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 June 30, 1997
Commission File No. 1-4582
RALSTON PURINA COMPANY
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(Exact name of registrant as specified in its charter)
MISSOURI 43-0470580
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(State of Incorporation) (I.R.S. Employer
Identification No.)
CHECKERBOARD SQUARE, ST. LOUIS MISSOURI 63164
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(Address of principal executive offices) (Zip Code)
(314) 982-1000
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(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: _____
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Number of shares of Ralston Purina common stock, $.10 par value, outstanding
as of the close of business on August 11, 1997:
106,546,055
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PART I - FINANCIAL INFORMATION
RALSTON PURINA COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL INFORMATION
----------------------------------------------------------------
Net earnings for the nine months ended June 30, 1997 were $314.8 million
compared to $269.8 million for the same period in the prior year. Earnings
per share were $2.99 and $2.83 on a primary and fully diluted basis,
respectively, for the current nine months, compared to $2.55 and $2.41 in the
prior year. Net earnings for the current nine months included two unusual
items which increased net earnings by $5.6 million or $.06 and $.05 per
primary and fully diluted share, respectively. The first unusual item is an
after-tax restructuring charge of $29.1 million, net of income tax benefits
of $74.2 million related to current and past restructurings. The second
unusual item is a tax benefit of $34.7 million related to tax refund claims
for 1993 through 1996 as a result of a change in the Company's method of
computing foreign tax credits. The prior year nine months includes an
extraordinary loss on the early retirement of debt of $2.1 million, after
taxes, or $.02 per share. Excluding these unusual items in both periods, net
earnings increased $37.3 million in the current nine months to $309.2 million,
compared to $271.9 million for the same period in 1996. Earnings per share
for the nine months ended June 30, 1997, on this basis, were $2.93 and $2.78
per primary and fully diluted share, respectively, compared to $2.57 and $2.43
in the prior year nine months.
The increased earnings for the first nine months of fiscal year 1997 are
primarily the result of higher equity earnings from the Company's investment
in Interstate Bakeries Corporation (IBC), lower interest expense and a lower
tax rate.
For the quarter ended June 30, 1997, net earnings were $100.7 million compared
to $82.2 million for the same quarter in 1996. Earnings per share were $.96
and $.91 per primary and fully diluted share, respectively, compared to $.77
and $.73 a year ago. Each of the unusual items mentioned above was recorded
in the quarter. Excluding these unusual items, net earnings for the quarter
ended June 30, 1997 increased $10.8 million, or $.11 per primary and fully
diluted share. This earnings increase resulted primarily from higher equity
earnings from the Company's investment in IBC.
RESULTS OF OPERATIONS
Net sales increased 5.8% in the nine months ended June 30, 1997 on high single
digit sales increases in Pet Products, Soy Protein Products and Agricultural
Products. For the quarter, net sales increased 3.6% on increases in Pet
Products and Soy Protein Products.
Gross profit as a percentage of sales was 40.3% in the nine months of both the
current and prior year. The 1997 gross profit percentage improved in both
Agricultural Products and Battery Products, but decreased in Soy Protein
Products where margins were unfavorably impacted by higher raw material costs.
Additionally, sales increases in the lower margin Agricultural Products
segment negatively impacted Company margins. Gross profit percentages were
40.1% and 38.7% for the quarter ended June 30, 1997 and 1996, respectively.
The increased percentage in the quarter reflects improvements in all segments
except Soy Protein Products where price increases have not offset higher raw
material costs.
Selling, general and administrative expenses increased 8.4% in the current
nine months and 9.2% in the quarter due primarily to increases in Pet
Products, increased business development and management costs in Soy Protein
Products and incremental expense associated with options and mark-to-market
adjustments on liabilities denominated in share equivalents. Additionally,
both periods are impacted by start-up expenses associated with capital
projects. Prior year Agricultural Products' acquisitions also impacted the
nine month period. Selling, general and administrative expenses were 17.8%
and 17.3% of sales in the current and prior year nine month periods,
respectively, and 18.5% and 17.5% in the current and prior year third
quarters.
