-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MOeZFAp1X+B08KIBW1hVn+X/gAjSOKSZWEfIFOPUYu2gwZ9RBfKY3xeiSmxwk7Uv lmKGA9i4KYeeCgPxkJw1yA== 0000045379-96-000015.txt : 19961106 0000045379-96-000015.hdr.sgml : 19961106 ACCESSION NUMBER: 0000045379-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961105 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANNAFORD BROTHERS CO CENTRAL INDEX KEY: 0000045379 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 010085930 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07603 FILM NUMBER: 96654572 BUSINESS ADDRESS: STREET 1: 145 PLEASANT HILL RD CITY: SCARBOROUGH STATE: ME ZIP: 04074 BUSINESS PHONE: 2078832911 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7603 HANNAFORD BROS. CO. (Exact name of Registrant as specified in its charter) Maine 01-0085930 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 145 Pleasant Hill Road, Scarborough, Maine 04074 (Address of principal executive offices; Zip Code) Registrant's telephone number, including area code: (207) 883-2911 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . As of October 24, 1996, there were 42,276,097 outstanding shares of Common Stock, $.75 par value, the only authorized class of common stock of the Registrant. INDEX PART I - FINANCIAL INFORMATION Page No. Item 1. Financial Statements: Consolidated Balance Sheets, September 28, 1996 and December 30, 1995 3-4 Consolidated Statements of Earnings, Three Months Ended September 28, 1996 and September 30, 1995 5 Consolidated Statements of Earnings, Nine Months Ended September 28, 1996 and September 30, 1995 6 Consolidated Statements of Cash Flows Nine Months Ended September 28, 1996 and September 30, 1995 7-8 Notes and Schedules to Consolidated Financial Statements 9-11 Item 2. Management's Discussion and Analysis of Third Quarter 1996 Results 12-17 PART II - OTHER INFORMATION Item 5. Other Information 18 Item 6. Exhibits and Reports on Form 8K 18 Signatures 19 HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in thousands) (UNAUDITED) September 28, December 30, 1996 1995 Current assets: Cash and cash items $ 9,055 $ 7,017 Accounts receivable, net 16,063 15,556 Inventories 171,536 157,968 Prepaid expenses 7,970 7,217 Deferred income taxes 6,696 6,584 Total current assets 211,320 194,342 Property, plant and equipment, net 674,422 577,126 Leased property under capital leases, net 61,004 56,691 Other assets: Goodwill, net 96,947 93,348 Deferred charges, net 32,087 27,484 Computer software costs, net 12,746 10,063 Miscellaneous assets 3,069 2,776 Total other assets 144,849 133,671 $1,091,595 $961,830 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands except share amounts) (UNAUDITED) September 28, December 30, 1996 1995 Current liabilities: Current maturities of long-term debt $ 9,672 $ 11,246 Obligations under capital leases 1,772 1,467 Accounts payable 123,745 113,846 Accrued payroll 22,619 20,652 Other accrued expenses 29,386 23,619 Income taxes 2,721 - Total current liabilities 189,915 170,830 Deferred income tax liabilities 24,794 23,229 Other liabilities 42,278 28,699 Long-term debt 205,799 150,648 Obligations under capital leases 75,682 69,747 Shareholders' equity: Class A Serial Preferred stock, no par, authorized 2,000,000 shares - - Class B Serial Preferred stock, par value $.01 per share, authorized 28,000,000 shares - - Common stock, par value $.75 per share: Authorized 110,000,000 shares; September 28, 1996: Issued, 42,338,316 shares, outstanding 42,265,790 shares. December 30, 1995: Issued and outstanding 42,298,230 shares 31,754 31,724 Additional paid-in capital 119,874 121,974 Preferred stock purchase rights 423 423 Retained earnings 403,413 364,556 555,464 518,677 Less common stock in treasury (72,526 shares at cost) 2,337 - Total shareholders' equity 553,127 518,677 $1,091,595 $961,830 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands except per share data) (UNAUDITED) THREE MONTHS ENDED September 28, September 30, 1996 1995 Sales and other revenues $773,271 $653,879 Cost of sales 589,178 498,469 Gross margin 184,093 155,410 Selling, general and administrative expenses 145,802 118,392 Operating profit 38,291 37,018 Interest expense, net 5,356 4,199 Earnings before income taxes 32,935 32,819 Income taxes 13,037 13,105 Net earnings $ 19,898 $ 19,714 Per share of common stock: Net earnings $ .47 $ .47 Cash dividends $ .120 $ .105 Weighted average number of common shares outstanding 42,284 42,168 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands except per share data) (UNAUDITED) NINE MONTHS ENDED September 28, September 30, 1996 1995 Sales and other revenues $2,192,877 $1,887,473 Cost of sales 1,664,603 1,433,054 Gross margin 528,274 454,419 Selling, general and administrative expenses 422,684 350,789 Operating profit 105,590 103,630 Interest expense, net 16,075 14,486 Earnings before income taxes 89,515 89,144 Income taxes 35,434 35,841 Net earnings $ 54,081 $ 53,303 Per share of common stock: Net earnings $ 1.28 $ 1.27 Cash dividends $ .360 $ .315 Weighted average number of common shares outstanding 42,301 42,035 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (UNAUDITED) NINE MONTHS ENDED September 28, September 30, 1996 1995 Cash flows from operating