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 December 31, 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 o (I.R.S. Employer
incorporation or organi Identification No.)
2000 Two First Union Center
Charlotte, North Carolina 28282
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including (704) 372-5404
area code
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 2, 1996
Common Stock 46,391,758 shares
RUDDICK CORPORATION
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS -
DECEMBER 31, 1995 AND OCTOBER 1, 1995 2
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME - THREE MONTHS ENDED
DECEMBER 31, 1995 AND JANUARY 1, 1995 3
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - THREE MONTHS ENDED
DECEMBER 31, 1995 AND JANUARY 1, 1995 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
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
December 31, OCTOBER 1,
ASSETS 1995 1995
(Unaudited) (Unaudited)
___________ ___________
CURRENT ASSETS:
Cash and Temporary Cash Investments $ 11,465 $ 18,959
Accounts Receivable, Net 55,140 57,906
Inventories 183,906 177,395
Other 29,791 32,131
Net Assets of Discontinued Operations 13,224 11,712
___________ ___________
Total Current Assets 293,526 298,103
PROPERTY, NET 354,231 344,368
INVESTMENTS AND OTHER ASSETS 77,457 71,496
___________ ___________
Total $ 725,214 $ 713,967
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 5,926 $ 5,852
Current Portion of Long-Term Debt 9,166 9,192
Accounts Payable 128,638 150,028
Income Taxes Payable 3,046 (253)
Other Accrued Liabilities 46,990 59,567
___________ ___________
Total Current Liabilities 193,766 224,386
___________ ___________
LONG-TERM DEBT 156,271 119,760
DEFERRED LIABILITIES 53,734 53,585
SHAREHOLDERS' EQUITY:
Capital Stock - Common 54,923 54,816
Retained Earnings 268,258 262,921
Cumulative Translation Adjustments (1,738) (1,501)
___________ ___________
Shareholders' Equity 321,443 316,236
___________ ___________
Total $ 725,214 $ 713,967
=========== ===========
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except share and per share data)
THREE MONTHS ENDED
_________________________
December 31, January 1,
1995 1995
(Unaudited) (Unaudited)
___________ ___________
NET SALES
American & Efird $ 67,114 $ 69,716
Harris Teeter 462,555 423,875
___________ ___________
Total 529,669 493,591
___________ ___________
OPERATING PROFIT
American & Efird 4,952 6,647
Harris Teeter 12,071 10,013
___________ ___________
Total 17,023 16,660
___________ ___________
OTHER COSTS AND DEDUCTIONS
Interest expense, net 3,097 2,637
Other expense 2,378 1,294
___________ ___________
Total 5,475 3,931
___________ ___________
Income from continuing operations
before income taxes 11,548 12,729
Income taxes 3,505 4,431
___________ ___________
Income from continuing operations 8,043 8,298
Income (loss) from operations of
discontinued business forms
segment (less applicable
income taxes of $47 and $(14)) 76 (32)
___________ ___________
Net Income $ 8,119 $ 8,266
=========== ===========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING:
Primary 46,578,843 46,704,435
Fully Diluted 46,578,843 46,704,435
NET INCOME PER SHARE - PRIMARY AND
FULLY DILUTED:
Income from continuing operations $.17 $.17
Income (loss) from discontinued operations - -
___________ ___________
NET INCOME PER SHARE $.17 $.17
=========== ===========
DIVIDENDS DECLARED PER SHARE - Common $.06 $.03
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
THREE MONTHS ENDED
_________________________
December 31, January 1,
1995 1995
(Unaudited) (Unaudited)
___________ ___________
CASH FLOW FROM INCOME $ 19,763 $ 19,480
Decrease (Increase) in
Current Assets (1,947) (2,607)
Increase (Decrease) in
Current Liabilities (30,518) (6,778)
___________ ___________
NET CASH PROVIDED BY
OPERATING ACTIVITIES (12,702) 10,095
___________ ___________
CASH USED IN DISCONTINUED ACTIVITIES (1,297) (1,821)
INVESTING ACTIVITIES
Purchase of Assets (26,593) (24,482)
Cash Proceeds from Sale of Assets 623 33
Company Owned Life Insurance, Net 618 (2,163)
Other, Net (2,616) (1,016)
___________ ___________
NET CASH USED IN INVESTING ACTIVITIES (27,968) (27,628)
___________ ___________
FINANCING ACTIVITIES
Proceeds (Repayments) of
Long-Term Borrowings 37,900 22,200
Payment of Principal on Long-Term Debt (1,346) (1,281)
Dividends (2,783) (1,620)
Other, Net 702 (1,022)
___________ ___________
NET CASH PROVIDED BY
FINANCING ACTIVITIES 34,473 18,277
___________ ___________
INCREASE (DECREASE) IN BALANCE
SHEET CASH (7,494) (1,077)
BALANCE SHEET CASH AT BEGINNING
OF PERIOD 18,959 14,531
___________ ___________
BALANCE SHEET CASH AT END OF PERIOD $ 11,465 $ 13,454
=========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 1,546 $ 2,141
Income Taxes $ 213 $ 1,329
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.
