SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 1999
Ralcorp Holdings, Inc.
(Exact name of registrant as specified in its charter)
Missouri 1-12619 43-1766315
(State or other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
800 Market Street, Suite 2900
St. Louis, MO 63101
(Address of principal (Zip Code)
executive offices)
(314) 877-7000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
In a press release dated July 27, 1999, a copy of which is attached hereto as
Exhibit 99.1 and the text of which is incorporated by reference herein, the
registrant announced its results of operations for the period ended June 30,
1999.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated July 27, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RALCORP HOLDINGS, INC.
(Registrant)
Date: July 27, 1999 By: /s/ T. G. Granneman
----------------------
Duly Authorized Signatory and
Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
Exhibit 99.1 Press Release dated July 27, 1999
Immediate
Daniel P. Zoellner
314/877-7052
RALCORP HOLDINGS REPORTS THIRD QUARTER
AND NINE-MONTH 1999 EARNINGS
ST. LOUIS, MO, JULY 27, 1999 Ralcorp Holdings, Inc. today reported improved net
sales and net earnings for its core food businesses (operating results excluding
equity earnings from the Company's investment in Vail Resorts, Inc.). Net sales
for the third quarter ended June 30, 1999 were $154.4 million compared to net
sales for the same quarter last year of $143.3 million, an improvement of over
7.7 percent. Net earnings for the Company's core food businesses were $7.8
million for the quarter ended June 30, 1999 compared to $7.0 million of net
earnings in the same prior year quarter, an 11.4 percent increase. These
improved quarterly results were driven primarily by favorable results from
recent acquisitions compared to the prior year results of the now divested baby
food business. In addition, the Company's operating results continue to be
positively affected by its aggressive cost containment focus.
On an earnings per share basis, the Company's core food businesses recorded
basic and diluted earnings per share for the current year's third quarter of
approximately $.25, compared to last year's third quarter food business basic
and diluted earnings per share of $.21, an approximate 19 percent increase.
Ralcorp's core food businesses also performed very well in a comparison of
nine-month periods ended June 30, 1999 and 1998. Net sales increased 7.5
percent, from $427.6 million for the nine months ended June 30, 1998 to $459.6
million for the same nine-month period of the current fiscal year. Net earnings
for the food businesses for the nine months ended June 30, 1999 were $24.9
million compared to $19.8 million for the same prior year period, a rise of 25.8
percent. On a diluted earnings per share basis, results of the food businesses
approximates $.78 for the current year's nine-month period compared to $.60 in
the prior year, a 30 percent improvement. These year-over-year gains for the
nine months can be primarily attributed again to the favorable results of
acquisitions when compared to prior year baby food business results, as well as
to organic growth within the Company's Consumer Foods segment during the first
six months of the current year period.
The Company's overall results for the current year quarter and nine-month
periods ended June 30, 1999 were negatively impacted by its equity investment in
Vail Resorts, Inc. (Vail). For the quarter ended June 30, 1999, the Company
recorded $7.0 million in pre-tax equity earnings, a 27.8 percent decline from
the $9.7 million in pre-tax equity earnings recorded in the same prior year
period. In a comparison of nine-month periods, the Company recorded $7.1
million of pre-tax equity earnings in the current year versus $13.9 million in
the prior year, a drop of 48.9 percent. Including the results of Ralcorp's
equity earnings, net earnings and diluted earnings per share for the quarter
ended June 30, 1999 were $12.1 million and $.38, respectively, compared to $13.2
million, or $.40, for the same prior year period. For the nine months ended
June 30, 1999, the Company, including its Vail equity earnings, reported net
earnings of $29.3 million, or $.92 per diluted share, compared to $28.5 million,
or $.86 per diluted share, for the same nine-month period of the prior year.
