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): June 10, 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)
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Item 5. Other Events.
In a Press Release dated June 10, 1996, a copy of which is attached hereto as
Exhibit 99.1 and the text of which its incorporated by reference herein,
the Registrant announced the elimination of approximately 100 positions,
primarily at its St. Louis, Missouri headquarters. The Registrant also announced
that it is considering additional cost-reducing actions in response to the
volatility of the ready-to-eat cereal category.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Press Release dated June 10, 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: June 10, 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., ANNOUNCES
COST REDUCTION PLAN AT CEREAL SUBSIDIARY
St. Louis, MO, June 10, 1996 . . . Ralcorp Holdings, Inc., today announced that
it is eliminating approximately 100 positions at its Ralston Foods subsidiary
and its Ralcorp corporate support groups. The changes represent an approximate
25 percent reduction in St. Louis headquarters staffing for Ralston Foods and
Ralcorp corporate, and a limited number of positions at satellite sales
locations. The restructuring is one of several moves the Company is planning in
order to remove between $25 million to $30 million from the cost structure of
the Company's Ralston Foods cereal and snack subsidiary.
The plan to lower overall costs is in response to recent and dramatic changes in
the pricing structure of the ready-to-eat cereal category, changes which are
negatively impacting the overall profitability of Ralcorp Holdings. "Pricing
decisions by several branded cereal manufacturers within the last few months
could strip more than $1 billion in sales dollars and a material amount of
earnings from the cereal industry," said Ralcorp Chief Executive Officer,
Richard A. Pearce. "In order to remain competitive, we felt it was imperative
that we remove costs from our system. If the category is going to be driven by
price, then we will make the modifications needed to succeed in that
environment."
The Company is offering a comprehensive severance and outplacement package to
employees affected by the staff reductions. "Deciding to eliminate jobs was a
difficult choice but if the entire organization is to remain successful, we have
to change with the category," Pearce said. "For those employees who are losing
their jobs, it is our hope that the severance and outplacement benefits being
provided will give them the necessary support to transition to new employment."
Pearce said the negative pricing trends in the cereal industry will in all
likelihood lead to further reductions in Ralcorp earnings in fiscal 1996. "In
March of this year, Kellogg and General Mills reverted to the types of deep
price discounts that disrupted the cereal category in the early 1990s. In April,
the Post cereal brands of Kraft Foods, Inc., followed with a 20 percent price
reduction across its entire line of branded cereals. Today, Kellogg responded by
announcing a 19 percent reduction across brands accounting for two-thirds of its
cereal volume.
"At this point, the only thing that is clear is that the category is in the
midst of a very costly price war and that our Ralston Foods franchise, as well
as the entire cereal industry, will be negatively impacted." Pearce said. "The
actions we are taking assumed a competitive response comparable to that
announced today by Kellogg and that the profit impact to the category would be
long term in nature. We anticipated the worst and are restructuring our
organization in a way to preserve its long-term competitiveness."
The Company will detail the remaining steps in its cost reduction plan over the
next several weeks, Pearce said. "Our goal is to cut approximately $25 million
to $30 million in costs by the end of this fiscal year and to maintain that
lower base in the future. No further headcount reductions are planned in St.
Louis, but decisions involving additional aspects of the cereal operation, as
well as other strategic alternatives, are anticipated. We believe these are the
correct choices for our Company and will help provide us the flexibility needed
to operate in a vastly different cereal category and remain competitive."
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Ralcorp Holdings, Inc., is comprised of Ralston Foods breakfast cereals,
Beech-Nut baby food, Bremner crackers and cookies and Keystone, Arapahoe Basin
and Breckenridge ski resorts in Colorado. The Ralston Foods operation is the
largest of the Company's four subsidiaries and is the nation's leading producer
of private label breakfast cereals and a number of popular branded cereals and
snacks, marketed primarily under the CHEX name. Ralcorp is publicly traded on
the New York Stock Exchange under the RAH symbol.
