SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 6, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........to...........
Commission File number 0-6080
FOOD LION, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0660192
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 1330, 2110 Executive Drive Salisbury, NC 28145-1330
(Address of principal executive office) (Zip Code)
(704) 633-8250
(Registrant's telephone number)
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 registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Outstanding shares of common stock of the Registrant as of October 10,1997.
Class A Common Stock 236,160,455
Class B Common Stock 232,727,364
Page 1 of 20
The Exhibit index is located on page 17.
FOOD LION, INC.
INDEX TO FORM 10-Q
September 6, 1997
Part I.FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Statements of Income for the
12 and 36 weeks ended September 6, 1997 and
September 7, 1996 3-4
Consolidated Balance sheets as of September 6,
1997, December 28, 1996 and September 7, 1996 5
Consolidated Statements of Cash Flows for
36 weeks ended September 6, 1997
and September 7, 1996 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security 14
Holders
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14-15
Signatures 16
Exhibit Index 17
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FOOD LION, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the 12 Weeks ended September 6, 1997 and September 7, 1996
(Dollars in thousands except per share data)
Sept 6, 1997 Sept 7, 1996 Sept 6, 1997 Sept 7, 1996
% %
<S> <C> <C> <C> <C>
Net sales $2,366,905 $2,124,390 100.00 100.00
Cost of goods sold 1,850,296 1,662,329 78.17 78.25
Gross profit 516,609 462,061 21.83 21.75
Selling and administrative expenses 346,059 322,498 14.63 15.18
Depreciation and amortization 52,153 38,370 2.20 1.81
Asset impairment reserve - - 0.00 0.00
Store closing charge (Note 4) 87,114 - 3.68 0.00
Operating income 31,283 101,193 1.32 4.76
Interest expense 29,268 19,197 1.24 0.90
Income before income taxes 2,015 81,996 0.08 3.86
Provision for income taxes 786 31,978 0.03 1.51
Net income $ 1,229 $ 50,018 0.05 2.35
Earnings per share $ 0.00 $ 0.11
Dividends per share $ 0.03 $ 0.03
Weighted average number
of shares outstanding:
Class A 236,086,942 235,731,888
Class B 232,727,364 233,182,364
Total 468,814,306 468,914,252
</TABLE>
-3-
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FOOD LION, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the 36 Weeks ended September 6, 1997 and September 7, 1996
(Dollars in thousands except per share data)
Sept 6, 1997 Sept 7, 1996 Sept 6, 1997 Sept 7, 1996
% %
<S> <C> <C> <C> <C>
Net sales $6,968,371 $6,233,257 100.00 100.00
Cost of goods sold 5,448,053 4,915,927 78.18 78.87
Gross profit 1,520,318 1,317,330 21.82 21.13
Selling and administrative expenses 1,038,313 907,896 14.90 14.56
Depreciation and amortization 153,000 113,340 2.20 1.82
Asset impairment reserve - 9,640 0.00 0.15
Store closing charge (Note 4) 87,114 - 1.25 0.00
Operating income 241,891 286,454 3.47 4.60
Interest expense 83,714 57,840 1.20 0.93
Income before income taxes 158,177 228,614 2.27 3.67
Provision for income taxes 61,689 89,159 0.89 1.43
Net income $ 96,488 $ 139,455 1.38 2.24
Earnings per share $ 0.21 $ 0.30
Dividends per share $ 0.10 $ 0.08
Weighted average number
of shares outstanding:
Class A 236,123,299 236,208,081
Class B 232,796,808 234,578,183
Total 468,920,107 470,786,264
</TABLE>
-5-
<TABLE>
FOOD LION, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Sept 6, 1997 December 28, 1996 Sept 7, 1996
Assets
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 106,088 $ 102,371 $ 149,448
Receivables 149,951 151,163 137,869
Inventories 984,482 1,065,743 886,842
Prepaid expenses and other 69,382 33,660 29,325
Deferred tax asset 75,807 75,807 50,018
Total current assets 1,385,710 1,428,744 1,253,502
Property, at cost, less accumulated
depreciation 1,807,934 1,772,503 1,558,619
Deferred tax asset 8,619 8,619 -
Intangible assets 273,204 278,726 9,602
