FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ______
Commission file number 1-6905
RUDDICK CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0905940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2000 Two First Union Center
Charlotte, North Carolina 28282
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (704) 372-5404
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding Shares
Class As of August 4, 1995
Common Stock 23,030,380 shares
<PAGE>
RUDDICK CORPORATION
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS -
JULY 2, 1995 AND OCTOBER 2, 1994 2
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME - THREE MONTHS AND NINE MONTHS
ENDED JULY 2, 1995 AND JULY 3, 1994 3
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - NINE MONTHS ENDED
JULY 2, 1995 AND JULY 3, 1994 4
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 6-9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 10
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
JULY 2, OCTOBER 2,
ASSETS 1995 1994
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and Temporary Cash Investments $ 14,210 $ 14,531
Accounts Receivable, Net 68,392 62,302
Inventories 183,869 180,784
Other 24,802 19,030
Total Current Assets 291,273 276,647
PROPERTY, NET 334,841 299,660
INVESTMENTS AND OTHER ASSETS 67,566 64,485
Total $693,680 $640,792
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 4,899 $ 5,596
Current Portion of Long-Term Debt 8,302 5,415
Accounts Payable 124,705 125,767
Income Taxes Payable 4,384 3,162
Other Accrued Liabilities 53,236 50,464
Total Current Liabilities 195,526 190,404
LONG-TERM DEBT 133,737 104,152
DEFERRED LIABILITIES 53,633 55,027
SHAREHOLDERS' EQUITY:
Capital Stock - Common 52,725 57,620
Retained Earnings 260,021 235,543
Cumulative Translation Adjustments (1,962) (1,954)
Shareholders' Equity 310,784 291,209
Total $693,680 $640,792
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except share and per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 2, JULY 3, JULY 2, JULY 3,
1995 1994 1995 1994
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
NET SALES
American & Efird $ 78,304 $ 71,590 $ 225,314 $ 202,452
Harris Teeter 431,888 401,792 1,272,317 1,175,663
Jordan Graphics 15,581 13,192 46,347 38,907
Total 525,773 486,574 1,543,978 1,417,022
OPERATING PROFIT
American & Efird 10,465 7,721 26,936 19,439
Harris Teeter 11,808 10,350 32,093 27,377
Jordan Graphics 11 116 468 (219)
Ruddick Investment 41 399 841 850
Total 22,325 18,586 60,338 47,447
OTHER COSTS AND DEDUCTIONS
Interest expense, net 2,588 2,058 7,949 6,174
Other expense 2,386 1,856 6,546 5,112
Total 4,974 3,914 14,495 11,286
Income Before Taxes 17,351 14,672 45,843 36,161
Taxes 6,044 5,421 15,968 13,201
NET INCOME $ 11,307 $ 9,251 $ 29,875 $ 22,960
AVERAGE NUMBER OF SHARES OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING:
Primary 23,175,716 23,529,825 23,270,256 23,658,181
Fully Diluted 23,180,172 23,529,851 23,287,869 23,658,767
NET INCOME PER SHARE:
PRIMARY $0.48 $0.39 $1.28 $0.97
FULLY DILUTED $0.48 $0.39 $1.28 $0.97
DIVIDENDS DECLARED PER SHARE:
Common $0.08 $0.07 $0.22 $0.21
$.56 Convertible
Preference - $0.10 - $0.38
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
NINE MONTHS ENDED
JULY 2, JULY 3,
1995 1994
(Unaudited) (Unaudited)
CASH FLOW FROM INCOME $ 62,251 $ 56,102
Decrease (Increase) in Current Assets (15,819) (13,010)
Increase (Decrease) in Current
Liabilities 3,211 6,165
NET CASH PROVIDED BY OPERATING ACTIVITIES 49,643 49,257
INVESTING ACTIVITIES
Purchase of Assets (82,606) (51,470)
Cash Proceeds from Sale of Assets 18,678 2,779
Company Owned Life Insurance, Net (6,272) (5,922)
Other, Net (2,396) (1,133)
NET CASH USED IN INVESTING ACTIVITIES (72,596) (55,746)
FINANCING ACTIVITIES
Proceeds (Repayments) of Long-Term