<PAGE>
<TABLE>
<CAPTION>
NET SALES BY DIVISION
Three Months Ended Three Months Ended
June 30, June 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Ralston Foods $ 68.8 $ 66.9 $ 219.1 $ 207.1
Bremner 40.0 36.5 128.3 115.4
Beech-Nut - 31.7 - 96.9
-------- -------- -------- --------
Consumer Foods $ 108.8 $ 135.1 $ 347.4 $ 419.4
-------- -------- -------- --------
Snack Nuts 27.4 8.2 88.5 8.2
Martin Gillet 18.2 - 23.7 -
-------- -------- -------- --------
$ 154.4 $ 143.3 $ 459.6 $ 427.6
======== ======== ======== ========
</TABLE>
CONSUMER FOODS
- ---------------
Actual Consumer Foods sales were down $26.3 million for the quarter and $72.0
million for the nine months, as the prior year periods include the sales of the
now divested branded baby food business, Beech-Nut Nutrition Corporation
(Beech-Nut). On a comparison of current year quarter sales to prior year
quarter sales, excluding the benefit of the branded baby food business, sales
improved $5.4 million. Comparing sales of the first nine months of the current
fiscal year to the same prior year period, again excluding Beech-Nut, sales rose
$24.9 million. Sales from the Company's cereal business improved 2.8 percent
when comparing third quarter results for fiscal years 1999 and 1998. Volume
improvements in hot cereals and an improved product mix were the key items
driving this sales growth. Current year third quarter store brand ready-to-eat
cereal volume declined just 1.9 percent, against volume improvements in the
prior year third quarter of 7.3 percent and very heavy promotional activity
by major branded cereal manufacturers in the current year. For the same
comparative periods, the Company's hot cereal volume rose 12.9 percent,
continuing the impressive growth realized in the first half of this fiscal year.
Volume comparisons for the current and prior year nine-month periods also
reflected year-over-year improvement. Ready-to-eat cereal volume improved .2
percent in a slightly declining category, and following a 6.5 percent volume
improvement last year, while hot cereal volume grew 23.1 percent.
Sales revenue increases were also achieved in both current year periods by the
Bremner cracker and cookie operation. Both the quarter and nine-month periods
of the current fiscal year benefited from the addition of sales revenue from
Sugar Kake Cookie Inc. Sugar Kake, a primarily private label cookie operation,
was acquired in August 1998. Volumes for the pre-existing cracker and cookie
operation (excluding Sugar Kake) have been adversely affected by the aggressive
promotional activity of large branded cracker and cookie manufacturers. Despite
deep discounting by these branded product manufacturers, volume declined just
1.9 percent in the current year's third quarter compared to the same prior year
quarter, with the higher percentage of volume decline occurring in the lower
margin saltine and graham cracker area. In a comparison of nine-month periods,
again excluding the Sugar Kake acquisition, cracker and cookie volume declined
1.5 percent, again driven by less volume from the lower margin saltine and
graham crackers.
<PAGE>
From an operating results perspective, Ralcorp's Consumer Foods segment recorded
operating profit of $12.6 million for the current quarter and $39.9 million for
the nine months ended June 30, 1999. This compares to operating profit of $12.7
million for the quarter ended June 30, 1998, including a $.5 million operating
loss from the now divested branded baby food business, and $36.7 million for the
nine months ended June 30, 1998, including $.4 million from Beech-Nut. Ralston
Foods' operating profit declined slightly in the quarter as the benefits of
increased hot cereal volume, an improved product mix and continued cost
containment could not completely offset the slight decline in ready-to-eat
cereal volume and higher promotion expenses. For the year to date period ended
June 30, 1999, the Company's cereal division benefited primarily from hot cereal
and co-packing volume gains, a product mix improvement and favorable raw
material costs, while maintaining a significantly lower cost base. Bremner
operating profit for the quarter ended June 30, 1999 was down slightly from the
same prior year quarter, despite the addition of Sugar Kake in the current
year's results. The additional operating profit from Sugar Kake, favorable
ingredient costs and enhanced operating efficiencies were only partially able to
offset the decline in cracker and cookie volume and the increased price
discounting instituted to combat the heavy branded promotion activity. For the
nine months, Bremner's operating profit improved considerably due to the
addition of Sugar Kake volume and operating profit in current year operations.