activities: Net income $ 54,081 $ 53,303 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 56,079 50,653 Increase in inventories (13,568) (10,402) (Increase) decrease in receivables and prepayments (1,647) 3,450 Increase in accounts payable and accrued expenses 26,349 23,779 Increase (decrease) in income taxes payable 2,720 (2,768) Increase (decrease) in deferred taxes 1,453 (458) Other operating activities 103 854 Net cash provided by operating activities 125,570 118,411 Cash flows from investing activities: Acquisition of Farm Fresh supermarkets - (23,850) Acquisition of property, plant and equipment (148,116) (86,868) Sale of property, plant and equipment, net 3,061 1,892 Increase in goodwill and deferred charges (6,945) (2,825) Increase in computer software costs (4,402) (3,657) Net cash used in investing activities (156,402) (115,308) Cash flows from financing activities: Principal payments under capital lease obligations (1,076) (1,057) Proceeds from issuance of long-term debt 75,000 - Issuance of common stock 7,300 9,467 Payments of long-term debt (21,423) (7,568) Purchase of Treasury Stock (11,708) - Dividends paid (15,223) (13,253) Net cash provided by (used in) financing activities 32,870 (12,411) Net increase (decrease) in cash and cash items 2,038 (9,308) Cash and cash items at beginning of period 7,017 40,955 Cash and cash items at end of period $ 9,055 $ 31,647 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental disclosures of cash flow information (in thousands) (UNAUDITED) NINE MONTHS ENDED September 28, September 30, 1996 1995 Cash paid during the first nine months for: Interest (net of amount capitalized, $2,493 in 1996 and $1,647 in 1995) $15,100 $15,287 Income taxes $30,019 $39,067 Supplemental disclosure of non-cash investing and financing activity Capital lease obligations of $7,652,000 were incurred during the nine month period ended September 28, 1996 when the Company entered into leases for certain improved real estate. Disclosure of accounting policy For the purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash items. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the amounts shown reflect all adjustments necessary to present fairly the financial position and results of operations for the periods presented. All such adjustments are of a normal recurring nature. The year-end consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Earnings per share of common stock have been determined by dividing net earnings by the weighted average number of shares of common stock outstanding. The assumed exercise of existing employee stock options has been excluded since it does not result in any material dilution. It is suggested that the financial statements be read in conjunction with the financial statements and notes included in the Company's latest annual report. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 2. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following: (in thousands) (Unaudited) September 28, December 30, 1996 1995 Land and improvements $ 96,041 $ 90,430 Buildings 230,123 228,858 Furniture, fixtures & equipment 387,990 333,492 Leasehold interests & improvements 237,472 188,730 Construction in progress 39,162 16,179 990,788 857,689 Less accumulated depreciation and amortization 316,366 280,563 $674,422 $577,126 3. LEASED PROPERTY Leased property under capital leases consists of the following: (in thousands) (Unaudited) September 28, December 30, 1996 1995 Real property $83,476 $76,457 Less accumulated amortization 22,472 19,766 $61,004 $56,691 HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 4. LONG-TERM DEBT In February 1996, the Company received $36 million of proceeds of a $75 million senior uncollateralized debt financing, with the balance of $39 million received in May 1996. The terms of these notes range from 7 to 20 years with a weighted average life of 9 years. Interest rates on the notes vary from 6.25% to 7.1% with a weighted average rate of 6.6%. The amounts of annual principal payments vary over the terms of the loans. 5. CAPITAL STOCK In May 1996, the Company amended and extended its existing standstill agreement with certain shareholders ("the Sobey Parties"). The amendment extends the term of the standstill agreement to December 31, 1998, subject to automatic renewal for successive one-year periods (but not beyond December 31, 2000) unless by July 31 of a given year either the Company or any of the Sobey Parties gives written notice of an intention not to further extend the term of the standstill agreement. The amendment also made technical changes to the agreement which will allow the Company greater flexibility in the use of common stock to compensate employees and directors and will permit renewal of Hannaford's Shareholder Rights Plan through February 28, 2001. The amendment maintains the Sobey Parties' ownership limit at approximately 25.6% of the Company's voting stock, except in certain circumstances specified by the agreement. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS RESULTS OF OPERATIONS SALES Sales and other revenues rose 16.2% for the first three quarters of 1996, to $2,192.9 million, an increase of $305.4 million over the first three quarters of 1995. Sales from supermarkets that were open in both periods presented ("same store sales") increased $57.1 million or 3.3%. Additional supermarket sales of $235.7 million resulted from the net impact of new, expanded and closed stores. Other sales and revenues, which include trucking, real estate and miscellaneous retail operations, increased $12.6 million. In the third quarter of 1996, sales and other revenues were $773.3 million, an increase of $119.4 million or 18.3% over those reported for the same period in 1995. Same store sales increased $22.1 million or 3.6%. Additional supermarket sales of $91.5 million resulted from the net impact of new, expanded and closed stores. Other sales and revenues increased $5.8 million. Same store sales were up 3.3% this year as compared to 2.4% in the comparable period for 1995. The Company attributes a portion of this increase to positive customer response to its conversion of private brand products from the Shop n Save name to the Hannaford brand. The 1996 increase sustains a positive trend that started in late 1993. GROSS MARGIN Gross margins were 24.1% of sales and other revenues in both the first three quarters of 1996 and the first three quarters of 1995. Gross margins were also constant at 23.8% in both the third quarter of 1996 and the third quarter of 1995. The Company has experienced declines in meat margins in the current year periods. These declines have been offset by slightly increased margins to several product categories as well as an increase in other operating revenues. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses increased to 19.3% of sales and other revenues in the first nine months of 1996 as compared to 18.6% in the comparable period of 1995. In the third quarter of 1996, selling, general and administrative expenses were 18.9% of sales and other revenues up from 18.1% for the third quarter of 1995. These increases are principally the result of additional costs of establishing the Company's position in its southeastern markets coupled with expenditures incurred in coping with the aftermath of Hurricane Fran. INCOME TAXES The effective income tax rate decreased in both the first nine months and third quarter of 1996 to 39.6% from 40.2% in the first nine months of 1995 and 39.9% in the third quarter of 1995. This lower rate is the result of a reduction in the Company's overall state income tax rate. The Company expects the effective tax rate to be in the 39% to 40% range for fiscal 1996. NET EARNINGS Net earnings increased 1.5% in the first nine months of 1996 to $54.1 million or 2.5% of sales and other revenues, an increase of $0.8 million from 1995 nine months earnings of $53.3 million or 2.8% of sales and other revenues. Third quarter 1996 net earnings were $19.9 million or 2.6% of sales and other revenues as compared to $19.7 million or 3.0% of sales and other revenues in the third quarter of 1995. Expressed as a percentage of sales, net earnings decreased in the 1996 periods presented due primarily to increased selling, general and administrative expenses. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS The 1996 third quarter results were below Company expectations due to increased costs that continue to be incurred in the establishment of supermarkets in new southeastern markets, significantly reduced meat margins and the impact of Hurricane Fran. The Company expects fourth quarter earnings to be within expectations. CAPITAL RESOURCES AND LIQUIDITY GENERAL The current ratio (FIFO basis) at September 28, 1996, was 1.20 while working capital (FIFO basis) was $37.8 million or 3.5% of total assets. On December 30, 1995, the current ratio (FIFO basis) was 1.23 while working capital (FIFO basis) was $39.1 million or 4.1% of total assets. The Company values the majority of its inventories using the LIFO method. The current cost of inventories exceeded the LIFO valuation by approximately $16.4 million on September 28, 1996 and $15.6 million on December 30, 1995. The Company's liquidity position is stronger than indicated by stated working capital and current ratios because of available unused lines of revolving credit of $58.5 million and available unused lines of short-term credit of $35.2 million at September 28, 1996. Cash and cash items increased $2.1 million to $9.1 million at September 28, 1996 from $7.0 million at December 30, 1995. This increase is primarily the result of cash provided by operating and financing activities offset by cash used in investing activities. CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by operating activities was $125.6 million in the first nine months of 1996, an increase of $7.2 million over the $118.4 million provided in the first nine months of 1995. This increase is primarily attributable to higher depreciation and amortization. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS CASH FLOWS FROM INVESTING ACTIVITIES Cash used in investing activities increased $41.1 million during the first nine months of 1996 to $156.4 million from $115.3 million during the first nine months of 1995. This increase is primarily the result of increased capital expenditures during the period. Total capital expenditures totaled $167.1 million in the first nine months of 1996 and were composed of $148.1 million in additions to property, plant and equipment, $11.3 million in deferred charges and computer software costs and $7.7 million in non-cash capital lease additions. These nine months capital expenditures are primarily composed of costs incurred in meeting the Company's 1996 capital program. The Company expects to spend approximately $200 million on new, relocated and expanded stores to open in 1996 and 1997; a new distribution facility in Butner, North Carolina, scheduled to begin shipping product during the fourth quarter; and improvements necessary to maintain current facilities and systems. So far this year, the Company has opened ten new stores, relocated two stores and closed two small units. One additional store was sold to an independent wholesale customer. During July, the Company opened a new supermarket in Charlotte, North Carolina, with 34,000 square feet of retail selling space. This is the Company's third store in that market. In August, the Company opened a new supermarket in Brattleboro, Vermont, with 35,000 square feet of retail selling space. The Company also opened a relocated store in Waterville, Maine with 32,000 square feet of retail selling space. This new store replaced a similar downtown facility which was closed. Three new stores were opened in the Southeast in September. The new Raleigh, North Carolina store with 41,000 square feet of retail selling space, continues to increase the Company's presence in this market. A similar sized store in Chester, Virginia, enhances the Company's offering in the Richmond market. The Company opened its second store in Cary, North Carolina, with 35,000 square feet of retail selling space. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS During the first two quarters of 1996, the Company opened new stores in Cary and Charlotte, North Carolina, Norfolk, Virginia, Niskayuna, New York and Williston, Vermont. The Company also opened a relocated store in South Burlington, Vermont which replaced an older and smaller facility which was closed. Also during the first half, the Company sold a small supermarket in Kennebunk, Maine and closed two stores in Madawaska and Fort Kent, Maine. During the fourth quarter, the Company expects to open one expanded supermarket. In addition, the Company's new 450,000 square foot distribution center in Butner, North Carolina, will be distributing product to the supermarkets in the Southeast. This program is subject to continuing change and review as conditions warrant. Net square footage of retail selling space is expected to increase by over 10% in 1996. Also, construction has commenced on a number of stores to open in 1997 with emphasis on additional stores in several southeastern markets. The 1996 capital program is being financed by internally generated funds, long-term debt, leases and lines of credit. CASH FLOWS FROM FINANCING ACTIVITIES Cash provided by financing activities was $32.9 million in the first nine months of 1996 as compared to $(12.4) million in the first nine months of 1995. This increase of $45.3 million is the result of proceeds from the issuance of long-term debt (note 4) partially offset by payments of long-term debt and purchases of treasury stock. During the first nine months of 1996 the Company utilized a portion of its debt proceeds to repay $11.4 million on its revolving lines of credit. The Company purchased 393,413 shares of common stock during the first nine months at a cost of $11.7 million. The majority of this repurchased stock was used to fund the Company's stock based benefit plans, with the balance being held in treasury. Previously, the Company used new shares to fund certain benefit plans. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1996 RESULTS FORWARD-LOOKING INFORMATION From time to time, information provided by the Company or statements made by its associates may contain forward-looking information, as defined in the Private Securities Litigation Reform Act of 1995. Examples of such statements in this report include those concerning the Company's expected future earnings, construction schedules and capital expenditures. The Company cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors and risks including, but not limited to the following: (1) Hannaford's future operating results are dependent on its ability to achieve increased sales and to control expenses. Factors such as lower than expected inflation, product cost fluctuations particularly in perishable categories, changes in product mix or the use of promotional items, both of which may affect pricing strategy, continued or increased competitive pressures from existing competitors and new entrants, including price cutting strategies, and deterioration in general or regional economic conditions are all factors which could adversely affect sales projections. Other components of operating results could be adversely affected by state or federal legislation or regulation that increases costs, increases in interest rates or the Company's cost of borrowing, increases in labor rates due to low unemployment or other factors, unanticipated costs related to the opening of new stores or the inability to control various expense categories. (2) Hannaford's