SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 21, 1997
RALSTON PURINA COMPANY
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(Exact name of Registrant as specified in its charter)
MISSOURI
1-4582 No. 43-0470580
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(State or Other (Commission
(IRS Employer
Jurisdiction of File
Numbe) Identification
Incorporation)
Number)
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)
<PAGE>
PAGE 2
Item 5. Other Events
On July 21, 1997, the Company released the following statement to the
public:
RALSTON THIRD QUARTER EARNINGS INCREASE 13 PERCENT
St. Louis, Missouri, July 21, 1997Ralston Purina Company today announced third
quarter sales and earnings before unusual items of $1,531,800,000 and
$95,100,000, respectively, compared to sales and earnings before an
extraordinary item of $1,478,600,000 and $84,300,000 in the prior year third
quarter, an earnings increase of 13 percent. Earnings per share before these
items were $.90 and $.86 on a primary and fully diluted basis, respectively,
compared to $.79 and $.75 a year ago. Earnings increased primarily on higher
equity earnings from Ralston's investment in Interstate Bakeries Corporation
(IBC). Operating profit in the quarter was flat, as improvements in Pet
Products and Agricultural Products were offset by declines in Battery Products
and Soy Protein Products.
Net earnings for the third quarter of $100,700,000 or $.96 and $.91 per share
on a primary and fully diluted basis, respectively, included two unusual items
which increased net earnings in the quarter by $5.6 million or $.06 and $.05
per primary and fully diluted share, respectively. The first unusual item was
an after-tax restructuring charge of $29.1 million, net of income tax benefits
of $74.2 million, primarily related to continued rationalization of
Energizer's worldwide battery production capacity. The income tax benefits of
$74.2 million associated with current and past restructuring actions included
current tax benefits of $12.5 million and the recognition of capital loss tax
benefits of $61.7 million. These benefits will be used to partially offset
taxes due upon the future disposition of IBC shares. 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 fiscal 1996 third quarter net earnings of
$82,200,000 or $.77 and $.73 per share on a primary and fully diluted basis,
respectively, included an extraordinary charge related to debt retirement of
$2,100,000 or $.02 per share.
For the current nine months, sales and earnings before the third quarter
unusual items previously mentioned were $4,811,600,000 and $309,200,000,
respectively, compared to sales and earnings of $4,550,000,000 and
$271,900,000 in the prior year. Earnings per share on this basis were $2.93
and $2.78 per primary and fully diluted share, respectively, compared to $2.57
and $2.43 a year ago. Earnings increased on higher equity earnings, lower
interest expense and a lower tax rate. Net earnings for the nine months were
$314,800,000 or $2.99 and $2.83 per share on a primary and fully-diluted
basis, respectively, compared to 1996 net earnings of $269,800,000 or $2.55
and $2.41 per share on a primary and fully-diluted basis, respectively.
Pet Products' operating profit increased in the quarter, as higher pet food
volumes were partially offset by increased promotion spending. For the nine
months, operating profit was flat, as increased pet food volume and pricing
were offset by higher ingredient costs and promotion support.
Battery Products' operating profit decreased in the quarter and improved
slightly in the nine months. Positive factors included in the periods were
increased worldwide alkaline volume and improved results in the Asia Pacific
region. Negative factors in both periods included decreased volumes and
earnings in Europe, start-up costs associated with the lithium ion
rechargeable battery and decreased Original Equipment Manufacturer (OEM)
rechargeable sales in the Asia Pacific region due to competitive pricing
pressures.
Operating profit of Soy Protein Products decreased in the quarter and nine
months, as higher volumes and selling prices were more than offset by higher
raw material and business development and management costs and unfavorable
foreign exchange. Agricultural Products' operating profit increased in the
quarter and nine months on favorable margins and increased volume in the Asia
Pacific region, partially offset by decreased volume and lower margins in
South and Central America.
# # #
(See attached schedule for additional information for the quarters and nine
months ended June 30, 1997 and 1996.)
