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 27, 2000
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 April 27, 2000, 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 second quarter earnings for the period ended March 31,
2000.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated April 27, 2000
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 27, 2000 By: /s/ T. G. Granneman
----------------------
Duly Authorized Signatory and
Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
Exhibit 99.1 Press Release dated April 27, 2000
Immediate
Daniel J. Sescleifer
314/877-7113
RALCORP HOLDINGS REPORTS SECOND QUARTER
AND SIX-MONTH 2000 EARNINGS
ST. LOUIS, MO, APRIL 27, 2000 Ralcorp Holdings, Inc. today reported net sales
and net earnings for the second quarter ended March 31, 2000 of $173.2 million
and $10.6 million, respectively, compared to $150.3 million and $10.9 million
for the same quarter last year. 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, matching the figures for last year's
second quarter.
For the six-month periods ended March 31, 2000 and 1999, net sales were $378.1
million and $305.2 million, respectively, an increase of $72.9 million, or
nearly 24 percent. Net earnings for the current year's first six months
improved 5.8 percent to $18.2 million, or $.59 per diluted share, compared to
prior year six-month net earnings of $17.2 million, or $.54 per diluted share.
The Company's results were affected by certain non-operating factors. Changes
in Ralcorp's stock price resulted in favorable mark-to-market adjustments to the
Company's deferred compensation liability. These adjustments yielded pre-tax
income of $1.7 million and $1.0 million for the quarter and six months ended
March 31, 2000, respectively, compared to pre-tax expense of $.3 million and
$1.1 million for the corresponding periods last year. Partially offsetting this
effect, equity earnings from the Company's investment in Vail Resorts, Inc.
declined to $2.8 million in the second quarter from $4.1 million in last year's
second quarter. For the six months ended March 31, 2000, the Company recorded a
pre-tax loss from Vail of $1.6 million versus $.1 million of pre-tax equity
earnings in the prior year.
<TABLE>
<CAPTION>
NET SALES BY SEGMENT Three Months Ended Six Months Ended
(In Millions) March 31, March 31,
- ----------------------------- ----------------- -----------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Ralston Foods $ 70.0 $ 77.3 $ 143.8 $ 150.3
Bremner 56.2 43.8 116.3 88.3
------- ------- ------- -------
CEREALS, CRACKERS & COOKIES 126.2 121.1 260.1 238.6
SNACK NUTS 31.4 23.7 86.0 61.1
MAYONNAISE & DRESSINGS 15.6 5.5 32.0 5.5
------- ------- ------- -------
Total Net Sales $ 173.2 $ 150.3 $ 378.1 $ 305.2
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
OPERATING PROFIT BY SEGMENT Three Months Ended Six Months Ended
(In Millions) March 31, March 31,
- ----------------------------- ----------------- -----------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
CEREALS, CRACKERS & COOKIES $ 14.3 $ 14.3 $ 30.5 $ 27.3
SNACK NUTS .6 1.1 4.5 4.8
MAYONNAISE & DRESSINGS .3 .4 .9 .4
------- ------- ------- -------
Total Operating Profit $ 15.2 $ 15.8 $ 35.9 $ 32.5
======= ======= ======= =======
</TABLE>
<PAGE>
CEREALS, CRACKERS & COOKIES
- ------------------------------
Second quarter and six-month net sales for the Cereals, Crackers & Cookies
segment were up $5.1 million and $21.5 million, respectively, from last year.
This increase is due primarily to the additional revenue acquired through the
current year purchases of Ripon Foods, Inc. and Cascade Cookie Company, which
are operated as part of Bremner, Ralcorp's cracker and cookie division. Ripon
Foods, a cookie, sugar wafer and breakfast bar producer, was acquired on October
4, 1999, and Cascade, which produces cookies for in-store bakeries, was acquired
on January 31, 2000.
The Company's ready-to-eat and hot cereal division, Ralston Foods, recorded
decreased sales for the three-month and six-month periods, principally due to
lower volumes. Previously, Company management disclosed that a cereal
comanufacturing agreement was terminated effective December 31, 1999. The
reduction of volume related to this agreement was a significant factor in the
revenue decline at Ralston Foods. In addition, Ralston Foods' ready-to-eat
volume declined 7 percent during the three months ended March 31, 2000 as a
result of increased competitive trade dealing in the value segment of the
category and a year-over-year decline in retailer store brand promotions. The
Company's hot cereal volume declined 12 percent in the quarter. Management
believes the unusually warm winter weather led to reduced consumption of hot
cereal during the period. Moreover, the current period faced difficult
comparisons to the prior year quarter when hot cereal volume had increased 23
percent year-over-year. Volume comparisons for the six months ended March 31,
2000 also reflected declines as ready-to-eat cereal volumes fell 1.9 percent
from last year compared to a corresponding 1.3 percent increase for the prior
year period. Hot cereal volume for the same period was down 6 percent from last
year compared to a corresponding 26.6 percent increase for the prior year
period.
As previously stated, sales revenue increases at Bremner resulted from the
addition of Ripon Foods and Cascade Cookie Company in the current year. Second
quarter cracker volumes of the pre-existing Bremner businesses declined 3
percent from the prior year, which management attributes to the aforementioned
warm winter weather. Nevertheless, cracker volumes for the six-month period
were up 2.4 percent from last year due to strong sales in this year's first
fiscal quarter.
