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): January 28, 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 January 28, 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 first quarter earnings.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated January 28, 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: January 28, 2000 By: /s/ T. G. Granneman
----------------------
Duly Authorized Signatory and
Chief Accounting Officer
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
Exhibit 99.1 Press Release dated January 28, 2000
Immediate
Daniel P. Zoellner
314/877-7052
RALCORP HOLDINGS REPORTS IMPROVED
FIRST QUARTER FISCAL 2000 EARNINGS
ST. LOUIS, MO, JANUARY 28, 2000 Ralcorp Holdings, Inc. today reported net sales
and net earnings for the first quarter ended December 31, 1999 of $204.9 million
and $7.6 million, respectively, compared to $154.9 million and $6.3 million for
the same quarter last year. These current year quarter figures represent a 32.3
percent increase in net sales and a 20.6 percent rise in net earnings.
On a diluted earnings per share basis, the Company reported a 20 percent rise
for the current year's first quarter to $.24 per share compared to last year's
first quarter diluted earnings per share of $.20.
<TABLE>
<CAPTION>
NET SALES BY SEGMENT
Three Months Ended
December 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Ralston Foods $ 73.8 $ 73.0
Bremner 60.1 44.5
-------- --------
CEREAL, CRACKERS & COOKIES 133.9 117.5
SNACK NUTS 54.6 37.4
MAYONNAISE & DRESSINGS 16.4 -
-------- --------
Total Net Sales $ 204.9 $ 154.9
======== ========
</TABLE>
<TABLE>
<CAPTION>
OPERATING PROFIT BY SEGMENT
Three Months Ended
December 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
CEREALS, CRACKERS & COOKIES $ 16.2 $ 13.0
SNACK NUTS 3.9 3.7
MAYONNAISE & DRESSINGS .6 -
-------- --------
Total Operating Profit $ 20.7 $ 16.7
======== ========
</TABLE>
<PAGE>
CEREALS, CRACKERS & COOKIES
- ------------------------------
A comparison of current year quarter sales to prior year quarter sales for the
Cereals, Crackers & Cookies segment reflects an improvement of $16.4 million.
This significant sales dollar increase can be attributed primarily to the
Company's cracker and cookie business, Bremner, which benefited in the current
year from a nearly full quarter of results of Ripon Foods, Inc. Ripon Foods, a
cookie, sugar wafer and breakfast bar producer, was acquired by Ralcorp on
October 4, 1999. In addition to the increase provided by the acquisition,
Bremner also recorded improved sales over the prior year's first quarter on the
strength of volume gains from the cracker side of its business. Cracker volume
increased 7.9 percent. It should be noted that volume gains made in the cracker
business were not aided by any acquisition activity.
The Company's ready-to-eat and hot cereal division, Ralston Foods, also showed
modest top line growth in the current quarter compared to the same prior year
period. The sales improvement recorded in the first quarter of fiscal 2000 is
primarily the result of 4.0 percent higher volume in store brand ready-to-eat
cereal and a slightly improved product mix. The Company's hot cereal business
was basically flat on a sales dollar basis despite volume declines of 1.2
percent. The current year quarter faced a difficult comparison, as the prior
year first quarter benefited significantly from volume improvement in hot
cereals (+30.0 percent) as well as increased volume requirements of certain
copacking arrangements. The primary offset to the improved ready-to-eat volume
in the current year's first quarter was a significant decline in volume related
to current year copacking activity. Copacking volume declined 40.8 percent when
comparing current and prior year first quarters.
From an operating results perspective, the Cereals, Crackers & Cookies segment
recorded an operating profit of $16.2 million, a 24.6 percent improvement over
the prior year's first quarter. The cereal business recorded operating profit
improvement in the current quarter on volume increases in ready-to-eat cereal.
Also contributing to the improved operating profit at the Company's cereal
division were efforts to aggressively contain, and where possible reduce, the
operation's cost structure, while improving production efficiencies. Offsetting
a portion of the cereal business operating profit improvement was the previously
referenced decline in business related to a specific copacking contract.
Bremner made year-over-year operating profit gains on the addition of its Ripon
Foods cookie operation, which was not in prior year results. In addition, the
pre-existing Bremner operation improved on cracker volume gains in both
specialty crackers and saltines, and favorable raw material and packaging supply
costs.
