EX-99 3 rudexhibit99.htm Exhibit 99.1
                                                                           Exhibit 99.1
 
 

Ruddick Corporation Reports Third Quarter Fiscal 2003 Results

CHARLOTTE, N.C., July 31 /PRNewswire-FirstCall/ -- Ruddick Corporation (NYSE: RDK) today reported that consolidated sales for the third fiscal quarter ended June 29, 2003 rose 2.8% to $685 million from $666 million a year earlier. For the nine months ended June 29, 2003, sales of $2.05 billion were 3.5% above the $1.98 billion for the comparable period last year. The increase in sales during the quarter, and fiscal year to date, was attributable to the opening of new supermarkets and comparable store sales increases in the Harris Teeter subsidiary offset to some extent during the quarter ended June 29, 2003 by sales declines at the Company's American & Efird ("A&E") textile subsidiary.

The Company reported consolidated net income of $16.1 million, or $0.35 per diluted share, in the third fiscal quarter of 2003 compared to net income of $16.5 million, or $0.35 per diluted share, in the prior year third quarter. For the first nine months of fiscal 2003 consolidated net income was $43.5 million, or $0.94 per diluted share, compared to $35.7 million, or $0.77 per diluted share, in the same period of fiscal 2002.

The prior year nine month period was affected by a $7.9 million pre-tax exit and impairment charge ($4.8 million after tax benefits, or $0.10 per diluted share), related to the consolidation of two industrial thread dyeing and finishing operations at A&E in the second quarter of fiscal 2002. The fiscal 2002 third quarter included $710,000 ($431,000 after tax, or $0.01 per diluted share) of credits related to favorable experience of actual charges incurred compared to charges originally estimated and recorded in 2001 for the sale of 26 Harris Teeter stores.

For the third quarter of fiscal 2003, Harris Teeter sales rose 4.0% to $608.1 million from $584.8 million last year. The increase in sales was attributable to sales from the opening of new stores (partially offset by the closing of older stores) and a 1.69% increase in comparable store sales for the third quarter of fiscal 2003. For the first nine months of fiscal 2003, sales rose 3.7% to $1.83 billion from $1.76 billion in the same period of fiscal 2002. Comparable store sales increased 0.77% for the first nine months of fiscal 2003.

Operating profit at Harris Teeter of $23.1 million for the third quarter of fiscal 2003 increased 0.9% from the $22.9 million in the previous year. For the nine months ended June 29, 2003 operating profit was $69.2 million, an increase of 5.7% from $65.5 million for the comparable period last year. Operating margin on sales for the quarter was 3.80% compared to 3.91% for the comparable period in the prior year. For the first nine months of fiscal 2003 the operating margin improved to 3.79% from 3.72% in fiscal 2002. Comparison of the operating margin on sales was impacted by the previously mentioned prior year credits of $710,000 which was 0.12% of sales for the third quarter of fiscal 2002 and 0.04% of sales for the first nine months of fiscal 2002. Operating profit improvements were achieved primarily through the continued growth in total and comparable store sales. Increased promotional spending to drive sales was offset primarily by lower costs associated with store closings.

Thomas W. Dickson, President and Chief Executive Officer of Ruddick commented that, "We are very pleased with the continued trend in positive comparable store sales growth, despite the fiercely competitive nature of the retail industry. We continue to improve overall sales while remaining focused on our business strategy of providing excellent customer service and providing value to our customers. Our ongoing promotions and new programs such as Harris Teeter Rancher(TM) beef have been very successful in generating sales in what continues to be a very competitive grocery store environment."

At the end of the quarter, Harris Teeter operated 139 stores. Management plans to open two additional stores in the fourth quarter for a total of four stores for fiscal 2003. At the present time, Management expects to open seven new stores and replace one existing store during fiscal 2004. On a routine basis the company periodically reviews its business strategy and evaluates its existing store operations, and may from time-to-time close or divest older or under-performing stores.

A&E's sales of $76.9 million in the 2003 fiscal third quarter declined 5.6% from the $81.5 million for the same quarter last year. The decline in sales for the quarter resulted from a 15.6% decline in U.S. sales offset by a 5.1% increase in foreign sales over the prior year period. A&E's sales of $222.2 million for the first nine months of fiscal 2003 increased 2.0% from the prior year period when sales were $217.9 million. Foreign sales represented approximately 54% of the total sales for the quarter and approximately 52% of the total sales for the first nine months. Operating profit for the third quarter of fiscal 2003 of $5.4 million decreased 36.2% from $8.4 million in the prior year period. For the nine months ended June 29, 2003, operating profit increased to $11.3 million compared to operating profit of $4.8 million last year, which included exit and impairment charges. As discussed above, the operating profit of A&E was reduced by a $7.9 million pre-tax charge recorded in the second quarter of fiscal 2002 due to the consolidation of two U.S. industrial thread dyeing and finishing operations at A&E.

