SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 27, 1999
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 April 30, 1999.
Class A Common Stock 244,429,133
Class B Common Stock 229,399,364
Page 1 of 17
FOOD LION, INC.
FORM 10-Q/A
Part I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Statements of Income for the
12 weeks ended March 27, 1999 and March 28, 1998 3
Consolidated Balance Sheets as of March 27,
1999, January 2, 1999 and March 28, 1998 4
Consolidated Statements of Cash Flows for
12 weeks ended March 27, 1999 and March
28, 1998 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-16
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FOOD LION, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the 12 Weeks ended March 27, 1999 and March 28, 1998
(Dollars in thousands except per share data)
Mar 27, 1999 Mar 28, 1998 Mar 27, 1999 Mar 28, 1998
% %
<S> <C> <C> <C> <C>
Net sales $2,407,046 $2,305,473 100.00 100.00
Cost of goods sold 1,856,862 1,800,115 77.14 78.08
Selling and administrative expenses 431,301 388,713 17.92 16.86
Operating income 118,883 116,645 4.94 5.06
Interest expense 24,353 27,614 1.01 1.20
Income before income taxes 94,530 89,031 3.93 3.86
Provision for income taxes 35,922 33,797 1.50 1.47
Net income $ 58,608 $ 55,234 2.43 2.39
Basic earnings per share $ 0.12 $ 0.12
Diluted earnings per share $ 0.12 $ 0.12
Dividends per share $ 0.04 $ 0.04
Weighted average number
of shares outstanding:
Class A 247,906,512 236,334,766
Class B 230,830,364 232,727,364
Total 478,736,876 469,062,130
</TABLE>
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<TABLE>
FOOD LION, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Mar 27, 1999 January 2, 1999 Mar 28, 1998
Assets
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 184,690 $ 123,592 $ 176,155
Receivables 186,423 199,101 157,306
Inventories 1,090,980 1,103,635 1,014,622
Prepaid expenses 19,302 20,552 22,455
Deferred tax asset 65,397 65,397 63,123
Total current assets 1,546,792 1,512,277 1,433,661
Property, at cost, less accumulated
depreciation 1,926,031 1,897,080 1,819,752
Deferred tax asset 4,707 4,707 51,980
Intangible assets 256,524 258,402 269,480
Other assets 3,421 3,495 5,576
Total assets $3,737,475 $3,675,961 $3,580,449
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term borrowings $ - $ 61,000 $ -
Accounts payable, trade 545,480 545,015 520,648
Accrued expenses 418,308 360,105 409,043
Capital lease obligations - current 22,149 21,940 20,915
Long term debt - current 42,403 42,518 2,580
Other liabilities - current 10,136 9,839 9,446
Income taxes payable 35,262 - ____ 27,796
Total current liabilities 1,073,738 1,040,417 990,428
Long-term debt 429,208 429,763 585,260
Capital lease obligations 486,220 492,660 505,479
Other liabilities 110,635 114,199 126,746
Total liabilities 2,099,801 2,077,039 2,207,913
Shareholders' Equity:
Class A non-voting common stock, $.50 par value 123,957 123,946 118,253
Class B voting common stock, $.50 par value 115,415 115,415 116,364
Additional capital 60,457 60,332 2,248
Retained earnings 1,337,845 1,299,229 1,135,671
Total shareholders' equity 1,637,674 1,598,922 1,372,536
Total liabilities and shareholders' equity $3,737,475 $3,675,961 $3,580,449
</TABLE>
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FOOD LION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the 12 Weeks ended March 27, 1999 and March 28, 1998
(Dollars in thousands)
12 Weeks
Mar 27,1999 Mar 28,1998
Cash flows from operating activities
Net income $ 58,608 $ 55,234
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 57,459 52,418
Gain on disposals of property (312) (4,834)
Changes in operating assets and liabilities:
Receivables 12,678 9,484
Inventories 12,655 (31,878)
Prepaid expenses 1,250 59
Other assets 74 144
Accounts payable and accrued expenses 58,668 80,611
Income taxes payable 35,262 27,796
Other liabilities (3,267) 1,556
Total adjustments 174,467 135,356
Net cash provided by operating activities 233,075 190,590
Cash flows from investing activities
Capital expenditures (86,084) (58,304)
Proceeds from disposal of property 900 56,224
Net cash used in investing activities ( 85,184) ( 2,080)
Cash flows from financing activities
Net payments under short-term borrowings (61,000) (80,000)
Principal payments on long-term debt (670) (740)
Principal payments under capital lease obligations (5,267) (8,772)
Dividends paid (19,992) (17,474)
Proceeds from issuance of common stock 136 1,291
Net cash used in financing activities ( 86,793) (105,695)
Net increase in cash and cash
equivalents 61,098 82,815
Cash and cash equivalents at beginning
of period 123,592 93,340
Cash and cash equivalents at end of period $184,690 $176,155
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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 January 2, 1999 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:
Selected cash payments and non-cash activities during the period
were as follows:
Mar 27, 1999 Mar 28, 1998
Cash payments for income taxes $ 658 $ 6,681
Cash payments for interest,
net of amounts capitalized 16,145 18,390
Non-cash investing and financing activities:
Capitalized lease obligations
incurred for store properties 0 33,024
Capitalized lease obligations
terminated for store properties 964 8,213
Conversion of long-term debt
to stock 0 300
The Company considers all highly liquid investment instruments
purchased with an original maturity of three months or less to
be cash equivalents.
