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Ralcorp's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Forward-looking statements and these remarks should be evaluated together with the many risks and uncertainties that affect Ralcorp’s business, particularly those mentioned in the cautionary statements in yesterday’s earnings press release and in the periodic reports filed by Ralcorp with the Securities and Exchange Commission.

In addition during today’s call, we will reference certain non-GAAP financial measures such as adjusted earnings before interest, income taxes, depreciation and amortization, and adjusted diluted earnings per share, which have been reconciled to the most comparable GAAP measure in yesterday’s earnings press release. I would also like to point out that a replay of today’s call will be made available on our website. At the conclusion of the prepared remarks, we will open the call for questions.

With that, let me now turn the call over to Kevin.

Kevin J. Hunt

Thank you Matt and good morning everyone. We’ll do a few things on the call this morning. First, I’ll provide an overview of our performance for the quarter and an update on our recent acquisitions, including our acquisition of the Petri cookie company, which we announced this morning. Then I’ll turn to category dynamics to offer some context before Scott reviews financial information and results for our segments. Lastly, I’ll provide you with our outlook for the remainder of the year before we take your questions.

Starting with our performance, Ralcorp’s adjusted second quarter fully diluted earnings per share were $0.72 versus $0.75 last year, or a 4% decrease. Earnings per share were adjusted for a number of items that were highlighted in the press release last night. The primary factors in the EPS short fall were in our Pasta and Frozen Bakery Product segments.

Past segment profit reflects sharply higher cost for durum wheat that could not be fully offset by pricing actions. In Frozen Bakery, our base business operating performance was negatively impacted by lower volumes in some key categories, higher input costs and increased trade spending. These declines were somewhat offsets by a favorable tax adjustment and the benefit of the Refrigerated Dough acquisition. On a consolidated basis, Ralcorp’s segment operating profit decreased 9%, while adjusted EBITDA was down 4%.

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