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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the Fiscal Year Ended: October 1, 1995
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the transition period from to
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Commission File Number: 1-6905
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RUDDICK CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0905940
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2000 TWO FIRST UNION CENTER, CHARLOTTE, NORTH CAROLINA 28282
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (704) 372-5404
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS: NAME OF EXCHANGE ON WHICH REGISTERED:
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COMMON STOCK NEW YORK STOCK EXCHANGE, INC.
RIGHTS TO PURCHASE SERIES A JUNIOR
PARTICIPATING ADDITIONAL PREFERRED STOCK NEW YORK STOCK EXCHANGE, INC.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of October 31, 1995, was $340,849,396.
As of October 31, 1995, the Registrant had outstanding 46,370,690 shares of
Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: Certain portions of the Annual Report to Shareholders for the
fiscal year ended October 1, 1995 (with the exception of those portions which
are specifically incorporated by reference in this Form 10-K and included as
Exhibit 13 hereto, the Annual Report to Shareholders for the fiscal year ended
October 1, 1995, is not deemed to be filed or incorporated by reference as part
of this report).
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Part III: Definitive Proxy Statement dated December 20, 1995, as filed
pursuant to Section 14 of the Securities Exchange Act of 1934 in connection
with the 1996 Annual Meeting of Shareholders. (With the exception of those
portions which are specifically incorporated by reference in this Form 10-K,
the Proxy Statement is not deemed to be filed or incorporated by reference as
part of this report.)
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RUDDICK CORPORATION
AND CONSOLIDATED SUBSIDIARIES
Form 10-K for the Fiscal Year ended October 1, 1995
TABLE OF CONTENTS
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PAGE
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PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 4A. Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters . . . . . . . . . . . . . . . 7
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . 8
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . 8
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . 9
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 10
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PART I
Item 1. Business
Ruddick Corporation (the "Registrant") is a diversified holding
company which, through its subsidiaries, is engaged in four primary businesses:
Harris Teeter, Inc. ("Harris Teeter") operates a chain of supermarkets in five
southeastern states; American & Efird, Inc. ("A&E") manufactures and
distributes industrial and consumer sewing thread and sales yarn; Jordan
Graphics, Inc. ("Jordan Graphics") produces and distributes business forms; and
R.S. Dickson & Co., which does business as Ruddick Investment Company ("Ruddick
Investment"), operates as an investment management, real estate development and
venture capital company.
At October 1, 1995, the Registrant and its subsidiaries had total
consolidated assets of $721,941,000 and had approximately 20,000 employees.
The principal executive offices of the Registrant are located at 2000 Two First
Union Center, Charlotte, North Carolina 28282.
Ruddick Corporation, which is incorporated under North Carolina law,
was created in 1968 through the consolidation of the predecessor companies of
A&E and Ruddick Investment. In 1969 the Registrant acquired Harris Teeter and
the predecessor company of Jordan Graphics.
The businesses in which the Registrant engages through its
subsidiaries, together with certain financial information and competitive
aspects of such businesses, are discussed separately below. For certain other
information regarding industry segments, see the Note entitled "Industry
Segment Information" of the Notes to Consolidated Financial Statements of
Ruddick Corporation and Subsidiaries in the Registrant's 1995 Annual Report to
Shareholders (the "1995 Annual Report"), which information is incorporated
herein by reference.
The only foreign operations conducted by the Registrant are through
A&E. None of the businesses engaged in by the Registrant would be
characterized as seasonal.
The Registrant employs nineteen people, including four executives who
form and implement overall corporate objectives and policies. The Registrant's
employees perform functions in a number of areas including finance, accounting,
audit, insurance, reporting, employee benefits, and public and shareholder
relations. The Registrant assists its subsidiaries in developing long-range
goals, in strengthening management personnel and skills, and in financing
operations. Management of each subsidiary is responsible for implementing
operating policies and reports to management of the Registrant.
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A&E
A&E produces industrial sewing thread from natural and synthetic
fibers for use by apparel, automotive, upholstered furniture, home furnishings,
and footwear manufacturers. A&E also produces consumer sewing thread for use
in home sewing. These products are primarily manufactured in twelve plants,
all located in North Carolina, and are sold primarily in the United States.
Limited quantities of industrial sewing threads are exported. A&E also
distributes sewing supplies manufactured by other companies. Thread and notion
products accounted for approximately 98% of A&E's net sales in fiscal 1995.
A&E also produces a limited quantity of mercerized cotton yarns for use by
knitting and weaving industries, which products accounted for 2% of A&E's net
sales in fiscal 1995. This yarn production has decreased in recent years as
plant capacity has been converted to the manufacture of sewing thread. Sales
operations are conducted through A&E's employed salesmen and commission brokers
and jobbers. A&E's sales constituted 14% of the Registrant's consolidated
sales in fiscal 1995 (14% in 1994 and 15% in 1993).
The order backlog, believed to be firm, as of the end of the 1995
fiscal year was approximately $12,920,000 versus $17,863,000 at the end of the
preceding fiscal year. Such backlog normally is expected to be filled within
three weeks of fiscal year end. A&E has approximately 7,900 active customer
accounts. In fiscal 1994, no single customer accounted for more than 8% of
total net sales, and the ten largest customers accounted for an aggregate of
less then 26% of total net sales.
A&E purchases cotton from domestic cotton merchants. There is
presently a sufficient supply of cotton worldwide and in the domestic market.
Synthetic fibers are bought from the principal American synthetic fiber
producers and are currently available in an adequate supply.
There are no material patents, licenses, franchises, or concessions
held by A&E. Research and Development expenditures were $245,000 and $244,000
in fiscal 1995 and fiscal 1994, respectively, none of which expenditures were
sponsored by customers. Two employees are engaged in this activity full-time.
A&E has expanded into international markets as sewing thread demand
has increased outside the United States in the apparel, home furnishings, and
industrial markets. A&E's value of assets in its subsidiaries in England,
Costa Rica, Canada, Korea, Mexico, Hong Kong and Singapore and in its joint
ventures in Dominican Republic and Venezuela totals approximately $51 million.
Management expects to continue to expand foreign production and distribution
operations, primarily through additional joint ventures.
The industrial sewing thread industry is highly competitive. A&E is
one of the largest producers in the domestic industrial thread market.
Principal competitors include Coats/American and Dixie/Threads USA. Principal
competitive factors include quality, service and price. In the consumer thread
market, A&E competes with a number of large, well-established companies,
including Coats/American.
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A&E employed approximately 2,800 persons as of the end of fiscal 1995.
A&E considers its employee relations to be good.
HARRIS TEETER
Harris Teeter operates supermarkets in North Carolina (90), South
Carolina (24), Virginia (19), Georgia (5), and Tennessee (1) for sales of
groceries, produce, meat, delicatessen items, bakery items, and non-food items
such as health and beauty care and other products normally offered for sale in
supermarkets. Harris Teeter has a program in place whereby each retail store
will undergo a major remodel every eight years. Harris Teeter remodeled nine
stores during fiscal 1995 and expects to remodel nine stores in fiscal 1996.
In addition, eleven new stores were opened and eleven older, less profitable,
stores were closed. In fiscal 1993, a reserve was established in anticipation
of closing 12 smaller, less competitive stores and replacing them with larger
stores offering increased variety and drawing from a larger market area. Seven
of the eleven stores closed in fiscal 1995 were covered by this reserve. As of
fiscal year end, Harris Teeter had 139 stores in operation. Its principal
offices and perishable distribution facilities are located near Charlotte,
North Carolina, and its dry grocery and cold storage distribution facilities
are located in Greensboro, North Carolina. Harris Teeter produces some dairy
products, but buys most of the products it sells, including its private label
brands. Harris Teeter's sales constituted 83% of the Registrant's consolidated
sales in fiscal 1995 (83% in 1994 and 82% in 1993).
The supermarket industry is highly competitive. Harris Teeter
competes with local, regional, and national food chains, some of which are
larger in terms of assets and sales, as well as with independent merchants.
Principal competitive factors include store location, price, service,
convenience, cleanliness, product quality and product variety. No one customer
or group of customers has a material effect upon the business of Harris Teeter.
At fiscal year end, Harris Teeter employed approximately 8,300 persons
full-time and 8,700 part-time. Warehouse employees and drivers at Harris
Teeter's warehouse near Charlotte, North Carolina are represented by a union,
but Harris Teeter is not party to a collective bargaining agreement covering
such employees. Harris Teeter considers its employee relations to be good.
JORDAN GRAPHICS
Jordan Graphics produces a line of business forms and printed products
and distributes its products through its own sales representatives. Its
product line includes custom and stock continuous forms for computer use,
snap-apart forms, pressure sensitive labels, sheeted and roll labels,
envelopes, many specialty items and multi-color forms for laser printers.
Jordan Graphics' offices and principal plant are located near Charlotte, North
Carolina. Jordan Graphics manufactures and distributes its products, primarily
through its direct sales force, mainly in the eastern United States.
As of December 14, 1995, the Registrant and Jordan Graphics entered
into a letter of intent to sell the assets of Jordan Graphics to The Reynolds
and Reynolds Company.
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Reynolds and Reynolds is an integrated information management systems provider
headquartered in Dayton, Ohio. The sale of such assets, which is expected to
close in the second fiscal quarter, is subject to the execution of a definitive
agreement between the parties, the receipt of all necessary consents, releases
and approvals and other conditions typical in transactions of this type. For
certain financial information with respect to Jordan Graphics, reference is
made to the Note entitled "Industry Segment Information" of the Notes to the
Registrant's Consolidated Financial Statements contained in the 1995 Annual
Report, which is incorporated by reference herein.
The principal raw materials used by Jordan Graphics include paper,
carbon, cartons, and ink. Management believes that sufficient sources of these
raw materials are currently available.
In fiscal 1995, the largest single customer of Jordan Graphics
accounted for 4.1% of total net sales, and the ten largest customers accounted
for an aggregate of 24.4% of total net sales. The loss of any one of its five
largest accounts would not, in the opinion of management, materially affect
Jordan Graphics' business.
Jordan Graphics operates in a highly competitive industry, and many of
its competitors are substantially larger, both in terms of assets and sales.
The principal methods of competition in the business forms industry are price,
quality, and service.
At fiscal year end, Jordan Graphics employed 351 persons, of which 60
were in sales. Jordan Graphic considers its employee relations to be good.
