Date of Report (Date of earliest event reported):
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August 9, 2011
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Missouri
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1-12619
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43-1766315
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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800 Market Street, Suite 2900 Saint Louis, MO
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63101
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code
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314-877-7000
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Item 2.02.
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Results of Operations and Financial Condition.
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Item 7.01.
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Regulation FD Disclosure.
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Item 9.01.
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Financial Statements and Exhibits.
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Exhibit 99.1
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Press Release dated August 9, 2011 announcing third quarter results
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Exhibit 99.2
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Press Release dated August 9, 2011 announcing acquisition
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RALCORP HOLDINGS, INC.
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(Registrant)
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Date:
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August 9, 2011
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By: /s/ T. G. Granneman
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T. G. Granneman
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||
Corporate Vice President and
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||
Chief Accounting Officer
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Number
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Description
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99.1
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Press Release dated August 9, 2011 announcing third quarter results
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99.2 | Press Release dated August 9, 2011 announcing acquisition |
§
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Net sales up 22%, including 5% base-business growth
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§
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Adjusted diluted EPS of $1.15 compared to $1.11 last year
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§
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2010 acquisitions expected to contribute approximately $1.00 per share for the year
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§
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Full year adjusted diluted EPS expected to be between $5.20 and $5.35
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Three Months Ended
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Nine Months Ended
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|||||||||||||||||||||||
June 30,
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June 30,
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|||||||||||||||||||||||
2011
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2010
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% Change
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2011
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2010
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% Change
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|||||||||||||||||||
(dollars in millions, except per share data)
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||||||||||||||||||||||||
Net Sales
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$ | 1,171.9 | $ | 962.4 | 22% | $ | 3,517.8 | $ | 2,919.3 | 21% | ||||||||||||||
Diluted Earnings per Share
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$ | .50 | $ | .95 | -47% | $ | 3.28 | $ | 2.98 | 10% | ||||||||||||||
Adjusted Diluted Earnings per Share
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$ | 1.15 | $ | 1.11 | 4% | $ | 3.84 | $ | 3.43 | 12% |
·
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Net Sales grew as a result of incremental sales from acquisitions, higher net pricing in all segments, and base-business volume gains in many categories.
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·
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Acquisitions completed in fiscal 2010 contributed approximately $.20 per share for the quarter, driven primarily by AIPC, and are expected to contribute approximately $1.00 per share for the full year compared to $.18 per share last year.
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·
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Diluted Earnings per Share (EPS) this year were negatively affected by impairments of intangible assets, mark-to-market losses on economic hedges, amounts related to plant closures, and minor merger and integration costs. Last year’s diluted EPS were affected by merger and integration costs. The effects of all of these items are excluded from Adjusted Diluted EPS, which are expected to be between $5.20 and $5.35 for the full year.
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Three Months Ended
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Nine Months Ended
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|||||||||||||||||||||||
June 30,
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June 30,
