FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
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 1-7603
HANNAFORD BROS. CO.
(Exact name of Registrant as specified in its charter)
Maine 01-0085930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
145 Pleasant Hill Road, Scarborough, Maine 04074
(Address of principal executive offices; Zip Code)
Registrant's telephone number, including area code: (207) 883-2911
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 .
As of October 24, 1996, there were 42,276,097 outstanding shares of
Common Stock, $.75 par value, the only authorized class of common stock
of the Registrant.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets, September 28, 1996 and
December 30, 1995 3-4
Consolidated Statements of Earnings, Three Months
Ended September 28, 1996 and September 30, 1995 5
Consolidated Statements of Earnings, Nine Months
Ended September 28, 1996 and September 30, 1995 6
Consolidated Statements of Cash Flows
Nine Months Ended September 28, 1996
and September 30, 1995 7-8
Notes and Schedules to Consolidated Financial
Statements 9-11
Item 2. Management's Discussion and Analysis of
Third Quarter 1996 Results 12-17
PART II - OTHER INFORMATION
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8K 18
Signatures 19
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in thousands)
(UNAUDITED)
September 28, December 30,
1996 1995
Current assets:
Cash and cash items $ 9,055 $ 7,017
Accounts receivable, net 16,063 15,556
Inventories 171,536 157,968
Prepaid expenses 7,970 7,217
Deferred income taxes 6,696 6,584
Total current assets 211,320 194,342
Property, plant and equipment, net 674,422 577,126
Leased property under capital leases, net 61,004 56,691
Other assets:
Goodwill, net 96,947 93,348
Deferred charges, net 32,087 27,484
Computer software costs, net 12,746 10,063
Miscellaneous assets 3,069 2,776
Total other assets 144,849 133,671
$1,091,595 $961,830
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(In thousands except share amounts)
(UNAUDITED)
September 28, December 30,
1996 1995
Current liabilities:
Current maturities of long-term debt $ 9,672 $ 11,246
Obligations under capital leases 1,772 1,467
Accounts payable 123,745 113,846
Accrued payroll 22,619 20,652
Other accrued expenses 29,386 23,619
Income taxes 2,721 -
Total current liabilities 189,915 170,830
Deferred income tax liabilities 24,794 23,229
Other liabilities 42,278 28,699
Long-term debt 205,799 150,648
Obligations under capital leases 75,682 69,747
Shareholders' equity:
Class A Serial Preferred stock, no par,
authorized 2,000,000 shares - -
Class B Serial Preferred stock,
par value $.01 per share,
authorized 28,000,000 shares - -
Common stock, par value $.75 per share:
Authorized 110,000,000 shares;
September 28, 1996: Issued, 42,338,316
shares, outstanding 42,265,790 shares.
December 30, 1995: Issued and
outstanding 42,298,230 shares 31,754 31,724
Additional paid-in capital 119,874 121,974
Preferred stock purchase rights 423 423
Retained earnings 403,413 364,556
555,464 518,677
Less common stock in treasury
(72,526 shares at cost) 2,337 -
Total shareholders' equity 553,127 518,677
$1,091,595 $961,830
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(UNAUDITED)
THREE MONTHS ENDED
September 28, September 30,
1996 1995
Sales and other revenues $773,271 $653,879
Cost of sales 589,178 498,469
Gross margin 184,093 155,410
Selling, general and administrative
expenses 145,802 118,392
Operating profit 38,291 37,018
Interest expense, net 5,356 4,199
Earnings before income taxes 32,935 32,819
Income taxes 13,037 13,105
Net earnings $ 19,898 $ 19,714
Per share of common stock:
Net earnings $ .47 $ .47
Cash dividends $ .120 $ .105
Weighted average number of common shares
outstanding 42,284 42,168
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(UNAUDITED)
NINE MONTHS ENDED
September 28, September 30,
1996 1995
Sales and other revenues $2,192,877 $1,887,473
Cost of sales 1,664,603 1,433,054
Gross margin 528,274 454,419
Selling, general and administrative
expenses 422,684 350,789
Operating profit 105,590 103,630
Interest expense, net 16,075 14,486
Earnings before income taxes 89,515 89,144
Income taxes 35,434 35,841
Net earnings $ 54,081 $ 53,303
Per share of common stock:
Net earnings $ 1.28 $ 1.27
Cash dividends $ .360 $ .315
Weighted average number of common shares
outstanding 42,301 42,035
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(UNAUDITED)
NINE MONTHS ENDED
September 28, September 30,
1996 1995
Cash flows from operating activities:
Net income $ 54,081 $ 53,303
