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): April 29, 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> 2
Item 5. Other Events.
In a press release dated April 29, 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 operation for the period ended March 31,
1999. Also, in a separate press release dated April 29, 1999, a copy of which
is attached hereto as Exhibit 99.2 and the text of which is incorporated by
reference herein, the registrant announced that it had entered into a new
three-year $125,000,000 credit facility.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated April 29, 1999
Exhibit 99.2 Press Release dated April 29, 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: April 29, 1999 By: /s/ T. G. Granneman
----------------------
Duly Authorized Signatory and
Chief Accounting Officer
<PAGE> 3
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
Exhibit 99.1 Press Release dated April 29, 1999
Exhibit 99.2 Press Release dated April 29, 1999
Immediate
Daniel P. Zoellner
314/877-7052
RALCORP HOLDINGS REPORTS IMPROVED SECOND QUARTER
AND SIX-MONTH 1999 EARNINGS
ST. LOUIS, MO, APRIL 29, 1999 Ralcorp Holdings, Inc. today reported net sales
and net earnings for the second quarter ended March 31, 1999 of $150.3 million
and $10.9 million compared to net sales and earnings for the same quarter last
year of $147.1 million and $10.5 million, respectively. These figures for the
quarter ended March 31, 1999 represent increases of 2.2 percent in net sales and
3.8 percent in net earnings.
On an earnings per share basis, the Company reported basic and diluted earnings
per share for the current year's second quarter of $.35 and $.34, respectively,
compared to last year's second quarter basic and diluted earnings per share of
$.32.
On a comparison of actual results for the six-month period ended March 31, 1999
to results for the same period of the prior year, net sales were $305.2 million
and $284.3 million, respectively, an improvement of $20.9 million or nearly 7.4
percent. Net earnings for the current year's first six months improved 12.4
percent to $17.2 million, or $.54 per diluted share, compared to prior year net
earnings of $15.3 million, or $.46 per share (basic and diluted).
The decline in equity earnings from the Company's investment in Vail Resorts,
Inc. negatively affected its results for the current year quarter and six-month
periods. For the quarter ended March 31, 1999, the Company recorded $4.1
million in pre-tax equity earnings, a 34 percent decline from the $6.2 million
in pre-tax equity earnings recorded in the same prior year period. In a
comparison of six-month periods, the Company recorded $.1 million of pre-tax
equity earnings in the current year versus $4.2 million in the prior year.
Exclusive of the results from the Company's equity interest in Vail Resorts for
all periods presented, net earnings from Ralcorp's core foods businesses
improved significantly. For the quarter ended March 31, 1999 net earnings for
the foods businesses were $8.4 million compared to $6.8 million for the same
prior year period, or an improvement of 23.5 percent. For the six months ended
March 31, 1999, net earnings for the core foods businesses were $17.1 million
compared to $12.75 million for the same fiscal 1998 period, an improvement of 34
percent. These year-over-year earnings improvements can be attributed to
organic growth within the Company's Consumer Foods segment, as well as to
favorable results of its acquired entities compared to prior year results of the
now divested baby food business.
<TABLE><CAPTION>
NET SALES BY DIVISION
Three Months Ended Six Months Ended
March 31, March 31,
------------------ --------------------
1999 1998 1999 1998
------- ------- -------- --------
<S> <C> <C> <C> <C>
Ralston Foods $ 77.3 $ 73.8 $ 150.3 $ 140.2
Bremner 43.8 39.1 88.3 78.9
Beech-Nut - 34.2 - 65.2
------- ------- -------- --------
Consumer Foods $ 121.1 $ 147.1 $ 238.6 $ 284.3
------- ------- -------- --------
Snack Nuts 23.7 - 61.1 -
Martin Gillet 5.5 - 5.5 -
------- ------- -------- --------
Total Net Sales $ 150.3 $147.1 $ 305.2 $ 284.3
======= ======= ======== ========
</TABLE>
<PAGE> 2
CONSUMER FOODS
- ---------------
Actual Consumer Foods sales were down $26.0 million for the quarter and $45.7
million for the six 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 $8.2 million. Comparing sales of the first six months of the current
fiscal year to the same prior year period, again excluding Beech-Nut, sales rose
$19.5 million. Sales from the Company's cereal business improved 4.7 percent
when comparing second quarter results for fiscal years 1999 and 1998. Key
attributes of the business driving this sales growth were volume improvements in
ready-to-eat and hot cereals and an improved product mix. On a comparison of
current year second quarter volume to the same period of the prior year, store
brand ready-to-eat cereal volume improved 3.5 percent, outpacing a domestic
cereal category that was relatively flat. For the same comparative periods, the
Company's hot cereal volume rose nearly 23 percent, continuing the impressive
growth realized in the Company's first fiscal quarter. Volume comparisons for
the current and prior year six-month periods also reflected year-over-year
improvement. Ready-to-eat cereal volume improved 1.3 percent, reversing the 1.2
percent volume decline recorded in the first fiscal quarter of 1999, while hot
cereal volume grew 26.6 percent.