In addition, the pre-existing Bremner operation continued to benefit from a
favorable product mix and from improved production yields.
SNACK NUTS
- -----------
The Company's snack nuts business, which consists of Nutcracker Brands, Inc.,
Flavor House Products, Inc. and, as of March 24, 1999, Southern Roasted Nuts of
Georgia, Inc., recorded net sales and operating profit for the quarter ended
June 30, 1999 of $27.4 million and $1.4 million, respectively. Net sales for
the nine months ended June 30, 1999 were $88.5 million with a corresponding
operating profit of $6.2 million. The prior year included just $8.2 million in
net sales, which represented solely the operations of Flavor House since its
acquisition on April 23, 1998.
Operations in the Snack Nuts segment are somewhat seasonal, with a higher
percentage of sales and operating profits recorded in the first fiscal quarter.
MARTIN GILLET
- --------------
Ralcorp Holdings began operating in mayonnaise and shelf-stable salad dressings
with the March 4, 1999 acquisition of Martin Gillet & Co., Inc. For the quarter
ended June 30, 1999 the operations of Martin Gillet resulted in $18.2 million in
net sales and $.5 million of operating profit. Since its acquisition, Martin
Gillet operations have recorded $23.7 million in net sales and $.9 million of
operating profit.
The Company continues to work toward integrating Martin Gillet into the Ralcorp
business portfolio. As part of that effort, an extensive cost reduction program
has been initiated, which should benefit this division's operating results in
the future.
BUSINESS SEGMENTS - COMBINED
- -------------------------------
On a combined EBITDA (earnings before interest, taxes, depreciation and
amortization) basis, the Company recorded $58.2 million for the nine months
ended June 30, 1999, excluding the equity earnings from its Vail investment.
This represents a 27.6 percent improvement over the foods business EBITDA in the
prior year's first nine months of $45.6 million, including Beech-Nut.
<PAGE>
EQUITY INTEREST IN VAIL RESORTS, INC.
- ------------------------------------------
As a result of the sale of Ralcorp's resort operations to Vail Resorts, Inc.,
Ralcorp maintains an approximate 21.9 percent equity ownership interest in Vail.
Aberrant weather conditions during the peak ski season hurt the operating
results of Vail. These difficult weather conditions, plus timing issues
resulting from a fiscal year end change at Vail, combined to negatively affect
the Company's equity earnings from its investment in Vail. For the three- and
nine-month periods ended June 30, 1999, the Company's equity stake in Vail
resulted in non-cash, pre-tax earnings of $7.0 million and $7.1 million,
respectively. This compares to non-cash, pre-tax equity earnings for the same
prior year periods of $9.7 million and $13.9 million, respectively. Due to the
timing of a fiscal year end change at Vail, the prior year equity income amounts
represent the Company's portion of Vail's operating results for only the period
of October 1997 through April 1998. The current year equity earnings are based
on the full nine-month period of August 1998 through April 1999, a period that
includes the historically unprofitable ski months of August through October.
Ralcorp's equity in Vail earnings for Vail's quarter and year ending July 31,
1999 will be reported in the Company's fourth fiscal quarter and year ending
September 30, 1999.
UNAUDITED PRO FORMA INFORMATION
- ----------------------------------
The accompanying Unaudited Pro Forma Combined Statements of Earnings reflect pro
forma information for the three- and nine-month periods ended June 30, 1998.
This information assumes the divestiture of Beech-Nut was completed as of the
beginning of the prior fiscal year.
See the attached schedules and notes for additional information on the quarter
and nine-month results for both years.
NOTE: This press release may contain forward-looking statements as defined by
the Private Securities Litigation Reform Act of 1995. Any such forward-looking
statements are subject to various risks and uncertainties and are therefore
qualified by the Company's cautionary statements contained in its filings with
the Securities and Exchange Commission.
