FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended August 31, 1997
Commission File No. 1-6807
FAMILY DOLLAR STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-0942963
(State of incorporation) (I.R.S. Employer Identification Number)
10401 Old Monroe Road, Matthews, North Carolina 28105
(Address of principal executive offices) (Zip Code)
P. O. Box 1017, Charlotte, North Carolina 28201-1017
(Mailing address)
Registrant's telephone number, including area code (704) 847-6961
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
The aggregate market value of the voting stock of the registrant held by
non-affiliates of the registrant based on the closing price of these shares
on the New York Stock Exchange on November 10, 1997, was approximately
$1,530,800,000.
The number of shares of the registrant's Common Stock outstanding as of
November 10, 1997, was 85,872,666.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated Documents
(To the extent indicated herein) Location in Form 10-K
Annual Report to Stockholders for the Part II (Items 5, 6, 7 and 8)
fiscal year ended August 31, 1997 Part IV (Item 14)
Proxy Statement dated November 20, 1997 Part III (Items 10, 11, 12 and 13)
for the Annual Meeting of Stockholders
<PAGE>
PART I
ITEM 1. BUSINESS
The original predecessor of Family Dollar Stores, Inc., was
organized in 1959 to operate a self-service retail store in Charlotte,
North Carolina. In subsequent years, additional stores were opened, and
separate corporations generally were organized to operate these stores.
Family Dollar Stores, Inc. (together with its subsidiaries referred to
herein as the "Company"), was incorporated in Delaware in 1969, and all
existing corporate entities became wholly-owned subsidiaries. Additional
stores continued to be opened and operated in wholly-owned subsidiaries
organized in the states where the stores were located. Four subsidiaries
organized as North Carolina corporations provide distribution, trucking,
operations, marketing and other services to the Company.
The Company now operates a chain of self-service retail discount
stores. As of November 1, 1997, there were 2,820 stores in 38 states and
the District of Columbia as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Texas 277 Louisiana 87 Colorado 21
North Carolina 214 New York 83 Kansas 20
Georgia 186 Illinois 81 Iowa 16
Ohio 182 West Virginia 79 Delaware 15
Florida 173 Mississippi 75 Connecticut 14
Tennessee 138 Arkansas 55 Minnesota 13
Virginia 137 Oklahoma 53 Nebraska 11
South Carolina 118 Missouri 51 Rhode Island 10
Pennsylvania 114 Maryland 44 New Hampshire 7
Alabama 112 Massachusetts 38 Vermont 5
Michigan 109 Wisconsin 32 Maine 4
Kentucky 104 New Jersey 24 South Dakota 3
Indiana 91 New Mexico 23 District of Columbia 1
</TABLE>
The number of stores operated by the Company at the end of each of
its last five fiscal years is as follows: 2,035 stores on August 31,
1993; 2,215 stores on August 31, 1994; 2,416 stores on August 31, 1995;
2,581 stores on August 31, 1996; and 2,767 stores on August 31, 1997.
During the fiscal year ended August 31, 1997, 50 stores were
closed, 39 stores were relocated within the same shopping center or market
area, 55 stores were expanded in size and 380 stores were renovated. All
of the stores are occupied under leases, except 141 stores owned by the
Company. (See "Properties" herein.) The Company has announced plans to
open approximately 300 stores and close approximately 50 stores during the
current fiscal year. Such plans are continually reviewed and subject to
change. From September 1, 1997, through November 1, 1997, the Company
opened 71 new stores, closed 18 stores, relocated 1 store and expanded 7
stores. All stores opening in the fiscal year ending August 31, 1998, will
<PAGE>
have the new interior store layout that has been utilized in all new stores
opened since September 1, 1995. This layout features increased emphasis on
seasonal and promotional goods, improved presentation of merchandise, lower
fixtures and wider aisles for an attractive, customer-friendly shopping
environment.
As of November 1, 1997, the Company had in the aggregate approximately
22,600,000 square feet of total store space (including receiving rooms and
other non-selling areas). The typical store has approximately 6,000 to
8,000 square feet of total area. The stores are in both rural and urban
areas, and they are typically freestanding or located in shopping centers
with adequate parking available. As of November 1, 1997, there were
approximately 1,450 stores located in communities with populations of less
than 15,000; approximately 540 stores in communities with populations of
15,000 to 50,000; and approximately 830 stores in communities with
populations of over 50,000. All stores are similar in appearance and
display highly visible red and white "Family Dollar Stores" or "Family
Dollar" signs.
The Company's stores are operated on a self-service,
cash-and-carry basis, and low overhead permits the sale of merchandise at
a relatively moderate markup. During the fiscal year ended August 31, 1994,
in the face of increasing competition, the Company began to change its
merchandising strategy away from promotional pricing and towards everyday
low prices. In December 1993, prices were reduced on a limited number of
items in 400 stores and in June 1994, this program was expanded to 1,000
stores. In September and October 1994, the number of stores with
merchandise at reduced prices increased to 1,800, and the number of
stockkeeping units with price reductions increased from approximately 500
to approximately 2,500. A lesser number of price reductions were taken in
the balance of the stores in less competitive markets. No single store
accounted for more than one-eighth of one percent of sales during the fiscal
year ended August 31, 1997. Most of the stores are open six evenings a
week, and many remain open on Sunday afternoons.
The stores offer a variety of merchandise including men's, women's,
boys', girls' and infants' clothing, shoes, domestics, household products,
health and beauty aids, toys, school supplies, candy and snack food,
electronics, housewares, paint and automotive supplies. During the fiscal
year ended August 31, 1997, soft goods, including wearing apparel, shoes,
linens, blankets, bedspreads and curtains, accounted for approximately 34.5
percent of the Company's sales. During the fiscal year ended August 31,
1997, nationally advertised brand merchandise accounted for approximately
30 percent of sales, Family Dollar label merchandise accounted for
approximately 4.5 percent of sales and merchandise sold under other labels,
or which was unlabeled, accounted for the balance of sales. Irregular
merchandise accounted for approximately 1.5 percent of sales during such
period. The Company does not accept credit cards or extend credit.
The Company has a policy of uniform pricing of most items in its
stores. Selected merchandise in stores in the most competitive markets
carries lower prices and in stores in the least competitive markets with
higher operating costs carries higher prices. The Company advertises
through circulars which are inserted in newspapers or mailed directly to
<PAGE>
consumers' residences, and also advertises to a limited degree in
newspapers. As part of the Company's plan to reduce expenses to support the
program of price reductions on merchandise in its stores, in the fiscal year
ended August 31, 1995, the number of advertising circulars distributed to
consumers' homes or inserted in newspapers was cut from 22 to 15. In the
fiscal year ended August 31, 1996, the number of advertising circulars
distributed was reduced from 15 to 14. In the fiscal year ended August 31,
1997, 14 circulars again were distributed. In the fiscal year ending
August 31, 1998, the current plan is to distribute 10 or 11 circulars. The
Company has an unadvertised internal maximum price policy which currently is
to price most items of merchandise under $17.99.
The Company purchases its merchandise from approximately 1,600 suppliers
and generally has not experienced difficulty in obtaining adequate
quantities of merchandise. Approximately 63 percent of the merchandise is
manufactured in the United States and substantially all such merchandise is
purchased directly from the manufacturer. Purchases of imported merchandise
are made directly from the manufacturer or from importers. No single
supplier accounted for more than 1.5 percent of the merchandise sold by the
Company in the fiscal year ended August 31, 1997. Each of the Company's 22
buyers specializes in the purchase of specific categories of goods.
During the fiscal year ended August 31, 1997, approximately 2.5 percent
of the merchandise purchased by the Company was shipped directly to its
stores by the manufacturer or importer. Most of the balance of the
merchandise was received at the Company's Distribution Centers in Matthews,
North Carolina, and West Memphis, Arkansas. Merchandise is delivered to the
stores from the Distribution Centers in Matthews and West Memphis by
Company-owned trucks and by common and contract carriers. During the last
fiscal year, approximately 70 percent of the merchandise delivered was by
common or contract carriers. The average distance between the Distribution
Center in Matthews and the approximately 1,490 stores served by that
facility on August 31, 1997, is approximately 390 miles. The average
distance between the Distribution Center in West Memphis and the
approximately 1,277 stores served by that facility on August 31, 1997, is
approximately 465 miles.
The Company also operates satellite distribution buildings in Salisbury,
North Carolina, and Memphis, Tennessee. High volume, bulk items of
merchandise are shipped by vendors directly to these facilities and then
delivered to the stores by contract carriers.
The business in which the Company is engaged is highly competitive. The
principal competitive factors include location of stores, price and quality
of merchandise, in-stock consistency, merchandise assortment and
presentation, and customer service. The Company competes for sales and
store locations in varying degrees with national, regional and local
retailing establishments, including department stores, discount stores,
variety stores, dollar stores, discount clothing stores, drug stores,
grocery stores, outlet stores, warehouse stores and other stores. Many of
the largest retail merchandising companies in the nation have stores in
areas in which the Company operates. The relatively small size of the
Company's stores permits the Company to open new units in rural areas and
small towns, as well as in large urban centers, in locations convenient to
<PAGE>
the Company's low and low-middle income customer base. As the Company's
sales are focused on low priced, basic merchandise, the stores offer
customers a reasonable selection of competitively priced merchandise within
a relatively narrow range of price points.
Generally, in a typical store the highest monthly volume of sales occurs
in December, and the lowest monthly volume of sales occurs in January and
February.
The Company maintains a substantial variety and depth of basic and
seasonal merchandise inventory in stock in its stores (and in distribution
centers for weekly store replenishment) to attract customers and meet their
shopping needs. Vendors' trade payment terms are negotiated to help finance
the cost of carrying this inventory. The Company must balance the value of
maintaining high inventory levels to meet customers' demands with the cost
of having inventories at levels that exceed such demands and that must be
marked down in price in order to sell.
The Company has registered with the U. S. Patent and Trademark Office
the name "Family Dollar Stores" as a service mark.
On August 31, 1997, the Company had approximately 12,000 full-time
employees and approximately 10,500 part-time employees. Approximately 750
additional employees were hired on a temporary basis for the 1996 Christmas
season. None of the Company's employees are covered by collective
bargaining agreements. The Company considers its employee relations
to be good.
ITEM 2. PROPERTIES
As of November 1, 1997, the Company operated 2,820 stores in 38
states and the District of Columbia. See "Business" herein. With the
exception of 141 stores owned by the Company, all of the Company's stores
were occupied under lease. Most of the leases are for fixed rentals.
A large majority of the leases contain provisions which may require
additional payments based upon a percentage of sales or property taxes,
insurance premiums or common area maintenance charges.