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|||||||||||||||||||||||
2011
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2010
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% Change
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2011
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2010
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% Change
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|||||||||||||||||||
(dollars in millions)
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||||||||||||||||||||||||
Base-business Net Sales
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$ | 1,011.1 | $ | 962.4 | 5% | $ | 3,005.8 | $ | 2,919.3 | 3% | ||||||||||||||
Net sales from recent acquisitions
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||||||||||||||||||||||||
excluded from base-business net sales:
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||||||||||||||||||||||||
AIPC
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140.4 | - | 15% | 419.8 | - | 14% | ||||||||||||||||||
Other fiscal 2010 acquisitions
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20.4 | - | 2% | 92.2 | - | 3% | ||||||||||||||||||
Net Sales
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$ | 1,171.9 | $ | 962.4 | 22% | $ | 3,517.8 | $ | 2,919.3 | 21% |
Three Months Ended
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Nine Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
(% of net sales)
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||||||||||||||||
Gross Profit
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24.7% | 25.5% | 26.9% | 26.9% | ||||||||||||
Selling, general and administrative expenses
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-13.4% | -12.1% | -13.1% | -13.0% | ||||||||||||
Amortization of intangible assets
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-1.7% | -1.1% | -1.6% | -1.2% | ||||||||||||
Impairment of intangible assets
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-2.7% | - | -.9% | -.7% | ||||||||||||
Other operating expenses, net
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-.4% | -1.5% | -.3% | -.6% | ||||||||||||
Operating Profit
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6.5% | 10.8% | 11.0% | 11.4% | ||||||||||||
Adjusted Gross Profit
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26.5% | 25.5% | 27.2% | 26.9% | ||||||||||||
Adjustments for economic hedges
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-1.8% | - | -.3% | - | ||||||||||||
Gross Profit
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24.7% | 25.5% | 26.9% | 26.9% | ||||||||||||
Adjusted Operating Profit
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11.3% | 12.2% | 12.4% | 12.7% | ||||||||||||
Adjustments for economic hedges
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-1.8% | - | -.3% | - | ||||||||||||
Provision for legal settlement
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- | - | -.1% | - | ||||||||||||
Merger and integration costs
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-.1% | -1.4% | - | -.6% | ||||||||||||
Amounts related to plant closures
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-.2% | - | -.1% | - | ||||||||||||
Impairment of intangible assets
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-2.7% | - | -.9% | -.7% | ||||||||||||
Operating Profit
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6.5% | 10.8% | 11.0% | 11.4% |
Three Months Ended
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Nine Months Ended
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|||||||||||||||||||||||
June 30,
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June 30,
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|||||||||||||||||||||||
2011
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2010
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% Change
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2011
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2010
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% Change
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|||||||||||||||||||
(pounds in millions)
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||||||||||||||||||||||||
Sales Volume
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||||||||||||||||||||||||
Branded Cereal Products
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110.8 | 129.4 | -14% | 336.7 | 381.7 | -12% | ||||||||||||||||||
Other Cereal Products
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132.2 | 127.3 | 4% | 392.1 | 387.7 | 1% | ||||||||||||||||||
Snacks, Sauces & Spreads
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321.9 | 319.9 | 1% | 994.8 | 963.0 | 3% | ||||||||||||||||||
Frozen Bakery Products
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164.1 | 156.0 | 5% | 509.3 | 482.1 | 6% | ||||||||||||||||||
Pasta
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206.9 | - | n/a | 633.7 | - | n/a | ||||||||||||||||||
Total Sales Volume
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935.9 | 732.6 | 28% | 2,866.6 | 2,214.5 | 29% | ||||||||||||||||||
(dollars in millions)
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||||||||||||||||||||||||
Net Sales
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||||||||||||||||||||||||
Branded Cereal Products
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$ | 244.1 | $ | 242.7 | 1% | $ | 721.0 | $ | 749.2 | -4% | ||||||||||||||
Other Cereal Products
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217.1 | 197.6 | 10% | 620.7 | 585.8 | 6% | ||||||||||||||||||
Snacks, Sauces & Spreads
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383.0 | 359.9 | 6% | 1,182.6 | 1,067.4 | 11% | ||||||||||||||||||
Frozen Bakery Products