Sales revenue increases were also achieved in both current year periods by the
Bremner cracker and cookie operation. Both the quarter and six-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) increased nearly 1 percent in the current
year's second quarter compared to the same prior year quarter, with continued
volume improvement in the higher margin specialty crackers driving much of this
growth. In a comparison of six-month periods, cracker and cookie volume, again
excluding the Sugar Kake acquisition, declined 1.5 percent driven primarily by a
strategic product mix shift to less volume in lower margin saltine and graham
crackers.
From an operating results perspective, Ralcorp's Consumer Foods segment recorded
an operating profit of $14.3 million for the current quarter and $27.3 million
for the six months ended March 31, 1999. This compares to operating profit of
$13.3 million for the quarter ended March 31, 1998, including $.5 million from
the now divested branded baby food business, and $24.0 million for the six
months ended March 31, 1998, including $.9 million from Beech-Nut. Ralston
Foods recorded operating profit improvement in the quarter on the strength of
ready-to-eat and hot cereal volume growth and a favorable product mix. For the
year to date period ended March 31, 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 improved considerably in both the
quarter and six months due to the addition of Sugar Kake in current year
operations. In addition, the pre-existing Bremner operation had slightly
improved volumes in the quarter, and continued to benefit from a strategic
product mix shift to higher margin products.
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
March 31, 1999 of $23.7 million and $1.1 million, respectively. Net sales for
the six months ended March 31, 1999 were $61.1 million with a corresponding
operating profit of $4.8 million. There are no prior year comparisons, as the
Company first began operating in the snack nut category in April 1998, with the
acquisition of Flavor House.
<PAGE> 3
As referred to above, the Company acquired Southern Roasted Nuts of Georgia,
Inc. on March 24, 1999. Southern Roasted, the Company's third snack nut
operation, is a private label and value brand snack nut operation located in
Fitzgerald, GA. This acquisition had no effect on results of operations for the
periods presented.
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. The nearly one
month of Martin Gillet operations provided the Company $5.5 million in net sales
revenue and approximately $.4 million of operating profit. Such results were in
line with the Company's early expectations for this business.
BUSINESS SEGMENTS - COMBINED
- -------------------------------
On a combined EBITDA (earnings before interest, taxes, depreciation and
amortization) basis the Company recorded $38.8 million for the six months ended
March 31, 1999, excluding the equity earnings from its Vail investment. This
represents a 29.3 percent improvement over the foods business EBITDA in the
prior year's first six months of $30.0 million, including Beech-Nut.
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. Such 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 Resorts. For the
three- and six-month periods ended March 31, 1999, the Company's equity stake in
Vail Resorts resulted in non-cash, pre-tax earnings of $4.1 million and $.1
million, respectively. This compares to non-cash, pre-tax equity earnings for
the same prior year periods of $6.2 million and $4.2 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 January 1998. The current year equity earnings
are based on the full six-month period of August 1998 through January 1999, a
period that includes the historically unprofitable ski months of August through
October. Ralcorp's equity ownership interest in Vail earnings for Vail's
quarter ending April 30, 1999 will be reported in the Company's third fiscal
quarter ending June 30, 1999.
UNAUDITED PRO FORMA INFORMATION
- ----------------------------------
The accompanying Unaudited Pro Forma Combined Statements of Earnings reflect pro
forma information for the three- and six-month periods ended March 31, 1998.
This information assumes the divestiture of Beech-Nut, was completed as of the
beginning of the prior fiscal year.
See attached schedules and notes for additional information on the quarter and
six-month results for both years.