Of the Company's 2,679 leased stores at November 1, 1997, all but
145 leases contain options to renew for additional terms; in most cases
for a number of successive five-year periods. The following table sets
forth certain data, as of November 1, 1997, concerning the expiration
dates of all leases with renewal options:
<PAGE>
<TABLE>
<CAPTION>
Approximate Number of Approximate Number of
Leases Expiring Leases Expiring
Assuming No Exercise Assuming Full Exercise
Fiscal Years of Renewal Options of Renewal Options
<S> <C> <C>
1998 514 0
1999-2001 1,386 2
2002-2004 530 101
2005-2007 102 214
2008 and thereafter 2 2,217
</TABLE>
Of the 141 Company-owned stores, 18 are located in Texas, 16 in
North Carolina, 13 each in Georgia and Virginia, 11 in Indiana, 10 in
Illinois, 8 in Tennessee, 7 in Michigan, 6 in Ohio, 5 in Alabama, 4 each
in South Carolina, West Virginia, Florida, Arkansas, Kentucky and
Louisiana, 3 in Mississippi, 2 each in Iowa and Oklahoma and one each in
New Jersey, Missouri and Kansas. In these owned stores, there are
approximately 1,130,000 total square feet of space.
The Company also owns its Executive Offices and Distribution Center
which are located on a 64.5 acre tract of land in Matthews, North
Carolina, just outside of Charlotte, in a building containing
approximately 810,000 square feet of which approximately 740,000 square
feet are used for the Distribution Center which includes receiving,
warehousing and shipping facilities, and approximately 70,000 square
feet are used for Executive Offices.
The Company owns a second full-service distribution center which is
located on a 75-acre tract of land in West Memphis, Arkansas, in a
building containing approximately 850,000 square feet. This facility
became operational in the spring of 1994 with 550,000 square feet of
space, and a 300,000 square foot addition was substantially completed by
the end of the Company's fiscal year on August 31, 1996.
The Company began construction in March 1997 of a third full-service
distribution center on a 75-acre tract of land owned by the Company in
Warren County, Virginia. This distribution center will contain
approximately 907,000 square feet and the plan is to begin shipping
merchandise from this facility to stores in February 1998. The
estimated cost of $49 million for the land, building, equipment and
<PAGE>
related services is expected to be funded with cash flow from current
operations and short-term borrowing under the Company's bank lines of
credit. Approximately $22 million of the estimated cost had been
expended prior to August 31, 1997.
During the fiscal year ended August 31, 1997, the Company leased
buildings in Salisbury, North Carolina (approximately 300,000 square
feet) and Memphis, Tennessee (approximately 270,000 square feet) to
serve as satellite distribution facilities and a building in Charlotte
(approximately 313,000 square feet) to provide storage space for the
Distribution Center in nearby Matthews. The Company also leased another
building in Charlotte (approximately 78,100 square feet) to serve as a
reclamation facility for merchandise returned from the stores. These
leases continue in effect through all or most of the current fiscal
year.
The Company owns and operates a fleet of tractor-trailers and trucks
to distribute merchandise to some of its stores.
ITEM 3. LEGAL PROCEEDINGS
The Company knows of no material pending legal proceedings,
other than ordinary routine litigation incidental to the business, to
which the Company is a party or of which any of its property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted during the fourth quarter of the
fiscal year ended August 31, 1997, to a vote of security holders through
the solicitation of proxies or otherwise.
ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to each of
the executive officers of the Company as of November 1, 1997:
<TABLE>
<CAPTION>
Name Position and Office Age
<S> <C> <C>
Leon Levine (1) Chairman of the Board 60
and Treasurer
Howard R. Levine (2) President 38
R. James Kelly (3) Vice Chairman 50
George R. Mahoney, Jr. (4) Executive Vice President- 55
General Counsel and Secretary
<PAGE>
<S> <C> <C>
R. David Alexander, Jr. (5) Senior Vice President- 40
Distribution and
Logistics
Albert S. Rorie (6) Senior Vice President- 47
Information Technology
C. Martin Sowers (7) Senior Vice President- 39
Finance
Phillip W. Thompson (8) Senior Vice President- 48
Store Operations
Charles W. Broome (9) Vice President- 49
Store Operations
Terry A. Cozort (10) Vice President- 54
Human Resources
Charles D. Curry (11) Vice President- 42
Asset Protection
Bruce W. Fosson (12) Vice President- 51
Store Operations
Charles S. Gibson, Jr. (13) Vice President- 36
Logistics
Owen R. Humphrey (14) Vice President- 56
Distribution and
Transportation
Gilbert A. LaFare (15) Vice President- 51
Real Estate
Edgar L. Paxton (16) Vice President- 55
Advertising and
Sales Promotion
John J. Scanlon (17) Vice President- 48
General Merchandise
Manager: Hardlines
Lou Scognamiglio (18) Vice President- 48
General Merchandise
Manager: Softlines
Kenneth T. Smith (19) Vice President- 35
Loss Prevention
</TABLE>
<PAGE>
(1) Mr. Leon Levine founded the Company's business in 1959
and was its President, Chief Executive Officer and
Treasurer from 1959 until September 1977 when he was
elected Chairman of the Board, Chief Executive Officer
and Treasurer. He is the father of Howard R. Levine.
(2) Mr. Howard R. Levine was employed by the Company in
various capacities in the Merchandising Department from
1981 to 1987, including employment as Senior Vice
President-Merchandising and Advertising. From 1988 to
1992, Mr. Levine was President of Best Price Clothing
Stores, Inc., a chain of ladies' apparel stores. From
1992 to April 1996, he was self-employed as an
investment manager. He rejoined the Company in April
1996, and was elected Vice President-General Merchandise
Manager: Softlines in April 1996, Senior Vice President-
Merchandising and Advertising in September 1996 and
President and Chief Operating Officer in April 1997.
He is the son of Leon Levine.
(3) Mr. R. James Kelly was employed by the Company as Vice
Chairman-Chief Financial and Administrative Officer in
January 1997. For more than five years prior to his
employment by the Company, he was a partner with Price
Waterhouse LLP.
(4) Mr. George R. Mahoney, Jr. was employed by the Company
as General Counsel in October 1976. He was elected Vice
President-General Counsel and Secretary in April 1977,
Senior Vice President-General Counsel and Secretary in
January 1984 and Executive Vice President-General
Counsel and Secretary in October 1991.
(5) Mr. R. David Alexander, Jr. was employed by the Company
as Senior Vice President-Distribution and Transportation
in August 1995, and was promoted to Senior Vice
President-Distribution and Logistics in September 1997.
Prior to his employment by the Company, he was employed
by Northern Automotive Co., Inc., a chain of discount
automotive supply stores, from June 1993 to August 1995,
where he was Senior Vice President-Distribution and
Transportation. Prior to his employment by Northern
Automotive Co., Inc., he was employed by Best Products
Co., Inc., a chain of catalogue showroom stores, from
June 1985 to May 1993 where he was Senior Vice
President-Distribution and Transportation.
<PAGE>
(6) Mr. Albert S. Rorie was employed by the Company in
various capacities in the Data Processing area from
March 1973 through January 1981, including employment as
Director of Data Processing. Mr. Rorie was
self-employed as a data processing consultant from
January 1981 through May 1982, when he rejoined the
Company and was elected Vice President-Data Processing.
He was elected Senior Vice President-Data Processing in
January 1988 and Senior Vice President-Information
Technology in September 1997.
(7) Mr. C. Martin Sowers was employed by the Company as an
Accountant in October 1984 and was promoted to Assistant
Controller in January 1985. He was elected Controller
in January 1986, Vice President-Controller in July 1989
and Senior Vice President-Finance in December 1991.
(8) Mr. Phillip W. Thompson was employed by the Company in
January 1984 in the Store Operations Department. He was
elected Vice President-Store Operations in January 1985,
and Senior Vice President-Store Operations in January
1992.
(9) Mr. Charles W. Broome was employed by the Company in
1977 in the Store Operations Department. He was
promoted to Regional Vice President-Store Operations in
February 1992. He was elected Vice President-Store
Operations in October 1996.
(10) Mr. Terry A. Cozort was employed by the Company as
Director of Human Resources in April 1988. He was
elected Vice President-Human Resources in July 1989.
(11) Mr. Charles D. Curry was employed by the Company in
May 1982 in the Store Operations Department and
served in several positions including Regional Vice
President-Store Operations. He was elected Vice
President-Asset Protection in June 1997.
(12) Mr. Bruce W. Fosson was employed by the Company in March
1992 as Regional Vice President-Store Operations. He
was elected Vice President-Store Operations in March
1996.
<PAGE>
(13) Mr. Charles S. Gibson, Jr. was employed by the Company
as Vice President-Logistics in September 1997. Prior
to his employment by the Company, he was employed by
Campo Electronics, Appliances and Computers, Inc. a
regional chain of electronics stores, from November 1994
to August 1997, where his last position was Chief
Operating Officer and his previous position was Vice
President-Logistics and Operations. Prior to his
employment by Campo Electronics, Appliances and
Computers, Inc., he was employed by Big B, Inc., a drug
store chain, from August 1991 to November 1994 where he
was Vice President-Logistics.
(14) Mr. Owen R. Humphrey was employed by the Company in
August 1979, and was promoted to Distribution Center
Operations Manager in December 1983. Mr. Humphrey was
promoted to Director of Distribution in January 1988,
and was elected Vice President-Distribution and
Transportation in July 1989.
(15) Mr. Gilbert A. LaFare was employed by the Company in
August 1992 as Vice President-Real Estate.
(16) Mr. Edgar L. Paxton was employed by the Company in
December 1985 as Director of Advertising. He was
elected Vice President-Advertising and Sales Promotion
in January 1988.
(17) Mr. John J. Scanlon was employed by the Company as
Divisional Vice President in March 1992 and was elected
Vice President-General Merchandise Manager: Hardlines in
April 1996.
(18) Mr. Lou Scognamiglio was employed by the Company as Vice
President-General Merchandise Manager: Softlines in
February 1997. For more than five years prior to his
employment by the Company, he was employed by One Price
Clothing Stores, Inc., a regional chain of apparel
stores, where his last position was Divisional
Merchandise Manager.
(19) Mr. Kenneth T. Smith was employed by the Company as a
financial analyst in March 1990. Mr. Smith was promoted
to Director of Information Services-Operations in
February 1992 and to Director of Accounting in October
1992. He was elected Vice President-Controller in
October 1995 and Vice President-Loss Prevention in June
1997.
All executive officers of the Company are elected by and serve at
the pleasure of the Board of Directors.
