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, 1995
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 Purina common stock, $.10 par value, outstanding as
of the close of business on February 13, 1995:
105,955,268
-----------
PART I - FINANCIAL INFORMATION
RALSTON PURINA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL INFORMATION
----------------------------------------------------------------
OPERATING RESULTS
Net earnings for the three months ended December 31, 1995 were $128.5 million,
compared to $101.1 million for the same period in the prior year. During the
quarter ended December 31, 1994, the Company recorded provisions for battery
products restructuring of $16.3 million, after taxes.
Effective July 22, 1995, the Company sold its Continental Baking Company (CBC)
subsidiary. On May 15, 1995, the Company exchanged each outstanding share of
its Ralston-Continental Baking Group Common Stock (CBG Stock) for shares of its
Ralston-Ralston Purina Group Common Stock (RAL Stock). Pro forma earnings,
assuming that each of these events had occurred on October 1, 1994, and before
restructuring charges, increased $6.1 million in the current quarter to $128.5
million, compared to $122.4 million for the same period last year. The increase
resulted from higher operating profit and a lower income tax rate, partially
offset by foreign currency losses related to Mexican operations. Earnings
per share for the quarter ended December 31, 1995, on this basis, were $1.23 and
$1.15 on a primary and fully diluted basis, respectively, compared to $1.16 and
$1.09 in the prior year.
BUSINESS SEGMENTS
Sales for the Pet Products segment for the quarter increased on the inclusion of
sales from Golden Cat, acquired in April 1995, and higher pet food volume.
Operating profit for the quarter increased slightly as the benefit of higher
sales was nearly offset by higher advertising and promotion support for core
brands and new products, and higher pet food ingredient and packaging costs.
Price increases are expected to offset higher costs beginning in the second
quarter.
Sales of the Battery Products segment increased slightly in the quarter over the
same period last year as strong alkaline volume growth in the Asia Pacific
region was nearly offset by sales declines in Pan America caused by poor
economic conditions, particularly in Mexico. Domestically, sales were flat with
alkaline improvements offset by lower rechargeable sales to the OEM (original
equipment manufacturers) market segment. Domestic alkaline volume growth was
below expectations due to a weak retail holiday selling season.
Operating profit for the quarter increased slightly over the first quarter last
year, excluding restructuring charges. Strong performance in the Asia Pacific
region and improved results in Europe were nearly offset by declines in Pan
America, and higher investments in information systems. Margin percentages in
Europe and Pan America improved reflecting the 1995 plant closings.
During the quarter ended December 31, 1994, the Company recorded charges of
$16.3 million, after taxes, or $.16 and $.15 per primary and fully diluted
share, respectively, in connection with the restructuring of its worldwide
carbon zinc battery production capacity. On a pre-tax basis, charges were $22.9
million and consisted of termination benefits of $12.2 million, other cash exit
costs of $3.3 million and non-cash charges of $7.4 million, primarily related to
anticipated losses on disposal of land, buildings and machinery and equipment.
During the current quarter 279 employees were severed in connection with the
restructuring plan. Other activities related to the restructuring plan during
the quarter were as follows:
Reserve balance at September 30, 1995
Cash exit costs incurred during the quarter
Increase due to translation
Reserve balance at December 31, 1995
Sales of the soy protein products business increased on strong volume in food
protein products and favorable foreign currency exchange rates. Operating
profit increased as higher sales were partially offset by higher business
development costs.
Sales for international agricultural products increased on higher volume and
prices in most world areas. Operating profit was up slightly as higher sales
were nearly offset by lower earnings in the Americas.
RESULTS OF OPERATIONS
Comparisons in this paragraph exclude the results of the sold CBC operations in
the prior year costs. Cost of products sold as a percentage of sales was 57.1%
in the current quarter compared to 57.0% in last year's first quarter.
Improvements in battery and soy protein products were offset by increased
percentages in pet products and international agricultural products. The
battery products' plant closings in 1995 contributed to margin improvements.
Pet products were unfavorably impacted by higher ingredient and packaging costs.
Selling, general and administrative expenses were 15.7% and 15.4% of sales in
the current and prior year first quarters, respectively. The increase was
primarily due to systems development costs in battery products and business
development costs in soy protein products. Advertising and promotion expense
for those periods was 11.4% and 10.7% of sales, respectively, on increases in
pet products. Other income/expense, net, was unfavorable by $8.2 million on
higher foreign currency translation and exchange losses, primarily in Mexico.
Income taxes include federal, state and foreign taxes and were 38% of earnings
before income taxes for the current quarter, compared to 42.7% in the prior
year. Exclusive of the impact of restructuring provisions, the prior year tax
rate was 41%. Income taxes in the current year are lower by three percentage
points due to elimination or moderation of operating losses in certain foreign
jurisdictions where valuation allowances had been established for tax benefits
on such losses and due to the realization of certain previously unrecognized net
operating loss carryforwards. The income tax percentage in the prior year was
also influenced by certain restructuring provisions which did not result in tax
benefits due to foreign tax loss situations.