Borrowings 37,477 19,200
Payment of Principal on Long-Term
Debt (4,053) (4,333)
Dividends (5,073) (4,883)
Other, Net (5,719) (2,434)
NET CASH PROVIDED BY FINANCING ACTIVITIES 22,632 7,550
INCREASE (DECREASE) IN BALANCE SHEET CASH (321) 1,061
BALANCE SHEET CASH AT BEGINNING OF PERIOD 14,531 12,392
BALANCE SHEET CASH AT END OF PERIOD $ 14,210 $ 13,453
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 8,752 $ 6,154
Income Taxes $ 17,748 $ 10,205
<PAGE>
RUDDICK CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STAETMENTS
(UNAUDITED)
IN THE OPINION OF MANAGEMENT, THE INFORMATION FURNISHED REFLECTS
ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING ACCRUALS)
NECESSARY TO PRESENT FAIRLY THE RESULTS FOR THE INTERIM PERIODS
PRESENTED.<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table shows net sales and operating profit for
each of Ruddick Corporation's subsidiaries for the quarters and
nine months ended July 2, 1995 and July 3, 1994:
(In Thousands) Quarter Ended Nine Months Ended
_____________ _______________
July 2, July 3 July 2, July 3,
1995 1994 1995 1994
Net Sales
American & Efird $ 78,304 $ 71,590 $ 225,314 $ 202,452
Harris Teeter 431,888 401,792 1,272,317 1,175,663
Jordan Graphics 15,581 13,192 46,347 38,907
_________ ________ _________ __________
Total $525,773 $486,574 $1,543,978 $1,417,022
Operating Profit
American & Efird $ 10,465 $ 7,721 $ 26,936 $ 19,439
Harris Teeter 11,808 10,350 32,093 27,377
Jordan Graphics 11 116 468 (219)
Ruddick Investment 41 399 841 850
_________ _________ __________ ________
Total $ 22,325 $ 18,586 $ 60,338 $ 47,447
For the Three Months Ended July 2, 1995 and July 3, 1994
__________________________________________________
Consolidated sales of $526 million in the third quarter of
fiscal 1995 increased 8% over the $487 million reported for the
comparable quarter last year. Total operating profit of $22.3
million was 20% ahead of last year. Net income after taxes was
$11.3 million, an increase of 22% over the $9.3 million reported
last year.
Fully diluted and primary earnings per share were $.48 in
the third quarter of fiscal 1995 compared to $.39 for the
comparable period last year.
In the third quarter of fiscal 1995, American & Efird sales
of $78.3 million increased 9% over the $71.6 million reported for
the comparable period last year. The increase in sales occurred
primarily in industrial thread, which sales were strong in the
quarter in most markets served by A&E. Operating profit of $10.5
million increased 36% over last year's operating profit of $7.7
million. Increased sales allowing efficient plant operating
schedules and cost reductions combined to produce the significant
increase in operating profit. The International Division and
export achieved sales increases in most markets and improvement
was recorded in operating profit, though operations in Mexico
continue to experience adverse results due to its continuing
start-up activities. Rising raw material prices are resulting in
increasing pressure on margins though cost reductions are
offsetting some of these increases. A&E anticipates relatively
weaker business conditions in the fourth quarter due to
anticipated poor sales in the retail sector of the U.S. economy.
Harris Teeter sales in the third fiscal quarter of $431.9
million increased 7% over the $401.8 million reported for the
same period last year. The increase in sales was the result of
new stores and aggressive feature plans and advertising. Net
sales for stores in operation during both periods increased 4.8%.
Same store sales growth rates are declining from prior quarters
as more stores pass the first anniversary of the switch to 24-
hour operations. Operating profit of $11.8 million in the
quarter increased 14% over the $10.4 million reported last year.