<PAGE>
<TABLE>
<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,
-------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
--------- --------- --------- ---------
Net Sales $1,531.8 $1,478.6 $4,811.6 $4,550.0
--------- --------- --------- ---------
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
--------- --------- --------- ---------
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
--------- --------- --------- ---------
Earnings before Extraordinary Item 100.7 84.3 314.8 271.9
Extraordinary Item - Loss on Early
Retirement of Debt - (2.1) - (2.1)
--------- --------- --------- ---------
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
========= ========= ========= =========
Earnings Per Share
Primary
Earnings before extraordinary item $ 0.96 $ 0.79 $ 2.99 $ 2.57
Extraordinary item - (0.02) - (0.02)
--------- --------- --------- ---------
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
========= ========= ========= =========
Average Shares Outstanding Used for
Earnings per Share Computations
Primary 102.1 101.8 102.0 101.8
Fully Diluted 109.6 110.5 110.6 110.5
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Condensed)
(Dollars in millions)
<S> <C> <C>
June 30, September 30,
---------- ---------------
1997 1996
---------- ---------------
Assets
Current Assets
Cash and cash equivalents $ 91.4 $ 62.3
Receivables, net 806.2 845.6
Inventories 833.4 816.2
Other current assets 179.0 149.3
---------- ---------------
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
---------- ---------------
1,526.4 1,455.9
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
---------- ---------------
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)
---------- ---------------
Total Shareholders Equity 861.3 689.0
Total $ 4,952.6 $ 4,785.1
========== ===============
See Accompanying Notes to Condensed Financial Statements.
</TABLE>
<PAGE>
<PAGE>
RALSTON PURINA COMPANY AND SUBSIDIARIES
Notes:
1. The following tables reconcile earnings before unusual items to net
earnings, and earnings before unusual
items per share to net earnings per share. Reconciling items are discussed in
the notes which follow.
<TABLE>
<CAPTION>
(in millions)
<S> <C> <C> <C> <C>
Quarter Ended Nine Months Ended
June 30, June 30,
Earnings 1997 1996 1997 1996
- ---------------------------------------------- ------------------- ------------------- ------- -------
Earnings before restructuring charges, foreign
tax credit refunds and extraordinary item $ 95.1 $ 84.3 $309.2 $271.9
Restructuring provisions (29.1) - (29.1) -
Foreign tax credit refunds 34.7 - 34.7 -
------------------- ------------------- ------- -------
Total unusual items 5.6 - 5.6 -
Earnings before extraordinary item 100.7 84.3 314.8 271.9
Extraordinary Item - (2.1) - (2.1)
------------------- ------------------- ------- -------
Net Earnings 100.7 82.2 314.8 269.8
=================== =================== ======= =======
Quarter Ended Nine Months Ended
June 30, June 30,
Primary Earnings Per Share 1997 1996 1997 1996
- ---------------------------------------------- ------------------- ------------------- ------- -------
Earnings before restructuring charges, foreign
tax credit refunds and extraordinary item $ 0.90 $ 0.79 $ 2.93 $ 2.57
Restructuring provisions (0.28) - (0.28) -
Foreign tax credit refunds 0.34 - 0.34 -
------------------- ------------------- ------- -------
Total unusual items 0.06 - 0.06 -
Earnings before extraordinary item 0.96 0.79 2.99 2.57
Extraordinary Item - (0.02) - (0.02)
------------------- ------------------- ------- -------
Net Earnings $ 0.96 $ 0.77 $ 2.99 $ 2.55
=================== =================== ======= =======
Quarter Ended Nine Months Ended
June 30, June 30,
Fully Diluted Earnings Per Share 1997 1996 1997 1996
- ---------------------------------------------- ------------------- ------------------- ------- -------
Earnings before restructuring charges, foreign
tax credit refunds and extraordinary item $ 0.86 $ 0.75 $ 2.78 $ 2.43
Restructuring provisions (0.27) - (0.26) -
Foreign tax credit refunds 0.32 - 0.31 -
------------------- ------------------- ------- -------
Total unusual items 0.05 - 0.05 -
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
=================== =================== ======= =======
</TABLE>
2. The current quarter results include restructuring charges of $29.1
million, after taxes, primarily related
to continuation of the rationalization of Energizer's worldwide battery
production capacity. On a pre-tax basis,
charges for restructuring were $103.3 million and 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 anticipated losses on
disposal of land, buildings and machinery and equipment. The restructuring
actions are expected to generate
pretax 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.
3. The current quarter results include tax benefits of $34.7 million
related to tax refund claims for 1993
through 1996 related to a change in the Company's method of computing foreign
tax credits.
4. Net earnings for the quarter and nine months ended June 30, 1996
include an extraordinary loss related
to the retirement of $40.5 million of 9.5% debentures.
5. Operating results for any quarter are not necessarily indicative of the
results for any other quarter of the
full year.
<PAGE>
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 hereunto duly authorized.
RALSTON PURINA COMPANY
By: /s/JAMES R. ELSESSER
------------------------------------------
James R. Elsesser
Vice President and
Chief Financial Officer
Dated: July 21, 1997
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