Total assets $3,475,467 $3,488,592 $2,821,723
Liabilities and Shareholders' Equity
Current Liabilities:
Notes payable $ - $ 250,010 $ -
Accounts payable, trade 490,500 470,994 413,764
Accrued expenses 423,468 397,431 362,235
Capital lease obligations - current 20,456 21,970 16,962
Long term debt - current 50,805 973 -
Other liabilities - current 7,408 7,279 3,591
Income taxes payable - 5,578 ____ -
Total current liabilities 992,637 1,154,235 796,552
Long-term debt 583,802 495,111 314,689
Capital lease obligations 494,973 469,035 411,717
Deferred income taxes - - 44,120
Other liabilities 140,749 154,273 94,164
Total liabilities 2,212,161 2,272,654 1,661,242
Shareholders' Equity:
Class A non-voting common stock, $.50 par value 118,054 118,083 117,915
Class B voting common stock, $.50 par value 116,364 116,451 116,451
Additional capital 222 1,708 -
Retained earnings 1,028,666 979,696 926,115
Total shareholders' equity 1,263,306 1,215,938 1,160,481
Total liabilities and shareholders' equity $3,475,467 $3,488,592 $2,821,723
</TABLE>
-5-
FOOD LION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the 36 Weeks ended September 6, 1997 and September 7, 1996
(Dollars in thousands)
36 Weeks
Sept 6,1997 Sept 7,1996
Cash flows from operating activities
Net income $96,488 $139,455
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 153,000 113,340
Loss (Gain) on disposals of property 1,022 (165)
Store closing charge (Note 4) 87,114
Asset impairment reserve - 9,640
Changes in operating assets and liabilities:
Receivables 1,212 (9,874)
Inventories 81,261 (5,821)
Prepaid expenses and other (35,722) (5,981)
Accounts payable and accrued expenses 35,344 95,859
Income taxes payable (5,578) -
Other liabilities (14,149) 22,237
Total adjustments 303,504 219,235
Net cash provided by operating activities 399,992 358,690
Cash flows from investing activities
Capital expenditures (236,712) (163,211)
Proceeds from disposal of property 17,644 18,682
Net cash used in investing activities (219,068) (144,529)
Cash flows from financing activities
Net payments under short-term borrowings (250,010) -
Principal payments on long-term debt (161,477) (40,000)
Proceeds from issuance of long-term debt 300,000
Principal payments under capital lease obligations (16,600) (12,653)
Dividends paid (47,086) (39,276)
Repurchase of common stock (2,960) (44,344)
Proceeds from issuance of common stock 926 1,525
Net cash used in financing activities (177,207) (134,748)
Net increase in cash and cash
equivalents 3,717 79,413
Cash and cash equivalents at beginning
of period 102,371 70,035
Cash and cash equivalents at end of period $106,088 $149,448
-6-
Notes to Consolidated Financial Statements (Dollars in thousands)
1) Basis of Presentation:
The accompanying financial statements are presented in accordance with
the requirements of Form 10-Q and, consequently, do not include all the
disclosures normally required by generally accepted accounting principles or
those normally made in the Annual Report on Form 10-K of Food Lion, Inc.
(the "Company"). Accordingly, the reader of this Form 10-Q should refer
to the Company's Form 10-K for the year ended December 28, 1996 for further
information.
The financial information has been prepared in accordance with the
Company's customary accounting practices and has not been audited. In the
opinion of management, the financial information includes all
adjustments consisting of normal recurring adjustments necessary for
a fair presentation of interim results.
2) Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Sept 6, 1997 Sept 7, 1996
Interest (net of amounts
capitalized)* $70,234 $54,091
Income taxes 102,425 90,472
*Interest capitalized 1,526 944
Capital lease obligations for stores of $56,718 and $71,776
were incurred in the 36 week period of 1997 and 1996,
respectively. Capital lease retirements of $15,694 and $18,121
were recorded in the 36 week period of 1997 and 1996,
respectively.
The Company considers all highly liquid investment instruments
purchased with an original maturity of three months or less to
be cash equivalents.
