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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of Earliest Event Reported): July 31, 2000
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Delhaize America, Inc.
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(Exact name of registrant as specified in its charter)
Commission File No. 001-15275
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North Carolina 56-0660192
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(State or other Jurisdiction of incorporation) (I.R.S. Employer
Identification No.)
2110 Executive Drive, P.O. Box 1330
Salisbury, North Carolina 28145-1330
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (704) 633-8250
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Not Applicable
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(Former name or former address, if changed since last report.)
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This Amendment No. 1 on Form 8-K/A (this "Amendment") is being
filed by Delhaize America, Inc., a North Carolina corporation ("Delhaize
America" or the "Registrant"), to amend Item 7 of the Registrant's Current
Report on Form 8-K dated July 31, 2000, filed with the Securities and Exchange
Commission (the "SEC") on August 15, 2000 (the "Initial Report"). This Amendment
and the Initial Report relate to the merger (the "Merger") of FL Acquisition
Sub, Inc., a Maine corporation wholly-owned by Delhaize America, with and into
Hannaford Bros. Co., a Maine corporation ("Hannaford"), resulting in Hannaford
becoming a wholly-owned subsidiary of Delhaize America. Pursuant to the
instructions to Item 7 of Form 8-K, the Registrant is filing this Amendment (not
later than 60 days after the date that the Initial Report was required to be
filed) in order to include the pro forma financial information required with
respect to the acquisition of Hannaford. Pursuant to Rule 12b-15 under the
Securities Exchange Act of 1934, as amended, the complete text of Item 7, as
amended, is set forth below.
Item 7. Financial Statements and Exhibits
Item 7(a). Financial Statements of Business Acquired
The required financial information of Hannaford is hereby
incorporated by reference to Hannaford's Annual Report on Form 10-K for the
period ended January 1, 2000, filed with the SEC on March 10, 2000, and
Hannaford's Quarterly Report on Form 10-Q for the quarterly period ended April
1, 2000, filed with the SEC on May 5, 2000.
Item 7(b). Pro Forma Financial Information
The following unaudited pro forma consolidated condensed
financial statements give effect to the Merger applying the purchase method of
accounting in accordance with generally accepted accounting principles. The
unaudited pro forma consolidated condensed financial statements are presented
for illustrative purposes only and are not necessarily indicative of the results
of operations or financial position that would have been realized had Delhaize
America and Hannaford been a consolidated company during the specified periods,
nor are they necessarily indicative of future consolidated results of operations
or financial position.
The unaudited pro forma consolidated condensed statements of
income assume that the Merger was completed at the beginning of the periods
presented. The six-month period of 2000 includes the 24-week period ended June
17, 2000 for Delhaize America and the 26-week period ended July 1, 2000 for
Hannaford. The unaudited pro forma consolidated condensed balance sheet assumes
that the Merger was completed as of June 17, 2000.
The unaudited pro forma consolidated condensed financial
statements are based on (i) the historical financial statements of Delhaize
America as of and for the fiscal year ended January 1, 2000, as reported in
Delhaize America's Annual Report on Form 10-K for such period, and as of and for
the 24-week period ended June 17, 2000, as reported in Delhaize America's
Quarterly Report on Form 10-Q for such period, and (ii) the historical financial
statements of Hannaford as of and for the fiscal year ended January 1, 2000, as
reported in Hannaford's Annual Report on Form 10-K for such period, and the
interim financial statements prepared by Hannaford as of and for the 26-week
period ended July 1, 2000. These unaudited pro forma consolidated condensed
financial statements should be read in conjunction with and are qualified by the
above referenced historical consolidated financial statements of Delhaize
America and Hannaford and related notes thereto.