FINANCIAL CONDITION
The Company's primary source of liquidity is cash flow generated from
operations. For the quarter ended December 31, 1995, cash flow from operations
was $166.6 million compared to $143.4 million in the quarter ended December 31,
1994. The increase in cash flow in the current year is primarily due to changes
in working capital. Working capital at December 31, 1995 was $100.1 million
compared to $21.8 million at September 30, 1995. Cash and cash equivalents at
December 31, 1995 were $71.8 million compared to $44.3 million at September 30,
1995.
On October 2, 1995, the Company issued $175 million of 7-3/4% fixed rate long-
term debt.
As of February 5, 1996, approximately 1,584,200 shares remained under the Board
of Directors' authorization for the purchase of up to 3 million shares of RAL
Stock.
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
Quarter Ended
December 31,
1995 1994
---- ----
Net Sales $ 1,654.9 $ 1,991.8
--------- ---------
<S>
Costs and Expenses
Cost of products sold 944.6 1,110.3
Selling, general and administrative 259.5 455.0
Advertising and promotion 188.9 178.8
Interest expense 49.7 48.9
Provisions for restructuring 22.9
Other (income)/expense, net 8.0 (0.4)
--------- ---------
1,450.7 1,815.5
--------- ---------
Earnings before Income Taxes and
Equity Earnings 204.2 176.3
Income Taxes (77.6) (75.2)
--------- ---------
Earnings before Equity Earnings 126.6 101.1
Equity Earnings, Net of Taxes 1.9
--------- ---------
Net Earnings 128.5 101.1
Preferred Stock Dividend, Net of Taxes (3.6) (4.8)
--------- ---------
Earnings Available to Common Shareholders $ 124.9 $ 96.3
========= =========
<S>
Earnings Per Share (pro forma in prior year
assuming one class of common stock):
Primary $ 1.23 $ 0.95
Fully Diluted $ 1.15 $ 0.89
RAL Stock (based on RPG earnings):
Primary $ 1.02
Fully Diluted $ 0.95
CBG Stock:
Primary $ (0.28)
Fully Diluted $ (0.28)
See Accompanying Notes to Condensed Financial Statements.
<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Condensed)
(Dollars in millions)
Dec. 31, Sept. 30,
1995 1995
Assets --------- ---------
<S>
Current Assets
Cash and cash equivalents $ 71.8 $ 44.3
Receivables, less allowance for doubtful
accounts of $37.3 and $34.3, respectively 982.0 801.4
Inventories
Raw materials and supplies 212.2 209.1
Work in process 121.3 111.4
Finished products 413.8 445.7
Other current assets 163.9 151.1
--------- ---------
Total Current Assets 1,965.0 1,763.0
--------- ---------
Investments and Other Assets 1,468.7 1,453.3
--------- ---------
Property at Cost 2,658.1 2,606.0
Accumulated depreciation 1,286.2 1,255.1
--------- ---------
1,371.9 1,350.9
--------- ---------
Total $ 4,805.6 $ 4,567.2
========= =========
<S>
Liabilities and Shareholders Equity
Current Liabilities
Current maturities of long-term debt $ 308.3 $ 303.2
Notes payable 504.4 503.2
Accounts payable 399.8 400.5
Other current liabilities 652.4 534.3
--------- ---------
Total Current Liabilities 1,864.9 1,741.2
--------- ---------
Long-Term Debt 1,586.8 1,602.1
--------- ---------
Deferred Income Taxes 56.3 53.6
--------- ---------
Other Liabilities 489.7 479.3
--------- ---------
Redeemable Preferred Stock 336.9 348.7
--------- ---------
Unearned ESOP Compensation (143.3) (151.9)
--------- ---------
<S>
Shareholders Equity
Preferred stock
Common stock 11.5 11.5
Capital in excess of par value 188.3 169.6
Retained earnings 1,213.1 1,089.7
Cumulative translation adjustment (54.0) (50.3)
Common stock in treasury, at cost (480.5) (481.7)
Unearned portion of restricted stock (5.0) (5.3)
Value of common stock held in Grantor Trust (259.1) (239.3)
--------- ---------
Total Shareholders Equity 614.3 494.2
--------- ---------
Total $ 4,805.6 $ 4,567.2
========= =========
See Accompanying Notes to Condensed Financial Statements.
