TABLE OF CONTENTS |
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Cautionary Statement On Forward-Looking Statements | |
2 |
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PART I |
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Item 1. | |
Business | |
3 |
Item 2. | |
Properties | |
7 |
Item 3. | |
Legal Proceedings | |
8 |
Item 4. | |
Submission of Matters to a Vote of Security Holders | |
8 |
Item 4A. | |
Executive Officers of the Registrant | |
9 |
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PART II |
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Item 5. | |
Market for Registrant’s Common Equity and Related Stockholder Matters | |
9 |
Item 6. | |
Selected Financial Data | |
10 |
Item 7. | |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
11 |
Item 7A. | |
Quantitative And Qualitative Disclosures About Market Risk | |
18 |
Item 8. | |
Financial Statements and Supplementary Data | |
19 |
Item 9. | |
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | |
42 |
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PART III |
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Item 10. | |
Directors and Executive Officers of the Registrant | |
43 |
Item 11. | |
Executive Compensation | |
43 |
Item 12. | |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
43 |
Item 13. | |
Certain Relationships and Related Transactions | |
43 |
Item 14. | |
Controls and Procedures | |
43 |
Item 15. | |
Principal Accountant Fees and Services | |
43 |
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PART IV |
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Item 16. | |
Exhibits, Financial Statement Schedules, and Reports on Form 8-K | |
44 |
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Signatures | |
45 |
Exhibit Index | |
46 |
1
Forward-looking
statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are
made throughout this Report. These forward-looking statements are sometimes identified by
their use of terms and phrases such as “believes,” “should,”
“expects,” “anticipates,” “intends,” “plans,”
“will,” or similar expressions elsewhere in this Report. The Company’s
results of operations and financial condition may differ materially from those in the
forward-looking statements. Such statements are based on management’s current views
and assumptions, and involve risks and uncertainties that could affect expected results.
For example, any of the following factors cumulatively or individually may impact expected
results:
(i)
If the Company is unable to maintain a meaningful price gap between its private
label products and the branded products of its competitors, successfully
introduce new products or successfully manage costs across all parts of the
Company, the Company’s private label businesses could incur operating
losses;
(ii)
Consolidation among members of the grocery trade may lead to increased wholesale
price pressure from larger grocery trade customers and could result in
significant profit pressure, or in some cases, the loss of key accounts if the
surviving entities are not customers of the Company;
(iii)
Significant increases in the cost of certain raw materials (e.g., peanuts,
wheat, soybean oil, various tree nuts, corn syrup) or energy used to manufacture
the Company’s products, to the extent not reflected in the price of the
Company’s products, could adversely impact the Company’s results;
(iv)
In light of its significant ownership in Vail Resorts, Inc., the Company’s
non-cash earnings can be adversely affected by unfavorable results from Vail
Resorts;
(v)
The Company is currently generating profit from certain co-manufacturing
contract arrangements with other manufacturers within its competitive
categories. The termination or expiration of these contracts and the inability
of the Company to replace this level of business could negatively affect the
Company’s operating results;
(vi)
The Company’s businesses compete in mature segments with competitors having
large percentages of segment sales;
(vii)
The Company has realized increases to sales and earnings through the
acquisitions of businesses, but the ability to undertake future acquisitions
depends on many factors that the Company does not control, such as identifying
available acquisition candidates and negotiating satisfactory terms upon which
to purchase such candidates;
(viii)
Presently, all of the interest on the Company’s indebtedness is set on a
short-term basis. Consequently, increases in interest rates will increase the
Company’s interest expense;
(ix)
If actual or forecasted cash flows of any reporting unit deteriorate such that
its fair value falls below its carrying value, goodwill would likely be impaired
and an impairment loss would be recorded immediately as a charge against
earnings;
(x)
In September 2003, the Company began implementing a new information systems
software program within its Snack Nuts & Candy segment. Implementation of
the new system could cause disruptions to the segment’s operations. In the
event the system is implemented within other segments, those segments could be
similarly impacted; and
(xi)
Other uncertainties, all of which are difficult to predict and many of which are
beyond the control of the Company, may impact its financial position, including
those risks detailed from time to time in its publicly filed documents. These
and other factors are discussed in the Company’s Securities and Exchange
Commission filings.
The
list of factors above is illustrative, but by no means exhaustive. All forward-looking
statements should be evaluated with the understanding of their inherent uncertainty.
