SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1993
Commission File No. 1-4582
RALSTON PURINA COMPANY
-----------------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-0470580
------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
CHECKERBOARD SQUARE, ST. LOUIS MISSOURI 63164
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(314) 982-1000
------------------------------------------------------------
(Registrant's telephone number, including area code)
Registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements for the
past 90 days.
YES X NO
--- ---
Number of shares of Ralston-Ralston Purina Group common stock $.10 par
value, outstanding as of the close of business on February 1, 1994
- - 100,335,110.
Number of shares of Ralston-Continental Baking Group common stock $.10 par
value outstanding as of the close of business on February 1, 1994
- - 20,438,731.
<PAGE>
PAGE 2
PART I - FINANCIAL INFORMATION
A. Consolidated
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
Three Months Ended
December 31,
1993 1992
---- ----
Net Sales $ 2,199.3 $ 2,177.5
---------- ----------
Costs and Expenses
Cost of products sold 1,173.6 1,166.8
Selling, general and administrative 468.5 465.9
Advertising and promotion 268.6 262.5
Interest 56.3 58.6
Other (income)/expense, net 7.6 4.3
---------- ----------
1,974.6 1,958.1
---------- ----------
Earnings before Income Taxes, Extraordinary
Item and Cumulative Effect of Accounting
Changes 224.7 219.4
Income Taxes 91.0 87.1
---------- ----------
Earnings before Extraordinary Item and
Cumulative Effect of Accounting Changes 133.7 132.3
Extraordinary Item - Loss on Early
Retirement of Debt (6.8)
---------- ----------
Earnings before Cumulative Effect of
Accounting Changes 133.7 125.5
Cumulative Effect of Accounting Changes:
Postretirement Benefits Other Than Pensions (171.9)
Income Taxes (35.0)
---------- ----------
Net Earnings (Loss) 133.7 (81.4)
Preferred Stock Dividend, Net of Taxes 5.2 5.2
---------- ----------
Earnings (Loss) Available to Common
Shareholders $ 128.5 $ (86.6)
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 3
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (continued)
(Dollars in millions except per share data)
Three Months Ended
December 31,
1993 1992
---- ----
Earnings (Loss) per Common Share -
RPG Stock (pro forma in 1992):
Primary-
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.27 $ .82
Extraordinary item (.05)
Cumulative effect of accounting changes (1.16)
---------- ----------
Net earnings (loss) $ 1.27 $ (.39)
========== ==========
Fully Diluted-
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.18 $ .78
Extraordinary item (.05)
Cumulative effect of accounting changes (1.05)
---------- ----------
Net earnings (loss) $ 1.18 $ (.32)
========== ==========
CBG Stock (pro forma in 1992):
Primary-
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .08
Extraordinary item (.03)
Cumulative effect of accounting changes (2.30)
---------- ----------
Net loss $ (.01) $ (2.25)
========== ==========
Fully Diluted-
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .07
Extraordinary item (.03)
Cumulative effect of accounting changes (2.13)
---------- ----------
Net loss $ (.01) $ (2.09)
========== ==========
Ralston Purina Common Stock:
Primary-
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.22
Extraordinary item (.06)
Cumulative effect of accounting changes (2.00)
----------
Net loss $ (.84)
==========
Fully Diluted-
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.14
Extraordinary item (.06)
Cumulative effect of accounting changes (1.81)
----------
<PAGE>
PAGE 4
Net loss $ (.73)
==========
See Accompanying Notes to Condensed Financial Statements.<PAGE>
PAGE 5
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Condensed)
(Dollars in millions)
Dec. 31, Sept. 30,
1993 1993
Assets ---- ----
Current Assets
Cash $ 19.6 $ 21.5
Marketable securities 57.8 36.4
Receivables, less allowance for doubtful
accounts of $31.6 and $31.2, respectively 921.6 763.2
Inventories -
Raw materials and supplies 247.7 232.6
Work in process 91.1 93.7
Finished products 443.5 477.4
Other current assets 178.7 171.2
---------- ----------
Total Current Assets 1,960.0 1,796.0
---------- ----------
Investments and Other Assets 941.4 944.3
---------- ----------
Property at Cost 3,992.4 3,941.8
Accumulated depreciation 1,652.8 1,610.2
---------- ----------
2,339.6 2,331.6
---------- ----------
Total $ 5,241.0 $ 5,071.9
========== ==========
Liabilities and Shareholders Equity
Current Liabilities
Current maturities of long-term debt $ 148.5 $ 98.4
Notes payable 490.5 401.3
Accounts payable 447.9 497.3
Other current liabilities 694.4 610.3
---------- ----------
Total Current Liabilities 1,781.3 1,607.3
---------- ----------
Long-Term Debt 1,973.6 2,054.5
---------- ----------
Deferred Income Taxes 153.8 149.5
---------- ----------
Other Liabilities 591.2 590.5
---------- ----------
Redeemable Preferred Stock 509.8 509.8
Unearned ESOP Compensation (297.7) (309.5)
---------- ----------
Shareholders Equity
Preferred stock
Common stocks:
RPG Stock 11.5 11.5
CBG Stock 2.1 2.1
Capital in excess of par value 115.2 115.2
Retained earnings 1,286.6 1,159.3
Cumulative translation adjustment (79.0) (70.1)
Common stock in treasury, at cost:
RPG Stock (801.6) (744.3)
CBG Stock (2.5)
<PAGE>
PAGE 6
Unearned portion of restricted stock (3.3) (3.9)
---------- ----------
Total Shareholders Equity 529.0 469.8
---------- ----------
Total $ 5,241.0 $ 5,071.9
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 7
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Condensed)
(Dollars in millions)
Three Months Ended
December 31,
1993 1992
---- ----
Cash Flow from Operations
Earnings before extraordinary item and
cumulative effect of accounting changes $ 133.7 $ 132.3
Non-cash items included in income 84.5 71.4
Changes in operating assets and liabilities
used in operations (68.5) (36.5)
Other, net 2.1 12.5
---------- ----------
Net cash flow from operations 151.8 179.7
---------- ----------
Cash Flow from Investing Activities
Acquisition of businesses (39.2)
Property additions, net (61.1) (69.4)
Other, net 2.2 12.8
---------- ----------
Net cash used by investing
activities (98.1) (56.6)
---------- ----------
Cash Flow from Financing Activities
Net cash flow provided (used) by debt 82.7 (52.2)
Proceeds from sale of stock 2.4 2.1
Treasury stock purchases (60.4) (1.6)
Dividends paid (49.2) (48.1)
---------- ----------
Net cash used by financing activities (24.5) (99.8)
---------- ----------
Effect of Exchange Rate Changes on Cash (9.7) (8.1)
---------- ----------
Net Increase in Cash and Cash Equivalents 19.5 15.2
Cash and Cash Equivalents, Beginning of Year 57.9 59.5
---------- ----------
Cash and Cash Equivalents, End of Quarter $ 77.4 $ 74.7
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 8
RALSTON PURINA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(Dollars in millions except per share data)
Note 1 - The accompanying unaudited financial statements have been prepared
in accordance with the instructions for Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments considered necessary for a fair
presentation, have been included. Operating results for any
quarter are not necessarily indicative of the results for any
other quarter or for the full year. These statements should be
read in connection with the financial statements and notes thereto
included in the Ralston Purina Company's (the Company) Annual
Report to Shareholders for the year ended September 30, 1993.