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187.3 | 162.2 | 15% | 573.7 | 516.9 | 11% | ||||||||||||||||||
Pasta
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140.4 | - | n/a | 419.8 | - | n/a | ||||||||||||||||||
Total Net Sales
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$ | 1,171.9 | $ | 962.4 | 22% | $ | 3,517.8 | $ | 2,919.3 | 21% | ||||||||||||||
Segment Profit
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||||||||||||||||||||||||
Branded Cereal Products
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$ | 54.0 | $ | 54.1 | 0% | $ | 160.6 | $ | 158.2 | 2% | ||||||||||||||
Other Cereal Products
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21.9 | 22.0 | 0% | 64.4 | 68.2 | -6% | ||||||||||||||||||
Snacks, Sauces & Spreads
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26.0 | 35.9 | -28% | 96.7 | 123.9 | -22% | ||||||||||||||||||
Frozen Bakery Products
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21.5 | 17.5 | 23% | 67.4 | 62.1 | 9% | ||||||||||||||||||
Pasta
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27.1 | - | n/a | 91.9 | - | n/a | ||||||||||||||||||
Total Segment Profit
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$ | 150.5 | $ | 129.5 | 16% | $ | 481.0 | $ | 412.4 | 17% | ||||||||||||||
Segment Profit Margin
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||||||||||||||||||||||||
Branded Cereal Products
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22 | % | 22 | % | 22 | % | 21 | % | ||||||||||||||||
Other Cereal Products
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10 | % | 11 | % | 10 | % | 12 | % | ||||||||||||||||
Snacks, Sauces & Spreads
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7 | % | 10 | % | 8 | % | 12 | % | ||||||||||||||||
Frozen Bakery Products
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11 | % | 11 | % | 12 | % | 12 | % | ||||||||||||||||
Pasta
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19 | % | n/a | 22 | % | n/a | ||||||||||||||||||
Total Segment Profit Margin
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13 | % | 13 | % | 14 | % | 14 | % | ||||||||||||||||
Depreciation and Amortization
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||||||||||||||||||||||||
Branded Cereal Products
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$ | 14.7 | $ | 14.2 | 4% | $ | 43.8 | $ | 41.6 | 5% | ||||||||||||||
Other Cereal Products
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6.4 | 5.3 | 21% | 19.8 | 15.8 | 25% | ||||||||||||||||||
Snacks, Sauces & Spreads
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10.0 | 9.0 | 11% | 30.5 | 25.9 | 18% | ||||||||||||||||||
Frozen Bakery Products
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10.1 | 9.1 | 11% | 29.8 | 26.8 | 11% | ||||||||||||||||||
Pasta
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13.1 | - | n/a | 39.4 | - | n/a | ||||||||||||||||||
Corporate
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2.2 | 1.7 | 29% | 6.2 | 6.6 | -6% | ||||||||||||||||||
Total Depreciation and Amortization
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$ | 56.5 | $ | 39.3 | 44% | $ | 169.5 | $ | 116.7 | 45% |
·
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Base-business net sales, as reported herein, has been adjusted to exclude estimated current year sales attributable to recently acquired businesses for the period corresponding to the pre-acquisition period of the comparative period of the prior year. For each acquired business, the excluded period starts at the beginning of the most recent fiscal year being compared and ends one year after the acquisition date. The Company has included financial measures for the base business (such as sales growth) because they provide useful and comparable trend information regarding the results of our businesses without the effect of the timing of acquisitions.
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·
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Total segment profit is an accumulation of the GAAP measures of profit for each reportable segment that are reported to the chief operating decision maker for purposes of making decisions about allocating resources to each segment and assessing its performance, which gives investors a combined measure of these key amounts.
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·
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Adjusted EBITDA, as presented herein, is defined as earnings before interest, income taxes, depreciation, and amortization, excluding impairment of intangible assets (if any), adjustments for economic hedges, provision for legal settlement, merger and integration costs, and amounts related to plant closures. Ralcorp’s board of directors, management, and investors use Adjusted EBITDA to assess the Company’s performance because it allows them to compare operating performance on a consistent basis across periods by removing the effects of capital structure (such as varying levels of interest expense), items largely outside the control of the management team (such as income taxes), asset base (such as depreciation, amortization, and impairments), derivatives accounting that is not representative of the economic effect of hedges, amounts related to significant legal settlements, and items related to acquisition and disposal activity (such as merger and integration costs and amounts related to plant closures).
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·
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Adjusted diluted earnings per share is an additional measure for comparing the earnings generated by operations between periods, without the effects of intangible asset impairments (if any), adjustments for economic hedges, provision for legal settlement, merger and integration costs, and amounts related to plant closures.