Advertising and promotion expense increased 10.6% in the current nine months
and 13.7% in the current quarter due to additional promotional spending in Pet
Products. As a percentage of sales, advertising and promotion expense was
10.6% and 10.5% in the current nine months and third quarter, respectively,
compared to 10.1% and 9.6% in the same periods a year ago.
Other income/expense, net, was $17.9 million favorable for the nine months
primarily due to prior year foreign currency translation and exchange losses,
particularly in Mexico and Venezuela, and a higher return on other
investments.
Income taxes, which represent federal, state and foreign taxes, include
certain unusual items in the quarter and nine months ended June 30, 1997.
First, income tax benefits of $74.2 million were recorded in the current
quarter related to current and past restructuring actions. These benefits
include current tax benefits of $12.5 million and the recognition of capital
loss tax benefits of $61.7 million. Additionally, a tax benefit of $34.7
million was recorded related to tax refund claims for 1993 through 1996 as a
result of a change in the Company's method of computing foreign tax credits.
Excluding these unusual items, income taxes were 34.8% and 36.4% of pre-tax
earnings before equity earnings for the current quarter and nine months,
respectively, compared to 35.8% and 37.3% in the prior year periods. The
decrease in the current year rates reflects the impact of adopting a different
methodology for computing foreign tax credits.
BUSINESS SEGMENTS
Comments and percentages in the following business segment review exclude the
effects of provisions for restructuring. See discussion of these charges in
the separate section which follows.
Sales for the Pet Products segment increased 10.5% in the quarter and 9.1% in
the nine months on higher volumes and pricing. Operating profit increased for
the quarter but was flat for the nine months. In the quarter, the volume
gains were partially offset by higher promotion support. For the nine
months, higher pet food ingredient costs and promotional spending offset the
sales gains.
Sales for the Battery Products segment decreased slightly in the quarter and
were flat for the nine months over the same periods in the prior year. During
the quarter and nine months, worldwide branded alkaline volumes improved,
particularly in North America and the Asia Pacific region. In addition,
increased domestic prices had a positive effect. These increases were offset
by lower sales in Europe, decreased OEM rechargeable sales in the Asia Pacific
region due to competitive pricing pressures, and the continued decline in
carbon zinc sales. Additionally, in the nine months, decreased alkaline
private label sales had a negative effect.
Battery Products' operating profit decreased in the quarter and improved
slightly in the nine months. Both periods included increased worldwide
alkaline volume and improved results in the Asia Pacific region. These
positive factors were more than offset in the quarter and nearly offset in the
nine months by decreased earnings in Europe, decreased OEM rechargeable sales
in the Asia Pacific region and start-up costs associated with the lithium ion
rechargeable battery.
Sales for the Soy Protein Products segment increased 8.3% in the quarter and
in the nine months on higher volume in food protein products and higher
prices. Operating profit decreased in both periods as higher raw material
costs, higher business development and management costs, and unfavorable
foreign exchange more than offset the sales increase.
Sales for International Agricultural Products were flat in the quarter and
increased 9.1% in the nine months. In both periods, increased volumes in the
Asia Pacific region were offset by lower volumes in South and Central America.
In the quarter, sales prices moderated with the decline in commodity prices.
The nine month period was favorably impacted by prior year acquisitions and
higher prices associated with higher commodity prices. Operating profit
increased in the quarter and nine months on favorable margins and increased
Asia Pacific volumes, partially offset by decreased volumes and lower margins
in South and Central America. Additionally, results improved in France and
Brazil reflecting the impact of prior year restructurings.
RESTRUCTURING ACTIVITIES
In the quarter ended June 30, 1997, the Company recorded provisions for
restructuring of $103.3 million, or $29.1 million, after taxes. These charges
primarily relate to a continuation of the rationalization of the Battery
Products' worldwide battery production capacity. The restructuring charges
provide for the closing of 4 plants and the termination of 1,340 employees.