future growth is dependent on its ability to expand its retail square footage. Increases in interest rates or the Company's cost of capital, the unavailability of funds for capital expenditures and the inability to develop new stores or convert existing stores as rapidly as planned are all risks to our projected future expansion. (3) Adverse determinations with respect to pending or future litigation or other material claims against Hannaford could affect actual results. Furthermore, the market price of Hannaford common stock could be subject to fluctuations in response to quarter to quarter variations in operating results, changes in analysts' earnings estimates, market conditions in the retail sector, especially in the supermarket industry, as well as general economic conditions and other factors external to Hannaford. PART II Item 5: Other Information A limited review was made of the results of the three-month and nine-month periods ended September 28, 1996, by Coopers & Lybrand. Item 6: Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation SK 10.1 Third Amendment to the Hannaford Bros. Co. Employee Stock Purchase Plan effective October 2, 1996. 15 Letter of Coopers & Lybrand L.L.P. furnished pursuant to Regulation SX. 23 Letter of Coopers & Lybrand L.L.P. regarding incorporation by reference to certain Forms S-8 of the Registrant 27 Financial Data Schedule (b) There were no reports on Form 8-K filed during the quarter ended September 28, 1996. 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. HANNAFORD BROS. CO. Date November 5, 1996 s/Blythe J. McGarvie Blythe J. McGarvie Senior Vice President (Chief Financial Officer) Date November 5, 1996 s/Charles H. Crockett Charles H. Crockett Assistant Secretary EX-10 2 EXHIBIT 10.1 THIRD AMENDMENT TO THE HANNAFORD BROS. CO. EMPLOYEE STOCK PURCHASE PLAN The Hannaford Bros. Co. Employee Stock Purchase Plan (the "Plan") was last amended and restated effective October 19, 1994. The Plan was thereafter amended by a First Amendment, effective February 7, 1995, and a Second Amendment, effective August 20, 1995. The Plan is hereby further amended in the following respects: 1. The terms used in this Amendment shall have the meanings set forth in the Plan unless the context indicates otherwise. 2. Subsection (f) of Section 2 is hereby amended to read as follows: "(f) Compensation' shall mean the base salary or wages paid to an Employee by the Corporation or any Subsidiary, before any reduction pursuant to a deferral election under Code Subsection 401(k) or a benefit election under a Code Subsection 125 plan sponsored by the Corporation or any Subsidiary, including compensation for incentive hours and excluding nonguaranteed overtime pay, bonuses and other irregular payments." 3. The second paragraph of Section 7, Section 9, the first paragraph of Section 10, Section 11 and the second paragraph of subsection (b) of Section 12 are hereby amended by replacing the parenthetical "(including fractional Shares)" with the parenthetical "(including fractional Shares, if provided for in the Option Agreement)". 4. This Amendment shall be effective October 2, 1996. EX-15 3 Exhibit 15 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Hannaford Bros. Co.: We have reviewed the accompanying consolidated balance sheet of Hannaford Bros. Co. and Subsidiaries as of September 28, 1996, and the related consolidated statements of earnings for the three and nine month periods ended September 28, 1996 and September 30, 1995, and the consolidated statements of cash flows for the nine month periods then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We previously audited and expressed an unqualified opinion on the Company's consolidated financial statements for the year ended December 30, 1995 (not presented herein). In our opinion, the information set forth in the accompanying balance sheet as of December 30, 1995, is fairly stated in all material respects, in relation to the statement of financial position from which it has been derived. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. s/Coopers & Lybrand L.L.P. Portland, Maine October 17, 1996 EX-23 4 Exhibit 23 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 RE: Hannaford Bros. Co. Registrations on Form S-8 We are aware that our report dated October 17, 1996, on our review of interim financial information of Hannaford Bros. Co. and Subsidiaries as of September 28, 1996, and for the three month and nine month periods ended September 28, 1996 and September 30, 1995, and included in this Form 10-Q is incorporated by reference in the Company's registration statements on Form S-8 (Numbers 2-77902, 2-77903, 2-98387, 33-1281, 33-22666, 33-31624, 33-45273, 33-60119, 33-60655 and 33-60691). Pursuant to rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the Registration Statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. s/Coopers & Lybrand L.L.P. Portland, Maine November 1, 1996 EX-27 5
5 1,000 9-MOS DEC-28-1996 SEP-28-1996 9,055 0 16,276 213 171,536 211,320 990,788 316,366 1,091,595 189,915 281,481 0 0 31,754 521,373 1,091,595 2,192,877 2,192,877 1,664,603 1,664,603 422,684 0 16,075 89,515 35,434 54,081 0 0 0 54,081 1.28 1.28
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