Ruddick Corporation Reports Fiscal 2009 Results

http://www.businesswire.com/news/home/20091029006423/en

CHARLOTTE, N.C.--(Business Wire)--
Ruddick Corporation (NYSE:RDK) (the "Company") today reported that consolidated
sales for fiscal 2009 increased by 2.1% to $4.08 billion from $3.99 billion in
fiscal 2008. Consolidated sales for the fiscal fourth quarter ended September
27, 2009 increased by 2.1% to $1.05 billion from $1.03 billion in the fourth
quarter of fiscal 2008. The increase in consolidated sales for the year and
quarter was attributable to sales increases at Harris Teeter, the Company`s
supermarket subsidiary, that were partially offset by sales declines at American
& Efird ("A&E"), the Company`s sewing thread and technical textiles subsidiary.

The Company reported that consolidated net income for fiscal 2009 was $86.0
million, or $1.78 per diluted share, as compared to $96.8 million, or $2.00 per
diluted share reported for fiscal 2008. For the fiscal fourth quarter ended
September 27, 2009, consolidated net income was $23.6 million, or $0.49 per
diluted share, as compared to $24.8 million, or $0.51 per diluted share, in the
fourth quarter of fiscal 2008.

Fiscal 2009 results include non-cash charges totaling $9.9 million ($6.1 million
after tax benefits, or $0.13 per diluted share) related to goodwill and
long-lived asset impairments recognized by A&E in the third quarter of fiscal
2009. As previously disclosed, the impairment charges related to A&E`s U.S.
operations and consisted of $7.7 million for the write-off of all of the
goodwill associated with acquisitions made in 1995 and 1996 and $2.2 million for
the write-down of long-lived assets.

Consolidated net income for fiscal 2009 decreased from fiscal 2008 as a result
of the non-cash charges discussed above, operating losses at A&E and a decrease
in operating profit at Harris Teeter as compared to the prior year. The decrease
in consolidated net income for the year was partially offset by the previously
disclosed adjustment recorded in the second quarter of fiscal 2009 that reduced
income taxes by approximately $1.6 million for the reversal of valuation
allowances associated with foreign tax credits and reduced interest expense in
fiscal 2009.

Operating profit for both subsidiaries improved in the fourth quarter of fiscal
2009 over the fourth quarter of fiscal 2008. Consolidated income before income
taxes increased by $1.7 million in the fourth quarter of fiscal 2009 over the
fourth quarter of fiscal 2008 due to operating profit increases of $807,000 at
Harris Teeter and $805,000 at A&E, and reduced interest expense. The decrease in
consolidated net income for the fourth quarter of fiscal 2009 over the prior
year was due to an increased effective income tax rate in fiscal 2009, when
compared to the prior year. As previously disclosed, income tax expense for
fiscal 2008 included refund claims of approximately $2.4 million associated with
A&E`s foreign operations.

Harris Teeter sales for fiscal 2009 increased by 4.4% to $3.83 billion from
$3.66 billion in fiscal 2008. Sales for the fourth quarter of fiscal 2009 were
$984.5 million, an increase of 3.8% from the $948.8 million in the fourth
quarter of fiscal 2008. The increase in sales for both the year and fiscal
fourth quarter was attributable to incremental new stores and was partially
offset by comparable store sales declines of 1.49% for the year and 2.44% for
the fourth quarter. Comparable store sales were negatively impacted by retail
price deflation and, to some extent, the cannibalization created by
strategically opening stores in key major markets that have a close proximity to
existing stores. In addition, Harris Teeter customers, in these economic times,
are choosing our lower priced store branded products and reducing their
purchases of more discretionary categories such as floral, tobacco, and certain
general merchandise.

During fiscal 2009, Harris Teeter opened 15 new stores (including 2
replacements), closed 2 older stores and completed the major remodeling of 3
stores (1 of which was expanded in size). Harris Teeter operated 189 stores at
September 27, 2009. Retail square footage increased by 8.7% in fiscal 2009, as
compared to an increase of 8.5% in fiscal 2008.