3) The Financial Accounting Standards Board has issued Statement No.128
"Earnings Per Share," effective for financial statements issued for
periods ending after December 15, 1997. FAS No. 128 will be
implemented in the Company's 10K for the year ended January 3, 1998.
The Company does not expect that FAS No. 128 will have a material impact
on the earnings per share computation.
4) On September 18, 1997, the Company announced plans to exit its Southwest
market ("Southwest") by closing 61 stores (located in Louisiana,
Oklahoma and Texas), and its distribution center in
-7-
Roanoke, Texas. During the third quarter of 1997, the Company recorded a
pre-tax reserve against earnings to cover management's estimate of the
costs to close these facilities including the expected loss on the
disposition of owned assets.
This reserve totaled $87.1 million pre-tax, representing $129.1 million
related to the divestiture of the Southwest, less $42.0 million in unused
reserves related to store closings that have occurred since 1993 ($35
million of which reflects an unused portion of a $170.5 million pre-tax
charge against 1993 earnings and $7.0 million of which reflects unused
reserves for store closures since 1993). These net costs include the
write-down of store assets ($76.1 million) to reflect estimated
realizable values, the present value (calculated by applying an 8%
discount rate) of remaining rent payments on leased stores
($0.2 million), and other costs associated with the store closings
such as legal fees, commissions,severance costs and on-going
maintenance costs ($10.8 million).
The Company anticipates that net proceeds from the disposition of owned
assets will total approximately $100 million. Actual proceeds could differ
based on such factors as the conditions in the real estate market and general
economic conditions in the communities in which the assets are located. The
Company plans to use the proceeds to pay-off $50 million in outstanding notes
(at 10.21% interest rate) and to fund planned growth and future share
repurchase activity as necessary.
-8-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS (12 and 36 weeks ended September 6, 1997 compared to 12
and 36 weeks ended September 7, 1996)
The Company's sales for the third quarter and year-to-date 1997 were $2.4
billion and $7.0 billion, respectively, resulting in increases of 11.4% and
11.8% over the corresponding periods in 1996. These increases are primarily the
result of additional sales from the Company's Kash n'Karry Food Stores, Inc.
("Kash n' Karry") subsidiary, which Food Lion acquired in December 1996. Same
store sales increased 0.3% and 0.03% for the third quarter and year to date,
respectively. Excluding the Southwest market, same store sales increased 0.9%
and 0.5% for the third quarter and year to date,respectively. The Company's same
store sales for the quarter and year to date were influenced by the following:
The grocery industry in general has experienced slow growth during 1997,
particularly in the overstored Southeast markets.
Competitive initiatives by other supermarkets in Food Lion's major markets
have increased with the introduction of customer loyalty cards and heavy
advertising and promotional activity.
The Company is cycling many of the initiatives started in late 1995 and
early 1996, which increased sales during 1996. These initiatives included the
conversion to 24-hour store operations, expansion of the MVP program(Food
Lion's customer loyalty card program), new deli/bakery operations, and
acceptance of debit and credit card transactions in all stores.
The Company anticipates that it will open 64 new stores, close or relocate
approximately 50 stores (excluding the Southwest closings), and renovate
approximately 94 stores in 1997. The Company anticipates a net increase in store
square footage of 11% in 1997 after accounting for this growth plan, the
acquisition of 100 Kash n' Karry stores and the closing of 61 stores in the
Southwest. At September 6, 1997, the Company had opened 37 new stores, closed 39
stores (of which 15 were relocations), and completed renovations of 62 existing
stores.
Gross profits of 21.83% of sales for the third quarter and 21.82% year to date
increased 0.08% of sales and 0.69% of sales,respectively,from the prior year.
The increase in gross profit is primarily due to continued category management
initiatives particularly in the grocery and perishable departments and an
increase in private label sales.
-9-
For the third quarter of 1997, selling and administrative expenses were $346.1
million or 14.63% of sales as compared to 15.18% of sales in third quarter of
1996.