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The information required by this item is included in the
Company's Annual Report to Stockholders for the fiscal year ended
August 31, 1997, on page 16 under the captions "Market Price and
Dividend Information" and "Market Prices and Dividends" and is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is included in the
Company's Annual Report to Stockholders for the fiscal year ended
August 31, 1997, on pages 14 and 15 under the caption "Summary of
Selected Financial Data" and is incorporated herein by reference. The
Company did not have any long-term debt at the end of each of its last
five fiscal years.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this item is included in the
Company's Annual Report to Stockholders for the fiscal year ended
August 31, 1997, on pages 14 through 16 under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and is incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK
Not Applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is included in the
Company's Annual Report to Stockholders for the fiscal year ended
August 31, 1997, on pages 17 through 24 and is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item as to the Company's
directors and compliance by the Company's directors, executive officers
and certain beneficial owners of the Company's Common Stock with Section
16(a) of the Securities Exchange Act of 1934 is included in the
Company's proxy statement dated November 20, 1997, on pages 4 through 6
under the caption "Election of Directors" and on page 18 under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" and is
incorporated herein by reference. The information required by this item
as to executive officers is included in Item 4A in Part I of this
report.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is included in the
Company's proxy statement dated November 20, 1997, on pages 7 through 14
under the caption "Executive Compensation" and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is included in the
Company's proxy statement dated November 20, 1997, on pages 3 and 4
under the caption "Ownership of the Company's Securities" and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is included in the
Company's proxy statement dated November 20, 1997, on page 14 under the
caption "Related Transactions" and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1 and 2. Financial Statements and Financial Statement
Schedules:
The consolidated financial statements of Family Dollar Stores,
Inc., and subsidiaries which are incorporated by reference to
the Annual Report to Stockholders for the fiscal year ended
August 31, 1997, are set forth in the index on page 17 of this
report.
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission are not required under the related instructions, are
inapplicable or the information is included in the consolidated
financial statements, and therefore, have been omitted.
<PAGE>
The financial statements of Family Dollar Stores, Inc. (Parent
Company) are omitted because the registrant is primarily an
operating company and all subsidiaries included in the
consolidated financial statements being filed, in the
aggregate, do not have minority equity and/or indebtedness to
any person other than the registrant or its consolidated
subsidiaries in amounts which together exceed 5 percent of the
total assets as shown by the most recent year-end consolidated
balance sheet.
3. Exhibits:
Exhibits incorporated by reference:
3(a)(i) Certificate of Incorporation, dated November 24, 1969,
(filed as Exhibit 3(a) to the Company's Registration
Statement on Form S-1, No. 2-35468).
(ii) Certificate of Amendment, dated February 2, 1972, of
Certificate of Incorporation (filed as Exhibit 3(a)(ii)
to the Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1980).
(iii) Certificate of Amendment, dated January 23, 1979, of
Certificate of Incorporation (filed as Exhibit 2 to the
Company's Form 10-Q (File No. 1-6807) for the quarter
ended February 28, 1979).
(iv) Certificate of Amendment, dated January 20, 1983, of
Certificate of Incorporation (filed as Exhibit 4(iv) to
the Company's Registration Statement on Form S-3,
No. 2-85343).
(v) Certificate of Amendment, dated January 16, 1986, of
Certificate of Incorporation (filed as Exhibit 3(a)(v) to
the Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1986).
(vi) Certificate of Amendment, dated January 15, 1987, of
Certificate of Incorporation (filed as Exhibit 3(a)(vi)
to the Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1987).
(b) By-Laws, as amended as of April 29, 1997 (filed as
Exhibit 3(b) to the Company's Form 10-Q (File No. 1-6807)
for the quarter ended May 31, 1997).
* 10 (i) Incentive Profit Sharing Plan amended as of January 16,
1997 (filed as Exhibit 10(ii) to the Company's Form 10-Q
(File No. 1-6807) for the quarter ended February 28,
1997).
<PAGE>
* 10 (ii) 1989 Non-Qualified Stock Option Plan, amended as of
January 16, 1997 (filed as Exhibit 10(iii) to the
Company's Form 10-Q (File No. 1-6807) for the quarter
ended February 28, 1997).
* 10 (iii) Family Dollar Employee Savings and Retirement Plan and
Trust amended and restated as of January 1, 1987 (filed
as Exhibit 10 (viii) to the Company's Form 10-K (File No.
1-6807) for the year ended August 31, 1995).
* 10 (iv) Amendment No. One dated January 15, 1996, to Family
Dollar Employee Savings and Retirement Plan and Trust
(filed as Exhibit 10(v) to the Company's Form 10-K (File
No. 1-6807) for the year ended August 31, 1996).
10 (v) Credit Agreement dated as of March 31, 1996, between the
Company and NationsBank, N.A.,(filed as Exhibit 10 to the
Company's Form 10-Q (File No. 1-6807) for the quarter
ended May 31, 1996).
* 10 (vi) Employment Agreement dated December 17, 1996, between the
Company and R. James Kelly (filed as Exhibit 10(i) to the
Company's Form 10-Q (File No. 1-6807) for the quarter
ended February 28, 1997).
* 10 (vii) Employment Agreement dated April 29, 1997, between the
Company and Howard R. Levine (filed as Exhibit 10(i) to
the Company's Form 10-Q (File No. 1-6807) for the quarter
ended May 31, 1997).
Exhibits filed herewith:
* 10 (i) Amendment dated August 28, 1997, to the Employment
Agreement dated April 29, 1997, between the Company and
Howard R. Levine.
11 Statement Re: Computations of Per Share Earnings.
13 Annual Report to Stockholders for the fiscal year ended
August 31, 1997 (only those portions specifically
incorporated by reference herein shall be deemed filed).
21 Subsidiaries of the Company.
27 Financial Data Schedule
* Exhibit represents a management contract or compensatory plan.
(b) No reports on Form 8-K have been filed by the Company
during the last quarter of the period covered by this
report.
<PAGE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
Index
The consolidated financial statements of Family Dollar Stores, Inc.,
and subsidiaries together with the report of Price Waterhouse LLP
incorporated in this report appear on the following pages of the Annual
Report to Stockholders for the fiscal year ended August 31, 1997.
<TABLE>
<CAPTION>
Page of the
Annual Report
<S> <C>
Report of Independent Accountants 17
Consolidated Statements of Income 17
Consolidated Balance Sheets 18
Consolidated Statements of Shareholders'
Equity 19
Consolidated Statements of Cash Flows 20
Notes to Consolidated Financial Statements 21-24
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
FAMILY DOLLAR STORES, INC.
(Registrant)
Date November 17, 1997 By LEON LEVINE
LEON LEVINE
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title Date
LEON LEVINE Chairman of the Board and November 17, 1997
LEON LEVINE Director (Chief Executive
Officer)
HOWARD R. LEVINE President and Director November 17, 1997
HOWARD R. LEVINE
R. JAMES KELLY Vice Chairman-Chief November 17, 1997
R. JAMES KELLY Financial and Administrative
Officer and Director
(Principal Financial
Officer)
GEORGE R. MAHONEY, JR. Executive Vice President November 17, 1997
GEORGE R. MAHONEY, JR. and Director
C. MARTIN SOWERS Senior Vice President- November 17, 1997
C. MARTIN SOWERS Finance (Principal
Accounting Officer)
MARK R. BERNSTEIN Director November 17, 1997
MARK R. BERNSTEIN
JAMES H. HANCE, JR. Director November 17, 1997
JAMES H. HANCE, JR.
JAMES G. MARTIN Director November 17, 1997
JAMES G. MARTIN
<TABLE>
<CAPTION>
FAMILY DOLLAR STORES, INC. STATEMENT RE COMPUTATIONS OF PER SHARE EARNINGS
AS PRESENTED FY 1997 FY 1996
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING FOR THE YEAR ENDED 85,593,710 85,593,710 85,220,346 85,220,346
NET INCOME $74,676,737 $74,676,737 $60,587,746 $60,587,746
EARNINGS PER SHARE:
NET INCOME $0.87 $0.87 $.071 $.071
PRO FORMA DILUTION IMPACT OF COMMON STOCK EQUIVALENTS
ADDITIONAL WEIGHTED AVERAGE SHARES FROM ASSUMED EXERCISE
AT THE BEGINNING OF THE YEAR OF DILUTIVE STOCK
OPTIONS 1,615,741 1,677,179 607,466 1,180,191
WEIGHTED AVERAGE SHARES ASSUMED REPURCHASED FROM
ASSUMED PROCEEDS OF EXERCISES USING TREASURY STOCK
METHOD (AVERAGE MARKET PRICE FOR PRIMARY AND, IF
GREATER, ENDING MARKET PRICE FOR FULLY DILUTED) (1,350,475) (1,190,373) (523,289) (1,066,539)
NET PRO FORMA COMMON STOCK EQUIVALENT INCREMENTAL SHARES 265,266 486,806 84,177 113,652
PERCENTAGE DILUTION FROM PRO FORMA COMMON
STOCK EQUIVALENT INCREMENTAL SHARES 0.31% 0.57% 0.10% 0.13%
TOTAL COMMON STOCK AND COMMON STOCK EQUIVALENTS 85,858,976 86,080,516 85,304,523 85,333,998
NET INCOME $74,676,737 $74,676,737 $60,587,746 $60,587,746
PRO FORMA EARNINGS PER SHARE (INCLUDING DILUTIVE
COMMON STOCK EQUIVALENTS):
NET INCOME $0.87 $0.87 $0.71 $0.71
<PAGE>
<CAPTION>
FY 1995
PRIMARY FULLY DILUTED
<C> <C>
85,027,292 85,027,292
$58,109,525 $58,109,525
$0.69 $0.69
623,495 1,309,527
(534,266) (1,100,292)
89,229 209,235
0.10% 0.25%
85,116,521 85,236,527
$58,109,525 $58,109,525
$0.69 $0.69
</TABLE>
Market Price and Dividend Information
Family Dollar's Common Stock is traded on the New York Stock Exchange under
the ticker symbol FDO. At November 1, 1997, there were approximately 2,250
holders of record of the Common Stock. The accompanying tables give the high
and low sales prices of the Common Stock and the dividends declared per share
for each quarter of fiscal 1997 and 1996. All figures have been adjusted to
reflect the three-for-two stock split effective July 15, 1997.