2
PART I
ITEM 1. BUSINESS
Ralcorp
Holdings, Inc. is a Missouri corporation incorporated on October 23, 1996. Our principal
executive offices are located at 800 Market Street, Suite 2900, St. Louis, Missouri 63101.
The terms “our,” “we,” “Company,” “Ralcorp,” and
“Registrant” as used herein refer to Ralcorp Holdings, Inc. and its consolidated
subsidiaries.
We
are primarily engaged in the manufacturing, distribution and marketing of store brand
(private label) ready-to-eat and hot cereal products, store brand and branded crackers and
cookies, store brand and value branded snack nuts and chocolate candy, and store brand
wet-filled products such as salad dressings, mayonnaise, peanut butter, syrups, jams and
jellies, and specialty sauces.
The
following sections of this report contain financial and other information concerning our
business developments and operations and are incorporated into this Item 1:
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” under Item 7 of this Report; Note 2 “Acquisitions and
Goodwill,” Note 9 “Supplemental Earnings Statement and Cash Flow
Information,” and Note 19 “Segment Information” to the Financial Statements
filed as part of this document under Item 8.
You
can find additional information about Ralcorp including our previous 10-Ks, 10-Qs, 8-Ks,
and other securities filings by visiting our website at http://www.ralcorp.com or the
SEC’s website at http://www.sec.gov, from which they can be printed free of charge.
The Company’s Corporate Governance Guidelines; Code of Business Conduct and Ethics
for Employees, including executive officers; Code of Business Conduct and Ethics for the
Board of Directors; and the Charters of the Board’s Audit and Corporate Governance
and Compensation Committees are also available on our website, from which they can be
printed free of charge. All of these documents are also available to shareholders upon
request sent to the Company’s Secretary.
RECENT BUSINESS
DEVELOPMENTS
On
December 12, 2002, we completed the purchase of 1,145,667 shares of our common stock at a
price of $24.00 per share.
On
January 22, 2003, we announced the restructuring of Senior Management. David P. Skarie was
appointed President of Ralston Foods in addition to his position as President of the
Carriage House Companies, Inc. Also, Kevin J. Hunt was appointed President of Nutcracker
Brands, Inc. in addition to his position as President of Bremner, Inc.
On
February 4, 2003, we announced the sale of our tomato processing factory in Williams,
California.
On
February 20, 2003, we announced the closure of our Kent, Washington in-store bakery
facility.
On
May 22, 2003, we completed the sale of $150 million Floating Rate Senior Notes due May 22,
2010.
On
September 18, 2003, we announced that on September 29, 2003, Joe R. Micheletto would
retire as Chief Executive Officer and President and would serve as Vice Chairman of the
Board of Directors. Kevin J. Hunt and David P. Skarie were each appointed Co-CEO and
President of Ralcorp in addition to their existing duties as Presidents of our operating
units.
On
September 18, 2003, we announced that on September 30, 2003 Robert W. Lockwood would
retire as Corporate Vice President, General Counsel and Secretary and Charles G. Huber,
Jr. would be appointed Corporate Vice President, General Counsel and Secretary.
On
November 6, 2003, we announced that effective immediately Richard R. Koulouris was
appointed Corporate Vice President, and President of Bremner, Inc. and Nutcracker Brands,
Inc.
On
November 12, 2003, we announced the signing of a definitive agreement to purchase Bakery
Chef, Inc. for $287.5 million.
On
December 3, 2003, we announced the completion of the acquisition of Bakery Chef, Inc.
On December
4, 2003, we announced that David L. Beré was appointed Corporate Vice President,
and President and Chief Executive Officer of Bakery Chef, Inc.
3
OTHER INFORMATION
PERTAINING TO THE BUSINESS OF THE COMPANY
Segments
Presently
our businesses are comprised of three reportable business segments: Cereals, Crackers
& Cookies (consisting of Ralston Foods and Bremner, Inc.); Dressings, Syrups, Jellies
& Sauces (The Carriage House Companies, Inc.); and Snack Nuts & Candy (Nutcracker
Brands, Inc.). Primarily, we produce and sell emulations of various types of branded food
products that retailers, mass merchandisers and drug stores sell under their own
“store” brands or under value brands. Each of our business segments attempts to
produce products that are equivalent in quality to branded products. In the event branded
producers modify their existing products or successfully introduce new products, we may
attempt to emulate the modified or new products. In conjunction with our customers, we
develop packaging and graphics that rival the national brands. Our goal is that the only
difference consumers perceive when purchasing our store brand products is a notable cost
savings when compared to branded counterparts.