Year to date, selling and administrative expenses were $1.0 billion or 14.90% of
sales as compared to 14.56% of sales for the same period last year. Kash n'
Karry operations increased the Company's selling and administrative expenses by
0.5% and 0.7% of sales for the quarter and year to date, respectively. Kash n'
Karry stores incur a higher level of selling and administrative expenses than
Food Lion stores due to their larger store format and emphasis on specialty
service departments. The impact of Kash n' Karry's higher cost structure has
improved in the third quarter at 0.5%, as compared to the first and second
quarter at 0.8% and 0.7%, respectively, primarily due to the consolidation of
the Kash n' Karry warehouse into Food Lion's existing Florida Distribution
Center and the continued integration of administrative functions.
Selling and administrative expenses for the Food Lion stores were 14.10% of
sales for the third quarter of 1997, representing an improvement over expense
levels experienced in the previous four quarters, as a result of continued cost
containment, despite a soft sales environment.
Depreciation and amortization was $52.2 million or 2.20% of sales compared to
1.81% of sales in the third quarter of 1996. Year to date depreciation and
amortization was $153.0 million or 2.20% of sales compared to 1.82% of sales
year to date 1996. The quarter and year to date increases of 0.39% and 0.38% of
sales, respectively, are primarily due to equipment purchases and leasehold
improvements for new stores and renovations since the third quarter last year.
Amortization of the goodwill resulting from the Kash n' Karry acquisition also
increased amortization expense in 1997.
During the first quarter of 1996 Food Lion adopted Financial Accounting
Standards Board Statement no. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" (FAS no. 121). The
implementation of FAS no. 121 created a non-cash charge against first quarter
1996 pre-tax net income of $9.6 million to reflect the carrying value of the
Company's assets, using a discounted cash flow valuation method.
On September 18, 1997 the Company announced plans to exit its Southwest market
by closing 61 stores (located in Louisiana, Oklahoma, Texas) and its
distribution center in Roanoke,Texas. The Southwest market has lowered the
Company's net earnings by approximately $0.01 per share annually. Sales for the
61 Southwest stores totaled $236 million year to date through the end of the
third quarter. In reviewing these operating results and after continued
evaluation of the Southwest market, the Company determined that it was in the
best interests of the Company and its shareholders to exit the market and
deploy the related capital
-10-
in its growth markets in the Southeast. The Company does not expect these store
closings to have a significant impact on future earnings.
The Company recorded a pre-tax reserve of $87.1 million against third quarter
earnings, representing $129.1 million related to the divestiture of the
Southwest, less $42.0 million in unused reserves related to store closings that
occurred since 1993 ($35 million of which reflects an unused portion of a $170.5
million pre-tax charge against 1993 earnings and $7.0 million of which reflects
unused reserves for store closings since 1993). These net costs include the
write down of store assets ($76.1 million) to reflect estimated realizable
values, the present value (calculated by applying an 8% discount rate) of
remaining rent payments on leased stores ($0.2 million),and other costs
associated with the store closings such as legal fees, commissions, severance
costs and on-going maintenance costs ($10.8 million). The after tax impact of
this reserve on third quarter earnings was $53.1 million or $0.11 per share.
Interest expense of $29.3 million for the third quarter of 1997 and $83.7
million year to date increased $10.1 million and $25.9 million, respectively,
compared to the same periods of 1996. The third quarter increase of 0.34% of
sales and the year to date increase of 0.27% of sales is due to borrowings
incurred to fund the Kash n' Karry transaction, and an increase in interest
expense on store capital leases resulting from new store openings and
renovations.
During the second quarter of 1997, the Company replaced short-term borrowings
with $300 million in debt securities - $150 million at an interest rate of 7.55%
due in 2007 and $150 million at an interest rate of 8.05% due in 2027.
Net income for the quarter was $1.2 million or 0.05% of sales as compared to
2.35% of sales in the third quarter of 1996. Net income for the quarter,
exclusive of the store charge, was $54.4 million, or $0.12 per share, compared
to $50.0 million, or $0.11 per share, in the prior year.
Liquidity and Capital Resources
Cash provided by operating activities totaled $400.0 million for the 36 weeks
ended September 6, 1997 compared with $358.7 million for the same period last
year. The increase was primarily due to lower inventory levels and an increase
in trade payables.
