FOR IMMEDIATE RELEASE
October 31, 2000
Contact:
Katharine W. Kenny
V.P. - Investor Relations
(704)372-5404
Ruddick Reports Fiscal 2000
Fourth Quarter and Year End Financial Results
Charlotte, N.C.- Ruddick Corporation (NYSE:RDK) today reported that unaudited
consolidated sales for the 52-week fiscal year ended October 1, 2000 increased
by 2.2% to $2.68 billion from $2.62 billion for the previous 53-week fiscal
year ended October 3, 1999. Adjusted for the additional week of sales in
fiscal 1999, sales increased by approximately 4.2%. Net income rose by .6%
in the 2000 fiscal year to $51.0 million, or $1.10 per share, from $50.7
million, or $1.08 per share in fiscal 1999. The increase in net income
resulted from increased operating profit at Harris Teeter, the Company's
regional supermarket subsidiary, partially offset by a decrease in operating
profit at American & Efird (A&E), the industrial thread subsidiary, and
reduced by higher income taxes for the Company.
Consolidated sales for the 13-week fourth quarter of fiscal 2000 decreased
by 2.6% to $672.2 million from $690.4 million in the 14-week fourth quarter
of fiscal 1999. Adjusting for the additional week in fiscal 1999, sales
increased by approximately 4.8%. Net income in the fourth quarter of $12.0
million, or $.26 per share was lower by 8.3% from $13.1 million or $.28 per
share in the prior fiscal year's fourth quarter. These results reflected
primarily the continuation of a very competitive sales environment for
both subsidiaries, weakness in certain apparel markets for customers of
A&E, higher income taxes, and the impact of one less week of sales in the
fourth quarter of fiscal 2000.
Harris Teeter's sales for the 52-week fiscal year 2000 grew by 2.6%, to
$2.33 billion from $2.27 billion in 53-week fiscal 1999 and comparable
store sales grew by .6%. Sales results for the fiscal year have been
impacted by the lack of inflation in the grocery sector and by competitive
activity in the Southeast, to which Harris Teeter has responded with
expanded promotional activities. Adjusting for the additional week in
fiscal 1999, total sales in fiscal 2000 grew by approximately 4.6%.
Thomas W. Dickson, President of Ruddick Corporation, stated "Weak comparable
store sales growth in the first half of the year improved in the second half,
however, the competitive landscape in the Southeast continues to be one of
the toughest in the country." Dickson said that Harris Teeter has
been disappointed with the uneven pace of sales growth in a number of its
non-core markets. "These are markets that we will focus on in fiscal 2001
and evaluate ways to achieve their greater sales potential," stated Dickson.
Harris Teeter's sales for the fourth quarter of fiscal 2000 decreased by
2.2%. Adjusting for the additional week in 1999, total sales increased
5.3% for the quarter. Comparable store sales increased by .6%.
Harris Teeter's gross margin on sales improved during fiscal 2000 and
certain productivity improvements were achieved at the store level. Harris
Teeter's operating profit for fiscal 2000 grew by 6.7%, from $55.4 million
in fiscal 1999 to $59.1 million in fiscal 2000. Operating profit for the
fourth quarter grew by 4.5% in fiscal 2000, from $13.3 million in fiscal 1999
to $13.9 million. Operating margin on sales in fiscal 2000 improved to
2.54% as compared to 2.44% in fiscal 1999, and improved to 2.38% in the
fourth quarter of fiscal 2000 from 2.23% in the fourth quarter of 1999.
Harris Teeter's operating profit decreased in the third and fourth quarter
of fiscal 1999 due to the reduced revenues and increased costs related to
the sale of 11 western Virginia stores and the opening of eight of 10 stores
it purchased from Kroger in the Winston-Salem and Greensboro, North Carolina
markets. In fiscal 2000, operating profit at Harris Teeter was effected by
additional promotional spending, increases in labor costs and higher than
expected waste. Even though labor rates increased this past year due to the
tight labor market in the southeastern U.S., Harris Teeter reported that it
was able to offset a portion of this by implementing engineered labor
standards in more departments. In addition, the designation of model stores
in each region will help store management better understand
and implement desired best operating practices and is expected to be a
positive factor in improving overall profitability.
Harris Teeter opened three new stores in the fourth quarter, for a total of
nine new stores during the year, including its first two stores in the
northern Virginia/Washington D.C. market. At year end, 156 stores were in
operation, compared to 147 at the end of fiscal 1999. Total store square
footage increased by 5.9%, from 5,930,991 square feet at the
end of fiscal 1999 to 6,278,753 square feet at the current year end.