Cereals,
Crackers & Cookies
The
Cereals, Crackers & Cookies segment is composed of two product lines: store brand
ready-to-eat and hot cereals (the “Store Brand Cereal Business”), and store
brand and branded crackers and cookies (the “Cracker and Cookie Business”). In
fiscal 2003, these product lines accounted for approximately 44% and 56%, respectively, of
the Company’s Cereals, Crackers & Cookies segment sales.
Store
Brand Cereal Business
Store
brand ready-to-eat cereals are currently produced at three operating facilities. Our
Cracker and Cookie Business produces shredded wheat cereal for the Store Brand Cereal
Business. Ready-to-eat cereals include 13 extruded cereals, fourteen flaked cereals, seven
biscuit cereals and three shredded cereals. Three additional cereals are produced for the
Store Brand Cereal Business through certain co-manufacturing arrangements. Store brand and
branded hot cereals are produced at one facility. The hot cereal products include
old-fashioned oatmeal, quick oatmeal, regular instant oatmeal, flavored instant oatmeals,
farina, instant Ralston®, a branded hot wheat cereal, and 3
Minute Brand® hot cereals. As expected, we sell far more hot cereals in
cooler months. We believe we are the largest manufacturer in the U.S. of store brand
ready-to-eat and hot cereals.
We
produce cereal products based on our estimates of customer orders and consequently
maintain, on average six to eight weeks’ inventory of finished products. Our
ready-to-eat and hot cereals are warehoused in and distributed through four independent
distribution facilities and two of our cereal plants, and shipped to customers principally
via independent truck lines. The ready-to-eat and hot cereal products are sold through
in-house district sales managers and independent food brokers.
Cracker
and Cookie Business
We
believe our Cracker and Cookie Business is currently the leading manufacturer of store
brand crackers and cookies for sale in the United States. The business also produces
branded cookies under the Rippin’ Good® brand. In addition, the
business produces branded and store brand cookies for sale in the in-store bakery sections
of food retailers. We utilize the brands Cascade® and
Lofthouse® for branded in-store bakery cookies. Sales of in-store
bakery cookies typically increase significantly near major holidays. The Cracker and
Cookie Business also produces Ry Krisp® branded crackers. Management
positions the Cracker and Cookie Business as a low cost, premier quality producer of a
wide variety of store brand crackers and cookies. We produce thirty-three kinds of store
brand cookies and eighteen kinds of store brand crackers.
Our
Cracker and Cookie Business operates eight plants: one produces only Ry Krisp® crackers,
two produce store brand crackers and cookies, three produce store brand and
branded cookies, and two produce cookies for the in-store bakery sections of grocery
stores. Cracker and Cookie products are largely produced to order and shipped directly to
customers. In the fall and winter as consumer consumption of crackers increases, we have
the ability to produce to estimated volumes, thereby building product inventories ranging
from four to six weeks. The majority of the products sold to in-store bakery departments
of food retailers are stored and shipped frozen. Store brand crackers and cookies are sold
through a broker network and district manager sales staff. Branded Ry
Krisp® crackers and many branded cookies are sold through direct store
distributor networks.
4
Dressings,
Syrups, Jellies & Sauces
Our
Dressings, Syrups, Jellies & Sauces segment operates six plants. Five plants produce a
variety of store brand shelf-stable dressings, syrups, jellies, salsas, sauces, and drink
mixes under the Major Peters’® brand. One plant produces only
peanut butter. The segment’s products are largely produced to order and shipped
directly to customers. The products are sold through an internal sales staff and a broker
network.
Many
wet-filled products are easier to produce than those of the cereals, crackers and cookies
segments. However, due to the varied nature of branded counterparts and customer
preferences, this segment produces far more variations of each type of product compared to
our other segments. For example, we produce up to 40 varieties of many types of salad
dressing. At any one time, we maintain over 8,000 active SKUs in this segment.
Snack
Nuts & Candy
Our
Snack Nuts & Candy segment operates two plants that produce a variety of jarred,
canned and bagged snack nuts and one plant that produces chocolate candy. Our Snack Nut
and Candy products are largely produced to order and shipped directly to customers. We
sell our products through an internal sales staff and a broker network. The segment
produces store brand products as well as value branded products under the
Nutcracker® and Flavor House® brands. Snack
nut sales are seasonal. The segment sells approximately 45% of its snack nuts in a
four-month period between September and December. Profits from the sale of snack nuts are
impacted significantly by the cost of raw materials (peanuts and tree nuts). Our chocolate
candy products are positioned as premium chocolate products and not as an emulation of a
branded product. Consequently, our chocolate candy products are sold to customers who
maintain premium store brand product lines.