Capital expenditures totaled $236.7 million for the 36 weeks ended September 6,
1997 compared with $163.2 million for the same period in 1996. During the third
quarter of 1997, the Company opened 18 new stores, including the relocation
of seven existing stores, closed one store, and completed the renovation of
29 existing stores. Food Lion plans to open a total of 64 new stores and
to renovate approximately 94 stores in 1997. The Company anticipates that
the majority of new stores will be opened under
conventional leasing arrangements.
-11-
Significant cash capital expenditures currently estimated for the remainder of
1997 are $81 million to be applied to store renovations and expansions, new
store construction, distribution equipment, information technology and other
capital expenditures. The Company projects 1998 cash capital expenditures to
total $360.0 million.
Capital expenditures will be financed through funds generated from operations,
existing bank and credit lines, and other debt, if necessary.
On April 21, 1997, the Company issued $150 million in debt securities at an
interest rate of 7.55% due in 2007 and $150 million in debt securities at an
interest rate of 8.05% due in 2027. Interest on the notes is payable
semiannually in arrears on April 15 and October 15 of each year, commencing on
October 15, 1997. Proceeds from the issuance were used to refinance amounts
outstanding under the Company's revolving credit facility, as noted below.
The Company maintains the following bank and credit lines:
$250 million commercial paper program under which no borrowings were
outstanding during the entire third quarter of 1997 or 1996.
A revolving credit facility with a syndicate of commercial banks providing
$700 million in committed lines of credit, of which $350 million will
expire in December, 1997 with the remaining $350 million to expire in
December, 2001. There were no borrowings outstanding at the end of the
third quarter of 1997 or 1996. During the third quarter 1997, the Company
had no borrowings. Previously, borrowings against this facility were used
to fund the Kash n'Karry acquisition initially until long-term financing
(see above discussion) was finalized in April 1997.
Additional short-term committed lines of credit totaling $35 million which
are available when needed. The Company is not required to maintain
compensating balances related to these lines of credit, and borrowings may
occur periodically. There were no borrowings as of September 6, 1997 or
September 7, 1996. During the third quarter of 1997, the Company had
average borrowings of $3.0 million at a daily weighted average interest
rate of 5.66% with a maximum amount outstanding of $20 million.
Periodic short-term borrowings may be placed under informal credit
arrangements, which are available to the Company at the discretion of the
lender. Borrowings for the third quarter were as follows (see following
table):
Informal Credit Arrangements:
(dollars in millions) 1997 1996
Outstanding borrowings at end of third quarter $ 0 $0
Average borrowings $ 4.9 $3.7
Maximum amount outstanding $52.0 $20.0
Daily weighted average interest rate 5.79% 5.54%
The Board of Directors has approved the repurchase of up to $100 million of
Class A and/or Class B common stock under the Company's share repurchase
program, which expires in May of 1998. Purchases of Class A and Class B common
stock may be made in the open market under this program which began in May of
1997, as deemed in the best interest of shareholders.
The Company established a pre-tax charge against 1993 earnings of $170.5 million
(approximately $104 million after tax) to cover management's estimate of the
costs associated with the closing of 88 unprofitable store locations. As of the
end of third quarter 1997, the Company has charged $90.2 million against the
reserve, primarily as a result of the payment of remaining rent obligations on
leased stores and the disposition of property. In the third quarter of 1997,
$35.0 million in related unused reserves (which represents the difference
between the actual disposal costs and the original estimate of disposal costs)
was recognized into income, offsetting a portion of the Company's third quarter
reserve established in connection with the closure of the Southwest market.
(see Note 4). The remaining reserve balance of $45.3 million will be used for
remaining rent obligations due on leased stores and for
owned property not yet sold. The Company believes the remaining reserve is
adequate to cover the costs associated with the disposition of the remaining
properties.
Other
Information provided by the Company, including written or oral statements made
by its representatives, may contain forward-looking information as defined
in the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, which address
activities, events or developments that the Company expects or anticipates will
or may occur in the future, including such things as expansion and growth of the
Company's business, future capital expenditures and the Company's business
strategy, are forward-looking statements. In reviewing such information, it
should be kept in mind that actual results may differ materially from those
projected or suggested in such forward-looking statements. This forward-looking
information is based on various factors and was derived using numerous
assumptions. Many of these factors have previously been identified in filings
or statements made by or on behalf of the Company, including filings with the
Securities and Exchange Commission on Forms 10-Q, 10-K and 8-K.
