Technical textiles subsidary of Ruddick registers sales decline

31 Oct '08

6 min read

Harris Teeter's operating profit improved primarily as a result of increased sales. The sales increases, along with a continued emphasis on operational efficiencies and overhead cost containment during this time of expansion, have provided leverage to offset the incremental costs associated with Harris Teeter's new store program (pre-opening costs and incremental start-up costs), increased LIFO expense, fuel and cost of petroleum-based supplies, associate benefit costs, credit and debit card fees, and store occupancy costs.

Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation stated, "We are pleased with our results for both the quarter and fiscal year, especially during these times of economic uncertainty. As consumer confidence has fallen in recent weeks and customers continue to change their shopping habits, the coming months will continue to present challenges in regards to the trend of our same store sales. We continue to refine our merchandising strategies to respond to the changing environment and remain focused on our new store expansion and remodeling programs."

A&E sales for fiscal 2008 decreased by 3.6% to $327.6 million from $339.8 million in fiscal 2007. Foreign sales accounted for approximately 55% and 54% of A&E sales in fiscal 2008 and fiscal 2007, respectively. Sales for the fourth quarter of fiscal 2008 were $77.7 million, a decrease of 5.8% from the $82.5 million in the fourth quarter of fiscal 2007.

Operating profit at A&E for fiscal 2008 was $2.3 million, an increase of 63.6% from $1.4 million in fiscal 2007. For the fourth quarter ended September 28, 2008, A&E realized operating profit of $0.5 million as compared to a $0.3 million operating loss in the fourth quarter of fiscal 2007. Management continues to rationalize A&E's operations in the Americas and focus on providing best-in-class service to its customers, while expanding its product lines throughout A&E's supply chain.

Dickson said, "The current economic environment throughout the globe has created an even more challenging retail environment for A&E's customers. We remain committed to our strategic plans that will transform A&E's business to a more Asian-centric global supplier of sewing thread, embroidery thread and technical textiles.

As part of these plans, on April 7, 2008 we completed the previously announced joint venture with Vardhman Textiles Limited ("Vardhman"), to manufacture, distribute and sell sewing thread for industrial and consumer markets within India and for export markets. Subsequent to year end and in accordance with the original joint venture agreement, A&E increased its ownership interest in Vardhman to 49%.

A&E has already realized the benefits of this joint venture and we are very excited about the opportunity to grow the business together in this important region of Asia. We will continue to evaluate A&E's structure to best positionA&E to take advantage of opportunities available through its enhanced international operations."

Capital expenditures for the consolidated Ruddick Corporation for fiscal 2008 totaled $199.5 million and depreciation and amortization totaled $114.4 million. Total capital expenditures for the year ended September 28, 2008, were comprised of $192.2 million for Harris Teeter and $7.3 million for A&E.

Ruddick Corporation

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