SALISBURY, NC – Food Lion, Inc. (Nasdaq: FDLNA, FDLNB) has announced that it will restate its financial statements for the fiscal year ended December 28, 1996 and revise previously reported results for the year ended January 3, 1998 to reflect an adjustment between the two years related to previously recorded store closing reserves. The restatement is not expected to affect operating performance, cash flow or financial trends as previously reported for either 1996 or 1997.
As disclosed in the Company’s Form 10-Q for the third quarter ended September 6, 1997, the Company announced plans to exit the Southwest market. During the third quarter of 1997, the Company recorded a pre-tax charge of $129.1 million related to the divestiture of the Southwest market less $42.0 million in unused reserves related to store closings that have occurred since 1993 ($35 million represents the unused portion of a $170.5 million pre-tax charge against 1993 earnings, and $7.0 million represents unused reserves recorded for store closures since 1993).
The anticipated effect of the restatement is to increase earnings in 1996 by approximately $0.02 per share and reduce earnings for 1997 by approximately $0.02 per share.
Safe Harbor Statement Regarding Forward-looking Information or Statements
This document contains forward-looking statements that involve uncertainties. Factors that could cause results to differ materially from those in the forward-looking statements are detailed from time to time in reports filed by the Company with the SEC, including Forms 8K, 10Q and 10K.
Contact: Chris Ahearn (704) 633-8250, Ext. 2892