Important assumptions and other factors that could cause actual results to
differ materially from those set forth in the forward-looking statements
include: changes in the general economy or in the Company's primary markets,
-13-
changes in consumer spending, competitive factors, changes in the rate of
inflation, changes in state or federal legislation or regulation, adverse
determinations with respect to litigation or other claims, inability to develop
new stores or complete remodels as rapidly as planned, stability of product
costs, and uncertainties detailed from time to time in the Company's filings
with the Securities and Exchange Commission. In addition, with respect to the
anticipated proceeds from the disposition of assets in the Southwest, additional
factors that could cause results to differ materially include conditions in the
real estate market and general economic conditions in the local communities
where the assets are located.
Part II OTHER INFORMATION
Item 1. Legal Proceedings
The Company has had no significant developments related to legal
matters since the Item 1 disclosure included in the Company's Form
10Q filed July 25, 1997 for the quarter ended June 14, 1997.
Item 2. Change in Securities
This item is not applicable.
Item 3. Defaults Upon Senior Securities
This item is not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
This item is not applicable.
Item 5. Other Information
This item is not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
11 Computation of Earnings per Share
27 Financial Data Schedule
-14-
(b). The Company filed a report on Form 8-K pursuant to Item 5 and Item
7 on October 3, 1997 in regard to a)Closure of Stores and Distribution
Center in Southwest and b) press release.
-15-
SIGNATURES
PURSUANT TO THE REQUIREMENTS 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.
FOOD LION, INC.
Registrant
DATE: October 21, 1997 BY: Laura Kendall
Laura Kendall
Vice President of Finance
Chief Financial Officer
Principal Financial Officer
-16-
EXHIBIT INDEX
SEQ. PAGE
EXHIBIT # DESCRIPTION NO.
11 Computation of Earnings per Share 18
27 Financial Data Schedule 19-20
-17-
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
(Amounts in thousands except Periods Ended
per share amounts)
Sept 6, 1997 Sept 7, 1996
PRIMARY
NET INCOME $ 96,488 $139,455
WEIGHTED AVERAGE COMMON
SHARES AND OTHER COMMON
STOCK EQUIVALENTS:
COMMON STOCK OUTSTANDING 468,920 470,786
STOCK OPTIONS 715 387
469,635 471,173
PRIMARY EARNINGS PER SHARE (*) $ .21 $ .30
FULLY DILUTED
NET INCOME $96,488 $139,455
ELIMINATION OF INTEREST EXPENSE,
NET OF RELATED TAX EFFECT,
APPLICABLE TO 5% CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2003 3,938 2,420
ADJUSTED INCOME APPLICABLE TO
COMMON STOCK $100,426 $141,875
WEIGHTED AVERAGE COMMON
SHARES AND OTHER COMMON
STOCK EQUIVALENTS:
COMMON STOCK OUTSTANDING 468,920 470,786
STOCK OPTIONS 735 622
SHARES ISSUABLE UPON
CONVERSION OF 5% CONVERTIBLE
SUBORDINATED DEBENTURES DUE
2003 14,440 14,480
484,095 485,888
FULLY DILUTED EARNINGS PER SHARE (*) $ .21 $ .29
(*) NOTE: Dilution is less than 3%. Therefore, common stock equivalents
have been excluded from the total weighted average common shares.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets, the Consolidated Statements of Income and the
Consolidated Statement of Cash Flows and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-3-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> SEP-6-1997
<CASH> 106088
<SECURITIES> 0
<RECEIVABLES> 149951
<ALLOWANCES> 0
<INVENTORY> 984482
<CURRENT-ASSETS> 1385710
<PP&E> 2834939
<DEPRECIATION> 1027005
<TOTAL-ASSETS> 3475467
<CURRENT-LIABILITIES> 992637
<BONDS> 583802
0
0
<COMMON> 234640
<OTHER-SE> 1028666
<TOTAL-LIABILITY-AND-EQUITY> 3475467
<SALES> 6968371
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