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 January 2, 1994
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 1-6905
RUDDICK CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0905940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2600 Two First Union Center
Charlotte, North Carolina 28282
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (704) 372-5404
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 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 _____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding Shares
Class As of February 4, 1994
Common Stock 23,128,535 shares
This issuer also had outstanding, as of February 4, 1994, 92,758
shares of its Non-cumulative, Voting $.56 Convertible Preference
Stock, each of which is convertible into four shares of Common
Stock.
RUDDICK CORPORATION
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS-
JANUARY 2, 1994 AND OCTOBER 3, 1993 2
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME - THREE MONTHS ENDED JANUARY 2, 1994
AND DECEMBER 27, 1992 3
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - THREE MONTHS ENDED
JANUARY 2, 1994 AND DECEMBER 27, 1992 4
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 6-8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES 9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
January 2, October 3,
ASSETS 1994 1993
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and Temporary Cash Investments $ 14,314 $ 12,392
Accounts Receivable, Net 58,068 58,757
Inventories 176,397 171,142
Other 9,887 15,327
Total Current Assets 258,666 257,618
PROPERTY, NET 277,820 273,683
INVESTMENTS AND OTHER ASSETS 60,485 55,514
TOTAL $ 596,971 $ 586,815
LIABILITIES
CURRENT LIABILITIES:
Notes Payable $ 10,522 $ 2,918
Current Portion of Long-Term Debt 5,987 5,989
Accounts Payable 90,327 104,518
Income Taxes Payable 5,401 3,740
Other Accrued Liabilities 36,802 45,157
Total Current Liabilities 149,039 162,322
LONG-TERM DEBT AND DEFERRED LIABILITIES 167,858 149,753
SHAREHOLDERS' EQUITY:
Capital Stock
Preference 466 486
Common 63,363 62,523
Retained Earnings 218,026 213,713
Cumulative Translation Adjustments (1,781) (1,982)
Shareholders' Equity 280,074 274,740
Total $ 596,971 $ 586,815
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except share and per share data)
THREE MONTHS ENDED
JANUARY 2, DECEMBER 27,
1994 1992
(Unaudited) (Unaudited)
NET SALES
American & Efird $ 63,720 $ 62,005
Harris Teeter 387,991 346,297
Jordan Graphics 12,855 14,113
Total 464,566 422,415
OPERATING PROFIT
American & Efird 5,917 7,346
Harris Teeter 7,761 8,133
Jordan Graphics (244) 873
Ruddick Investment 120 178
Total 13,554 16,530
OTHER COSTS AND DEDUCTIONS
Interest expense, net 2,072 2,074
Other expense 1,103 1,402
Total 3,175 3,476
Income Before Taxes and Cumulative
Effect of Accounting Change 10,379 13,054
Taxes 4,114 5,045
Income Before Cumulative Effect of
Accounting Change 6,265 8,009
Cumulative Effect of Accounting
Change 3,869
NET INCOME $ 6,265 $ 11,878
AVERAGE NUMBER OF SHARES OF COMMON
STOCK AND COMMON STOCK EQUIVALENTS
OUTSTANDING:
Primary 23,753,606 23,799,704
Fully Diluted 23,767,430 23,865,963
NET INCOME PER SHARE-PRIMARY:
Income Before Cumulative Effect
of Accounting Change $0.26 $0.34
Cumulative Effect of Accounting Change $0.16
NET INCOME PER SHARE-PRIMARY $0.26 $0.50
NET INCOME PER SHARE-FULLY DILUTED:
Income Before Cumulative Effect of
Accounting Change $0.26 $0.34
Cumulative Effect of Accounting Change $0.16
NET INCOME PER SHARE-FULLY DILUTED $0.26 $0.50
DIVIDENDS DECLARED PER SHARE:
Common $0.07 $0.06
$.56 Convertible Preference $0.14 $0.14
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
THREE MONTHS ENDED
JANUARY 2, DECEMBER 27,
1994 1992
(Unaudited) (Unaudited)
CASH FLOW FROM INCOME $ 17,241 $ 14,962
Decrease (Increase) in Current
Assets 1,199 (12,548)
Increase (Decrease) in Current
Liabilities (13,608) 3,190
NET CASH PROVIDED BY OPERATING
ACTIVITIES 4,832 5,604
INVESTING ACTIVITIES
Purchase of Assets (17,668) (8,661)
Cash Proceeds from Sale of Assets 1,893 884
Other, Net 696 (34)
