(X)
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2011.
|
( )
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ____________.
|
Missouri
|
43-1766315
|
|
(State of Incorporation)
|
(I.R.S. Employer
|
|
Identification No.)
|
||
800 Market Street, Suite 2900
|
||
St. Louis, MO
|
63101
|
|
(Address of principal
|
(Zip Code)
|
|
Executive offices)
|
Large accelerated filer (X)
|
Accelerated filer ( )
|
Non-accelerated filer ( )
|
Smaller reporting company ( )
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PAGE
|
||
PART I.
|
FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements
|
1
|
Condensed Consolidated Statements of Earnings
|
1
|
|
Condensed Consolidated Statements of Comprehensive Income
|
1
|
|
Condensed Consolidated Balance Sheets
|
2
|
|
Condensed Consolidated Statements of Cash Flows
|
3
|
|
Notes to Condensed Consolidated Financial Statements
|
4
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial
|
|
Condition and Results of Operations
|
20
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
32
|
Item 4.
|
Controls and Procedures
|
32
|
PART II.
|
OTHER INFORMATION
|
|
Item 1.
|
Legal Proceedings
|
33
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
34
|
Item 4.
|
Mine Safety Disclosures
|
34
|
Item 6.
|
Exhibits
|
34
|
SIGNATURES
|
34
|
Item 1.
|
Financial Statements.
|
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net Sales
|
$ | 1,380.9 | $ | 1,173.3 | ||||
Cost of goods sold
|
(1,044.6 | ) | (855.3 | ) | ||||
Gross Profit
|
336.3 | 318.0 | ||||||
Selling, general and administrative expenses
|
(173.2 | ) | (147.5 | ) | ||||
Amortization of intangible assets
|
(24.0 | ) | (19.5 | ) | ||||
Other operating expenses, net
|
(3.4 | ) | (3.9 | ) | ||||
Operating Profit
|
135.7 | 147.1 | ||||||
Interest expense, net
|
(34.4 | ) | (35.7 | ) | ||||
Earnings before Income Taxes
|
101.3 | 111.4 | ||||||
Income taxes
|
(36.0 | ) | (40.1 | ) | ||||
Net Earnings
|
$ | 65.3 | $ | 71.3 | ||||
Earnings per Share
|
||||||||
Basic
|
$ | 1.18 | $ | 1.30 | ||||
Diluted
|
$ | 1.16 | $ | 1.28 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net Earnings
|
$ | 65.3 | $ | 71.3 | ||||
Other comprehensive income
|
6.7 | 24.0 | ||||||
Comprehensive Income
|
$ | 72.0 | $ | 95.3 |
|
Dec. 31,
|
Sept. 30,
|
||||||
2011
|
2011
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 61.4 | $ | 50.0 | ||||
Marketable securities
|
1.0 | 8.2 | ||||||
Receivables, net
|
404.9 | 410.4 | ||||||
Inventories
|
532.1 | 490.7 | ||||||
Deferred income taxes
|
19.6 | 19.6 | ||||||
Prepaid expenses and other current assets
|
22.8 | 15.8 | ||||||
Total Current Assets
|
1,041.8 | 994.7 | ||||||
Property, Net
|
1,258.1 | 1,195.3 | ||||||
Goodwill
|
2,820.4 | 2,590.1 | ||||||
Other Intangible Assets, Net
|
1,757.5 | 1,516.5 | ||||||
Other Assets
|
39.8 | 36.6 | ||||||
Total Assets
|
$ | 6,917.6 | $ | 6,333.2 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 318.6 | $ | 313.2 | ||||
Notes payable to banks
|
610.0 | 105.0 | ||||||
Current portion of long-term debt
|
106.3 | 30.7 | ||||||
Other current liabilities
|
237.0 | 223.0 | ||||||
Total Current Liabilities
|
1,271.9 | 671.9 | ||||||
Long-term Debt
|
2,083.6 | 2,172.5 | ||||||
Deferred Income Taxes
|
620.3 | 635.6 | ||||||
Other Liabilities
|
247.6 | 234.0 | ||||||
Total Liabilities
|
4,223.4 | 3,714.0 | ||||||
Commitments and Contingencies | ||||||||
Shareholders' Equity
|
||||||||
Common stock
|
.6 | .6 | ||||||
Additional paid-in capital
|
1,959.9 | 1,957.3 | ||||||
Common stock in treasury, at cost
|
(338.5 | ) | (338.9 | ) | ||||
Retained earnings
|
1,146.2 | 1,080.9 | ||||||
Accumulated other comprehensive loss
|
(74.0 | ) | (80.7 | ) | ||||
Total Shareholders' Equity
|
2,694.2 | 2,619.2 | ||||||
Total Liabilities and Shareholders' Equity
|
$ | 6,917.6 | $ | 6,333.2 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net earnings
|
$ | 65.3 | $ | 71.3 | ||||
Adjustments to reconcile net earnings to net
|
||||||||
cash flow provided by operating activities:
|
||||||||
Depreciation and amortization
|
64.4 | 56.9 | ||||||
Stock-based compensation expense
|
3.9 | 3.8 | ||||||
Deferred income taxes
|
(15.9 | ) | (12.2 | ) | ||||
Other, net
|
6.6 | 57.9 | ||||||
Net Cash Provided by Operating Activities
|
124.3 | 177.7 | ||||||
Cash Flows from Investing Activities
|
||||||||
Business acquisitions, net of cash acquired
|
(570.3 | ) | - | |||||
Additions to property and intangible assets
|
(38.4 | ) | (21.1 | ) | ||||
Purchases of securities
|
- | (10.0 | ) | |||||
Proceeds from sale or maturity of securities
|
7.2 | 10.0 | ||||||
Net Cash Used by Investing Activities
|
(601.5 | ) | (21.1 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Repayments of long-term debt
|
(25.7 | ) | (42.2 | ) | ||||
Net borrowings (repayments) under credit arrangements
|
515.0 | (79.3 | ) | |||||
Purchases of treasury stock
|
(.6 | ) | (.6 | ) | ||||
Proceeds and tax benefits from exercise of stock awards
|
.8 | 2.3 | ||||||
Changes in book cash overdrafts
|
(1.4 | ) | (41.5 | ) | ||||
Other, net
|
- | (.1 | ) | |||||
Net Cash Provided (Used) by Financing Activities
|
488.1 | (161.4 | ) | |||||
Effect of Exchange Rate Changes on Cash
|
.5 | .4 | ||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
11.4 | (4.4 | ) | |||||
