-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KipmB0ho90C44BKBF1BowOGH1f10YvxlHFuMAab6w8rwfgjUHdYmP/tSFyIJoRs9 howeVPSy8Wy7dSBh37YxOg== 0000104169-96-000006.txt : 19960613 0000104169-96-000006.hdr.sgml : 19960613 ACCESSION NUMBER: 0000104169-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960612 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAL MART STORES INC CENTRAL INDEX KEY: 0000104169 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 710415188 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06991 FILM NUMBER: 96579917 BUSINESS ADDRESS: STREET 1: 702 SOUTHWEST 8TH ST CITY: BENTONVILLE STATE: AR ZIP: 72716 BUSINESS PHONE: 5012734000 MAIL ADDRESS: STREET 1: 702 SOUTHWEST 8TH STREET CITY: BENTONVILLE STATE: AR ZIP: 72716 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 30, 1996. or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______to______. Commission file number 1-6991 WAL-MART STORES, INC. (Exact name of registrant as specified in its charter) Delaware 71-0415188 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 702 S.W. Eighth Street Bentonville, Arkansas 72716 (Address of principal executive offices) (zip code) (501) 273-4000 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes _____ No _____ Applicable Only to Corporate Issuers Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, $.10 Par Value -- 2,293,531,782 shares as of April 30, 1996. PART I. FINANCIAL INFORMATION Item 1. Financial Statements WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in millions)
April 30, January 31, 1996 1996 ASSETS (Unaudited) (*Note) Cash and cash equivalents $ 32 $ 83 Receivables 908 853 Inventories 16,213 15,989 Other current assets 626 406 Total current assets 17,779 17,331 Property, plant and equipment 21,592 20,850 Less accumulated depreciation 4,053 3,752 Net property, plant and equipment 17,539 17,098 Property under capital leases 2,508 2,476 Less accumulated amortization 708 680 Net property under capital leases 1,800 1,796 Other assets and deferred charges 1,131 1,316 Total assets $38,249 $37,541 LIABILITIES AND SHAREHOLDERS' EQUITY Commercial paper $ 1,575 $ 2,458 Accounts payable 7,375 6,442 Other current liabilities 2,720 2,554 Total current liabilities 11,670 11,454 Long-term debt 8,508 8,508 Long-term obligations under capital leases 2,111 2,092 Deferred income taxes and other 744 731 Common stock and capital in excess of par value 775 774 Retained earnings 14,843 14,394 Foreign currency translation adjustment ( 402) ( 412) Total shareholders' equity 15,216 14,756 Total liabilities and shareholders' equity $38,249 $37,541
[FN] See accompanying notes to condensed consolidated financial statements. *Note: The balance sheet at January 31, 1996, has been taken from the audited financial statements at that date, and condensed. WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in millions except per share data)
Three Months Ended April 30, 1996 1995 Net sales $22,772 $20,440 Other income - net 229 212 23,001 20,652 Costs and expenses: Cost of sales 18,064 16,196 Operating, selling and general and administrative expenses 3,810 3,377 Interest costs: Debt 169 154 Capital leases 51 46 22,094 19,773 Income before income taxes 907 879 Provision for income taxes 336 326 Net income $ 571 $ 553 Net income per share $ .25 $ .24 Dividends per share $ .0525 $ .05 Beginning of the year shareholders' equity $14,756 $12,726 Return for the period on beginning of the year shareholders' equity 3.87% 4.35% Average number of common shares outstanding 2,293 2,297
[FN] See accompanying notes to condensed consolidated financial statements. WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in millions)
Three Months Ended April 30, 1996 1995 Cash flows from operating activities: Net income $ 571 $ 553 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 348 276 Increase in inventories ( 217) ( 484) Increase (decrease) in accounts payable 948 ( 50) Noncash items and other ( 10) ( 278) Net cash provided by operating activities 1,640 17 Cash flows from investing activities: Net capital additions ( 733) ( 759) Other investing activities 63 21 Net cash used in investing activities ( 670) ( 738) Cash flows from financing activities: (Decrease)increase in commercial paper ( 884) 573 Proceeds from issuance of long-term debt - 250 Dividends paid ( 120) ( 115) Other financing activities ( 17) ( 18) Net cash (used in) provided by financing activities ( 1,021) 690 Net decrease in cash and cash equivalents ( 51) ( 31) Cash and cash equivalents at beginning of year 83 45 Cash and cash equivalents at end of first quarter $ 32 $ 14 Supplemental Disclosure of Cash Flow Information: Income tax paid $ 105 $ 356 Interest paid 225 206 Capital lease obligations incurred 35 59
