SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event
reported) October 3,1997.
FOOD LION, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-6080 56-0660192
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
P.O. Box 1330, 2110 Executive Drive, Salisbury, North
Carolina 28145-1330
(704) 633-8250
(Address, including zip code, and telephone number,
including area code of registrant's principal
executive offices)
N.A.
(Former name or former address if changed since last report)
Item 5. Other Events
a. Closure of Stores and Distribution Center in Southwest
On September 18, 1997, Food Lion, Inc. (the "Company")
announced its plan to close the Company's 61 stores and one
distribution center in Louisiana, Oklahoma and Texas (the
"Southwest"). The stores in the Southwest were not
profitable and reduced the Company's net earnings by nearly
$.01 per share on an annual basis. The Company established
a pre-tax reserve against third quarter earnings of $87.1
million ($53.1 million after tax) for the closures. This
pre-tax reserve reflects management's estimate of $129.1
million in costs and asset revaluations associated with the
divestiture of the Southwest, less $42.0 million in unused
reserves related to store closures since 1993. The Company
estimates that cash proceeds from the disposition of assets
in the Southwest, net of expenses, will be approximately
$100 million. Conditions in the real estate market and
general economic conditions in the communities in which the
assets are located could cause the actual proceeds to differ
from this estimate.
The closure of the Southwest stores and distribution
center is further described in a press release issued by the
Company on September 18, 1997, a copy of which is attached
hereto as Exhibit 99.
b. "Safe Harbor" Statement Regarding Forward-Looking
Statements or Information
The Company, or its executive officers and directors on
behalf of the Company, may from time to time make "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"). All
statements, other than statements of historical fact, which
address activities, events or developments that the Company
expects or anticipates will or may occur in the future are
forward-looking statements. Such forward-looking statements
include statements regarding the Company's business,
including the business of the Company's subsidiary, Kash n'
Karry Food Stores, Inc.
The Company cautions that the factors discussed below,
among others (including but not limited to factors mentioned
from time to time in the Company's reports filed with the
SEC), could affect the Company's results and cause actual
results to differ materially from those expressed in forward-
looking statements. Any forward-looking statement speaks
only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-
looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. The Company further
cautions that new factors may emerge from time to time. The
following discussion includes matters as to which the
Company has made forward-looking statements, both orally and in
writing. This discussion is intended to provide information as to
some of the factors that could cause results to differ
materially from those expressed or implied in the forward-
looking statements.
Important factors that could cause actual results to
differ materially from those set forth in forward-looking
statements regarding the Company's financial condition and
results of operations include changes in economic conditions
including inflation levels, particularly in the Company's
primary markets; changes in consumer spending; unanticipated
costs associated with the Company's store expansion and
renovation strategies; competitive practices and pricing in
the food industry generally and particularly in the
Company's primary markets; the cost of or constraints on the
Company's supply of necessary inventory; changes in local,
state or federal legislation or regulation; the retirement
or loss of services of key personnel; and technological
problems involving the Company, its vendors or other third
parties.
The Company's growth plans include expansion through
new store development, remodels of its existing stores, and
acquisitions, where appropriate. Factors that could impact
the Company's growth plans include competitive conditions;
the Company's ability to develop new stores cost effectively
in advantageous locations; the availability and cost of
resources (including capital, materials, real estate, labor
and contractors) to complete the Company's new store and
renovation plans; the availability of appropriate
acquisition opportunities; the Company's ability to
successfully integrate acquired entities; unanticipated
problems with third parties such as landlords, including but
not limited to difficulties in acquiring, financing and
developing sites, and securing necessary permits and
licenses; and unanticipated costs associated with the
Company's new store and renovation strategies.
The Company has also stated that it intends to continue
to incur costs associated with remodeling stores, which has
historically resulted in increased sales in remodeled
stores. Factors that could negatively impact such results
in the future include diminishing availability of stores
suitable for remodeling, unanticipated costs associated with
remodels, and changes in general economic and competitive
conditions in the markets in which the remodeled stores are
located.
From time to time, the Company states its estimates of
the average range of costs to close a store and its
projections of the number of stores it will close in the
coming year. While the Company believes that these
estimates are accurate at the time they are made, certain
factors could cause those projections or results to change
from time to time, including general economic and
competitive conditions, unanticipated costs associated with
store closures, and the age or newness of the stores closed.
In addition, the Company has made forward-looking statements
with respect to the anticipated proceeds from the disposition
of assets in the Southwest. Factors that could cause those
results to differ materially include conditions in the real estate
market and general economic conditions in the communities
where the assets are located.
Item 7. Financial Statements and Exhibits
(b) Exhibits
Exhibit No.
99 Press Release Regarding Closure of Stores and
Distribution Center in Southwest
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.
FOOD LION, INC.
Dated: October 3, 1997 By: \s\ Laura Kendall
Name: Laura Kendall
Its: Vice President of Finance
Chief Financial Officer