Note 2 - On July 30, 1993, the shareholders of the Company approved a plan
to distribute to shareholders shares of a new class of common
stock, Ralston-Continental Baking Group Common Stock (CBG Stock),
which is intended to reflect separately the performance of the
Company's fresh bakery products business (the CBG Group). As part
of this plan, existing common stock was redesignated Ralston-
Ralston Purina Group Common Stock (RPG Stock) and is intended to
reflect separately the performance of the Company's other
businesses (the RPG Group). The CBG Stock distributed to
shareholders, at a ratio of one share for every five shares of
existing common stock, represents a 55% interest in the business,
assets and liabilities of the CBG Group and the RPG Group retains
the remaining 45% interest.
Note 3 - Primary earnings per share are based on the average number of
shares outstanding during the period. Fully diluted earnings per
share are based on the average number of outstanding shares
adjusted for the dilutive effect of convertible preferred stock,
stock options, convertible debentures and compensation awards. The
earnings per share for the RPG Group and CBG Group for the quarter
ended December 31, 1992 are on a pro forma basis as the stock
distribution described in Note 2 had not occurred as of that date.
The shares and pro forma shares used in earnings per share
computations were as follows:
Quarter ended Quarter ended
December 31, 1993 December 31, 1992
------------------ ------------------
Primary:
RPG Stock 101,488,000 103,672,000
CBG Stock 20,577,000 20,725,000
Ralston Purina
Common Stock 103,672,000
Fully Diluted:
RPG Stock 111,924,000 113,983,000
CBG Stock 22,422,000 22,413,000
Ralston Purina
Common Stock 114,379,000
<PAGE>
PAGE 9
RALSTON PURINA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(Dollars in millions except per share data)
Note 4 - As of December 31, 1993, there were 100,334,000 shares of RPG
Stock and 20,439,000 shares of CBG Stock outstanding, and at
September 30, 1993, there were 101,763,000 shares of RPG Stock and
20,694,000 shares of CBG Stock outstanding. These share figures
are exclusive of shares held in treasury, which were 14,346,000 of
RPG Stock and 256,000 of CBG Stock at December 31, 1993, and
12,917,000 of RPG Stock and 1,000 of CBG Stock at September 30,
1993.
Note 5 - Other (income)/expense, net for three months consists of the
following:
December 31, December 31,
1993 1992
----------- -----------
Translation and exchange (gain)/loss $ 7.2 $ 6.9
Investment income (3.8) (2.9)
Miscellaneous 4.2 .3
------- -------
$ 7.6 $ 4.3
======= =======
Note 6 - Investments and Other Assets consist of the following:
December 31, September 30,
1993 1993
----------- -----------
Intangible Assets $ 633.5 $ 635.7
Other Assets 307.6 308.6
--------- ---------
$ 941.4 $ 944.3
========= =========
Note 7 - During the fourth quarter of fiscal 1993, the Company elected to
adopt Statement of Financial Accounting Standards No. 106 -
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" (FAS 106) and Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" (FAS 109) as of
the beginning of the year. The quarter ended December 31, 1992
has been restated to reflect the accounting changes.
Note 8 - The extraordinary item, in fiscal 1993, represents the loss on
early retirement of debt during the quarter ended December 31,
1992 of $6.8, after taxes. Retired debt consisted primarily of a
portion of the Company's outstanding 9 1/2% and 9 3/8% debentures
and all remaining 7.7% debentures.
Note 9 - During the quarter ended December 31, 1993, the Company purchased
the oats processing and packaging and cereal making operations of
the National Oats Company division of Curtice Burns Foods, Inc.,
along with certain related manufacturing assets for approximately
$39.
<PAGE>
PAGE 10
RALSTON PURINA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(Dollars in millions except per share data)
Note 10- The Company's Board of Directors has approved a plan to spin-off
its private label and branded cereal, baby food,
crackers and
cookies, ski resort and coupon redemption businesses.
The spin-
off is subject to receipt of a favorable tax ruling from the
Internal Revenue Service, satisfaction of all legal
requirements
and final review by the Board. The stock of the new
company would
be distributed to holders of RPG Stock. In addition, the new
company has filed a preliminary registration statement on Form 10
with the Securities and Exchange Commission which includes
information regarding the details of the proposed spin-off.
Note 11- On February 3, 1994, the Company's Board of Directors declared a
dividend of $.30 per share of RPG Stock, payable on March 11, 1994
to shareholders of record on February 14, 1994.
<PAGE>
PAGE 11
RALSTON PURINA COMPANY AND SUBSIDIARIES
REVIEW OF FINANCIAL INFORMATION
---------------------------------------
Operating Results
Net earnings for the three months ended December 31, 1993 were $133.7
million compared to a net loss of $81.4 million for the same period in
the prior year. During the quarter ended December 31, 1992, the Company
recognized an extraordinary loss on the early retirement of debt of $6.8
million, after tax, and charges for the cumulative effect of accounting
changes related to postretirement benefits other than pensions and
income taxes totaling $206.9 million, after taxes. Exclusive of these
items, net earnings increased $1.4 million in the first quarter of
fiscal 1994.
