Ralcorp Holdings: sales and profit up in Q1/2008

St. Louis / MO. (rh) Ralcorp Holdings Inc. announced its results for the period ended December 31, 2007. Reported diluted earnings per share were 1,61 USD including the impact of a non-cash gain on forward sale contracts related to Ralcorp´s investment in Vail Resorts Inc., or 0,68 USD per share excluding that impact. In last year´s first quarter, reported diluted earnings per share were 0,28 USD including the impact of a non-cash loss on those contracts, or 0,70 USD excluding that impact. Other reported results for the quarter include:

• Net sales for the quarter increased 24 percent as a result of business acquisitions, other volume gains, and higher pricing in response to rising input costs.
• Total segment profit contribution was up two percent as a result of acquisitions and higher volumes and selling prices, partially offset by higher ingredient costs and amortization expense.
• Food EBITDA was 66,2 million USD compared to 62,2 million USD last year.
• Earnings before income taxes and equity loss were 69,7 million USD (compared to 17,9 million USD last year) after a 37,8 million USD (0,93 USD per share) non-cash gain on Ralcorp´s Vail forward sale contracts. Last year´s amount included a 17,9 million USD (0,42 USD per share) non-cash loss on those contracts.
• Equity in loss of Vail Resorts, Inc. after tax was 2,8 million USD (0,10 USD per share) compared to 4,2 million USD (0,15 USD per share) a year ago.
• Net earnings were 42,4 million USD, which is 34,8 million USD higher than a year ago, including the non-cash after-tax effects of gains or losses on the Vail forward sale contracts.

The first quarter sales growth was 128,0 million USD, of which approximately 60 percent is attributable to the timing of recent acquisitions. Those acquisitions include Bloomfield Bakers (March 2007) in the Cereals, Crackers + Cookies segment and Cottage Bakery (November 2006) in the Frozen Bakery Products segment. The remaining growth (more than nine percent over the prior year) was due to volume gains in all segments and price increases in response to rapidly rising costs.

For the quarter, the company´s overall ingredient and packaging costs were unfavorable by a total of about 25,7 million USD. Amortization of intangible assets related to acquisitions (primarily customer relationships and trademarks) increased with the addition of amounts for Bloomfield and Cottage. Amortization of such intangibles was 5,5 million USD (0,13 USD per share) for the first quarter of fiscal 2008, but only 3,2 million USD (0,07 USD per share) for Q1/2007.

St. Louis-based Ralcorp Holdings Inc. manufactures private label food products, including frozen bakery products, cereals, crackers, cookies, dressings, syrups, jellies, sauces, snack nuts and candy. November 2007 the company acquired Kraft Food´s Post cereals in a 2,6 billion USD deal expected to close in mid-2008.