Ralcorp Holdings Announces Preliminary Q3 Results, Initiates Strategic Restructuring
Net sales for the third quarter grew 11% as a result of the acquisitions, as well as higher net pricing in all segments in response to rising commodity costs.
2 Aug 2012 --- In order to supplement the disclosures included in its current report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2012, Ralcorp Holdings, Inc. has announced preliminary results for the quarter ended June 30, 2012. These preliminary results include the effects of acquisitions completed during fiscal 2012.
Net sales for the third quarter grew 11% as a result of the acquisitions, as well as higher net pricing in all segments in response to rising commodity costs. Diluted earnings per share from continuing operations increased from $.28 in the third quarter of fiscal 2011 to $.54 per share for the third quarter of fiscal 2012 and were negatively impacted by $.23 and $.06 per diluted share, respectively, of special charges related to plant closures, merger and integration costs, the accelerated amortization of intangible assets, and the effects of mark-to-market adjustments on economic hedges.
On July 31, 2012, Ralcorp initiated a strategic restructuring to improve organizational effectiveness and reduce costs. Ralcorp will consolidate its existing Cereal, Pasta, and Snacks, Sauces & Spreads businesses into a single center-store private brand food company. The business will possess leading positions across 20 food categories with superior scale and capability in sales, marketing, research and development and operations. As a result of this strategic initiative, the Company expects to generate annual pre-tax cost savings of approximately $26 to $31 million in fiscal 2013. These savings are incremental to the Company's ongoing Accelerated Cost Reduction program and will begin in fiscal 2013. These initiatives are anticipated to result in one-time pre-tax costs of approximately $17 to $22 million consisting of employee separation and related expenses, half of which the Company expects to record in each of fiscal 2012 and fiscal 2013. Ralcorp expects to complete the strategic restructuring in fiscal 2014.
"Overall, we continue to be impacted by the Bloomfield transition as well as a challenging operating environment, with higher year over year commodity costs and lower volumes," said Kevin J. Hunt, Chief Executive Officer and President of Ralcorp. "However, we remain confident in our business strategy and believe that we are well-positioned to compete and seek opportunities to grow despite the challenging environment. We believe the actions we are taking, both with respect to Bloomfield and the strategic restructuring, will result in a leaner, more cost efficient operation that is more appropriately structured for sustainable, long-term growth. "
The Company expects to provide additional details regarding its third quarter financial results and strategic restructuring initiatives on August 8, 2012.