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 56,079 50,653
Increase in inventories (13,568) (10,402)
(Increase) decrease in receivables and
prepayments (1,647) 3,450
Increase in accounts payable
and accrued expenses 26,349 23,779
Increase (decrease) in income taxes
payable 2,720 (2,768)
Increase (decrease) in deferred taxes 1,453 (458)
Other operating activities 103 854
Net cash provided by operating
activities 125,570 118,411
Cash flows from investing activities:
Acquisition of Farm Fresh supermarkets - (23,850)
Acquisition of property, plant and
equipment (148,116) (86,868)
Sale of property, plant and
equipment, net 3,061 1,892
Increase in goodwill and deferred
charges (6,945) (2,825)
Increase in computer software costs (4,402) (3,657)
Net cash used in investing activities (156,402) (115,308)
Cash flows from financing activities:
Principal payments under capital
lease obligations (1,076) (1,057)
Proceeds from issuance of long-term debt 75,000 -
Issuance of common stock 7,300 9,467
Payments of long-term debt (21,423) (7,568)
Purchase of Treasury Stock (11,708) -
Dividends paid (15,223) (13,253)
Net cash provided by (used in)
financing activities 32,870 (12,411)
Net increase (decrease) in cash and cash items 2,038 (9,308)
Cash and cash items at beginning of period 7,017 40,955
Cash and cash items at end of period $ 9,055 $ 31,647
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information
(in thousands)
(UNAUDITED)
NINE MONTHS ENDED
September 28, September 30,
1996 1995
Cash paid during the first nine months for:
Interest (net of amount capitalized,
$2,493 in 1996 and $1,647 in 1995) $15,100 $15,287
Income taxes $30,019 $39,067
Supplemental disclosure of non-cash investing and financing activity
Capital lease obligations of $7,652,000 were incurred during the nine
month period ended September 28, 1996 when the Company entered into
leases for certain improved real estate.
Disclosure of accounting policy
For the purposes of the Consolidated Statements of Cash Flows, the
Company considers all highly liquid debt instruments with maturities
of three months or less when purchased to be cash items.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. In the
opinion of management, the amounts shown reflect all adjustments
necessary to present fairly the financial position and results of
operations for the periods presented. All such adjustments are
of a normal recurring nature. The year-end consolidated balance
sheet was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting
principles.
Earnings per share of common stock have been determined by dividing
net earnings by the weighted average number of shares of common stock
outstanding. The assumed exercise of existing employee stock options
has been excluded since it does not result in any material dilution.
It is suggested that the financial statements be read in conjunction
with the financial statements and notes included in the
Company's latest annual report.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
(in thousands)
(Unaudited)
September 28, December 30,
1996 1995
Land and improvements $ 96,041 $ 90,430
Buildings 230,123 228,858
Furniture, fixtures & equipment 387,990 333,492
Leasehold interests & improvements 237,472 188,730
Construction in progress 39,162 16,179
990,788 857,689
Less accumulated depreciation and
amortization 316,366 280,563
$674,422 $577,126
3. LEASED PROPERTY
Leased property under capital leases consists of the following:
(in thousands)
(Unaudited)
September 28, December 30,
1996 1995
Real property $83,476 $76,457
Less accumulated amortization 22,472 19,766
$61,004 $56,691
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
4. LONG-TERM DEBT
In February 1996, the Company received $36 million of proceeds of a
$75 million senior uncollateralized debt financing, with the balance
of $39 million received in May 1996. The terms of these notes range
from 7 to 20 years with a weighted average life of 9 years. Interest
rates on the notes vary from 6.25% to 7.1% with a weighted average
rate of 6.6%. The amounts of annual principal payments vary over the
terms of the loans.
5. CAPITAL STOCK
In May 1996, the Company amended and extended its existing standstill
agreement with certain shareholders ("the Sobey Parties"). The
amendment extends the term of the standstill agreement to December
31, 1998, subject to automatic renewal for successive one-year
periods (but not beyond December 31, 2000) unless by July 31 of a
given year either the Company or any of the Sobey Parties gives
written notice of an intention not to further extend the term of the
standstill agreement.