Operating profit at Harris Teeter for fiscal 2009 decreased to $175.6 million
(4.59% of sales) from $177.8 million (4.85% of sales) in fiscal 2008. However,
operating profit for the fourth quarter of fiscal 2009 increased to $43.5
million (4.41% of sales) from $42.6 million (4.49% of sales) in the prior year
period. Operating profit was impacted by new store pre-opening costs of $14.4
million (0.37% of sales) and $15.4 million (0.42% of sales) in fiscal 2009 and
2008, respectively. Pre-opening costs for the fiscal fourth quarter of 2009 and
2008 were $2.8 million (0.29% of sales) and $3.8 million (0.40% of sales),
respectively. New store pre-opening costs fluctuate between reporting periods
depending on the new store opening schedule and market location.

The decrease in Harris Teeter`s operating profit for fiscal 2009 resulted
primarily from retail price deflation and promotional price investments made to
enhance the overall value we provide to our customers. The sales increases,
along with a continued emphasis on operational efficiencies and cost controls,
have provided the leverage to partially offset the additional costs associated
with Harris Teeter`s increased promotional activity and increased credit and
debit card fees, and other occupancy costs.

Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer
of Ruddick Corporation stated, "I am encouraged by the refinements we are making
to our merchandising strategies during these times of economic uncertainty and
constantly changing consumer shopping behavior. We made investments in
promotional activity, as well as price, to drive customer shopping visits and
loyalty, while remaining focused on enhancing the overall value we deliver to
our customers. We delivered positive comparable store customer shopping visits
and items sold in the fourth quarter. Additionally, our customer loyalty data
indicates that the number of active households increased by 3.31% per comparable
store during the fourth quarter of fiscal 2009. A significant portion of our
promotional activity investment was offset by operational efficiencies and cost
saving initiatives throughout the organization. As a result, selling, general
and administrative costs as a percent of sales decreased to 25.97% for fiscal
2009, as compared to 26.22% in fiscal 2008. We remain focused on the customer
and meeting their needs, while delivering the quality, value and customer
service they have come to expect from us."

A&E sales for fiscal 2009 were $250.8 million, as compared to $327.6 million in
fiscal 2008 and were $63.5 million in the fourth quarter of fiscal 2009, as
compared to $77.7 million in the fourth quarter of fiscal 2008. Foreign sales
accounted for approximately 55% of A&E sales in both fiscal 2009 and fiscal
2008.

A&E recorded an operating loss of $14.6 million in fiscal 2009, as compared to
an operating profit of $2.3 million in fiscal 2008. For the fourth quarter ended
September 27, 2009, A&E realized operating profit of $1.3 million, as compared
to operating profit of $0.5 million in the fourth quarter of fiscal 2008. As
discussed above, the operating loss for the year included non-cash impairment
charges of $9.9 million. Management continues to rationalize A&E`s operations in
the Americas and focus on providing best-in-class service to its customers.

Dickson said, "A&E experienced significant sales declines during fiscal 2009 as
a result of the serious economic conditions facing A&E`s customers in the
apparel and non-apparel markets, including the automotive segment. For the year,
all geographic areas of A&E`s operations, including Asia, experienced weak
business conditions as a result of poor retail sales on a global basis. However,
the accomplishments made in expense reduction, and overall improved sales and
operating profit in Asia, enabled A&E to realize a significant increase in
operating profit during the fourth quarter of fiscal 2009 over the fourth
quarter of fiscal 2008. A&E`s operating results are not indicative of the
progress that has been made in becoming more Asian centric due to the fact that
increased sales and improved operating profit of our consolidated Asian
operations realized during the fourth quarter of fiscal 2009 have been offset by
weakness in the U.S. and other operating areas outside of Asia. In addition, A&E
has minority interests in certain Asian operations that are not consolidated
with A&E`s reported sales, but have substantial sales and good operating
results. We will also continue to evaluate A&E's structure to best position A&E
to take advantage of opportunities available through its enhanced international
operations."