On a pre-tax basis, charges for restructuring consisted of termination
benefits of $44.4 million, other cash exit costs of $9.5 million and non-cash
charges of $49.4 million, primarily related to impairment losses on land,
buildings and machinery and equipment. These restructuring actions are
expected to generate pre-tax cost savings of $15 million in fiscal 1998 and
ultimate annual savings of $35 million in fiscal 2000.
The income tax benefits of $74.2 million recorded in the quarter associated
with current and past restructuring actions include current tax benefits of
$12.5 million and the recognition of capital loss benefits of $61.7 million.
These capital loss tax benefits will be used to partially offset taxes due
upon the Company's future disposition of IBC shares. The Company
expects to recognize additional capital loss tax benefits associated
with these restructuring provisions in future periods to further affect
some of the anticipated capital gains on the disposition of IBC shares.
Activity related to past restructuring provisions resulted in the closing of
one plant and the termination of approximately 370 employees during the nine
months ended June 30, 1997. In addition, termination benefits and other cash
exit costs of $19.0 million were paid during the current nine months in
connection with these previous provisions for restructuring, resulting in a
reserve balance of $6.4 million at June 30, 1997. This activity is primarily
associated with Battery Products' restructuring.
FINANCIAL CONDITION
The Company's primary source of liquidity is cash flow generated from
operations. For the nine months ended June 30, 1997, cash flow from
operations was $409.4 million compared to $327.3 million in the nine months
ended June 30, 1996. The increase in cash flow in the current nine months is
due to increased cash earnings and changes in working capital. The changes in
working capital primarily represent increased accounts payable and accrued
liabilities, largely due to current period restructuring reserves, and a lower
level of inventory increases. Included in other, net cash flows from
operations in the current nine months are IBC equity earnings and the long
term receivable related to tax refund claims for 1993 through 1996 as a result
of the change in the Company's method of computing foreign tax credits.
Current liabilities exceeded current assets by $19.6 million at June 30, 1997
and by $22.1 million at September 30, 1996.
The increased cash used by investing activities is primarily due to a higher
level of capital expenditures related to the expansion of production capacity.
On October 2, 1995, the Company issued $175 million of 7-3/4% fixed rate
long-term debt.
In July 1997, the Company issued $480 million of Stock Appreciation Income
Linked Securities (SAILS) consisting of 7% Exchangeable Notes due in 2000.
These notes are unsecured debt which is exchangeable at maturity into a number
of shares of IBC common stock or cash, at the Company's option. The number of
shares of IBC Common Stock to be exchanged will depend upon the market price
of the IBC Common Stock at maturity of the Notes, ranging from one share per
Note if the price at maturity is less than or equal to the initial price of
approximately $62, to .82 of a share per Note if the maturity price is greater
than or equal to $75.5 per share. Approximately 7.7 million Notes were
issued. Net proceeds of $466 million from the transaction were used to reduce
short-term debt. The SAILS debt will initially be recorded on the balance
sheet at the principal amount of the issuance. At each subsequent balance
sheet date, the SAILS will be marked to the cash value of the underlying IBC
shares for which the SAILS may be exchanged. Any changes in value will be
recorded in earnings each period. This transaction effectively limits the
amount of appreciation on part of the Company's investment in IBC and locks in
a minimum pre-tax gain of $340 million, or $220 million after tax, which is
expected to be realized partially through equity earnings through 2000, with
the remainder being realized upon maturity of the SAILS.
Simultaneous with the SAILS transaction, the Company sold 1,000,000 shares of
its IBC stock back to IBC for $60 million and will recognize a pre-tax gain of
$41 million, or $27 million after tax, in the fourth quarter.
As of July 31, 1997, approximately 1,130,000 shares remained under the Board
of Directors' authorization dated February 16, 1994 for the purchase of up to
3 million shares of RAL Stock.
As previously announced, the Company intends to separate its international
agricultural animal feeds business in a tax-free spin-off to shareholders.