Previously, Company management disclosed that a cereal copacking arrangement was
terminated effective December 31, 1999 and that short-term results for the
Company's cereal operation could be negatively impacted. Management believes it
can replace the lost business through new copacking arrangements or organic
volume growth. However, any replacement of the lost business may not be
immediate and will likely take time to cultivate. Therefore, in assessing the
magnitude of the lost copacking business on the current state of operations, it
is estimated that diluted earnings per share for the remainder of fiscal 2000
may be negatively impacted in the range of $.08 to $.10 per share. It should be
noted, however, that although the level of cereal copacking activity for the
Cereals, Crackers & Cookies segment had significantly declined in the current
quarter from the same period of the prior year, cereal sales increased modestly
and operating profit improved significantly - factors that highlight the sound
fundamentals of the Company's on-going, core cereal business.
SNACK NUTS
- -----------
First quarter fiscal 2000 Snack Nut sales increased $17.2 million to $54.6
million. This nearly 46 percent net sales improvement reflects significantly
improved organic volumes, as well as a full quarter of operations of Southern
Roasted Nuts of Georgia. Southern Roasted, the Company's third snack nut
operation, was acquired in late March 1999.
<PAGE>
Ralcorp's Snack Nut segment recorded $3.9 million in operating profit for the
first fiscal quarter of 2000, compared to $3.7 million in the prior year. This
5.4 percent improvement in operating profit can be attributed to sharply
improved volumes. Unfortunately, the full profit potential of the increased
volume was again mitigated by the negative impact of the high cost of cashews -
a key commodity ingredient.
MAYONNAISE & DRESSINGS
- ------------------------
Fiscal 2000's first quarter also includes $16.4 million in net sales revenue
from the Company's March 1999 acquisition of Martin Gillet, a maker of private
label mayonnaise and salad dressings.
The acquisition of Martin Gillet in mid-fiscal 1999 represented the Company's
first foray into "wet" foods - mayonnaise and salad dressings. For the first
fiscal quarter of 2000, this segment recorded $600 thousand in operating profit.
There are, of course, no prior year comparisons for this business.
As part of the effort to integrate this operation into the Ralcorp business
portfolio, an extensive cost reduction program has been initiated. As
referenced in previous documents issued by the Company, it is anticipated that
the benefits of this program will be realized throughout a total estimated time
period of 12 to 18 months.
BUSINESS SEGMENTS - COMBINED
- -------------------------------
On a combined EBITDA basis (earnings before interest, taxes, depreciation and
amortization) the Company recorded $25.1 million in the current year's first
quarter, excluding the non-cash equity loss from its Vail Resorts, Inc.
investment. This is a 27.4 percent improvement over the "food business" EBITDA
in the prior year's first quarter of $19.7 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., as of December 31, 1999. For the first fiscal quarter
ended December 31, 1999, the Company's equity stake in Vail Resorts resulted in
non-cash, pre-tax losses of $4.4 million. Through the first quarter ended
December 31, 1998, the Company recorded non-cash, pre-tax equity losses of $4.0
million. 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. The current and prior year quarter equity losses are based on results
involving the historically unprofitable ski months of August through October.
While the current year's equity loss exceeds losses recorded in the prior year,
it should also be noted that on January 14, 2000 the management of Vail Resorts
announced that anticipated operating results for their second fiscal quarter
ending January 31, 2000 and full year ending July 31, 2000 will fall below
current consensus analyst expectations. Vail Resorts management attributed this
unfavorable outlook to slow millennium period travel patterns across the U.S.
and soft pre-Christmas activity caused by poor early season snow conditions.
See attached schedules and notes for additional information on the quarterly
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.
###
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<TABLE>
<CAPTION>
RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(in millions except per share data)
(unaudited)
Three Months Ended
December 31,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
Net Sales $ 204.9 $ 154.9
-------- --------
Costs and Expenses
Cost of products sold 155.5 112.0
Selling, general and administrative 25.6 22.3
Advertising and promotion 6.2 6.5
Interest expense, net 1.1 -
Equity in loss of Vail Resorts, Inc. 4.4 4.0
-------- --------
192.8 144.8
-------- --------
Earnings before Income Taxes 12.1 10.1
Income Taxes 4.5 3.8
-------- --------
Net Earnings $ 7.6 $ 6.3
======== ========
Basic Earnings per Share $ .25 $ .20
======== ========
Diluted Earnings per Share $ .24 $ .20
======== ========
Weighted Average Shares Outstanding - Basic 30.5 31.4
Weighted Average Shares Outstanding - Diluted 31.2 31.9
<FN>
Notes:
1. The weighted average shares outstanding used to compute earnings per share
(basic and diluted) for the quarters ended December 31, 1999 and 1998 are based
on the weighted average number of Ralcorp common stock shares outstanding for
the periods then ended. In addition, the calculation of diluted earnings per
share includes all other common stock equivalents.
2. Operating results for any quarter are not necessarily indicative of the
results for any other quarter or for the full year.
</TABLE>