Capital expenditures for the consolidated Ruddick Corporation for fiscal 2009
totaled $209.2 million and depreciation and amortization totaled $125.5 million.
Total capital expenditures for the year ended September 27, 2009, were comprised
of $206.7 million for Harris Teeter and $2.5 million for A&E. In connection with
the development of certain of its new stores, Harris Teeter invested an
additional $7.6 million which was effectively offset by $7.5 million received
from property investment sales and partnership returns during fiscal 2009. As
previously disclosed, A&E invested another $8.7 million for an additional 14%
ownership interest in Vardhman Yarns and Threads Limited located in India and an
additional $0.7 million in its joint venture in Brazil during fiscal 2009.

Harris Teeter`s strong operating performance and financial position provides the
flexibility to continue with its store development program for new and
replacement stores along with the remodeling and expansion of existing stores.
During fiscal 2010, Harris Teeter plans to open 13 new stores (2 of which will
be replacements for existing stores) and complete 2 major remodels (1 of which
will be expanded in size). The new store development program for fiscal 2010 is
expected to result in a 6.8% increase in retail square footage as compared to an
8.7% increase in fiscal 2009. The Company routinely evaluates its existing store
operations in regards to its overall business strategy and from time to time
will close or divest underperforming stores.

Harris Teeter`s capital expenditure plans entail the continued expansion of its
existing markets, including the Washington, D.C. metro market area which
incorporates northern Virginia, the District of Columbia, southern Maryland and
coastal Delaware. As previously disclosed, Harris Teeter has reduced or delayed
the number of new store openings originally planned for fiscal 2010 and beyond
due to the current economic environment. Real estate development by its nature
is both unpredictable and subject to external factors including weather,
construction schedules and costs. Any change in the amount and timing of new
store development would impact the expected capital expenditures, sales and
operating results.

Fiscal 2010 consolidated capital expenditures are planned to total approximately
$155 million, consisting of $150 million for Harris Teeter and $5 million for
A&E. Such capital investment is expected to be financed by internally generated
funds, liquid assets and borrowings under the Company`s revolving line of
credit. Management believes that the Company`s revolving line of credit provides
sufficient liquidity for what management expects the Company will require
through the expiration of the line of credit in December 2012.

The Company`s management remains cautious in its expectations for fiscal 2010
due to the current economic environment and its impact on the Company`s
customers. The Company will continue to refine its merchandising strategies to
respond to the changing shopping demands as a result of the challenging economic
environment. The retail grocery market remains intensely competitive and the
textile and apparel environment faces additional challenges during this
recessionary period. Any operating improvement will be dependent on the
Company`s ability to continue to increase Harris Teeter`s market share,
rationalize A&E`s operations, offset increased operating costs with additional
operating efficiencies, and to effectively execute the Company`s strategic
expansion plans.

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; changes in 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; volatility of financial and credit markets which would affect
access to capital for the Company; changes in the Company's expansion plans and
their effect on store openings, closings and other investments; the ability to
predict the required contributions to the Company's pension and other retirement
plans; the Company`s requirement to impair recorded goodwill and long-lived
assets; the cost and availability of energy and raw materials; the continued
solvency of third parties on leases the Company guarantees; the Company`s
ability to recruit, train and retain effective employees; changes in labor and
employer benefits costs, such as increased health care and other insurance
costs; the Company`s ability to successfully integrate the operations of
acquired businesses; the extent and speed of successful execution of strategic
initiatives; and, unexpected outcomes of any legal proceedings arising in the
normal course of business. Other factors not identified above could cause actual
results to differ materially from those included, contemplated or implied by the
forward-looking statements made in this news release.

Ruddick Corporation is a holding company with two primary operating
subsidiaries: Harris Teeter, Inc., a leading regional supermarket chain with
operations in eight states along the eastern seaboard and the District of
Columbia, and American & Efird, Inc., one of the world`s largest global
manufacturers and distributors of industrial sewing thread, embroidery thread
and technical textiles.

Selected information regarding Ruddick Corporation and its subsidiaries follows.
For more information on Ruddick Corporation, visit our web site
at:www.ruddickcorp.com.

RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

13 WEEKS ENDED 52 WEEKS ENDED
September 27, September 28, September 27, September 28,
2009 2008 2009 2008
NET SALES
Harris Teeter $ 984,461 $ 948,789 $ 3,827,005 $ 3,664,804
American & Efird 63,482 77,719 250,817 327,593
Total 1,047,943 1,026,508 4,077,822 3,992,397

COST OF SALES
Harris Teeter 691,425 655,767 2,657,564 2,525,947
American & Efird 50,093 62,088 202,901 258,003
Total 741,518 717,855 2,860,465 2,783,950

GROSS PROFIT
Harris Teeter 293,036 293,022 1,169,441 1,138,857
American & Efird 13,389 15,631 47,916 69,590
Total 306,425 308,653 1,217,357 1,208,447

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Harris Teeter 249,586 250,379 993,850 961,092
American & Efird 12,103 15,150 52,646 67,262
Corporate 1,684 1,499 6,119 6,308
Total 263,373 267,028 1,052,615 1,034,662

IMPAIRMENT CHARGES - A&E
Goodwill Impairment - - 7,654 -
Long-Lived Asset Impairments - - 2,237 -
Total - - 9,891 -

OPERATING PROFIT (LOSS)
Harris Teeter 43,450 42,643 175,591 177,765
American & Efird 1,286 481 (14,621 ) 2,328
Corporate (1,684 ) (1,499 ) (6,119 ) (6,308 )
Total 43,052 41,625 154,851 173,785

OTHER EXPENSE (INCOME)
Interest expense 4,011 5,203 17,307 20,334
Interest income (56 ) (926 ) (493 ) (1,185 )
Net investment loss (gains) (92 ) 19 (746 ) 41
Minority interest 196 80 594 484
Total 4,059 4,376 16,662 19,674

INCOME BEFORE TAXES 38,993 37,249 138,189 154,111
INCOME TAXES 15,344 12,416 52,225 57,359
NET INCOME $ 23,649 $ 24,833 $ 85,964 $ 96,752

NET INCOME PER SHARE:
Basic $ 0.49 $ 0.52 $ 1.79 $ 2.02
Diluted $ 0.49 $ 0.51 $ 1.78 $ 2.00

WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING:
Basic 48,004 47,814 47,964 47,824
Diluted 48,419 48,267 48,337 48,295

DIVIDENDS DECLARED PER SHARE - Common $ 0.12 $ 0.12 $ 0.48 $ 0.48

RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)

September 27, September 28,
2009 2008
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 37,310 $ 29,759
Accounts Receivable, Net 80,146 91,528
Refundable Income Taxes 9,707 8,607
Inventories 310,271 312,589
Deferred Income Taxes 6,502 6,477
Prepaid Expenses and Other Current Assets 30,350 28,196
Total Current Assets 474,286 477,156

PROPERTY, NET 1,080,326 967,331
INVESTMENTS 156,434 143,902
DEFERRED INCOME TAXES 30,285 361
GOODWILL 515 8,169
INTANGIBLE ASSETS 23,754 26,355
OTHER LONG-TERM ASSETS 78,721 73,133

Total Assets $ 1,844,321 $ 1,696,407

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Notes Payable $ 7,056 $ 11,150
Current Portion of Long-Term Debt and Capital Lease Obligations 9,526 9,625
Accounts Payable 227,901 236,649
Dividends Payable 5,825 -
Deferred Income Taxes 68 347
Accrued Compensation 65,295 63,826
Other Current Liabilities 87,194 89,206
Total Current Liabilities 402,865 410,803

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 355,561 310,953
DEFERRED INCOME TAXES 580 10,877
PENSION LIABILITIES 168,060 44,306
OTHER LONG-TERM LIABILITIES 98,892 89,685
MINORITY INTEREST 6,184 5,948

SHAREHOLDERS' EQUITY:
Common Stock 89,878 83,252
Retained Earnings 830,236 767,562
Accumulated Other Comprehensive Income (Loss) (107,935 ) (26,979 )
Total Shareholders' Equity 812,179 823,835