RUDDICK INVESTMENT
Ruddick Investment makes direct venture investments from its own
capital base and from internally generated funds. In an increasingly important
role, venture investment activities include the development of shopping centers
where Harris Teeter serves as an anchor tenant. Additionally, the company's
venture capital portfolio is invested in a limited number of industries and may
include securities of start-ups and early stage firms, as well as publicly
traded securities. Some of the products and services produced by the current
portfolio holdings include proprietary building products, textiles,
pharmaceuticals and medical diagnostic instrumentation. Ruddick Investment's
principal objective is to achieve long-term gains on each of its investments.
It is not an operating company and does not offer a service or product in the
normal course of business.
ITEM 2. PROPERTIES
The executive offices of the Registrant are located in approximately
8,086 square feet of leased space in a downtown office tower at 2000 Two First
Union Center, Charlotte, North Carolina 28282, in which it is a tenant under a
lease which expires in May 1998.
A&E's principal offices and twelve domestic manufacturing plants are
all owned by A&E and are all located in North Carolina. Manufacturing plants
have an aggregate of 1,467,409 square feet of floor space and an insured value
of $250,000,000. A&E has the
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capacity to produce annually approximately 35,800,000 pounds of industrial
sewing thread and 3,250,000 pounds of sales yarn and has a dyeing capacity of
approximately 35,000,000 pounds per year. Capacities are based on 168 hours of
operations per week. A&E also leases 17 distribution centers scattered
throughout its domestic markets at an approximate annual rent of $1,500,000.
Through subsidiaries, A&E also owns seven international manufacturing plants
with an aggregate of 336,500 square feet of floor space and an insured value of
$49,952,000. These subsidiaries have the capacity to produce annually
approximately 7,830,000 pounds of sewing thread and have a dyeing capacity of
approximately 9,865,000 pounds per year. Capacities are based on 168 hours of
operations per week. In addition to its subsidiaries, A&E has a minority
interest in two joint ventures.
Harris Teeter owns its principal offices, which consist of 95,050
square feet of space located on a 10 acre tract of land near Charlotte, North
Carolina. Harris Teeter owns a 104 acre tract east of Charlotte where its cold
storage distribution facility is located. This facility contains approximately
176,000 square feet, most of which is equipped to store refrigerated or
perishable goods. Harris Teeter also owns a 49 acre tract in Greensboro, North
Carolina, where its dry grocery and frozen goods warehouses are located. The
dry grocery warehouse contains approximately 547,000 square feet and the frozen
goods warehouse contains approximately 130,000 square feet. Harris
Teeter owns a 18,050 square foot milk processing plant located on 8.3 acres of
land in Charlotte, North Carolina and a 81,900 square foot milk processing and
ice cream manufacturing facility located on 4.7 acres of land in High Point,
North Carolina. Harris Teeter operates its retail stores exclusively from
leased properties. The base annual rentals on leased store and warehouse
properties as of October 1, 1995 aggregated approximately $31,862,000 net of
sublease rentals of approximately $1,556,000. In addition to the base rentals,
the majority of the lease agreements provide for additional annual rentals
based on 1% of the amount by which annual store sales exceed a predetermined
amount. During the fiscal year ended October 1, 1995, the additional rental
amounted to approximately $1,277,000. Harris Teeter's supermarkets range in
size from approximately 15,000 square feet to 67,000 square feet, with an
average size of approximately 34,000 square feet. The following table sets
forth selected statistics with respect to Harris Teeter stores for each of the
last three fiscal years:
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HARRIS TEETER STORE DATA 1993 1994 1995
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Stores Open at End of Period 138 139 139
Average Weekly Net Sales Per Store* $ 197,745 $ 223,467 $ 234,656
Average Square Footage Per Store 30,480 30,974 33,678
Average Square Footage Per New Store 44,748 40,154 47,348
Opened During Period
Total Square Footage at End 4,206,284 4,305,325 4,681,204
of Period
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* Computed on the basis of aggregate sales of stores open for a full year.
The corporate offices and principal manufacturing facility and
warehouses for Jordan Graphics are located near Charlotte, North Carolina.
Jordan Graphics owns this
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facility, which contains 188,000 square feet and is located on 26 acres of
land. In addition, Jordan Graphics closed a smaller manufacturing plant in
Baltimore, Maryland. The Baltimore site, consisting of approximately 42,000
square feet located on six acres of land, will be used as a sales office and
warehouse until its disposition, which is anticipated during fiscal 1996.
ITEM 3. LEGAL PROCEEDINGS
The Registrant has entered into an Administrative Order on Consent
with Region IV of the United States Environmental Protection Agency, together
with 14 other parties who have been designated potentially responsible parties,
to perform a remedial investigation/feasibility study at the Leonard Chemical
Company Superfund site in Rock Hill, South Carolina. The Registrant's
potential liability is based on the alleged disposal of waste material at this
Superfund site by Pargo, Inc. Pargo, Inc. was a wholly owned subsidiary of the
Registrant from 1969 to 1972. The Registrant has agreed to participate in the
remedial investigation/feasibility study on the condition that its share of the
costs does not exceed 1.8% of the total plus an additional payment of $4,680
for costs previously incurred by other parties. The Registrant estimates that,
based on current information, the total cost of the remedial
investigation/feasibility study should be approximately $500,000. Under the
interim allocation of costs agreed to by the parties to the Administrative
Order on Consent, the Registrant's share is 1.155% of the total cost. The
Registrant does not believe that this proceeding will have a material effect on
its business or financial condition.
The Registrant and its subsidiaries are involved in various matters
from time to time in connection with their operations, including various
environmental matters. These matters considered in the aggregate have not had,
nor does the Registrant expect them to have, a material effect on the
Registrant's business or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The following list contains the name, age, positions and offices held,
and period served in such positions or offices for each of the executive
officers of the Registrant.
R. Stuart Dickson, age 66, has been Chairman of the Executive
Committee since February, 1994. Prior to that time he had been
Chairman of the Board of the Registrant since its formation in
October, 1968.
Alan T. Dickson, age 64, has been Chairman of the Board since
February, 1994. Prior to that time he had been President of the
Registrant since its formation in October, 1968.
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John W. Copeland, age 60, has been President of the Registrant since
February, 1994. Prior to that time he had been President of A&E since
October, 1984.
Richard N. Brigden, age 56, has been Vice President-Finance of the
Registrant since December, 1983.
Thomas W. Dickson, age 40, has been President of A&E since February,
1994. Prior to that time, he served as Executive Vice President from
1991 to 1994 and as Senior Vice President-Marketing and International
from 1989 to 1991.
Edward S. Dunn, age 52, has been President of Harris Teeter since
January 1, 1989.
Brian F. Gallagher, age 48, has been President of Jordan Graphics,
Inc. since July, 1993. From April, 1993 to July, 1993, he served as
Vice President of Manufacturing. From May, 1985 to April, 1993, he
served as Plant Manager at several plants for Moore Business Forms.
The executive officers of the Registrant and its subsidiaries are
elected annually by their respective Boards of Directors. R. Stuart Dickson
and Alan T. Dickson are brothers. Thomas W. Dickson is the son of R. Stuart
Dickson and the nephew of Alan T. Dickson. No other executive officer has a
family relationship with any other executive officer or director or nominee for
director as close as first cousin.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The information required for this item is incorporated herein by
reference to the following sections of the Registrant's 1995 Annual Report:
information regarding the principal market for Common Stock, number of
shareholders of record, market price information per share of Common Stock and
dividends declared per share of Common Stock and $.56 Convertible Preference
Stock for each quarterly period in the 1995 and 1994 fiscal years (the $.56
Preference was called for redemption on May 31, 1994) is incorporated by
reference to the Note headed "Quarterly Information (Unaudited)" to the Notes
to Consolidated Financial Statements; and information regarding restrictions on
the ability of the Registrant to pay cash dividends is incorporated by
reference to "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Capital Resources and Liquidity" and the Note
headed "Long-Term Debt" to the Notes to Consolidated Financial Statements.
ITEM 6. SELECTED FINANCIAL DATA
The information required for this item, for each of the last five
fiscal years, is incorporated herein by reference to the section headed
"Eleven-Year Financial and Operating Summary" in the Registrant's 1995 Annual
Report.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required for this item is incorporated herein by
reference to the section headed "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Registrant's 1995 Annual
Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Registrant, including the
Report of Independent Public Accountants thereon, are incorporated herein by
reference from the Registrant's 1995 Annual Report.
The required supplementary financial information is incorporated
herein by reference from the Note headed "Quarterly Information (Unaudited)" of
the Notes to Consolidated Financial Statements in the Registrant's 1995 Annual
Report.
The financial statement schedules required to be filed herewith, and
the Report of Independent Public Accountants thereon, are listed under Item
14(a) of this Report and filed herewith pursuant to Item 14(d) of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to executive
officers is set forth above in Part I, Item 4A. The other information required
by this item is incorporated herein by reference to the sections entitled
"Election of Directors" and "Beneficial Ownership of Company Stock" in the
Registrant's Proxy Statement dated December 20, 1995, filed with the Securities
and Exchange Commission with respect to the Registrant's 1996 Annual Meeting of
Shareholders (the "1996 Proxy Statement").
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by
reference to the sections entitled "Election of Directors - Directors' Fees and
Attendance" and "Executive Compensation" in the Registrant's 1996 Proxy
Statement.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by
reference to the sections entitled "Principal Shareholders" and "Election of
Directors-Beneficial Ownership of Company Stock" in the Registrant's 1996 Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of report
(1) Financial Statements: The following report and
financial statements are incorporated by reference to
the Registrant's 1995 Annual Report:
Consolidated Balance Sheets, October 1, 1995 and October
2, 1994
Statements of Consolidated Income and Retained Earnings
for the fiscal years ended October 1, 1995, October 2,
1994 and October 3, 1993
Statements of Consolidated Cash Flows for the fiscal
years ended October 1, 1995, October 2, 1994 and October
3, 1993
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
(2) Financial Statement Schedules: The following report and
financial statement schedules are filed herewith:
Report of Independent Public Accountants for each of the
fiscal years in the three year period ended October 1, 1995
Schedule II - Valuation and Qualifying Accounts and
Reserves
All other schedules are omitted as the required
information is inapplicable or the information is
presented in the consolidated financial statements or
related notes thereto.
(3) Exhibits: The following exhibits are filed with
this report or, as noted, incorporated by reference
herein:
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<TABLE>
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Exhibit No. Description
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3.1 Restated Articles of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 of the
Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 29, 1992 (Commission File No.
1-6905).
3.2 Amended and Restated Bylaws of the Registrant, incorporated herein by reference to Exhibit 3.2 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended September 27, 1992 (Commission File No. 1-6905).
