FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 4, 1998
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 May 1, 1998, there were 42,303,089 outstanding shares of Common
Stock, $.75 par value, the only authorized class of common stock of the
Registrant.
<PAGE>
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
PAGE NO.
Item 1. Financial Statements:
Consolidated Balance Sheets, April 4, 1998 and
January 3, 1998 3-4
Consolidated Statements of Earnings, Three Months
Ended April 4, 1998 and March 29, 1997 5
Consolidated Statements of Cash Flows,
Three Months Ended April 4, 1998
and March 29, 1997 6-7
Notes and Schedules to Consolidated Financial Statements 8-11
Item 2. Management's Discussion and Analysis of
First Quarter 1998 Results 12-18
PART II
Item 5. Other Information and Signatures 19
Item 6. Exhibits and Reports on Form 8-K 19
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
(UNAUDITED)
APRIL 4, JANUARY 3,
1998 1998
Current assets:
Cash and cash items $ 43,309 $ 57,663
Accounts receivable, net 13,497 14,918
Inventories 184,070 188,767
Prepaid expenses 7,783 7,801
Deferred income taxes 4,777 6,912
Total current assets 253,436 276,061
Property, plant and equipment, net 790,627 777,909
Leased property under capital leases, net 56,902 58,516
Other assets:
Goodwill, net 66,581 67,552
Deferred charges, net 29,202 28,724
Computer software costs, net 17,435 16,551
Miscellaneous assets 1,815 1,877
Total other assets 115,033 114,704
$1,215,998 $1,227,190
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)
APRIL 4, JANUARY 3,
1998 1998
Current liabilities:
Current maturities of long-term debt $ 18,276 $ 18,155
Obligations under capital leases 1,852 1,873
Accounts payable 172,606 182,252
Accrued payroll 21,823 25,526
Other accrued expenses 21,887 24,553
Income taxes 9,387 2,829
Total current liabilities 245,831 255,188
Deferred income tax liabilities 17,650 18,265
Other liabilities 40,614 41,171
Long-term debt 227,458 235,850
Obligations under capital leases 74,258 75,687
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;
April 4, 1998: Issued, 42,338,316
shares, outstanding 42,290,994 shares.
January 3, 1998: Issued 42,338,316
shares, outstanding 42,279,483 shares. 31,754 31,754
Additional paid-in capital 112,498 115,130
Preferred stock purchase rights 423 423
Retained earnings 467,534 456,063
612,209 603,370
Less common stock in treasury
(April 4, 1998: 47,322 shares at cost.
January 3, 1998: 58,833 shares
at cost) 2,022 2,341
Total shareholders' equity 610,187 601,029
$1,215,998 $1,227,190
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except per share data)
(UNAUDITED)
THREE MONTHS ENDED
APRIL 4, MARCH 29,
1998 1997
Sales and other revenues $788,296 $759,923
Cost of sales 589,979 574,273
Gross margin 198,317 185,650
Selling, general and administrative expenses 162,995 153,874
Operating profit 35,322 31,776
Interest expense, net 6,534 6,474
Earnings before income taxes 28,788 25,302
Income taxes 10,973 9,712
Net earnings $ 17,815 $ 15,590
Per share of common stock:
Basic earnings per share $ .42 $ .37
Diluted earnings per share $ .42 $ .37
Cash dividends $ .150 $ .135
Weighted average number of common shares
outstanding Basic 42,281 42,271
Diluted 42,864 42,685
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
THREE MONTHS ENDED
APRIL 4, MARCH 29,
1998 1997
Cash flows from operating activities:
Net income $ 17,815 $ 15,590
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 23,030 21,568
Decrease in inventories 4,697 16,587
Decrease in receivables and
prepayments 1,456 2,588
Decrease in accounts payable
and accrued expenses (16,573) (8,286)
Increase in income taxes payable 6,559 6,787
Increase (decrease) in deferred taxes 1,520 (319)
Other operating activities (397) (51)
Net cash provided by operating
activities 38,107 54,464
Cash flows from investing activities:
Acquisition of property, plant and
equipment (37,474) (43,434)
Sale of property, plant and
equipment, net 5,502 778
Increase in deferred charges (1,178) (861)
Increase in computer software costs (1,946) (1,207)
Net cash used in investing activities (35,096) (44,724)
Cash flows from financing activities:
Principal payments under capital
lease obligations (437) (426)
Proceeds from issuance of long-term debt - 20,000
Payments of long-term debt (8,271) (13,704)
Issuance of common stock 5,248 3,539
Purchase of treasury stock (7,561) (5,052)
Dividends paid (6,344) (5,712)
Net cash used in
financing activities (17,365) (1,355)
Net increase (decrease) in cash and cash items (14,354) 8,385
Cash and cash items at beginning of period 57,663 42,505
Cash and cash items at end of period $ 43,309 $ 50,890
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information
(Dollars in thousands)
(UNAUDITED)
THREE MONTHS ENDED
APRIL 4, MARCH 29,
Cash paid during the first quarter for: 1998 1997
Interest (net of amount capitalized,
$802 in 1998 and $657 in 1997) $5,789 $5,277
Income taxes $2,894 $3,087
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.