ON JANUARY 23, 1996, THE ASSETS OF JORDAN GRAPHICS, INC. WERE SOLD
TO THE REYNOLDS AND REYNOLDS COMPANY. THE REVENUES OF THE DISCONTINUED
OPERATION FOR THE FISCAL YEAR TO DATE OF SALE WERE $17.3 MILLION. JORDAN
GRAPHICS RETAINED TITLE TO TRADE ACCOUNTS RECEIVABLE, LAND AND BUILDINGS,
WHICH ASSETS HAVE BEEN VALUED AT THE LOWER OF COST OR NET REALIZABLE VALUE.
THE DISPOSITION IS EXPECTED TO HAVE NO SIGNIFICANT IMPACT ON THE REPORTED
CONSOLIDATED EARNINGS OR THE FINANCIAL CONDITION OF RUDDICK CORPORATION.
THE BUSINESS FORMS SEGMENT IS REPORTED AS DISCONTINUED OPERATIONS.
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
December 31, 1995 and January 1, 1995:
(In Thousands) Quarter Ended
December 31, January 1,
1995 1995
Net Sales
American & Efird $ 67,114 $ 69,716
Harris Teeter 462,555 423,875
_________ _________
Total $ 529,669 $ 493,591
_________ _________
Operating Profit
American & Efird $ 4,952 $ 6,647
Harris Teeter 12,071 10,013
_________ _________
Total $ 17,023 $ 16,660
_________ _________
Consolidated sales of $530 million in the first quarter of
fiscal 1996 increased 7% over the $494 million reported in the
comparable period last year. Total operating profit of $17
million increased 2% over the prior year quarter. Net income of
$8.1 million was slightly lower than the $8.3 million reported
last year.
Fully diluted and primary earnings per share were $.17 in
both the first quarter of fiscal 1996 and the prior year.
In the first quarter of fiscal 1996, American & Efird sales
of $67.1 million decreased 4% over the $69.7 million reported for
the comparable period last year. The sales decline was driven by
the decrease in U.S. industrial thread sales as a result of the
soft market in apparel sales at retail. Operating profit of $5.0
million declined 25% from the $6.6 million reported last year.
In response to the sales decline, A&E reduced operating schedules
to control inventories, which action had an adverse impact on
operating profit. International sales and operating profit
increased over the prior year while consumer products' sales
declined. A&E expects poor business conditions to continue in
its industry due to weakness in retail apparel sales. A&E will
continue its efforts to gain market share through quality
improvement and to reduce costs.
Harris Teeter sales in the first fiscal quarter of 1996 of
$462.6 million increased 9% over the $423.9 million reported for
the same period last year. Net sales for stores in operation
during both periods increased 4.6%. Sales increases were
achieved in all major markets and were driven by very strong
demand in the holiday periods of Thanksgiving and Christmas.
Operating profit of $12.1 million was up 21% from the $10.0
million reported for the comparable period last year. The
operating profit improvement was the result of increased sales
volume and a favorable product mix of higher gross profit items,
while operating expenses remainder under control. During the
quarter, one new store was opened and two stores were closed
leaving 138 stores in operation at December 31, 1995 compared to
139 in operation at January 1, 1995.
During the first fiscal quarter, Harris Teeter closed one
older, smaller store and replaced it with a new, larger store
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 in this quarter
against the reserve were $162 thousand. A cumulative total of
$1.7 million 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.
On January 24, 1996, Ruddick Corporation announced the
completion of the sale of the assets of Jordan Graphics, Inc. to
The Reynolds and Reynolds Company. Jordan Graphics retained
title to approximately $7.3 million of trade accounts receivable,
net of reserves for uncollectible balances, which are expected to
be collected within the next several months. Management believes
applicable reserves to be adequate. Jordan also retained title
to land and buildings which were plant sites in Charlotte, N.C.
and Baltimore, Md. The Charlotte site has been leased to
Reynolds on a 10-year term, while the Baltimore site is held for
sale. Substantially all other assets of Jordan were sold. The
disposition is expected to have no significant impact on the
reported consolidated earnings or the financial condition of
Ruddick. The business forms segment is reported as discontinued
operations.