4.1 Revolving Credit Agreements for an aggregate of $100,000,000, entered into as of February 15, 1995, by and between
the Registrant and each of First Union National Bank of North Carolina, NationsBank, National Association
(Carolinas) and Wachovia Bank of North Carolina, N.A., incorporated herein by reference to Exhibits 4.1,
4.2 and 4.3 of the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended April 2, 1995,
(Commission File No. 1-6905). The Registrant has certain other long-term debt, but has not filed the instruments
evidencing such debt as part of Exhibit 4 as none of such instruments authorize the issuance of debt exceeding 10
percent of the total consolidated assets of the Registrant. The Registrant agrees to furnish a copy of each such
agreement to the Commission upon request.
10.1 Description of Incentive Compensation Plans, incorporated herein by reference to Exhibit 10.1 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended October 2, 1994 (Commission File No. 1-6905).*
10.2 Supplemental Executive Retirement Plan of Ruddick Corporation, as amended and restated, incorporated herein by
reference to Exhibit 10.3 of the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30,
1990 (Commission File No. 1-6905).*
10.3 Resolutions adopted by the Board of Directors of the Registrant and the Plan's Administrative Committee with
respect to benefits payable under the Registrant's Supplemental Executive Retirement Plan to Alan T. Dickson and
R. Stuart Dickson, incorporated herein by reference to Exhibit 10.3 of the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 29, 1991 (Commission File No. 1-6905).*
10.4 Deferred Compensation Plan for Key Employees of Ruddick Corporation and subsidiaries, as amended and restated,
incorporated herein by reference to Exhibit 10.5 of the Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1990 (Commission File No. 1-6905).*
</TABLE>
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<TABLE>
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Exhibit No. Description
- ----------- -------------------------------------------------------------------------------------------------------------
<S> <C>
10.5 1982 Incentive Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10.5 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended October 2, 1994 (Commission File No. 1-6905).*
10.6 1988 Incentive Stock Option Plan, incorporated herein by reference to Exhibit 10.6 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended October 2, 1994 (Commission File No. 1-6905).*
10.7 1993 Incentive Stock Option and Stock Appreciation Rights Plan, incorporated herein by reference to Exhibit 10.7
of the Registrant's Annual Report on Form 10-K for the fiscal year ended October 3, 1993 (Commission File No.
1-6905).*
10.8 Description of the Registrant's Long Term Key Management Incentive Program, incorporated herein by reference to
Exhibit 10.7 of the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 1991
(Commission File No. 1-6905).*
10.9 Ruddick Corporation Irrevocable Trust for the Benefit of Participants in the Long Term Key Management Incentive
Program, incorporate herein by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990 (Commission File No. 1-6905).*
10.10 Rights Agreement dated November 15, 1990 by and between the Registrant and Wachovia Bank of North Carolina, N.A.,
incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated November 21,
1990 (Commission File No. 1-6905).
10.11 Ruddick Corporation Senior Officers Insurance Program Plan Document and Summary Plan Description, incorporated
herein by reference to Exhibit 10.10 of the Registrant's Annual Report on Form 10-K for the fiscal year ended
September 27, 1992 (Commission File No. 1-6905).*
11 Statement Regarding the Computation of Per Share Earnings.
13 Ruddick Corporation 1995 Annual Report to Shareholders (consolidated financial statements on pages 20 to 32 and
sections headed "Management's Discussion and Analysis of Financial Condition and Results of Operations" (pages 16
to 19) and "Eleven-Year Financial and Operating Summary" (pages 12 to 13) only).
21 List of Subsidiaries of the Registrant.
23 Consent of Independent Public Accountants.
</TABLE>
12
<PAGE> 16
Exhibit No. Description
- ----------- -----------------------------------------------------------------
27 Financial Data Schedule (For SEC Use Only)
__________________________
* Indicates management contract or compensatory plan required to be
filed as an Exhibit.
(b) Reports on Form 8-K.
The Registrant did not file any reports on Form 8-K during the three
months ended October 1, 1995.
(c) The following exhibits are filed herewith and follow the signature
pages:
11 Statement Regarding Computation of Per Share Earnings.
13 Ruddick Corporation 1995 Annual Report to Shareholders
(consolidated financial statements on pages 20 to 32 and sections
headed "Management's Discussion and Analysis of Financial
Condition and Results of Operations" (pages 16 to 19) and
"Eleven-Year Financial and Operating Summary" (pages 12 to 13)
only).
21 List of Subsidiaries of the Registrant.
23 Consent of Independent Public Accountants.
27 Financial Data Schedule. (For SEC Use Only)
(d) The financial statement schedules listed in Item 14(a)(2) above begin
on Page S-1.
13
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 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
(Registrant)
By: /s/ John W. Copeland
--------------------------------------
John W. Copeland, President
Dated: December 27, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ John W. Copeland President and Director December 27, 1995
- -------------------- (Principal Executive Officer)
John W. Copeland
/s/ Richard N. Brigden Vice President-Finance December 27, 1995
- ---------------------- (Principal Financial Officer)
Richard N. Brigden
/s/ Douglas A. Stephenson Treasurer December 27, 1995
- ------------------------- (Principal Accounting Officer)
Douglas A. Stephenson
/s/ Thomas M. Belk Director December 27, 1995
- ------------------
Thomas M. Belk
/s/ Edwin B. Borden, Jr. Director December 27, 1995
- ------------------------
Edwin B. Borden, Jr.
/s/ Alan T. Dickson Chairman of the Board December 27, 1995
- ------------------- and Director
Alan T. Dickson
/s/ R. Stuart Dickson Chairman of the Executive December 27, 1995
- --------------------- Committee and Director
R. Stuart Dickson
</TABLE>
14
<PAGE> 18
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Beverly F. Dolan Director December 27, 1995
- --------------------
Beverly F. Dolan
/s/ Roddey Dowd, Sr. Director December 27, 1995
- --------------------
Roddey Dowd, Sr.
/s/ James E. S. Hynes Director December 27, 1995
- ---------------------
James E. S. Hynes
/s/ Hugh L. McColl, Jr. Director December 27, 1995
- ----------------------
Hugh L. McColl, Jr.
/s/ E. Craig Wall, Jr. Director December 27, 1995
- ----------------------
E. Craig Wall, Jr.
</TABLE>
15
<PAGE> 19
INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants S-2
For each of the fiscal years in the three year period ended October 1, 1995
Schedule II - Valuation and Qualifying Accounts and
Reserves S-3
</TABLE>
All other schedules are omitted as the required information is inapplicable or
the information is presented in the financial statements or related notes.
S-1
<PAGE> 20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Ruddick Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Ruddick Corporation's annual
report to shareholders incorporated in this Form 10-K, and have issued our
report thereon dated October 26, 1995. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. The schedule listed
in Item 14(a)(2) is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina,
October 26, 1995.
S-2
<PAGE> 21
RUDDICK CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE FISCAL YEARS ENDED
OCTOBER 3, 1993, OCTOBER 2, 1994
AND OCTOBER 1, 1995 SCHEDULE II
(in thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE CHARGED TO BALANCE
AT BEGINNING COSTS AND AT END
DESCRIPTION OF FISCAL YEAR EXPENSES DEDUCTIONS OF PERIOD
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal Year Ended October 3, 1993:
Reserves deducted from assets
to which they apply -
Allowance For Doubtful Accounts........... $ 903 $1,413 $337 * $1,979
=================================================================
Fiscal Year Ended October 2, 1994:
Reserves deducted from assets
to which they apply -
Allowance For Doubtful Accounts........... $ 1,979 $ 506 $454 * $2,031
=================================================================
Fiscal Year Ended October 1, 1995:
Reserves deducted from assets
to which they apply -
Allowance For Doubtful Accounts........... $ 2,031 $ 376 $176 * $2,230
=================================================================
</TABLE>
* Represents accounts receivable balances written off as uncollectible, less
recoveries.
S-3
<PAGE> 22
INDEX TO EXHIBITS
Exhibit No.
(per Item 601 Sequential
of Reg. S-K Description of Exhibit Page No.
- ----------- ---------------------- --------
3.1 Restated Articles of Incorporation of the Registrant, *
incorporated herein by reference to Exhibit 3.1 of the
Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended March 29, 1992 (Commission
File No. 1-6905).
3.2 Amended and Restated Bylaws of the Registrant, *
incorporated herein by reference to Exhibit 3.2 of the
Registrant's Annual Report on Form 10-K for the fiscal
year ended September 27, 1992 (Commission File No. 1-
6905).
4.1 Revolving Credit Agreements for an aggregate of *
$100,000,000, entered into as of February 15, 1995, by
and between the Registrant and each of First Union
National Bank of North Carolina, NationsBank,
National Association (Carolinas) and Wachovia Bank of
North Carolina, N.A., incorporated herein by reference
to Exhibits 4.1, 4.2 and 4.3 of the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended
April 2, 1995, (Commission File No. 1-6905). The
Registrant has certain other long-term debt, but has not
filed the instruments evidencing such debt as part of
Exhibit 4 as none of such instruments authorize the
issuance of debt exceeding 10 percent of the total
consolidated assets of the Registrant. The Registrant
agrees to furnish a copy of each such agreement to the
Commission upon request.
10.1 Description of Incentive Compensation Plans, *
incorporated herein by reference to Exhibit 10.1 of the
Registrant's Annual Report on Form 10-K for the fiscal
year ended October 2, 1994 (Commission File No. 1-
6905). **
10.2 Supplemental Executive Retirement Plan of Ruddick *
Corporation, as amended and restated, incorporated
herein by reference to Exhibit 10.3 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended
September 30, 1990 (Commission File No. 1-6905). **
<PAGE> 23
Exhibit No.
(per Item 601 Sequential
of Reg. S-K Description of Exhibit Page No.
- ----------- ---------------------- --------
10.3 Resolutions adopted by the Board of Directors of the *
Registrant and the Plan's Administrative Committee
with respect to benefits payable under the Registrant's
Supplemental Executive Retirement Plan to Alan T.