It is suggested that the financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's latest annual report.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. EARNINGS PER COMMON SHARE
Basic earnings per share of common stock have been determined by
dividing net earnings by the weighted average number of shares of
common stock outstanding during the periods presented. Diluted
earnings per share reflect the potential dilution that would occur
if existing stock options were exercised. Following is a
reconciliation of the dual presentations of earnings per share for
the periods presented.
(In thousands except per share amounts)
NET INCOME COMMON SHARES EARNINGS
(NUMERATOR) (DENOMINATOR) PER SHARE
FIRST QUARTER 1998
Basic earnings per share $17,815 42,281 $ 0.42
Dilutive potential shares 583
Diluted earnings per share $17,815 42,864 $ 0.42
FIRST QUARTER 1997
Basic earnings per share $15,590 42,271 $ 0.37
Dilutive potential shares 414
Diluted earnings per share $15,590 42,685 $ 0.37
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
(In thousands)
(Unaudited)
APRIL 4, JANUARY 3,
1998 1998
Land and improvements $ 133,858 $ 129,752
Buildings 288,286 279,310
Furniture, fixtures & equipment 463,883 454,564
Leasehold interests & improvements 282,646 277,560
Construction in progress 28,628 29,124
1,197,301 1,170,310
Less accumulated depreciation and
amortization 406,674 392,401
$ 790,627 $ 777,909
4. LEASED PROPERTY
Leased property under capital leases consists of the following:
(In thousands)
(Unaudited)
April 4, January 3,
1998 1998
Real property $82,941 $84,494
Less accumulated amortization 26,039 25,978
$56,902 $58,516
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
5. LONG-TERM DEBT
In April 1998, the Company received the proceeds of a $20 million
senior uncollateralized debt financing. The term of the debt is
10 years with an average life of 7 years and an interest rate
of 6.3%.
6. ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) NO. 130 -
REPORTING COMPREHENSIVE INCOME, which requires the separate reporting
of all changes to shareholders' equity, and SFAS NO. 131 -
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION, which revises existing guidelines about the level of
financial disclosure of a Company's operations. Both Statements
are effective for financial statements issued for fiscal years
beginning after December 15, 1997. The Company has determined that
the new standards will not necessitate any changes to existing
financial reporting.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
RESULTS OF OPERATIONS
SALES
Sales and other revenues rose 3.7% in the first quarter of 1998,
to $788 million, an increase of $28 million over the first
quarter of 1997. Sales from supermarkets that were open in both
periods presented ("identical store sales") increased $6 million
or 0.9%. Additional supermarket sales of $20 million resulted
from the net impact of new, expanded, relocated and closed stores.
Other sales and revenues which include wholesale, trucking, home
delivery, real estate and miscellaneous retail operations,
increased $2 million. Comparable store sales, which included
results from expanded and relocated stores, increased 1.8% in the
first quarter of 1998.
Sales and other revenues from the Easter holiday occurred in the
second quarter this year and the first quarter last year.
Adjusting for estimated Easter sales, identical store sales
increased 2.6% and comparable store sales were up 3.6%.
