Costs related mainly to its acquisition of Hannaford Bros Co. resulted in a third-quarter loss of $10.6 million for Salisbury-based Delhaize America.

That translates to a loss of 6 cents a share.

Not counting the costs of the merger and one-time adjustments, the company’s third-quarter earnings amounted to $36.3 million, or 22 cents a share — also below the predictions of analysts, who expected the company to earn about 34 cents a share before costs.

A year ago, third-quarter earnings were $73 million, or 47 cents a share.

Delhaize America is the parent company of Food Lion, Kash n’ Karry and Hannaford grocery stores. It is the country’s fifth largest supermarket operator with stores from Maine to Florida.

Earlier this month, Delhaize’s Belgian parent offered to buy the remainder of Delhaize America it does not own. A Delhaize America committee is reviewing the offer, which Food Lion co-founder Ralph Ketner recently criticized as a “bad and ridiculous” deal.

Company officials blamed the merger costs, higher interest rates and promotional activities in a highly competitive Southeastern market for hurting Delhaize America’s bottom line.

In response, Delhaize has decided to concentrate on its three main banners — Food Lion, Hannaford and Kash ‘n Karry — and eliminate its Save ‘n Pack subsidiary in Florida.

Of 18 Save ‘n Pack locations, Delhaize will close 13 and convert five others to Kash ‘n Karry stores.

The company also will close two Food Lion stores and relocate 14 others.

Overall, third-quarter sales increased 18 percent over 1999 and comparable store sales were up 1 percent. This quarterly data includes the operating results of Hannaford Bros. for six weeks, or half of the quarter, since its acquisition on July 31.

Delhaize America expects to end the year with 1,418 stores, a net increase of 140 stores, with renovations to 130 existing locations.

The company earnings statement said its 2001 growth plans include a capital expenditure program of $450 million, with an objective of increasing square footage by 4 to 5 percent and renovating 200 stores.

“We will be pursuing a growth strategy that promotes the continued expansion and development of our three banners, while focusing on cash flow and reduction of debt,” Delhaize Chief Executive Officer Bill McCanless said.

“Our strategic review of our operations noted that all of our markets are providing positive cash flow, and plans are in place to reduce investment in working capital.”

Delhaize America had sales of $8.2 billion for the first three quarters.

Delhaize America reported some of these third-quarter costs:

• Higher interest expense of $18.6 million, or 11 cents a share.
• Amortization of intangible assets related to the acquisition of Hannaford of $8.7 million, or 5 cents a share.
• A store closing charge of $30.5 million.
• Additional one-time adjustments, including a non-cash asset impairment charge related to store locations of $9.7 million.
• Merger costs of $6.8 million “related primarily to amortization of fees incurred prior to the third quarter to arrange bridge financing to fund the Hannaford acquisition.”

Delhaize America officials said promotional activity of its Food Lion stores also affected the company’s gross profit on product sold in the third quarter.

But Delhaize adds that Food Lion’s sales trends have met the company’s targets, and Food Lion’s market share in the Southeast is growing.

McCanless and High Farrington, vice chairman of Delhaize America, hosted a conference call this morning with analysts. McCanless called it a “landmark quarter” for the company because of the Hannaford merger.

He also described the quarter’s final results as “quite complex, with all of these various charges.”

McCanless said Delhaize America’s strategic direction focuses on three themes:improving operations, growing and increasing cash flow. He expressed some concerns about employee retention and merchandise theft and reviewed company efforts at looking at its demographic and ethnic customer base in some areas.

Farrington said the final stages of the merger went smoothly, and he discussed savings the company expects in the future from the consolidation of operations.

“Overall, I’m very pleased with our progress,” Farrington said, adding that a “high spirit of cooperation” exists among all the company’s banners.

Farrington said excellent growth opportunities exist in the Florida market, where the company is converting 30 Food Lions to Kash ‘n Karrys.