Business Segments
Sales of the Pet and Human Foods segment for the first quarter increased
1% over the prior year first quarter with increases in cereals,
primarily related to acquired operations and higher branded cereal
prices, and international pet foods volume, partially offset by declines
in domestic pet food and cracker and cookie volumes. Operating profit
for the segment declined compared to the prior year on lower volume
and higher ingredient costs in pet foods and lower results in crackers
and cookies related to production inefficiencies associated with plant
relocation start-up, partially offset by higher prices in branded
cereals.
Sales for the Bakery Products segment declined 2% compared to the prior
year first quarter primarily on lower volume and an unfavorable product
mix in bread, lower thrift store volume and higher promotional sales
discounts in both bread and sweet baked goods. Operating profit for
bakery products declined significantly as a result of the previously
mentioned items, partially offset by improved margins reflecting cost
reduction programs and lower ingredient costs.
Battery products sales increased 4% over the same period of the prior
year on the inclusion of rechargable operations acquired in
August 1993
and growth in domestic alkaline volume during the key holiday
selling
period, partially offset by substantial declines in Europe due to
unfavorable foreign currency exhange rates and generally poor
economic
conditions. First quarter operating profit for battery products
increased significantly on domestic alkaline volume growth,
contribution
of rechargable products and a favorable product mix, partially offset by
declines in Europe.
Sales of resort operations increased reflecting the acquisition
of
Breckenridge resort. Sales for the soy protein products business
increased in the first quarter on strong volume in food protein
products. Operating profit of the soy protein products business
increased as higher volume was partially offset by higher raw
material
costs and unfavorable foreign currency exchange rates.
Sales for international agricultural products declined as a
result of
unfavorable exchange rates and volume declines in Europe.
Operating
profit was unchanged as European declines were offset by
improvements in
most other areas of the world.
<PAGE>
PAGE 12
Consolidated Results of Operations
Cost of products sold as a percentage of sales decreased from 53.6% in
the prior year first quarter to 53.4% in the current period primarily
due to results in the bakery and battery products, partially offset by
pet and human food operations. Selling, general and administrative
expenses were 21.3% of sales for the current period compared to 21.4% in
the prior period. Advertising and promotion expense was 12.2% of sales
compared to 12.1% in the prior year.
Income taxes include federal, state and foreign taxes and were 40.5%
of earnings before income taxes for the current year first quarter
compared to 39.7% in the prior period, primarily due to the increase in
the federal statutory tax rate.
Financial Condition
At December 31, 1993, total debt as a percentage of total capitalization
was 78% compared to 79% at September 30, 1993. For the purpose of this
ratio, guaranteed ESOP debt is treated as long-term debt and redeemable
preferred stock and related unearned compensation are treated as
capital.
The Company's primary source of liquidity is cash flow generated from
operations. For the three months ended December 31, 1993, cash flow
from operations was $151.8 million compared to $179.7 million for the
same period in the prior year, with the change primarily attributable
to working capital changes. Working capital was $178.7 million at
December 31, 1993 compared to $188.7 million at September 30, 1993.
In November, 1993, the Company purchased the oats processing and
packaging and cereal making operations of the National Oats Company,
division of Curtice Burns Foods, Inc., along with related manufacturing
assets, for approximately $39 million.
In the first quarter of fiscal 1994, the Company repurchased
approximately 1,400,000 shares of RPG Stock, substantially completing
the most recent share repurchase authorization of the Board of
Directors. As of February 3, 1994, approximately 3,756,000 shares of
CBG Stock remained under the Board of Directors' authorization for the
purchase of up to 4 million shares of CBG Stock.
<PAGE>
PAGE 13
PART I - FINANCIAL INFORMATION
B. RPG Group
RALSTON PURINA GROUP
COMBINED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
Three Months Ended
December 31,
1993 1992
---- ----
Net Sales $ 1,724.3 $ 1,691.2
---------- ----------
Costs and Expenses
Cost of products sold 944.1 924.8
Selling, general and administrative 252.8 256.5
Advertising and promotion 246.4 239.8
Interest 49.7 51.7
Other (income)/expense, net 6.9 4.3
---------- ----------
1,499.9 1,477.1
---------- ----------
Loss Related to Retained Interest in the
CBG Group (.1) (38.1)
---------- ----------
Earnings before Income Taxes, Extraordinary
Item and Cumulative Effect of Accounting
Changes 224.3 176.0
Income Taxes 90.9 85.3
---------- ----------
Earnings before Extraordinary Item and
Cumulative Effect of Accounting Changes 133.4 90.7
Extraordinary Item - Loss on Early
Retirement of Debt (5.7)
---------- ----------
Earnings before Cumulative Effect of
Accounting Changes 133.4 85.0
Cumulative Effect of Accounting Changes:
Postretirement Benefits Other Than Pensions (130.7)
Income Taxes 10.4
---------- ----------
Net Earnings(Loss) 133.4 (35.3)
Preferred Stock Dividend, Net of Taxes 4.7 4.7
---------- ----------
Earnings(Loss) after Preferred Stock Dividend $ 128.7 $ (40.0)
========== ==========
Earnings (Loss) per RPG Stock Common Share
(pro forma in 1992) -
Primary
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.27 $ .82
Extraordinary item (.05)
Cumulative effect of accounting changes (1.16)
---------- ----------
Net earnings (loss) $ 1.27 $ (.39)
========== ==========
Fully Diluted
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.18 $ .78
PAGE 14
Extraordinary item (.05)
Cumulative effect of accounting changes (1.05)
---------- ----------
<PAGE>
PAGE 15
Net earnings (loss) $ 1.18 $ (.32)
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 16
RALSTON PURINA GROUP
COMBINED BALANCE SHEET
(Condensed)
(Dollars in millions)
Dec. 31, Sept. 30,
1993 1993
Assets ---- ----
Current Assets
Cash $ 19.6 $ 21.5
Marketable securities 54.9 35.9
Receivables, less allowance for doubtful
accounts of $28.1 and $27.9, respectively 828.9 673.2
Inventories -
Raw materials and supplies 196.0 185.7
Work in process 91.1 93.7
Finished products 433.0 469.0
Other current assets 150.0 142.2
---------- ----------
Total Current Assets 1,773.5 1,621.2
---------- ----------