<TABLE>
Market Prices and Dividends
<CAPTION>
1997 High Low Dividend
<S> <C> <C> <C>
First Quarter.............. $ 12.58 $ 11.00 $ .07 1/3
Second Quarter............. 15.75 12.33 .08
Third Quarter.............. 18.00 15.25 .08
Fourth Quarter............. 23.38 16.67 .08
<CAPTION>
1996 High Low Dividend
<S> <C> <C> <C>
First Quarter ............. $ 12.83 $9.92 $ .06 2/3
Second Quarter............. 10.92 7.33 .07 1/3
Third Quarter.............. 11.83 9.17 .07 1/3
Fourth Quarter............. 12.33 9.83 .07 1/3
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF SELECTED FINANCIAL DATA
<CAPTION>
Years Ended August 31, 1997 1996 1995 1994
<S> <C> <C> <C> <C>
Net sales............................. $1,994,973,237 $1,714,627,092 $1,546,894,565 $1,428,440,427
Cost of sales and operating expenses.. 1,873,496,500 1,615,861,346 1,452,519,040 1,328,323,366
Income before income taxes and
cumulative effect of accounting
change.............................. 121,476,737 98,765,746 94,375,525 100,117,061
Income taxes.......................... 46,800,000 38,178,000 36,266,000 38,157,175
Income before cumulative effect
of accounting change................ 74,676,737 60,587,746 58,109,525 61,959,886
Cumulative effect of change in
method of accounting for income
taxes............................... - - - 1,139,153
Net income............................ 74,676,737 60,587,746 58,109,525 63,099,039
Earnings per common share:
Income before cumulative effect of
accounting change.*................. $ .87 $ .71 $ .69 $ .73
Net income.*........................ $ .87 $ .71 $ .69 $ .75
Dividends declared.................... $ 26,848,520 $ 24,435,102 $ 21,837,249 $ 18,656,163
Dividends declared per common share.*. $.31 1/3 $.28 2/3 $.25 2/3 $.22
Total assets.......................... $ 780,293,852 $696,808,291 $636,233,767 $592,821,871
Working capital....................... $ 283,476,028 $273,694,125 $264,671,854 $230,234,774
Shareholders' equity.................. $ 500,198,473 $444,957,119 $407,750,588 $370,172,275
Stores opened 236 223 213 202
Stores closed (50) (58) (12) (22)
Number of stores - end of year 2,767 2,581 2,416 2,215
<PAGE>
<CAPTION>
SUMMARY OF SELECTED FINANCIAL DATA (Continued)
1993 1992 1991 1990 1989 1988
<C> <C> <C> <C> <C> <C>
$1,297,430,787 $1,158,703,861 $989,345,265 $874,395,095 $756,886,681 $669,493,241
1,194,510,816 1,069,764,555 925,619,376 826,764,773 721,799,222 625,314,311
102,919,971 88,939,306 63,725,889 47,630,322 35,087,459 44,178,930
38,491,288 33,267,370 23,484,031 18,897,177 13,570,222 16,845,017
64,428,683 55,671,936 40,241,858 28,733,145 21,517,237 27,333,913
- - - - - -
64,428,683 55,671,936 40,241,858 28,733,145 21,517,237 27,333,913
$ .77 $ .67 $ .48 $ .35 $ .26 $ .33
$ .77 $ .67 $ 48 $ .35 $ .26 $ .33
$ 16,325,918 $ 13,988,516 $ 11,960,851 $ 10,819,248 $ 9,709,104 $ 8,620,700
$.19 1/3 $.16 2/3 $.14 1/3 $.13 $.11 2/3 $.10 1/3
$537,445,610 $478,027,178 $399,271,302 $355,096,527 $324,012,452 $290,720,223
$205,863,199 $170,288,208 $136,207,278 $107,879,235 $ 87,228,450 $ 78,870,930
$323,281,504 $271,772,441 $227,319,970 $197,076,663 $179,135,552 $167,305,094
174 160 122 122 161 178
(24) (34) (43) (22) (10) (20)
2,035 1,885 1,759 1,680 1,580 1,429
*Adjusted to reflect three-for-two stock split effective July 15, 1997.
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Net Sales
Net sales increased approximately 16.4% ($280,346,000) in fiscal
1997 compared with fiscal 1996, and approximately 10.8% ($167,733,000) in
fiscal 1996 compared with fiscal 1995. The sales increases in fiscal
1997 and fiscal 1996 were attributable to increased sales in existing
stores and sales from new stores opened as part of the Company's store
expansion program.
Customers responded favorably during fiscal 1996 and fiscal 1997 to
the Company's everyday low pricing strategy and price reduction program
which was implemented in all stores in fiscal 1995. Comparable store
sales increased approximately 9.3% in fiscal 1997 and 3.7% in fiscal
1996, as compared with the respective prior years. In fiscal 1997,
comparable stores sales of hardlines merchandise increased approximately
12.8% and sales of softlines merchandise increased approximately 3.2%.
The increase in sales of softlines merchandise in comparable stores in
fiscal 1997 represents the first annual increase in comparable store
softlines sales since fiscal 1993. Hardlines as a percentage of total
sales increased to 65.5% in fiscal 1997 compared to 63.5% in fiscal 1996.
The Company distributed 14 advertising circulars during fiscal `1997,
which was the same number as in fiscal 1996. The Company's circulars for
fiscal 1997 featured more items at the everyday low price, which reduced
the level of promotional markdowns taken as compared to fiscal 1996.
The comparable store sales increase of 3.7% in fiscal 1996 was
attributable to sales increases in hardlines. In fiscal 1996, comparable
store hardlines sales increased approximately 7.7% and softlines sales
decreased approximately 2.6%. In connection with the Company's move to
everyday low pricing, the Company reduced the number of advertising
circulars distributed in fiscal 1996 from 15 to 14.
Hardlines merchandise includes primarily household chemical and
paper products, health and beauty aids, candy and snack food,
electronics, housewares and giftware, toys, hardware and automotive
supplies. Softlines merchandise includes men's, women's, boy's, girl's
and infant's clothing, shoes, and domestic items such as blankets, sheets
and towels.
During fiscal 1997, the Company opened 236 stores and closed 50
stores for a net addition of 186 stores, compared with the opening of 223
stores and closing of 58 stores for a net addition of 165 stores during
fiscal 1996. The Company also expanded or relocated 94 stores in fiscal
1997, compared with 34 stores that were expanded or relocated in fiscal
1996. All stores opened, expanded or relocated in fiscal 1996 and fiscal
1997 have a new interior layout featuring wider aisles, lower fixtures
and updated signage. In addition, approximately 380 stores in fiscal
1997 and approximately 265 stores in fiscal 1996 were renovated with some
or all of the features of the new layout. The Company currently plans to
open approximately 300 stores and close approximately 50 stores for a net
addition of 250 stores during fiscal 1998. The Company also currently
<PAGE>
expects to renovate an additional 200 to 300 stores and expand or
relocate approximately 150 stores in fiscal 1998. Store opening,
closing, expansion, relocation, and renovation plans are continuously
reviewed and are subject to change.
Cost of Sales and Margin
Cost of sales increased approximately 16.8% ($193,962,000) in fiscal 1997
compared with fiscal 1996, and approximately 11.9% ($123,126,000) in
fiscal 1996 compared with fiscal 1995. These increases primarily
reflected the additional sales volume in each of the years. Cost of
sales, as a percentage of net sales, was 67.7% in fiscal 1997, 67.4% in
fiscal 1996, and 66.8% in fiscal 1995. The increase in sales of
hardlines merchandise, which typically carries a lower margin than
softlines, contributed to the increases in the cost of sales percentages
for both fiscal 1997 and fiscal 1996. This effect was mitigated in
fiscal 1997 by a reduction in promotional markdowns. The price reduction
program also contributed to the increase in the cost of sales percentage
for the first half of fiscal 1996 compared to the same period in fiscal
1995.
For fiscal 1998, the Company's plan is for the cost of sales
percentage to be at approximately the same level as for fiscal 1997.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased approximately
13.9% ($63,672,000) in fiscal 1997 compared with fiscal 1996, and
approximately 9.6% ($40,216,000) in fiscal 1996 compared with fiscal
1995. The increases in these expenses primarily were attributable to
additional costs arising from the continued growth in the number of
stores in operation. As a percentage of net sales, selling, general and
administrative expenses were 26.2% in fiscal 1997, 26.8% in fiscal 1996,
and 27.1% in fiscal 1995. The percentage decrease in fiscal 1997
primarily was due to the leverage provided by the 9.3% increase in sales
in comparable stores, and to cost control measures. The Company
estimates that during fiscal 1997 store labor costs increased
approximately $3.6 million due to the federal minimum wage increase that
was effective on October 1, 1996.
The percentage decrease in expenses in fiscal 1996 primarily was
due to the leverage provided by the 3.7% increase in sales in comparable
stores and to decreases in store labor costs and advertising expenses as
a percentage of net sales. In fiscal 1996, the Company eliminated one of
the 15 advertising circulars that were distributed in fiscal 1995. These
decreases were offset in part by a modest increase in distribution
expenses due to the handling of additional units of lower priced
merchandise.
<PAGE>
The federal minimum wage increased again on September 1, 1997, and
the Company estimates that as a result store labor costs will increase
approximately $4 million in fiscal 1998. Selling, general and
administrative expenses also will increase in fiscal 1998 due to the
costs of the new distribution center. Advertising expenses are expected
to decrease in fiscal 1998 as the Company plans to reduce the number of
circulars distributed from 14 to 10 or 11. With planned increases in
sales in comparable stores, the Company is planning for selling, general,
and administrative expenses in fiscal 1998 to decrease modestly as a
percentage of net sales.
Income Taxes
The effective tax rate was 38.5% in fiscal 1997, 38.7% in fiscal
1996 and 38.4% in fiscal 1995. The decrease in the effective tax rate in
fiscal 1997 compared to fiscal 1996 resulted from changes in effective
state income tax rates and from the implementation of the federal Work
Opportunity Tax Credit program. The increase in the effective tax rate
in fiscal 1996 compared to fiscal 1995 primarily was due to the
expiration of the federal Targeted Jobs Tax Credit program.
Liquidity and Capital Resources
The Company has consistently maintained a strong position of liquidity
and financial strength. Cash provided from operating activities during
fiscal 1997 was $123.2 million as compared to $81.2 million in fiscal
1996 and $57.8 million in fiscal 1995. These amounts have enabled the
Company to fund its regular operating needs, capital expenditure program
and cash dividend payments. In addition, the Company maintains
$100,000,000 of unsecured bank lines of credit for short-term financing
and periodically utilizes short-term borrowings to meet the cash needs of
its expansion program and seasonal inventory increases. The increase in
inventories during fiscal 1997 was due to the required inventory
investment for 186 net additional stores. Average inventory per store
declined as a result of improved inventory management. There were no
long-term borrowings during fiscal 1997, 1996 or 1995.
The increase in capital expenditures to $77.0 million in fiscal
1997 from $54.3 million in fiscal 1996 primarily was due to expenditures
incurred in fiscal 1997 to begin construction of a 907,000 square foot
distribution center in Warren County, Virginia, as well as costs to open
236 new stores, expand or relocate 94 existing stores and renovate
approximately 380 existing stores. Capital expenditures for fiscal 1998
are currently expected to be approximately $80 to $90 million, which
primarily represent estimated expenditures for new store expansion,
existing store expansion, relocation, and renovation, and completion in
January 1998 of the construction and equipping of the new distribution
center. The new store expansion and the additional distribution center
also will require additional investment in merchandise inventories.