The amendment also made technical changes to the agreement which will
allow the Company greater flexibility in the use of common stock to
compensate employees and directors and will permit renewal of
Hannaford's Shareholder Rights Plan through February 28, 2001. The
amendment maintains the Sobey Parties' ownership limit at
approximately 25.6% of the Company's voting stock, except in certain
circumstances specified by the agreement.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996
RESULTS
RESULTS OF OPERATIONS
SALES
Sales and other revenues rose 16.2% for the first three quarters of
1996, to $2,192.9 million, an increase of $305.4 million over the first
three quarters of 1995. Sales from supermarkets that were open in both
periods presented ("same store sales") increased $57.1 million or 3.3%.
Additional supermarket sales of $235.7 million resulted from the net
impact of new, expanded and closed stores. Other sales and revenues,
which include trucking, real estate and miscellaneous retail
operations, increased $12.6 million.
In the third quarter of 1996, sales and other revenues were $773.3
million, an increase of $119.4 million or 18.3% over those reported for
the same period in 1995. Same store sales increased $22.1 million
or 3.6%. Additional supermarket sales of $91.5 million resulted from
the net impact of new, expanded and closed stores. Other sales and
revenues increased $5.8 million.
Same store sales were up 3.3% this year as compared to 2.4% in the
comparable period for 1995. The Company attributes a portion of this
increase to positive customer response to its conversion of private
brand products from the Shop n Save name to the Hannaford brand. The
1996 increase sustains a positive trend that started in late 1993.
GROSS MARGIN
Gross margins were 24.1% of sales and other revenues in both the
first three quarters of 1996 and the first three quarters of 1995.
Gross margins were also constant at 23.8% in both the third quarter of
1996 and the third quarter of 1995. The Company has experienced
declines in meat margins in the current year periods. These declines
have been offset by slightly increased margins to several product
categories as well as an increase in other operating revenues.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased to 19.3% of
sales and other revenues in the first nine months of 1996 as compared
to 18.6% in the comparable period of 1995. In the third quarter of
1996, selling, general and administrative expenses were 18.9% of sales
and other revenues up from 18.1% for the third quarter of 1995. These
increases are principally the result of additional costs of
establishing the Company's position in its southeastern markets coupled
with expenditures incurred in coping with the aftermath of Hurricane
Fran.
INCOME TAXES
The effective income tax rate decreased in both the first nine months
and third quarter of 1996 to 39.6% from 40.2% in the first nine months
of 1995 and 39.9% in the third quarter of 1995. This lower rate is the
result of a reduction in the Company's overall state income tax rate.
The Company expects the effective tax rate to be in the 39% to 40%
range for fiscal 1996.
NET EARNINGS
Net earnings increased 1.5% in the first nine months of 1996 to $54.1
million or 2.5% of sales and other revenues, an increase of $0.8
million from 1995 nine months earnings of $53.3 million or 2.8%
of sales and other revenues. Third quarter 1996 net earnings were
$19.9 million or 2.6% of sales and other revenues as compared to $19.7
million or 3.0% of sales and other revenues in the third quarter of
1995. Expressed as a percentage of sales, net earnings decreased in
the 1996 periods presented due primarily to increased selling, general
and administrative expenses.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS
The 1996 third quarter results were below Company expectations due to
increased costs that continue to be incurred in the establishment of
supermarkets in new southeastern markets, significantly reduced meat
margins and the impact of Hurricane Fran. The Company expects fourth
quarter earnings to be within expectations.
CAPITAL RESOURCES AND LIQUIDITY
GENERAL
The current ratio (FIFO basis) at September 28, 1996, was 1.20 while
working capital (FIFO basis) was $37.8 million or 3.5% of total assets.
On December 30, 1995, the current ratio (FIFO basis) was 1.23 while
working capital (FIFO basis) was $39.1 million or 4.1% of total assets.
The Company values the majority of its inventories using the LIFO
method. The current cost of inventories exceeded the LIFO valuation by
approximately $16.4 million on September 28, 1996 and $15.6 million on
December 30, 1995. The Company's liquidity position is stronger than
indicated by stated working capital and current ratios because of
available unused lines of revolving credit of $58.5 million and
available unused lines of short-term credit of $35.2 million at
September 28, 1996. Cash and cash items increased $2.1 million to $9.1
million at September 28, 1996 from $7.0 million at December 30, 1995.
This increase is primarily the result of cash provided by operating and
financing activities offset by cash used in investing activities.