A&E's sales fell by .5%, from $351.6 million in 53-week fiscal 1999 to
$349.9 million in the 52-week fiscal 2000. Adjusting for the additional
week in fiscal 1999, sales in 2000 would have increased by approximately
1% as compared to last year. "Fiscal 2000 was a very challenging year for
A&E," said Dickson. "Sales and profitability were impacted by
slowing retail sales, increased imports into the U.S. market and a
competitive pricing environment." A&E sales in the U.S. declined by 6.6%
with the continued shift of apparel production out of the country, but
foreign sales expanded by 14.2%, accounting in fiscal 2000 for approximately
34% of total A&E sales. In the fourth quarter, foreign sales accounted for
about 39% of total A&E sales. The United States-Caribbean Basin Trade
Partnership Act, which took effect in October, 2000, eliminates duty on
all apparel made of U.S. fabrics from U.S. yarns coming out of the Caribbean
Basin and is already having a positive impact on Latin American thread sales
by A&E. A&E anticipates that the bill will increase demand for U.S.
manufactured sewing thread in the region and bring more apparel sourcing
back to this hemisphere from Asia. Further, A&E management was pleased
with the sales expansion this year in its non-apparel, or filament, thread
sales, and the launch of its new embroidery thread product. "We believe
both products have strong future growth potential," said Dickson. A&E's
sales for the fourth quarter of fiscal 2000 decreased by 5.3%, although
adjusting for the additional week in fiscal 1999 would have resulted in a
slight increase.
A&E's operating profit decreased by 2.3%, to $47.5 million in fiscal 2000
from $48.6 million in the prior year. Operating profit for the fourth
quarter of fiscal 2000 decreased by 14.4%, from $13.5 million in fiscal
1999 to $11.6 million. Major contributors to this decrease in operating
profit included the impact of competitive pricing pressures on gross
margins and the rising costs of labor, raw materials and energy. These
factors were partially offset during much of the year by improved
productivity related to the consolidation of A&E's North Carolina dyeing
and finishing facilities and U.S. service centers, as well as the continued
improvement in many of its international operations. Dickson said "A&E
continues to build the infrastructure necessary to support our
international expansion, such as the current construction of a new dyeing
and finishing plant in southern China. This plant will allow us to better
and more efficiently service our customer base in Asia."
As Ruddick Corporation looks forward to fiscal 2001, management is
cautious in its expectations for modest increases in consumer spending in
the U.S. within at least the first half of the fiscal year. While industrial
thread sales in the U.S. are expected to continue to decline, A&E
anticipates the continuation in the coming year of growth in
foreign sales at a pace at least equal to that at which it has grown
recently. Total sales for A&E are expected to grow at a very modest rate.
Further, the competitive environment for supermarkets is not expected to
ease significantly within the foreseeable future. However, Harris Teeter
has put into place aggressive promotional and merchandising programs
which it expects will have a positive impact on comparable store sales,
as well as attract new customers from competitors that have closed in our
markets. If Harris Teeter achieves its comparable store sales growth plan
of about 1% and its new store opening plan of eleven new stores and one
replacement store, it expects to generate total sales growth in the mid
single digits.
Consistent execution at underperforming Harris Teeter stores of the
productivity initiatives that have been implemented and proven successful
will dictate the pace at which its margins could improve. A&E can improve
margins when generating a level of sales volume that allows for more
efficient operating schedules. The extent of softness in apparel, home
furnishings and other markets will obviously have an impact upon A&E
production levels. Further, pressure from retailers on manufacturers to
reduce prices continues to be an important factor in gross margin
improvement for the company. Given all the complex factors currently
impacting sales and costs at both subsidiaries, Ruddick Corporation
management remains conservative in its outlook and believes that earnings
improvement for fiscal 2001 will be difficult in the current environment.
Capital expenditures are expected to increase somewhat from fiscal 2000
levels in fiscal 2001 for A&E. A&E's capital expenditures are expected
to grow to approximately $31 million, as compared to $19.7 million in
fiscal 2000, and a greater portion of these expenditures will occur in the
first half of the year as the new China dyeing and finishing facility and
other currently underway modernization programs are completed. Harris
Teeter anticipates capital spending of approximately $76 million, as
compared to $99 million in fiscal 2000. If A&E and Harris Teeter meet
these capital spending plans, depreciation/amortization costs should
increase by approximately 9%.
This news release contains forward-looking statements that involve
uncertainties. A discussion of various important factors that could
cause results to differ materially from those expressed in such forward-
looking statements is shown in reports filed by the Company with the
Securities and Exchange Commission and include: generally adverse
economic and industry conditions; changes in the competitive environment;
economic or political changes in countries where the Company operates;
the passage of future adverse tax legislation, or any negative regulatory
or judicial position which prevails; management's ability to predict the
adequacy of the Company's liquidity to meet future requirements; changes
in the Company's capital expenditures and Harris Teeter store openings
and closings; and the extent and speed of the successful execution of
strategic initiatives in each of the operating companies.
Ruddick Corporation is a holding company which operates two subsidiaries:
Harris Teeter, Inc., a regional chain of supermarkets in six southeastern
states and American & Efird, Inc., a leading manufacturer and distributor
of industrial sewing thread.
Selected information regarding Ruddick Corporation and its subsidiaries
is attached. For more information on Ruddick Corporation, visit its web
site at www.ruddickcorp.com.