GROSS MARGIN
Gross margins increased in the first quarter of 1998 to 25.2%
of sales and other revenues in comparison to 24.4% in the first
quarter of 1997. The 1998 increase is the result of improved
selling margins in certain of the Company's marketing territories
coupled with better operations in the Southeast. The Company
continues to focus on maintaining a competitive pricing strategy.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased to 20.7% of
sales and other revenues in the first quarter of 1998 as compared
to 20.2% in the first quarter of 1997. Payroll and payroll
related expenses, which exceeded 50% of selling, general and
administrative expenses in both years, increased as a percentage
of sales in the current quarter. The Company experienced rising
payroll and benefit costs in certain of its marketing territories.
INTEREST EXPENSE, NET
Net interest expense expressed as a percentage of sales and other
revenues was 0.8% in the first quarter of 1998 versus 0.9% in the
first quarter of 1997.
INCOME TAXES
The effective income tax rate decreased in the first quarter of
1998 to 38.1% from 38.4% in the first quarter of 1997. This lower
rate is the result of a reduction in the Company's overall
state income tax rate. Assuming there are no federal or state
income tax rate changes, the Company expects the effective tax
rate for fiscal 1998 to be in the 37.8% to 38.2% range.
NET EARNINGS AND EARNINGS PER COMMON SHARE
Net earnings increased 14.3% in the first quarter of 1998 to $18
million or 2.3% of sales and other revenues, an increase of
approximately $2 million from 1997 first quarter earnings of $16
million or 2.1% of sales and other revenues. This increase is the
result of increased sales, gross margin and the disposition
of certain properties, partially offset by an
increase in selling, general and administrative expenses.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
Basic earnings per common share in the first quarter of 1998 were
$0.42 as compared to $0.37 in the first quarter of 1997, an
increase of 13.5%. Diluted earnings per common share (Note 2)
were also $0.42 in the first quarter of 1998 as compared to $0.37
in the first quarter of 1997.
CAPITAL RESOURCES AND LIQUIDITY
OVERVIEW
Measures of liquidity for the periods presented are as follows:
(Dollars in millions)
APRIL 4, JANUARY 3,
1998 1998
Cash and cash items $43 $58
Working capital (FIFO inventory) $26 $39
Unused lines of revolving credit $57 $54
Unused lines of short-term credit $30 $30
Current ratio (FIFO inventory) 1.11 1.15
The Company continued to maintain a strong capital position at
April 4, 1998. Cash and cash items decreased $15 million to $43
million at the end of the first quarter of 1998. This decrease
was primarily the result of a decrease in cash provided by
operating activities coupled with an increase in cash used in
financing activities. Lines of credit represent a continuing
source of capital and are available for purposes of short-term
financing. At April 4, 1998, the Company had $35 million
outstanding on its revolving lines of credit. The Company is in a
solid financial position to carry out its current expansion and
operating plans in 1998.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
CASH FLOWS FROM OPERATING ACTIVITIES
Cash provided by operating activities was $38 million in the
first quarter of 1998, a decrease of $16 million from the $54
million provided in the first quarter of 1997. This decrease is
primarily attributable to a reduction in cash flows provided by
net working capital items partially offset by increases in
depreciation and amortization and net income.
CASH FLOWS FROM INVESTING ACTIVITIES
Cash used in investing activities decreased $10 million in the
first quarter of 1998 to $35 million from $45 million
in the first quarter of 1997. This decrease is the result of
the Company's reduced capital investment and the net book
value of assets sold during the period. During
the quarter the Company completed the sale of certain assets
relative to supermarkets that were closed in January 1998 and that
had been written down to their estimated fair values in the fourth
quarter of 1997.
Capital investments totaled $41 million in the first quarter of
1998 and were composed of $38 million in addition to property,
plant and equipment and $3 million in deferred charges and
computer software costs. These first quarter capital investments
are primarily composed of costs incurred in building and equipping
new and expanded supermarkets and in improvements necessary to
maintain current facilities and systems. The Company expects to
spend in excess of $140 million on new, relocated and expanded
stores to open in 1998 and 1999 and improvements necessary to
maintain current facilities and systems.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
During the first quarter of 1998, the Company opened 5
supermarkets including 3 new stores and 2 expansions. These
supermarkets, together with their square footage of selling area,
are listed below:
SQUARE FOOTAGE
LOCATION SELLING AREA
Northeast
Machias, ME (expansion) 18,000
Lincoln, ME (expansion) 19,000
Rindge, NH 39,000
Southeast
Rocky Mount, NC 41,000
Gastonia, NC 42,000
During January 1998, the Company closed seven southeastern stores
in non-core markets with limited opportunity for profitable
growth. These closures will allow the Company to focus on its key
southeastern market regions in 1998. The Company plans to invest
approximately $50 million in new and remodeled stores in its key
southeastern markets in 1998.