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Unaudited Pro Forma Consolidated Condensed Balance Sheet
(Dollars in thousands)
<TABLE>
<CAPTION>
Delhaize America Hannaford
as of as of Pro Forma Pro Forma
June 17, 2000 July 1, 2000 Adjustments Consolidated
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<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 100,573 $ 130,463 $ 99,332 (a) $ 330,368
Receivables 222,586 41,186 (6,406) (a),(b) 257,366
Inventories 1,178,395 197,278 (21,957) (a),(c) 1,353,716
Prepaid expenses 57,812 4,705 - 62,517
Deferred tax asset 55,611 - - 55,611
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Total current assets 1,614,977 373,632 70,969 2,059,578
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Property, at cost, less accumulated depreciation 2,107,368 845,305 (203,800) (a),(d) 2,748,873
Intangible assets, less accumulated amortization 250,360 50,088 3,024,283 (a),(e),(f),(g) 3,324,731
Other assets 20,775 72,978 16,202 (a),(d),(f) 109,955
Total assets $ 3,993,480 $1,342,003 $ 2,907,654 $ 8,243,137
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short term borrowings $ 235,000 $ - $ 2,772,294 (h) $ 3,007,294
Accounts payable 590,038 206,061 6,952 (a) 803,051
Accrued expenses 327,880 45,833 4,680 (a) 378,393
Capital lease obligations - current 25,137 2,430 1,300 (h) 28,867
Long term debt - current 1,987 - - 1,987
Other liabilities - current 13,100 141 (60) (f) 13,181
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Total current liabilities 1,193,142 254,465 2,785,166 4,232,773
Notes payable - 20,651 (1,250) (h) 19,401
Long-term debt 426,654 156,380 (7,541) (a) 575,493
Capital lease obligations 505,322 59,107 12,498 (h) 576,927
Deferred income tax liabilities 7,421 (1,016) 180,960 (b) 187,365
Other liabilities 101,124 84,951 (10,085) (h) 175,990
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Total liabilities 2,233,663 574,538 2,959,748 5,767,949
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Shareholders' equity:
Common stock, par value $.75 per share - 32,819 (32,819) (i) -
Common stock A, par value $.50 per share 39,983 - 12,816 (i) 52,799
Common stock B, par value $.50 per share 37,645 - - 37,645
Additional paid-in-capital 156,097 167,747 534,808 (i) 858,652
Preferred stock purchase rights 438 (438) (i) -
Retained earnings 1,526,092 566,461 (566,461) (i) 1,526,092
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Total shareholders' equity 1,759,817 767,465 (52,094) 2,475,188
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Total liabilities and shareholders' equity $ 3,993,480 $1,342,003 $ 2,907,654 $ 8,243,137
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</TABLE>
See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
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Unaudited Pro Forma Consolidated Condensed Statement of Income
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Historical
Delhaize America Hannaford
For the 24 For the 26 Total
Weeks Ended Weeks Ended Pro Forma Pro Forma
June 17, 2000 July 1, 2000 Adjustments Consolidated
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<S> <C> <C> <C> <C>
Net Sales $ 5,131,555 $ 1,718,357 $ (322,928) (a) $ 6,526,984
Cost of goods sold 3,864,868 1,283,228 (249,398) (a) 4,898,698
Selling and administrative expenses 1,007,304 343,003 (41,162) (a),(j) 1,309,145
Divestiture and other non-recurring costs 2,944 106,010 (108,954) (a),(k) 0
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Operating income (loss) 256,439 (13,884) 76,586 319,141
Interest expense 55,374 9,258 110,286 (a),(l) 174,918
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Income (loss) before income taxes 201,065 (23,142) (33,700) 144,223
Provision for income taxes 76,408 (8,794) (482) (m) 67,132
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Net Income (loss) $ 124,657 $ (14,348) $ (33,218) $ 77,091
Earnings per common shares and
common share equivalents:
Primary $ 0.80 $ (0.33) $ 0.43
Fully diluted $ 0.80 $ (0.33) $ 0.42
Weighted average common shares
and common share equivalents:
Primary 155,241 180,865 (n)
Fully diluted 155,367 183,205 (o)
</TABLE>
See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
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Unaudited Pro Forma Consolidated Condensed Statement of Income
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Historical
Delhaize America Hannaford Total
Year Ended Year Ended Pro Forma Pro Forma
January 1, 2000 January 1, 2000 Adjustments Consolidated
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<S> <C> <C> <C> <C>
Net Sales $ 10,891,231 $ 3,434,471 $ (671,762) (a) $ 13,653,940
Cost of goods sold 8,209,486 2,559,812 (523,913) (a) 10,245,385
Selling and administrative expenses 2,091,886 682,240 (101,964) (a),(j) 2,672,162
Merger related costs 1,465 9,453 (10,918) (k) 0
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Operating income (loss) 588,394 182,966 (34,967) 736,393
Interest expense 103,820 23,468 220,678 (a),(l) 347,966
