FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 1, 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 56-090594
(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 February 3, 1995
Common Stock 23,172,478 shares<PAGE>
RUDDICK CORPORATION
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS -
JANUARY 1, 1995 AND OCTOBER 2, 1994 2
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME - THREE MONTHS ENDED JANUARY 1, 1995
AND JANUARY 2, 1994. 3
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - THREE MONTHS ENDED
JANUARY 1, 1995 AND JANUARY 2, 1994 4
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 6-8
PART II. OTHER INFORMATION
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES 9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
JANUARY 1, OCTOBER 2,
ASSETS 1995 1994
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and Temporary Cash
Investments $ 13,454 $ 14,531
Accounts Receivable, Net 62,801 62,302
Inventories 182,801 180,784
Other 20,473 19,030
Total Current Assets 279,529 276,647
PROPERTY, NET 309,375 299,660
INVESTMENTS AND OTHER ASSETS 70,905 64,485
Total $ 659,809 $ 640,792
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 14,058 $ 5,596
Current Portion of Long-Term
Debt 5,337 5,415
Accounts Payable 113,212 125,767
Income Taxes Payable 6,246 3,162
Other Accrued Liabilities 44,336 50,464
Total Current Liabilities 183,189 190,404
LONG-TERM DEBT AND DEFERRED
LIABILITIES 179,410 159,179
SHAREHOLDERS' EQUITY:
Capital Stock - Common 57,063 57,620
Retained Earnings 241,865 235,543
Cumulative Translation
Adjustments (1,718) (1,954)
Shareholders' Equity 297,210 291,209
Total $ 659,809 $ 640,792
2<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except share and per share data)
THREE MONTHS ENDED
JANUARY 1, JANUARY 2,
1995 1994
(Unaudited) (Unaudited)
NET SALES
American & Efird $ 69,716 $ 63,720
Harris Teeter 423,875 387,991
Jordan Graphics 14,732 12,855
Total 508,323 464,566
OPERATING PROFIT
American & Efird 6,647 5,917
Harris Teeter 10,013 7,761
Jordan Graphics (46) (244)
Ruddick Investment 604 120
Total 17,218 13,554
OTHER COSTS AND DEDUCTIONS
Interest expense, net 2,637 2,072
Other expense 1,898 1,103
Total 4,535 3,175
Income Before Taxes 12,683 10,379
Taxes 4,417 4,114
NET INCOME $ 8,266 $ 6,265
AVERAGE NUMBER OF SHARES OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING:
Primary 23,352,218 23,753,606
Fully Diluted 23,352,218 23,767,430
NET INCOME PER SHARE:
PRIMARY $0.35 $0.26
FULLY DILUTED $0.35 $0.26
DIVIDENDS DECLARED PER SHARE:
Common $0.07 $0.07
$.56 Convertible Preference - $0.14
3<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
THREE MONTHS ENDED
JANUARY 1, JANUARY 2,
1995 1994
(Unaudited) (Unaudited)
CASH FLOW FROM INCOME $ 19,960 $ 17,241
Decrease (Increase) in Current
Assets (3,959) 1,199
Increase (Decrease) in Current
Liabilities (7,113) (13,608)
NET CASH PROVIDED BY OPERATING
ACTIVITIES 8,888 4,832
INVESTING ACTIVITIES
Purchase of Assets (25,096) (17,668)
Cash Proceeds from Sale of Assets 33 1,893
Company Owned Life Insurance, Net (2,163) (4,108)
Other, Net (1,016) 696
NET CASH USED IN INVESTING ACTIVITIES (28,242) (19,187)
FINANCING ACTIVITIES
Proceeds From Long-Term Borrowings 22,200 18,600
Payment of Principal on Long-Term
Debt (1,281) (1,444)
Dividends (1,620) (1,628)
Other, Net (1,022) 749
NET CASH PROVIDED BY FINANCING
ACTIVITIES 18,277 16,277
INCREASE (DECREASE) IN BALANCE SHEET
CASH (1,077) 1,922
BALANCE SHEET CASH AT BEGINNING OF
PERIOD 14,531 12,392
BALANCE SHEET CASH AT END OF
PERIOD $ 13,454 $ 14,314
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 2,141 $ 1,716
Income Taxes $ 1,329 $ 1,726
4
RUDDICK CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
IN THE OPINION OF MANAGEMENT, THE INFORMATION FURNISHED
REFLECTS ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL
RECURRING ACCRUALS) NECESSARY TO PRESENT FAIRLY THE
RESULTS FOR THE INTERIM PERIODS PRESENTED.