Completion of the spin-off is expected in early 1998 and is contingent upon a
favorable tax ruling from the Internal Revenue Service and approval by the
Ralston Purina Board of Directors.
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<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)
QUARTER ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Net Sales $1,531.8 $1,478.6 $4,811.6 $4,550.0
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Costs and Expenses
Cost of products sold 917.8 906.3 2,874.5 2,718.4
Selling, general and administrative 282.6 258.8 854.4 788.2
Advertising and promotion 161.0 141.6 509.5 460.6
Interest expense 42.0 46.2 129.0 145.4
Provision for restructuring 103.3 - 103.3 -
Other (income)/expense, net (4.0) (1.4) (4.9) 13.0
-------- ------- ------- --------
1,502.7 1,351.5 4,465.8 4,125.6
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Earnings before Income Taxes, Equity Earnings
and Extraordinary Item 29.1 127.1 345.8 424.4
Income Tax (Provision)/Benefit 62.8 (45.5) (54.4) (158.5)
--------- --------- --------- ---------
Earnings before Equity Earnings
and Extraordinary Item 91.9 81.6 291.4 265.9
Equity Earnings, Net of Taxes 8.8 2.7 23.4 6.0
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Earnings before Extraordinary Item 100.7 84.3 314.8 271.9
Extraordinary Item - Loss on Early
Extinguishment of Debt .- (2.1) .- (2.1)
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Net Earnings 100.7 82.2 314.8 269.8
Preferred Stock Dividend, Net of Taxes (3.2) (3.5) (9.9) (10.7)
--------- --------- --------- ---------
Earnings Available to Common Shareholders $ 97.5 $ 78.7 $ 304.9 $ 259.1
========= ========= ========= =========
Cash Dividends Declared per Common Share $ 0.30 $ 0.30 $ 0.90 $ 0.90
========= ========= ========= =========
Earnings Per Share
Primary
Earnings before extraordinary item $ 0.96 $ 0.79 $ 2.99 $ 2.57
Extraordinary item - (0.02) - (0.02)
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Net Earnings $ 0.96 $ 0.77 $ 2.99 $ 2.55
========= ========= ========= =========
Fully Diluted
Earnings before extraordinary item $ 0.91 $ 0.75 $ 2.83 $ 2.43
Extraordinary item - (0.02) - (0.02)
-------- -------- -------- ---------
Net Earnings $ 0.91 $ 0.73 $ 2.83 $ 2.41
========= ========= ========= =========
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(CONDENSED)
(DOLLARS IN MILLIONS)
JUNE 30, SEPTEMBER 30,
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1997 1996
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<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 91.4 $ 62.3
Receivables, less allowance for doubtful accounts
of $38.7 and $35.9, respectively 806.2 845.6
Inventories
Raw materials and supplies 231.2 242.1
Work in process 120.5 123.6
Finished products 481.7 450.5
Other current assets 179.0 149.3
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Total Current Assets 1,910.0 1,873.4
Investments and Other Assets 1,516.2 1,455.8
Property at Cost 2,932.7 2,797.3
Accumulated depreciation 1,406.3 1,341.4
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1,526.4 1,455.9
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Total $4,952.6 $4,785.1
========= =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Current maturities of long-term debt $ 91.5 $ 98.0
Notes payable 908.9 881.9
Accounts payable 360.3 407.9
Other current liabilities 568.9 507.7
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Total Current Liabilities 1,929.6 1,895.5
Long-Term Debt 1,412.5 1,437.0
Deferred Income Taxes (14.0) 50.0
Other Liabilities 531.4 500.7
Redeemable Preferred Stock 307.8 323.5
Unearned ESOP Compensation (76.0) (110.6)
Shareholders Equity
Preferred stock - -
Common stock 11.5 11.5
Capital in excess of par value 289.4 217.3
Retained earnings 1,495.4 1,302.9
Cumulative translation adjustment (105.2) (66.6)
Common stock in treasury, at cost (473.2) (482.3)
Unearned portion of restricted stock (4.0) (4.2)
Value of common stock held in Grantor Trust (352.6) (289.6)
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Total Shareholders Equity 861.3 689.0
-------- ---------
Total $4,952.6 $4,785.1
========= =========
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
(CONDENSED)
(DOLLARS IN MILLIONS)