Cash and Cash Equivalents, Beginning of Period
|
50.0 | 29.3 | ||||||
Cash and Cash Equivalents, End of Period
|
$ | 61.4 | $ | 24.9 |
Refrigerated
|
||||||||
Dough
|
Annoni
|
|||||||
Cash
|
$ | .9 | $ | .9 | ||||
Receivables
|
14.7 | 8.0 | ||||||
Inventories
|
23.1 | .7 | ||||||
Other current assets
|
.1 | - | ||||||
Property
|
62.6 | 3.6 | ||||||
Goodwill
|
216.6 | 10.7 | ||||||
Other intangible assets
|
259.6 | - | ||||||
Total assets acquired
|
577.6 | 23.9 | ||||||
Accounts payable
|
(14.1 | ) | (3.0 | ) | ||||
Other current liabilities
|
(8.8 | ) | (1.1 | ) | ||||
Other liabilities
|
(3.2 | ) | (3.0 | ) | ||||
Total liabilities assumed
|
(26.1 | ) | (7.1 | ) | ||||
Net assets acquired
|
$ | 551.5 | $ | 16.8 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net sales
|
$ | 1,385.5 | $ | 1,272.6 | ||||
Net earnings
|
65.7 | 77.0 | ||||||
Basic earnings per share
|
1.19 | 1.40 | ||||||
Diluted earnings per share
|
1.17 | 1.39 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Pension Benefits
|
||||||||
Service cost
|
$ | 1.8 | $ | 1.4 | ||||
Interest cost
|
3.2 | 3.1 | ||||||
Expected return on plan assets
|
(5.2 | ) | (4.7 | ) | ||||
Amortization of prior service cost
|
.1 | .1 | ||||||
Amortization of net loss
|
1.6 | 1.2 | ||||||
Net periodic benefit cost
|
$ | 1.5 | $ | 1.1 | ||||
Other Postretirement Benefits
|
||||||||
Service cost
|
$ | .6 | $ | .6 | ||||
Interest cost
|
1.6 | 1.3 | ||||||
Amortization of prior service cost
|
(.3 | ) | (.3 | ) | ||||
Amortization of net loss
|
.4 | - | ||||||
Net periodic benefit cost
|
$ | 2.3 | $ | 1.6 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Weighted Average Shares
|
||||||||
for Basic Earnings per Share
|
55,013 | 54,703 | ||||||
Dilutive effect of:
|
||||||||
Stock options
|
205 | 270 | ||||||
Stock appreciation rights
|
600 | 222 | ||||||
Restricted stock awards
|
203 | 230 | ||||||
Weighted Average Shares
|
||||||||
for Diluted Earnings per Share
|
56,021 | 55,425 |
SARs at $66.07 per share
|
504 | |
SARs at $58.79 per share
|
8 | |
SARs at $56.27 per share
|
372 | |
SARs at $57.14 per share
|
13 | |
SARs at $57.45 per share
|
536 | |
SARs at $61.98 per share
|
6 |
Dec. 31,
|
Sept. 30,
|
|||||||
2011
|
2011
|
|||||||
Raw materials (thousands of pounds)
|
124,900 | 679,393 | ||||||
Natural gas (thousands of MMBTUs)
|
1,990 | 3,200 | ||||||
Other fuel (thousands of gallons)
|
10,627 | 8,001 | ||||||
Currency (thousands of dollars)
|
59,000 | 69,450 |
Fair Value
|
|||||||||
Dec. 31
|
Sept. 30,
|
||||||||
2011
|
2011
|
Balance Sheet Location
|
|||||||
Liability Derivatives
|
|||||||||
Commodity contracts
|
$ | 25.5 | $ | 49.0 |
Other current liabilities
|
||||
Foreign exchange contracts
|
2.3 | 4.1 |
Other liabilities
|
||||||
$ | 27.8 | $ | 53.1 | ||||||
Asset Derivatives
|
|||||||||
Commodity contracts
|
$ | .9 | $ | .3 |
Prepaid expenses and other current assets
|
||||
Foreign exchange contracts
|
1.4 | - |
Prepaid expenses and other current assets
|
||||||
$ | 2.3 | $ | .3 |
Gain (Loss)
|
|||||||||||||||||||||||||
Gain (Loss)
|
Recognized in
|
||||||||||||||||||||||||
Amount of Gain
|
Reclassified from
|
Earnings [Ineffective
|
|||||||||||||||||||||||
(Loss) Recognized
|
Accumulated OCI
|
Portion and Amount
|
|||||||||||||||||||||||
Derivatives in
|
in OCI
|
into Earnings
|
Excluded from
|
||||||||||||||||||||||
ASC Topic 815 Cash Flow
|
[Effective Portion]
|
[Effective Portion]
|
Effectiveness Testing]
|
||||||||||||||||||||||
Hedging Relationships
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
Location in Earnings
|
||||||||||||||||||
Commodity contracts
|
$ | (.2 | ) | $ | 19.2 | $ | 1.9 | $ | .3 | $ | .4 | $ | (.1 | ) |
Cost of goods sold
|
||||||||||
Foreign exchange contracts
|
2.4 | 1.8 | (.7 | ) | .7 | - | - |
SG&A expenses
|
|||||||||||||||||
Interest rate contracts
|
- | - | (.4 | ) | (.4 | ) | - | - |
Interest expense, net
|
||||||||||||||||
$ | 2.2 | $ | 21.0 | $ | .8 | $ | .6 | $ | .4 | $ | (.1 | ) |
Derivatives Not Designated
|
Amount of Gain (Loss)
|
||||||||
as Hedging Instruments
|
Recognized in Earnings
|
Location of Gain (Loss)
|
|||||||
Under ASC Topic 815
|
2011
|
2010
|
Recognized in Earnings
|
||||||
Commodity contracts
|
$ | (5.8 | ) | $ | 4.8 |
Cost of goods sold
|
December 31, 2011
|
September 30, 2011
|
|||||||||||||||||||||||
Total
|
Level 1
|
Level 2
|
Total
|
Level 1
|
Level 2
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Marketable securities
|
$ | 1.0 | $ | 1.0 | $ | - | $ | 8.2 | $ | 8.2 | $ | - | ||||||||||||
Derivative assets
|
2.3 | - | 2.3 | .3 | - | .3 | ||||||||||||||||||
Deferred compensation investment
|
27.3 | 27.3 | - | 23.7 | 23.7 | - | ||||||||||||||||||
$ | 30.6 | $ | 28.3 | $ | 2.3 | $ | 32.2 | $ | 31.9 | $ | .3 | |||||||||||||
Liabilities
|
||||||||||||||||||||||||
Derivative liabilities
|
$ | 27.8 | $ | - | $ | 27.8 | $ | 53.1 | $ | - | $ | 53.1 | ||||||||||||
Deferred compensation liabilities
|
41.8 | - | 41.8 | 37.3 | - | 37.3 | ||||||||||||||||||
$ | 69.6 | $ | - | $ | 69.6 | $ | 90.4 | $ | - | $ | 90.4 |
Level 1 –
|
Inputs are quoted prices in active markets for identical assets or liabilities.
|
Level 2 –
|
Inputs are quoted prices of similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
|
Level 3 –
|
Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.