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·
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Adjusted gross profit (as a percentage of net sales) is an additional measure for comparing gross margins between periods, without the effects of adjustments for economic hedges and acquired inventory valuation adjustments (if any).
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·
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Adjusted operating profit (as a percentage of net sales) is an additional measure for comparing operating margins between periods, without the effects of intangible asset impairments (if any), adjustments for economic hedges, provision for legal settlement, merger and integration costs, and amounts related to plant closures
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2011
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2010
|
2011
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2010
|
|||||||||||||
Net Sales
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$ | 1,171.9 | $ | 962.4 | $ | 3,517.8 | $ | 2,919.3 | ||||||||
Cost of goods sold
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(882.2 | ) | (717.1 | ) | (2,570.1 | ) | (2,134.8 | ) | ||||||||
Gross Profit
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289.7 | 245.3 | 947.7 | 784.5 | ||||||||||||
Selling, general and administrative expenses
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(157.4 | ) | (116.3 | ) | (460.7 | ) | (378.7 | ) | ||||||||
Amortization of intangible assets
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(19.6 | ) | (11.0 | ) | (58.5 | ) | (33.6 | ) | ||||||||
Impairment of intangible assets
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(32.1 | ) | - | (32.1 | ) | (20.5 | ) | |||||||||
Other operating expenses, net
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(5.0 | ) | (13.9 | ) | (9.6 | ) | (17.8 | ) | ||||||||
Operating Profit
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75.6 | 104.1 | 386.8 | 333.9 | ||||||||||||
Interest expense, net
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(33.0 | ) | (24.7 | ) | (102.5 | ) | (75.1 | ) | ||||||||
Earnings before Income Taxes
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42.6 | 79.4 | 284.3 | 258.8 | ||||||||||||
Income taxes
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(14.3 | ) | (26.4 | ) | (101.4 | ) | (91.9 | ) | ||||||||
Net Earnings
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$ | 28.3 | $ | 53.0 | $ | 182.9 | $ | 166.9 | ||||||||
Earnings per Share
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||||||||||||||||
Basic
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$ | .51 | $ | .97 | $ | 3.33 | $ | 3.02 | ||||||||
Diluted
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$ | .50 | $ | .95 | $ | 3.28 | $ | 2.98 | ||||||||
Weighted Average Shares Oustanding
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||||||||||||||||
Basic
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54,851 | 54,624 | 54,774 | 55,030 | ||||||||||||
Diluted
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55,918 | 55,510 | 55,615 | 55,856 |
Three Months Ended
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Nine Months Ended
|
|||||||||||||||
June 30,
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June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Adjusted Diluted Earnings per Share
|
$ | 1.15 | $ | 1.11 | $ | 3.84 | $ | 3.43 | ||||||||
Adjustments for economic hedges
|
(.24 | ) | - | (.12 | ) | - | ||||||||||
Provision for legal settlement
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- | - | (.03 | ) | - | |||||||||||
Merger and integration costs
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(.01 | ) | (.16 | ) | (.01 | ) | (.21 | ) | ||||||||
Amounts related to plant closures
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(.03 | ) | - | (.03 | ) | (.01 | ) | |||||||||
Impairment of intangible assets
|
(.37 | ) | - | (.37 | ) | (.23 | ) | |||||||||
Diluted Earnings per Share
|
$ | .50 | $ | .95 | $ | 3.28 | $ | 2.98 | ||||||||
Adjusted EBITDA
|
$ | 189.0 | $ | 157.1 | $ | 605.6 | $ | 490.7 | ||||||||
Interest expense, net
|
(33.0 | ) | (24.7 | ) | (102.5 | ) | (75.1 | ) | ||||||||
Income taxes
|
(14.3 | ) | (26.4 | ) | (101.4 | ) | (91.9 | ) | ||||||||
Depreciation and amortization
|
(56.5 | ) | (39.3 | ) | (169.5 | ) | (116.7 | ) | ||||||||
Adjustments for economic hedges
|
(21.2 | ) | - | (10.4 | ) | - | ||||||||||
Provision for legal settlement
|
- | - | (2.5 | ) | - | |||||||||||
Merger and integration costs
|
(1.2 | ) | (13.5 | ) | (1.5 | ) | (18.6 | ) | ||||||||
Amounts related to plant closures
|
(2.4 | ) | (.2 | ) | (2.8 | ) | (1.0 | ) | ||||||||
Impairment of intangible assets
|
(32.1 | ) | - | (32.1 | ) | (20.5 | ) | |||||||||
Net Earnings
|
$ | 28.3 | $ | 53.0 | $ | 182.9 | $ | 166.9 | ||||||||
Total Segment Profit
|
$ | 150.5 | $ | 129.5 | $ | 481.0 | $ | 412.4 | ||||||||
Interest expense, net
|
(33.0 | ) | (24.7 | ) | (102.5 | ) | (75.1 | ) | ||||||||
Adjustments for economic hedges
|
(21.2 | ) | - | (10.4 | ) | - | ||||||||||
Provision for legal settlement
|
- | - | (2.5 | ) | - | |||||||||||
Merger and integration costs
|
(1.2 | ) | (13.5 | ) | (1.5 | ) | (18.6 | ) | ||||||||
Amounts related to plant closures
|
(2.4 | ) | (.2 | ) | (2.8 | ) | (1.0 | ) | ||||||||
Impairment of intangible assets
|
(32.1 | ) | - | (32.1 | ) | (20.5 | ) | |||||||||
Stock-based compensation expense
|
(4.5 | ) | (2.4 | ) | (12.4 | ) | (11.9 | ) | ||||||||
Systems upgrade and conversion costs
|
(1.5 | ) | (1.2 | ) | (5.4 | ) | (3.8 | ) | ||||||||
Other unallocated corporate expenses
|
(12.0 | ) | (8.1 | ) | (27.1 | ) | (22.7 | ) | ||||||||
Earnings before Income Taxes
|
$ | 42.6 | $ | 79.4 | $ | 284.3 | $ | 258.8 |