<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Condensed)
(Dollars in millions)
Quarter Ended
December 31,
1995 1994
<S>
Cash Flow from Operations --------- ---------
Net earnings $ 128.5 $ 101.1
Non-cash items included in income 62.1 80.5
Changes in assets and liabilities
used in operations (24.8) (47.3)
Other, net 0.8 9.1
--------- ---------
Net cash flow from operations 166.6 143.4
--------- ---------
<S>
Cash Flow from Investing Activities
Acquisition of businesses (25.1)
Property additions, net (53.4) (57.2)
Other, net (4.8) (9.4)
--------- ---------
Net cash provided (used) by investing activities (83.3) (66.6)
--------- ---------
<S>
Cash Flow from Financing Activities
Net cash flow provided (used) by debt (4.3) (57.3)
Dividends paid (42.3) (45.7)
Other, net (8.8) (0.5)
--------- ---------
Net cash provided (used) by financing activities (55.4) (103.5)
--------- ---------
Effect of Exchange Rate Changes on Cash (0.4) (5.1)
--------- ---------
Net Increase (Decrease) in Cash and
Cash Equivalents 27.5 (31.8)
Cash and Cash Equivalents, Beginning of Period 44.3 126.0
--------- ---------
Cash and Cash Equivalents, End of Period $ 71.8 $ 94.2
========= =========
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
RALSTON PURINA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(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 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
conjunction with the financial statements and notes thereto included in the
Ralston Purina Company (the Company) Annual Report to Shareholders for the year
ended September 30, 1995.
Note 2 - Primary earnings per share are based on the average number of shares
outstanding during the period, excluding 4,154,000 and 4,061,000 shares of RAL
Stock held by Ralston's Grantor Trust at December 31, 1995 and 1994,
respectively. Fully diluted earnings per share are based on the average number
of shares used for the primary earnings per share calculation, adjusted for the
dilutive effect of convertible preferred stock, stock options, convertible
debentures and compensation awards, when the effects of inclusion of such
securities does not result in anti-dilution. The shares used in earnings per
share computations were as follows:
<TABLE>
<CAPTION>
(in millions)
Quarter Ended
December 31,
1995 1994
--------- ---------
<S> <C> <C>
Primary 101.7 101.9
Fully Diluted 110.5 112.2
(Pro forma in prior year assuming
one class of common stock)
Primary
RAL Stock 100.0
CBG Stock 20.6
Fully Diluted
RAL Stock 110.3
CBG Stock 22.3*
</TABLE>
* Due to anti-dilution for the quarter ended December 31, 1994, fully diluted
earnings per share as reported on the statement of earnings is revised to
exclude anti-dilutive securities from the computation.
Note 3 - As of December 31, 1995, there were 101,743,000 shares of RAL Stock
outstanding, exclusive of 8,791,000 shares held in treasury and 4,154,000
Grantor Trust shares. At September 30, 1995, there were 101,721,000 shares of
RAL Stock outstanding, exclusive of 8,831,000 RAL Stock shares held in treasury
and 4,135,000 RAL Stock shares held by the Grantor Trust.
Note 4 - Other (income)/expense, net for the quarter consists of the following:
<TABLE>
December 31,
1995 1994
--------- ---------
<S> <C> <C>
Net translation and exchange loss $13.2 $2.0
Investment income (2.2) (2.0)
Miscellaneous (income)/expense (3.0) (0.4)
--------- ---------
$8.0 ($0.4)
========= =========
Note 5 - Investments and Other Assets consists of the following:
Dec. 31, Sept. 30,
1995 1995
--------- ---------
Goodwill $525.6 $519.6
Other intangible assets 279.5 286.9
Investments in affiliated companies 292.1 295.6
Deferred charges and other assets 371.5 351.2
--------- ---------
$1,468.7 $1,453.3
========= =========
</TABLE>
Note 6 - During the quarter ended December 31, 1994, the Company recorded
charges of $16.3, after taxes, or $.16 and $.15 per primary and fully diluted
share, respectively, in connection with the restructuring of its worldwide
carbon zinc battery production capacity. On a pre-tax basis, charges were $22.9
and consisted of termination benefits of $12.2, other cash exit costs of $3.3
and non-cash charges of $7.4, primarily related to anticipated losses on
disposal of land, buildings and machinery and equipment.
During the current quarter, 279 employees were severed in connection with the
restructuring plan. Cash exit costs related to the restructuring plan of $6.5
were incurred during the quarter ended December 31, 1995.
Note 7 - On May 15, 1995, the Company exchanged each outstanding share of
Ralston-Continental Baking Group Common Stock (CBG Stock) for .0886 shares of
Ralston-Ralston Purina Group Common Stock (RAL Stock) as permitted by Ralston's
Restated Articles of Incorporation (CBG Stock Exchange).
Note 8 - Effective July 22, 1995, the Company sold Continental Baking Company
(CBC) to Interstate Bakeries Corporation (IBC) and its wholly-owned subsidiary,
Interstate Brands Corporation, for $220 in cash and 16,923,077 shares of common
stock of IBC (the IBC Stock). The Company's earnings and cash flows reflect the
operations of CBC through July 22, 1995.