Dickson and R. Stuart Dickson, incorporated herein by
reference to Exhibit 10.3 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended
September 29, 1991 (Commission File No. 1-6905). **
10.4 Deferred Compensation Plan for Key Employees of *
Ruddick Corporation and subsidiaries, as amended and
restated, incorporated herein by reference to Exhibit 10.5
of the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990 (Commission File
No. 1-6905). **
10.5 1982 Incentive Stock Option Plan, incorporated herein *
by reference to Exhibit 10.5 of the Registrant's Annual
Report on Form 10-K for the year ended October 2, 1994
(Commission File No. 1-6905). **
10.6 1988 Incentive Stock Option Plan, incorporated herein *
by reference to Exhibit 10.6 of the Registrant's Annual
Report on Form 10-K for the year ended October 2, 1994
(Commission File No. 1-6905). **
10.7 1993 Incentive Stock Option and Stock Appreciation *
Rights Plan, incorporated herein by reference to Exhibit
10.7 of the Registrant's Annual Report on Form 10-K for
the fiscal year ended October 3, 1993 (Commission File
No. 1-6905). **
10.8 Description of the Registrant's Long Term Key *
Management Incentive Program, incorporated herein by
reference to Exhibit 10.7 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended
September 29, 1991 (Commission File No. 1-6905). **
<PAGE> 24
Exhibit No.
(per Item 601 Sequential
of Reg. S-K Description of Exhibit Page No.
- ----------- ---------------------- --------
10.9 Ruddick Corporation Irrevocable Trust for the Benefit of *
Participants in the Long Term Key Management Incentive
Program, incorporated herein by reference to Exhibit 10.9
of the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990 (Commission File No.
1-6905).**
10.10 Rights Agreement dated November 15, 1990 by and between *
the Registrant and Wachovia Bank of North Carolina, N.A.,
incorporated herein by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated November 21,
1990 (Commission File No. 1-6905).
10.11 Ruddick Corporation Senior Officers Insurance Program Plan *
Document and Summary Plan Description, incorporated herein
by reference to Exhibit 10.10 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended September 27,
1992 (Commission File No. 1-6905).**
11 Statement Regarding the Computation of Per Share Earnings.
13 Ruddick Corporation 1995 Annual Report to Shareholders
(consolidated financial statements on pages 20 to 32 and
sections headed "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (pages 16 to
19) and "Eleven-Year Financial and Operating Summary" (pages
12 to 13) only).
21 List of Subsidiaries of the Registrant.
23 Consent of Independent Public Accountants.
27 Financial Data Schedule. (For SEC Use Only)
- --------------
* Incorporated by reference.
** Indicates management contract or compensatory plan required to be filed
as an exhibit.
<PAGE> 1
RUDDICK CORPORATION EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 1, OCTOBER 2,
1995 1994
------------ ------------
<S> <C> <C>
NET INCOME PER SHARE WAS COMPUTED AS FOLLOWS:
PRIMARY:
1. Net Income $39,267,058 $31,810,847
=========== ===========
2. Weighted Average Common Shares
Outstanding 46,194,760 46,325,898
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 391,302
4. Incremental Shares Under Stock Options
Computed Under the Treasury Stock
Method Using the Average Market Price
of Issuer's Stock During the Periods 341,586 475,922
5. Weighted Average Common Shares and ----------- -----------
Common Equivalent Shares Outstanding 46,536,346 47,193,122
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.84 $ 0.67
=========== ===========
FULLY DILUTED:
1. Unadjusted Net Income $39,267,058 $31,810,847
=========== ===========
2. Weighted Average Common Shares
Outstanding 46,194,760 46,325,898
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 391,302
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 494,961 483,010
5. Weighted Average Common Shares and ----------- -----------
Common Equivalent Shares Outstanding 46,689,721 47,200,210
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.84 $ 0.67
=========== ===========
</TABLE>
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 13
Ruddick Corporation and Subsidiaries
Dollars in thousands, except per share data 1995 1994 1993(1) 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET SALES
American & Efird $ 297,963 $ 277,016 $ 264,814 $ 243,324 $ 208,649
Harris Teeter 1,711,813 1,578,880 1,412,315 1,270,430 1,213,127
Jordan Graphics 60,991 52,541 55,401 55,401 56,077
- ----------------------------------------------------------------------------------------------------------------------------------
Total Net Sales $2,070,767 $1,908,437 $1,732,530 $1,569,155 $1,477,853
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING PROFIT
American & Efird $ 34,614 $ 26,916 $ 30,551 $ 28,510 $ 22,589
Harris Teeter 42,114 37,032 29,845 31,067 34,329
Jordan Graphics 336 (1,432) 2,006 3,635 3,660
Ruddick Investment 799 1,495 725 703 457
- ----------------------------------------------------------------------------------------------------------------------------------
Total Operating Profit $ 77,863 $ 64,011 $ 63,127 $ 63,915 $ 61,035
- ----------------------------------------------------------------------------------------------------------------------------------
Net Income $ 39,267 $ 31,811 $ 33,873 $ 30,789 $ 26,786
Net Income Per Share $.84 $.67 $.71 $.65 $.59
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON DIVIDEND
Regular $.17 $.14 $.13 $.12 $.11
Extra .08 .08 .08 .08 .08
- ----------------------------------------------------------------------------------------------------------------------------------
Total Common Dividend $.25 $.22 $.21 $.20 $.19
- ----------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity $ 316,236 $ 291,209 $ 274,740 $ 255,403 $ 233,566
Percent Return on Beginning Equity 13.5% 11.6% 13.3% 13.2% 14.5%
Book Value Per Share $6.82 $6.28 $5.87 $5.44 $4.98
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES
American & Efird $ 16,359 $ 20,416 $ 19,433 $ 16,399 $ 11,417
Harris Teeter 81,447 38,802 33,683 25,910 30,903
Jordan Graphics 1,913 1,400 2,609 2,220 853
Ruddick Investment - 7,547 - - 55
Corporate 297 35 27 4,039 5
- ----------------------------------------------------------------------------------------------------------------------------------
Total Capital Expenditures $ 100,016 $ 68,200 $ 55,752 $ 48,568 $ 43,233
- ----------------------------------------------------------------------------------------------------------------------------------
Working Capital $ 67,887 $ 86,243 $ 95,296 $ 98,362 $ 79,640
Total Assets $ 721,941 $ 640,792 $ 586,815 $ 542,084 $ 498,458
Long-term Debt -
Including Current Portion $ 129,215 $ 109,567 $ 104,173 $ 97,280 $ 83,850
Long-term Debt as a Percent
of Capital Employed 29.0% 27.3% 27.5% 27.6% 26.4%
Number of Employees 20,200 19,000 17,500 14,100 13,500
Number of Beneficial Shareholders
Including Employee/Owners 14,500 14,100 14,600 12,900 11,400
Common Shares Outstanding 46,373,666 46,352,214 46,036,146 46,124,798 46,002,708
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 53-week year.
12
<PAGE> 2
Management's Discussion and
Analysis of Financial Condition
and Results of Operations
Ruddick Corporation and Subsidiaries
RESULTS OF OPERATIONS -
FISCAL 1995 COMPARED TO FISCAL 1994
For fiscal year 1995, consolidated net sales of $2.07 billion
increased 8.5% from $1.91 billion generated in fiscal 1994.
Consolidated 1995 net income of $39.3 million was up 23% from the $31.8
million reported last year. On a per share basis earnings were $.84 for
fiscal 1995, an increase of 25% when compared to $.67 in fiscal 1994.
Earnings per share reflect a two-for-one split of the common stock
effected in the form of a 100% stock dividend in fiscal 1995. Fiscal
1995 consolidated operating profit increased 22% led by gains primarily
at American & Efird and Harris Teeter.
American & Efird, Inc.
Sales at American & Efird increased 8% over fiscal 1994. Sales
increases were recorded in most major domestic market segments,
particularly as a result of a relatively strong apparel trade over most
of the year, and in export and international markets except Canada.
Thread and notion sales increased 8% and represented 98% of all sales
by A&E. This sales increase resulted primarily from additional business
from existing customers, greater domestic market share and growth in
foreign markets. Strong sales demand allowed A&E to consistently
operate on a five day or more manufacturing schedule. This generated
very favorable operating efficiencies and enhanced operating profit,
which increased 29% over last year. However, rising raw material prices
in the last half of the year resulted in increasing pressure on margins
although cost reductions and operating efficiencies offset most of
these price increases. In the fourth quarter, weak retail sales of
apparel and home furnishings caused A&E's customers to drastically
reduce production. As a result, thread demand abated and through the
fall, sales have been near or below levels of a year ago. While profits
in Canada and Mexico were below last year, total international
operating profit increased slightly.
Harris Teeter, Inc.
Harris Teeter sales in fiscal 1995 increased 8% over fiscal 1994. Sales
of stores in operation in both periods were ahead 6.5% compared to
7.5% last year. Same-store sales growth rates have declined from prior
year as more stores passed the first anniversary of the switch to
24-hour operations. Sales increases were attributable to strong
feature-oriented merchandising, additional operating hours and an 8.7%
increase in store square footage during the year. Grocery sales were up
9%, which accounted for 53% of the sales increase. Dairy, meat, produce
and frozen products had sales increases ranging from 2% to 14%,
accounting for 31% of the sales increase. Operating profit showed
improvement as increased gross profit, derived mainly from higher
sales volume and a good product mix of higher gross margin items, more
than offset an increase of 15% in operating expenses. Operating
expenses as a percentage of sales were up less than 1.4%.
Additionally, Harris Teeter's first Atlanta, Georgia store which opened
in fiscal 1994 became profitable during fiscal 1995. The Columbia,
South Carolina market continued to show improvement in part as a result
of store remodels. Both of these markets generated increased sales and
more efficient store operations.
At fiscal year end, 139 stores were in operation, the same number as a
year ago. Eleven new stores were opened during fiscal 1995 replacing
eleven older stores thereby closed. Seven of those stores were closed
under the marketing strategy for which a restructuring reserve of $5.3
million before taxes was
Ruddick Corporation 1995 Annual Report
16
<PAGE> 3
established in fiscal 1993. The resulting charges in 1995 were $1.5
million. A cumulative total of $1.6 million has been charged in all
periods to date for nine store replacements. Harris Teeter continues to
incur liability for rent expense for six of those stores. The plan
calls for the replacement of an anticipated 12 smaller, less
competitive stores with larger stores offering increased variety and
drawing from a larger marketing area, with related store closings
planned to occur through fiscal 1996. Management anticipates that on
average approximately half of the charges associated with each store
closing will be incurred in the year of closing and the balance within
four years thereafter. Management expects that the effect on operating
results in any fiscal year and on liquidity will not be material, and
that capital resources will be adequate to complete such restructuring.
Jordan Graphics, Inc.