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3) Inventories
Inventories are stated at the lower of cost or market. Inventories
valued using the last-in, first-out(LIFO) method comprised
approximately 86% and 85% of inventories as of March 27, 1999 and March 28,
1998, respectively. Meat, produce and deli inventories are valued on the
first-in, first-out (FIFO) method. If the FIFO method were used entirely,
inventories would have been $140.5 million and $117.9 million greater
as of March 27, 1999 and March 28, 1998, respectively. Application of
the LIFO method resulted in increases in the cost of goods sold of
$1.4 million and $3.5 million for the periods ended March 27,
1999 and March 28, 1998, respectively.
4) Reclassification
Certain financial statement items have been reclassified to
conform to the current year's format.
5) Earnings Per Share
Basic earnings per share is computed by dividing income available
to common shareholders by the weighted average number of common shares
outstanding (478,736,876 and 469,062,130 for the first quarter of 1999 and
1998, respectively). Diluted earnings per share is computed by dividing
income available to common shareholders by the weighted average number of
common shares outstanding and the weighted average number of potential
common shares outstanding. The common stock equivalents that were added to
the weighted average shares outstanding for purposes of diluted EPS were
764,000 and 1,322,000 for outstanding stock options in the first quarter of
1999 and 1998, respectively. Additionally, common stock equivalents for the
first quarter of 1998 included 14,402,000 shares issuable upon conversion
of 5% convertible subordinated debentures due 2003. During the second
quarter of 1998, the Company's convertible subordinated debentures were
redeemed.
-7-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS (12 weeks ended March 27, 1999 compared to 12 weeks
ended March 28, 1998)
The Company recorded earnings of $58.6 million for the first quarter
of 1999, an increase of 6.1% over the corresponding period of the prior
year. The first quarter of 1999 includes an after-tax charge of $2.4
million related to retirement benefits for the Company's former President
and Chief Executive Officer ("CEO") (see discussion below). Excluding this
charge, earnings would have been $61.0 million, representing an increase of
10.5% over the first quarter of 1998.
Sales for the first quarter of 1999 were $2.4 billion, an increase
of 4.4% over the first quarter of 1998. The Company's first quarter
1999 sales are not comparable to 1998 due to a change in the method of
collecting sales tax on products discounted through the MVP customer
("MVP") and Preferred Customer Club ("PCC") loyalty card programs (see
discussion below). On a comparable basis, sales increased 6.8% over the
first quarter of last year. Same store sales increased 2.0%. The
Company experienced the strongest same store sales performance in North
and South Carolina, Maryland, Delaware and Georgia.
Beginning in May 1998, after receiving permission from all state
departments of revenue, the Company began collecting sales tax on the
net sales price, after considering the MVP/PCC discount granted, rather
than the full retail price of the MVP/PCC items. The related impact to
the first quarter of 1999 was to reduce reported sales by approximately
$54.0 million. This change does not impact the same store sales
calculation or the Company's net income, as gross profit and expense
dollars are the same under either method. The only difference is that
under the new method the discount granted is reflected in sales rather
than cost of goods sold under the original method. The following table
illustrates the impact of the change.