The following pro forma consolidated statement of earnings reflects the results
of operations of the Company for the quarter ended December 31, 1994 as if the
sale of CBC and the CBG Stock Exchange had occurred as of October 1, 1994. Such
statement has been prepared by adjusting the historical statement for the
effects of revenues, expenses, assets and liabilities and the recapitalization
which might have occurred had the sale of CBC and the CBG Stock Exchange been
effected as of October 1, 1994.
This pro forma financial statement may not necessarily reflect the consolidated
results of operations that would have existed had the sale of CBC and the CBG
Stock Exchange occurred as of the date specified.
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data)
Quarter Ended
December 31, 1994
-----------------
<S> <C>
Net Sales (a) $ 1,513.1
Costs and Expenses
Cost of products sold (a) 862.6
Selling, general and administrative (a) 232.9
Advertising and promotion (a) 162.6
Interest expense (b) 46.2
Provisions for restructuring (a) 22.9
Other (income)/expense, net (a) (0.2)
---------
1,327.0
---------
Earnings before Income Taxes and
Equity Loss 186.1
Income Taxes (c) (79.2)
---------
Earnings before Equity Loss 106.9
Equity Loss, Net of Taxes (d) (0.8)
---------
Net Earnings $ 106.1
=========
Earnings per Share (e): $ 1.00
Primary $ 0.94
Fully Diluted
Average Shares Outstanding Used in
Earnings per Share Computation (e):
Primary 101.9
Fully Diluted (f) 111.0
(a) Excludes results of operations for CBC.
(b) Reflects reduction of interest expense at an average rate of 6.75%
assuming debt repayment of $160 by the Company from a portion of
the CBC sale proceeds.
(c) Reflects the applicable federal and state statutory tax rates for
the pro forma adjustments.
(d) Reflects the Company's 46% share of IBC pro forma loss.
(e) Reflects exchange of CBG Stock for 1.8 million shares of RAL Stock.
(f) Reflects redemption of Redeemable Preferred Stock allocated to CBC
ESOP participants.
</TABLE>
PART II - OTHER INFORMATION
------------------
There is no information required to be reported under any items except those
indicated below.
Item 2. Changes in Securities
---------------------
On February 1, 1996, shareholders of the Company approved amendments to the
Company's Restated Articles of Incorporation which eliminated the authorization
in the Articles to issue shares of a class of common stock designated as
Ralston-Continental Baking Group Common Stock (`CBG Stock''). All outstanding
shares of CBG Stock were exchanged in May of 1995 for shares of the Company's
Ralston-Ralston Purina Group Common Stock (now redesignated as Ralston Purina
Company Common Stock), and after that time there were no outstanding holders of
CBG Stock. The amendments to the Company's Restated Articles of Incorporation
did not affect the rights of holders of Ralston Purina Company Common Stock.
Item 4. Submission of Matter to a Vote of Security Holders
--------------------------------------------------
The Company held its Annual Meeting of Shareholders on February 1, 1996, for the
purpose of electing four directors to serve three-year terms ending January,
1999, to ratify the Board of Directors' appointment of Price Waterhouse as
independent accountants for the Company for the fiscal year ending September 30,
1996, to consider certain proposed amendments to the Company's Restated Articles
of Incorporation, and to consider adoption of the 1996 Incentive Stock Plan for
Key Management Employees.
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 abstentions with respect thereto, is as follows:
<TABLE>
<CAPTION>
<C> <C>
VOTES VOTES
FOR WITHHELD
--- --------
Donald Danforth, Jr. 96,250,891 1,316,344
William H. Danforth 96,227,866 1,339,369
Richard A. Liddy 95,797,963 1,769,272
Katherine D. Ortega 96,032,226 1,535,009
<C> <C> <C>
VOTES VOTES VOTES
FOR AGAINST ABSTAINED
--- ------- ---------
Ratification 96,632,555 534,872 399,808
of Price
Waterhouse
<C> <C> <C>
VOTES VOTES VOTES
FOR AGAINST ABSTAINED
--- ------- ---------
Amendments to 94,288,294 1,189,746 2,089,195
Restated
Articles of
Incorporation
<C> <C> <C>
VOTES VOTES VOTES
FOR AGAINST ABSTAINED
--- ------- ---------
1996 Incentive 85,395,540 9,770,495 2,401,200
Stock Plan for
Key Management
Employees
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits filed with this Report:
(3)(i) Restated Articles of Incorporation, amended
February 1, 1996
(11) Statement, re: Computation of Per Share Earnings.
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for
which this report is filed.