From an operating results perspective, the Cereals, Crackers & Cookies segment
recorded second quarter operating profit unchanged from the prior year and
six-month profit up nearly 12 percent. Bremner operating profit improved in
both the quarter and six-month periods primarily due to the Ripon and Cascade
acquisitions. Six-month results for Bremner were also benefited by strong first
quarter cracker volume gains in the pre-existing Bremner operations and
favorable raw material and packaging supply costs.
Ralston Foods second quarter operating profit was negatively impacted by the
aforementioned loss of comanufacturing business. The Company previously
disclosed that the loss of this comanufacturing agreement could negatively
impact diluted earnings per share for the last nine months of fiscal 2000 in the
range of $.08 to $.10 per share. Importantly, despite lower volumes in the
quarter, Ralston Foods' continuing store brand cereal businesses reported
operating profit consistent with the previous year on the strength of improved
product mix and lower costs. For the six-month period, Ralston Foods reported
improved operating profit with improved product mix and lower costs offsetting
the impact of reduced volumes and the reduction of comanufacturing business.
<PAGE>
SNACK NUTS
- -----------
Second quarter and six-month net sales for the Snack Nuts segment increased 32
percent and 41 percent, respectively, reflecting incremental business from
Southern Roasted Nuts of Georgia, as well as significantly improved organic
volumes. Southern Roasted, the Company's third snack nut operation, was
acquired in late March 1999.
Despite the improved volumes and net sales, Snack Nuts second quarter operating
profit fell $.5 million from last year as the segment continued to be negatively
impacted by the high cost of cashews due to a worldwide shortage of this key
commodity ingredient. Snack Nuts management anticipates some relief in cashew
costs for the Company's third and fourth quarters. In addition, the segment is
moving ahead with its plans to consolidate the operations of the three snack nut
businesses into two locations at Billerica, MA and Dothan, AL, which management
believes will result in increased efficiencies.
MAYONNAISE & DRESSINGS
- ------------------------
The Company's fiscal 2000 second quarter and six-month net sales included $15.6
million and $32.0 million, respectively, from Martin Gillet, a maker of private
label mayonnaise and salad dressings. Martin Gillet was acquired at the
beginning of March 1999, so prior year net sales included only $5.5 for the
corresponding quarter and six-month periods. Operating profit was $.3 million
and $.9 million for the second quarter and first six months this year, compared
to $.4 million for March 1999.
Cost reduction efforts at Martin Gillet continue and management anticipates that
the benefits of these efforts will be realized over the next twelve months.
BUSINESS SEGMENTS - COMBINED
- -------------------------------
On a combined EBITDA basis (earnings before interest, taxes, depreciation and
amortization) the Company recorded $47.9 million for the six months ended March
31, 2000, excluding the equity earnings from its Vail investment. This
represents a 23.5 percent improvement over the "food business" EBITDA in the
prior year's first six months of $38.8 million.
Operations in the Snack Nuts segment are somewhat seasonal, with a higher
percentage of sales and operating profits expected to be recorded in the first
fiscal quarter. In addition, certain aspects of both the Company's cereal and
cracker and cookie businesses are also seasonal in nature. It is important to
note that operating results for any quarter are not necessarily indicative of
the results for any other quarter or for the full year.
EQUITY INTEREST IN VAIL RESORTS, INC.
- ------------------------------------------
Ralcorp continues to hold an approximate 21.9 percent equity ownership interest
in Vail Resorts, Inc. Vail Resorts operates on a fiscal year ending July 31;
therefore, Ralcorp reports its portion of Vail Resorts' operating results on a
two-month time lag. For the second quarter ended March 31, 2000, this
investment resulted in non-cash pre-tax earnings of $2.8 million, compared to
$4.1 million for last year's second quarter. Vail Resorts management attributed
the decline in earnings for its November through January period to slow
millennium period travel patterns across the U.S. and soft pre-Christmas
activity caused by poor early season snow conditions.
See the attached schedule and notes for additional information on the quarter
and six-month results for both years.
NOTE: Information in this press release that includes information other than
historical data contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. Any such forward-looking statements
are made based on information currently known and 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 Six Months Ended
March 31, March 31,
------------------- -------------------
2000 1999 2000 1999
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 173.2 $ 150.3 $ 378.1 $ 305.2
--------- -------- -------- ---------
Costs and Expenses
Cost of products sold 130.9 108.6 286.4 220.6
Selling, general and administrative 21.0 21.1 46.6 43.4
Advertising and promotion 6.0 6.8 12.2 13.3
Interest expense, net 1.3 .3 2.4 .3
Equity in (earnings) loss
of Vail Resorts, Inc. (2.8) (4.1) 1.6 (.1)
--------- -------- -------- ---------
156.4 132.7 349.2 277.5
--------- -------- -------- ---------
Earnings before Income Taxes 16.8 17.6 28.9 27.7
Income Taxes 6.2 6.7 10.7 10.5
--------- -------- -------- ---------
Net Earnings $ 10.6 $ 10.9 $ 18.2 $ 17.2
========= ======== ======== =========
Basic Earnings per Share $ .35 $ .35 $ .60 $ .55
========= ======== ======== =========
Diluted Earnings per Share $ .34 $ .34 $ .59 $ .54
========= ======== ======== =========
Weighted Average Shares Outstanding-Basic 30.3 31.1 30.4 31.3
Weighted Average Shares Outstanding-Diluted 30.8 31.8 31.0 31.9
<FN>
Notes:
1. The weighted average shares outstanding used to compute earnings per share
(basic and diluted) for the quarters and six-month periods ended March 31, 2000
and 1999 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.
2. 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.
3. Operating results for any quarter are not necessarily indicative of the
results for any other quarter or for the full year.
</TABLE>