Retained Interest in the CBG Group 25.2 27.4
---------- ----------
Investments and Other Assets 901.5 902.6
---------- ----------
Property at Cost 2,968.5 2,927.5
Accumulated depreciation 1,215.2 1,184.8
---------- ----------
1,753.3 1,742.7
---------- ----------
Total $ 4,453.5 $ 4,293.9
========== ==========
Liabilities and Shareholders Equity
Current Liabilities
Current maturities of long-term debt $ 120.9 $ 80.1
Notes payable 475.0 393.9
Accounts payable 360.6 392.0
Other current liabilities 589.2 503.7
---------- ----------
Total Current Liabilities 1,545.7 1,369.7
---------- ----------
Long-Term Debt 1,636.1 1,731.6
---------- ----------
Deferred Income Taxes 143.5 138.4
---------- ----------
Other Liabilities 389.3 386.0
---------- ----------
Redeemable Preferred Stock 463.9 463.9
---------- ----------
Unearned ESOP Compensation (223.3) (232.1)
---------- ----------
RPG Group Equity 498.3 436.4
---------- ----------
Total $ 4,453.5 $ 4,293.9
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 17
RALSTON PURINA GROUP
COMBINED STATEMENT OF CASH FLOWS
(Condensed)
(Dollars in millions)
Three Months Ended
December 31,
1993 1992
---- ----
Cash Flow from Operations
Earnings before extraordinary item and
cumulative effect of accounting changes $ 133.4 $ 90.7
Retained interest in CBG Group's earnings .1 38.1
Non-cash items included in income 66.5 54.3
Changes in operating assets and liabilities
used in operations (42.9) (42.6)
Other, net 3.6 6.3
---------- ----------
Net cash flow from operations 160.7 146.8
---------- ----------
Cash Flow from Investing Activities
Acquisition of businesses (39.2)
Property additions, net (45.2) (55.0)
Other, net 4.6 12.7
---------- ----------
Net cash used by investing
activities (79.8) (42.3)
---------- ----------
Cash Flow from Financing Activities
Net payments on centrally managed debt (5.2) (111.6)
Net proceeds from specifically attributed
long-term debt, including current maturities .5
Net increase in specifically attributed notes
payable 52.4 70.1
Proceeds from the sale of stock 2.4
Treasury stock purchases (58.1)
Dividends paid on RPG Stock (46.1)
Cash provided for corporate equity transactions (40.7)
---------- ----------
Net cash used by financing activities (54.1) (82.2)
---------- ----------
Effect of Exchange Rate Changes on Cash (9.7) (8.1)
---------- ----------
Net Increase in Cash and Cash Equivalents 17.1 14.2
Cash and Cash Equivalents, Beginning of Year 57.4 59.0
---------- ----------
Cash and Cash Equivalents, End of Quarter $ 74.5 $ 73.2
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 18
RALSTON PURINA GROUP
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(Dollars in millions except per share data)
Note 1 - The accompanying unaudited financial statements have been prepared
in accordance with the instructions for Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments considered necessary for a fair
presentation, have been included. Operating results for any
quarter are not necessarily indicative of the results for any
other quarter or for the full year. These statements should be
read in connection with the financial statements of the RPG Group
and notes thereto included in the Ralston Purina Company's (the
Company) Annual Report to Shareholders for the year ended
September 30, 1993.
Note 2 - On July 30, 1993, the shareholders of the Company approved a plan
to distribute to shareholders shares of a new class of common
stock, Ralston-Continental Baking Group Common Stock (CBG Stock),
which is intended to reflect separately the performance of the
Company's fresh bakery products business (the CBG Group). As part
of this plan, existing common stock was redesignated Ralston-
Ralston Purina Group Common Stock (RPG Stock) and is intended to
reflect separately the performance of the Company's other
businesses (the RPG Group). The CBG Stock distributed to
shareholders, at a ratio of one share for every five shares of
existing common stock, represents a 55% interest in the business,
assets and liabilities of the CBG Group and the RPG Group retains
the remaining 45% interest.
Holders of RPG Stock are common shareholders of the Company.
Although the financial statements of the RPG Group and the CBG
Group separately report the assets, liabilities and shareholders
equity of the Company attributed to each group, this attribution
does not affect legal title to such assets or responsibility for
such liabilities. Financial impacts arising from the CBG Group
that affect the consolidated results of operations or financial
position of the Company could affect the results of operations or
financial position of the RPG Group. Accordingly, the Company's
consolidated quarterly financial information should be read in
connection with the RPG Group financial information.
Note 3 - Primary earnings per share are based on 101,488,000 average RPG
Stock shares and 103,672,000 average pro forma RPG Stock shares
for the quarters ended December 31, 1993 and 1992, respectively.
Fully diluted earnings per share are based on the average number
of shares outstanding adjusted for the dilutive effect of
convertible preferred stock, stock options, convertible debentures
and deferred compensation awards. The balances were 111,924,000
average RPG Stock shares and 113,983,000 average pro forma RPG
Stock shares for the quarters ended December 31, 1993 and 1992,
respectively. The earnings per share for the quarter ended
December 31, 1992 are on a pro forma basis as the stock
distribution described in Note 2 had not occurred as of that date.
PAGE 19
Note 4 - There were RPG Stock common shares outstanding of 100,334,000 at
December 31, 1993 and 101,763,000 at September 30, 1993, exclusive
of 14,346,000 and 12,917,000 RPG Stock treasury shares,
respectively.
<PAGE>
PAGE 20
RALSTON PURINA GROUP
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(Dollars in millions except per share data)
Note 5 - Other (income)/expense, net for three months consists of the
following:
Dec. 31, Dec. 31,
1993 1992
---------- ----------
Translation and exchange (gain)/loss $7.2 $6.9
Investment income (3.8) (2.9)
Miscellaneous 3.5 .3
---------- ----------
$6.9 $4.3
========== ==========
Note 6 - Investments and Other Assets consists of the following:
Dec. 31, Sept. 30,
1993 1993
---------- ----------
Intangible Assets $592.5 $594.4
Other Assets 309.0 308.2
---------- ----------
$901.5 $902.6
========== ==========
Note 7 - During the fourth quarter of fiscal 1993, the Company elected to
adopt Statement of Financial Accounting Standards No. 106 -
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" (FAS 106) and Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (FAS 109) as
of the beginning of the year. The quarter ended December 31,
1992 has been restated to reflect the accounting changes.
