In the first quarter of fiscal 2010, consolidated net income was $23.7 million, or $0.49 per diluted share, compared to $22.9 million, or $0.47 per diluted share, in the prior year's first quarter. The increase in net income over the prior year was driven by operating profit improvements at A&E that more than offset the slight decline in operating profit at Harris Teeter and additional overhead expenses at the holding company, as compared to the prior year. The increase in corporate expenses was driven by increased costs associated with certain benefit programs that have investment returns referenced to the financial markets and expenses of $500,000 associated with certain contract negotiations.

Harris Teeter's sales increased by 4.7% to $972.3 million in the first quarter of fiscal 2010, compared to sales of $928.9 million in the first quarter of fiscal 2009. The increase in sales was attributable to incremental new store sales that were partially offset by a comparable store sales decline of 2.37% for the quarter. Comparable store sales for the quarter were negatively impacted by retail price deflation and changes in consumer purchasing habits, reflective of the current economic environment.

During the first quarter of fiscal 2010, Harris Teeter opened 6 new stores and closed one existing store, which was replaced by one of the new stores. Since the end of the first quarter of fiscal 2009, Harris Teeter has opened 21 new stores, closed 3 older stores (which were all replaced by new stores) and completed the major remodeling of one store, which included the expansion of selling square footage. Harris Teeter operated 194 stores at December 27, 2009.

Operating profit at Harris Teeter in the first quarter of fiscal 2010 decreased to $42.3 million (4.35% of sales), from $44.3 million (4.77% of sales) in the first quarter of fiscal 2009. Operating profit was impacted by new store pre-opening costs of $2.6 million (0.26% of sales) and $4.0 million (0.43% of sales) in the first quarter of fiscal 2010 and fiscal 2009, respectively. New store pre-opening costs fluctuate between reporting periods depending on the new store opening schedule.

The decrease in Harris Teeter's operating profit for the first quarter of fiscal 2010 from the prior year resulted primarily from the continued promotional retail price investments made to enhance the overall value we provide to our customers. The sales increases, along with a continued emphasis on operational efficiencies and cost controls, have provided the leverage to partially offset the additional costs associated with Harris Teeter's increased promotional activity, increased occupancy costs and increased pension expense.

Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation commented that, "As customers face the ongoing challenges of the economy, our focus remains on driving customer shopping visits and loyalty. We continue to deliver quality, variety and value to each and every customer through further investing in our in-store promotional activity and lower everyday prices. Despite the presence of deflation in some categories, we realized a greater number of items sold and increased customer shopping visits in our comparable stores during the first quarter of fiscal 2010. Additionally, our customer loyalty data indicates that the number of active households increased by 2.21% per comparable store. We have continued to offset a significant portion of our promotional activity investment by operational efficiencies and cost saving initiatives throughout the organization. As a result, selling, general and administrative costs as a percent of sales decreased to 25.53% for the first quarter of fiscal 2010, as compared to 26.27% in the prior year. Our customers are much more price sensitive than ever before; however, they continue to demand the quality, variety and service we have always provided and we will continue to provide."

A&E sales for the first quarter of fiscal 2010 increased by 3.2% to $68.2 million from $66.1 million in the first quarter of fiscal 2009. Foreign sales accounted for approximately 55% and 56% of total A&E sales for the first quarters of fiscal 2010 and fiscal 2009, respectively.

A&E recorded operating profit of $4.0 million for the first quarter of fiscal 2010, compared to an operating loss of $1.1 million for the first quarter of fiscal 2009. Operating profit improvements were realized in A&E's U.S. operations and the majority of its foreign operations. The increase in sales, along with inventories being in line with sales volumes, contributed to improved operating schedules at most of A&E's manufacturing facilities. Improved operating results were also realized through the cost reduction measures taken in fiscal 2009.

Mr. Dickson said, "A&E experienced a significant increase in operating profit during the first quarter of fiscal 2010 over the prior year due to the accomplishments made in their expense reduction efforts during the past year and increased sales. The rationalization of inventory levels throughout the supply chain has enabled A&E to realize improved operating schedules at A&E's U.S. and foreign facilities. In addition, improved operating results have also been realized through the sizeable Asian operations in which A&E holds a noncontrolling interest. Today, A&E has over 60% of its total finishing production capacity located in Asia, including its joint ventures, which emphasizes A&E's progress toward becoming an Asian-centric global supplier of sewing threads and technical textiles. We will continue to enhance our international operations and evaluate A&E's structure to best position A&E to take advantage of opportunities available through these operations."