<PAGE>
Capital spending plans, including store expansion, are continuously
reviewed and are subject to change. Cash flow from current operations
and short-term borrowings under the bank lines of credit are expected to
be sufficient to meet all foreseeable liquidity and capital resource
needs, including store expansion and other capital spending programs. No
long-term borrowings are now expected to be required during fiscal 1998.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128")
effective for fiscal years ending after December 15, 1997. SFAS 128,
which requires dual presentation of basic and diluted earnings per share
(EPS) on the face of the statement of income and requires a
reconciliation of the numerators and denominators of the basic and
diluted EPS calculations, will be implemented in fiscal 1998. The
Company does not expect that basic and diluted EPS will be materially
different from its current EPS calculation since potential common shares
in the form of stock options are not expected to be materially dilutive.
Inflation and Other Matters
The Company's results are impacted by the effect of inflation on the cost
of its merchandise and on operating expenses. Due to the nature of the
Company's merchandise, sales levels generally have incorporated an
inflation factor which neither exceeds nor is significantly lower than
general inflation trends. The Company attempts to combat inflation in
the cost of its merchandise by shifting its source of supply or by
changing merchandise assortments. The Company's operating expenses also
tend to rise with general inflation. The increases in the federal
minimum wage rate on October 1, 1996, and September 1, 1997, increased
store labor costs during fiscal 1997 and will increase store labor costs
in fiscal 1998. Legislative initiatives to reduce federal aid to low and
low-middle income families also may adversely impact the Company's sales.
Forward-Looking Statements
Certain statements contained herein and elsewhere in this Annual Report
which are not historical facts are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements address
activities or events which the Company expects will or may occur in the
future, such as future capital expenditures, store openings, closings,
renovations, expansions and relocations, additional distribution
facilities, and other aspects of the Company's future business and
operations. The Company cautions that a number of important factors
could cause actual results to differ materially from those expressed in
<PAGE>
any forward-looking statements, whether written or oral, made by or on
behalf of the Company. Such factors include, but are not limited to,
competitive factors and pricing pressures, general economic conditions,
changes in consumer demand, inflation, merchandise supply constraints,
changes in exchange rates, tariffs, quotas, and freight rates,
availability of real estate, construction and start-up of a new
distribution center, and the effects of legislation on wage levels and
entitlement programs. Consequently, all of the forward-looking
statements made are qualified by these and other factors, risks and
uncertainties.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Family Dollar Stores, Inc. and Subsidiaries
<CAPTION>
Years Ended August 31, 1997 1996 1995
<S> <C> <C> <C>
Net sales.......................................... $ 1,994,973,237 $ 1,714,627,092 $ 1,546,894,565
Costs and expenses:
Cost of sales.................................... 1,350,157,693 1,156,194,732 1,033,068,759
Selling, general and administrative.............. 523,338,807 459,666,614 419,450,281
1,873,496,500 1,615,861,346 1,452,519,040
Income before income taxes......................... 121,476,737 98,765,746 94,375,525
Income taxes (Note 5).............................. 46,800,000 38,178,000 36,266,000
Net income......................................... $ 74,676,737 $ 60,587,746 $ 58,109,525
Net income per common share (Note 9):.............. $.87 $ .71 $ .69
Weighted average number of shares outstanding
during each year(Note 9)........................ 85,593,710 85,220,346 85,027,291
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Family Dollar Stores, Inc.
In our opinion, the accompanying consolidated balance sheets and
the related consolidated statements of income, of shareholders'
equity and of cash flows present fairly, in all material respects,
the financial position of Family Dollar Stores, Inc. and its
subsidiaries at August 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the
period ended August 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
October 3, 1997
Charlotte, North Carolina
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Family Dollar Stores, Inc. and Subsidiaries
<CAPTION>
August 31, 1997 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............... $ 42,468,300 $ 18,844,839
Merchandise inventories................. 467,945,483 462,840,051
Deferred income taxes (Note 5).......... 28,407,454 20,372,129
Prepayments and other current assets.... 5,881,520 5,842,953
Total current assets ................ $ 544,702,757 $ 507,899,972
Property and equipment, net (Note 2)...... 231,234,756 184,607,229
Other assets.............................. 4,356,339 4,301,090
$ 780,293,852 $ 696,808,291
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable (Note 3).................. $ - $ 4,400,000
Accounts payable........................ 165,150,085 157,011,545
Accrued liabilities (Note 4)............ 84,957,841 65,972,111
Income taxes payable (Note 5)........... 11,118,803 6,822,191
Total current liabilities............ 261,226,729 234,205,847
Deferred income taxes (Note 5)............ $ 18,868,650 $ 17,645,325
Commitments and contingencies (Note 7)
Shareholders' equity (Notes 8 and 9):
Preferred stock, $1 par; authorized and
unissued 500,000 shares
Common stock, $.10 par;
authorized 120,000,000 shares ....... . 9,103,148 6,029,068
Capital in excess of par.................. 21,157,973 16,818,916
Retained earnings......................... 481,286,620 433,458,403
511,547,741 456,306,387
Less common stock held in treasury, at cost 11,349,268 11,349,268
500,198,473 444,957,119
$ 780,293,852 $ 696,808,291
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Family Dollar Stores, Inc. and Subsidiaries
<CAPTION>
Capital in
Common excess Retained Treasury
Years Ended August 31, 1997, 1996 and 1995 stock of par earnings stock
<S> <C> <C> <C> <C>
Balance, September 1, 1994
(60,039,074 shares common stock;
3,452,822 shares treasury stock)................ $ 6,003,907 $14,484,153 $361,033,483 $11,349,268
Net income for the year............................... 58,109,525
Issuance of 157,590 common shares under employee
stock option plan, including tax benefits (Note 8) 15,759 1,290,278
Less dividends on common stock, $.25 2/3 per share....
(adjusted for stock split - Note 9) (21,837,249)
Balance, August 31, 1995
(60,196,664 shares common stock;
3,452,822 shares treasury stock)............... 6,019,666 15,774,431 397,305,759 11,349,268
Net income for the year.............................. 60,587,746
Issuance of 94,020 common shares under employee
stock option plan, including tax benefits (Note 8) 9,402 1,044,485
Less dividends on common stock, $.28 2/3 per share....
(adjusted for stock split - Note 9) (24,435,102)
Balance, August 31, 1996
(60,290,684 shares common stock;
3,452,822 shares treasury stock)................. 6,029,068 16,818,916 433,458,403 11,349,268
Net income for the year............................... 74,676,737
Issuance of 421,757 common shares under employee
stock option plan, including tax benefits
(347,560 shares issued prior to stock split and
74,197 shares issued after stock split - Note 8) 42,176 7,370,961
Issuance of 30,319,037 common shares as a result of
stock split, including 1,726,411 shares of treasury
stock (Note 9).................................... 3,031,904 (3,031,904)
Less dividends on common stock, $.31 1/3 per share.... (26,848,520)
Balance, August 31, 1997
(91,031,478 shares common stock;
5,179,233 shares treasury stock) $9,103,148 $21,157,973 $481,286,620 $11,349,268
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Family Dollar Stores, Inc. and Subsidiaries
<CAPTION>
Years Ended August 31, 1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................... $ 74,676,737 $ 60,587,746 $ 58,109,525
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.... 29,116,624 24,621,033 22,185,435
Deferred income taxes............ (6,812,000) (4,436,380) (2,316,000)
Loss on disposition of property and equipment 39,207 257,167 14,799
Changes in operating assets and liabilities:
Merchandise inventories........ (5,105,432) (19,394,603) (39,874,715)
Income tax refund receivable... - - 4,569,686
Prepayments and other current assets (38,567) 472,927 (1,462,464)
Other assets................... (55,249) 262,745 444,132
Accounts payable and accrued liabilities 27,124,270 14,435,775 13,772,751
Income taxes payable........... 4,296,612 4,434,629 2,387,562
123,242,202 81,241,039 57,830,711
Cash flows from investing activities:
Capital expenditures................ (77,061,959) (54,264,515) (27,695,509)
Proceeds from dispositions of property and equipment 1,278,601 1,419,310 801,374
(75,783,358) (52,845,205) (26,894,135)
Cash flows from financing activities:
Net change in short-term borrowings (Note 3) (4,400,000) 4,400,000 (12,300,000)
Exercise of employee stock options,
including tax benefits 7,413,137 1,053,887 1,306,037
Payment of dividends............... (26,848,520) (23,857,513) (20,972,515)
(23,835,383) (18,403,626) (31,966,478)
Net increase (decrease) in cash and cash equivalents 23,623,461 9,992,208 (1,029,902)
Cash and cash equivalents at beginning of year 18,844,839 8,852,631 9,882,533
Cash and cash equivalents at end of year.. $ 42,468,300 $ 18,844,839 $ 8,852,631
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest..................... $ 320,830 $ 576,695 $ 549,570
Income taxes................. 48,440,176 37,920,059 31,189,881
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Family Dollar Stores, Inc. and Subsidiaries
Years Ended August 31, 1997, 1996 and 1995
1. Description of business and summary of significant accounting
policies:
Description of business:
The Company operates a chain of neighborhood retail discount stores
in 38 contiguous states in the Northeast, Southeast, Midwest, and
Southwest.
Principles of consolidation:
The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All
significant intercompany balances and transactions have been
eliminated.
Cash equivalents:
The Company considers all highly liquid investments with a maturity
of three months or less to be cash equivalents.
Merchandise inventories:
Inventories are valued using retail prices less markon percentages,
and approximate the lower of first-in, first-out (FIFO) cost or
market.
Property and equipment and depreciation:
Property and equipment is stated at cost. Depreciation for
financial reporting purposes is being provided principally by the
straight-line method over the estimated useful lives of the related
assets, and by straight-line and accelerated methods for income tax
reporting purposes.
Store opening and closing costs:
The Company charges pre-opening costs against operating results when
incurred. When a store is identified for closing, the remaining
investment in fixed assets, net of expected recovery value, is
expensed. For properties under operating lease agreements, the
present value of any remaining liability under the lease, net of
expected sublease and lease termination recoveries, is expensed when
the closing is determined.
Selling, general and administrative expenses:
Buying, warehousing and occupancy costs are included in selling,
general and administrative expenses.
<PAGE>
Stock Options:
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require,
companies to record compensation cost for stock-based employee plans
at fair value. The Company has chosen to continue to account for
stock based compensation using the intrinsic value method prescribed
in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related Interpretations. The exercise
price of options awarded under the Company's non-qualified stock
option plan has been equal to the fair market value of the underlying
common stock on the date of grant. Accordingly, no compensation
expense has been recognized for options granted under the plan.
