Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, May 7, 1993 TAG: 9305070113
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: Associated Press
DATELINE: SALISBURY, N.C. LENGTH: Medium
"We took some hard hits in 1992, but we got off the canvas and we're back on our toes," Smith told about 1,200 shareholders at the annual meeting at Catawba College.
The meeting was shareholders' first since last year's broadcast by ABC News of a "PrimeTime Live" report that accused the company of unsanitary food handling.
Food Lion's stock has lost nearly two-thirds of its value since the Nov. 5, 1992, report. The grocery chain has responded with a $30 million lawsuit against ABC News, charging violation of federal racketeering laws.
Smith, re-elected chairman of the board Thursday, said the company would become "more efficient and cost-effective than ever." The plan includes remodeling at 40 stores, to cost $1 million each, and the opening of 110 more stores this year, he said.
Growth will be in markets where Food Lion already operates, Smith said.
"Specific growth plans for 1994 must await financial results from the first half of this year," Smith said. "Growth only makes sense when our performance can support it."
He also said the company would push ahead in Texas.
The stockholders' show of support for Smith, a day after Food Lion's Class B or voting-share stock closed at a 52-week low, surprised some observers. Shareholders and analysts had said they expected Smith to be forced to answer questions about the company's dwindling stock price, its continuing battle with ABC News and co-founder Ralph Ketner's sudden departure from the board last month.
All those subjects came up during the meeting, but there were no angry exchanges between company officials and shareholders. Smith answered questions written on file cards by shareholders.
At the end of the two-hour meeting, Ketner's daughter said her question had not been asked. So Smith allowed Linda Ketner, a former Food Lion employee, to ask why he had not communicated with shareholders immediately about the company's planned response to ABC's report.
Smith said Food Lion executives were too busy trying to turn the company around. He said the proper way to communicate with shareholders was by letter in the annual report.
When other shareholders began asking questions, Smith abruptly adjourned the meeting. He left without comment to the media. A spokesman said later that Smith planned to respond to any questions that were not addressed at the meeting.
"I think it's going to be a long road back," said Charlie Barger of Albemarle, N.C., who said he has owned Food Lion stock for three decades.
by CNB