Ownership of Vail Resorts, Inc.
We
own 7,554,406 shares of Vail Resorts, Inc. (Vail) common stock (approximately 21.5 percent
of the shares outstanding as of September 30, 2003). Additionally, two of our Directors,
Messrs. Stiritz and Micheletto, are on the Vail Board of Directors. Currently, we utilize
the equity method of accounting to reflect the portion of Vail’s earnings (or losses)
applicable to us on a non-cash basis.
Pursuant
to a Shareholder Agreement entered into in connection with the acquisition of the Vail
common stock, we can only sell our Vail common stock in a registered offering allowed
under the Shareholder Agreement or in private transactions (provided the purchaser agrees
to be bound by the Shareholder Agreement). Vail’s results of operations are highly
seasonal and are dependent in part on weather conditions and consumers’ discretionary
spending trends. In light of the significance of our ownership in Vail in comparison to
our earnings and assets, changes in the price of Vail’s Common Stock can impact our
stock price.
Trademarks
We
own a number of trademarks that are substantially important to our businesses, including
Lofthouse®, Nutcracker®, Flavor House®,
Rippin’ Good®, Golden Batch®, and
Major Peters’®.
Competition
Our
businesses face intense competition from large branded manufacturers and highly
competitive store label manufacturers in each of their product lines. Top branded
ready-to-eat and hot cereal competitors include Kellogg, General Mills, Kraft Foods’
Post division, and Quaker Oats (owned by PepsiCo). Large branded competitors of the
Cracker and Cookie Business include Nabisco (owned by Kraft) and Keebler (owned by
Kellogg), which possess large portions of the branded cracker and cookie categories. The
Snack Nuts & Candy segment faces significant competition from one significant branded
snack nut producer (Planters, owned by Kraft). Top branded competitors of the Dressings,
Syrups, Jellies & Sauces segment include Kraft Foods, Bestfoods, Smucker’s, and
Heinz. In addition, privately owned store brand manufacturers provide significant
competition in all of the Company’s segments.
5
The
industries in which we compete are highly sensitive to both pricing and promotion.
Competition is based upon product quality, price, effective promotional activities, and
the ability to identify and satisfy emerging consumer preferences. These industries are
expected to remain highly competitive in the foreseeable future. Our customers do not
typically commit to buy predetermined amounts of products. Moreover, many food retailers
utilize bidding procedures to select vendors. Consequently, in any segment up to 50% of
our business can be subject to a bidding process conducted by our customers.
Future
growth opportunities are expected to depend on our ability to implement strategies for
competing effectively in all of our businesses, including strategies relating to enhancing
the performance of our employees, maintaining effective cost control programs, developing
and implementing methods for more efficient manufacturing and distribution operations, and
developing successful new products, while at the same time maintaining aggressive pricing
and promotion of our products.
Customers
In
fiscal 2003, Wal-Mart Stores, Inc. accounted for approximately 14% of our aggregate net
sales. Each of our reporting segments sells products to Wal-Mart. Additionally, we sell
our products to retail chains, mass merchandisers, grocery wholesalers, warehouse club
stores and drug stores across the country and in Canada.
Employees
We
employ approximately 5,000 people in the United States (as of September 30, 2003).
Approximately 1,700 of our personnel are covered by thirteen union contracts and, from
time to time, the Company has experienced union organizing activities at its non-union
plants. The contracts expire at times from January 31, 2004, to October 7, 2007.
The production employees at the Lancaster facility are presently working without a
contract and have the ability to engage in a strike at any time, but the operations of the
Lancaster facility have not been disrupted by the lack of a contract. Notwithstanding the
foregoing, we believe relations with our employees, including union employees, are good.