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 /S/ JAMES R. ELSESSER
----------------------
James R. Elsesser
Vice President and Chief
Financial Officer
Date: February 14, 1996
EXHIBIT INDEX
- -------------
Exhibits
- --------
EX-3 Restated Articles of Incorporation of Ralston Purina Company
EX-11 Computation of Earnings Per Share
EX-27 Finanical data schedule for 1st Quarter 1996
(provided electronically)
RALSTON PURINA COMPANY
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE (PRO FORMA
IN PRIOR YEAR ASSUMING ONE CLASS OF COMMON STOCK)
(in millions except per share data)
Quarter Ended
December 31,
1995 1994
PRO FORMA EARNINGS PER COMMON SHARE OUTSTANDING
Net earnings $128.5 $101.1
Dividend on Series A ESOP convertible
preferred stock, net of tax (3.6) (4.8)
------ ------
Earnings available to common shareholders $124.9 $96.3
====== ======
Weighted average shares - primary
earnings per share calculation 101.7 * 101.9 *
====== =======
Earnings per common share outstanding $1.23 $0.95
====== =====
PRO FORMA EARNINGS PER SHARE ASSUMING FULL DILUTION
Net earnings $128.5 $101.1
Adjustments to net earnings to reflect assumed
ESOP preferred stock conversion (1.1) (1.5)
------ -----
Net earnings for fully diluted
earnings per share calculation $127.4 99.6
====== =====
Weighted average number of common shares 101.7 * 101.9 *
outstanding
Convertible preferred stock 7.0 9.5
Dilutive effect of stock options 1.6 0.6
Shares issuable on conversion of debentures
Dilutive effect of deferred compensation awards 0.2 0.2
------ ------
Weighted average shares - fully diluted
earnings per share calculation 110.5 112.2
===== =====
Earnings per share assuming full dilution $1.15 $0.89
====== =====
*Excludes 4,154,000 and 4,061,000 shares held in Grantor Trust at
December 31, 1995 and 1994, respectively.
RALSTON PURINA COMPANY
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE FOR RAL STOCK*
(in millions except per share data)
Quarter Ended
December 31,
1994
EARNINGS PER COMMON SHARE OUTSTANDING ----------
Net earnings for RPG Group $106.4
Dividend on Series A ESOP convertible
preferred stock, net of tax (4.4)
----------
Earnings after preferred stock dividend 102.0
==========
Weighted average shares - primary
earnings per share calculation 100.0**
==========
Earnings per common share outstanding $1.02
==========
EARNINGS PER SHARE ASSUMING FULL DILUTION
Net earnings for RPG Group $106.4
Adjustments to net earnings to reflect assumed
ESOP preferred stock conversion (1.2)
----------
Net earnings for fully diluted
earnings per share calculation 105.2
==========
Weighted average number of common shares outstanding 100.0 **
Convertible preferred stock 9.4
Dilutive effect of stock options 0.7
Shares issuable on conversion of debentures
Dilutive effect of deferred compensation awards 0.2
----------
Weighted average shares - fully diluted
earnings per share calculation 110.3
==========
Earnings per share assuming full dilution $0.95
==========
*Prior to May 15, 1995, RAL Stock reflected operations of the RPG Group only.
**Excludes 4,061,000 shares held in Grantor Trust at December 31, 1994.
RALSTON PURINA COMPANY
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE FOR CBG STOCK
(in millions except per share data)
13 Weeks Ended
December 24,
1994
LOSS PER COMMON SHARE OUTSTANDING ------------
Net loss for CBG Group ($10.0)
Dividend on Series A ESOP convertible
preferred stock, net of tax (0.4)
------
Loss after preferred stock dividend (10.4)
======
Weighted average number of shares outstanding 20.6
Shares issuable with respect to RPG Group's
retained interest in the CBG Group 16.7
------
Weighted average shares - primary
earnings per share calculation 37.3
======
Loss per common share outstanding ($0.28)
======
LOSS PER SHARE ASSUMING FULL DILUTION
Net loss for CBG Group ($10.0)
Adjustments to net loss to reflect assumed
ESOP preferred stock conversion (0.6)
-------
Net loss for fully diluted
earnings per share calculation (10.6)
=======
Weighted average number of common shares outstanding 20.6
Shares issuable with respect to RPG Group's
retained interest in the CBG Group 16.7
Convertible preferred stock 1.6
Dilutive effect of deferred compensation awards 0.1
-------
Weighted average shares - fully diluted
earnings per share calculation 39.0
=======
Loss per share assuming full dilution ($0.27)*
=======
*Due to anti-dilution as computed above for the
13 weeks ended December 24, 1994, fully diluted
earnings per share as reported on the statement
of earnings is revised to exclude anti-dilutive
securities from the computation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 12/31/95
RALSTON PURINA COMPANY BALANCE SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 71,800
<SECURITIES> 0
<RECEIVABLES> 1,019,300
<ALLOWANCES> 37,300
<INVENTORY> 747,300
<CURRENT-ASSETS> 1,965,000
<PP&E> 2,658,100
<DEPRECIATION> 1,286,200
<TOTAL-ASSETS> 4,805,600
<CURRENT-LIABILITIES> 1,864,900
<BONDS> 1,586,800
<COMMON> 11,500
336,900
0
<OTHER-SE> 602,800
<TOTAL-LIABILITY-AND-EQUITY> 4,805,600
<SALES> 1,654,900
<TOTAL-REVENUES> 1,654,900
<CGS> 944,600
<TOTAL-COSTS> 944,600
<OTHER-EXPENSES> 456,400
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 49,700
<INCOME-PRETAX> 204,200
<INCOME-TAX> 77,600
<INCOME-CONTINUING> 128,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,500
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.15
<FN>
<F1>LOSS-PROVISION INCLUDED IN OTHER-EXPENSE ABOVE.