|
Dec. 31,
|
Sept. 30,
|
|||||||
2011
|
2011
|
|||||||
Raw materials and supplies
|
$ | 223.4 | $ | 201.9 | ||||
Finished products
|
308.7 | 288.8 | ||||||
$ | 532.1 | $ | 490.7 |
Dec. 31,
|
Sept. 30,
|
|||||||
2011
|
2011
|
|||||||
Property at cost
|
$ | 2,072.6 | $ | 1,969.4 | ||||
Accumulated depreciation
|
(814.5 | ) | (774.1 | ) | ||||
$ | 1,258.1 | $ | 1,195.3 |
Branded
|
Other
|
Snacks,
|
Frozen
|
|||||||||||||||||||||
Cereal
|
Cereal
|
Sauces
|
Bakery
|
|||||||||||||||||||||
Products
|
Products
|
& Spreads
|
Products
|
Pasta
|
Total
|
|||||||||||||||||||
Balance, September 30, 2011
|
||||||||||||||||||||||||
Goodwill (gross)
|
$ | 1,794.0 | $ | 47.2 | $ | 292.8 | $ | 366.3 | $ | 534.1 | $ | 3,034.4 | ||||||||||||
Accumulated impairment losses
|
(364.8 | ) | - | (79.5 | ) | - | - | (444.3 | ) | |||||||||||||||
Goodwill (net)
|
$ | 1,429.2 | $ | 47.2 | $ | 213.3 | $ | 366.3 | $ | 534.1 | $ | 2,590.1 | ||||||||||||
Goodwill acquired
|
- | - | - | 216.6 | 10.7 | 227.3 | ||||||||||||||||||
Currency translation adjustment
|
.2 | - | 1.2 | 1.6 | - | 3.0 | ||||||||||||||||||
Balance, December 31, 2011
|
||||||||||||||||||||||||
Goodwill (gross)
|
$ | 1,794.2 | $ | 47.2 | $ | 294.0 | $ | 584.5 | $ | 544.8 | $ | 3,264.7 | ||||||||||||
Accumulated impairment losses
|
(364.8 | ) | - | (79.5 | ) | - | - | (444.3 | ) | |||||||||||||||
Goodwill (net)
|
$ | 1,429.4 | $ | 47.2 | $ | 214.5 | $ | 584.5 | $ | 544.8 | $ | 2,820.4 |
Dec. 31,
|
Sept. 30,
|
|||||||
2011
|
2011
|
|||||||
Subject to amortization:
|
||||||||
Computer software
|
$ | 79.1 | $ | 75.3 | ||||
Customer relationships
|
1,049.1 | 836.9 | ||||||
Trademarks/brands
|
127.0 | 126.5 | ||||||
Other
|
62.1 | 13.1 | ||||||
1,317.3 | 1,051.8 | |||||||
Accumulated amortization
|
(284.2 | ) | (259.7 | ) | ||||
$ | 1,033.1 | $ | 792.1 | |||||
Not subject to amortization:
|
||||||||
Trademarks/brands
|
724.4 | 724.4 | ||||||
$ | 1,757.5 | $ | 1,516.5 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Computer software
|
$ | 2.1 | $ | 1.8 | ||||
Customer relationships
|
19.6 | 15.4 | ||||||
Trademarks/brands
|
1.8 | 1.8 | ||||||
Other
|
.5 | .5 | ||||||
$ | 24.0 | $ | 19.5 |
December 31, 2011
|
September 30, 2011
|
||||||||
Balance
|
Rate
|
Balance
|
Rate
|
||||||
Fixed Rate Senior Notes, Series C
|
$ |
50.0
|
5.43%
|
$ |
50.0
|
5.43%
|
|||
Fixed Rate Senior Notes, Series D
|
21.4
|
4.76%
|
32.1
|
4.76%
|
|||||
Fixed Rate Senior Notes, Series E
|
100.0
|
5.57%
|
100.0
|
5.57%
|
|||||
Fixed Rate Senior Notes, Series F
|
75.0
|
5.43%
|
75.0
|
5.43%
|
|||||
Fixed Rate Senior Notes, Series I-1
|
75.0
|
5.56%
|
75.0
|
5.56%
|
|||||
Fixed Rate Senior Notes, Series I-2
|
25.0
|
5.58%
|
25.0
|
5.58%
|
|||||
Fixed Rate Senior Notes, Series J
|
100.0
|
5.93%
|
100.0
|
5.93%
|
|||||
Fixed Rate Senior Notes maturing 2018
|
577.5
|
7.29%
|
577.5
|
7.29%
|
|||||
Floating Rate Senior Notes maturing 2018
|
20.0
|
3.00%
|
20.0
|
2.80%
|
|||||
Fixed Rate Senior Notes maturing 2020
|
67.0
|
7.39%
|
67.0
|
7.39%
|
|||||
4.95% Senior Notes maturing 2020
|
300.0
|
4.95%
|
300.0
|
4.95%
|
|||||
Fixed Rate Senior Notes maturing 2039
|
450.0
|
6.63%
|
450.0
|
6.63%
|
|||||
Fixed Rate Senior Notes, Series 2009A
|
50.0
|
7.45%
|
50.0
|
7.45%
|
|||||
Fixed Rate Senior Notes, Series 2009B
|
50.0
|
7.60%
|
50.0
|
7.60%
|
|||||
2010 Revolving Credit Agreement
|
30.0
|
2.62%
|
19.9
|
2.62%
|
|||||
2010 Term Loan
|
175.0
|
2.75%
|
190.0
|
2.75%
|
|||||
Other
|
3.0
|
Various
|
-
|
Various
|
|||||
2,168.9
|
2,181.5
|
||||||||
Plus: Unamortized premium (discount), net
|
3.1
|
3.1
|
|||||||
Plus: Unamortized adjustment related
|
|||||||||
to interest rate fair value hedge
|
17.9
|
18.6
|
|||||||
Less: Current portion
|
(106.3
|
) |
(30.7
|
) | |||||
$ |
2,083.6
|
$ |
2,172.5
|
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net Sales
|
||||||||
Branded Cereal Products
|
$ | 214.4 | $ | 221.6 | ||||
Other Cereal Products
|
226.2 | 204.7 | ||||||
Snacks, Sauces & Spreads
|
473.6 | 417.4 | ||||||
Frozen Bakery Products
|
308.0 | 193.7 | ||||||
Pasta
|
158.7 | 135.9 | ||||||
Total
|
$ | 1,380.9 | $ | 1,173.3 | ||||
Segment Operating Profit
|
||||||||
Branded Cereal Products
|
$ | 34.9 | $ | 49.7 | ||||
Other Cereal Products
|
28.8 | 22.5 | ||||||
Snacks, Sauces & Spreads
|
41.1 | 37.4 | ||||||
Frozen Bakery Products
|
33.9 | 23.0 | ||||||
Pasta
|
26.7 | 28.2 | ||||||
Total segment operating profit
|
165.4 | 160.8 | ||||||
Interest expense, net
|
(34.4 | ) | (35.7 | ) | ||||
Adjustments for economic hedges
|
(5.8 | ) | 4.8 | |||||
Post separation costs
|
(2.7 | ) | - | |||||
Merger and integration costs
|
(5.6 | ) | (.2 | ) | ||||