Jordan Graphics sales of $61 million in fiscal 1995 increased 16% over
fiscal 1994. Sales increases were recorded in all product lines with
label and stock tab being particularly strong. Most of the sales
increase reflected significant increases in the cost of paper. The
operating profit of $336 thousand showed considerable improvement over
the $1.4 million loss in 1994. During the year, a $311 thousand
one-time charge was recorded to cover the costs associated with the
decision to close the Baltimore plant. Further, Jordan sold its
unprofitable Commercial Division during the fourth quarter. This
division represented about 5% of annual sales of Jordan. Jordan
operates in an industry that continues to experience overcapacity,
therefore margins remain under competitive pressures even though
efforts toward operational improvements continue.
Ruddick Investment Company
In fiscal 1995, Ruddick Investment reported operating profit of $799
thousand, down from the $1.5 million reported in fiscal 1994.
During fiscal 1995, a gain of $2.7 million was realized from the sale
of a shopping center in Charlotte, North Carolina. Also, during the
year a reserve in the amount of $3.0 million was recorded to provide
protection from the potential exposure to future losses in the
investment portfolio. Management believes the reserve at fiscal year
end to be prudent and adequate. The timing of sales opportunities for
investment assets held in the investment portfolio is difficult to
predict. Accordingly, reported profit on an annual basis in Ruddick
Investment Company can vary greatly from year to year. More emphasis
will be focused on site development for Harris Teeter stores in a shift
of primary focus from venture capital investment.
RESULTS OF OPERATIONS -
FISCAL 1994 COMPARED TO FISCAL 1993
For fiscal year 1994, a 52-week year, consolidated net sales of
$1.91 billion increased 10% from $1.73 billion generated in the prior
53-week year. Consolidated 1994 net income of $31.8 million was up 6%
from the $30.0 million before adjustment for the cumulative effect of a
change in accounting principle reported in fiscal 1993. Net income in
fiscal 1993 was $33.9 million including the effect of adopting
Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes." On a per share basis, earnings were $.67 in fiscal 1994,
an increase of 7% when compared to $.63 in fiscal 1993 before the
cumulative effect of change in accounting principle, which change
Ruddick Corporation 1995 Annual Report
17
<PAGE> 4
Management's Discussion and
Analysis of Financial Condition
and Results of Operations
Ruddick Corporation and Subsidiaries
increased 1993 earnings per share by $.08 to $.71. Fiscal 1994
consolidated operating profit increased just over 1% compared to 1993
as profitability gains at Harris Teeter were nearly offset by lower
operating results at American & Efird and Jordan Graphics.
American & Efird, Inc.
Fiscal 1994 sales at American & Efird increased 5% over fiscal 1993,
led by industrial thread, which benefited from improved business
conditions during the year. Sales increases were recorded in both
domestic and international markets. Thread and notion sales increased
6% and represented 98% of all sales by A&E. This increase resulted from
additional business from existing customers, improved product, greater
domestic market share and growth in foreign markets. Sales yarn,
representing only 2% of A&E's sales in fiscal 1994, declined 29% for
the year. Operating profits declined in U.S. and foreign markets, due
largely to significantly lower sales margins resulting from very
competitive market conditions. However, in the last two quarters of
the fiscal year, operating profit strengthened on improved sales volume
as well as capacity and efficiency gains which resulted from the costs
incurred in the first two quarters for equipment relocations
domestically, consolidation of Canadian operations, and foreign
operations startups.
Harris Teeter, Inc.
Harris Teeter sales for the 52-week fiscal year 1994 increased
12% over the 53-week fiscal year 1993. After excluding the fifty-third
week in fiscal 1993, sales of stores in operation in both periods were
ahead 7.5%. Sales increases were attributable to strong
feature-oriented merchandising in place throughout fiscal 1994, from
additional operating hours, and from new stores opened during the year.
Total square footage increased just over 2% in fiscal 1994. Grocery
sales were up 11%, which accounted for 47% of the sales increase.
Dairy, meat, produce, and frozen products had sales increases ranging
from 9% to 15%, accounting for 39% of the sales increase. Operating
profit showed improvement as increased gross profit, derived mainly
from improved sales volume, customer count and product mix, more than
offset an increase of 17% in operating expenses. Operating expenses as
a percentage of sales were up less than 1%. At 1994 fiscal year end,
139 stores were in operation compared to 138 a year earlier. Six new
stores were opened during fiscal 1994. Five older stores were closed
during the year, two of which were closed under the marketing strategy
for which a restructuring reserve was established in fiscal 1993. The
resulting charges in 1994 were $82 thousand.
Jordan Graphics, Inc.
Jordan Graphics sales of $52.5 million in fiscal 1994 were 5% lower
than in fiscal 1993. Sales were lower in all product lines except for
label and laser. In fiscal 1994 a $1.4 million loss was reported. This
loss resulted in part from lower sales margins affected by
underutilized manufacturing capacity and the inability to pass on paper
price increases to its customers, both of which were industry-wide
difficulties. In addition, a redesign of the management information
system and a redirection of some specific product lines contributed to
a significant increase in costs during the year as obsolete hardware,
software and manufacturing equipment were displaced.
Ruddick Corporation 1995 Annual Report
18
<PAGE> 5
Ruddick Investment Company
In fiscal 1994, Ruddick Investment reported operating profit of
$1.5 million, or nearly double that of 1993. There were no significant
sales of investment assets during the year, and the increased earnings
came largely from increased rents from the Morrocroft Village shopping
center. Timing of sales opportunities for investment assets held in
Ruddick Investment's portfolio is difficult to predict. Accordingly,
reported profit on an annual basis in this company can vary greatly
from year to year.
CAPITAL RESOURCES AND LIQUIDITY
Ruddick has an overall financial goal of earning at least a 15%
return on beginning shareholders' equity. In fiscal 1995, the return on
beginning equity was 13.5% as compared to 11.6% in the prior year. At
the same time, Ruddick seeks to limit long-term debt so as to
constitute no more than 40% of capital employed, which includes
long-term debt and shareholders' equity. As of the end of fiscal 1995,
this percentage was 29.0%, a slight increase from last year's 27.3%.
The Company's principle source of liquidity has been revenue from
operations. The Company also has the ability to borrow up to an
aggregate of $100 million under established revolving lines of
credit with three banks. The Company increased its borrowing capacity
under these lines of credit from $60 million during the current fiscal
year. The maximum amount outstanding under these credit facilities
during fiscal 1995 was $78.6 million, and $62.1 million was outstanding
at year end. The majority of additional borrowings under Ruddick's
revolving credit facilities were used for capital expenditures.
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 five years for
repayment, all borrowings under these facilities are classified as
long-term debt.
Working capital as of the fiscal years ended 1995, 1994, and 1993 was
$67.9 million, $86.2 million, and $95.3 million, respectively. Most of
the decrease in fiscal 1995 from fiscal 1994 was the result of
increased accounts payable as of year end. Accounts payable grew at a
faster rate than inventories primarily as a result of increased store
development activity at Harris Teeter. The current ratio was 1.3 at
October 1, 1995, compared to 1.5 at October 2, 1994.
Covenants in certain of the Company's long-term debt agreements
limit the total indebtedness that the Company may incur. Management
believes that the limit on indebtedness does not significantly restrict
the Company's liquidity and that such liquidity is adequate to meet
foreseeable requirements.
In fiscal 1995, capital expenditures were $100.0 million. In
fiscal 1996, capital expenditures are expected to be about equal to
fiscal 1995, and management expects that internally generated funds,
supplemented by available borrowing capacity, will be adequate to
finance such expenditures.
Ruddick Corporation 1995 Annual Report
19
<PAGE> 6
Consolidated Balance Sheets
Ruddick Corporation and Subsidiaries
October 1, 1995 and October 2, 1994
<TABLE>
<CAPTION>
(Dollars in thousands) 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 18,959 $ 14,531
Accounts Receivable, Less Allowance For Doubtful
Accounts: 1995, $2,231; 1994, $2,031 65,515 62,302
Inventories 182,075 180,784
Other Current Assets 32,559 19,030
- -------------------------------------------------------------------------------------
Total Current Assets 299,108 276,647
- -------------------------------------------------------------------------------------
Property
Land and Buildings 103,224 97,438
Machinery and Equipment 418,393 372,795
Leasehold Improvements 92,833 73,850
Assets Under Capital Leases 2,184 2,548
- -------------------------------------------------------------------------------------
Total, at Cost 616,634 546,631
- -------------------------------------------------------------------------------------
Accumulated Depreciation and Amortization 265,297 246,971
- -------------------------------------------------------------------------------------
Property, Net 351,337 299,660
- -------------------------------------------------------------------------------------
Investments and Other Assets
Investments 23,888 25,130
Other Assets 47,608 39,355
- -------------------------------------------------------------------------------------
Total Assets $721,941 $640,792
=====================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 5,852 $ 5,596
Current Portion of Long-term Debt 9,233 5,415
Dividends Payable 6,491 5,131
Accounts Payable 146,818 120,636
Federal and State Income Taxes 57 3,162
Accrued Compensation 29,447 25,831
Accrued Interest 13,623 7,231
Other Accrued Liabilities 19,700 17,402
- -------------------------------------------------------------------------------------
Total Current Liabilities 231,221 190,404
- -------------------------------------------------------------------------------------
Non-Current Liabilities
Long-term Debt 119,982 104,152
Deferred Income Taxes 35,420 35,459
Other Liabilities 19,082 19,568
- -------------------------------------------------------------------------------------
Commitments and Contingencies
- -------------------------------------------------------------------------------------
Shareholders' Equity
Common Stock - Shares Outstanding:
1995 - 46,373,666; 1994 - 46,352,214 54,816 57,620
Retained Earnings 262,921 235,219
Cumulative Translation Adjustments (1,501) (1,630)
- -------------------------------------------------------------------------------------
Shareholders' Equity 316,236 291,209
- -------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $721,941 $640,792
=====================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
Ruddick Corporation 1995 Annual Report
20
<PAGE> 7
Statements of Consolidated
Income and Retained Earnings
Ruddick Corporation and Subsidiaries
For the Fiscal Years Ended October 1, 1995, October 2, 1994, and October 3,
1993
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data) 1995 1994 1993(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $2,070,767 $1,908,437 $1,732,530
- ------------------------------------------------------------------------------------------------------------------------
Cost of Sales 1,526,079 1,436,070 1,308,601
Selling, General and Administrative Expenses 466,825 408,356 360,802
- ------------------------------------------------------------------------------------------------------------------------
Operating Profit 77,863 64,011 63,127
- ------------------------------------------------------------------------------------------------------------------------
Net Interest Expense 10,480 8,329 8,312
Other Administrative Expense 8,126 5,614 5,351
- ------------------------------------------------------------------------------------------------------------------------
Income Before Taxes and Cumulative Effect of Accounting Change 59,257 50,068 49,464
Taxes 19,990 18,257 19,460
- ------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of Accounting Change 39,267 31,811 30,004
Cumulative Effect of Accounting Change - - 3,869
- ------------------------------------------------------------------------------------------------------------------------
Net Income 39,267 31,811 33,873
Retained Earnings at Beginning of Fiscal Year 235,219 213,389 189,483
- ------------------------------------------------------------------------------------------------------------------------
Total 274,486 245,200 223,356
- ------------------------------------------------------------------------------------------------------------------------
Dividends:
Preference - 1994: $.38 a share;
1993: $.56 a share - 27 56
Common - 1995: $.25 a share; 1994: $.22 a share;
1993: $.21 a share 11,565 9,954 9,911
- ------------------------------------------------------------------------------------------------------------------------
Total Dividends 11,565 9,981 9,967
- ------------------------------------------------------------------------------------------------------------------------
Retained Earnings at End of Fiscal Year $ 262,921 $ 235,219 $ 213,389
========================================================================================================================
Net Income Per Share:
Income Before Cumulative Effect of Accounting Change $.84 $.67 $.63
Cumulative Effect of Accounting Change - - .08
- ------------------------------------------------------------------------------------------------------------------------
Net Income Per Share $.84 $.67 $.71
========================================================================================================================
</TABLE>
(1) 53-week year.