The increase in operating profit was the result of increased
sales volume and more favorable product mix. Increases in gross
margin exceeded increases in operating costs. The Columbia area
stores, which have adversely affected operating profit this
fiscal year, continue to show improvement.
During the third fiscal quarter, Harris Teeter replaced one
older, smaller store with a new, larger unit, opened four new
stores and closed one store, leaving 142 in operation at July 2,
1995 compared to 141 in operation at July 3, 1994. The older
store that was replaced was replaced under a previously announced
marketing strategy and plan for which a restructuring reserve of
$5.3 million before taxes was established in fiscal 1993.
Charges incurred against the reserve during the third fiscal
quarter of 1995 were $25 thousand. A cumulative total of $746
thousand has been charged for all periods to date. 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 during fiscal years ending 1994 through
1996. Management anticipates that, on average, the charges
associated with each store closing will be incurred within four
years following the closing. Management expects that the effect
on operating results of any fiscal year and on liquidity will not
be material, and that capital resources will be adequate to
complete such restructuring.
Jordan Graphics sales of $15.6 million in the third quarter
of fiscal 1995 increased 18% from the comparable period last
year. Sales gains were realized in all product lines with label
and stock tab being particularly strong. Operating profit this
year was $11 thousand. Increased sales and improved margins
generated a profit of $311 thousand prior to a one-time charge
associated with the decision to close the Baltimore plant. This
compares to an operating profit of $116 thousand in the third
quarter last year. Jordan continues to be aggressive toward
obtaining sales in its markets and improving the utilization of
its manufacturing facilities which has contributed toward
improving profit margins.
Ruddick Investment reported an operating profit of $41
thousand in the quarter from its investment assets compared to
$399 thousand for the same period last year. Last year's
operating profit included rents from the Morrocroft Village
shopping center that was sold in the second quarter of this
fiscal year.
For the Nine Months Ended July 2, 1995 and July 3, 1994
_______________________________________________________
Consolidated sales for the nine months ended July 2, 1995 of
$1.54 billion increased 9% over the $1.42 billion reported for
the first nine months in fiscal 1994, with all subsidiary
companies reporting increases. Operating profit of $60.3 million
was up 27% from the $47.4 million reported for the comparable
period last year, with all subsidiaries, except Ruddick
Investment, reporting increases. Net income of $29.9 million was
up 30% from the $23.0 million reported last year. Fully diluted
earnings per share for the first nine months this year were $1.28
versus $.97 a year ago.
American & Efird sales of $225.3 million for the first nine
months this year increased 11% over the comparable period last
year. Sales increases were recorded in most product lines while
consumer thread sales remained relatively weak. The 38% increase
in operating profit was generally the result of increased sales,
efficient plant operating schedules and other cost reductions.
Harris Teeter sales of $1.27 billion for the nine months
ended July 2, 1995 were 8% higher than for the same period last
year, primarily the result of volume generated by feature
programs, effective advertising and new, larger stores.
Operating profit was up 17% from the comparable period last year
due largely to increased sales volume, a more favorable product
mix and improved operating results in the Columbia, South
Carolina and Atlanta, Georgia markets.
Jordan Graphics sales of $46.3 million for the nine months
ended July 2, 1995 increased 19% over the comparable period last
year with sales increases being recorded in all product lines.
The operating profit for the nine months to date this year was
$468 thousand after a one-time charge of $300 thousand associated
with the decision in the third quarter to close the Baltimore
plant. A $219 thousand loss was recorded in the first nine
months last year. The operating profit for the nine months was
realized from increasing sales, better service, aggressive cost
reduction efforts and operational improvements.
Ruddick Investment's operating profit for the nine months to
date this year was equal to the comparable period last year. The
majority of current year profit was generated primarily in the
first fiscal quarter from rental income from the Morrocroft
Village shopping center, which was sold during the second quarter
at a gain. Also, during the second quarter loss reserves were
increased to provide protection from the potential exposure to
future investment losses which risks might be associated with the
strategy toward investing in larger and fewer investments.
