, compared to income from continuing operations of $5.6 million in 2002. Net loss was $1.0 million ($0.11 per share) in 2003, versus net income of $4.0 million ($0.43 per diluted share) in 2002. During 2003, sales declined on a local currency basis in each of Lancer's geographical segments due to generally weak demand for foodservice equipment. Lancer incurred $2.5 million of costs associated with the investigation conducted by the Audit Committee of Lancer's Board of Directors and investigations being conducted by the Securities and Exchange Commission and the United States Attorney's Office. Additionally, Lancer took a charge of $1.2 million relating to inventory unlikely to be used as intended in the production of a customer's beverage dispensing platform. Lancer believes there are no significant alternative uses for the inventory. If it were to receive full reimbursement for the inventory in the future, Lancer would recognize income of approximately $1.2 million. Lancer cannot, however, give assurance that it will receive such reimbursement. An agreement for reimbursement received prior to the completion of the 2003 audit would likely cause material changes in the financial information presented in this news release and the Form 8-K. First Quarter 2004 Operating Results Sales for the three months ended March 31, 2004 were $30.4 million, up 13% from $26.9 million in the first quarter last year. Net earnings were $0.9 million ($0.10 per diluted share) in the first quarter of 2004, compared to a net loss of $0.3 million ($0.03 per share) in the same period of 2003. Sales in the first quarter improved in all regions except Latin America, where market conditions remain weak. Investigation related expenses were $0.8 million in the first quarter of 2004. 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) 2003 2002 2001 Net sales $113,500 $139,015 $122,745 Cost of sales 84,978 101,925 95,877 Gross profit 28,522 37,090 26,868 Selling, general and administrative expenses 28,674 27,535 22,235 Operating income (152) 9,555 4,633 Other (income) expense: Interest expense 409 1,318 3,128 Loss from joint ventures 217 653 296 Minority interest --- (55) (239) Other income, net 709 (649) (1,049) 1,335 1,267 2,136 Income (loss) from continuing operations before income taxes (1,487) 8,288 2,497 Income tax expense (benefit): Current 1,430 1,440 1,319 Deferred (1,348) 1,229 (401) 82 2,669 918 Income (loss) from continuing operations (1,569) 5,619 1,579 Discontinued operations: Loss from operations of discontinued Brazilian subsidiary 196 2,442 268 Income tax benefit (788) (829) (91) (Income) loss from discontinued operations (592) 1,613 177 Net (loss) earnings $(977) $4,006 $1,402 Common Shares Outstanding: Basic 9,356,082 9,326,529 9,127,062 Diluted 9,356,082 9,433,193 9,314,789 Earnings Per Share: Basic Earnings (loss) from continuing operations $(0.17) $0.60 $0.17 Earnings (loss) from discontinued operations $0.06 $(0.17) $(0.02) Net earnings (loss) $(0.11) $0.43 $0.15 Diluted Earnings (loss) from continuing operations $(0.17) $0.60 $0.17 Earnings (loss) from discontinued operations $0.06 $(0.17) $(0.02) Net earnings (loss) $(0.11) $0.43 $0.15 LANCER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share data) Three Months Ended March 31, March 31, 2004 2003 Net sales $30,356 $26,874 Cost of sales 21,755 21,080 Gross profit 8,601 5,794 Selling, general and administrative expenses 7,512 6,582 Operating income 1,089 (788) Other (income) expense: Interest expense 109 168 (Income) loss from joint ventures (153) 226 Minority interest --- --- Other income, net (353) (201) (397) 193 Income (loss) from continuing operations before income taxes 1,486 (981) Income tax expense (benefit): Current 605 (139) Deferred (63) 168 542 29 Income (loss) from continuing operations 944 (1,010) Discontinued operations: Loss from operations of discontinued Brazilian subsidiary --- 44 Income tax benefit --- (737) (Income) loss from discontinued operations --- (693) Net earnings (loss) $944 $(317) Common Shares Outstanding: Basic 9,367,431 9,345,331 Diluted 9,471,713 9,345,331 Earnings Per Share: Basic Earnings (loss) from continuing operations $0.10 $(0.11) Earnings from discontinued operations $--- $0.08 Net earnings $0.10 $(0.03) Diluted Earnings (loss) from continuing operations $0.10 $(0.11) Earnings from discontinued operations $--- $0.08 Net earnings $0.10 $(0.03) LANCER CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) ASSETS March 31, December 31, 2004 2003 (Unaudited) (Unaudited) Assets: Cash $2,845 $1,129 Net receivables 16,933 14,686 Total inventories 22,817 24,502 Other assets 42,482 42,361 Total assets $85,077 $82,678 LIABILITIES AND SHAREHOLDERS' EQUITY March 31, December 31, 2004 2003 (Unaudited) (Unaudited) Liabilities: Accounts payable $7,849 $7,043 Debt 12,620 12,003 Other liabilities 11,829 11,879 Total liabilities $32,298 $30,925 Minority interest --- --- Shareholders' equity 52,779 51,753 Total liabilities and shareholders' equity $85,077 $82,678 DATASOURCE: Lancer Corporation CONTACT: Scott Adams of Lancer Corporation, +1-210-310-7065 Web site: http://www.lancercorp.com/

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