</FN>
</TABLE>
RESTATED ARTICLES OF INCORPORATION
OF
RALSTON PURINA COMPANY
* * *
The original Articles of Incorporation were filed with the Secretary of State of
the State of Missouri on January 8, 1894. The initial shareholders were William
O. Andrews, William H. Danforth and George R. Robinson, Jr., each of whom
resided in the City of St. Louis, Missouri, and each of whom initially
subscribed to 40 shares. The Restated Articles of Incorporation, as amended,
are hereby restated pursuant to Section 351.106 of the General and Business
Corporation Law of Missouri.
ARTICLE ONE - NAME
The name of the corporation is Ralston Purina Company.
ARTICLE TWO - OFFICE
The registered office of the corporation is located at 906 Olive Street, St.
Louis, Missouri 63101, and the name of its registered agent at such address is
CT Corporation System.
ARTICLE THREE - AUTHORIZED SHARES
A. CLASSES AND NUMBER OF SHARES
The aggregate number of shares of capital stock which the corporation is
authorized to issue is 610,600,000 shares, consisting of:
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(a) 600,000,000 shares of Common Stock, par value $.10 per share ("Common
Stock"); and
(b) 10,600,000 shares of Preferred Stock, par value $1.00 per share ("Preferred
Stock"), of which 4,600,000 shares of Preferred Stock are designated as
Series A ESOP Convertible Preferred Stock ("ESOP Preferred Stock").
B. NO PREEMPTIVE RIGHTS
No shareholder of any class of stock of the corporation shall have any
preemptive right to acquire any additional shares of any class.
C. TERMS OF PREFERRED STOCK
The terms of the shares of each series of Preferred Stock shall be as stated and
expressed in these Restated Articles of Incorporation or any amendment hereto,
or in the resolution or resolutions providing for the issuance of such series of
Preferred Stock adopted by the Board of Directors. Subject to the requirements
of The General and Business Corporation Law of Missouri ("GBCL") and the
provisions of these Restated Articles of Incorporation, the Board of Directors
is expressly authorized to cause any number of the authorized and undesignated
shares of Preferred Stock to be issued from time to time in one or more series
of Preferred Stock with such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, if any, as the Board of Directors may fix by resolution or resolutions,
prior to the issuance of any shares of such series of Preferred Stock, each of
which series may differ from any and all other series, including, without
limiting the generality of the foregoing, the following:
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(i) The number of shares constituting such series of Preferred Stock and the
designation thereof;
(ii) The dividend rate, if any, on the shares of such series of Preferred Stock,
whether and the extent to which any such dividends shall be cumulative or
non-cumulative, the relative rights of priority, if any, of payments of any
dividends, and the time at which, and the terms and conditions on which,
any dividends shall be paid;
(iii) The right, if any, of the holders of shares of such series of
Preferred Stock to vote and the manner of voting, except as may otherwise
be provided by the GBCL and the provisions of these Restated Articles of
Incorporation;
(iv) The right, if any, of the holders of shares of such series of Preferred
Stock to convert the same into, or the right, if any, of the corporation to
exchange the same for, another class or series of capital stock of the
corporation and the terms and conditions, including any provision for
future adjustment in the conversion or exchange rate, under which said
shares may be converted or exchanged;
(v) The redemption or purchase price or prices of the shares of such series of
Preferred Stock, if any, and the times at which, and the terms and
conditions of which, the shares of such series of Preferred Stock may be
redeemed or purchased;
(vi) The terms of the sinking fund, if any, to be provided for such series of
Preferred Stock, and the terms and amount of any such sinking fund;
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(vii) The rights of the holders of shares of such series of Preferred Stock
in the event of a voluntary or involuntary liquidation, dissolution or
winding up of the corporation and the relative rights of priority, if any,
of such holders with respect thereto; and
(viii)Any other relative powers, preferences and rights, and any qualifications,
limitations or restrictions, of such series of Preferred Stock.
If there be a default in the payment to the holders of the ESOP Preferred Stock
of the equivalent of six quarterly dividends, all such holders, voting as a
class, shall be entitled to elect two directors and their successors, to serve
until such time as the cumulative dividends on the ESOP Preferred Stock shall be
paid in full. In such event, the President or the Secretary of the corporation
may, and upon the written request of the holders of 10% or more of the ESOP
Preferred Stock outstanding shall promptly, call a special meeting of the
holders of the ESOP Preferred Stock to be held within 90 days after the call;
however, if any such request shall be made within 120 days preceding the date
fixed for any annual meeting of shareholders, such special meeting shall be held
within 120 days after the call. All other directors of the corporation shall
continue to be elected by the holders of all the outstanding capital stock
entitled to vote thereon.
