Ralcorp Holdings: announces mixed results for Q3/2009

St. Louis / MO. (rh) Ralcorp Holdings Inc. filed its Quarterly Report for the period ended June 30, 2009. Reported diluted earnings per share (EPS) were 1,31 USD for the quarter and 3,69 USD for the nine months ended June 30 – compared to 1,73 USD and 4,81 USD for the corresponding periods 2008; including the effects of certain special items related to Ralcorp´s investment in Vail Resorts and the Post Foods.

Third quarter diluted EPS excluding the above special items were 1,30 USD compared to 0,82 USD last year, a 59 percent increase. Total segment profit contribution grew 51 percent excluding the incremental amounts from Post Foods and Harvest Manor Farms, acquired in August 2008 and March 2009, respectively. On April 27, 2009, Ralcorp transferred Post Foods to stand-alone information systems and commenced Post Foods´ independent sales, logistics, and purchasing functions. As a result of the complexity of that transition and the related logistical challenges, the Company reduced Post branded promotional activity during the quarter, which caused Post Foods net sales and operating profit to be lower than expected. Management believes all significant transition issues have since been addressed. Through the first eleven months of our ownership, the Post Foods business has met expectations for earnings before interest, income taxes, depreciation and amortization. Other reported results for the quarter ended June 30, 2009 included:

• Net sales increased 51percent, primarily as a result of the Post Foods and Harvest Manor Farms acquisitions, as well as higher pricing in response to rising input costs.
• Total segment profit contribution was up 192 percent, primarily due to the acquisitions and improved selling prices, partially offset by higher raw material costs.
• Earnings before income taxes and equity earnings were 105,7 million USD (compared to 53,5 million USD a year ago), including the gains and losses on Vail forward sale contracts and sale of Vail shares, and Post transition and integration costs.
• Equity in earnings of Vail Resorts Inc. (after tax) was 6,9 million USD compared to 11,2 million USD a year ago.
• Net earnings were 74,8 million USD compared to 45,8 million USD last year.
• Weighted average shares for diluted EPS rose to 56,9 million USD from 26,3 million USD a year ago, primarily as a result of the 30,5 million USD shares issued in the Post Foods acquisition.
• Food EBITDA was 157,8 million USD compared to 65,3 million USD last year, largely due to incremental EBITDA from Post Foods partially offset by related transition and integration costs.

Of the third quarter´s 335,4 million USD sales growth, approximately 264,8 million USD came from Post Foods (included in the Cereals segment), and approximately 46,0 million USD came from Harvest Manor Farms. Excluding the effects of these two acquisitions, third quarter sales volume changes were mixed, with an increase in Cereals (four percent) and Sauces and Spreads (one percent) and declines in Frozen Bakery Products (eleven percent) and Snacks (three percent). Sales Dollars in each segment were helped by improved selling prices, which were raised in several product categories in response to higher input costs.

Amortization of intangible assets other than software (mainly related to brands and customers) increased primarily as a result of the addition of amounts for Post Foods. Total amortization of such intangibles was 9,2 million USD (0,10 USD per share) for the third quarter of fiscal 2009 and 5,9 million USD (0,14 USD per share) for the third quarter of fiscal 2008 (source).