Note 8 - The extraordinary item, in fiscal 1993, represents the loss on
early retirement of debt during the quarter ended December 31,
1992 of $5.7 million, after taxes, or $.05 per pro forma primary
share. Retired debt consisted primarily of a portion of the
Company's outstanding 9 1/2% and 9 3/8% debentures and all
remaining 7.7% debentures.
Note 9 - During the quarter ended December 31, 1993, the Company purchased
the oats processing and packaging and cereal making operations of
the National Oats Company division of Curtice Burns Foods, Inc.,
along with certain related manufacturing assets for approximately
$39.
Note 10 - The Company's Board of Directors has approved a plan to spin-off
its private label and branded cereal, baby food, crackers and
cookies, ski resort and coupon redemption businesses. The spin-
off is subject to receipt of a favorable tax ruling from the
Internal Revenue Service, satisfaction of all legal requirements
and final review by the Board. The stock of the new
company
<PAGE>
PAGE 21
would be distributed to holders of RPG Stock. In addition, the
new company has filed a preliminary registration statement on
Form 10 with the Securities and Exchange Commission which
includes information regarding the details of the proposed spin-
off.
Note 11 - On February 3, 1994, the Company's Board of Directors declared a
dividend of $.30 per share of RPG Stock, payable on March 11,
1994 to shareholders of record on February 14, 1994.
<PAGE>
PAGE 22
RALSTON PURINA GROUP
REVIEW OF FINANCIAL INFORMATION
-------------------------------
Operating Results
Net earnings for the three months ended December 31, 1993 were $133.4
million , compared to a net loss of $35.3 million for the same period
in the prior year. Included in net earnings for the three months ended
December 31, 1992 were an extraordinary loss on early retirement of debt
of $5.7 million, after taxes, a charge for the cumulative effect of
accounting changes related to postretirement benefits other than
pensions and income taxes of $120.3 million, and a decrease of $38.9
million in the RPG Group's earnings related to its 45% retained interest
in the CBG Group due to the CBG Group's accounting changes. Exclusive
of such items, earnings increased $3.8 million in the current quarter
from $129.6 million.
Earnings per share for the three months ended December 31, 1993 were
$1.27 and $1.18, on a primary and fully diluted basis, respectively.
Pro forma primary and fully diluted loss per share were $.39 and $.32 in
the prior year. Exclusive of the aforementioned items, pro forma
earning per share were $1.20 and $1.12 on a primary and fully diluted
basis.
Business Segments
Sales of the Pet and Human Foods segment for the first quarter increased
1% over the prior year first quarter with increases in cereals,
primarily related to acquired operations and higher branded cereal
prices, and international pet foods volume, partially offset by declines
in domestic pet food and cracker and cookie volumes. Operating profit
for the segment declined compared to the prior year on lower volume and
higher ingredient costs in pet foods and lower results in crackers and
cookies related to production inefficiencies associated with plant
relocation start-up, partially offset by higher prices in branded
cereals.
Battery products sales increased 4% over the same period of the
prior
year on the inclusion of rechargable operations acquired in August 1993
and growth in domestic alkaline volume during the key holiday
selling
period, partially offset by substantial declines in Europe due to
unfavorable foreign currency exchange rates and generally poor
economic
conditions. First quarter operating profit for battery products
increased significantly on domestic alkaline volume growth,
contribution
of rechargable products and a favorable product mix, partially
offset by
declines in Europe.
Sales of resort operations increased reflecting the acquisition of
Breckenridge resort. Sales for the soy protein products business
increased in the first quarter on strong volume in food protein
products. Operating profit of the soy protein products business
increased as higher volume was partially offset by higher raw material
costs and unfavorable foreign currency exchange rates.
Sales for international agricultural products declined as a result of
unfavorable exchange rates and volume declines in Europe.
Operating<PAGE>
PAGE 23
profit was unchanged as European declines were offset by improvements in
most other areas of the world.
Results of Operations
Cost of products sold as a percentage of sales increased from 54.7% in
the prior year first quarter to 54.8% in the current period as favorable
results in the battery products were nearly offset by pet and human
foods results. Selling, general and administrative expenses were
14.7% of sales for the current period compared to 15.2% in the prior
period. Advertising and promotion expense was 14.3% of sales compared
to 14.2% in the prior year.
Income taxes include federal, state and foreign taxes and were 40.5% of
earnings before income taxes for the current year first quarter compared
to 48.5% in the prior period. The income tax percentage in the prior
year is influenced by the inclusion of the RPG Group's loss related to
its retained interest in the CBG Group, on an after tax basis, in the
computation of pre-tax earnings. Excluding such impact, the income
tax percentage for the RPG Group was 39.8% in the prior year. The
current year income taxes reflect a 1% increase in the federal statutory
rate.
Financial Condition
The RPG Group's primary source of liquidity is cash flow from
operations, which increased to $160.7 million in the three months ended
December 31, 1993 compared to $146.8 million for the same period in the
prior year. Working capital was $227.8 million at December 31, 1993
compared to $251.5 million at September 30, 1993.
In November, 1993, the Company purchased the oats processing and
packaging and cereal making operations of the National Oats Company,
division of Curtice Burns Foods, Inc., along with related manufacturing
assets, for approximately $39 million.
In the first quarter of fiscal 1994, the Company repurchased
approximately 1,400,000 shares of RPG stock, substantially completing
the most recent share repurchase authorization of the Board of
Directors.