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Income (loss) before income taxes 484,574 159,498 (255,645) 388,427
Provision for income taxes 184,139 61,480 (72,498) (m) 173,121
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Net Income (loss) $ 300,435 $ 98,018 $ (183,147) $ 215,306
Earnings per common shares and
common share equivalents:
Primary $ 1.91 $ 2.32 $ 1.18
Fully diluted $ 1.91 $ 2.28 $ 1.16
Weighted average common shares
and common share equivalents:
Primary 157,109 182,733 (n)
Fully diluted 157,297 185,555 (o)
</TABLE>
See accompanying notes to the unaudited pro forma consolidated condensed
information.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
NOTE 1-BASIS OF PRESENTATION
The unaudited pro forma consolidated condensed financial information has
been prepared applying the purchase method of accounting assuming the Merger,
effective July 31, 2000, occurred, with respect to the pro forma statements of
income, as of the beginning of the periods presented, and, with respect to the
pro forma balance sheet, as of June 17, 2000. Under the purchase method of
accounting, the purchase cost is allocated to acquired assets and liabilities
based on their relative fair values at the effective date of the Merger. The
amount by which the purchase price exceeds the fair value of the net assets
acquired has been allocated to goodwill, which will be amortized over forty
years. Such allocations are subject to final adjustments within a one-year
period from the closing date of the transaction. Management does not presently
expect the final allocations to differ materially from the amounts presented
herein.
The amounts and components of the estimated purchase price reflected in
the unaudited pro forma consolidated condensed financial information are as
follows: (i) approximately $2.3 billion in cash and approximately 13.7 million
shares of Delhaize America Class A common stock valued at approximately $352
million exchanged in the Merger for all the outstanding shares of Hannaford
common stock, (ii) fully vested options to purchase approximately 4.2 million
shares of Delhaize America Class A common stock valued at approximately $40
million, which were converted from options to acquire shares of Hannaford
common stock, and (iii) approximately $0.5 billion in cash and 11.9 million
shares of Delhaize America Class A common stock valued at approximately $306
million paid to Empire Company Limited and E.C.L. Investments Limited (the
"Empire Group") in a transaction immediately preceding the Merger in exchange
for all of the shares of Hannaford common stock held by the Empire Group.
The unaudited pro forma consolidated condensed financial information
also reflects pro forma adjustments made to reflect (i) allocation of the
purchase cost to acquired assets and liabilities, (ii) the sale of 38 Hannaford
stores and closing of 13 Hannaford stores in markets in the southeastern United
States in response to the antitrust review of the Merger by the Federal Trade
Commission ("FTC") and (iii) the sale by Hannaford of a majority interest in
HomeRuns.com, Inc. ("HomeRuns"), which was consummated February 14, 2000. The
expected cost savings to be achieved as a result of the Merger, estimated at
approximately $40 million in the first year following consummation of the Merger
and $75 million annually by year three, are excluded from the pro forma data.
Certain financial statement items have been reclassified to conform to
the current presentation.
NOTE 2-PRO FORMA ADJUSTMENTS
The following pro forma adjustments have been made to the historical financial
statements of Delhaize America and Hannaford based upon assumptions made by
management for the purpose of preparing the unaudited pro forma consolidated
condensed financial statements.
(a) Includes adjustments related to Hannaford's sale or closure of its 51
southeastern United States retail locations and its sale of a majority
interest in HomeRuns, an Internet based grocery retail business. The pro
forma adjustments reflect (i) elimination of sales, cost of sales and
operating costs directly associated with these former Hannaford
operations as well as related assets and liabilities, and (ii) inclusion
of proceeds received upon sale of divested assets.
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(b) To provide deferred taxes of $173 million related to the temporary
differences between book and tax basis of assets and liabilities
acquired which arose as a result of the purchase price allocation.
(c) To conform Hannaford's inventory accounting method to that used by
Delhaize America and to eliminate Hannaford's LIFO reserve to properly
reflect the current fair value of its inventory.
(d) To adjust Hannaford's long-term assets to current estimated fair market
value principally based on independent appraisals.
(e) To record identifiable intangible assets acquired in the Merger,
principally consisting of trademarks, distribution network, work force,
favorable lease rights, and prescription files, having an aggregate
value, based on independent appraisal, of approximately $480 million.