5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table shows net sales and operating profit for
each of Ruddick Corporation's subsidiaries for the quarters
ended January 1, 1995 and January 2, 1994:
(In Thousands) Quarter Ended
January 1, January 2,
1995 1994
Net Sales
American & Efird $ 69,716 $ 63,720
Harris Teeter 423,875 387,991
Jordan Graphics 14,732 12,855
Total $ 508,323 $ 464,566
Operating Profit
American & Efird $ 6,647 $ 5,917
Harris Teeter 10,013 7,761
Jordan Graphics (46) (244)
Ruddick Investment 604 120
Total $ 17,218 $ 13,554
Consolidated sales of $508 million in the first quarter
of fiscal 1995 increased 9% over the $465 million reported
last year. Total operating profit of $17.2 million
increased 27% over last year. Net income of $8.3 million
increased 32% over the $6.3 million reported last year.
In the first quarter of fiscal 1995, American & Efird
sales of $69.7 million increased 9% over the $63.7 million
reported last year. U.S. industrial thread sales increased
in all of A&E's major domestic market segments during the
quarter. Operating profit of $6.6 million was up 12.3% over
the $5.9 million reported last year. Increased operating
profit resulted primarily from sales increases and slightly
higher margins, mainly the result of lower freight costs.
During the first quarter, a reduction in plant operating
schedules reduced inventories and negatively impacted
operating profit. Operating profits in the international
division were lower, primarily the result of dye house
relocation costs incurred in Hong Kong and Singapore.
Although sales were down in the consumer division, operating
profit increased as promotional expenses related to cabinet
thread were reduced dramatically.
6<PAGE>
Harris Teeter sales in the first fiscal quarter of 1995
of $424 million increased 9% over the $388 million reported
for the same period last year. Net sales for stores in
operation during both periods increased 8.4%. Sales
increases, driven by feature-oriented merchandising
programs, were achieved in all major markets. Operating
profit of $10.0 million was up 29% from the $7.8 million
reported for the comparable period last year. This increase
was the result of increased sales volume, a good product mix
of higher gross profit items and less expense associated
with new stores which adversely affected the quarter last
year. The Atlanta market, which continues to generate
impressive sales, became profitable in the quarter. The
Columbia, South Carolina market continues to show
improvement. In this market, two major remodels which were
recently completed and another which is set to begin in the
second fiscal quarter are expected to have positive impacts
on performance. There were 139 stores in operation at
January 1, 1995 compared to 141 in operation at January 2,
1994.
During the first fiscal quarter, Harris Teeter closed
two older, smaller stores and replaced them with openings of
two new, larger stores 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 first fiscal quarter of 1995 were $639 thousand. A
cumulative total of $721 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, half of the charges associated
with each store closing will be incurred in the year of the
closing and the balance, within four years thereafter.
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 $14.7 million in the first
quarter of fiscal 1995 increased 14.6% over the comparable
period last year. Sales gains were realized in all product
lines due in part to paper cost increases. An operating
loss of $46 thousand was recorded in the quarter compared to
a loss of $244 thousand the prior year quarter. Selling
price increases instituted in the quarter were not
sufficient to offset the erosion of margin resulting from
increased paper prices. Additionally, margins remain under
pressure due to continuing over capacity in the industry.
The unusually strong sales increase experienced in this
quarter will be difficult to maintain throughout the year.
Ruddick Investment reported an operating profit of $604
thousand in the quarter ended January 1, 1995, up from the
$120 thousand reported for the comparable quarter last year.
The increase was primarily the result of increased rental
income.
7<PAGE>
Capital Resources and Liquidity
Ruddick has an overall financial goal of earning at
least a 15% return on beginning shareholders' equity. At
the same time, Ruddick seeks to limit long-term debt so as
to constitute no more than 40% of capital employed, which
includes long-term debt and shareholders' equity. As of
January 1, 1995, this percentage was 30.4% and compares to
30.2% at January 2, 1994.
The Company's principal source of liquidity has been
revenue from operations. The Company also has the ability
to borrow up to an aggregate of $60 million under
established revolving lines of credit with three banks. The
maximum amount outstanding under these credit facilities
during the quarter ended January 1, 1995, was $60 million,
which amount 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
seven years for repayment, all borrowings under these
facilities are classified as long-term debt. The Company
also has the ability to borrow up to $30 million in
aggregate under short-term credit lines with three banks,
and $9.2 million was outstanding at quarter end. The
Company has completed negotiations with the same three banks
to increase the aggregate amount of the existing revolving
credit facility from $60 million to $100 million with an
initial term of five years. The parties have established a
closing date on the agreement in the second fiscal quarter
ending April 2, 1995.
