SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 1999
RICHFOOD HOLDINGS, INC.
(Exact name of registrant as specified in charter)
Virginia 0-16900 54-1438602
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4860 Cox Road, Suite 300
Glen Allen, Virginia 23060
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 915-6000
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Not Applicable
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(former name or former address if changed since last report)
Page 1 of 4 pages.
Exhibit Index appears on page 4.
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INFORMATION TO BE INCLUDED IN REPORT
ITEM 5: OTHER EVENTS
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On April 22, 1999, Giant Food Stores, Inc. of Carlisle, Pennsylvania
("Giant"), the Company's largest customer, informed the Company that its
existing supply contract (scheduled to expire December 31, 1999)would not
be renewed. In July 1998, Giant initiated a confidential bidding process
for a new supply contract by soliciting competitive bids from a number of
qualified food wholesalers. In January 1999, Giant notified the Company
that Giant had selected the Company as its long-term supplier, and that
Giant was prepared to enter into a new supply agreement with the Company,
subject to completion of definitive documentation. The documentation
process was interrupted prior to final contract execution, at Giant's
request. Subsequently, Koninklijke Ahold N.V., Giant's parent company,
announced its pending acquisition of Pathmark Stores, Inc. On April 22,
the Company was informed by Giant that, notwithstanding earlier
indications, the existing supply contract would not be renewed.
Additional information with respect to the Giant supply contract is
included in the Company's press release, dated April 23, 1999, a copy of
which is filed herewith as Exhibit 99.1 and incorporated herein by
reference.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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a.) Financial Statements.
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None
b.) Pro Forma Financial Statements.
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None
c.) Exhibits.
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Number Exhibit
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99.1 Press release
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SIGNATURE
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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.
RICHFOOD HOLDINGS, INC.
Date: April 30, 1999 By: /s/ John C. Belknap
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John C. Belknap
Executive Vice President, Chief Financial Officer
and Secretary
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EXHIBIT INDEX
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Number Exhibit Page
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99.1 Press release 5
Exhibit 99.1
FOR IMMEDIATE RELEASE
RICHFOOD ANNOUNCES GIANT
OF CARLISLE SUPPLY CONTRACT TO LAPSE
RICHMOND, VA, April 23, 1999 ... Richfood Holdings, Inc. (NYSE:RFH), today
announced that it has been informed by Giant Food Stores, Inc. of Carlisle,
Pennsylvania ("Giant"), that Giant's supply contract with Richfood will not be
renewed when it expires on December 31, 1999.
In July, 1998, Giant initiated a confidential bidding process for a new supply
contract by soliciting competitive bids from a number of qualified food
wholesalers. In January, 1999, Giant notified Richfood that Giant had selected
Richfood as its long-term supplier, and that Giant was prepared to enter into a
new supply agreement with Richfood, subject to completion of definitive
documentation. The documentation process was interrupted prior to final contract
execution, at Giant's request. Subsequently, Koninklijke Ahold N.V. ("Royal
Ahold"), Giant's parent company, announced its pending acquisition of Pathmark
Stores, Inc. On April 22, Richfood was informed by Giant that, notwithstanding
earlier indications, the existing supply contract would not be renewed.
Giant, which is Richfood's largest wholesale customer, buys approximately $600
million of dry grocery products from Richfood on an annual basis. Giant's
decision not to renew the supply contract is not expected to affect Richfood's
operating earnings for the current fiscal year, which ends on May 1, 1999. The
Company estimates, however, that the non-renewal of the supply contract,
effective December 31, 1999, will negatively impact fiscal 2000's earnings per
share by approximately $0.15 to $0.20 and will negatively impact future years by
approximately $0.28 to $0.33. Additionally, the Company anticipates that the
loss of the Giant contract will increase its effective tax rate by approximately
1%.
John E. Stokely, Chairman, President and Chief Executive Officer of Richfood,
said, "Obviously, we are very disappointed by Giant's decision. Giant is a fine
organization, and we have enjoyed a long and productive relationship with them.
It took an acquisition the size of Pathmark and the related strategic
implications to Royal Ahold to neutralize the cost advantage which Richfood had
been able to create for Giant. We wish them well in their future endeavors."
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<PAGE>
Page two
Richfood Announces Giant of Carlisle Supply Contract to Lapse
April 23, 1999
"Although Giant has been a significant source of volume," Stokely added, "we
have worked hard to diminish its long-term strategic importance to Richfood. Two
years ago, we began the process of repositioning Richfood to lessen its reliance
on the Giant business while, at the same time, capitalizing on our advantageous
strategic position in the Mid-Atlantic to become a major consolidator of retail
supermarkets. In March, 1998, we acquired Farm Fresh, and, in May, 1998, we
acquired Shoppers Food Warehouse. In so doing," Stokely said, "I believe we have
created the potential for exceptional value for our shareholders."
Stokely concluded, "Although Giant's decision is a surprise, we had obviously
considered this possibility and formulated contingency plans. As part of our
contingency planning, we have developed certain strategic alternatives which we
will be fully evaluating over the upcoming months."
Richfood Holdings, Inc., headquartered in Richmond, Virginia, is one of the
largest food retailers and the largest wholesale food distributor in the
Mid-Atlantic operating region. The Company's retail division operates three
retail grocery store chains: 41 Farm Fresh retail grocery stores located
primarily in Virginia's Hampton Roads market; 37 Shoppers Food Warehouse
supermarkets in the Washington, D.C. area; and 18 Metro retail grocery stores in
the metropolitan Baltimore area. The Company's wholesale division provides a
full range of grocery, dairy, frozen food, produce, meat and non-food items to
chain and independent retailers throughout the region.
FORWARD-LOOKING STATEMENTS IN THIS NEWS RELEASE, IF ANY, ARE MADE UNDER THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
CERTAIN IMPORTANT FACTORS THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM
THOSE ANTICIPATED BY THE FORWARD-LOOKING STATEMENTS ARE DISCUSSED FROM TIME TO
TIME IN REPORTS FILED BY RICHFOOD HOLDINGS, INC. WITH THE SECURITIES AND
EXCHANGE COMMISSION.
For additional information, contact:
John C. Belknap John P. Finneran, Jr.
Executive Vice President and Senior Vice President and
Chief Financial Officer Treasurer
Richfood Holdings, Inc. Richfood Holdings, Inc.
(804) 915-6003 (804) 915-6064