(f) To eliminate Hannaford's historical basis in certain intangible and
other assets.
(g) To record approximately $2.6 billion as goodwill representing the excess
of purchase price over the fair value of the net tangible and
identifiable intangible assets.
(h) To record the bridge financing of approximately $2.8 billion and adjust
liabilities assumed in the acquisition to estimated fair value based on
estimates of current interest rates and market values.
(i) To eliminate the Hannaford equity accounts and record the increase in
shareholders' equity for the fair value of shares of Delhaize America
Class A common stock issued in exchange for shares of Hannaford common
stock and the fair value of the Delhaize America fully vested employee
stock options which were given in exchange for Hannaford options in
connection with the Merger.
(j) Represents the amortization of the acquired identifiable intangible
assets and goodwill resulting from the acquisition over the estimated
useful lives which range from 2 to 40 years. The total amortization
included is approximately $43 million and $85 million for the 24-week
period ended June 17, 2000 and year ended January 1, 2000, respectively.
(k) To eliminate divestiture and merger costs incurred during the period
presented.
(l) Represents the interest expense effect of approximately $2.7 billion of
additional debt as a result of the transaction. Management has assumed
an average interest rate of approximately 8% based upon the rate
associated with the bridge financing secured for the initial financing
of the cash consideration in the Merger. The effect of an interest
rate change of 1/8th of one percent would increase/decrease interest
expense approximately $3.3 million per year.
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(m) Represents the anticipated tax effect of the pro forma adjustments
listed above (excluding goodwill amortization). The principal difference
in the effective tax rate for the consolidated pro forma statements of
income relates to the amortization of goodwill.
(n) Includes shares issued to Hannaford shareholders upon closing of the
Merger.
(o) Includes the common stock equivalents associated with Delhaize America
stock options issued in exchange for fully vested Hannaford stock
options held by Hannaford employees.
Item 7(c). Exhibits
2 Agreement and Plan of Merger, dated as of August 17,
1999, among Delhaize America, Hannaford and FL
Acquisition Sub, Inc., as amended, which is incorporated
herein by reference to exhibit 2.1 to Delhaize America's
Registration Statement on Form S-4 filed with the SEC on
November 17, 1999, as amended by Amendment No. 1 to
Delhaize America's Registration Statement on Form S-4
filed with the SEC on January 3, 2000.
23 Consent of Independent Accountants,
PricewaterhouseCoopers LLP
* 99.1 Press Release, dated July 31, 2000.
99.2 Stock Exchange Agreement, dated August 17, 1999, among
Delhaize America, Empire Company Limited and E.C.L.
Investments Limited, which is incorporated by reference
to Exhibit 99.2 to Delhaize America's Registration
Statement on Form S-4 filed with the SEC on November 17,
1999, as amended by Amendment No. 1 to Delhaize
America's Registration Statement on Form S-4 filed with
the SEC on January 3, 2000.
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* Previously filed as an exhibit to Delhaize America's Current Report on
Form 8-K, dated July 31, 2000.
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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 hereunto duly authorized.
DELHAIZE AMERICA, INC.
Dated: October 16, 2000 By: /s/ Michael R. Waller
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Michael R. Waller
Executive Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Description
2 Agreement and Plan of Merger, dated as of August 17, 1999, among
Delhaize America, Hannaford and FL Acquisition Sub, Inc., as
amended, which is incorporated herein by reference to exhibit
2.1 to Delhaize America's Registration Statement on Form S-4
filed with the SEC on November 17, 1999, as amended by Amendment
No. 1 to Delhaize America's Registration Statement on Form S-4
filed with the SEC on January 3, 2000.
23 Consent of Independent Accountants, PricewaterhouseCoopers LLP
* 99.1 Press Release, dated July 31, 2000.
99.2 Stock Exchange Agreement, dated August 17, 1999, among Delhaize
America, Empire Company Limited and E.C.L. Investments Limited,
which is incorporated by reference to Exhibit 99.2 to Delhaize
America's Registration Statement on Form S-4 filed with the SEC
on November 17, 1999, as amended by Amendment No. 1 to Delhaize
America's Registration Statement on Form S-4 filed with the SEC
on January 3, 2000.
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* Previously filed as an exhibit to Delhaize America's Current Report on
Form 8-K, dated July 31, 2000.
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