<PAGE>
PAGE 24
PART I - FINANCIAL INFORMATION
C. CBG Group
CONTINENTAL BAKING GROUP
COMBINED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
13 Weeks Ended
Dec. 25, Dec. 26,
1993 1992
---- ----
Net Sales $ 476.0 $ 488.9
---------- ----------
Costs and Expenses
Cost of products sold 230.5 244.6
Selling, general and administrative 215.7 209.4
Advertising and promotion 22.2 22.7
Interest 6.6 6.9
Other (income)/expense, net .7
---------- ----------
475.7 483.6
---------- ----------
Earnings before Income Taxes, Extraordinary
Item and Cumulative Effect of Accounting
Changes .3 5.3
Income Taxes .1 1.8
---------- ----------
Earnings before Extraordinary Item and
Cumulative Effect of Accounting Changes .2 3.5
Extraordinary Item - Loss on Early
Retirement of Debt (1.1)
---------- ----------
Earnings before Cumulative Effect of
Accounting Changes .2 2.4
Cumulative Effect of Accounting Changes:
Postretirement Benefits Other Than Pensions (41.2)
Income Taxes (45.4)
---------- ----------
Net Earnings (Loss) .2 (84.2)
Preferred Stock Dividend, Net of Taxes .5 .5
---------- ----------
Loss after Preferred Stock Dividend (.3) (84.7)
Loss Applicable to the RPG Group's
Retained Interest in the CBG Group (.1) (38.1)
---------- ----------
Loss after RPG Group's Retained Interest $ (.2) $ (46.6)
========== ==========
Earnings (Loss) per CBG Stock Common Share
(pro forma in 1992) -
Primary
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .08
Extraordinary item (.03)
Cumulative effect of accounting changes (2.30)
---------- ----------
Net loss $ (.01) $ (2.25)
========== ==========
<PAGE>
PAGE 25
Fully Diluted
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .07
Extraordinary item (.03)
Cumulative effect of accounting changes (2.13)
---------- ----------
Net loss $ (.01) $ (2.09)
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 26
CONTINENTAL BAKING GROUP
COMBINED BALANCE SHEET
(Condensed)
(Dollars in millions)
Dec. 25, Sept. 25,
1993 1993
---- ----
Assets
Current Assets
Marketable securities $ 2.9 $ .5
Receivables, less allowance for doubtful
accounts of $3.5 and $3.3, respectively 92.7 91.3
Inventories -
Raw materials and supplies 51.7 46.9
Finished products 10.5 8.4
Other current assets 28.7 29.0
---------- ----------
Total Current Assets 186.5 176.1
---------- ----------
Investments and Other Assets 59.0 60.1
---------- ----------
Property at Cost 1,023.9 1,014.3
Accumulated depreciation 437.6 425.4
---------- ----------
586.3 588.9
---------- ----------
Total $ 831.8 $ 825.1
========== ==========
Liabilities and Shareholders Equity
Current Liabilities
Current maturities of long-term debt $ 27.6 $ 18.3
Notes payable 15.5 7.4
Accounts payable 87.3 105.3
Other current liabilities 105.0 107.9
---------- ----------
Total Current Liabilities 235.4 238.9
---------- ----------
Long-Term Debt 337.5 322.9
---------- ----------
Deferred Income Taxes 10.3 11.1
---------- ----------
Other Liabilities 221.0 222.9
---------- ----------
Redeemable Preferred Stock 45.9 45.9
Unearned ESOP Compensation (74.4) (77.4)
---------- ----------
CBG Group Equity 56.1 60.8
---------- ----------
Total $ 831.8 $ 825.1
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 27
CONTINENTAL BAKING GROUP
COMBINED STATEMENT OF CASH FLOWS
(Condensed)
(Dollars in millions)
13 Weeks Ended
Dec. 25, Dec. 26,
1993 1992
---- ----
Cash Flow from Operations
Earnings before extraordinary item and cumulative
effect of accounting changes $ .2 $ 3.5
Non-cash items included in income 18.0 17.1
Changes in operating assets and liabilities
used in operations (25.6) 6.1
Other, net (1.5) 6.2
---------- ----------
Net cash flow from operations (8.9) 32.9
---------- ----------
Cash Flow from Investing Activities
Property additions, net (15.9) (14.4)
Other, net .9 .1
---------- ----------
Net cash used by investing
activities (15.0) (14.3)
---------- ----------
Cash Flow from Financing Activities
Net proceeds from (payments on) centrally
managed debt 35.0 (10.7)
Treasury stock purchases (2.3)
Dividends paid on CBG Stock (3.1)
Cash provided for corporate equity transactions
prior to distribution of CBG Stock (6.9)
Payment attributed to Retained Interest (3.3)
---------- ----------
Net cash provided (used) by financing activities 26.3 (17.6)
---------- ----------
Net Increase in Cash and Cash Equivalents 2.4 1.0
Cash and Cash Equivalents, Beginning of Period .5 .5
---------- ----------
Cash and Cash Equivalents, End of Period $ 2.9 $ 1.5
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
PAGE 28
CONTINENTAL BAKING GROUP
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 25, 1993
(Dollars in millions except per share data)
Note 1 - The accompanying unaudited financial statements have been prepared
in accordance with the instructions for Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments considered necessary for a fair
presentation, have been included. Operating results for any
thirteen week period are not necessarily indicative of the results
for any other thirteen week period or for the full year. These
statements should be read in connection with the financial
statements of the CBG Group and notes thereto included in the
Ralston Purina Company's (the Company) Annual Report to
Shareholders for the year ended September 30, 1993.
Note 2 - On July 30, 1993, the shareholders of the Company approved a plan
to distribute to shareholders shares of a new class of common
stock, Ralston-Continental Baking Group Common Stock (CBG Stock),
which is intended to reflect separately the performance of the
Company's fresh bakery products business (the CBG Group). As part
of this plan, existing common stock was redesignated Ralston-
Ralston Purina Group Common Stock (RPG Stock) and is intended to
reflect separately the performance of the Company's other
businesses (the RPG Group). The CBG Stock distributed to
shareholders, at a ratio of one share for every five shares of
existing common stock, represents a 55% interest in the business,
assets and liabilities of the CBG Group and the RPG Group retains
the remaining 45% interest.
Holders of CBG Stock are common shareholders of the Company.
Although the financial statements of the RPG Group and the CBG
Group separately report the assets, liabilities and shareholders
equity of the Company attributed to each group, this attribution
does not affect legal title to such assets or responsibility for
such liabilities. Financial impacts arising from the RPG Group
that affect the consolidated results of operations or financial
position of the Company could affect the results of operations or
financial position of the CBG Group. Accordingly, the Company's
consolidated quarterly financial information should be read in
connection with the CBG Group financial information.