NET CASH USED IN INVESTING ACTIVITIES (15,079) (7,811)
FINANCING ACTIVITIES
Proceeds from Long-Term Borrowings 18,600 2,100
Payment of Principal on Long-Term
Debt (1,444) (1,642)
Dividends (1,628) (1,400)
Other, Net (3,359) 253
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 12,169 (689)
INCREASE (DECREASE) IN BALANCE SHEET
CASH 1,922 (2,896)
BALANCE SHEET CASH AT BEGINNING OF
PERIOD 12,392 20,427
BALANCE SHEET CASH AT END OF
PERIOD $ 14,314 $ 17,531
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 1,716 $ 2,240
Income Taxes 1,726 3,461
<PAGE>
RUDDICK CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
IN THE OPINION OF MANAGEMENT, THE INFORMATION FURNISHED REFLECTS
ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING ACCRUALS)
NECESSARY TO PRESENT FAIRLY THE RESULTS FOR THE INTERIM PERIODS
PRESENTED.
<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table shows net sales and operating profit for
each of Ruddick Corporation's subsidiaries for the quarters ended
January 2, 1994 and December 27, 1992:
(In Thousands) Quarter Ended
January 2, December 27,
1994 1992
Net Sales
American & Efird $ 63,720 $ 62,005
Harris Teeter 387,991 346,297
Jordan Graphics 12,855 14,113
Total $ 464,566 $ 422,415
Operating Profit
American & Efird $ 5,917 $ 7,346
Harris Teeter 7,761 8,133
Jordan Graphics (244) 873
Ruddick Investment 120 178
Total $ 13,554 $ 16,530
Consolidated sales of $465 million in the first quarter of
fiscal 1994 increased 10% over the $422 million reported last
year. Total operating profit of $13.6 million declined 18% from
last year. Net income of $6.3 million was down from the $8.0
million as reported last year, before adjustment for the
cumulative effect of a change in accounting principle. Prior
year's quarterly results have been restated to $11.9 million to
reflect the adoption of Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes."
In the first quarter of fiscal 1994, American & Efird sales
of $63.7 million increased 3% over the $62.0 million reported
last year. Sales increases were recorded in the consumer
division and foreign subsidiaries. U.S. industrial thread sales
declined 1% from the same quarter last year. Operating profit of
$5.9 million declined 19.5% from the $7.3 million reported last
year. This decrease was due partially to the fact that apparel
customers trimmed their inventories during the quarter thereby
reducing thread purchases. A&E was positioned to service growing
demand and the drop in volume caused unfavorable variances in
several plants. Work schedules were adjusted to reflect lower
sales volume during the quarter. The decrease in operating
profit was also attributed to a deterioration in profit margins
reflecting the inability to increase prices and some additional
expenses associated with the modernization programs in two
production facilities. The early weeks of the second quarter
indicated increased sales activity.
Harris Teeter sales in the first fiscal quarter of 1994 of
$388 million increased 12% over the $346 million reported for the
same period last year, primarily the result of additional market
share. Net sales for stores in operation during both periods
increased 4.8%. Operating profit of $7.8 million declined 4.6%
from the $8.1 million reported for the comparable period last
year. In other than the Columbia, SC and Atlanta, GA markets,
sales and profits have shown improvement. Losses in the five
newly acquired stores in the Columbia market and expenses
associated with the Atlanta store opening were greater than
expected resulting in the decline in operating profit. In
Columbia, greater costs of retraining an acquired work force and
inadequate sales resulted in the loss. The Atlanta market has
generated impressive sales, but expenses have exceeded acceptable
levels. Attention is being devoted to expense reduction while
maintaining high service levels to ensure continuing customer
satisfaction. Four new stores were opened in the quarter and one
store was closed. There were 141 stores in operation at January
2, 1994 compared to 133 in operation at December 27, 1992.
