SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 1996
Ralcorp Holdings, Inc.
(Exact name of registrant as specified in its charter)
Missouri 1-12766 43-1664297
(State or other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
800 Market Street, Suite 2900
St. Louis, MO 63101
(Address of principal (Zip Code)
executive offices)
(314) 877-7000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
In a Press Release dated August 1, 1996, a copy of which is attached hereto as
Exhibit 99.1 and the text of which is incorporated by reference herein, the
Registrant announced earnings for its third quarter ended June 30, 1996.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1 Press Release dated August 1, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RALCORP HOLDINGS, INC.
(Registrant)
Date: August 1, 1996 By: /s/ Richard A. Pearce
---------------------
Richard A. Pearce
Chief Executive Officer
and President
EXHIBIT 99.1
Immediate
Patrick T. Farrell
314/877-7095
RALCORP HOLDINGS, INC., THIRD QUARTER 1996 EARNINGS
St. Louis, MO, August 1, 1996 . . . Ralcorp Holdings, Inc., today reported sales
of $230.1 million and a net loss of $3.6 million for the quarter ended June 30,
1996 -- excluding a one-time charge against earnings -- compared to sales of
$231.5 million and net earnings of $5.1 million for the third quarter last year.
For the nine months, the Company recorded sales of $802.8 million and net
earnings of $32.3 million -- again excluding the one-time charge -- compared to
sales of $768.2 million and net earnings of $44.1 million for the same period
last year.
The Company recorded a net loss of $.11 per share for this year's third quarter
and net earnings of $.98 per share for the nine months, excluding the charge,
compared to $.15 per share and $1.31 per share for the same quarter and nine
months last year. The amount of the one-time charge is $20.7 million ($12.7
million or $.39 per share after tax), and its inclusion in operating results
increases the third quarter net loss to $16.3 million or $.50 per share. The
after-tax charge reduces net earnings for the nine months to $19.6 million or
$.59 per share.
The one-time charge covers expenses related to a restructuring of the Company's
ready-to-eat cereal subsidiary. The Company announced the restructuring plan in
June of this year in response to the recent and dramatic changes in the pricing
structure of the cereal category, changes which are negatively impacting the
profitability of the Company's cereal business. The restructuring effort
includes the elimination of a combined 290 jobs at the Company's St. Louis
headquarters and its cereal manufacturing facility in Battle Creek, MI, as well
as the partial closing of the Battle Creek plant. It is anticipated that the
restructuring plan could remove approximately $25 million annually from the cost
structure of the Company's cereal business beginning in fiscal 1997. Realizing
<PAGE>
these cost savings will depend on the Company's ability to consolidate much of
its branded cereal production into its Cincinnati manufacturing facility.
<TABLE>
Business Segment Information
----------------------------
<CAPTION>
Three Months Ended June 30
--------------------------
Sales Operating Profit
---------------------- -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Consumer Foods $ 212.5 $ 214.1 $ 8.3* $ 22.1
Resort Operations 17.6 17.4 (6.3) (5.2)
--------- --------- --------- ---------
Total $ 230.1 $ 231.5 $ 2.0 $ 16.9
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended June 30
-------------------------
Sales Operating Profit
---------------------- -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Consumer Foods $ 681.3 $ 654.0 $ 45.3* $ 73.7
Resort Operations 121.5 114.2 31.9 25.8
--------- --------- --------- ---------
Total $ 802.8 $ 768.2 $ 77.2 $ 99.5
========= ========= ========= =========
<FN>
* Excluded from the three and nine month periods ended June 30, 1996 is a $20.7
million pre-tax charge related to the restructuring of the Company's cereal
subsidiary.
</FN>
</TABLE>
Consumer Foods
- --------------
Consumer Foods sales were down less than one percent for the quarter and up 4.2
percent for the nine months on significantly improved branded snack and private
label cracker volume, offset in the quarter and partially offset year to date by
volume reductions in both private label and branded cereal. Baby food sales were
up only slightly in the quarter on a small volume increase, and up significantly
for the nine months on strong volume growth.
Private label cereal recorded its second straight quarter of reduced volume,
down sharply in the third quarter and down slightly for the nine months. The
volume shortfall is being driven by the recent reductions in branded cereal
pricing and heavy promotional spending by competitors, which has narrowed the
price gap between private label cereals and their branded counterparts. This
negative trend is expected to continue in the Company's fourth quarter, although
the restructuring efforts in the cereal business are expected to help the
Company respond to private label pricing concerns in future periods. Branded
cereal volume was down significantly for the quarter and nine months, primarily
the result of the continued decline in a number of fractional share brands. The
branded snack business continues its strong growth following the restage of the
CHEX MIX product last year, with volume up more than 50 percent for the quarter
and 70 percent for the nine months.