Consolidated capital expenditures for the Company during the first quarter of fiscal 2010 totaled $25.3 million and depreciation and amortization totaled $33.1 million. Total capital expenditures for the 13 weeks ended December 27, 2009, were comprised of $24.9 million for Harris Teeter and $0.4 million for A&E. During the first quarter of fiscal 2010, Harris Teeter made an additional net investment of $4.2 million ($7.5 million additional investments less $3.3 million received from property investment sales and partnership returns) in connection with the development of certain of its new stores. Additionally, A&E spent $0.3 million to acquire the noncontrolling interest in its joint ventures in South Africa and now has a 100% ownership interest.

Harris Teeter's strong operating performance and financial position provides the flexibility to continue with its store development program for new and replacement stores along with the remodeling and expansion of existing stores. Harris Teeter plans to open an additional 7 new stores (one of which will replace an existing store) and complete the major remodeling on 2 additional stores (one of which will be expanded in size) during the remainder of fiscal 2010. The new store development program for fiscal 2010 is expected to result in a 6.8% increase in retail square footage, as compared to an 8.7% increase in fiscal 2009. The Company routinely evaluates its existing store operations in regards to its overall business strategy and from time to time will close or divest underperforming stores.

Harris Teeter's capital expenditure plans entail the continued expansion of its existing markets, including the Washington, D.C. metro market area which incorporates northern Virginia, the District of Columbia, southern Maryland and coastal Delaware. Real estate development by its nature is both unpredictable and subject to external factors, including weather, construction schedules and costs. Any change in the amount and timing of new store development would impact the expected capital expenditures, sales and operating results.

Consolidated capital expenditures for the Company during fiscal 2010 are planned to total approximately $146 million, consisting of $141 million for Harris Teeter and $5 million for A&E. Such capital investment is expected to be financed by internally generated funds, liquid assets and borrowings under the Company's revolving line of credit. The Company's revolving line of credit provides substantially more liquidity than what management expects the Company will require through the expiration of the line of credit in December 2012.

The Company's management remains cautious in its expectations for the remainder of fiscal 2010 due to the current economic environment and its impact on the Company's customers. Harris Teeter will continue to refine its merchandising strategies to respond to the changing shopping demands and to maintain or increase its customer base. The retail grocery market remains intensely competitive and there is no evidence that the recent improvements in the textile and apparel industries will continue. Any operating improvement will be dependent on the Company's ability to increase Harris Teeter's market share, to continue to rationalize A&E's operations, to offset increased operating costs with additional operating efficiencies, and to effectively execute the Company's strategic expansion plans.

This news release may contain forward-looking statements that involve uncertainties. A discussion of various important factors that could cause results to differ materially from those expressed in such forward-looking statements is shown in reports filed by the Company with the Securities and Exchange Commission and include: generally adverse economic and industry conditions; changes in the competitive environment; economic or political changes in countries where the Company operates; changes in federal, state or local regulations affecting the Company; the passage of future tax legislation, or any negative regulatory or judicial position which prevails; management's ability to predict the adequacy of the Company's liquidity to meet future requirements; volatility of financial and credit markets which would affect access to capital for the Company; changes in the Company's expansion plans and their effect on store openings, closings and other investments; the ability to predict the required contributions to the Company's pension and other retirement plans; the Company's requirement to impair recorded goodwill or long-lived assets; the cost and availability of energy and raw materials; the continued solvency of third parties on leases the Company guarantees; the Company's ability to recruit, train and retain effective employees; changes in labor and employer benefits costs, such as increased health care and other insurance costs; the Company's ability to successfully integrate the operations of acquired businesses; the extent and speed of successful execution of strategic initiatives; and, unexpected outcomes of any legal proceedings arising in the normal course of business. Other factors not identified above could cause actual results to differ materially from those included, contemplated or implied by the forward-looking statements made in this news release.

Ruddick Corporation is a holding company with two primary operating subsidiaries: Harris Teeter, Inc., a leading regional supermarket chain with operations in eight states primarily in the southeastern and mid-Atlantic United States, including the District of Columbia; and American & Efird, Inc., one of the world's largest global manufacturers and distributors of industrial sewing thread, embroidery thread and technical textiles.

Selected information regarding Ruddick Corporation and its subsidiaries is attached. For more information on Ruddick Corporation, visit our web site at:www.ruddickcorp.com.

SOURCE: Ruddick Corporation

Ruddick Corporation
John B. Woodlief, Vice President - Finance and Chief Financial Officer
704-372-5404