Accelerated amortization of intangible assets
|
(1.3 | ) | (1.3 | ) | ||||
Provision for legal settlement
|
- | (2.5 | ) | |||||
Amounts related to plant closures
|
(.1 | ) | (.2 | ) | ||||
Stock-based compensation expense
|
(3.9 | ) | (3.8 | ) | ||||
Systems upgrade and conversion costs
|
(1.6 | ) | (2.4 | ) | ||||
Other unallocated corporate expenses
|
(8.7 | ) | (8.1 | ) | ||||
Earnings before income taxes
|
$ | 101.3 | $ | 111.4 | ||||
Depreciation and Amortization
|
||||||||
Branded Cereal Products
|
$ | 15.0 | $ | 14.7 | ||||
Other Cereal Products
|
5.3 | 5.5 | ||||||
Snacks, Sauces & Spreads
|
10.6 | 10.3 | ||||||
Frozen Bakery Products
|
16.9 | 10.0 | ||||||
Pasta
|
12.7 | 13.2 | ||||||
Corporate
|
3.9 | 3.2 | ||||||
Total
|
$ | 64.4 | $ | 56.9 | ||||
Dec. 31, | Sept. 30, | |||||||
2011 | 2011 | |||||||
Assets
|
||||||||
Branded Cereal Products
|
$ | 2,720.1 | $ | 2,670.6 | ||||
Other Cereal Products
|
279.4 | 263.4 | ||||||
Snacks, Sauces & Spreads
|
799.7 | 799.0 | ||||||
Frozen Bakery Products
|
1,282.1 | 712.9 | ||||||
Pasta
|
1,484.1 | 1,463.0 | ||||||
Total segment assets
|
6,565.4 | 5,908.9 | ||||||
Cash and cash equivalents
|
61.4 | 50.0 | ||||||
Other unallocated corporate assets
|
290.8 | 374.3 | ||||||
Total
|
$ | 6,917.6 | $ | 6,333.2 |
Three Months Ended December 31, 2011
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Net Sales
|
$ | 141.5 | $ | 1,182.5 | $ | 101.6 | $ | (44.7 | ) | $ | 1,380.9 | |||||||||
Other intercompany revenues
|
.5 | 3.0 | 13.5 | (17.0 | ) | - | ||||||||||||||
Cost of goods sold
|
(109.4 | ) | (898.2 | ) | (81.7 | ) | 44.7 | (1,044.6 | ) | |||||||||||
Gross Profit
|
32.6 | 287.3 | 33.4 | (17.0 | ) | 336.3 | ||||||||||||||
Selling, general and administrative expenses
|
(37.7 | ) | (135.2 | ) | (17.3 | ) | 17.0 | (173.2 | ) | |||||||||||
Amortization of intangible assets
|
(2.9 | ) | (19.6 | ) | (1.5 | ) | - | (24.0 | ) | |||||||||||
Other operating expenses, net
|
(2.8 | ) | (.5 | ) | (.1 | ) | - | (3.4 | ) | |||||||||||
Operating Profit
|
(10.8 | ) | 132.0 | 14.5 | - | 135.7 | ||||||||||||||
Interest (expense) income, net
|
(34.1 | ) | .4 | (.7 | ) | - | (34.4 | ) | ||||||||||||
Earnings before Income Taxes and Equity Earnings
|
(44.9 | ) | 132.4 | 13.8 | - | 101.3 | ||||||||||||||
Income taxes
|
(15.9 | ) | (15.2 | ) | (4.9 | ) | - | (36.0 | ) | |||||||||||
Earnings before Equity Earnings
|
(60.8 | ) | 117.2 | 8.9 | - | 65.3 | ||||||||||||||
Equity in earnings of subsidiaries
|
126.1 | 5.8 | - | (131.9 | ) | - | ||||||||||||||
Net Earnings
|
$ | 65.3 | $ | 123.0 | $ | 8.9 | $ | (131.9 | ) | $ | 65.3 |
Three Months Ended December 31, 2010
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Net Sales
|
$ | 134.4 | $ | 972.6 | $ | 94.6 | $ | (28.3 | ) | $ | 1,173.3 | |||||||||
Other intercompany revenues
|
.5 | 2.7 | 12.3 | (15.5 | ) | - | ||||||||||||||
Cost of goods sold
|
(95.9 | ) | (708.6 | ) | (79.1 | ) | 28.3 | (855.3 | ) | |||||||||||
Gross Profit
|
39.0 | 266.7 | 27.8 | (15.5 | ) | 318.0 | ||||||||||||||
Selling, general and administrative expenses
|
(31.5 | ) | (113.4 | ) | (18.1 | ) | 15.5 | (147.5 | ) | |||||||||||
Amortization of intangible assets
|
(1.3 | ) | (16.6 | ) | (1.6 | ) | - | (19.5 | ) | |||||||||||
Other operating expenses, net
|
(.4 | ) | (3.5 | ) | - | - | (3.9 | ) | ||||||||||||
Operating Profit
|
5.8 | 133.2 | 8.1 | - | 147.1 | |||||||||||||||
Interest (expense) income, net
|
(36.1 | ) | .2 | .2 | - | (35.7 | ) | |||||||||||||
Earnings before Income Taxes and Equity Earnings
|
(30.3 | ) | 133.4 | 8.3 | - | 111.4 | ||||||||||||||
Income taxes
|
10.9 | (47.9 | ) | (3.1 | ) | - | (40.1 | ) | ||||||||||||
Earnings before Equity Earnings
|
(19.4 | ) | 85.5 | 5.2 | - | 71.3 | ||||||||||||||
Equity in earnings of subsidiaries
|
90.7 | 1.6 | - | (92.3 | ) | - | ||||||||||||||
Net Earnings
|
$ | 71.3 | $ | 87.1 | $ | 5.2 | $ | (92.3 | ) | $ | 71.3 |
December 31, 2011
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | .9 | $ | 3.2 | $ | 57.3 | $ | - | $ | 61.4 | ||||||||||
Marketable securities
|
1.0 | - | - | - | 1.0 | |||||||||||||||
Receivables, net
|
41.1 | 108.8 | 259.0 | (4.0 | ) | 404.9 | ||||||||||||||
Inventories
|
74.4 | 430.5 | 27.2 | - | 532.1 | |||||||||||||||
Deferred income taxes
|
14.4 | 4.8 | .4 | - | 19.6 | |||||||||||||||
Prepaid expenses and other current assets
|
8.9 | 11.0 | 2.9 | - | 22.8 | |||||||||||||||
Total Current Assets
|
140.7 | 558.3 | 346.8 | (4.0 | ) | 1,041.8 | ||||||||||||||
Intercompany Notes and Interest
|
- | 88.9 | 106.6 | (195.5 | ) | - | ||||||||||||||
Investment in Subsidiaries
|
5,530.4 | 299.6 | - | (5,830.0 | ) | - | ||||||||||||||
Deferred Income Taxes