NINE MONTHS ENDED JUNE 30,
--------------------------
1997 1996
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<S> <C> <C>
Cash Flow from Operations
Net earnings $ 314.8 $ 269.8
Extraordinary Item - 2.1
Non-cash items included in income 169.3 186.5
Changes in assets and liabilities used in operations (28.5) (131.3)
Other, net (46.2) 0.2
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Net cash flow from operations 409.4 327.3
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Cash Flow from Investing Activities
Acquisition of businesses - (25.1)
Property additions, net (271.4) (203.8)
Other, net (14.7) (0.3)
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Net cash used by investing activities (286.1) (229.2)
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Cash Flow from Financing Activities
Net cash proceeds from debt 49.8 63.4
Dividends paid (113.1) (114.6)
Other, net (27.2) (26.5)
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Net cash used by financing activities (90.5) (77.7)
-------- --------
Effect of Exchange Rate Changes on Cash (3.7) (2.4)
-------- --------
Net Increase in Cash and Cash Equivalents 29.1 18.0
Cash and Cash Equivalents, Beginning of Period 62.3 44.3
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Cash and Cash Equivalents, End of Period $ 91.4 $ 62.3
======== ========
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
<PAGE>
RALSTON PURINA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1997
(Dollars in millions)
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, 1996.
Note 2 - Primary earnings per share are based on the average number of shares
outstanding during the period, excluding 4,290,000 and 4,201,000 shares of
common stock held by the Company's Grantor Trust at June 30, 1997 and 1996,
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. Primary and fully
diluted shares used in earnings per share computations were 102,106,000 and
109,622,000, respectively, for the quarter ended June 30, 1997 and 101,813,000
and 110,516,000 for the quarter ended June 30, 1996. For the nine months
ended June 30, 1997, primary and fully diluted shares were 102,000,000 and
110,623,000, respectively, and were 101,780,000 and 110,485,000 for the nine
months ended June 30, 1996.
Note 3 - At June 30, 1997, there were 102,132,000 shares of common stock
outstanding, exclusive of 8,269,000 shares held in treasury and 4,290,000
Grantor Trust shares. At September 30, 1996, there were 101,720,000 shares
of common stock outstanding, exclusive of 8,740,000 shares held in treasury
and 4,228,000 Grantor Trust shares.
Note 4 - Other (income)/expense, net, for the nine months consists of the
following:
<TABLE>
<CAPTION>
June 30,
1997 1996
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<S> <C> <C>
Net translation and exchange loss $ 8.6 $19.2
Investment income (6.6) (6.5)
Miscellaneous (income)/expense (6.9) 0.3
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$(4.9) $13.0
====== ======
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Note 5 - Investments and Other Assets consists of the following:
<TABLE>
<CAPTION>
June 30, Sept. 30,
1997 1996
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<S> <C> <C>
Goodwill $ 491.8 $ 509.1
Other intangible assets 243.4 256.3
Investments in affiliated companies 328.9 301.6
Deferred charges and other assets 452.1 388.8
-------- --------
$1,516.2 $1,455.8
======== ========
</TABLE>
Note 6 - During the current quarter, the Company recorded provisions for
restructuring of $29.1, after taxes, or $.28 and $.27 per primary and fully
diluted share for the quarter and $.28 and $.26 per share, respectively, for
the nine months. These charges primarily relate to continued rationalization
of Battery Products' worldwide battery production capacity.
On a pre-tax basis, charges for restructuring were $103.3 and consisted of
termination benefits of $44.4, other cash exit costs of $9.5 and noncash
charges of $49.4, primarily related to impairment losses on land, buildings
and machinery and equipment.
The income tax benefits of $74.2 recorded in the quarter associated with
current and past restructuring actions include current tax benefits of $12.5
and the recognition of capital loss benefits of $61.7.