Jordan Graphics sales of $12.9 million in the first quarter
of fiscal 1994 declined 9% from the comparable period last year.
Sales declined in all product lines except for commercial
printing. An operating loss of $244 thousand was largely
attributed to lower sales and the erosion of margin in custom and
stock products. Margins remain under pressure due to the
continuing over capacity in the industry. Lower prices in
selected custom products have been offered in order to gain
additional sales volume. Since last year, capacity has been
increased in labels and commercial printing, but additional sales
have not resulted in full utilization of this capacity.
Ruddick Investment reported an operating profit of $120
thousand in the quarter ended January 2, 1994 down from the $178
thousand reported for the comparable quarter last year. There
were no significant sales of investment assets during the
quarter, and interest and rental income more than offset
operating expenses.
Financial Condition, Capital Resources and Liquidity
Ruddick has an overall financial goal of earning at least a
15% return on beginning shareholders' equity. At the same time,
Ruddick seeks to limit long-term debt so as to constitute no more
than 40% of capital employed. As of January 2, 1994, this
percentage was 30.2% and compares to 27.5% at October 3, 1993.
The Company's principal source of liquidity has been revenue
from operations. The Company also has the ability to borrow up
to an aggregate of $45 million under three established revolving
bank loans. The maximum amount outstanding under these credit
facilities during the quarter ended January 2, 1994, was $45
million, which amount was outstanding at quarter end. Borrowings
and repayments under these revolving credit facilities are of the
same nature as short-term credit lines; however, due to the
nature and terms of the agreements allowing up to seven years for
repayment, all borrowings under these facilities are classified
as long-term debt. The Company also has the ability to borrow up
to $20 million in aggregate under short-term credit lines with
two banks, and the amount outstanding at quarter end was $7.1
million. The majority of additional borrowings under Ruddick's
revolving credit facilities and short-term credit lines was used
to reduce accounts payable and other accrued liabilities while
increasing inventories.
Working capital of $109.6 million at January 2, 1994,
increased $14.3 million from October 3, 1993, largely the result
of the reductions in accounts payable and other accrued
liabilities. The current ratio was 1.7 at January 2, 1994, and
1.6 at October 3, 1993.
Covenants in certain of the Company's long-term debt
agreements limit the total indebtedness which the Company may
incur, but management believes its liquidity to be adequate for
the foreseeable future.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit No. Description of Exhibit
11 Statement re: Computation of
per share earnings
(B) REPORTS ON FORM 8-K
On December 7, 1993, the Registrant filed a
Current Report on Form 8-K naming certain new
executive officers, effective February 3, 1994.
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.
RUDDICK CORPORATION
DATE: February 15, 1994 /s/ R. N. BRIGDEN
R. N. BRIGDEN
VICE PRESENT - FINANCE
(PRINCIPAL FINANCIAL OFFICER)
<PAGE>
RUDDICK CORPORATION EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED
January 2, December 27,
1994 1992
NET INCOME PER SHARE COMPUTED
AS FOLLOWS:
PRIMARY:
1. Net Income $ 6,265,0000 $ 11,878,000
2. Weighted Average Common
Shares Outstanding 23,070,002 23,084,985
3. Incremental Shares Relating
to $.56 Convertible
Preference Shares 382,481 413,177
4. Incremental Shares Under Stock
Options Computed Under the
Treasury Stock
Method Using the Average
Market Price of Issuer's
Stock During the Periods 301,123 301,542
5. Weighted Average Common
Shares and Common Equivalent
Shares Outstanding 23,753,606 23,799,704
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.26 0.50
FULLY DILUTED:
1. Net Income $ 6,265,000 $ 11,878,000
2. Weighted Average Common
Shares Outstanding 23,070,002 23,084,985
3. Incremental Shares Relating
to $.56 Convertible Preference
Shares 382,481 413,177
4. Incremental Shares Under Stock
Options Computed Under the
Treasury Stock Method Using
the Higher of the Average or
Ending Market Price of
Issuer's Stock at the End
of the Periods 314,947 367,801
5. Weighted Average Common Shares
and Common Equivalent Shares
Outstanding 23,767,430 23,865,963
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.26 $ 0.50