Income tax benefits attributable to stock options exercised are
credited to capital in excess of par.
Use of Estimates:
The preparation of the Company's consolidated financial statements,
in conformity with generally accepted accounting principles, requires
management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from these estimates.
2. Property and equipment:
<TABLE>
<CAPTION>
August 31,
1997 1996
<S> <C> <C>
Buildings............................ $ 74,182,859 $ 63,563,073
Furniture, fixtures and equipment.... 195,725,850 171,765,594
Transportation equipment............. 19,481,899 13,805,879
Leasehold improvements............... 47,832,733 36,253,250
Construction in Progress............. 21,551,427 14,411,777
358,774,768 299,799,573
Less accumulated depreciation
and amortization................. 136,773,358 124,525,085
222,001,410 175,274,488
Land................................ 9,233,346 9,332,741
$ 231,234,756 $ 184,607,229
</TABLE>
<PAGE>
3. Lines of credit and short-term borrowings:
The Company has two unsecured bank lines of credit for short-term revolving
borrowings of up to $50,000,000 each, or $100,000,000 of total borrowing
capacity. The lines of credit expire on March 31, 1999 and March 29, 1998,
respectively, and the Company expects that the line expiring on March 29,
1998, will be extended. Borrowings under these lines of credit are at a
variable interest rate based on short-term market interest rates. The
Company may convert up to $50,000,000 of the line of credit expiring on
March 31, 1999, into either a five or seven year term loan, at the bank's
variable prime rate.
Interest expense, average and maximum borrowings outstanding and interest
rates for each of the three years in the period ended August 31, 1997, were
as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Interest expense $ 312,147 $ 585,378 $ 481,886
Average borrowings
outstanding............ $ 5,222,000 $ 8,710,000 $ 5,828,000
Maximum month-end
outstanding............ $ 31,000,000 $ 45,800,000 $ 36,100,000
Interest rates at
year-end............... N/A 5.7% N/A
Daily weighted average
interest rates.......... 5.7% 6.2% 6.3%
</TABLE>
4.Accrued liabilities:
<TABLE>
<CAPTION>
August 31,
1997 1996
<S> <C> <C>
Compensation........................... $23,054,512 $18,433,250
Insurance................................ 34,599,071 25,130,170
Taxes other than income taxes............ 17,042,783 15,118,737
Other................................. 10,261,475 7,289,954
$84,957,841 $65,972,111
</TABLE>
<PAGE>
5. Income Taxes:
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of
August 31, 1997 and 1996, were as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Deferred income tax liabilities:
Excess of book over tax valuation of
property and equipment.............. $ 18,868,650 $ 17,645,325
Deferred income tax assets:
Excess of tax over book valuation
of inventories...................... $ 11,419,697 $ 6,544,680
Currently nondeductible accruals for:
Insurance........................... 13,796,383 10,061,492
Deferred incentive compensation..... - 1,257,199
Vacation pay........................ 1,933,431 1,661,573
Closed store lease liabilities...... 1,332,878 1,205,450
State net operating losses............ 983,000 983,000
Other................................. 292,065 8,735
Gross deferred income tax assets.... 29,757,454 21,722,129
Valuation allowance for deferred
income tax assets................... (1,350,000) (1,350,000)
Net deferred income tax assets...... $ 28,407,454 $ 20,372,129
</TABLE>
A valuation allowance has been established for a portion of the
benefits of state tax net operating losses and for a portion of
certain other state tax benefits because the Company currently
believes that it is more likely than not that these benefits will
not be realized in future years.
<PAGE>
5. Income taxes (continued):
The provisions for income taxes in each of the three years in the
period ended August 31, 1997, were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Current:
Federal... $47,142,000 $37,542,400 $32,595,000
State..... 6,470,000 5,075,000 5,987,000
53,612,000 42,617,400 38,582,000
Deferred:
Federal... (5,753,000) (4,115,600) (1,852,000)
State.... (1,059,000) (323,800) (464,000)
(6,812,000) (4,439,400) (2,316,000)
$46,800,000 $38,178,000 $36,266,000
</TABLE>
<PAGE>
The following table summarizes the components of income tax expense
in each of the three years in the period ended August 31, 1997:
<TABLE>
<CAPTION>
1997 1996 1995
% % %
Income tax of pre-tax Income tax of pre-tax Income tax of pre-tax
expense income expense income expense income
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" federal income tax $42,516,858 35.0 $34,549,635 35.0 $33,031,434 35.0
State income taxes, net of federal
income tax benefit........... 4,187,150 3.4 3,990,375 4.1 3,771,950 4.0
Other............................. 95,992 0.1 (362,010) (0.4) (537,384) (0.6)
Actual income tax expense......... $46,800,000 38.5 $38,178,000 38.7 $36,266,000 38.4
</TABLE>
<PAGE>
6. Employee benefit plans:
Incentive compensation plan:
The Company has an incentive profit-sharing plan whereby, at the
discretion of the Board of Directors, the Company may pay certain
employees and officers an aggregate amount not to exceed 5% of the
Company's consolidated income before income taxes. Expenses under
the profit-sharing plan were $2,446,586 in fiscal 1997,
$1,355,200 in fiscal 1996, and $0 in fiscal 1995.
Compensation deferral plan:
The Company has a voluntary compensation deferral plan, under
Section 401(k) of the Internal Revenue Code, available to eligible
employees. At the discretion of the Board of Directors, the
Company makes contributions to the plan which are allocated to
participants, and in which they become vested, in accordance with
formulas and schedules defined by the plan. Company expenses for
contributions to the plan were $1,066,966 in fiscal 1997, $923,352
in fiscal 1996,and $901,019 in fiscal 1995.
<PAGE>
7. Commitments and contingencies:
Operating leases:
Except for its executive offices and primary distribution
centers, the Company generally conducts its operations from
leased facilities. Normally, store real estate leases are for
initial terms of from five to fifteen years with multiple
renewal options for additional five year periods. Certain
leases provide for contingent rental payments based upon a
percentage of store sales.
Rental expenses on all operating leases, both cancellable and
non-cancellable, for each of the three years in the period ended
August 31, 1997, were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Minimum rentals,
net of minor
sublease rentals....... $78,414,264 $67,844,955 $59,826,236
Contingent rentals....... 1,707,010 1,095,944 929,241
$80,121,274 $68,940,899 $60,755,477
</TABLE>
Future minimum rental payments required under operating leases
that have initial or remaining non-cancellable lease terms in
excess of one year as of August 31, 1997, were as follows:
<TABLE>
<CAPTION>
Years Ending August 31, Minimum Rental
<C> <C>
1998 $ 73,902,474
1999 60,045,117
2000 46,240,193
2001 33,557,277
2002 18,458,957
Thereafter 27,900,881
$260,104,899
</TABLE>
<PAGE>
Construction commitments:
The Company has commitments under contracts related to the construction
of a distribution facility in Warren County, Virginia. Contracts for
site preparation, building construction, material handling equipment,
and other equipment and services related to the facility totalling
approximately $46,000,000 were entered into prior to October 1, 1997.
Expenditures under these contracts prior to August 31, 1997 were
approximately $22,000,000.
8. Employee stock option plan:
The Company's non-qualified stock option plan provides for the
granting of options to key employees to purchase shares of
common stock at prices not less than fair market value on the
date of the grant. Options are exercisable to the extent of 40%
after the second anniversary of the grant, an additional 30%
annually on a cumulative basis, and expire five years from the
date of the grant.
The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation." If compensation cost for the
Company's stock-based compensation plan had been determined
based on the fair value at the grant date for awards under this
plan consistent with the methodology prescribed under this
statement, net income and net income per share would have been
reduced to the pro forma amounts indicated in the table below.
<TABLE>
<CAPTION>
August 31, August 31,
1997 1996
<S> <C> <C>
Net income - as reported $ 74,676,737 $ 60,587,746
Net income - pro forma $ 74,493,973 $ 60,562,982
Net income per share - as reported $ .87 $ .71
Net income per share - pro forma $ .87 $ .71
</TABLE>
Net income per share has been adjusted for the July 15, 1997, three-
for-two stock split.
The pro forma effects on net income for fiscal 1997 and fiscal
1996 are not representative of the pro forma effect on net income in
future years because they do not take into consideration pro forma
compensation expense related to grants made prior to fiscal 1996.
The fair value of options granted during fiscal 1997 and fiscal 1996
is $3.31 and $2.34 per share, respectively.
<PAGE>
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the following
assumptions:
<TABLE>
<CAPTION>
August 31, August 31,
1997 1996
<S> <C> <C>
Expected dividend yield 2.36% 2.97%
Expected stock price volatility 28.75% 29.47%
Weighted average risk-free interest rate 6.35% 6.11%
Expected life of options (years) 3.5 3.5
</TABLE>
The summary of the status of the Company's stock-based
compensation plan as of August 31, 1997 and 1996 and changes
during the years then ended were as follows:
<TABLE>
<CAPTION>
Options Range of Option Weighted Average
Outstanding Prices Per Share Exercise Price
<S> <C> <C> <C>
Balance, August 31, 1995 1,672,440 $ 3.92 to $14.17 $ 10.16
Granted 135,525 7.67 to 12.50 9.92
Exercised (141,030) 3.92 to 11.50 5.63
Cancelled (163,485) 3.92 to 14.17 9.96
Balance, August 31, 1996 1,503,450 $ 6.83 to $14.17 $ 10.58
Granted 852,850 11.17 to 21.75 13.16
Exercised (595,537) 7.00 to 14.17 10.98
Cancelled (189,759) 6.83 to 14.17 9.71
Balance, August 31, 1997 1,571,004 $ 7.00 to $21.75 $ 11.93
</TABLE>
<PAGE>
At August 31, 1997 and 1996, options for 354,533 and 637,898
shares were exercisable, respectively. The following table summarizes
information about stock options outstanding at August 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable:
Number Weighted Average Number
Range of Outstanding Remaining Weighted Average Exercisable Weighted Average
Exercise Prices at 8/31/97 Contractual Life Exercise Price at 8/31/97 Exercise Price
<S> <C> <C> <C> <C> <C>
$ 7.00 to $11.00 414,015 2.74 Years $ 8.88 90,207 $ 8.55
11.01 to 13.50 620,189 3.25 11.38 127,526 11.34
13.51 to 21.75 536,800 3.49 14.92 136,800 14.17
$ 7.00 to $21.75 1,571,004 3.20 Years $11.93 354,533 $11.72
</TABLE>
At August 31, 1997 and 1996, shares available for granting of
stock options under the Company's stock option plan were 971,594 and
884,685 shares, respectively. All figures have been adjusted for the
three-for-two stock split effective July 15, 1997.