Raw
Materials and Energy
Our
principal raw materials are grain and grain products, flour, corn syrup, sugar, soybean
oil, tomatoes, various nuts such as peanuts and cashews, and liquid chocolate. We purchase
raw materials and a variety of packaging materials from local, regional, national and
international suppliers. The cost of raw materials used in the Company’s products may
fluctuate widely due to weather conditions, government regulations, economic climate or
other unforeseen circumstances. From time to time, we will enter into supply contracts for
periods up to three years to secure favorable pricing for ingredients and up to five years
for packaging supplies. We also purchase natural gas, electricity, and steam for use in
our processing facilities. Where possible, and when advantageous to the Company, we enter
into long-term normal purchase contracts to reduce the price volatility of these items and
the cost impact upon our operations. In fiscal 2003, ingredients, packaging, and energy
represented approximately 43%, 22%, and 2%, respectively, of our total cost of goods sold.
Seasonality
Due
to our equity interest in Vail, which typically yields more than the entire year’s
equity income during our second and third fiscal quarters, our net earnings are seasonal.
In addition, certain aspects of our operations, especially in the Snack Nuts & Candy
business, are seasonal, with a higher percentage of sales and operating profits expected
to be recorded in the first and fourth fiscal quarters. See Note 20 in Item 8 for
historical quarterly data.
Governmental
Regulation; Environmental Matters
We
are subject to regulation by federal, state and local governmental entities and agencies.
As a producer of goods for human consumption, our operations are subject to stringent
production and labeling standards. For example, in the early 1990s, new labeling
regulations were promulgated and implemented which required us to modify information
disclosed on our packaging. Recently, new labeling regulations relating to trans fatty
acids have been adopted by regulatory bodies. Management expects that changes in packaging
and formulations can be implemented without a material adverse impact on our businesses if
existing packaging stock can be used during a transition period while formulas are
modified.
6
Our
operations, like those of similar businesses, are subject to various federal, state and
local laws and regulations with respect to environmental matters, including air and water
quality, underground fuel storage tanks, waste handling and disposal, and other
regulations intended to protect public health and the environment. While it is difficult
to quantify with certainty the potential financial impact of actions regarding
expenditures for environmental matters, particularly remediation, and future capital
expenditures for environmental control equipment, in the opinion of management, based upon
the information currently available, the ultimate liability arising from such
environmental matters, taking into account established accruals for estimated liabilities,
should not have a material effect on our consolidated results of operations, financial
position, capital expenditures or other cash flows.
Contract Manufacturing
From
time to time, any of our segments may provide products for branded companies. Often such
products are new branded products for which branded companies lack capacity. Most often,
branded products retain ownership for the formulas and trademarks related to products we
produce for them. Also, the contract manufacturing business tends to be inconsistent in
volume. Often, initial orders can be significant and favorably impact a fiscal period but
later volume will level off or the branded company will ultimately produce the product
internally and cease purchasing product from us.
ITEM 2. PROPERTIES
Our
principal properties are our manufacturing locations. Shown below are our principal owned
and leased properties. We also lease our principal executive offices and research and
development facilities in St. Louis, Missouri. Management believes its facilities are
suitable and adequate for the purposes for which they are used and are adequately
maintained. We believe each segment’s combination of facilities provides adequate
capacity for current and anticipated future customer demand.
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Plant Locations |
Size
(Sq. Ft.) |
|
Owned/
Leased |
Production
Lines |
|
Products |
Battle Creek, MI | |
476,896 |
|
Owned | |
7 |
|
|
Cereal |
Cedar Rapids, IA | |
150,000 |
|
Owned | |
5 |
|
|
Cereal |
Lancaster, OH | |
478,719 |
|
Owned | |
11 |
|
|
Cereal |
Sparks, NV | |
243,000 |
|
Owned | |
7 |
|
|
Cereal |
Freeport, UT | |
124,000 |
|
Leased | |
4 |
|
|
Cookies |
Princeton, KY | |
700,000 |
|
Owned | |
6 |
|
|
Crackers and Cookies |
Poteau, OK | |
250,000 |
|
Owned | |
5 |
|
|
Crackers and Cookies |
Minneapolis, MN | |
40,000 |
|
Owned | |
3 |
|
|
Crackers |
Ogden, UT | |
325,000 |
|
Leased | |
5 |
|
|
Cookies |
Tonawanda, NY | |
95,000 |
|
Owned | |
3 |
|
|
Cookies |
Ripon, WI (two plants) | |
350,000 |
|
Owned | |
11 |
|
|
Cookies |
Billerica, MA | |
80,000 |
|
Owned | |
8 |
|
|
Snack Nuts |
Dothan, AL | |
135,000 |
|
Leased | |
14 |
|
|
Snack Nuts |
Womelsdorf, PA | |
100,000 |
|
Owned | |
5 |
|
|
Candy |
Buckner, NY | |
269,250 |
|
Owned | |
6 |
|
|
Dressings, Syrups, Jellies & Sauces |
Dunkirk, NY | |
306,000 |
|
Owned | |
6 |
|
|
Dressings, Syrups, Jellies & Sauces |
Fredonia, NY | |
367,000 |
|
Owned | |
10 |
|
|
Dressings, Syrups, Jellies & Sauces |
Kansas City, KS | |
67,000 |
|
Owned | |
4 |
|
|
Dressings, Syrups, Jellies & Sauces |
Los Angeles, CA | |
81,000 |
|
Leased | |
4 |
|
|
Dressings, Syrups, Jellies & Sauces |
Streator, IL | |
165,000 |
|
Owned | |
1 |
|
|
Peanut Butter |
7
We
are a party to a number of legal proceedings in various state and federal jurisdictions.