###
<PAGE>
<TABLE>
<CAPTION>
RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(in millions except per share data)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ ------------------
1999 1998 1999 1998
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Net Sales $ 154.4 $143.3 $ 459.6 $427.6
--------- ------- --------- -------
Costs and Expenses
Cost of products sold 114.6 94.8 335.2 277.9
Selling, general and administrative 21.2 25.2 64.6 74.5
Advertising and promotion 5.5 12.2 18.8 43.3
Interest expense (income), net .5 - .8 (.1)
Equity in earnings of Vail Resorts, Inc. (7.0) (9.7) (7.1) (13.9)
--------- ------- --------- -------
134.8 122.5 412.3 381.7
--------- ------- --------- -------
Earnings before Income Taxes 19.6 20.8 47.3 45.9
Income Taxes 7.5 7.6 18.0 17.4
--------- ------- --------- -------
Net Earnings $ 12.1 $ 13.2 $ 29.3 $ 28.5
========= ======= ========= =======
Basic Earnings per Share $ .39 $ .40 $ .94 $ .87
========= ======= ========= =======
Diluted Earnings per Share $ .38 $ .40 $ .92 $ .86
========= ======= ========= =======
Weighted Average Shares Outstanding - Basic 31.1 32.6 31.2 32.8
Weighted Average Shares Outstanding - Diluted 31.7 33.1 31.8 33.2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RALCORP HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
(in millions except per share data)
Pro Pro
Actual Forma Actual Forma
---------- ---------- ---------- ----------
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $ 154.4 $ 111.6 $ 459.6 $ 330.7
---------- ---------- ---------- ----------
Costs and Expenses
Cost of products sold 114.6 78.0 335.2 228.1
Selling, general and administrative 21.2 19.7 64.6 57.7
Advertising and promotion 5.5 2.6 18.8 14.2
Interest expense (income), net .5 (0.8) .8 (2.6)
Equity in earnings of Vail Resorts, Inc. (7.0) (9.7) (7.1) (13.9)
---------- ---------- ---------- ----------
134.8 89.8 412.3 283.5
---------- ---------- ---------- ----------
Earnings before Income Taxes 19.6 21.8 47.3 47.2
Income Taxes 7.5 8.0 18.0 17.9
---------- ---------- ---------- ----------
Net Earnings $ 12.1 $ 13.8 $ 29.3 $ 29.3
========== ========== ========== ==========
Basic Earnings per Share $ .39 $ .42 $ .94 $ .89
========== ========== ========== ==========
Diluted Earnings per Share $ .38 $ .42 $ .92 $ .88
========== ========== ========== ==========
Weighted Average Shares Outstanding - Basic 31.1 32.6 31.2 32.8
Weighted Average Shares Outstanding - Diluted 31.7 33.1 31.8 33.2
<FN>
Notes:
1. The accompanying unaudited pro forma combined statements of earnings for the three- and
nine-month periods ended June 30, 1998 are presented to reflect the results of operations
assuming the sale of the Company's branded baby food subsidiary, Beech-Nut Nutrition
Corporation, had been completed as of the beginning of the prior fiscal year. These
unaudited pro forma statements of earnings are for informational purposes only and may
not necessarily reflect the results of operations that would have been achieved, nor are
they necessarily indicative of future results of operations.
2. The weighted average shares outstanding used to compute earnings per share (basic and
diluted) for the quarters and nine-month periods ended June 30, 1999 and 1998 are based
on the weighted average number of shares of Ralcorp common stock outstanding for the
periods then ended. In addition, the calculation of diluted earnings per share includes
all other common stock equivalents.
3. Earnings per share (basic and diluted) are computed independently for each of the periods
presented; therefore, the sum of the earnings per share (basic and diluted) amounts for
the quarters may not total the year-to-date amounts.
4. Operating results for any quarter are not necessarily indicative of the results for any
other quarter or for the full year.
</TABLE>