Note 3 - Primary earnings per share are based on 20,577,000 average CBG
Stock shares and 20,725,000 average pro forma CBG Stock shares for
the quarters ended December 25, 1993 and December 26, 1992,
respectively. Fully diluted earnings per share are based on the
average number of shares outstanding adjusted for the dilutive
effect of convertible preferred stock, stock options, convertible
debentures and deferred compensation awards. The balances were
22,422,000 average CBG Stock shares and 22,413,000 average pro
forma CBG Stock shares for the quarters ended December 25, 1993
and December 26, 1992, respectively. The earnings per share for
the quarter ended December 26, 1992 are on a pro forma basis as
the stock distribution described in Note 2 had not occurred as of
that date.
PAGE 29
Note 4 - There were CBG Stock common shares outstanding of 20,439,000 at
December 25, 1993 and 20,694,000 at September 25, 1993, exclusive
of 256,000 and 1,000 CBG Stock treasury shares, respectively.
<PAGE>
PAGE 30
CONTINENTAL BAKING GROUP
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 25, 1993
(Dollars in millions except per share data)
Note 5 - Other Liabilities consists of the following:
Dec. 25, Sept. 25,
1993 1993
---------- ----------
Self-insurance reserves $113.4 $112.8
Other liabilities 107.6 110.1
---------- ----------
$221.0 $222.9
========== ==========
Note 6 - During the fourth quarter of fiscal 1993, the Company elected to
adopt Statement of Financial Accounting Standards No. 106 -
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" (FAS 106) and Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (FAS 109) as of
the beginning of the year. The quarter ended December 26, 1992
has been restated to reflect the accounting changes.
Note 7 - The extraordinary item, in fiscal 1993, represents the loss on
early retirement of debt during the thirteen weeks ended December
26, 1992 of $1.1 million, after taxes, or $.03 per pro forma
primary share. Retired debt consisted primarily of a portion of
the Company's outstanding 9 1/2% and 9 3/8% debentures and all
remaining 7.7% debentures.
<PAGE>
PAGE 31
CONTINENTIAL BAKING GROUP
REVIEW OF FINANCIAL INFORMATION
-------------------------------
Operating Results
Net earnings were $.2 million for the 13 weeks ended December 25, 1993
compared to a net loss of $84.2 million for the 13 weeks ended December
26, 1992. Included in the net loss for the prior year first quarter
were charges for the cumulative effect of changes in accounting for
postretirement benefits other than pensions and income taxes and an
extraordinary loss on the early retirement of debt totaling $87.7
million, after taxes. Exclusive of these items, earnings declined by
$3.3 million from $3.5 million in the prior year first quarter. After
reducing earnings for preferred stock dividends, the net loss per CBG
Stock share in the first quarter of fiscal 1994 was $.01 on a primary
and fully diluted basis. Fiscal 1993 pro forma net earnings per share
before extraordinary item and cumulative effect of accounting changes
were $.08 and $.07 on a primary and fully diluted basis, respectively.
Sales declined 3% compared to the prior year first quarter primarily on
lower volume and an unfavorable product mix in bread, lower thrift store
volume and higher promotional sales discounts in both bread and sweet
baked goods. Cost of products sold as a percent of sales decreased to
48.4% in the current quarter compared to 50% in the prior year on cost
reduction programs and lower ingredient costs. Selling, general and
administrative costs increased to 45.3% of sales compared to 42.8%,
primarily as a result of the CBG Group's lower sales in 1994, increased
route distribution costs and project related start-up costs.
Financial Condition
Cash used by operations in the first quarter of fiscal 1994 was $8.9
million compared to cash flow generated from operations of $32.9 for the
same period in the prior year, with the current period significantly
impacted by temporary fluctuations in working capital components.
Current liabilities in excess of current assets at December 25, 1993
were $48.9 million compared to $62.8 million at September 25, 1993.
The Company manages most financial activities of the group on a
centralized, consolidated basis. The liquidity and capital resources of
the Company provide financial and operating flexibilty to each group.
The CBG Group's centrally managed debt increased $35.0 million in the
first quarter of fiscal 1994 to fund operating, investing and other
financing activities.
Since the issuance of CBG Stock, a dividend of $.08 per share had been
declared for payment to CBG Stock holders on a quarterly basis. Based
on recent results of the CBG Group, the Board of Directors of the
Company eliminated CBG Stock dividends at its meeting on February 3,
1994. In the future, dividend policy will be considered on a quarter by
quarter basis.
As of February 3, 1994, approximately 3,756,000 shares of CBG Stock
remained under the Board of Directors' authorization for the purchase of
up to 4 million shares of CBG Stock.
<PAGE>
PAGE 32
PART II - OTHER INFORMATION
-----------------
There is no information required to be reported under any items except
those indicated below.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Shareholders on February 3, 1994,
for the purpose of electing three directors to serve three year
terms ending in January, 1997 and ratifying the Board of
Directors appointment of
Price Waterhouse as independent accountants for the Company for the fiscal
year ending September 30, 1994. The number of votes cast, and the number
of shares voting, for or against each candidate and the number of votes
cast for the ratification, as well as the number of absententions
with respect thereto, is as follows:
SHARES VOTING
SHARES
VOTES FOR FOR VOTES WITHHELD
WITHHELD
John H. Biggs 93,370,419 107,334,098 1,792,307
1,971,918
David C. Farrell 93,389,638 107,357,148 1,772,675
1,948,868
William P. Stiritz 93,177,572 107,112,598 1,993,243
2,193,418
SHARES SHARES
VOTING VOTING
VOTES SHARES
VOTES FOR FOR VOTES AGAINST AGAINST
ABSTAINED ABSTAINED
Ratification 94,065,680 108,107,351 584,558 634,317
519,042 564,028
of Price
Waterhouse
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits filed with this report:
(11) Statement re Computation of Per Share Earnings.
(b) Reports on Form 8-K
The Registrant filed a Report on Form 8-K on October 5, 1993
to disclose that its Board of Directors had approved in principle a plan to
spin-off its private label and branded cereal business as well as its baby
food, cracker and cookie, ski resort and coupon redemption
businesses.
<PAGE>
PAGE 33
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.