Working capital of $96.3 million at January 1, 1995,
increased $10.1 million from October 2, 1994, largely the
result of reductions in accounts payable and accrued
expenses. The current ratio was 1.5 at January 1, 1995 and
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.
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.
8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit No. Description of Exhibit
11 Statement Re: Computation of
Per Share Earnings
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: February 14, 1995 /s/ R. N. Brigden
R. N. BRIGDEN
VICE PRESIDENT - FINANCE
(PRINCIPAL FINANCIAL OFFICER)
9
EXHIBIT 11
RUDDICK CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED
JANUARY 1, JANUARY 2,
1995 1994
NET INCOME PER SHARE COMPUTED AS FOLLOWS:
PRIMARY:
1. Net Income $ 8,266,000 $ 6,265,000
2. Weighted Average Common Shares
Outstanding 23,165,283 23,070,002
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 382,481
4. Incremental Shares Under Stock Options
Computed Under the Treasury Stock
Method Using the Average Market Price
of Issuer's Stock During the Periods 186,935 301,123
5. Weighted Average Common Shares and
Common Equivalent Shares Outstanding 23,352,218 23,753,606
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.35$ 0.26
FULLY DILUTED:
1. Net Income $ 8,266,000 $ 6,265,000
2. Weighted Average Common Shares
Outstanding 23,165,283 23,070,002
3. Incremental Shares Relating to $.56
Convertible Preference Shares - 382,481
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 186,935 314,947
5. Weighted Average Common Shares and
Common Equivalent Shares Outstand 23,352,218 23,767,430
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.35$ 0.26
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
RUDDICK CORPORATION
FINANCIAL DATA SCHEDULE FOR THE THREE
MONTHS ENDED 1/1/95
5-02(1) CASH AND CASH ITEMS $ 13,454
5-02(02) MARKETABLE SECURITIES $ 0
5-02(3)(a)(1) NOTES AND ACCOUNTS RECEIVABLE -
TRADE $ 64,054
5-02(4) ALLOWANCES FOR DOUBTFUL ACCOUNTS $ 1,253
5-02(6) INVENTORY $ 182,801
5-02(9) TOTAL CURRENT ASSETS $ 279,529
5-02(13) PROPERTY, PLANT AND EQUIPMENT $ 560,952
5-02(14) ACCUMULATED DEPRECIATION $ 251,577
5-02(18) TOTAL ASSETS $ 659,809
5-02(21) TOTAL CURRENT LIABILITIES $ 183,189
5-02(22) BONDS, MORTGAGES AND SIMILAR DEBT $ 124,597
5-02(28) PREFERRED STOCK-MANDATORY REDEMPTION $ 0
5-02(29) PREFERRED STOCK-NO MANDATORY REDEMPTION $ 0
5-02(30) COMMON STOCK $ 57,062
5-02(31) OTHER STOCKHOLDERS' EQUITY $ 240,148
5-02(32) TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 659,809
5-03(b)1(a) NET SALES OF TANGIBLE PRODUCTS $ 508,323
5-03(b)1 TOTAL REVENUES $ 508,323
5-03(b)2(a) COST OF TANGIBLE GOODS SOLD $ 380,385
5-03(b)2 TOTAL COSTS AND EXPENSES APPLICABLE
TO SALES AND REVENUES $ 110,720
5-03(b)3 OTHER COSTS AND EXPENSES $ 1,898
5-03(b)5 PROVISION FOR DOUBTFUL ACCOUNTS AND
NOTES $ 0
5-03(b)(8) INTEREST AND AMORTIZATION OF DEBT
DISCOUNT $ 2,637
5-03(b)(10) INCOME BEFORE TAXES AND OTHER ITEMS $ 12,683
5-03(b)(11) INCOME TAX EXPENSE $ 4,417
5-03(b)(14) INCOME/LOSS CONTINUING OPERATIONS $ 8,266
5-03(b)(15) DISCONTINUED OPERATIONS $ 0
5-03(b)(17) EXTRAORDINARY ITEMS $ 0
5-03(b)(18) CUMULATIVE EFFECT-CHANGES IN ACCOUNTING
PRINCIPLES $ 0
5-03(b)(19) NET INCOME OR LOSS $ 8,266
5-03(b)(20) EARNINGS PER SHARE-PRIMARY $ 0.35
5-03(b)(20) EARNINGS PER SHARE-FULLY DILUTED $ 0.35
</TABLE>