CASH FLOWS FROM OPERATING ACTIVITIES
Cash provided by operating activities was $125.6 million in the first
nine months of 1996, an increase of $7.2 million over the $118.4
million provided in the first nine months of 1995. This increase is
primarily attributable to higher depreciation and amortization.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS
CASH FLOWS FROM INVESTING ACTIVITIES
Cash used in investing activities increased $41.1 million during the
first nine months of 1996 to $156.4 million from $115.3 million during
the first nine months of 1995. This increase is primarily the result
of increased capital expenditures during the period. Total capital
expenditures totaled $167.1 million in the first nine months of 1996
and were composed of $148.1 million in additions to property, plant and
equipment, $11.3 million in deferred charges and computer software
costs and $7.7 million in non-cash capital lease additions. These nine
months capital expenditures are primarily composed of costs incurred in
meeting the Company's 1996 capital program. The Company expects to
spend approximately $200 million on new, relocated and expanded stores
to open in 1996 and 1997; a new distribution facility in Butner, North
Carolina, scheduled to begin shipping product during the fourth
quarter; and improvements necessary to maintain current facilities and
systems.
So far this year, the Company has opened ten new stores, relocated two
stores and closed two small units. One additional store was sold to an
independent wholesale customer. During July, the Company opened a new
supermarket in Charlotte, North Carolina, with 34,000 square feet of
retail selling space. This is the Company's third store in that
market. In August, the Company opened a new supermarket in
Brattleboro, Vermont, with 35,000 square feet of retail selling space.
The Company also opened a relocated store in Waterville, Maine with
32,000 square feet of retail selling space. This new store replaced a
similar downtown facility which was closed. Three new stores were
opened in the Southeast in September. The new Raleigh, North Carolina
store with 41,000 square feet of retail selling space, continues to
increase the Company's presence in this market. A similar sized store
in Chester, Virginia, enhances the Company's offering in the Richmond
market. The Company opened its second store in Cary, North Carolina,
with 35,000 square feet of retail selling space.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS
During the first two quarters of 1996, the Company opened new stores in
Cary and Charlotte, North Carolina, Norfolk, Virginia, Niskayuna, New
York and Williston, Vermont. The Company also opened a relocated store
in South Burlington, Vermont which replaced an older and smaller
facility which was closed. Also during the first half, the Company
sold a small supermarket in Kennebunk, Maine and closed two stores in
Madawaska and Fort Kent, Maine.
During the fourth quarter, the Company expects to open one expanded
supermarket. In addition, the Company's new 450,000 square foot
distribution center in Butner, North Carolina, will be distributing
product to the supermarkets in the Southeast.
This program is subject to continuing change and review as conditions
warrant. Net square footage of retail selling space is expected to
increase by over 10% in 1996. Also, construction has commenced on a
number of stores to open in 1997 with emphasis on additional stores in
several southeastern markets. The 1996 capital program is being
financed by internally generated funds, long-term debt, leases and
lines of credit.
CASH FLOWS FROM FINANCING ACTIVITIES
Cash provided by financing activities was $32.9 million in the first
nine months of 1996 as compared to $(12.4) million in the first nine
months of 1995. This increase of $45.3 million is the result of
proceeds from the issuance of long-term debt (note 4) partially offset
by payments of long-term debt and purchases of treasury stock. During
the first nine months of 1996 the Company utilized a portion of its
debt proceeds to repay $11.4 million on its revolving lines of credit.
The Company purchased 393,413 shares of common stock during the first
nine months at a cost of $11.7 million. The majority of this
repurchased stock was used to fund the Company's stock based benefit
plans, with the balance being held in treasury. Previously, the
Company used new shares to fund certain benefit plans.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS
FORWARD-LOOKING INFORMATION
From time to time, information provided by the Company or statements made
by its associates may contain forward-looking information, as defined in
the Private Securities Litigation Reform Act of 1995. Examples of such
statements in this report include those concerning the Company's expected
future earnings, construction schedules and capital expenditures. The
Company cautions investors that there can be no assurance that actual
results or business conditions will not differ materially from those
projected or suggested in such forward-looking statements as a result of
various factors and risks including, but not limited to the following:
(1) Hannaford's future operating results are dependent on its ability to
achieve increased sales and to control expenses. Factors such as lower
than expected inflation, product cost fluctuations particularly in
perishable categories, changes in product mix or the use of promotional
items, both of which may affect pricing strategy, continued or increased
competitive pressures from existing competitors and new entrants,
including price cutting strategies, and deterioration in general or
regional economic conditions are all factors which could adversely affect
sales projections. Other components of operating results could be
adversely affected by state or federal legislation or regulation that
increases costs, increases in interest rates or the Company's cost of
borrowing, increases in labor rates due to low unemployment or other
factors, unanticipated costs related to the opening of new stores or the
inability to control various expense categories.