Dickson commented on the 15.6% decline in U.S. sales during the quarter, "The overall softness of the U.S. economy, poor retail sales of apparel, and inflated retail inventories negatively impacted our U.S. customer base. Lower sales volumes and weaker manufacturing schedules in the U.S., plus rising raw material costs and fierce competition contributed to the profit decline. The domestic market outlook remains weak. There is currently no sign of recovery from the deterioration of domestic production schedules that occurred during the third quarter."

The trend of customers shifting buying and production out of the United States has continued. Dickson discussed additions to A&E's foreign capacity, "On June 1, 2003 we successfully completed the establishment of a 50/50 joint venture with Ningbo Veken Elite Group to manufacture, distribute, and sell sewing thread for the domestic China market as well as exports. Veken is one of the largest thread companies in China with sales of approximately $34 million in 2002. The assets, sales, and staff were successfully transferred to the new joint venture company, Huamei Thread Company Limited."

Dickson added, "In addition to China, we expanded our international presence with a sales and distribution operation in Nicaragua. Also, our joint venture in Bangladesh began construction on a new dyehouse to support our growing business. The dyehouse is expected to be operational early in fiscal 2004."

Dickson continued, "The market outlook remains weak domestically. Customers continue to reduce production schedules to control inventories in this weak retail environment and we are not expecting much improvement in our operating schedules for the fourth quarter. Management is focused on executing our business plans in China, expanding sales worldwide, and optimizing costs and manufacturing capacities."

During the third fiscal quarter of 2003, depreciation and amortization for Ruddick on a consolidated basis totaled $19.3 million and capital expenditures totaled $18.5 million. Harris Teeter spent $15.4 million in capital expenditures during the quarter, and $38.7 million for the first nine months of fiscal 2003. Harris Teeter estimates total capital spending for fiscal 2003 of approximately $64.8 million compared to spending of $66.6 million in fiscal 2002. Harris Teeter has recognized opportunities to invest in the development of certain of its new stores. Such development capital spending was minimal during the third quarter of fiscal 2003 but was $9.5 million for the first nine months. A total of $20.5 million of such investment is expected for this fiscal year. The anticipated increase in expenditures primarily reflects Harris Teeter's focus on new store growth opportunities and store remodels in its core markets. A&E's capital expenditures were $3.1 million in the quarter and $6.5 million year to date. A&E expects total fiscal year 2003 capital spending of approximately $12.3 million, compared to $7.8 million last year.

In the attached "Summary of Sales and Earnings," the Company has reclassified certain corporate administrative expenses of the holding company from "Other Expense (Income)" to "Selling, General and Administrative Expenses" for the current and prior year periods presented. The reclassified amounts are captioned "Corporate." Such reclassification had the effect of reducing consolidated operating profit by $1.3 million and $3.1 million for the quarters ended June 29, 2003 and June 30, 2002, respectively and $4.0 million and $6.3 million for the nine months ended in 2003 and 2002, respectively. The reclassification had no effect on consolidated revenues, cost of sales, net income, net income per share, business segment operating profit or the financial position and cash flows of the Company.

This news release may contain 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 federal, state or local regulations affecting the Company; the passage of future 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 store openings and closings; the ability to predict the required contributions to the Company's pension plan; and successful execution of initiatives designed to increase sales and profitability.

Ruddick Corporation is a holding company with two primary operating 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 with global operations.
 