Note 7 - During the current quarter the Company recognized tax benefits of
$34.7, or $.34 and $.32 per primary and fully diluted share for the quarter
and $.34 and $.31 per share, respectively, for the nine months, related to tax
refund claims for 1993 through 1996 as a result of a change in the Company's
method of computing foreign tax credits.
Note 8 - During the quarter ended June 30, 1996, the Company recognized an
extraordinary loss in connection with the retirement of $40.5 of 9.5%
debentures.
Note 9 - On January 31, 1997, the Securities and Exchange Commission (SEC)
issued amended disclosure rules for derivatives and exposures to market risk
from derivative and other financial and certain commodity instruments.
Enhanced accounting policy disclosures in accordance with this SEC release
follow.
The Company uses financial and commodities derivatives in the management of
foreign currency, commodities pricing and interest rate risks that are
inherent to its business operations. Such instruments are not held or issued
for trading purposes.
The Company uses foreign exchange (F/X) instruments, including currency
forwards, futures and options, to reduce transaction and translation exposures
resulting from its foreign currency activities. F/X instruments used are
selected based on their risk reduction attributes and the related market
conditions. Such instruments are marked-to-market, and the terms generally do
not exceed twelve months. Realized and unrealized gains and losses from
instruments qualifying as hedges are deferred as part of the cost basis of the
asset or liability being hedged and are recognized in the statement of
earnings in the same period as the underlying transaction. Realized and
unrealized gains or losses from F/X instruments used as economic hedges but
not qualifying for hedge accounting are recognized currently in the statement
of earnings. Cash flows from F/X instruments are classified in the same
category in the statement of cash flows as the underlying activities. F/X
instruments are generally not disposed of prior to the settlement date;
however, if an F/X instrument was disposed of prior to the settlement date,
any gain or loss would be recognized immediately in the statement of earnings.
The Company uses commodities hedging instruments, including forwards, futures
and options, to reduce the risk of price fluctuations related to future raw
materials requirements for commodities such as corn, wheat and soybean meal.
The terms of such instruments generally do not exceed twelve months, and
depend on the commodity and other market factors. The instruments are
marked-to-market, and the gains and losses are deferred. Deferred gains and
losses are subsequently recorded as cost of products sold in the statement of
earnings when the inventory is sold. If the inventory is not acquired and the
hedge is disposed of, the deferred gain or loss is recognized immediately in
cost of products sold.
The Company uses interest rate swap and cap agreements in the management of
interest rate exposure. The interest rate differential to be paid or received
is normally accrued as interest rates change, and is recognized as a component
of interest expense over the life of the agreements. If an agreement was to
be terminated prior to the maturity date, any accrued rate differential would
be recognized immediately as interest expense in the statement of earnings.
Note 10 - Statement of Financial Accounting Standards No. 128, "Earnings Per
Share", was issued in February 1997. The Company expects the impact of
adoption of this statement to be immaterial.
PART II - OTHER INFORMATION
------------------
There is no information required to be reported under any items except those
indicated below.
Item 1. Legal Proceedings
------------------
On July 25, 1997 the United States District Court for the District of New
Jersey granted a Motion for Summary Judgment in favor of the defendants
(including the Company) in the consolidated proceedings styled In Re Baby Food
Antitrust Litigation, No. 92-5495 (NHP), described in the Company's Form 10K
Annual Report for the fiscal year ended September 30, 1997. It is not known
whether plaintiffs in the proceeding will timely file a notice of appeal.
Item 6. Exhibits and Reports on Form 8-K
-------------------------------------
(a) Exhibits filed with this Report:
(11) Statement re: Computation of Per Share Earnings.
(27) Financial Data Schedule
(b) Reports on Form 8-K
On May 23, 1997 the Registrant filed a Current Report of Form 8-K to
file its press release dated that same date relating to the retirement of its
current Chief Executive Officer and the succession of two Co-Chief Executive
Officers.
