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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003.

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ____________.

Commission file number: 1-12619
 
Ralcorp Holdings, Inc.
(Exact name of registrant as specified in its charter)
 

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)
 
 
 
(314) 877-7000
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (x) No ( )

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common Stock
 
Outstanding Shares at
par value $.01 per share
 
August 12, 2003
 
 
28,915,388
 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act). Yes (x) No ( )
 
     
 
RALCORP HOLDINGS, INC.

INDEX
 
                                       
 

   PAGE

PART I.
FINANCIAL INFORMATION
 
 
 
 
Item 1.
Financial Statements
 
 
 
 
 
Condensed Consolidated Statement of Earnings
1 
 
 
 
 
Condensed Consolidated Balance Sheet
2 
 
 
 
 
Condensed Consolidated Statement of Cash Flows
3 
 
 
 
 
Notes to Condensed Consolidated Financial Statements
4 
 
 
 
Item 2.
Management’s Discussion and Analysis of Financial
 
 
Conditions and Results of Operations
10 
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
16 
 
 
 
Item 4.
Controls and Procedures
16 
 
 
 
PART II.
OTHER INFORMATION
 
 
 
 
Item 5.
Other Information
16 
 
 
 
Item 6.
Exhibits and Reports on Form 8-K
16 

 
     
 
PART I.   FINANCIAL INFORMATION
 
Item 1.  Financial Statements.
RALCORP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
(Dollars in millions except per share data)
 
 

 Three Months Ended

 

 Nine Months Ended    

 
  

June 30,

  

 June 30,   

  
   
 
 
 
    
2003
   
2002
   
2003
   
2002
 
   
 
 
 
 
Net Sales
 
$
311.5
 
$
314.9
 
$
974.2
 
$
953.5
 
   
 
 
 
 
Costs and Expenses
   
 
    
 
    
 
    
 
  
Cost of products sold
   
249.0
   
251.5
   
782.7
   
763.8
 
Selling, general and administrative
   
42.7
   
41.9
   
125.5
   
122.6
 
Interest expense, net
   
.8
   
1.2
   
2.6
   
4.7
 
Restructuring and impairment charges
   
2.2
   
-
   
13.4
   
-
 
Litigation settlement income, net
   
-
   
(.6
)
 
(14.6
)
 
(.6
)
 
  
 
 
 
 
Total Costs and Expenses
   
294.7
   
294.0
   
909.6
   
890.5
 
   
 
 
 
 
Earnings before Income Taxes
   
 
    
 
    
 
    
 
  
and Equity Earnings
   
16.8
   
20.9
   
64.6
   
63.0
 
Income Taxes
   
6.1
   
7.6
   
23.3
   
22.7
 
   
 
 
 
 
Earnings before Equity Earnings
   
10.7
   
13.3
   
41.3
   
40.3
 
Equity in Earnings (Loss) of Vail Resorts, Inc.,
   
 
    
 
    
 
    
 
  
Net of Related Deferred Income Taxes
   
5.3
   
4.8
   
4.8
   
5.2
 
   
 
 
 
 
Net Earnings
 
$
16.0
 
$
18.1
 
$
46.1
 
$
45.5
 
 
  
 
 
 
 
Basic Earnings per Share
 
$
.55
 
$
.60
 
$
1.58
 
$
1.52
 
 
  
 
 
 
 
Diluted Earnings per Share
 
$
.54
 
$
.59
 
$
1.55
 
$
1.49
 
 
  
 
 
 
 
 
See accompanying Notes to Condensed Consolidated Financial Statements.
 
 
 
RALCORP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
(Dollars in millions)

 
  

Three Months Ended

  

 Nine Months Ended

  
 
  

June 30,

  

 June 30,

  
   
 
 
 
    
2003
   
2002
   
2003

 

 
2002
 
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Net Earnings
 
$
16.0
 
$
18.1
 
$
46.1
 
$
45.5
 
Other Comprehensive Income (Loss)
   
.4
   
(.1
)
 
(.7
)
 
.8
 
 
  
 
 
 
 
Comprehensive Income
 
$
16.4
 
$
18.0
 
$
45.4
 
$
46.3
 
 
  
 
 
 
 

See accompanying Notes to Condensed Consolidated Financial Statements.