Ruddick Investment Company has redefined its business.
Emphasis will be on the development of selected sites for Harris
Teeter stores. Venture capital investment holdings will continue
to be managed but future equity investment will be limited. Due to
continued growth of the A&E and Harris Teeter businesses, Ruddick
Investment's relative size to the consolidated company has declined.
As a result, Ruddick Investment will no longer be considered an
operating company. Effective with fiscal 1996, the activities of
Ruddick Investment will be combined with those of the Parent
Company in "other administrative expense" for financial
reporting.
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 December 31, 1995, this percentage
was 34.0% compared to 29.0% at October 1, 1995.
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 December 31, 1995 was $100 million, which amount was
outstanding at quarter end. The majority of additional
borrowings under Ruddick's revolving credit facilities were used
for capital expenditures. Also significant was a reduction in
accounts payable. 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. The Company also has the ability to borrow up to $30
million in aggregate under short-term credit lines with three
banks, and $650 thousand was outstanding at quarter end.
Working capital of $99.8 million at December 31, 1995,
increased $26.0 million from October 1, 1995, largely the result
of decreases in accounts payable. The current ratio was 1.5 at
December 31, 1995 and 1.3 at October 1, 1995.
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.
The level of capital expenditures incurred in the first
quarter may be reasonably indicative of those expected quarterly
for the balance of the year. Management expects that internally
generated funds, supplemented by available borrowing capacity,
will be adequate to finance such expenditures.
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, 1996 /s/R.N. Brigden
R. N. BRIGDEN
VICE PRESIDENT - FINANCE
(PRINCIPAL FINANCIAL OFFICER)
RUDDICK CORPORATION EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED
December 31, January 1,
1995 1995
_______________ ___________
NET INCOME PER SHARE COMPUTED
AS FOLLOWS:
PRIMARY:
1. Net Income $ 8,119,000 $ 8,266,000
============ ==========
2. Weighted Average Common Shares
Outstanding 46,386,590 46,330,565
3. Incremental Shares Under Stock
Options Computed Under the
Treasury Stock Method Using
the Average Market Price of
Issuer's Stock During the
Periods 192,253 373,870
______________ ____________
4. Weighted Average Common Shares
and Common Equivalent Shares
Outstanding 46,578,843 46,704,435
============== ===========
5. Net Income Per Share (Item 1
divided by Item 4) $ .17 $ .17
============== ===========
FULLY DILUTED:
1. Net Income $ 8,119,000 $ 8,266,000
============== ==========
2. Weighted Average Common Shares
Outstanding 46,386,590 46,330,565
3. Incremental Shares Under Stock
Options Computed Under the
Treasury Stock Method Using
the Average Market Price of
Issuer's Stock During the
Periods 192,253 373,870
______________ ____________
4. Weighted Average Common Shares
and Common Equivalent Shares
Outstanding 46,578,843 46,704,435
============== ===========
5. Net Income Per Share (Item 1
divided by Item 4) $ .17 $ .17
============== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RUDDICK CORPORATION
Financial Data Schedule for the three months ended 12/31/95
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 11,465,000
<SECURITIES> 0
<RECEIVABLES> 56,376,000
<ALLOWANCES> 1,236,000
<INVENTORY> 183,906,000
<CURRENT-ASSETS> 293,526,000
<PP&E> 610,159,000
<DEPRECIATION> 256,441,000
<TOTAL-ASSETS> 725,214,000
<CURRENT-LIABILITIES> 193,766,000
<BONDS> 156,271,000
<COMMON> 54,923,000
0
0
<OTHER-SE> 266,520,000
<TOTAL-LIABILITY-AND-EQUITY> 725,214,000
<SALES> 529,669,000
<TOTAL-REVENUES> 529,669,000
<CGS> 391,161,000
<TOTAL-COSTS> 512,646,000
<OTHER-EXPENSES> 2,378,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,097,000
<INCOME-PRETAX> 11,548,000
<INCOME-TAX> 3,505,000
<INCOME-CONTINUING> 8,043,000
<DISCONTINUED> 76,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,119,000
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