The accompanying notes to consolidated financial statements are an integral
part of these statements.
Ruddick Corporation 1995 Annual Report
21
<PAGE> 8
Statements of Consolidated
Cash Flows
Ruddick Corporation and Subsidiaries
For the Fiscal Years Ended October 1, 1995, October 2, 1994, and October 3,
1993
<TABLE>
<CAPTION>
(Dollars in thousands) 1995 1994 1993(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income $ 39,267 $31,811 $ 33,873
Non-cash Items Included in Net Income
Depreciation 43,410 39,954 36,965
Deferred Taxes (1,056) 2,174 (8,231)
Restructuring Charge (1,480) (82) 5,264
Other, Net 5,520 3,662 1,569
Decrease (Increase) in Accounts Receivable (3,213) (3,545) (2,703)
Decrease (Increase) in Inventories (1,291) (9,642) (19,824)
Decrease (Increase) in Other Current Assets (14,053) (3,703) (822)
Increase (Decrease) in Current Liabilities 38,523 29,428 20,690
- ------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 105,627 90,057 66,781
- ------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital Expenditures (100,016) (68,200) (55,752)
Cash Proceeds from Sale of Property 1,773 1,292 2,547
COLI, Net (9,345) (8,265) (11,636)
Other, Net 1,985 (2,699) (4,908)
- ------------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (105,603) (77,872) (69,749)
- ------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from Long-term Borrowings 25,777 11,400 18,000
Payments of Principal on Long-term Debt (5,408) (5,624) (10,100)
Dividends Paid (11,565) (9,981) (9,967)
Other, Net (4,400) (5,841) (3,000)
- ------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities 4,404 (10,046) (5,067)
- ------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents 4,428 2,139 (8,035)
Cash and Cash Equivalents at Beginning of Year 14,531 12,392 20,427
- ------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 18,959 $14,531 $ 12,392
========================================================================================================================
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 11,357 $ 8,455 $ 8,901
Income Taxes $ 23,959 $16,295 $ 22,028
========================================================================================================================
</TABLE>
(1) 53-week year.
The accompanying notes to consolidated financial statements are an integral
part of these statements.
Ruddick Corporation 1995 Annual Report
22
<PAGE> 9
Notes to Consolidated
Financial Statements
Ruddick Corporation and Subsidiaries
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Ruddick Corporation and its wholly owned subsidiaries,
American & Efird, Inc., Harris Teeter, Inc., Jordan Graphics, Inc., and
Ruddick Investment Company, collectively referred to herein as the
Company. All material intercompany amounts have been eliminated.
Cash Equivalents
For purposes of the statements of consolidated cash flows, the
Company considers all highly liquid cash investments purchased with a
maturity of three months or less to be cash equivalents.
Inventories
Inventories are valued at the lower of cost or market with the
cost of substantially all inventories being determined using the
last-in, first-out (LIFO) method. The LIFO cost of such inventories was
$21,373,000 $(20,113,000) less than the first-in, first-out (FIFO) cost
method at October 1, 1995 (October 2, 1994).
Property and Depreciation
Property is at cost and is depreciated, using principally the
straight-line method, over the following useful lives:
<TABLE>
<S> <C>
Land improvements 10-25 years
Buildings 10-50 years
Machinery and equipment 3-20 years
</TABLE>
Leasehold improvements are depreciated over the lesser of the estimated
useful life or the remaining term of the lease. Assets under capital
leases are amortized on a straight-line basis over the lesser of 10
years or the lease term. Maintenance and repairs are charged against
income when incurred. Expenditures for major renewals, replacements and
betterments are added to property. The cost and the related accumulated
depreciation of assets retired are eliminated from the accounts; gains
or losses on disposal are added to or deducted from income.
Investments
Ruddick Investment Company holds a financial position in certain
shopping centers in which Harris Teeter, Inc., is an anchor
tenant. Additionally it makes loans to and equity investments in a
number of emerging growth companies, as well as selected publicly
traded companies. Financial investments are carried at the lower of
cost or market. In management's opinion, the net aggregate carrying
value of financial instruments of $7,690,000 and $7,152,000 held for
investment approximated their aggregate fair values at October 1, 1995
and October 2, 1994, respectively.
Ruddick Corporation 1995 Annual Report
23
<PAGE> 10
Notes to Consolidated
Financial Statements (Continued)
Ruddick Corporation and Subsidiaries
Other Assets
Other assets include the net cash surrender value of
Company-owned life insurance (COLI), investments in unconsolidated
foreign subsidiaries and various acquisition costs. The cash surrender
value of life insurance is recorded net of policy loans. The net life
insurance expense, including interest expense of $12,845,000 in 1995,
$5,761,000 in 1994, and none in 1993, is included in other
administrative expense in the statements of consolidated income and
retained earnings. Acquisition costs allocated to other assets,
including favorable lease rights, are being amortized over 10 years.
Income Taxes
Ruddick and its subsidiaries file a consolidated federal income tax
return. Tax credits are recorded as a reduction of federal income taxes
in the years in which they are utilized. The Company adopted
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS No.109), in fiscal 1993. The change has been
reflected in the accompanying financial statements as the cumulative
effect of a change in accounting principle. Deferred tax liabilities or
assets at the end of each period are determined using the tax rate
expected to be in effect when taxes are actually paid or recovered.
Accordingly, income tax expense will increase or decrease in the same
period in which a change in tax rates is enacted.
Per Share Amounts
Primary and fully diluted net income per share amounts were determined
based on the average number of shares of common stock and common
stock equivalents (non-cumulative, voting $.56 convertible preference
stock and stock options) outstanding. The average primary shares
outstanding were 46,536,346 in 1995, 47,193,122 in 1994, and 47,619,798
in 1993. Fully diluted average shares outstanding were 46,689,721 in
1995, 47,200,210 in 1994, and 47,654,672 in 1993. Common stock
equivalents had no material effect on the per share amounts in 1995,
1994 and 1993.
Reclassifications
To conform with classifications adopted in the current year, the
financial statements for prior years reflect certain reclassifications,
which have no effect on net income.
Leases
The Company leases certain equipment under agreements expiring
during the next seven years. Harris Teeter leases most of its stores
under leases that expire during the next 22 years. It is expected that
such leases will be renewed by exercising options or replaced by leases
of other properties. Most store leases provide for additional rentals
based on sales, and certain store facilities are sublet under leases
expiring during the next eight years. Rent expenses were as follows
(in thousands):
<TABLE>
<CAPTION>l
1995 1994 1993
-----------------------------------------------------------------
<S> <C> <C> <C>
Operating Leases:
Minimum $36,831 $34,639 $33,676
Contingent 1,277 971 812
-----------------------------------------------------------------
Total $38,108 $35,610 $34,488
-----------------------------------------------------------------
</TABLE>
Ruddick Corporation 1995 Annual Report
24
<PAGE> 11
Future minimum lease commitments at October 1, 1995 (excluding leases
assigned or expected to be assigned - see below) were as follows (in
thousands):
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
--------------------------------------------------------------------------------------
<S> <C> <C>
1996 $ 337 $ 40,212
1997 337 38,661
1998 337 36,819
1999 337 35,187
2000 319 34,286
Later years 743 309,230
--------------------------------------------------------------------------------------
Total minimum lease payments $2,410 $494,395
--------------------------------------------------------------------------------------
Less amount representing interest
(Store premises 6.75%-10.25%, store equipment 8%-15%) 1,158
--------------------------------------------------------------------------------------
Present value of minimum lease obligations 1,252
Less current portion 135
--------------------------------------------------------------------------------------
Long-term capital lease obligations $1,117
--------------------------------------------------------------------------------------
Total minimum sublease rentals to be received
under noncancelable subleases $ 3,514
--------------------------------------------------------------------------------------
</TABLE>
In connection with the closing of certain store locations, Harris
Teeter has assigned leases to other merchants with recourse. These
leases expire over the next 10 years and the future minimum lease
payments of $11,457,000 over this period have been assumed by these
merchants. In addition, Harris Teeter leases certain store locations
which are not currently in use but are expected to be assigned to
other merchants. These leases expire over the next 13 years and the
future minimum lease payments related to these locations total
$9,574,000 (approximating $1,143,000 per year for each of the next five
years).
LONG-TERM DEBT
Long-term debt at October 1, 1995 and October 2, 1994 was as follows
(in thousands):
<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------------------------------------------
<S> <C> <C>
8.57% Term Note due $4,667 annually through May 2007 $ 54,833 $ 59,500
Revolving line of credit, variable rate 62,100 37,800
Industrial revenue bonds, variable 63% of prime,
due quarterly in various amounts through 2000 3,042 3,352
5.7% Term Note due April 1996 2,666 2,666
Obligations under capital leases and other 6,574 6,249
--------------------------------------------------------------------------------------
Total 129,215 109,567
Less current portion 9,233 5,415
--------------------------------------------------------------------------------------
Total long-term debt $119,982 $104,152
--------------------------------------------------------------------------------------
</TABLE>
Long-term debt maturities, excluding obligations under capital
leases, in each of the next five fiscal years are as follows (in
thousands): 1996 - $9,098; 1997 - $7,662; 1998 - $5,130; 1999 -
$4,990; 2000 - $4,827.
