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FOOD LION REPORTS THIRD QUARTER RESULTS

 SALISBURY, N.C., Sept. 23 /PRNewswire/ -- During the third quarter of 1993, Food Lion, Inc. (NASDAQ-NMS: FDLN), an operator of 1,080 supermarkets in 14 states, earned $39.0 million before LIFO and income taxes and $24.7 million net income, as compared to $79.0 million and $48.5 million, respectively, in the third quarter of 1992. Same store sales decreased 4.0 percent during the third quarter.
 During the quarter, the company settled all outstanding disputes arising under the Fair Labor Standards Act pending at the U.S. Labor Department ("DOL"). The settlement requires Food Lion to pay $16.2 million in back wages and penalties. As the company had established reserves to cover legal and other potential costs associated with the DOL's investigation, the actual impact of the settlement on pre- tax third quarter earnings is $8.2 million. The impact on third quarter net income is $6.2 million or $0.0128 per share.
 Excluding the impact of the DOL settlement on third quarter results, the company's earnings before LIFO and income taxes would have been $47.2 million, its net income $30.9 million, for a 1.71 percent net income margin, a net margin that more than doubles the 1992 industry average.
 The company reported a sales increase of 7.1 percent and a net income decrease of 49.1 percent for the third quarter of 1993 compared with the third quarter of 1992.
 Food Lion is encouraged with the third quartei?ng sales trends, and remains committed to increasing customer traffic and sales by taking the measures necessary to sharpen the company's image and to improve customer perception. Food Lion President and CEO Tom E. Smith stated that, "Although additional expenses are impacting current quarter operating results, they will help position Food Lion for continued success in the future."
 The impact of these additional expenses is partially offset by third quarter accounting adjustments to various overaccruals.
 Food Lion is scheduled to open between 100 and 105 new stores in 1993 and plans to open 40-50 new stores and to renovate 60-70 existing stores in 1994.
 STATEMENTS OF INCOME
 (Unaudited)
 For the 12 Weeks and 36 Weeks ended
 Sept. 11, 1993, and Sept. 5, 1992
 (Dollars in thousands except per share amounts)
 12 Weeks Ended 36 Weeks Ended
 Sept. 11 Sept. 5 Sept. 11 Sept. 5
 1993 1992 1993 1992
 (A) (B) (C) (D)
 Net Sales $1,807,374 $1,687,454 $5,214,122 $4,927,855
 Cost of goods
 sold 1,446,316 1,344,560 4,193,153 3,918,178
 Gross Profit 361,058 342,894 1,020,969 1,009,677
 Selling and
 Administrative
 Expenses 268,215 224,926 745,452 647,396
 Interest Expense 19,051 10,985 51,319 33,031
 Depreciation and
 Amortization 33,323 27,981 97,905 83,064
 320,589 263,892 894,676 763,491
 Income before
 Income Taxes 40,469 79,002 126,293 246,186
 Provision for
 Income Taxes 15,783 30,469 48,997 95,433
 Net Income $24,686 $48,533 $77,296 $150,753
 Earnings per
 share $0.0510 $0.1003 $0.1598 $0.3117
 Dividends per
 share $0.0218 $0.0278 $0.0653 $0.0835
 Weighted average
 number of shares
 outstanding:
 Class A 244,130,872 244,100,543 244,128,666 244,080,329
 Class B 239,571,114 239,571,582 239,571,114 239,571,738
 Total 483,701,986 483,672,125 483,699,780 483,652,067
 12 Weeks 36 Weeks
 A Pct. B Pct. C Pct. D Pct.
 Net Sales 100.00 100.00 100.00 100.00
 Cost of goods
 sold 80.02 79.68 80.42 79.51
 Gross Profit 19.98 20.32 19.58 20.49