|
141.0 | - | - | (141.0 | ) | - | ||||||||||||||
Property
|
254.3 | 1,578.6 | 239.7 | - | 2,072.6 | |||||||||||||||
Accumulated Depreciation
|
(180.5 | ) | (570.7 | ) | (63.3 | ) | - | (814.5 | ) | |||||||||||
Goodwill
|
- | 2,707.5 | 112.9 | - | 2,820.4 | |||||||||||||||
Other Intangible Assets
|
67.8 | 1,901.0 | 72.9 | - | 2,041.7 | |||||||||||||||
Accumulated Amortization
|
(42.5 | ) | (224.0 | ) | (17.7 | ) | - | (284.2 | ) | |||||||||||
Other Assets
|
11.0 | 28.6 | .2 | - | 39.8 | |||||||||||||||
Total Assets
|
$ | 5,922.2 | $ | 6,367.8 | $ | 798.1 | $ | (6,170.5 | ) | $ | 6,917.6 | |||||||||
Liabilities and Shareholders' Equity
|
||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||
Accounts payable
|
$ | 71.3 | $ | 215.0 | $ | 36.3 | $ | (4.0 | ) | $ | 318.6 | |||||||||
Notes payable to banks
|
550.0 | - | 60.0 | - | 610.0 | |||||||||||||||
Current portion of long-term debt
|
105.8 | - | .5 | - | 106.3 | |||||||||||||||
Other current liabilities
|
128.1 | 82.7 | 26.2 | - | 237.0 | |||||||||||||||
Total Current Liabilities
|
855.2 | 297.7 | 123.0 | (4.0 | ) | 1,271.9 | ||||||||||||||
Intercompany Notes and Interest
|
91.5 | 15.1 | 88.9 | (195.5 | ) | - | ||||||||||||||
Long-term Debt
|
2,081.2 | (.1 | ) | 2.5 | - | 2,083.6 | ||||||||||||||
Deferred Income Taxes
|
- | 750.2 | 11.1 | (141.0 | ) | 620.3 | ||||||||||||||
Other Liabilities
|
200.1 | 7.6 | 39.9 | - | 247.6 | |||||||||||||||
Total Liabilities
|
3,228.0 | 1,070.5 | 265.4 | (340.5 | ) | 4,223.4 | ||||||||||||||
Shareholders' Equity
|
||||||||||||||||||||
Common stock
|
.6 | - | - | - | .6 | |||||||||||||||
Other shareholders' equity
|
2,693.6 | 5,297.3 | 532.7 | (5,830.0 | ) | 2,693.6 | ||||||||||||||
Total Shareholders' Equity
|
2,694.2 | 5,297.3 | 532.7 | (5,830.0 | ) | 2,694.2 | ||||||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 5,922.2 | $ | 6,367.8 | $ | 798.1 | $ | (6,170.5 | ) | $ | 6,917.6 |
September 30, 2011
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 2.5 | $ | - | $ | 50.8 | $ | (3.3 | ) | $ | 50.0 | |||||||||
Marketable securities
|
8.2 | - | - | - | 8.2 | |||||||||||||||
Receivables, net
|
57.5 | 70.0 | 284.7 | (1.8 | ) | 410.4 | ||||||||||||||
Inventories
|
65.2 | 395.3 | 30.2 | - | 490.7 | |||||||||||||||
Deferred income taxes
|
14.4 | 4.8 | .4 | - | 19.6 | |||||||||||||||
Prepaid expenses and other current assets
|
3.4 | 10.3 | 2.1 | - | 15.8 | |||||||||||||||
Total Current Assets
|
151.2 | 480.4 | 368.2 | (5.1 | ) | 994.7 | ||||||||||||||
Intercompany Notes and Interest
|
- | 88.8 | 130.7 | (219.5 | ) | - | ||||||||||||||
Investment in Subsidiaries
|
4,921.9 | 267.7 | - | (5,189.6 | ) | - | ||||||||||||||
Deferred Income Taxes
|
141.0 | - | - | (141.0 | ) | - | ||||||||||||||
Property
|
252.5 | 1,488.8 | 228.1 | - | 1,969.4 | |||||||||||||||
Accumulated Depreciation
|
(177.1 | ) | (541.9 | ) | (55.1 | ) | - | (774.1 | ) | |||||||||||
Goodwill
|
- | 2,491.0 | 99.1 | - | 2,590.1 | |||||||||||||||
Other Intangible Assets
|
66.3 | 1,639.2 | 70.7 | - | 1,776.2 | |||||||||||||||
Accumulated Amortization
|
(40.8 | ) | (203.2 | ) | (15.7 | ) | - | (259.7 | ) | |||||||||||
Other Assets
|
11.5 | 24.9 | .2 | - | 36.6 | |||||||||||||||
Total Assets
|
$ | 5,326.5 | $ | 5,735.7 | $ | 826.2 | $ | (5,555.2 | ) | $ | 6,333.2 | |||||||||
Liabilities and Shareholders' Equity
|
||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||
Accounts payable | $ | 74.7 | $ | 201.8 | $ | 41.8 | $ | (5.1 | ) | $ | 313.2 | |||||||||
Notes payable to banks | - | - | 105.0 | - | 105.0 | |||||||||||||||
Current portion of long-term debt
|
30.7 | - | - | - | 30.7 | |||||||||||||||
Other current liabilities
|
120.2 | 84.5 | 18.3 | - | 223.0 | |||||||||||||||
Total Current Liabilities
|
225.6 | 286.3 | 165.1 | (5.1 | ) | 671.9 | ||||||||||||||
Intercompany Notes and Interest
|
115.6 | 15.1 | 88.8 | (219.5 | ) | - | ||||||||||||||
Long-term Debt
|
2,172.5 | - | - | - | 2,172.5 | |||||||||||||||
Deferred Income Taxes
|
- | 765.5 | 11.1 | (141.0 | ) | 635.6 | ||||||||||||||
Other Liabilities
|
193.6 | 3.2 | 37.2 | - | 234.0 | |||||||||||||||
Total Liabilities
|
2,707.3 | 1,070.1 | 302.2 | (365.6 | ) | 3,714.0 | ||||||||||||||
Shareholders' Equity
|
||||||||||||||||||||
Common stock
|
.6 | - | - | - | .6 | |||||||||||||||
Other shareholders' equity
|
2,618.6 | 4,665.6 | 524.0 | (5,189.6 | ) | 2,618.6 | ||||||||||||||
Total Shareholders' Equity
|
2,619.2 | 4,665.6 | 524.0 | (5,189.6 | ) | 2,619.2 | ||||||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 5,326.5 | $ | 5,735.7 | $ | 826.2 | $ | (5,555.2 | ) | $ | 6,333.2 |
Three Months Ended December 31, 2011