-8-
First Quarter of
1999 1999
1999 Dollars %
Dollars Comparable % Comparable
As to As to
Reported Qtr. 1- Reported Qtr. 1-
1998 1998
(Dollars and (New (Original (New (Original
shares in Method) Method) Method) Method)
thousands)
Net sales $ 2,407,046 $ 2,461,014 100.00% 100.00%
Cost of goods sold 1,856,862 1,910,830 77.14 77.64
Selling and
administrative
expenses 431,301 431,301 17.92 17.53
Operating income 118,883 118,883 4.94 4.83
Interest expense 24,353 24,353 1.01 0.99
Income before
income taxes 94,530 94,530 3.93 3.84
Provision for
income taxes 35,922 35,922 1.50 1.46
Net income $58,608 $58,608 2.43% 2.38%
Basic and diluted
earnings per share $.12 $.12
Weighted average
number of shares 478,737 478,737
outstanding
The Company's 1999 business plan includes opening 80 new stores,
closing 35 existing stores (approximately 20 of these closings will be
relocations) and renovating approximately 140 existing stores. With this
growth plan, the Company anticipates a net increase in store square
footage of 7.0% in 1999. As of March 27, 1999, the Company had opened 21
new stores, closed five stores (of which four were relocations), and
completed renovations of eight existing stores.
Gross profit was 22.86% of sales (22.36% adjusted to the original
method of reporting sales tax) for the first quarter this year compared to
21.92% of sales for the same period last year. The increase in gross
profit is due to continued category management initiatives particularly in
the perishable and grocery departments. The first quarter LIFO charge was
$1.4 million. The Company's internal testing for the first quarter
indicated minimal inflation. The current LIFO provision is adequate to
cover this level of inflation.
For the first quarter of 1999, selling and administrative expenses
were $431.3 million or 17.92% (17.53% adjusted for the original method of
reporting sales tax) of sales as compared to 16.86% of sales in the
corresponding period of the prior year. Excluding the one-time charge of
$3.9 million (before tax) related to retirement benefits for the Company's
former President and CEO (see discussion below), selling and administrative
expenses would have been 17.76% of sales (17.36% adjusted for the original
method of reporting sales tax). In addition to the retirement costs, the
increase in selling and administrative expenses as a percentage of sales is
due primarily to increases in (1) store salaries and benefits as a
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result of a tightening of the labor pool in key Southeast markets due to
the low unemployment rates in these areas, and (2) store rent due to the
new store openings and expansions of existing stores since the first
quarter of last year.
On April 7, 1999, the Company announced the retirement of Tom E.
Smith, its President, CEO and Chairman of the Board of Directors. During
the first quarter, the Company recorded a $3.9 million before-tax charge
($2.4 million after-tax) related to Mr. Smith's retirement benefits.
These costs are included in selling and administrative expenses.
The Company recorded $3.5 million in store closing costs (included in
Selling and Administrative Expenses on the Company's Consolidated
Statement of Income)during the first quarter of 1999. These costs are
included in "Additions" in the table below.
Store Closing Costs
(Dollars in millions)
Reduction Lease Accrued
of Asset Liabilities Expenses Total
Values
Balance at
January 2, 1999 $15.8 $113.2 $1.1 $130.1
Additions .2 2.7 .6 3.5
Reductions -.6 -5.4 -.5 -6.5
Reclassifications 0.0 0.0 0.0 0.0
Recognition of
unused reserves 0.0 0.0 0.0 0.0
Balance at
March 27, 1999 $15.4 $110.5 $1.2 $127.1
Reductions include fees totaling $4 million related to the
termination of three store leases. The remaining $2.5 million relates to
(1) on-going rent payments made on lease obligations, (2) the sale of
assets associated with closed store properties, and (3) expenses arising
from contractual obligations.
During the first quarter of 1999, the Company closed five stores in
the normal course of business, of which four were relocations. The
revenues and operating results of these stores were not significant to the
Company's total revenues and operating results.
During the first quarter of 1999, the Company completed disposition
efforts related to three closed stores.
At the end of the first quarter of 1999 the Company had
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$127.1 million in store closing costs related to 127 stores (124
leased and 3 owned) and one distribution center. Disposition efforts on
these properties (leases, equipment and buildings) will continue until all
are disposed.
Interest expense as a percent of sales was 1.01% for first quarter
1999 compared to 1.20% for the corresponding period last year. The
decrease in interest is primarily due to the conversion of the Company's
5% convertible subordinated debentures during the second quarter of 1998.
Net income for the quarter was $58.6 million or 2.43% of sales as
compared to $55.2 or 2.39% of sales in the first quarter of the prior
year. Basic and diluted earnings per share were $0.12 for both the first
quarter of 1999 and 1998. Excluding the one-time after-tax charge related
to retirement benefits of $2.4 million (see discussion above), net income
for the first quarter of 1999 would have been $61.0 million or 2.54% of
sales, and basic and diluted earnings per share would have been $0.13.