These proceedings are in varying stages and many may proceed for protracted periods of
time. Some proceedings involve complex questions of fact and law. Additionally, our
operations, like those of similar businesses, are subject to various federal, state, and
local laws and regulations intended to protect public health and the environment,
including air and water quality and waste handling and disposal.
Pending
legal liability, if any, from these proceedings cannot be determined with certainty;
however, in the opinion of management based upon the information presently known, the
liability of the Company, if any, arising from the pending legal proceedings, as well as
from asserted legal claims and known potential legal claims which are likely to be
asserted, taking into account established accruals for estimated liabilities (if any), are
not expected to be material to our consolidated financial position, results of operations
and cash flows. In addition, while it is difficult to quantify with certainty the
potential financial impact of actions regarding expenditures for compliance with
regulatory matters, in the opinion of management, based upon the information currently
available, the ultimate liability arising from such compliance matters should not be
material to the Company’s consolidated financial position, results of operations and
cash flows.
Additionally,
we retained certain potential liabilities associated with divested businesses (former
branded cereal business and ski resort business). Presently, management believes that
taking into account applicable liability caps, sharing arrangements with acquiring
entities and the known facts and circumstances regarding the retained liabilities,
potential liabilities of the divested businesses should not be material to the
Company’s consolidated financial position, results of operations and cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There
were no matters submitted to the security holders during the fourth quarter of fiscal year
2003.
8
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Kevin J. Hunt |
|
52 |
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Co-Chief Executive Officer and President
of the Company since September 2003; Chief Executive Officer of Bremner, Inc. and Nutcracker Brands, Inc. since November 2003.
He served as Corporate Vice President of the Company from October
1995 to September 2003; President of Bremner from October 1995 to November
2003; and President of Nutcracker Brands from January 2003 to November 2003. |
|
|
David P. Skarie | |
57 |
|
Co-Chief Executive Officer and President of the Company
since September 2003; President, The Carriage House Companies, Inc. and Ralston Foods since October 2002 and January 2003,
respectively. He served as Corporate Vice President of the Company from
March 1994 to September 2003; President of Nutcracker Brands, Inc. from
April 2002 to January 2003; President of Ralston Foods from June 2000 to
September 2002; and Director of Customer Development of Ralston Foods from
March 1994 to June 2000. |
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David L. Beré | |
50 |
|
Corporate Vice President, and President and Chief Executive
Officer of Bakery Chef, Inc. since the acquisition of Bakery Chef in
December 2003. He served as President and Chief Executive Officer of Bakery
Chef since December 1998; and President and Chief Executive Officer of
McCain Foods USA from April 1996 to December 1998. |
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Thomas G. Granneman | |
54 |
|
Corporate Vice President and Controller
since January 1999. He served as Vice President and Controller from December 1996 to January 1999. |
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Charles G. Huber, Jr. | |
39 |
|
Corporate Vice President, General Counsel and Secretary of
the Company since October 2003. He served as Vice President and Assistant
General Counsel from September 2001 to October 2003; and Assistant General
Counsel from March 1994 to September 2001. |
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Richard R. Koulouris | |
47 |
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Corporate Vice President, and President, Bremner, Inc. and Nutcracker Brands, Inc. since November 2003. He served as Vice President Operations, Bremner from September 1995 to November 2003. | |
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Scott Monette | |
42 |
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Corporate Vice President and Treasurer since September 2001.