 
1  
 
RALCORP HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(Dollars in millions)
 

 

 

June 30, 

 

 
Sept. 30,

 

 

 

 
2003

 

 
2002
 
   
 
 
Assets
   
 
    
 
  
Current Assets
   
 
    
 
  
Cash and cash equivalents
 
$
24.2
 
$
3.2
 
Investment in Ralcorp Receivables Corporation
   
42.2
   
29.7
 
Miscellaneous receivables
   
8.1
   
6.2
 
Inventories
   
137.0
   
161.6
 
Deferred income taxes
   
5.5
   
5.1
 
Other current assets
   
3.5
   
2.8
 
   
 
 
Total Current Assets
   
220.5
   
208.6
 
Investment in Vail Resorts, Inc.
   
88.1
   
80.8
 
Property, Net
   
266.4
   
282.6
 
Goodwill
   
236.6
   
238.0
 
Other Intangible Assets, Net
   
14.9
   
13.9
 
Other Assets
   
10.6
   
8.6
 
   
 
 
Total Assets
 
$
837.1
 
$
832.5
 
   
 
 
Liabilities and Shareholders' Equity
   
 
    
 
  
Current Liabilities
   
 
    
 
  
Accounts payable
 
$
73.8
 
$
75.2
 
Other current liabilities
   
46.1
   
44.8
 
   
 
 
Total Current Liabilities
   
119.9
   
120.0
 
Long-term Debt
   
156.0
   
179.0
 
Deferred Income Taxes
   
38.7
   
36.3
 
Other Liabilities
   
65.5
   
61.1
 
   
 
 
Total Liabilities
   
380.1
   
396.4
 
   
 
 
Shareholders' Equity
   
 
    
 
  
Common stock
   
.3
   
.3
 
Capital in excess of par value
   
113.2
   
110.0
 
Retained earnings
   
432.5
   
386.4
 
Common stock in treasury, at cost
   
(77.6
)
 
(49.9
)
Unearned portion of restricted stock
   
(.1
)
 
(.1
)
Accumulated other comprehensive loss
   
(11.3
)
 
(10.6
)
   
 
 
Total Shareholders' Equity
   
457.0
   
436.1
 
   
 
 
Total Liabilities and Shareholders' Equity
 
$
837.1
 
$
832.5
 
   
 
 

See accompanying Notes to Condensed Consolidated Financial Statements.

 
2  
 
RALCORP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in millions)
 

Nine Months Ended

 

June 30,

   
 
 
  

 
2003

 

 
2002

 

   
 
 
Cash Flows from Operating Activities
   
 
    
 
  
Net earnings
 
$
46.1
 
$
45.5
 
Adjustments to reconcile net earnings to net
   
 
    
 
  
cash flow provided by operating activities:
   
 
    
 
  
Depreciation and amortization
   
29.3
   
25.7
 
Impairment and loss on sale of business
   
8.6
   
-
  
Equity in earnings of Vail Resorts, Inc.
   
(7.3
)
 
(8.0
)
Deferred income taxes
   
2.0
   
4.2
 
Sale of receivables, net
   
(24.6
)
 
(6.1
)
Changes in current assets and liabilities, net
   
33.4
   
34.4
 
Other, net
   
5.1
   
4.6
 
   
 
 
Net Cash Provided by Operating Activities
   
92.6
   
100.3
 
   
 
 
Cash Flows from Investing Activities
   
 
    
 
  
Business acquisitions, net of cash acquired
   
-
   
(52.1
)
Additions to property and intangible assets
   
(26.2
)
 
(20.2
)
Proceeds from sale of property
   
2.5
   
12.0
 
Proceeds from sale of business
   
2.9
   
-
  
   
 
 
Net Cash Used by Investing Activities
   
(20.8
)
 
(60.3
)
   
 
 
Cash Flows from Financing Activities
   
 
    
 
  
Net repayments under credit arrangements
   
(23.0
)
 
(43.2
)
Purchase of treasury stock
   
(28.6
)
 
-
 
Proceeds from exercise of stock options
   
.8
   
1.6
 
   
 
 
Net Cash Used by Financing Activities
   
(50.8
)
 
(41.6
)
   
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
   
21.0
   
(1.6
)
Cash and Cash Equivalents, Beginning of Period
   
3.2
   
3.9
 
   
 
 
Cash and Cash Equivalents, End of Period
 
$
24.2
 
$
2.3