Liquidity and Capital Resources
Cash provided by operating activities totaled $233.1 million for the
12 weeks ended March 27, 1999, compared with $190.6 million for the same
period last year. The increase was primarily due to an increase in
operating income, a decrease in inventory levels, and an increase in
income taxes payable.
Capital expenditures totaled $86.1 million for the 12 weeks ended
March 27, 1999, compared with $58.3 million for the same period in 1998.
The Company opened 21 new stores, closed five stores (including four
relocations), and completed the renovation of eight existing stores during
the first quarter of 1999. Food Lion plans to open a total of 80 new
stores in 1999 and renovate approximately 140 stores. The Company
anticipates that the majority of the new stores will be opened under
conventional leasing arrangements.
During the quarter, the Company signed a contract to purchase 28
former A&P store locations for a total purchase price of $14.5 million.
The Company plans to open approximately ten of these stores over the next
two years, and has plans to sublease the remaining locations.
Capital expenditures currently estimated for 1999 are $390 million
(including the A&P store purchase). Capital expenditures for 1999 will be
financed through funds generated from operations and existing bank and
credit lines.
-11-
The Company maintains the following bank and credit lines:
$250.0 million commercial paper program under which no borrowings were
outstanding during the first quarters of 1999 and 1998.
A revolving credit facility with a syndicate of commercial banks providing
$625.0 million in committed lines of credit which expires in December 1999.
There were no outstanding borrowings as of March 27, 1999, and March 28, 1998.
Additional short-term committed lines of credit totaling $20.0 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 March 27, 1999, or
March 28, 1998. During the first quarter of 1999, the Company had average
borrowings of $6.21 million at a daily weighted average interest rate of
5.03% with a maximum amount outstanding of $20.0 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 first quarter were as follows:
Informal Credit Arrangements
(Dollars in millions)
1999 1998
Outstanding borrowings
at the end of the first quarter $0.0 $0.0
Average borrowings $3.2 $10.0
Maximum amount outstanding $35.0 $80.0
Daily weighted average interest rate 5.09% 5.66%
During the first quarter of 1999, the Company did not purchase any shares of
Class A or Class B stock. The Board of Directors has approved
a renewal of the annual share repurchase program for 1999 in the amount of $100
million. Purchases of Class A and/or Class B Common Stock may be made in the
open market, as deemed in the best interest of shareholders.
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Year 2000
In 1996, the Company began evaluating both its information technology
systems, and other systems and equipment in order to identify and adjust
date sensitive systems for Year 2000 compliance. As part of this
undertaking, the Company created a Year 2000 Project Team to address the
issues related to Year 2000 compliance. The Year 2000 Team is led by
representatives from the Company's Information Technology department and
includes key representatives from other areas of the Company. The Year
2000 Team has developed a three-phase plan to identify and remediate all
existing systems to ensure the Company's readiness for the century change.
These phases consist of assessment, system remediation and integration
testing.
Project Phase One primarily focused on assessing the business impact
of the century change on the Company's operating environment. This
assessment included information technology systems, non-information
technology systems and supply chain readiness. The assessment was
conducted based on an analysis of the Company's individual business
processes and the potential material risks associated with the Company's
operations. Project Phase Two primarily focused on code and system
conversion (remediation) of date impacted applications and systems.
Remediation or replacement was conducted for all information technology
and embedded systems impacted by Year 2000 issues. Project Phase Three
involves the execution of various testing protocol, analysis of test
results and the development of contingency plans for each of the impacted
systems.
The Company has completed Project Phase One for all systems and
Project Phase Two for all systems not scheduled for replacement. The
Company expects to complete installation of certain replacement systems
impacted by Year 2000 issues by mid-1999 and has included the cost of
these systems in its estimates for the Year 2000 Project. The Company has
commenced Project Phase Three, which includes testing and validation of
impacted systems, and anticipates this phase will be substantially
complete by mid-1999. However, the Company anticipates testing and
validation procedures, as well as development of contingency plans, will
continue throughout 1999.
Except for the cost of replacement systems, the Company will expense
the cost of the Year 2000 Project as incurred. The Company is funding the
costs associated with the Year 2000
Project through operating cash flows and has not deferred any Information
Technology projects in order to complete the Year 2000 Project.