(2) Hannaford's future growth is dependent on its ability to expand its
retail square footage. Increases in interest rates or the Company's cost
of capital, the unavailability of funds for capital expenditures and the
inability to develop new stores or convert existing stores as rapidly as
planned are all risks to our projected future expansion.
(3) Adverse determinations with respect to pending or future litigation
or other material claims against Hannaford could affect actual results.
Furthermore, the market price of Hannaford common stock could be subject
to fluctuations in response to quarter to quarter variations in operating
results, changes in analysts' earnings estimates, market conditions in
the retail sector, especially in the supermarket industry, as well as
general economic conditions and other factors external to Hannaford.
<PAGE>
PART II
Item 5: Other Information
A limited review was made of the results of the three-month and
nine-month periods ended September 28, 1996, by Coopers & Lybrand.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation SK
10.1 Third Amendment to the Hannaford Bros. Co. Employee
Stock Purchase Plan effective October 2, 1996.
15 Letter of Coopers & Lybrand L.L.P. furnished pursuant to
Regulation SX.
23 Letter of Coopers & Lybrand L.L.P. regarding incorporation
by reference to certain Forms S-8 of the Registrant
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter ended
September 28, 1996.
<PAGE>
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.
HANNAFORD BROS. CO.
Date November 5, 1996 s/Blythe J. McGarvie
Blythe J. McGarvie
Senior Vice President
(Chief Financial Officer)
Date November 5, 1996 s/Charles H. Crockett
Charles H. Crockett
Assistant Secretary
EXHIBIT 10.1
THIRD AMENDMENT
TO THE
HANNAFORD BROS. CO. EMPLOYEE STOCK PURCHASE PLAN
The Hannaford Bros. Co. Employee Stock Purchase Plan (the "Plan") was
last amended and restated effective October 19, 1994. The Plan was thereafter
amended by a First Amendment, effective February 7, 1995, and a Second
Amendment, effective August 20, 1995. The Plan is hereby further amended in
the following respects:
1. The terms used in this Amendment shall have the meanings set forth in
the Plan unless the context indicates otherwise.
2. Subsection (f) of Section 2 is hereby amended to read as follows:
"(f) Compensation' shall mean the base salary or wages paid to
an Employee by the Corporation or any Subsidiary, before any
reduction pursuant to a deferral election under Code Subsection
401(k) or a benefit election under a Code Subsection 125 plan
sponsored by the Corporation or any Subsidiary, including
compensation for incentive hours and excluding nonguaranteed overtime
pay, bonuses and other irregular payments."
3. The second paragraph of Section 7, Section 9, the first paragraph of
Section 10, Section 11 and the second paragraph of subsection (b) of Section
12 are hereby amended by replacing the parenthetical "(including fractional
Shares)" with the parenthetical "(including fractional Shares, if provided for
in the Option Agreement)".
4. This Amendment shall be effective October 2, 1996.
Exhibit 15
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Hannaford Bros. Co.:
We have reviewed the accompanying consolidated balance sheet of Hannaford
Bros. Co. and Subsidiaries as of September 28, 1996, and the related
consolidated statements of earnings for the three and nine month periods ended
September 28, 1996 and September 30, 1995, and the consolidated statements of
cash flows for the nine month periods then ended. These financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
We previously audited and expressed an unqualified opinion on the Company's
consolidated financial statements for the year ended December 30, 1995 (not
presented herein). In our opinion, the information set forth in the
accompanying balance sheet as of December 30, 1995, is fairly stated in all
material respects, in relation to the statement of financial position from
which it has been derived.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
s/Coopers & Lybrand L.L.P.
Portland, Maine
October 17, 1996
Exhibit 23
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Hannaford Bros. Co.
Registrations on Form S-8
We are aware that our report dated October 17, 1996, on our review of interim
financial information of Hannaford Bros. Co. and Subsidiaries as of September
28, 1996, and for the three month and nine month periods ended September 28,
1996 and September 30, 1995, and included in this Form 10-Q is incorporated by
reference in the Company's registration statements on Form S-8 (Numbers
2-77902, 2-77903, 2-98387, 33-1281, 33-22666, 33-31624, 33-45273, 33-60119,
33-60655 and 33-60691). Pursuant to rule 436(c) under the Securities Act of
1933, this report should not be considered a part of the Registration
Statements prepared or certified by us within the meaning of Sections 7 and 11
of that Act.
s/Coopers & Lybrand L.L.P.
Portland, Maine
November 1, 1996
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