9. Common stock:
The Board of Directors declared a three-for-two stock split in the form
of a 50% stock distribution on June 25, 1997, pursuant to which
30,319,037 common shares were issued on July 31, 1997, to holders of
record of common stock on July 15, 1997.
Net income per common share is based on the weighted average number of
shares of common stock outstanding during each year. Potential exercise
of outstanding stock options do not have a material dilutive effect on
net income per common share. All per share amounts have been restated to
reflect the stock split.
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128")
effective for fiscal years ending after December 15, 1997. SFAS 128,
which requires dual presentation of basic and diluted earnings per share
(EPS) on the face of the statement of income and requires a
reconciliation of the numerators and denominators of the basic and
diluted EPS calculations, will be implemented in fiscal 1998. The
Company does not expect that basic and diluted EPS will be materially
different from its current calculation of net income per common share
since potential common shares in the form of stock options are not
expected to be materially dilutive.
<PAGE>
10. Unaudited summaries of quarterly results:
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
(In thousands, except per share data)
<S> <C> <C> <C> <C>
1997
Net sales..................... $ 454,883 $ 530,259 $ 498,404 $511,427
Gross profit.................. 154,581 164,165 167,732 158,337
Net income.................... 17,360 20,002 23,088 14,227
Net income per
common share*.............. $.20 $.23 $.27 $.17
1996
Net sales..................... $396,165 $448,274 $427,941 $442,247
Gross profit.................. 137,211 139,965 144,010 137,247
Net income.................... 14,508 15,937 18,780 11,363
Net income per
common share*.............. $.17 $.19 $.22 $.13
1995
Net sales..................... $356,292 $420,927 $379,836 $389,839
Gross profit.................. 127,351 132,468 131,259 122,747
Net income.................... 15,586 17,040 16,405 9,078
Net income per
common share*.............. $.19 $.20 $.19 $.11
* Net income per common share gives retroactive effect
to the stock split discussed in Note 9.
</TABLE>
<TABLE>
<CAPTION>
FAMILY DOLLAR STORES, INC. & SUBSIDIARIES 8/31/97
-----------------------------------------
CORP. NO. NAME ADDRESS CITY STATE ZIP F.E.I. NO.
--------- --------------------------- -------------- --------- ----- ----- ----------
<S> <C> <C> <C> <C> <C>
FAMILY DOLLAR STORES
1 OF SANDERSVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1109922
2 OF NORTH CAROLINA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0693934
7 OF SANFORD, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0854677
8 OF WILMINGTON, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0752043
10 INC. OF S. C. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0766390
11 OF MARTINSVILLE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-0791244
12 OF ROCK HILL, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0774313
14 OF GAINESVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 58-1048442
15 OF GASTONIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0791813
22 OF ROANOKE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-0799404
26 OF HARRISONBURG, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1098343
31 OF AIRPORT CROSSROADS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0481964
32 OF TRAVELERS REST S.C. INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0484805
35 OF WINSTON-SALEM, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0891786
36 OF GEORGIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0754858
37 OF AUGUSTA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 58-1020583
39 OF THOMASVILLE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0903183
40 OF MECKLENBURG COUNTY INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0903810
42 OF HIGH POINT, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0927281
43 OF HENRY COUNTY INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0905499
45 OF EASLEY, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0511859
46 OF GAFFNEY, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0514835
47 OF LAURENS, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0516407
48 OF CHESTER, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0934964
49 OF NEWBERRY, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0516825
53 OF BUENA VISTA, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-0854189
60 OF WEST COLUMBIA, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0521348
62 OF OCEAN DRIVE, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0522185
65 OF BENNETTSVILLE, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0523895
66 OF JAMES ISLAND, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0950032
68 OF CUMBERLAND COUNTY, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0949450
69 OF SMITHFIELD, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0950033
73 OF UNION, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0524425
76 OF BRISTOL, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1193158
77 OF ABBEVILLE, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0525224
78 OF GALAX, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-0882766
79 INC. (MISSISSIPPI) P.O. BOX 1017 CHARLOTTE NC 28201-1017 64-0470226
80 OF MARION, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952811
81 OF SPARTANBURG, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952153
83 OF GREENWOOD, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952150
86 OF HURT, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0955749
88 OF CONWAY, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0955750
89 OF PONTOTOC, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1327478
90 OF COMMERCE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0963516
91 OF ANDERSON, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0963457
93 OF ALBEMARLE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0964262
99 OF INMAN, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0986749
101 OF LANCASTER COUNTY, S.C.,INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0987295
102 OF CAMDEN, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0987294
103 OF ATHENS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0989677
<PAGE>
<S> <C> <C> <C> <C> <C>
105 OF WINDER, GA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1024571
107 OF TOCCOA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0990185
111 OF SENECA, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0862849
112 OF SUMTER, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0990635
115 OF WOODRUFF, S.C. INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0990636
116 OF ASHEVILLE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992565
117 OF CHATSWORTH, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 58-0978660
119 OF CHERAW, S.C. INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0996222
121 OF PELZER, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0996223
124 OF BATESBURG, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1014267
125 OF DILLON, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0545233
126 OF RICHMOND, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992564
127 OF HARTSVILLE, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1007333
128 OF CHASE CITY, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1013307
130 OF GREENVILLE, S.C., INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1007385
131 OF ORANGEBURG, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1007387
132 OF FLORENCE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0471484
135 OF DARLINGTON, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1014266
136 OF WALTERBORO, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1014749
137 OF SOUTH BOSTON, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1013306
138 OF MULLINS, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1013308
147 OF PICKENS, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1019398
149 OF GREER, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-0876986
152 OF ANDREWS, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1024810
154 OF LAWRENCEVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1023884
156 OF LAKE CITY, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1025274
158 OF ELBERTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1024553
159 OF YORK, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1026926
160 OF THOMSON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1024316
162 OF PENDLETON, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0550909
165 OF PERRY,GA.INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1124535
167 OF CHARLESTON, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952148
168 OF GOOSE CREEK, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952149
170 OF MARTINEZ, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1033166
174 OF NORTH AUGUSTA, S.C. INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1023083
175 OF EMPORIA, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1044478
176 OF CHESAPEAKE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1042853
178 OF SUMMERVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1157531
179 OF LOUISA, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1038749
183 OF SWAINSBORO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1054983
186 OF RADFORD, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1048961
187 OF MANNING, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1161760
189 OF HAMPTON, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1141002
193 OF GEORGETOWN, SC. INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0565302
194 OF AIKEN, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1056848
195 OF MCDONOUGH GA INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1057216
199 OF MADISON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1065440
200 OF MILLEDGEVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1058472
208 OF WINNSBORO, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1068417
209 OF MONROE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1068416
211 OF MONCKS CORNER, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1068415
212 OF KINGSTREE, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1068419
214 OF HARTWELL, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072523
215 OF DOUGLAS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072513
<PAGE>
<S> <C> <C> <C> <C> <C>
216 OF EASTMAN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072512
218 OF FITZGERALD, GA.,INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072515
219 OF CORNELIA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1010175
222 OF PORTSMOUTH, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-0984373
223 OF BLUE RIDGE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1097105
224 OF NEWTON COUNTY GA INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1109917
226 OF SYLVANIA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-0959580
227 OF MACON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1118791
228 OF WARNER ROBINS,GA.,INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952152
229 OF CARROLLTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1119905
230 OF CARTERSVILLE,GA.,INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1119906
231 OF ATLANTA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1120343
234 OF CLINTON, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0526909
236 OF AMERICUS GA INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1127675
237 OF SMYRNA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1226226
240 OF WASHINGTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1161755
241 OF VIDALIA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1134237
244 OF HENDERSON INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1138200
246 OF FORT VALLEY GA INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1129286
248 OF BARNWELL, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1145736
252 OF MT. PLEASANT, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0952151
255 OF DENMARK, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1153152
258 OF RIVERDALE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1153153
261 OF CLINTON, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1064359
262 OF BEAUFORT, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1162735
263 OF ROSSVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1161763
265 OF CORDELE, GA., INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1165546
267 OF GRIFFIN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1165543
268 OF CHESTER, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1032440
270 OF JONESBORO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1168141
272 OF FORT MILL, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1169116
274 OF MARION, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1171732
276 OF CEDARTOWN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072514
277 OF BARNESVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1171725
278 OF HOPEWELL, VA. INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1173213
279 OF ALBANY, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1172385
282 OF PULASKI, VA., INC P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1175330
283 OF ROME, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1175344
285 OF SALEM, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1175329
286 OF OAK HILL, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1177991
287 OF SURFSIDE BEACH, S.C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1177990
289 OF DUBLIN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1177989
290 OF CALHOUN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1180596
297 OF SMITHFIELD, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1062596
299 OF ORANGE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1076698
302 OF COVINGTON, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1193159
305 OF BECKLEY, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0580827
313 OF JACKSON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1198043
315 OF SAVANNAH, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1208417
316 OF CHRISTIANSBURG, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1198411
318 OF NEWNAN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1073013
319 OF SIMPSONVILLE, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1030443
321 OF PRINCETON, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0583278
322 OF COCHRAN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1030842
<PAGE>
<S> <C> <C> <C> <C> <C>
324 OF THOMASTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1203988
325 OF WYTHEVILLE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1080403
326 OF BEDFORD, VA.,INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1208169
327 OF LYNCHBURG, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1080407
329 OF CLIFTON FORGE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1081404
331 OF ADEL, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1208235
332 OF MOULTRIE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1208239
333 OF COLUMBUS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1208230
335 OF SUFFOLK, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1216327
336 OF FARMVILLE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1216328
338 OF NORFOLK, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1212850
340 OF SUMMERVILLE, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1263366
341 OF ROCKY MOUNT, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1091171
343 OF STAUNTON, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1092451
345 OF DANVILLE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1221527
346 OF SOUTH HILL, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1221487
348 OF CAMILLA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1222247
349 OF QUITMAN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1222249
350 OF DOUGLASVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1051998
351 OF BAXLEY, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1051996
357 OF TAZEWELL, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1239650
358 OF HAWKINSVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1239375
360 OF SPRING LAKE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1240992
362 OF LAFAYETTE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1240352
363 OF MARIETTA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1131260
364 OF MABLETON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1067993
365 OF HAZLEHURST, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1067994
371 OF BLUEFIELD, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0596897
376 OF DUBLIN, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1254668
379 OF WAYNESBORO, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1301548