<PAGE>
Capital Resources and Liquidity
Ruddick has an overall financial goal of earning at least a
15% return on beginning shareholders' equity. The Company has
not met that objective in a number of years. 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 July 2, 1995, this percentage was
31.4% compared to 27.3% at October 2, 1994.
The Company's principal source of liquidity has been
revenues 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 maximum amount
outstanding under these credit facilities during the quarter
ended July 2, 1995 was $74.1 million and $73.8 million was
outstanding at quarter 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 of $95.7 million at July 2, 1995, increased
$9.5 million from October 2, 1994, largely the result of
increases in accounts receivable, inventory and other current
assets offset in part by increases in current portions of long-
term debt and income taxes and other accrued liabilities. The
current ratio was 1.5 at both July 2, 1995 and October 2, 1994.
Covenants in certain of the Company's long-term debt
agreements limit the total indebtedness which 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.
While an increase in capital expenditures is expected in the
remainder of fiscal 1995, management expects that internally
generated funds, supplemented by available borrowing capacity,
will be adequate to finance such expenditures.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit No. Description of Exhibit
11 Statement Re: Computation of Per Share
Earnings
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K - None
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
RUDDICK CORPORATION
DATE: August 15, 1995 /s/ R. N. Brigden
__________________________
R. N. BRIGDEN
VICE PRESIDENT - FINANCE
(PRINCIPAL FINANCIAL OFFICER)
<PAGE>
EXHIBIT INDEX
Exhibit No.
(per Item 601 Description of Sequential
Of Reg. S-K) Exhibit Page No.
_________________ __________________ ____________
11 Statement Re: Computation
of Per Share Earnings
27 Financial Data Schedule
EXHIBIT 11
RUDDICK CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
NINE MONTHS ENDED
__________________
JULY 2, JULY 3,
1995 1994
__________ _________
NET INCOME PER SHARE COMPUTED AS
FOLLOWS:
PRIMARY:
1. Net Income $29,875,000 $22,960,000
=========== ===========
2. Weighted Average Common Shares
Outstanding 23,093,495 23,143,430
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 260,869
4. Incremental Shares Under Stock
Options Computed Under the
Treasury Stock Method Using
the Average Market Price
of Issuer's Stock During the
Periods 176,761 253,882
___________ ___________
5. Weighted Average Common Shares and
Common Equivalent Shares
Outstanding 23,270,256 23,658,181
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 1.28 $ 0.97
=========== ===========
FULLY DILUTED:
1. Net Income $29,875,000 $22,960,000
2. Weighted Average Common Shares
Outstanding 23,093,495 23,143,430
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 260,869
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
194,374 254,468
___________ ___________
5. Weighted Average Common Shares and
Common Equivalent Shares
Outstanding 23,287,869 23,658,767
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 1.28 $ 0.97
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
RUDDICK CORPORATION
FINANCIAL DATA SCHEDULE FOR THE THREE MONTHS ENDED 7/2/95
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-02-1994
<PERIOD-END> JUL-02-1995
<CASH> 14,210,000
<SECURITIES> 0
<RECEIVABLES> 69,826,000
<ALLOWANCES> 1,434,000
<INVENTORY> 183,869,000
<CURRENT-ASSETS> 291,273,000
<PP&E> 599,131,000
<DEPRECIATION> 264,845,000
<TOTAL-ASSETS> 693,680,000
<CURRENT-LIABILITIES> 195,526,000
<BONDS> 133,737,000
<COMMON> 52,725,212
0
0
<OTHER-SE> 258,059,000
<TOTAL-LIABILITY-AND-EQUITY> 693,680,000
<SALES> 525,773,000
<TOTAL-REVENUES> 525,773,000
<CGS> 384,439,000
<TOTAL-COSTS> 119,009,000
<OTHER-EXPENSES> 2,386,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,588,000
<INCOME-PRETAX> 17,351,000
<INCOME-TAX> 6,044,000
<INCOME-CONTINUING> 11,307,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,307,000
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