Consolidated
Harris Teeter A&E Ruddick Corp.
Operating Statistics+
October 1, 2000
(Dollars in millions)
Fourth Qtr. 2000
Earnings before interest, taxes, depre-
ciation and amortization (EBITDA) $ 28.7 $ 15.8 $ 43.9
Depreciation/amortization 14.8 4.6 19.8
Capital expenditures 24.6 8.2 32.8
Working capital increase/(decrease (11.3) 2.0 (17.0)
Total assets 665.3 304.1 1,021.0
Capital employed* 456.6 215.6 712.1
Fiscal Year 2000
Earnings before interest, taxes, depre-
ciation and amortization (EBITDA) $116.2 $ 65.2 $ 176.9
Depreciation/amortization 57.0 18.6 77.0
Capital expenditures 99.0 19.7 118.7
Working capital increase/(decrease) (5.1) 5.4 18.2
Total assets 665.3 304.1 1,021.0
Capital employed* 456.6 215.6 712.1
+Due to the activities of Ruddick's corporate headquarters, the operating
statistics by subsidiary are not additive.
*Long-term debt including current portion, capital leases, minority
interests and shareholders' equity.
Harris Teeter Stores
Open at 10/3/99: 147
Opened during fiscal 2000:
1st quarter 2 (Atlanta, Ga., Arlington, Va.)
2nd quarter 2 (Atlanta, Ga.)
3rd quarter 2 (Atlanta, Ga., Norfolk, Va.)
4th quarter 3 (Annandale, Va., Huntersville, NC,
Atlanta, Ga.)
NO CLOSINGS
3 major remodels, 12 minor remodels
Open at 10/1/00: 156
0penings during fiscal 2001:
1st quarter (actual) 4 (Charlotte, NC, Nashville, Tn.,
Atlanta, Ga., Amelia Island, Fl.)
2nd quarter (estimated) 3
3rd quarter (estimated) 2
(includes replacement store)
4th quarter (estimated) 3
1 CLOSING (1)
(replaced in 3rd quarter)
5 major remodels, 13 minor
remodels
Estimated Open at 9/30/01 167
RUDDICK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
October 1, October 3,
2000 1999
ASSETS
Curent assets
Cash and temporary cash investments $ 9,527 $ 14,467
Accounts receivable, net 73,889 76,827
Inventories 248,623 223,694
Other 31,205 43,886
__________ __________
Total current assets 363,244 358,874
Property, net of accumulated depreciation 580,529 539,557
Investments and other assets 77,245 71,683
___________ __________
Total Assets $1,021,018 $970,114
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $800 $177
Current portion of long-term debt 2,944 429
Accounts payable and accrued expenses 208,634 223,276
Income taxes payable 12,680 14,986
___________ __________
Total current liabilities 225,058 238,868
Long-term debt 224,996 198,532
Deferred income taxes and liabilities 86,847 84,305
Minority interest 8,458 4,726
Shareholders' equity 475,659 443,683
___________ __________
Total Liabilities and Equity $1,021,018 $970,114
=========== ==========
RUDDICK CORPORATION
SUMMARY OF SALES AND EARNINGS
(Unaudited)
(In thousands)
Quarter Ended Twelve Months Ended
------------------------ -------------------------
October 1, October 3, October 1, October 3,
2000 1999 2000 1999
------------ ---------- ------------- -----------
Net Sales
American & Efird $ 88,816 $ 93,826 $ 349,925 $ 351,618
Harris Teeter 583,338 596,536 2,332,908 2,273,156
------------ ----------- ------------- -----------
Total 672,154 690,362 2,682,833 2,624,774
------------ ----------- ------------- -----------
Gross Profit
American & Efird 25,841 29,307 103,885 106,093
Harris Teeter 162,539 165,225 648,695 621,284
------------ ----------- ------------- ------------
Total 188,380 194,532 752,580 727,377
------------ ----------- -------------- ------------
Operating Profit
American & Efird 11,572 13,522 47,478 48,617
Harris Teeter 13,909 13,313 59,146 55,438
------------ ----------- -------------- ------------
Total 25,481 26,835 106,624 104,055
Other Costs and Deductions
Interest expense, net 3,945 3,536 15,487 14,686
Other administrative
expense, net 1,008 2,032 5,861 7,486
Minority interest 372 164 883 494
------------ ------------ ------------ ------------
Total 5,325 5,732 22,231 22,666
------------ ------------ ------------ ------------
Income before taxes 20,156 21,103 84,393 81,389
Taxes 8,162 8,028 33,391 30,675
------------ ------------ ------------ -------------
Net Income $11,994 $13,075 $51,002 $50,714
============ ============ ============ =============
Earnings Per Share - Basic $.26 $.28 $1.10 $1.09
Weighted Average Number
of Basic Shares
Outstanding 46,217 46,439 46,274 46,512
Earnings Per Share - Diluted $.26 $.28 $1.10 $1.08
Weighted Average Number
of Diluted Shares
Outstanding 46,251 46,656 46,350 46,747