 
RUDDICK CORPORATION
SUMMARY OF SALES AND EARNINGS
(In thousands, except per share data)
QUARTER ENDED
NINE MONTHS ENDED
June 29,
June 30, 
June 29,
June 30, 
2003
2002
2003
2002
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
NET SALES
   American & Efird
$ 76,919 
$ 81,517 
$ 222,164 
$ 217,899 
   Harris Teeter
608,093 
584,819 
1,826,428 
1,761,092 
       Total
685,012 
666,336 
2,048,592 
1,978,991 
COST OF SALES
   American & Efird
56,547 
58,598 
165,672 
162,930 
   Harris Teeter
434,519 
412,309 
1,301,089 
1,254,698 
       Total
491,066 
470,907 
1,466,761 
1,417,628 
GROSS PROFIT
   American & Efird
20,372 
22,919 
56,492 
54,969 
   Harris Teeter
173,574 
172,510 
525,339 
506,394 
       Total
193,946 
195,429 
581,831 
561,363 
SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES
   American & Efird
15,005 
14,505 
45,146 
42,347 
   Harris Teeter
150,481 
150,337 
456,135 
441,630 
   Corporate
1,328 
3,091 
3,988 
6,278 
       Total
166,814 
167,933 
505,269 
490,255 
EXIT AND IMPAIRMENT CHARGES
   (CREDITS)		        
   American & Efird
- 
- 
- 
7,858 
   Harris Teeter
- 
(710)
- 
(710)
       Total
- 
(710)
- 
7,148 
OPERATING PROFIT (LOSS)
   American & Efird
5,367 
8,414 
11,346 
4,764 
   Harris Teeter
23,093 
22,883 
69,204 
65,474 
   Corporate
(1,328)
(3,091)
(3,988)
(6,278)
       Total
27,132 
28,206 
76,562 
63,960 
OTHER EXPENSE (INCOME)
   Interest expense
3,187 
3,535 
9,345 
9,447 
   Interest income
(428)
(463)
(905)
(1,067)
   Investment gains
(306)
(289)
(483)
(241)
   Minority interest
467 
339 
1,077 
507 
       Total
2,920 
3,122 
9,034 
8,646 
INCOME BEFORE TAXES
24,212 
25,084 
67,528 
55,314 
Income Taxes
8,088 
8,605 
24,010 
19,597 
NET INCOME
$ 16,124 
$ 16,479 
$ 43,518 
$ 35,717 
WEIGHTED AVERAGE NUMBER OF
  SHARES OF 		        
COMMON STOCK OUTSTANDING --        
Weighted Average Number of Basic
   Shares Outstanding
46,306
46,424
46,444
46,388
Weighted Average Number of Diluted
   Shares Outstanding
46,372
46,611
46,506
46,565
NET INCOME PER SHARE --
Earnings Per Share - Basic
$ 0.35
$ 0.35
$ 0.94
$ 0.77
Earnings Per Share - Diluted
$ 0.35
$ 0.35
$ 0.94
$ 0.77
DIVIDENDS DECLARED PER SHARE -
   Common
$ 0.09
$ 0.09
$ 0.27
$ 0.27
RUDDICK CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)        
June 29,
June 30,
2003
2002
(Unaudited)
(Unaudited)
ASSETS
        
CURRENT ASSETS:        
  Cash and Cash Equivalents
$ 36,716 
$ 84,577 
    
  Temporary Investments
56,881 
- 
    
  Accounts Receivable, Net
73,365 
68,731 
    
  Inventories
233,620 
224,365 
    
  Other Current Assets
35,499 
41,849 
    
       Total Current Assets
436,081 
419,522 
PROPERTY, NET
516,870 
536,673 
    
         
INVESTMENTS
30,814 
12,686 
    
         
OTHER ASSETS
63,502 
59,530 
    
       Total Assets
$ 1,047,267 
$ 1,028,411 
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
CURRENT LIABILITIES:        
   Notes Payable
$ 2,633 
$ 3,665 
    
   Current Portion of Long-Term Debt
1,213 
701 
    
   Dividends Payable
3,397 
3,389 
    
   Accounts Payable
146,591 
148,823 
    
   Income Taxes Payable
3,485 
16,917 
    
   Other Accrued Liabilities
87,027 
91,034 
    
       Total Current Liabilities
244,346 
264,529 
LONG-TERM DEBT
188,247 
188,761 
    
         
DEFERRED INCOME TAXES
33,851 
44,889 
    
PENSION LIABILITIES
50,549 
19,852 
    
OTHER LIABILITIES
35,024 
32,151 
    
         
MINORITY INTEREST
8,603 
7,729 
    
         
SHAREHOLDERS' EQUITY:        
   Capital Stock - Common
47,223 
50,872 
    
   Retained Earnings
476,931 
433,854 
    
   Accumulated Non-Owner Changes in 
       Equity
(37,507)
(14,226)
    
          Shareholders' Equity
486,647 
470,500 
         Total Liabilities and Shareholders'
           Equity
 
 
$1,047,267 
$1,028,411 

RUDDICK CORPORATION
OPERATING STATISTICS
June 29, 2003
(Dollars in millions)
 
 
American & Efird Harris Teeter Consolidated
    Ruddick 
Corporation
Depreciation and Amortization:
    3rd Quarter      $ 4.6      $14.1     $19.3
    Year to Date        13.5        43.6       58.3
Capital Expenditures:
    3rd Quarter      $ 3.1      $15.4      $18.5
    Year to Date         6.5        38.7        45.2
Harris Teeter Store Count:
Quarter
Year-to-Date
     Beginning number of stores
142
143
     Opened during the period
1
2
     Closed during the period
(4)
(6)
     Stores in operation at end of period
139
139

 
  Note: Due to the activities of Ruddick's corporate headquarters, the
operating statistics by subsidiary are not necessarily additive.
 
 

Contact:
John Woodlief
Vice President - Finance and Chief Financial Officer
704-372-5404

SOURCE Ruddick Corporation