Impairment charge drags down Ralcorp earnings

by Eric Schroeder
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ST. LOUIS — A $471.4 million impairment charge related to the company’s Post cereal business dragged down fourth-quarter and full-year results at Ralcorp Holdings, Inc. In the year ended Sept. 30, Ralcorp sustained a loss of $187.2 million, which compared with earnings of $208.8 million, equal to $3.79 per share on the common stock, in fiscal 2010. Adjusted EBITDA for the year rose, though, climbing 19% to $800.2 million from $671.7 million.

Net sales in fiscal 2011 totaled $4,741 million, up 17% from $4,048.5 million in the same period a year ago.

For the fourth quarter ended Sept. 30 Ralcorp suffered a loss of $370.1 million, which compared with earnings of $41.9 million in the same period last year. Adjusted EBITDA, meanwhile, was $195 million, up from $181 million. Net sales in the fourth quarter rose 8% to $1,223.2 million from $1,129.2 million.
Profit contribution in the Branded Cereal Products segment totaled $206 million in fiscal 2011, down 7% from $220.6 million in fiscal 2010. Net sales in the segment totaled $953.8 million, down 3% from $987.5 million.

Ralcorp said volumes were down across most of its Post brand portfolio during the fourth quarter with the exception of Great Grains, which rose sharply driven by increased advertising support.

In the company’s Other Cereal Products segment, profit contribution eased 4% to $86.3 million from $90.3 million, while sales rose 5% to $838.5 million from $799.7 million.

Fiscal 2011 profit contribution in the Frozen Bakery Products segment climbed 9% to $88 million from $80.8 million. Net sales also were higher, rising 10% to $768.6 million from $698.3 million.

Profit contribution in the Pasta segment was $126.1 million on sales of $577.4 million, up from $21.6 million and $101.4 million, respectively, in fiscal 2010.

Profit contribution in the Snacks, Sauces & Spreads segment fell 11% to $135.5 million from $152.6 million, while sales rose 10% to $1,602.7 million from $1,461.6 million.

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