D. TERMS OF COMMON STOCK
1. Voting Rights. On all matters to be voted on by the holders of shares of
Common Stock, each outstanding share of Common Stock shall have one vote.
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2. Dividend Rights. Subject to the express terms of any outstanding series of
Preferred Stock, dividends may be declared and paid upon the Common Stock
out of funds of the corporation legally available therefor, in such amounts
and at such times as the Board of Directors may determine. Funds otherwise
legally available for the payment of dividends on the Common Stock shall
not be restricted or reduced by reason of there being any excess of the
aggregate preferential amount of any series of Preferred Stock outstanding
over the aggregate par value thereof. Before any dividend, other than a
dividend payable in Common Stock of the corporation, may be declared and
paid with respect to any class of Common Stock outstanding, all cumulative
dividends for past quarters and the dividend for the current quarter with
respect to the ESOP Preferred Stock outstanding must be declared and paid,
or declared and set apart for payment.
ARTICLE FOUR - DIRECTORS
Number and Classification
The Board of Directors of the corporation shall consist of twelve members, or
such other number as may be fixed by, or in the manner provided in, the Bylaws
of the corporation, but not less than nine nor more than eighteen, and any
changes in the number of Directors shall be reported to the Secretary of State
within thirty calendar days of such change. The time of service and mode of
classification of the Directors shall be provided for by the Bylaws of the
corporation; provided, however, that the Board of Directors shall be classified
into three classes as nearly equal in size as possible, with successive annual
elections of the classes, each class to be elected for a term of three years.
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Removal of Directors
At a meeting called expressly for that purpose, Directors may be removed in the
manner provided in this Article. One or more members of the Board of Directors
may be removed, with or without cause, by a vote of not less than two-thirds of
the aggregate voting power of the outstanding Common Stock and Preferred Stock
entitled to vote thereon at such meeting, and by such other vote as may be
required by the GBCL. Whenever the holders of the shares of any class are
entitled to elect one or more Directors, the provisions of this Article shall
apply, in respect of the removal of a Director or Directors so elected, to the
vote of the holders of the outstanding shares of that class and not to the vote
of the holders of the outstanding shares as a whole.
Amendment
This Article may be amended or repealed only upon the affirmative vote of not
less than two-thirds of the aggregate voting power of the outstanding Common
Stock and Preferred Stock entitled to vote thereon at a meeting called for such
purpose, and by such other vote as may be required by the GBCL; provided,
however, that whenever the holders of shares of any class are entitled to elect
one or more Directors, such amendment shall also require the affirmative vote of
not less than two-thirds of the voting power of the outstanding shares of each
such class entitled to vote at such meeting, and by such other vote as may be
required by the GBCL.
ARTICLE FIVE - TERM OF EXISTENCE
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The corporation shall have a perpetual existence.
ARTICLE SIX - PURPOSES
The purposes of the corporation are to engage in the food and feed business and
to carry on any other lawful business for profit which is authorized by the
Directors and which is proper for a corporation organized under the General and
Business Corporation Law of Missouri, and to enter into any transactions or
perform any acts necessary or incidental to any of the foregoing.
ARTICLE SEVEN - BYLAWS
The right to make, alter, amend or repeal the Bylaws of the corporation shall be
vested in the Board of Directors of the corporation.
ARTICLE EIGHT - CERTAIN BUSINESS COMBINATIONS
Approval
The approval of any Business Combination shall, in addition to any affirmative
vote required by the GBCL, require the affirmative vote of the holders of not
less than two-thirds of the aggregate voting power of the outstanding shares of
Common Stock and Preferred Stock entitled to vote at a meeting of shareholders
called for such purpose and of a majority of the voting power of all such shares
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of which a Substantial Shareholder is not the Beneficial Owner; provided,
however, that any such Business Combination may be approved on any affirmative
vote required by the GBCL if:
(a) there are one or more Continuing Directors and the Business Combination
shall have been approved by a majority of them; or
(b) the cash, or Fair Market Value of the property, securities or other
consideration to be received per share by the shareholders of each class of
stock of this corporation in the Business Combination is not less than the
higher of:
(i) the highest per share price paid by the Substantial Shareholder for
the acquisition of any shares of such class, with appropriate adjustments
for stock splits, stock dividends and like distributions, or
(ii) the Fair Market Value of such shares, on the date the Business
Combination is approved by the Board of Directors.