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations |
Consolidated
|
||||||||||||||||
Net Cash Provided (Used) by Operating Activities
|
$ | 64.6 | $ | (38.7 | ) | $ | 95.1 | $ | 3.3 | $ | 124.3 | |||||||||
Cash Flows from Investing Activities
|
||||||||||||||||||||
Business acquisitions, net of cash acquired
|
- | (554.4 | ) | (15.9 | ) | (570.3 | ) | |||||||||||||
Additions to property and intangible assets
|
(3.3 | ) | (33.0 | ) | (2.1 | ) | - | (38.4 | ) | |||||||||||
Proceeds from sale or maturity of securities
|
7.2 | - | - | - | 7.2 | |||||||||||||||
Intercompany investments and advances
|
(599.8 | ) | 625.9 | (26.1 | ) | - | - | |||||||||||||
Net Cash (Used) Provided by Investing Activities
|
(595.9 | ) | 38.5 | (44.1 | ) | - | (601.5 | ) | ||||||||||||
Cash Flows from Financing Activities
|
||||||||||||||||||||
Repayments of long-term debt
|
(25.7 | ) | - | - | - | (25.7 | ) | |||||||||||||
Net borrowings (repayments) under credit arrangements
|
560.0 | - | (45.0 | ) | - | 515.0 | ||||||||||||||
Purchase of treasury stock
|
(.6 | ) | - | - | - | (.6 | ) | |||||||||||||
Proceeds and tax benefits from exercise of stock awards
|
.8 | - | - | - | .8 | |||||||||||||||
Changes in book cash overdrafts
|
(4.8 | ) | 3.4 | - | - | (1.4 | ) | |||||||||||||
Net Cash Provided (Used) by Financing Activities
|
529.7 | 3.4 | (45.0 | ) | - | 488.1 | ||||||||||||||
Effect of Exchange Rate Changes on Cash
|
- | - | .5 | - | .5 | |||||||||||||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(1.6 | ) | 3.2 | 6.5 | 3.3 | 11.4 | ||||||||||||||
Cash and Cash Equivalents, Beginning of Period
|
2.5 | - | 50.8 | (3.3 | ) | 50.0 | ||||||||||||||
Cash and Cash Equivalents, End of Period
|
$ | .9 | $ | 3.2 | $ | 57.3 | $ | - | $ | 61.4 |
Three Months Ended December 31, 2010
|
||||||||||||||||||||
Parent
|
Guarantor
|
Non-Guarantor
|
||||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Eliminations |
Consolidated
|
||||||||||||||||
Net Cash Provided (Used) by Operating Activities
|
$ | 270.7 | $ | (6.1 | ) | $ | (78.8 | ) | $ | (8.1 | ) | $ | 177.7 | |||||||
Cash Flows from Investing Activities
|
||||||||||||||||||||
Additions to property and intangible assets
|
(.7 | ) | (21.2 | ) | .8 | - | (21.1 | ) | ||||||||||||
Purchases of securities
|
(10.0 | ) | - | - | - | (10.0 | ) | |||||||||||||
Proceeds from sale or maturity of securities
|
10.0 | - | - | - | 10.0 | |||||||||||||||
Intercompany investments and advances
|
(35.5 | ) | 59.5 | (24.0 | ) | - | - | |||||||||||||
Net Cash (Used) Provided by Investing Activities
|
(36.2 | ) | 38.3 | (23.2 | ) | - | (21.1 | ) | ||||||||||||
Cash Flows from Financing Activities
|
||||||||||||||||||||
Repayments of long-term debt
|
(42.2 | ) | - | - | - | (42.2 | ) | |||||||||||||
Net (repayments) borrowings under credit arrangements
|
(179.3 | ) | - | 100.0 | - | (79.3 | ) | |||||||||||||
Purchase of treasury stock
|
(.6 | ) | - | - | - | (.6 | ) | |||||||||||||
Proceeds and tax benefits from exercise of stock awards
|
2.3 | - | - | - | 2.3 | |||||||||||||||
Changes in book cash overdrafts
|
(9.1 | ) | (32.4 | ) | - | - | (41.5 | ) | ||||||||||||
Other, net
|
- | (.1 | ) | - | - | (.1 | ) | |||||||||||||
Net Cash (Used) Provided by Financing Activities
|
(228.9 | ) | (32.5 | ) | 100.0 | - | (161.4 | ) | ||||||||||||
Effect of Exchange Rate Changes on Cash
|
- | - | .4 | - | .4 | |||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
5.6 | (.3 | ) | (1.6 | ) | (8.1 | ) | (4.4 | ) | |||||||||||
Cash and Cash Equivalents, Beginning of Period
|
.6 | .3 | 28.4 | 29.3 | ||||||||||||||||
Cash and Cash Equivalents, End of Period
|
$ | 6.2 | $ | - | $ | 26.8 | $ | (8.1 | ) | $ | 24.9 |
•
|
The Indenture contains covenants that limit Ralcorp’s ability and the ability of Ralcorp's subsidiaries to, among other things: cause Ralcorp's leverage ratio to exceed 3.5 to 1 at the end of any fiscal quarter, without paying additional interest, or cause Ralcorp’s leverage ratio to exceed 3.75 to 1, at the end of any fiscal quarter, or 3.5 to 1, for the two successive fiscal quarters immediately following a period during which it exceeded 3.5 to 1, in any case; cause Ralcorp’s consolidated adjusted net worth to fall below a specified amount; incur priority debt in an amount exceeding 20% of Ralcorp’s consolidated adjusted net worth; sell assets, including the stock of its subsidiaries; create certain liens; engage in transactions with affiliates; merge or consolidate with other entities; change the nature of its business or violate foreign assets control regulations. These covenants are subject to important exceptions and qualifications set forth in the Indenture.