He joined Ralcorp in January 2001 as Vice President and Treasurer. Prior to
joining Ralcorp, Mr. Monette was Chief Investment Officer/Benefit Plans for
Hallmark Cards, Inc. from December 1998 to January 2001. He served as
Corporate Debt Manager for Hallmark Cards, Inc. from January 1996 to
December 1998. |
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Ronald D. Wilkinson | |
53 |
|
Corporate Vice President, and Director of Product Supply of
Ralston Foods and The Carriage House Companies, Inc. He has held the
Corporate Vice President position and the Ralston Foods position since
October 1996, and the Carriage House position since January 2003. |
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(Ages are as of December 31, 2003) |
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company’s
common stock is traded on the New York Stock Exchange under the symbol “RAH”.
There were 11,402 shareholders of record on November 28, 2003. The Company has never paid
cash dividends and has no plan to pay cash dividends in the foreseeable future. The range
of high and low sale prices of Ralcorp common stock as reported on the NYSE Composite Tape
is set forth in Note 20 of the financial statements filed as a part of this document under
Item 8.
9
FIVE YEAR FINANCIAL
SUMMARY
(In millions except per
share data)
|
Year Ended September 30, |
|---|
|
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|
2003 |
|
|
2002 |
|
|
2001 |
|
|
2000 |
|
|
1999 |
|
|
|
Statement of Earnings Data | | |
Net sales (a) |
|
|
$ |
1,303.6 |
|
$ | 1,280.3 |
|
$ | 1,178.0 |
|
$ | 847.0 |
|
$ | 666.2 |
|
Cost of products sold | | |
| (1,045.6 |
) |
| (1,027.6 |
) |
| (952.4 |
) |
| (672.0 |
) |
| (511.6 |
) |
|
|
Gross profit | | |
| 258.0 |
|
| 252.7 |
|
| 225.6 |
|
| 175.0 |
|
| 154.6 |
|
Selling, general and administrative expenses | | |
| (171.3 |
) |
| (163.1 |
) |
| (153.2 |
) |
| (111.1 |
) |
| (99.6 |
) |
Interest expense, net | | |
| (3.3 |
) |
| (5.9 |
) |
| (15.9 |
) |
| (8.8 |
) |
| (1.4 |
) |
Goodwill impairment loss (b) | | |
| (59.0 |
) |
| - |
|
| - |
|
| - |
|
| - |
|
Restructuring charges (c) | | |
| (14.3 |
) |
| - |
|
| (2.6 |
) |
| (2.5 |
) |
| - |
|
Litigation settlement income (d) | | |
| 14.6 |
|
| 1.6 |
|
| - |
|
| - |
|
| - |
|
Merger termination fee (e) | | |
| - |
|
| - |
|
| 4.2 |
|
| - |
|
| - |
|
|
|
Earnings before income taxes and equity earnings | | |
| 24.7 |
|
| 85.3 |
|
| 58.1 |
|
| 52.6 |
|
| 53.6 |
|
Income taxes | | |
| (16.9 |
) |
| (30.7 |
) |
| (22.1 |
) |
| (19.6 |
) |
| (20.1 |
) |
Equity in (loss) earnings of Vail Resorts, Inc., | | |
net of related deferred income taxes (f) | | |
| (.4 |
) |
| (.8 |
) |
| 3.9 |
|
| 3.4 |
|
| 2.9 |
|
|
|
Net earnings | | |
$ | 7.4 |
|
$ | 53.8 |
|
$ | 39.9 |
|
$ | 36.4 |
|
$ | 36.4 |
|
|
|
Earnings per share: | | |
Basic | | |
$ | 0.25 |
|
$ | 1.79 |
|
$ | 1.34 |
|
$ | 1.21 |
|
$ | 1.17 |
|
Diluted | | |
$ | 0.25 |
|
$ | 1.77 |
|
$ | 1.33 |
|
$ | 1.19 |
|
$ | 1.15 |
|
Weighted average shares outstanding: | | |
Basic | | |
| 29.1 |
|
| 30.0 |
|
| 29.9 |
|
| 30.2 |
|
| 31.1 |
|
Diluted | | |
| 29.7 |
|
| 30.4 |
|
| 30.1 |
|
| 30.6 |
|
| 31.7 |
|
|
Statement of Cash Flows Data | | |
Cash provided (used) by: | | |
Operating activities | | |
$ | 105.8 |
|
$ | 110.8 |
|
$ | 131.0 |
|
$ | 33.0 |
|
$ | 42.0 |
|
Investing activities | | |
| |