Ruddick Corporation 1995 Annual Report
25
<PAGE> 12
Notes to Consolidated
Financial Statements (continued)
Ruddick Corporation and Subsidiaries
During fiscal 1995, the Company increased its revolving line of credit
with three banks to $100,000,000 ($60,000,000 fiscal 1994). During
1995 (1994) the maximum outstanding borrowing under the revolving line
of credit was $78,600,000 ($45,600,000) and the average for the 364
(364) days outstanding was $61,817,000 ($39,417,000). The daily
weighted average interest rate (a variable rate related to the current
published CD rate) was 6.7% (4.8%) and a commitment fee of 1/8% (1/4%)
of the unused line is charged.
In management's opinion, the recorded amounts of the fixed rate
obligations of the Company approximated their fair value at October 1,
1995, and October 2, 1994 based on borrowing rates then available to
the Company for loans with similar terms and maturities.
Various loan agreements provide, among other things, for maintenance of
minimum levels of consolidated shareholders' equity. At October
1, 1995, consolidated tangible net worth exceeded by $51,538,000 the
balance which, under the most restrictive provisions, must be
maintained through September 29, 1996. The requirement shall increase
annually by 40% of consolidated net income for such year.
Total interest expense was $10,649,000, $8,563,000, and
$8,529,000 in 1995, 1994 and 1993, respectively.
CAPITAL STOCK
The capital stock of the Company authorized at October 1, 1995
was 1,000,000 shares of Additional Preferred, 4,000,000 shares of
Preference-noncumulative $.56 convertible, voting ($10 liquidation
value), and 75,000,000 shares of Common.
Changes in shares issued and outstanding and in shareholders'
equity accounts other than retained earnings are summarized as follows
(in thousands except share amounts):
<TABLE>
<CAPTION>
Preference-noncumulative
$.56 convertible (1) Common
Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at September 27, 1992 104,693 $524 46,124,798 $65,486
-----------------------------------------------------------------------------------------------------------------
Preference conversion (7,407) (38) 59,256 38
Shares issued under exercised stock options - - 396,840 2,153
Shares purchased and retired - - (544,748) (5,661)
Tax effect of disqualifying option stocks - - - 507
-----------------------------------------------------------------------------------------------------------------
Balance at October 3, 1993 97,286 $486 46,036,146 $62,523
-----------------------------------------------------------------------------------------------------------------
Preference conversion (95,170) (476) 761,360 476
Shares issued under exercised stock options - - 299,330 1,684
Shares purchased and retired (2,116)(1) (10) (744,622) (7,370)
Tax effect of disqualifying option stocks - - - 307
-----------------------------------------------------------------------------------------------------------------
Balance at October 2, 1994 0 $ 0 46,352,214 $57,620
-----------------------------------------------------------------------------------------------------------------
Shares issued under exercised stock options - - 704,052 3,639
Shares purchased and retired - - (682,600) (6,952)
Tax effect of disqualifying option stocks - - - 471
Other - - - 38
-----------------------------------------------------------------------------------------------------------------
Balance at October 1, 1995 0 $ 0 46,373,666 $54,816
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As of May 23, 1994, the remaining 2,116 shares of $.56
Preference stock were called for redemption. The redemption price was
$10.10 per share inclusive of the pro rata dividend of $.10 per share.
Ruddick Corporation 1995 Annual Report
26
<PAGE> 13
During fiscal 1995, the Company declared a two-for-one split of the
common stock effected in the form of a 100% stock dividend. All common
stock and per share data included in the consolidated financial
statements and footnotes have been restated to reflect the stock split.
The 1982, 1988, and 1993 incentive stock option plans authorized
options for 3,400,000 shares of common stock. The plans provide that
options may be granted at 100% of the fair market value of the shares
on the date of grant. At the discretion of the Company, a stock
appreciation right may be granted and exercised in lieu of the exercise
of the related option (which is then forfeited). Under the plans, as of
October 1, 1995, the Company may grant additional options for the
purchase of 855,000 shares.
A summary of the option transactions for the years ended October
1, 1995, October 2, 1994, and October 3, 1993, follows:
<TABLE>
<CAPTION>
1995 1994 1993
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Options outstanding, beginning of year 1,364,062 1,446,992 1,753,000
Options granted 124,000 240,000 124,000
Options exercised 756,878 299,330 402,808
Options canceled or forfeited 34,800 23,600 27,200
Options outstanding, end of year 696,384 1,364,062 1,446,992
Options exercisable, end of year 403,584 1,027,262 1,164,192
Exercise price $5 15/64 - $11 11/32 $5 15/64 - $11 11/32 $5 15/64 - $9 5/32
-----------------------------------------------------------------------------------------------------------------
</TABLE>
On November 15, 1990, the Company declared a dividend of one preferred
share purchase right for each outstanding share of common stock, which
rights expire on November 15, 2000. As a result of the July 1, 1991 and
October 1, 1995, 100% stock dividends, the number of rights outstanding
quadrupled. Each right entitles the holder to purchase one four-
hundredth of a share of a new Series A Junior Participating Additional
Preferred Stock at $26.25, subject to further adjustment. The rights
are not exercisable until 10 days after a party has acquired or
commences to acquire a beneficial interest of at least 20% of the
Company's outstanding common stock. In addition, each right would
entitle the rightholder to exercise the right and receive shares of
common stock of the acquiring company upon merger or other business
combination having a market value of twice the exercise price of the
right. Under certain circumstances after the rights become exercisable,
the Board of Directors may exchange all or part of the outstanding
rights at an exchange ratio of one share of common stock, or one
four-hundredth of a share of Series A Junior Participating Additional
Preferred Stock, per right, subject to adjustment. The rights have no
voting privileges and may be redeemed by the Board of Directors at a
price of $.0025 per right at any time prior to the acquisition of a
beneficial ownership of 20% of the outstanding common shares. There
are 200,000 shares of Series A Junior Participating Additional
Preferred Stock reserved for issuance upon exercise of the rights.
Ruddick Corporation 1995 Annual Report
27
<PAGE> 14
Notes to Consolidated
Financial Statements (continued)
Ruddick Corporation and Subsidiaries
INCOME TAXES
Effective September 28, 1992, the Company adopted SFAS No. 109,
"Accounting for Income Taxes." The cumulative effect on prior
years of this change in accounting principle increased fiscal 1993 net
income by $3,869,000 or $.08 per share. Financial statements for prior
years have not been restated.
The provision for income taxes consisted of the following
(in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENTLY PAYABLE
Federal $16,374 $12,253 $17,782
State and other 4,150 3,329 4,044
Foreign 522 501 98
----------------------------------------------------------------------------------------------------------
Total Current 21,046 16,083 21,924
----------------------------------------------------------------------------------------------------------
DEFERRED TAXES (CREDITS)
Reserves not currently deductible (241) 182 (5,294)
Accelerated tax depreciation 2,968 3,673 3,423
Property dispositions (821) (446) (1,073)
Other items, net (2,962) (1,235) 480
----------------------------------------------------------------------------------------------------------
Total Deferred (1,056) 2,174 (2,464)
----------------------------------------------------------------------------------------------------------
Income tax expense $19,990 $18,257 $19,460
----------------------------------------------------------------------------------------------------------
</TABLE>
Income from foreign operations before income taxes in fiscal
1995, 1994, and 1993 was $560,000, $1,020,000, and $1,727,000,
respectively.
Income tax expense differed from an amount computed by applying
the statutory tax rates to pre-tax income as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income tax on pre-tax income at the statutory federal
rate of 35% for 1995 and 1994, and 34.75% for 1993 $20,740 $17,524 $17,189
Increase (decrease) attributable to:
State and other income taxes, net of federal income
tax benefit 2,841 1,883 2,549
Company owned life insurance (3,646) (2,020) -
Other items, net 55 870 (278)
----------------------------------------------------------------------------------------------------------
Income tax expense $19,990 $18,257 $19,460
----------------------------------------------------------------------------------------------------------
</TABLE>
On August 10, 1993, the statutory federal tax rate was increased
to 35% effective January 1, 1993. The effect of the higher rate on
temporary differences that existed as of the first day of fiscal 1993
was approximately $800,000.
The tax effects of temporary differences giving rise to the
Company's consolidated deferred tax liability at October 1, 1995,
October 2, 1994 and October 3, 1993 are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DEFERRED TAX ASSETS
Employee benefits $ 6,541 $ 5,959 $ 5,797
Reserves not currently deductible 7,049 6,808 6,990
Other 3,023 1,651 1,735
----------------------------------------------------------------------------------------------------------
Total deferred tax assets $ 16,613 $ 14,418 $ 14,522
----------------------------------------------------------------------------------------------------------
DEFERRED TAX LIABILITIES
Property, plant and equipment $(43,412) $(41,266) $(38,039)
VEBA trust contribution (1,167) (2,098) (2,360)
Other capitalized costs (3,272) (4,527) (5,556)
Other (3,835) (2,656) (2,522)
----------------------------------------------------------------------------------------------------------
Total deferred tax liabilities $(51,686) $(50,547) $(48,477)
----------------------------------------------------------------------------------------------------------
</TABLE>
Ruddick Corporation 1995 Annual Report
28
<PAGE> 15
INDUSTRY SEGMENT INFORMATION
The Company operates primarily in four businesses: textiles - American
& Efird; retail grocery (including the real estate and store
development activities of Ruddick Investment Company) - Harris Teeter;
business forms - Jordan Graphics; and venture capital - Ruddick
Investment. Textiles - manufactures sewing thread for the apparel and
other markets. Retail grocery - operates a regional chain of
supermarkets. Business forms - produces and distributes a line of
business forms, labels, and laser-printed graphics. Venture capital -
investment manager and venture capital investor.