During the next three quarters, the Company expects to open 10
supermarkets including 2 new stores and 1 expansion in the
Northeast and 3 new stores, 2 relocations and 2 expansions 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 approximately 4.4% in
1998. Construction will also start on a number of stores to be
opened in 1999. The 1998 capital program is being financed by
internally generated funds, leases and long-term debt.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER 1998
RESULTS
CASH FLOWS FROM FINANCING ACTIVITIES
Cash used in financing activities was $17 million in the first
quarter of 1998 as compared to $1 million in the first quarter of
1997. This reduction in cash flows of $16 million is principally
the result of reduced proceeds from the issuance of long-term
debt. The Company purchased 185,000 shares of common stock during
the first quarter of 1998 at a cost of $8 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. This
amount was offset by proceeds of $5 million received during the
first quarter of 1998 from the issuance of 197,000 shares of
treasury stock. The Company paid $6 million in dividends to
common shareholders in the first quarter of 1998.
<PAGE>
FORWARD-LOOKING STATEMENTS
From time to time, information provided by the Company or statements
made by its associates may contain forward-looking statements, 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 tax rates, 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
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 and closing of 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 the Company's
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
period ended April 4, 1998, by Coopers & Lybrand L.L.P.
Item 6: Exhibits and Reports on Form 8-K
(a) There were no reports on Form 8-K filed during the first
quarter.
(b) Exhibits required by Item 601 of Regulation S-K
15 Letter from Coopers & Lybrand L.L.P. furnished pursuant
to Regulation S-X.
23 Letter from Coopers & Lybrand L.L.P furnished pursuant
to Rule 436(c) under the Securities Act of 1933.
27 Financial Data Schedule No. 1
27 Financial Data Schedule No. 2 (Restated prior periods)
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 May 12, 1998 s/Blythe J. McGarvie
Blythe J. McGarvie
Senior Vice President
(Chief Financial Officer)
Date May 12, 1998 s/Charles H. Crockett
Charles H. Crockett
Assistant Secretary
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 April 4, 1998, and the related
consolidated statements of earnings and cash flows for the three month
periods ended April 4, 1998 and March 29, 1997. 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 January 3, 1998 (not presented herein). In our
opinion, the information set forth in the accompanying balance sheet as
of January 3, 1998, 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
April 22, 1998
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 April 22, 1998 on our review of
interim financial information of Hannaford Bros. Co. and Subsidiaries as
of April 4, 1998 and for the three month periods ended April 4, 1998 and
March 29, 1997, and included in this Form 10-Q is incorporated by
reference in the Company's registration statements on Form S-8 (Numbers
2-77902, 2-98387, 33-1281, 33-22666, 33-31624, 33-41273, 33-60119,
33-60655, 33-60691 and 333-41381). 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
May 6, 1998
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<OTHER-SE> 486,953 521,373 537,402 575,060
<TOTAL-LIABILITY-AND-EQUITY> 961,830 1,091,595 1,183,727 1,249,504
<SALES> 2,568,061 2,192,877 2,957,559 2,355,725
<TOTAL-REVENUES> 2,568,061 2,192,877 2,957,559 2,355,725
<CGS> 1,951,248 1,664,603 2,242,784 1,772,400
<TOTAL-COSTS> 1,951,248 1,664,603 2,242,784 1,772,400
<OTHER-EXPENSES> 481,017 422,684 568,033 469,183
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 19,368 16,075 22,204 19,635
<INCOME-PRETAX> 116,428 89,515 124,538 94,507
<INCOME-TAX> 46,227 35,434 49,333 36,242
<INCOME-CONTINUING> 70,201 54,081 75,205 58,265
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 70,201 54,081 75,205 58,265
<EPS-PRIMARY> 1.67 1.28 1.78 1.38
<EPS-DILUTED> 1.66 1.27 1.76 1.37
</TABLE>