|
•
|
The Indenture provides for the payment of additional interest in the amount of 1.00% in the event that the Company’s 6.625% Senior Notes due August 15, 2039 fail to have an investment grade rating from at least two of the rating agencies.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Three Months Ended December 31,
|
||||||||||||
2011
|
2010
|
% Change
|
||||||||||
(dollars in millions, except per share data)
|
||||||||||||
Net Sales
|
$ | 1,380.9 | $ | 1,173.3 | 18% | |||||||
Operating Profit
|
135.7 | 147.1 | -8% | |||||||||
Net Earnings
|
65.3 | 71.3 | -8% | |||||||||
Diluted Earnings per Share
|
$ | 1.16 | $ | 1.28 | -9% | |||||||
Adjusted Diluted Earnings per Share (1)
|
$ | 1.33 | $ | 1.27 | 5% | |||||||
(1) Reconciliation to Diluted Earnings per Share:
|
||||||||||||
Adjusted Diluted Earnings per Share
|
$ | 1.33 | $ | 1.27 | ||||||||
Adjustments for economic hedges
|
(.07 | ) | .05 | |||||||||
Post separation costs
|
(.03 | ) | - | |||||||||
Merger and integration costs
|
(.06 | ) | - | |||||||||
Accelerated amortization of intangible assets
|
(.01 | ) | (.01 | ) | ||||||||
Provision for legal settlement
|
- | (.03 | ) | |||||||||
Diluted Earnings per Share
|
$ | 1.16 | $ | 1.28 |
Three Months Ended
|
||||||||||||
December 31,
|
||||||||||||
2011
|
2010
|
% Change
|
||||||||||
(dollars in millions)
|
||||||||||||
Base-business Net Sales
|
$ | 1,279.9 | $ | 1,173.3 | 9% | |||||||
Net sales from recent acquisitions
|
||||||||||||
excluded from base-business net sales:
|
||||||||||||
Refrigerated Dough
|
101.0 | - | 9% | |||||||||
Net Sales
|
$ | 1,380.9 | $ | 1,173.3 | 18% |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
(% of net sales)
|
||||||||
Gross Profit
|
24.4% | 27.1% | ||||||
Selling, general and administrative expenses
|
-12.5% | -12.6% | ||||||
Amortization of intangible assets
|
-1.8% | -1.7% | ||||||
Other operating expenses, net
|
-.2% | -.3% | ||||||
Operating Profit
|
9.8% | 12.5% | ||||||
Adjusted Gross Profit
|
24.9% | 26.7% | ||||||
Adjustments for economic hedges
|
-.4% | .4% | ||||||
Merger and integration costs
|
-.1% | - | ||||||
Gross Profit
|
24.4% | 27.1% | ||||||
Adjusted Selling, General & Administrative Expenses
|
-12.2% | -12.6% | ||||||
Merger and integration costs
|
-.1% | - | ||||||
Post separation costs
|
-.2% | - | ||||||
Selling, General & Administrative Expenses
|
-12.5% | -12.6% | ||||||
Adjusted Operating Profit
|
10.9% | 12.4% | ||||||
Adjustments for economic hedges
|
-.4% | .4% | ||||||
Post separation costs
|
-.2% | - | ||||||
Merger and integration costs
|
-.4% | - | ||||||
Accelerated amortization of intangible assets
|
-.1% | -.1% | ||||||
Provision for legal settlement
|
- | -.2% | ||||||
Operating Profit
|
9.8% | 12.5% |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
(dollars in millions)
|
||||||||
Adjusted EBITDA
|
$ | 214.3 | $ | 202.0 | ||||
Interest expense, net
|
(34.4 | ) | (35.7 | ) | ||||
Income taxes
|
(36.0 | ) | (40.1 | ) | ||||
Depreciation and amortization
|
(64.4 | ) | (56.9 | ) | ||||
Adjustments for economic hedges
|
(5.8 | ) | 4.8 | |||||
Post separation costs
|
(2.7 | ) | - | |||||
Merger and integration costs
|
(5.6 | ) | (.2 | ) | ||||
Provision for legal settlement
|
- | (2.5 | ) | |||||
Amounts related to plant closures (excluding depreciation)
|
(.1 | ) | (.1 | ) | ||||
Net Earnings
|
$ | 65.3 | $ | 71.3 |
Three Months Ended
|
||||||||||||
December 31,
|
||||||||||||
2011
|
2010
|
% Change
|
||||||||||
(pounds in millions)
|
||||||||||||
Sales Volume
|
||||||||||||
Branded Cereal Products
|
98.0 | 103.9 | -6% | |||||||||
Other Cereal Products
|
133.3 | 134.5 | -1% | |||||||||
Snacks, Sauces & Spreads
|
347.2 | 341.9 | 2% | |||||||||
Frozen Bakery Products
|
254.8 | 174.0 | 46% | |||||||||
Pasta
|
208.8 | 212.0 | -2% | |||||||||
Total Sales Volume
|
1,042.1 | 966.3 | 8% | |||||||||
(dollars in millions)
|
||||||||||||
Net Sales
|
||||||||||||
Branded Cereal Products
|
$ | 214.4 | $ | 221.6 | -3% | |||||||
Other Cereal Products
|
226.2 | 204.7 | 11% | |||||||||
Snacks, Sauces & Spreads
|
473.6 | 417.4 | 13% | |||||||||
Frozen Bakery Products
|
308.0 | 193.7 | 59% | |||||||||
Pasta
|
158.7 | 135.9 | 17% | |||||||||
Total Net Sales
|
$ | 1,380.9 | $ | 1,173.3 | 18% | |||||||
Segment Operating Profit
|
||||||||||||
Branded Cereal Products
|
$ | 34.9 | $ | 49.7 | -30% | |||||||
Other Cereal Products
|
28.8 | 22.5 | 28% | |||||||||
Snacks, Sauces & Spreads
|
41.1 | 37.4 | 10% | |||||||||
Frozen Bakery Products
|
33.9 | 23.0 | 47% | |||||||||
Pasta
|
26.7 | 28.2 | -5% | |||||||||
Total Segment Operating Profit
|
$ | 165.4 | $ | 160.8 | 3% | |||||||
Segment Operating Profit Margin
|
||||||||||||
Branded Cereal Products
|
16% | 22% | ||||||||||
Other Cereal Products
|
13% | 11% | ||||||||||
Snacks, Sauces & Spreads
|
9% | 9% | ||||||||||
Frozen Bakery Products
|
11% | 12% | ||||||||||
Pasta
|
17% | 21% | ||||||||||
Total Segment Operating Profit Margin
|
12% | 14% | ||||||||||
Depreciation and Amortization
|
||||||||||||
Branded Cereal Products
|
$ | 15.0 | $ | 14.7 | 2% | |||||||
Other Cereal Products
|
5.3 | 5.5 | -4% | |||||||||
Snacks, Sauces & Spreads
|
10.6 | 10.3 | 3% | |||||||||
Frozen Bakery Products
|
16.9 | 10.0 | 69% | |||||||||
Pasta
|
12.7 | 13.2 | -4% | |||||||||
Corporate
|
3.9 | 3.2 | 22% | |||||||||
Total Depreciation and Amortization
|
$ | 64.4 | $ | 56.9 | 13% |
Honey Bunches of Oats
|
-4 | % | ||
Pebbles
|
-4 | % | ||
Other
|
-8 | % | ||
Total
|
-6 | % |
Private-brand ready-to-eat cereal
|
3 | % | ||
Nutritional bars
|
13 | % | ||
Hot cereal
|
-7 | % | ||
Other minor categories
|
-15 | % | ||
Total
|
-1 | % |
Nuts
|
-11 | % | ||
Crackers
|
11 | % | ||
Cookies
|
6 | % | ||
Peanut butter
|
3 | % | ||
Preserves & jellies
|
-3 | % | ||
Syrups
|
5 | % | ||
Chips
|
3 | % | ||
Dressings
|
2 | % | ||
Other minor categories
|
-6 | % | ||
Total
|
2 | % |
In-store bakery (ISB)
|
-6 | % | ||
Foodservice
|
6 | % | ||
Retail
|
-5 | % | ||
Total
|
-1 | % |
Retail
|
-1 | % | ||
Institutional
|
-3 | % | ||
Total
|
-2 | % |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Cash provided by operating activities
|
$ | 124.3 | $ | 177.7 | ||||
Cash used by investing activities
|
(601.5 | ) | (21.1 | ) | ||||
Cash provided (used) by financing activities
|
488.1 | (161.4 | ) | |||||
Effect of exchange rate changes on cash
|
.5 | .4 | ||||||
Net decrease in cash and cash equivalents
|
$ | 11.4 | $ | (4.4 | ) | |||
Dec. 31,
|
Sept. 30,
|
|||||||
2011 | 2011 | |||||||
Cash and cash equivalents
|
$ | 61.4 | $ | 50.0 | ||||
Notes payable to banks
|
610.0 | 105.0 | ||||||
Current portion of long-term debt
|
106.3 | 30.7 | ||||||