Summarized information for fiscal 1995, 1994 and 1993 is as follows
(in millions):
<TABLE>
<CAPTION>
Net Sales Operating Profit (Loss)
1995 1994 1993 1995 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BUSINESS
SEGMENTS
Textiles $ 298.0 $ 277.0 $ 264.8 $34.6 $26.9 $30.6
Retail Grocery (1) 1,711.8 1,578.9 1,412.3 43.5 38.8 30.5
Business Forms 61.0 52.5 55.4 .3 (1.4) 2.0
Venture Capital - - - (.5) (.3) -
------------------------------------------------------------------------------------------------------------
Total $2,070.8 $1,908.4 $1,732.5 $77.9 $64.0 $63.1
------------------------------------------------------------------------------------------------------------
Net Interest Expense 10.5 8.3 8.3
Other Administrative Expense 8.1 5.6 5.3
------------------------------------------------------------------------------------------------------------
Income Before Taxes $59.3 $50.1 $49.5
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Identifiable Capital
Assets at Year-end Expenditures Depreciation
1995 1994 1993 1995 1994 1993 1995 1994 1993
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BUSINESS
SEGMENTS
Textiles $214.1 $206.5 $185.2 $ 16.4 $20.4 $19.4 $11.0 $10.0 $ 8.7
Retail Grocery (2) 437.2 365.6 343.1 81.4 46.4 33.7 29.3 26.6 24.6
Business Forms 25.5 28.3 27.8 1.9 1.4 2.6 1.9 2.1 2.2
Venture Capital 7.9 7.6 6.3 - - - - - -
Corporate (3) 37.2 32.8 24.4 .3 - - 1.2 1.3 1.5
----------------------------------------------------------------------------------------------------------------
Total $721.9 $640.8 $586.8 $100.0 $68.2 $55.7 $43.4 $40.0 $37.0
----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In fiscal 1993, operating profit was reduced by a one-time
before-tax charge of $5,264,000 for the costs associated with a
marketing strategy of replacing, over the next few years, a number
of smaller, less competitive Harris Teeter stores. In addition,
operating profit included $1,349,000, $1,777,000, and $726,000 in
1995, 1994 and 1993, respectively, related to store investment
activities of Ruddick Investment Company.
(2) Identifiable Assets include $19,080,000, $20,957,000 and
$19,248,000 in 1995, 1994 and 1993, respectively, for investment
activities of Ruddick Investment Company for the development of
retail sites.
(3) Identifiable Assets include the net cash surrender value of
Company-owned life insurance.
Ruddick Corporation 1995 Annual Report
29
<PAGE> 16
Notes to Consolidated
Financial Statements (continued)
Ruddick Corporation and Subsidiaries
QUARTERLY INFORMATION (UNAUDITED)
The following table sets forth certain financial information,
the high and low sales prices for the common stock and dividends
declared with respect to the common and $.56 convertible preference
stock (called for redemption May 23, 1994) for the periods indicated.
The Company's common stock is listed and traded on the New York Stock
Exchange. As of October 31, 1995, there were 1,947 holders of record of
common stock.
<TABLE>
<CAPTION>
First Second Third Fourth
(in millions, except per share data) Quarter Quarter Quarter Quarter
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Operating Results
Net sales $508.3 $509.9 $525.8 $526.8
Net income 8.3 10.3 11.3 9.4
Net Income Per Share .17 .23 .24 .20
Dividend Per Share - Common .03 .04 .04 .14(1)
Market Price Per Common Share
High 10 1/4 10 11/16 10 15/16 13 7/8
Low 8 1/2 9 3/8 9 5/8 10 7/16
-------------------------------------------------------------------------------------------------------------
1994
-------------------------------------------------------------------------------------------------------------
Operating Results
Net sales $464.5 $465.9 $486.6 $491.4
Net income 6.3 7.4 9.3 8.8
-------------------------------------------------------------------------------------------------------------
Net Income Per Share .13 .16 .19 .19
-------------------------------------------------------------------------------------------------------------
Dividend Per Share
Common .03 .04 .04 .11(1)
Preference .14 .14 .10 -
-------------------------------------------------------------------------------------------------------------
Market Price Per Common Share
High 11 15/16 11 1/2 9 11/16 10 5/16
Low 10 5/16 9 5/16 7 7/8 7 13/16
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes $.08 extra dividend in fiscal 1995 and fiscal 1994.
COMMITMENTS AND CONTINGENCIES
Substantially all domestic employees of the Company and its
subsidiaries participate in noncontributory defined benefit pension
plans. Employees in foreign subsidiaries participate to varying degrees
in local pension plans, which, in the aggregate, are not significant.
Employee retirement benefits are a function of both the years of
service and compensation for a specified period of time before
retirement. The Company's current funding policy is to contribute
annually the minimum amount required by regulatory authorities.
Ruddick Corporation 1995 Annual Report
30
<PAGE> 17
The following table sets forth the defined benefit plans' funded
status and amounts recognized in the Company's consolidated balance
sheets at October 1, 1995 and October 2, 1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits $64,984 $62,323
Nonvested benefits 2,507 2,780
----------------------------------------------------------------------------------------------------------
Accumulated benefit obligations 67,491 65,103
Effect of projected future compensation levels 20,026 18,559
----------------------------------------------------------------------------------------------------------
Projected benefit obligations 87,517 83,662
Plans' assets at fair market value 69,951 60,521
----------------------------------------------------------------------------------------------------------
Projected benefit obligations in excess of plans' assets (17,566) (23,141)
Unrecognized net asset at September 30, 1985, net of
amortization, being amortized over 15-20 years 2,330 2,724
Unrecognized net loss due to past experience
different from assumptions made (12,234) (17,758)
----------------------------------------------------------------------------------------------------------
Unfunded accrued pension cost ($7,662) ($8,107)
----------------------------------------------------------------------------------------------------------
</TABLE>
The plans' assets consist primarily of U.S. government securities,
fixed income funds, cash equivalents and domestic equities, all
managed by two banks.
In 1995 (1994), an 8% (7.5%) weighted average discount rate and
a 5% (4.75%) rate of increase in future payroll costs were used in
determining the actuarial present value of the projected benefit
obligations. The expected long-term rate of return on assets was 8%
(7.5%).
Pension expense for defined benefit plans for fiscal 1995, 1994,
and 1993 included the following components (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Benefits earned by employees $3,835 $3,822 $3,444
Interest on projected benefit obligations 6,608 5,934 5,578
Actual (return) loss on plan assets (7,134) 2,546 (4,473)
Net amortization and deferral 1,873 (7,045) 194
----------------------------------------------------------------------------------------------------------
Net pension expense $5,182 $5,257 $4,743
----------------------------------------------------------------------------------------------------------
</TABLE>
The Company also has an Employee Stock Ownership Plan (ESOP) and
a profit-sharing plan. Expenses under these plans were as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ESOP $7,651 $5,205 $6,480
Profit-sharing 1,652 866 2,124
----------------------------------------------------------------------------------------------------------
</TABLE>
The Company in the normal course of business guarantees loans relative
to real estate and other investment activities of Ruddick
Investment Company. There were no guarantees at October 1, 1995. At
October 2, 1994 and October 3, 1993, the amount guaranteed totaled
$3,066,000 and $4,696,000, respectively.
The Company is involved in various lawsuits and environmental
and patent matters arising in the normal course of business.
Management believes that such matters will not have a material effect
on the financial condition or results of operations of the Company.
See "Leases" for additional commitments and contingencies.
Ruddick Corporation 1995 Annual Report
31
<PAGE> 18
Report of Independent Public Accountants
Ruddick Corporation and Subsidiaries
TO THE BOARD OF DIRECTORS OF RUDDICK CORPORATION
We have audited the accompanying consolidated balance sheets of
Ruddick Corporation (a North Carolina corporation) and subsidiaries
as of October 1, 1995, and October 2, 1994, and the related statements
of consolidated income and retained earnings and consolidated cash
flows for each of the three years in the period ended October 1, 1995.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Ruddick Corporation and subsidiaries as of October 1, 1995,
and October 2, 1994, and the results of their operations and their cash
flows for each of the three years in the period ended October 1, 1995,
in conformity with generally accepted accounting principles.
As discussed in the notes to consolidated financial statements,
effective as of the beginning of the fiscal year 1993, the
Company changed its method of accounting for income taxes.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina,
October 26, 1995.
Ruddick Corporation 1995 Annual Report
32
<PAGE> 1
EXHIBIT 21
RUDDICK CORPORATION
Affiliated Companies
as of December 27,1995
Listed below are the domestic subsidiaries of the Corporation, all of which
are wholly owned and are owned directly by the Corporation, unless otherwise
indicated.
American & Efird, Inc.
The Kaim Company(1)
American & Efird Services, Inc.(1)
Harris Teeter, Inc.
Harris-Teeter Services, Inc.(2)
Jordan Graphics, Inc.
R. S. Dickson & Company
Ruddco Management, Inc.(3)
Ruddick of Delaware, Inc.
A&E Export, Inc.(1)
_______________________
(1) Owned by American & Efird, Inc.
(2) Owned by Harris Teeter, Inc.
(3) Owned by R. S. Dickson & Company
Listed below are the foreign subsidiaries of the Corporation, all of which
are wholly owned through American & Efird, Inc., unless otherwise indicated.
American & Efird (HK) Limited - 100%
A&E Korea Ltd - 100%
American & Efird (GB) Limited - 100%
Fils A Coudre Allied, Inc./Allied Threads, Inc. - 100%
Hilos A&E de Costa Rica, S.A. - 100%
American & Efird International (FE) Limited - 100%
Hilos American & Efird de Mexico, S.A. de C.V. - 100%
American & Efird Mills (S) Pte. Ltd. - 100%
Hilos Magic (H.M.) de Venezuela - Joint venture, 33% owned
Hilos A&E Dominicana, Ltd. - Joint venture, 49% owned
In addition, in the normal course of business, R. S. Dickson & Company from
time to time makes investments in corporations and partnerships that may result
in ownership of capital stock or other interests as an investment.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports included in this Form 10-K, into Ruddick Corporation's previously
filed Registration Statements on Form S-8, Registration No. 33-26302 and No.
33-56567.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina,
December 27, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF RUDDICK CORPORATION FOR THE FISCAL YEAR ENDED OCTOBER 1,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-01-1995
<PERIOD-END> OCT-01-1995
<CASH> 18,959,000
<SECURITIES> 0
<RECEIVABLES> 67,746,000
<ALLOWANCES> 2,231,000
<INVENTORY> 182,075,000
<CURRENT-ASSETS> 299,108,000
<PP&E> 616,634,000
<DEPRECIATION> 265,297,000
<TOTAL-ASSETS> 721,941,000
<CURRENT-LIABILITIES> 231,221,000
<BONDS> 119,982,000
0
0
<COMMON> 54,816,000
<OTHER-SE> 261,420,000
<TOTAL-LIABILITY-AND-EQUITY> 721,941,000
<SALES> 2,070,767,000
<TOTAL-REVENUES> 2,070,767,000
<CGS> 1,526,079,000
<TOTAL-COSTS> 1,992,904,000
<OTHER-EXPENSES> 8,126,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,480,000
<INCOME-PRETAX> 59,257,000
<INCOME-TAX> 19,990,000
<INCOME-CONTINUING> 39,267,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,267,000
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
</TABLE>