Consumer Foods operating profit, excluding the charge, was down $13.8 million in
the quarter due exclusively to cereal related issues such as higher costs for
advertising and promotion, commodities, distribution and lower overall volume.
For the nine months, operating profit was down $28.4 million due primarily to
higher advertising and promotion and commodities costs in cereal, offset
slightly by gains in baby food and crackers and cookies. Substantially all of
the quarterly increase in advertising and promotion spending and more than
one-third of the increase year to date went to defend the Company's private
label cereal franchise. The combination of higher levels of competitive trade
spending earlier in the year and the price reduction programs announced in April
and June by several branded cereal competitors, has curtailed sales of the
Company's private label cereal products. The increases in domestic baby food
volume, which have driven that subsidiary's operating profit gains in the nine
months, have slowed due to an increase in competitive activity late in the third
quarter and continuing early in the fourth quarter.
Resort Operations
- -----------------
Ralston Resorts third quarter sales of $17.6 million were virtually flat with
the same quarter last year. The resorts recorded an operating loss of $6.3
million for the quarter, which was $1.1 million unfavorable to the same period
last year on lower overall skier visits partially offset by improved pricing.
Ralston Resorts closed its last ski operation for the season following the July
4th holiday, one month earlier than last year's record closing date, due to warm
spring weather. The warmer weather also resulted in a quarterly reduction in
skier visits of approximately 13 percent. For the nine months, the Company's
resorts benefited from a five percent increase in skier visits, pushing the full
season total to 2.7 million skier visits. Operating profit improved for the nine
months to $31.9 million, or a 24 percent improvement for the period.
Historically, more than the entire year's operating profit at the Company's
resorts are earned during the second fiscal quarter, which includes the key
winter ski months. The third and fourth quarters generally record losses.
See the attached schedule and notes for additional information on the quarters
and nine months for both years.
EDITOR'S NOTE: On July 23, 1996, Ralcorp Holdings announced that it has reached
a definitive agreement to sell its Ralston Resorts ski subsidiary to Vail
Resorts, Inc., for a combination of stock and assumed debt valued in excess of
$310 million. The completion of the transaction is subject to various government
approvals and is expected to close during the fall of 1996.
<PAGE>
<TABLE>
RALCORP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(in millions except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 230.1 $ 231.5 $ 802.8 $ 768.2
-------- -------- -------- --------
Costs and Expenses
Cost of products sold 126.6 126.1 408.3 393.4
Selling, general and
administrative 44.6 37.3 132.5 120.2
Advertising and promotion 58.1 52.8 189.2 161.1
Interest expense 6.8 7.0 20.2 21.2
Restructuring charge 20.7 20.7
-------- -------- -------- --------
256.8 223.2 770.9 695.9
-------- -------- -------- --------
Earnings (Loss) before
Income Taxes (26.7) 8.3 31.9 72.3
Income Taxes (10.4) 3.2 12.3 28.2
-------- -------- -------- --------
Net Earnings (Loss) $ (16.3) $ 5.1 $ 19.6 $ 44.1
======== ======== ======== ========
Earnings (Loss) per
Common Share $ (.50) $ .15 $ .59 $ 1.31
======== ======== ======== ========
Average Shares Outstanding 32.9 33.4 33.0 33.6
<FN>
See accompanying notes.
Notes:
1. During the quarter ended June 30, 1996, the Company recorded a pre-tax
charge of $20.7 million ($12.7 million after taxes or $.39 per common
share) to recognize the costs related to the restructuring of its
ready-to-eat cereal subsidiary, Ralston Foods. As a result of
this restructuring plan, approximately 100 positions have been
eliminated from the Ralston Foods subsidiary and corporate support
groups, primarily at the Company's headquarters in St. Louis, MO. In
addition, the restructuring plan includes the partial closing of the
Ralston Foods production facility in Battle Creek, MI, thereby reducing
excess production capacity in the Ralston Foods system and eliminating
approximately 190 jobs from the production and administrative staffs
at that facility. Company management currently anticipates that all
restructuring activities will be completed by the end of the Company's
current fiscal year.
2. The average shares outstanding used to compute earnings (loss) per common
share for the quarter and nine month periods ended June 30, 1996 and 1995
are based on the average number of shares of Ralcorp Stock outstanding for
the periods then ended. Earnings (Loss) per common share is computed
independently for all periods presented, therefore, the sum of earnings
(loss) per common share amounts for the quarters may not total the
year-to-date.
3. Operating results for any quarter are not necessarily indicative of
the results for any other quarter or for the full year.
</FN>
</TABLE>