Working capital excluding cash and current indebtedness
|
424.8 | 408.5 | ||||||
Long-term debt excluding current portion
|
2,083.6 | 2,172.5 | ||||||
Total shareholders' equity
|
2,694.2 | 2,619.2 |
·
|
our ability to effectively manage the growth from acquisitions or continue to make acquisitions at the rate at which we have been acquiring in the past;
|
·
|
significant increases in the costs of certain commodities, packaging or energy used to manufacture our products;
|
·
|
our ability to continue to compete in our business segments and our ability to retain our market position;
|
·
|
our ability to maintain competitive pricing, successfully introduce new products or successfully manage costs across all parts of the Company;
|
·
|
significant competition within the private-brand business;
|
·
|
our ability to successfully implement business strategies to reduce costs;
|
·
|
the loss or bankruptcy of a significant customer;
|
·
|
allegations that our products cause injury or illness, product recalls and product liability claims and other litigation;
|
·
|
our ability to anticipate changes in consumer preferences and trends;
|
·
|
our ability to service our outstanding debt or obtain additional financing;
|
·
|
disruptions in the U.S. and global capital and credit markets;
|
·
|
fluctuations in foreign currency exchange rates;
|
·
|
the termination or expiration of current co-manufacturing agreements;
|
·
|
consolidations among the retail grocery and foodservice industries;
|
·
|
loss of key employees;
|
·
|
change in estimates in critical accounting judgments and changes to or new laws and regulations affecting our business;
|
·
|
termination of existing anti-dumping measures imposed against certain foreign imports of dry pasta;
|
·
|
labor strikes or work stoppages by our employees;
|
·
|
losses or increased funding and expenses related to our qualified pension plan;
|
·
|
impairment in the carrying value of goodwill or other intangibles;
|
·
|
technology failure;
|
·
|
our inability to protect our intellectual property rights;
|
·
|
changes in weather conditions, natural disasters and other events beyond our control;
|
·
|
the possibility that the combined post-separation value of Ralcorp and Post shares may not equal or exceed the pre-separation value of our common stock;
|
·
|
potential liabilities that may arise due to fraudulent transfer considerations surrounding the separation of the Post cereals business;
|
·
|
significant tax liabilities that could arise as a result of the separation of the Post cereals business; and
|
·
|
tax restrictions that may prevent us from engaging in certain corporate transactions or from raising equity capital beyond certain thresholds for a period of time after the separation of the Post cereals business.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
Period
|
(a)
Total Number of
Shares Purchased
|
(b)
Average Price Paid
per Share
|
(c)
Total Number of Shares Purchased
as Part of Publicly Announced Plans
or Programs
|
(d)
Maximum Number of Shares that
May Yet Be Purchased Under the
Plans or Programs**
|
||
October 1-
October 31, 2011
|
8,389*
|
$
|
78.00
|
0
|
See total
|
|
November 1 -
November 30, 2011
|
0
|
0
|
0
|
See total
|
||
December 1 -
December 31, 2011
|
0
|
0
|
0
|
See total
|
||
Total
|
8,389
|
0
|
0
|
5,000,000
|
|
* On October 1, 2011, 8,389 were forfeited back to the Company in satisfaction of required taxes to be withheld by federal, state and local governments in connections with the vesting of an employee restricted stock award.
|
|
* On November 10, 2009, the Board of Directors authorized the repurchase of up to 7,000,000 shares of common stock at prevailing market prices. The authorization has no expiration date. From time to time, the Company may repurchase its common stock through plans established under Rule 10b5-1. Typically, these plans direct a broker to purchase a variable amount of shares each day (usually between 0 and 50,000) depending on the previous day’s closing share price.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
31.1
|
Section 302 Certification of Kevin J. Hunt dated February 9, 2012
|
31.2
|
Section 302 Certification of Scott Monette dated February 9, 2012 |
32
|
Section 1350 Certification of Kevin J. Hunt and Scott Monette dated February 9, 2012
|
SIGNATURES
|
RALCORP HOLDINGS, INC.
|
|
Date: February 9, 2012
|
By: /s/ S. Monette
|
S. Monette
|
|
Corporate Vice President and
|
|
Chief Financial Officer
|
Exhibit
|
Description
|
31.1
|
Section 302 Certification of Kevin J. Hunt dated February 9, 2012
|
31.2
|
Section 302 Certification of Scott Monette dated February 9, 2012
|
32
|
Section 1350 Certification of Kevin J. Hunt and Scott Monette dated February 9, 2012
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Ralcorp Holdings, Inc.;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material internal weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 9, 2012
|
/s/ K. J. Hunt
|
K. J. Hunt
|
|
Chief Executive Officer
|
|
and President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Ralcorp Holdings, Inc.;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material internal weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 9, 2012
|
/s/ S. Monette
|
S. Monette
|
|
Corporate Vice President and
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ K. J. Hunt
|
/s/ S. Monette
|
||
K. J. Hunt
|
S. Monette
|
||
Chief Executive Officer
|
Chief Financial Officer
|
||
Ralcorp Holdings, Inc.
|
Ralcorp Holdings, Inc.
|
Pension And Other Postretirement Benefits (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Pension Benefits [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1.8 | $ 1.4 |
Interest cost | 3.2 | 3.1 |
Expected return on plan assets | (5.2) | (4.7) |
Amortization of prior service cost | 0.1 | 0.1 |
Amortization of net loss | 1.6 | 1.2 |
Net periodic benefit cost | 1.5 | 1.1 |
Other Postretirement Benefits [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0.6 | 0.6 |
Interest cost | 1.6 | 1.3 |
Amortization of prior service cost | (0.3) | (0.3) |
Amortization of net loss | 0.4 | |
Net periodic benefit cost | $ 2.3 | $ 1.6 |
Contingencies (Details) (USD $)
In Millions, unless otherwise specified |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Jan. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2011
|
Sep. 30, 2010
|
|
Contingencies [Abstract] | ||||
Payments of contractual and other claims | $ 5.0 | |||
Early estimates of the settlement and obligation amount | 5.0 | 7.5 | ||
Additional estimated accrued customer claim | 2.5 | |||
Maximum expected lawsuit liability | $ 10 |
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