<PAGE> 4
<TABLE>
<CAPTION>
RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(in millions except per share data)
Three Months Ended Six Months Ended
March 31, March 31,
------------------- ------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net Sales $ 150.3 $147.1 $ 305.2 $284.3
---------- ------- --------- -------
Costs and Expenses
Cost of products sold 108.6 92.9 220.6 183.1
Selling, general and administrative 21.1 25.7 43.4 49.3
Advertising and promotion 6.8 17.4 13.3 31.1
Interest expense (income), net .3 - .3 (.1)
Equity earnings in Vail Resorts, Inc. (4.1) (6.2) (.1) (4.2)
---------- ------- --------- -------
132.7 129.8 277.5 259.2
---------- ------- --------- -------
Earnings before Income Taxes 17.6 17.3 27.7 25.1
Income Taxes 6.7 6.8 10.5 9.8
---------- ------- --------- -------
Net Earnings $ 10.9 $ 10.5 $ 17.2 $ 15.3
========== ======= ========= =======
Basic Earnings per Common Share $ .35 $ .32 $ .55 $ .46
========== ======= ========= =======
Diluted Earnings per Common Share $ .34 $ .32 $ .54 $ .46
========== ======= ========= =======
Weighted Average Shares Outstanding-Basic 31.1 32.8 31.3 32.9
Weighted Average Shares Outstanding-Diluted 31.8 33.2 31.9 33.3
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
RALCORP HOLDINGS. INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
(in millions except per share data)
ACTUAL PRO FORMA ACTUAL PRO FORMA
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
--------- ----------- ----------- -----------
1999 1998 1999 1998
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $ 150.3 $ 112.9 $ 305.2 $ 219.1
--------- ----------- ----------- -----------
Costs and Expenses
Cost of products sold 108.6 75.9 220.6 150.1
Selling, general and administrative 21.1 20.0 43.4 38.0
Advertising and promotion 6.8 6.6 13.3 11.6
Interest expense (income), net .3 (.9) .3 (1.8)
Equity earnings in Vail Resorts, Inc. (4.1) (6.2) (.1) (4.2)
---------- ----------- ----------- -----------
132.7 95.4 277.5 193.7
---------- ----------- ----------- -----------
Earnings before Income Taxes 17.6 17.5 27.7 25.4
Income Taxes 6.7 6.9 10.5 9.9
---------- ----------- ----------- -----------
Net Earnings $ 10.9 $ 10.6 $ 17.2 $ 15.5
========== =========== =========== ===========
Basic Earnings per Common Share $ .35 $ .32 $ .55 $ .47
========== =========== =========== ===========
Diluted Earnings per Common Share $ .34 $ .32 $ .54 $ .47
========== =========== =========== ===========
Weighted Average Shares Outstanding-Basic 31.1 32.8 31.3 32.9
Weighted Average Shares Outstanding-Diluted 31.8 33.2 31.9 33.3
<FN>
NOTES:
1. The accompanying unaudited pro forma combined statements of earnings for the three and six month
periods ended March 31, 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 common share (basic and
diluted) for the quarters and six-month periods ended March 31, 1999 and 1998 are based on the weighted
average number of Ralcorp Stock shares outstanding for the periods then ended. In addition, the
calculation of diluted earnings per share includes all other common stock equivalents.
3. Earnings per common share (basic and diluted) are computed independently for each of the periods presented,
therefore, the sum of the earnings per common share (basic and diluted) amounts for the quarters may not
total the year-to-date.
4. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for
the full year.
</TABLE>
Immediate
Daniel P. Zoellner
314/877-7052
RALCORP HOLDINGS, INC. ENTERS INTO
NEW THREE-YEAR CREDIT FACILITY
ST. LOUIS, MO, APRIL 29, 1999 Ralcorp Holdings, Inc. today announced that on
April 28, 1999, it had entered into a new $125,000,000 three-year credit
facility with a group of six banks arranged by Banc One Capital Markets, Inc.,
with Wachovia Bank, N.A. as Documentation Agent. The Company can use the
proceeds from the facility for general and working capital needs including
repurchases of its stock and acquisitions of new businesses.
Ralcorp Holdings, Inc. is a leading manufacturer of private label ready-to-eat
and hot cereals, crackers and cookies, snack nuts, and mayonnaise and pourable,
shelf-stable salad dressings.