Total Liabilities and Shareholders' Equity $ 1,844,321 $ 1,696,407

RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
52 WEEKS ENDED
September 27, September 28,
2009 2008
CASH FLOW FROM OPERATING ACTIVITIES
Net Income $ 85,964 $ 96,752
Non-Cash Items Included in Net Income
Depreciation and Amortization 125,487 114,405
Deferred Income Taxes 10,411 13,665
Net Gain on Sale of Property (792 ) (1,789 )
Impairment Losses 9,891 -
Share-Based Compensation 5,722 5,376
Other, Net (2,670 ) 1,832
Changes in Operating Accounts Providing (Utilizing) Cash
Accounts Receivable 11,470 1,552
Inventories 1,833 (16,853 )
Prepaid Expenses and Other Current Assets (6,769 ) (3,464 )
Accounts Payable (9,196 ) 7,116
Other Current Liabilities 5,550 8,331
Other Long-Term Operating Accounts (4,102 ) (235 )
Dividends Received from Non-Consolidated Subsidiaries 940 500
NET CASH PROVIDED BY OPERATING ACTIVITIES 233,739 227,188

INVESTING ACTIVITIES
Capital Expenditures (209,203 ) (199,500 )
Purchase of Other Investments (16,980 ) (46,799 )
Acquired Favorable Leases - (1,136 )
Proceeds from Sale of Property 5,944 24,606
Return of Partnership Investments 3,152 129
Investments in Company-Owned Life Insurance (702 ) (1,879 )
Other, Net (996 ) (1,647 )
NET CASH USED IN INVESTING ACTIVITIES (218,785 ) (226,226 )

FINANCING ACTIVITIES
Net (Payments on) Proceeds from Short-Term Debt Borrowings (3,836 ) 865
Net Proceeds from (Payments on) Revolver Borrowings 23,900 (62,000 )
Proceeds from Long-Term Debt Borrowings 1,652 100,371
Payments on Long-Term Debt and Capital Lease Obligations (12,212 ) (10,207 )
Dividends Paid (17,465 ) (23,182 )
Proceeds from Stock Issued 1,598 3,359
Share-Based Compensation Tax Benefits 482 1,917
Purchase and Retirement of Common Stock - (8,000 )
Other, Net (1,041 ) (1,139 )
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (6,922 ) 1,984

INCREASE IN CASH AND CASH EQUIVALENTS 8,032 2,946
EFFECT OF FOREIGN CURRENCY FLUCTUATIONS ON CASH (481 ) 66
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 29,759 26,747

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 37,310 $ 29,759

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest, Net of Amounts Capitalized $ 17,360 $ 19,263
Income Taxes 43,588 46,072
Non-Cash Activity:
Assets Acquired Under Capital Leases 30,034 26,844

RUDDICK CORPORATION
OTHER STATISTICS
September 27, 2009
(dollars in millions)
Consolidated
Harris American Ruddick
Teeter & Efird Corporate Corporation

Depreciation and Amortization:
Fourth Fiscal Quarter $ 28.9 $ 3.7 $ 0.1 $ 32.7
Fiscal Year to Date 109.8 15.6 0.1 125.5

Capital Expenditures:
Fourth Fiscal Quarter $ 44.3 $ 0.6 $ - $ 44.9
Fiscal Year to Date 206.7 2.5 - 209.2

Purchase of Other Investment Assets:
Fourth Fiscal Quarter $ 0.5 $ - $ - $ 0.5
Fiscal Year to Date 7.6 9.4 - 17.0

Harris Teeter Store Count: Quarter Year to Date

Beginning number of stores 186 176
Opened during the period 4 15
Closed during the period (1 ) (2 )
Stores in operation at end of period 189 189

Quarter Year to Date

Harris Teeter Comparable Store Sales -2.44 % -1.49 %

Definition of Comparable Store Sales:
Comparable store sales are computed using corresponding calendar weeks to account for the occasional
extra week included in a fiscal year. A new store must be in operation for 14 months before it enters into
the calculation of comparable store sales. A closed store is removed from the calculation in the month
in which its closure is announced. A new store opening within an approximate two-mile radius of an
existing store that is to be closed upon the new store opening is included as a replacement store in
the comparable store sales measure as if it were the same store. Sales increases resulting from existing
comparable stores that are expanded in size are included in the calculations of comparable store sales, if
the store remains open during the construction period.

Ruddick Corporation
John B. Woodlief, Vice President - Finance and Chief Financial Officer
704-372-5404

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