RALSTON PURINA COMPANY
----------------------
Registrant
By James R. Elsesser
----------------------
James R. Elsesser
Vice President and Chief
Financial Officer
Date: February 14, 1994
<PAGE>
PAGE 34
Exhibit Index
Exhibits
-----
EX-11 Computation of Earnings Per Share
(provided electronically)
<PAGE>
<PAGE>
PAGE 1 Exhibit 11
RALSTON PURINA COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(in millions, except per share data)
3 Months
Ended
Dec. 31,
1992
----------
EARNINGS PER COMMON SHARE OUTSTANDING
Earnings before extraordinary item and
cumulative effect of accounting changes $ 132.3
Dividend on Series A ESOP convertible
preferred stock, net of tax (5.2)
----------
$ 127.1
Extraordinary item (6.8)
Cumulative effect of accounting changes (206.9)
----------
Net earnings (loss) $ (86.6)
==========
Weighted average shares - primary
earnings per share calculation 103.7
==========
Earnings (loss) per common share outstanding:
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.22
Extraordinary item (.06)
Cumulative effect of accounting changes (2.00)
----------
Net loss $ (.84)
==========
EARNINGS PER SHARE ASSUMING FULL DILUTION
Earnings before extraordinary item and
cumulative effect of accounting changes $ 132.3
Adjustments to earnings to reflect assumed
ESOP preferred stock conversion (2.1)
Extraordinary Item (6.8)
Cumulative effect of accounting changes (206.9)
----------
Net earnings (loss) for fully diluted earnings
per share calculation $ (83.5)
==========
Wtd. average number of shares outstanding 103.7
Convertible preferred stock 10.3
Dilutive effect of stock options .3
Dilutive effect of deferred compensation awards .1
----------
Weighted average shares - fully diluted
earnings per share calculation 114.4
==========
Earnings (loss) per share assuming full dilution:
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.14
Extraordinary Item (.06)<PAGE>
PAGE 2
Cumulative effect of accounting changes (1.81)
----------
Net loss $ (.73)
==========
<PAGE>
PAGE 3
Exhibit 11
RALSTON PURINA GROUP
COMPUTATION OF EARNINGS PER SHARE
(in millions, except per share data)
Pro
Forma
3 Months 3 Months
Ended Ended
Dec. 31, Dec. 31,
1993 1992
--------- ---------
EARNINGS PER COMMON SHARE OUTSTANDING
Earnings before extraordinary item and
cumulative effect of accounting changes $ 133.4 $ 90.7
Dividend on Series A ESOP convertible
preferred stock, net of tax (4.7) (4.7)
--------- ---------
$ 128.7 $ 86.0
Extraordinary item (5.7)
Cumulative effect of accounting changes (120.3)
--------- ---------
Net earnings (loss) $ 128.7 $ (40.0)
========= =========
Weighted average shares - primary
earnings per share calculation 101.5 103.7
========= =========
Earnings (loss) per common share outstanding:
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.27 $ .82
Extraordinary item (.05)
Cumulative effect of accounting changes (1.16)
--------- ---------
Net earnings (loss) $ 1.27 $ (.39)
========= =========
EARNINGS PER SHARE ASSUMING FULL DILUTION
Earnings before extraordinary item and
cumulative effect of accounting changes $ 133.4 $ 90.7
Adjustments to earnings to reflect assumed
ESOP preferred stock conversion (1.0) (1.6)
Extraordinary Item (5.7)
Cumulative effect of accounting changes (120.3)
--------- ---------
Net earnings (loss) for fully diluted earnings
per share calculation $ 132.4 $ (36.9)
========= =========
Wtd. average number of shares outstanding 101.5 103.7
Convertible preferred stock 10.2 10.1
Dilutive effect of stock options .1 .1
Dilutive effect of deferred compensation awards .1 .1
--------- ---------
Weighted average shares - fully diluted
earnings per share calculation 111.9 114.0
========= =========
Earnings (loss) per share assuming full dilution:
Earnings before extraordinary item and
cumulative effect of accounting changes $ 1.18 $ .78
<PAGE>
PAGE 4
Extraordinary Item (.05)
Cumulative effect of accounting changes (1.05)
--------- ---------
Net earnings (loss) $ 1.18 $ (.32)
========= =========
<PAGE>
PAGE 5
Exhibit 11
CONTINENTAL BAKING GROUP
COMPUTATION OF EARNINGS PER SHARE
(in millions, except per share data)
Pro Forma
13 Weeks 13 Weeks
Ended Ended
Dec. 25, Dec. 26,
1993 1992
---------- ----------
EARNINGS (LOSS) PER COMMON SHARE OUTSTANDING
Earnings before extraordinary item and
cumulative effect of accounting changes $ .2 $ 3.5
Dividend on Series A ESOP convertible
preferred stock, net of tax (.5) (.5)
---------- ----------
$ (.3) $ 3.0
Extraordinary item (1.1)
Cumulative effect of accounting changes (86.6)
---------- ----------
Net loss $ (.3) $ (84.7)
========== ==========
Wtd. average number of shares outstanding 20.6 20.7
Shares issuable with respect to RPG Group's
retained interest in the CBG Group 16.8 17.0
---------- ----------
Weighted average shares - primary
earnings per share calculation 37.4 37.7
========== ==========
Earnings (loss) per common share outstanding:
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .08
Extraordinary Item (.03)
Cumulative effect of accounting changes (2.30)
---------- ----------
Net loss $ (.01) $ (2.25)
========== ==========
EARNINGS PER SHARE ASSUMING FULL DILUTION
Earnings before extraordinary item and
cumulative effect of accounting changes $ .2 $ 3.5
Adjustments to earnings to reflect assumed
ESOP preferred stock conversion (.4) (.7)
Extraordinary Item (1.1)
Cumulative effect of accounting changes (86.6)
---------- ----------
Net earnings (loss) for fully diluted
earnings per share calculation $ (.2) $ (84.9)
========== ==========
Wtd. average number of shares outstanding 20.6 20.7
Shares issuable with respect to RPG Group's
retained interest in the CBG Group 16.8 17.0
Convertible preferred stock 3.4 3.1
---------- ----------
Weighted average shares - fully diluted
earnings per share calculation 40.8 40.8
========== ==========
<PAGE>
PAGE 6
Earnings (loss) per share assuming full dilution:
Earnings before extraordinary item and
cumulative effect of accounting changes $ (.01) $ .07
Extraordinary Item (.03)
Cumulative effect of accounting changes (2.13)
---------- ----------
Net loss $ (.01) $ (2.09)
========== ==========
<PAGE>