The Company estimates the total incremental cost of the Year 2000
Project is approximately $17.0 million which includes
-13-
equipment and software replacements, reprogramming, systems testing, and
outside consulting services. Approximately $4.0 million of the total cost
for the Year 2000 Project is related to reprogramming or remediation of
existing software and new systems, while the remaining cost of
approximately $13.0 million is related to the implementation of certain
replacement systems. At the end of the first quarter of fiscal 1999, the
Company had incurred approximately $10.4 million of the total cost of the
Year 2000 project of which $2.9 million had been expensed as incurred and
$7.5 million had been capitalized for replacement systems.
The Company has not materially increased the number of its employees
in order to complete the Year 2000 Project. Although the Company has
utilized external contractors in various phases of the Year 2000 Project,
the Company does not consider any of these contracts or relationships
material for the completion of the Year 2000 Project. The Company has
assigned certain employees from its Information Technology department to
the Year 2000 Project (averaging approximately 20 employees during Phase
One and 22 employees during Phase Two of the project and less than 15
employees from its user departments). As discussed above, the Company has
created a Year 2000 Project Team composed of representatives from all
areas of the Company. Members of the Year 2000 Project Team have
completed the tasks associated with the Year 2000 Project as part of their
normal duties. Although the Company has discussed its Year 2000 Project
with certain of its consultants, third parties were not retained to
perform independent verification and validation processes regarding the
risks and cost estimates of the Year 2000 Project.
As part of the Year 2000 Project, the Company has identified
relationships with third parties, including vendors, suppliers, and
service providers, which the Company believes are critical to its business
operations. Although the Company considered several factors in
identifying these critical relationships, the Company has concentrated its
communication efforts, as discussed below, with suppliers and vendors from
whom the Company makes annual purchases in excess of $10 million. The
Company is in the process of communicating with these third parties
through questionnaires, letters and interviews in an effort to determine
the extent to which they are addressing their Year 2000 compliance issues.
Based on the responses received to date from these efforts, the Company
understands that all critical suppliers have indicated they anticipate
being Year 2000 compliant. A small percentage of these critical suppliers
have indicated they are Year 2000 compliant, however, a majority have
indicated they are still addressing Year 2000 issues. Where appropriate,
the Company has developed strategies to work with its suppliers to verify
Year 2000 readiness and create contingency plans as discussed below.
-14-
The Company has identified its operational and supply chain
activities as its most critical functions potentially impacted by Year
2000 issues. The Company will conduct testing within a parallel operating
environment created to simulate business processes and integrated systems
functionality, including front-end operations and supply chain activities.
Validation of integrated systems functionality will be performed by
comparing test results to actual processes and data.
The Company cannot assure that there will not be an adverse impact on
the Company if third parties do not appropriately address their Year 2000
issues in a timely manner. Such other possible consequences include, but
are not limited to, loss of communications with stores, loss of electric
power, and an inability to process customer transactions or otherwise
engage in similar normal business activities. As discussed below, the
Company has developed contingency plans with its critical suppliers in
order to arrange for the timely delivery of inventory. The Company will
continue to communicate with, assess and monitor the progress of these
third parties in resolving Year 2000 issues.
Although the Company does not believe the actual impact of any system
failures related to the century change will be material, the Company has
developed various contingency plans with its critical suppliers and
certain other vendors in order to assure the timely delivery of inventory
and prepare for normal business activities following the century change.
In the event the Company or a key supplier is adversely impacted by the
century change, the Company will implement its contingency plan for such
situation. These plans include alternate means of communication with
suppliers, such as facsimile, telephone and hand delivery, manual
operation of certain systems, as well as the implementation of certain
established ordering procedures. Under the terms of these established
ordering procedures, the Company's critical suppliers will provide
inventory to the Company based on historical ordering patterns. These
suppliers will also substitute products and adjust inventory levels of
substitute items based on the availability of certain products. The
Company will continue to develop and finalize the implementation of its
contingency plans with third parties throughout 1999.
The projections and project completion dates are based on
management's best estimates and may be updated from time to time
as additional information becomes available. This section discussing Year
2000 issues contains forward-looking statements (refer to "Other" below
which addresses forward-looking statements made by the Company).
-15-
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 utilizing 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 of Forms 10-Q, 10-K and 8-K.
Important assumptions and other important 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, changes in consumer spending, competitive
factors, the nature and extent of continued consolidation in the industry,
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 -- supply or quality control problems
with the Company's vendors, and issues and uncertainties related to Year
2000 detailed from time-to-time in the Company's filings with the
Securities and Exchange Commission.
-16-
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: August 17, 1999 BY: Laura Kendall
Laura Kendall
Vice President of Finance
Chief Financial Officer
Principal Accounting Officer
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