On July 21, 1997 the Registrant filed a Current Report on Form 8-K
to file its press release dated that same date relating to earnings for its
Fiscal 1997 third Quarter.
On July 28, 1997 the Registrant filed a Current Report on Form 8-K
describing the sale to underwriters of its 7% Exchangeable Notes Due 2000 and
filing as exhibits to such Current Report, the Underwriting Agreement and
First Supplemental Indenture related to such Notes.
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
Vice President and Chief
Financial Officer
Date: August 14, 1997
<PAGE>
EXHIBIT INDEX
- -------------
Exhibits
- --------
EX-11 Computation of Earnings Per Share
EX-27 Financial data schedule for 3rd Quarter 1997
(provided electronically)
Exhibit 27
(Document prepared on Edgar)
i:\sec\10q\3qtr-97.doc
Exhibit 11
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<CAPTION>
RALSTON PURINA COMPANY
COMPUTATION OF EARNINGS PER SHARE
(IN MILLIONS EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
JUNE 30,
--------
1997 1996
------- -------
EARNINGS PER COMMON SHARE OUTSTANDING
<S> <C> <C> <C> <C>
Earnings before extraordinary item $314.8 $271.9
Dividend on Series A ESOP convertible
preferred stock, net of taxes (9.9) (10.7)
------- -------
304.9 261.2
Extraordinary item - (2.1)
------- -------
Earnings available to common shareholders $304.9 $259.1
======= =======
Weighted average shares - primary
earnings per share calculation 102.0* 101.8 *
======= =====
Earnings per common share outstanding
Earnings before extraordinary item $ 2.99 $ 2.57
Extraordinary item - (0.02)
------ -------
Net earnings $ 2.99 $ 2.55
======= =======
EARNINGS PER SHARE ASSUMING FULL DILUTION
Earnings before extraordinary item $314.8 $271.9
Adjustments to net earnings to reflect assumed
ESOP preferred stock conversion (2.2) (3.3)
------- -------
312.6 268.6
Extraordinary item - (2.1)
------- -------
Net earnings for fully diluted earnings per share calculation $312.6 $266.5
======= =======
Weighted average number of common shares outstanding 102.0* 101.8 *
Convertible preferred stock 6.5 6.8
Dilutive effect of stock options 1.8 1.6
Dilutive effect of deferred compensation awards 0.3 0.3
------- -------
Weighted average shares - fully diluted earnings
per share calculation 110.6 110.5
======= =======
Earnings per share assuming full dilution
Earnings before extraordinary item $ 2.83 $ 2.43
Extraordinary item - (0.02)
------ -------
Net earnings $ 2.83 $ 2.41
======= =======
</TABLE>
* Excludes 4,290,000 and 4,201,000 shares held in Grantor Trust at June 30,
1997 and 1996, respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 6/30/97
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> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 91,400
<SECURITIES> 0
<RECEIVABLES> 844,900
<ALLOWANCES> 38,700
<INVENTORY> 833,400
<CURRENT-ASSETS> 1,910,000
<PP&E> 2,932,700
<DEPRECIATION> 1,406,300
<TOTAL-ASSETS> 4,952,600
<CURRENT-LIABILITIES> 1,929,600
<BONDS> 1,412,500
307,800
0
<COMMON> 11,500
<OTHER-SE> 849,800
<TOTAL-LIABILITY-AND-EQUITY> 4,952,600
<SALES> 4,811,600
<TOTAL-REVENUES> 4,811,600
<CGS> 2,874,500
<TOTAL-COSTS> 2,874,500
<OTHER-EXPENSES> 1,462,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 129,000
<INCOME-PRETAX> 345,800
<INCOME-TAX> 54,400
<INCOME-CONTINUING> 314,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 314,800
<EPS-PRIMARY> 2.99
<EPS-DILUTED> 2.83<F1>
<FN>
<F1>LOSS-PROVISION INCLUDED IN OTHER-EXPENSE ABOVE.
</FN>
</TABLE>
