Net sales for the quarter stood at $1.2bn (€889m) up 8% on the same period last year mainly due to the company’s AIPC acquisition in July last year.
Undisclosed impairment charges
In its financial release, the company said that due to sales declines in its Post Foods cereal business and poor performance in Ralcorp ready-to-eat cereal products “management determined that additional strategic steps were needed to stabilize the business and the competitive position of its brands“.
To do so, the company recorded non-cash impairment charges of $471.4 (€349.2m) million related to certain Post intangible assets.
The company did not give information on what the intangible assets were for, but said it would make disclosures by 14 December 2011.
“The impact of these steps is to reduce expected net sales growth rates and profitability of certain brands in the near term, thereby resulting in the goodwill and trademark impairments,” said the company in a statement.
Ralcorp’s US ready-to-eat cereal business Post Foods slumped 5% in net sales compared to the same quarter last year, from $111.1m (€82.3m) in 2010 to $105m (€77.8m) this quarter.
In a presentation of the company’s results, Kevin Hunt, Ralcorp co-CEO and president said Ralcorp had acquisition plans in the pipeline.
“When we look at the current acquisition pipeline, we’ve identified approximately $10 billion in additional annual sales, representing over 50 individual companies that meet our initial criteria for strategic acquisitions ranked by margin and synergy with our existing business,” he said.