Definitions
(a) For purposes of this Article Eight, the term "Business Combination" shall
mean:
(i) any merger or consolidation of the corporation or any subsidiary of
the corporation with (a) any Substantial Shareholder or (b) any other
corporation which, after such merger or consolidation, would be a
Substantial Shareholder, regardless of which entity survives;
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(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Substantial Shareholder, of any assets of the corporation or any subsidiary
of the corporation, or both, that have an aggregate Fair Market Value of
more than twenty percent of the book value of the total assets of the
corporation as shown on its consolidated balance sheet as of the end of the
calendar quarter immediately preceding any such transaction;
(iii) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of a Substantial
Shareholder; or
(iv) any transaction involving the corporation or any of its subsidiaries,
including the issuance or transfer of any securities of, any
reclassification of securities of, or any recapitalization of, the
corporation or any of its subsidiaries, or any merger or consolidation of
the corporation with any of its subsidiaries (whether or not involving a
Substantial Shareholder), if the transaction would have the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
corporation or any subsidiary, of which a Substantial Shareholder is the
Beneficial Owner.
(b) The term "Continuing Director" shall mean any member of the Board of
Directors of the corporation who is not an Affiliate of the Substantial
Shareholder and who was a member of the Board of Directors prior to the
time that the Substantial Shareholder became a Substantial Shareholder, and
any successor of a Continuing Director if the successor is not an Affiliate
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of the Substantial Shareholder and is recommended or elected to succeed a
Continuing Director by a majority of Continuing Directors.
(c) The term "Substantial Shareholder" shall mean and include any individual,
corporation, partnership or other person or entity which, together with its
Affiliates and Associates, is the Beneficial Owner in the aggregate of more
than twenty percent of the voting power of the outstanding Common Stock and
Preferred Stock entitled to vote in an election of Directors; and any
Affiliate or Associate of any such individual, corporation, partnership or
other person or entity.
(d) The term "Fair Market Value" shall mean:
(i) in the case of stock, the highest closing sale price per share of a
share of such stock during the 30-day period immediately preceding the
approval of the Business Combination by the Board of Directors as reported
by any United States Securities Exchange registered under the Securities
Exchange Act on which such shares are listed, or, if such shares are not
listed on any such Exchange, then the highest closing bid quotation for any
of such shares as reported on the National Association of Securities
Dealers, Inc. Automated Quotations System or any such system then in use,
or if no such closing sales price or bid quotation is reported, the Fair
Market Value as determined on the date in question by a majority of
Continuing Directors; or
(ii) in the case of property or securities other than cash or stock, the
Fair Market Value of said property or securities on the date in question as
determined by a majority of the Continuing Directors.
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(e) The following terms shall be defined by reference to the Securities
Exchange Act of 1934 and the Rules in effect thereunder on
November 30, 1983:
(i) "Affiliate" under Rule 12b-2;
(ii) "Associate" under Rule 12b-2; and
(iii) "Beneficial Owner" under Rule 13d-3.
Amendment
In addition to such other vote or consent as shall then be required by the GBCL,
this Article may be amended or repealed only upon the affirmative vote of not
less than two-thirds of the aggregate voting power of the outstanding Common
Stock and Preferred Stock entitled to vote at a meeting called for such purpose
and of a majority of the voting power of all such shares of which a Substantial
Shareholder is not the Beneficial Owner, and by such other vote as may be
required by the GBCL; provided, however, that this Article may be amended upon
any affirmative vote required by the GBCL, if such amendment has been approved
by a majority of the Board of Directors, if there is not a Substantial
Shareholder, or if there is a Substantial Shareholder, by a majority of the
Continuing Directors.
ARTICLE NINE - INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Right to Indemnification
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The Company shall indemnify any person who is or was a director, officer, or
employee of the Company, or is or was serving at the request of the Company as
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any and all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with any civil, criminal,
administrative or investigative action, proceeding or claim (including an action
by or in the right of the Company) by reason of the fact that he is or was
serving in such capacity, provided that such person's conduct is not finally
adjudged to have been knowingly fraudulent, deliberately dishonest or willful
misconduct.
Rights Not Exclusive
The indemnification and other rights provided by this Article shall not be
deemed exclusive of any other rights to which a director, officer or employee
may be entitled under any agreement, vote of shareholders or disinterested
directors or otherwise, and the Company is hereby specifically authorized to
provide such indemnification and other rights by any agreement, vote of
shareholders or disinterested directors or otherwise.
Enforceability; Amendment
Each person who was or is a director, officer or employee of the Company and the
heirs, executors, administrator and estate of such person, is a third party
beneficiary of this Article and shall be entitled to enforce against the Company
all indemnification and other rights granted to such person by this Article.
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This Article may be hereafter amended or repealed; provided, however, that no
amendment or repeal shall reduce, terminate or otherwise adversely affect the
right of a person who was or is a director, officer or employee to obtain
indemnification with respect to an action, suit or proceeding that pertains to
or arises out of actions or omissions that occur prior to the effective date of
such amendment or repeal.
ARTICLE TEN - NO CUMULATIVE VOTING
Shareholders shall not have the right to vote cumulatively in electing