380 OF HARRISVILLE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1333358
381 OF HINESVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1270823
383 OF STATESBORO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1327882
384 OF TIFTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1085175
385 OF CLAXTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1270821
389 OF DANVILLE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0604584
394 OF OCEAN SPRINGS, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1278645
397 OF FOREST PARK, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1281082
405 OF SYLACAUGA, ALA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1234185
415 OF TARRANT, ALA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1234186
420 OF VALDOSTA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1232663
421 OF ELLIJAY, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1232660
422 OF CAIRO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1232661
423 OF ROYSTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1232659
424 OF CUTHBERT, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1232664
442 OF MONTEZUMA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1285497
443 OF ASHLAND, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1151354
444 OF HAMPTON, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1282880
446 OF SUMMERSVILLE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0606794
448 OF MANCHESTER, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1285001
449 OF DOTHAN, ALA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1285002
453 OF DULUTH, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1101171
454 INC. KENTUCKY P.O. BOX 1017 CHARLOTTE NC 28201-1017 38-1875634
456 OF RUSSELL SPRINGS, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1293634
<PAGE>
<S> <C> <C> <C> <C> <C>
460 OF WEST VIRGINIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992562
464 OF RAINELLE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1296336
469 OF ELKVIEW, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0610938
470 OF LITHONIA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1105736
476 OF ELKTON, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1113296
480 OF SPRINGFIELD, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1304661
481 OF VICTORIA, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1174498
482 OF TULLAHOMA, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1304568
483 OF WISE, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1171385
484 OF BEATTYVILLE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1360046
485 OF MAN, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1304664
492 OF VILLA RICA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1306477
493 OF REIDSVILLE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1307066
495 OF ESCATAWPA, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1308467
496 OF HARRODSBURG, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-0992945
497 OF COLUMBIA, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 57-0426310
498 OF FRANKFORT, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-0994177
499 OF FAIRBURN, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1117372
500 OF BRUNSWICK, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1315108
502 OF LOGAN, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0614710
504 OF WRENS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1311420
505 OF PENNINGTON GAP, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1179890
506 OF LAWRENCEBURG, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1312236
507 OF GREENSBORO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1311609
508 OF ST. ALBANS, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0618158
509 OF HINTON, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0614711
513 OF CYNTHIANA, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1313384
517 OF NEWPORT NEWS, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1182090
518 OF ST. GEORGE, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1313974
520 OF AMORY, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1313382
521 OF WESTMINSTER, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1145912
522 OF NINETY SIX, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1129271
523 OF TUPELO, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1315110
524 OF RICHLANDS, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1185784
526 OF GORDON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1117373
530 OF CUMBERLAND, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-0997242
532 OF GLASGOW, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-0998465
535 OF ALABAMA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1319884
538 OF GRUNDY, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 54-1199397
539 OF WATER VALLEY, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1129602
540 OF OXFORD, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1129865
542 OF FRANKLIN, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1325016
545 OF DREW, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1327479
546 OF LELAND, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1327486
547 OF GREENVILLE, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1327483
548 OF RIPLEY, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1332569
549 OF MARLINTON, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1332766
553 OF LOUISVILLE, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1333005
558 OF CUMMING, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1136722
559 OF JACKSON, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337230
560 OF STANFORD, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1335589
563 OF PHILIPPI, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0621212
564 OF FOLKSTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1334690
565 OF STARKVILLE, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1336091
566 OF QUITMAN, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1336088
<PAGE>
<S> <C> <C> <C> <C> <C>
570 OF NEW MARTINSVILLE,W.VA.,INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1338091
571 OF JENA, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1339389
572 OF WESTON, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337988
573 OF ST. MARYS, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337987
574 OF MANCHESTER, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337181
577 OF SPENCER, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 55-0621230
578 OF KINGWOOD, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337985
579 OF HAZLEHURST, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1339558
580 OF ABERDEEN, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1338003
581 OF LAVONIA, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1337229
582 OF RIPLEY, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1338000
583 OF MT. WASHINGTON, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-1009284
584 OF NATCHEZ, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1338905
585 OR ST. MARYS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1339387
586 OF FAYETTE, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1141805
587 OF STANTON, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 61-1010702
591 OF BOGALUSA, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1342397
595 OF WESTERNPORT, MD., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1343528
599 OF ARKANSAS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 71-0404928
601 OF DEWITT, ARK., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1343529
602 OF MCGEHEE, ARK., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1343356
603 OF CROSSLANES, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1343531
605 OF INEZ, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1347247
606 OF LEITCHFIELD, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1345063
607 OF BAY ST. LOUIS, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1345204
608 OF CANTON, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1346025
609 OF MCKENZIE, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1347234
612 OF CUMBERLAND, MD., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1346665
613 OF HUNTINGDON, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1147033
614 OF FLORIDA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1147034
617 OF BISHOPVILLE, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1349049
618 OF CARTHAGE, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1347757
620 OF LAGRANGE, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1349048
629 OF DAWSON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1072522
632 OF HOLLY SPRINGS, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1353786
633 OF TRENTON, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1355533
636 OF RICHMOND, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1360064
637 OF KENNESAW, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1065602
643 OF SALYERSVILLE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1358576
644 OF MARION, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1358577
649 OF LAKE PROVIDENCE, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1360667
651 OF CAMPBELLSVILLE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1362565
652 OF RUSSELLVILLE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1362567
655 OF NATCHITOCHES, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1363368
658 OF LEXINGTON, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1366205
669 OF MARYLAND, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1179942
670 OF VIDALIA, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373351
671 OF LOUISA, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1369714
672 OF ABBEVILLE, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373359
680 OF GREENUP, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373358
683 OF SPARTA, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 62-1114317
685 OF IRVINE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373356
687 OF GLENVILLE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373354
688 OF FRANKLINTON, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1373353
691 OF HUNTINGTON, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1375590
<PAGE>
<S> <C> <C> <C> <C> <C>
692 OF HURRICANE, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1375591
694 OF WAYCROSS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1375097
699 0F MEMPHIS, TENN., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1375593
701 OF VANCEBURG, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1376394
703 OF GREENWOOD, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1377739
704 OF BROOKHAVEN, MISS., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1377743
706 OF PINEVILLE, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1378199
707 OF BUNKIE, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1378191
708 OF LITTLE ROCK, ARK., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1378196
710 OF MONTICELLO, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1377738
715 OF PARKERSBURG, W. VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1378192
717 OF TALLULAH, LA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1379165
719 OF PENNSYLVANIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992563
732 OF STUART, VA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1382716
733 OF BOONEVILLE, KY., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1383058
744 OF OHIO, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0991921
801 OF MAULDIN, S. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0959395
802 OF CONYERS, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1065751
809 OF COVINGTON, GA., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1051675
810 OF DELAWARE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1416308
844 OF NO. PENNSYLVANIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56=1426757
880 OF ARIZONA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1355530
882 OF WISCONSIN, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1356720
884 OF CALIFORNIA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0993176
886 OF ILLINOIS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0993516
887 OF INDIANA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0991922
888 OF KANSAS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992164
889 OF NEVADA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1355536
890 OF NEW JERSEY, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1400170
891 OF MASSACHUSETTS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992166
892 OF MICHIGAN, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0991920
893 OF MINNESOTA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1400173
894 OF MISSOURI, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0991923
895 OF NEW YORK, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992165
897 OF OKLAHOMA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0992157
898 OF TEXAS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1389401
899 OF WYOMING, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1355538
1420 OF CONNECTICUT, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1587368
1423 OF COLORADO, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1587711
1424 OF IOWA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1587713
1425 OF NEBRASKA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1587714
1426 OF SOUTH DAKOTA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1587710
1613 OF VERMONT, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1633089
1620 OF NEW MEXICO, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1633088
1665 OF D. C., INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1441925
1881 OF NEW HAMPSHIRE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1435306
1883 OF NORTH DAKOTA, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1435307
2019 OF MAINE, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1763454
2020 OF RHODE ISLAND, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1763455
9100 FAMILY DOLLAR SERVICES, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1744955
9200 FAMILY DOLLAR OPERATIONS, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1747881
9300 FAMILY DOLLAR TRUCKING, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1747883
9400 FAMILY DOLLAR MARKETING, INC. P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-1911976
9990 INC. (DELAWARE) P.O. BOX 1017 CHARLOTTE NC 28201-1017 56-0942963
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF FAMILY DOLLAR STORES, INC. AND
SUBSIDIARIES FOR THE FISCAL YEAR ENDED AUGUST 31, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000034408
<NAME> FAMILY DOLLAR STORES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<EXCHANGE-RATE> 1
<CASH> 42,468,300
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 467,945,483
<CURRENT-ASSETS> 544,702,757
<PP&E> 368,008,114
<DEPRECIATION> 136,773,358
<TOTAL-ASSETS> 780,293,852
<CURRENT-LIABILITIES> 261,226,729
<BONDS> 0
0
0
<COMMON> 9,103,148
<OTHER-SE> 491,095,325
<TOTAL-LIABILITY-AND-EQUITY> 780,293,852
<SALES> 1,994,973,237
<TOTAL-REVENUES> 1,994,973,237
<CGS> 1,350,157,693
<TOTAL-COSTS> 1,873,496,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 121,476,737
<INCOME-TAX> 46,800,000
<INCOME-CONTINUING> 74,676,737
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 74,676,737
<EPS-PRIMARY> .87
<EPS-DILUTED> .87
</TABLE>
STATE OF NORTH CAROLINA AMENDMENT TO
EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG
THIS AMENDMENT, made and entered into effective the 28th day of
August 1997, by and between FAMILY DOLLAR STORES, INC., a Delaware
corporation (hereinafter referred to as the "Company"); and Howard R. Levine
(hereinafter referred to as the "Employee");
W I T N E S S E T H:
WHEREAS, the Company and the Employee entered into an Employment
Agreement dated April 29, 1997 (hereinafter referred to as the "Agreement)";
and
WHEREAS, the Company and the Employee desire to amend the Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Employee agree as follows:
1. The first paragraph of Section 5.01 of the Agreement is deleted
and the following paragraph is substituted in lieu thereof:
"5.01 In consideration of the services to be rendered by the Employee
pursuant to this Agreement, the Company shall pay, or cause to be paid, to
the Employee a weekly base salary (i) from the Commencement Date to August 31,
1997, of $5,769.24 ($300,000.00 per annum), and (ii) from September 1, 1997,
to August 31, 1998, of $6,250.00 ($325,000.00 per annum)."
2. All other terms and provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate, all as of the day and year first above written.
FAMILY DOLLAR STORES, INC.
Attest:
By LEON LEVINE
LEON LEVINE
Chairman of the Board
GEORGE R. MAHONEY, JR.
GEORGE R. MAHONEY, JR.
Secretary
(Corporate Seal)
HOWARD R. LEVINE (SEAL)
HOWARD R. LEVINE
Witness:
JANICE B. BURRIS
JANICE B. BURRIS