 Selling and
 Administrative
 Expenses 14.84 13.33 14.30 13.14
 Interest Expense 1.05 0.65 0.98 0.67
 Depreciation and
 Amortization 1.85 1.66 1.88 1.68
 17.74 15.64 17.16 15.49
 Income before
 Income Taxes 2.24 4.68 2.42 5.00
 Provision for
 Income Taxes 0.87 1.80 0.94 1.94
 Net Income 1.37 2.88 1.48 3.06
 BALANCE SHEETS
 (Unaudited)
 (Dollars in thousands except per share amounts)
 Sept. 11, Jan. 2, Sept. 5,
 1993 1993(B) 1992(A)(B)
 Assets
 Current assets:
 Cash and cash
 equivalents $190,108 $105,123 $30,206
 Receivables 103,693 95,987 95,875
 Inventories 864,321 896,385 836,020
 Prepaid expenses and
 other 48,453 51,230 47,108
 Total current
 assets $1,206,575 $1,148,725 $1,009,209
 Property, at cost,
 less accumulated
 depreciation and
 amortization 1,437,601 1,372,767 1,227,109
 Total assets $2,644,176 $2,521,492 $2,236,318
 Liabilities and Shareholders' Equity
 Current Liabilities:
 Notes pae? $15 $459,750 $65,000
 Accounts payable, trade 353,506 324,063 374,729
 Accrued expenses 303,598 196,781 271,572
 Long-term debt -
 current 222 276 291
 Capital lease obligations
 - current 6,298 5,090 4,626
 Other liabilities -
 current 301 314 17
 Income taxes payable 23,243 34,827
 Total current
 liabilities 687,183 986,274 751,062
 Long-term debt 569,389 240,537 240,665
 Capital lease
 obligations 286,610 245,654 225,038
 Deferred income taxes 91,493 84,068 70,251
 Deferred compensation 706 1,724 1,706
 Other liabilities 7,278 7,516 5,780
 Total liabilities 1,642,659 1,565,773 1,294,502
 Shareholders' equity:
 Class A non-voting
 common stock, $.50
 par value 122,066 122,061 122,055
 Class B voting common
 stock, $.50 par value 119,786 119,786 119,786
 Additional Capital 286 225 133
 Retained earnings 759,379 713,647 699,842
 Total shareholders'
 equity 1,001,517 955,719 941,816
 Total liabilities
 and shareholders'
 equity $2,644,176 $2,521,492 $2,236,318
 (A) Applicable amounts have been restated for SFAS No. 109, "Accounting for Income Taxes," which was adopted in the fourth quarter of 1992.
 (B) 1992 amounts have been restated to reflect account reclassification.
 FOOD LION INC.
 STATEMENTS OF INCOME (UNAUDITED)
 12 Weeks Ended 12 Weeks Ended Pct.
 09/11/93 09/05/92 Inc.
 (Dec.)
 Net Sales $1,807,373,762 $1,687,454,135 7.1
 Income before LIFO
 and income taxes 38,968,492 79,001,659 -50.7
 LIFO 1,500,000 0 NM
 Income before income taxes 40,468,492 79,001,659 -48.8
 Income taxes 15,782,721 30,468,788 -48.2
 Net income 24,685,771 48,532,871 -49.1
 Earnings per share 0.0510 0.1003 -49.1
 Weighted average number
 of shares outstanding 483,701,986 483,672,125
 36 Weeks Ended 36 Weeks Ended Pct.
 09/11/93 09/05/92 Inc.
 (Dec.)
 Net sales $5,214,121,681 $4,927,855,472 5.8
 Income before LIFO
 and income taxes 127,293,396 248,185,577 -48.7
 LIFO (1,000,000) (2,000,000) -50.0
 Income before income taxes 126,293,396 246,185,577 -48.7
 Income taxes 48,996,964 95,432,720 -48.7
 Net income 77,296,432 150,752,857 -48.7
 Earnings per share 0.1598 0.3117 -48.7
 Weighted average number
 of shares outstanding 483,699,780 483,652,067
 STATISTICAL INFORMATION
 Number of Stores at period end: 1080 940
 -0- 9/23/93
 /CONTACT: Mike Mozingo of Food Lion, 704-633-8250 Ext. 2575/
 (FDLN)


CO: Food Lion, Inc. ST: North Carolina IN: REA SU: ERN

CM -- CH010 -- 5404 09/23/93 17:09 EDT
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Publication:PR Newswire
Date:Sep 23, 1993
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