Harris Teeter 1998 Annual Report Download - page 11

9
This Is Ruddick.
1998 Annual Report
So much consolidation is taking place
in the supermarket industry. How
does Ruddick feel about making
acquisitions or considering acquisition
offers – at either Harris Teeter or
A&E? Would you consider acquisi-
tions in an industry other than your
core businesses?
There has certainly been considerable
consolidation activity in both of our indus-
tries. We have recently participated in that
consolidation at A&E with our 1996 acqui-
sition of Threads USA. That was a terrific
opportunity for us.
Acquisitions are always of interest to
us and we evaluate each and every opportu-
nity, whether from a buy or sell standpoint.
For both subsidiaries,we would clearly look
for significant synergies and expect the
acquisition to be accretive. In the case of
Harris Teeter, we would obviously be most
interested in a supermarket company with
a similar format to ours and in a contiguous
location. Having said that, we would not
rule anything out.
Would we consider acquisitions out-
side of our current core businesses? It may
not be a priority for us, but we would not be
serving our shareholders well if we didn’t
keep all our options open.
What do you think is most exciting
about Ruddick? Why would you rec-
ommend it to investors?
Ruddick offers investors the opportunity
to diversify and invest in two companies
with unique positions in their respective
industries. A&E is a market leader in indus-
trial sewing thread worldwide. Harris Teeter
is an innovative specialty grocery retailer
with a leading edge in the increasingly popu-
lar home meal replacement market. A&E
provides steady cash flow and is highly prof-
itable. Harris Teeter’s operating margins are
still below average for the leaders in the
industry and we have specific programs in
place to improve them. This represents a
great opportunity for us. Ruddick allows
investors to participate in both domestic
and international markets yet maintain mod-
erate risk.We have a well-managed balance
sheet. The stock has exhibited relatively
low price volatility as compared to price
fluctuations in the overall market.
Employees own 25% of Ruddick stock
through our ESOP and, additionally, manage-
ment owns another 11%; we have the very
best personal incentives to help enhance
shareholder value.
A&E’s significant capital
expenditures each year
ensure state-of-the-art
equipment and technol-
ogy, which provide a clear
competitive advantage.
Superior quality, outstand-
ing freshness, greater
variety, excitement and
meticulous cleanliness are
all hallmarks of Harris
Teeter’s spacious stores.
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