[FN] See accompanying notes to condensed consolidated financial statements. WAL-MART STORES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE A. BASIS OF PRESENTATION The condensed consolidated balance sheet as of April 30, 1996, and the related condensed consolidated statements of income and cash flows for the three month periods ended April 30, 1996 and 1995 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in the Company's annual report. Therefore, the interim statements should be read with the annual report. NOTE B. INVENTORIES Inventories are valued at the lower of cost or market value, using the last-in, first-out (LIFO) method for substantially all inventories. Quarterly inventory determinations under LIFO are partially based on assumptions as to inventory levels at the end of the fiscal year, sales and the rate of inflation for the year. If the first-in, first-out (FIFO) method of accounting had been used by the Company, inventories at April 30, 1996 would have been $316 million higher than reported, an increase in the LIFO reserve of $5 million from January 31, 1996. If the FIFO method had been used at April 30, 1995, inventories would have been $359 million higher than reported, an increase in the LIFO reserve of $8 million from January 31, 1995. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The quarter ended April 30, 1996, consisted of 90 days compared to 89 days in the quarter ended April 30, 1995. Increased sales during the quarter ended April 30, 1996, were attributable to the extra day of sales, an increase in comparable store sales of 4% and to the Company's continuing expansion activities. Domestic expansion activity in the first quarter of fiscal 1997 included eight new Wal-Mart stores, two new Supercenters, three new Sam's Clubs, the conversion of 26 Wal-Mart stores to Supercenters and the relocation or expansion of four Wal-Mart stores. International expansion included the addition of three Wal-Mart stores in Canada and four units in Mexico. International sales accounted for 4% of total sales this quarter compared to 3% in last year's first quarter. Sam's Clubs sales as a percentage of total sales fell from 22% in last year's quarter to 20% this quarter. At April 30, 1996, the Company had 1,977 Wal-Mart stores, 267 Supercenters, and 432 Sam's Clubs in the United States, along with 134 Canadian Wal-Mart stores, 130 units in Mexico, 11 units in Puerto Rico, five units in Brazil, and three units in Argentina. This compares with 1,979 Wal-Mart stores, 162 Supercenters, and 428 Sam's Clubs in the United States, and 126 Canadian Wal-Mart stores, 106 units in Mexico, and eight units in Puerto Rico at the same time last year. The Company's gross profit as a percentage of sales decreased from 20.76% in the first quarter of fiscal 1996 to 20.67% during the first quarter of fiscal 1997. The net change is comprised of an increase in the percentage of total sales in consumable goods which have lower markon percents. This decrease in gross profit is partially offset because Sam's Clubs comprised a lower percentage of consolidated sales in fiscal 1997 at a lower contribution to gross margin than the stores. Operating, selling, general, and administrative expenses increased as a percentage of sales from 16.52% during the first quarter of fiscal 1996 to 16.73% for the first quarter of fiscal 1997. The increase in the expenses as a percentage of sales is primarily due to the change in the percentage of sales by operating units discussed above. Because Sam's Clubs expenses as a percentage of sales are lower than the overall expense rate and because international expenses as a percentage of sales are higher than the overall rate, the expense rate has increased. In the first quarter of fiscal 1997, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The statement requires entities to review long-lived assets and certain intangible assets in certain circumstances, and if the value of the assets is impaired, an impairment loss shall be recognized. Due to the Company's previous accounting policies this pronouncement had no effect on the Company's financial position or results of operations. The Company also adopted SFAS No. 123 "Accounting for Stock-Based Compensation" in the first quarter of fiscal 1997. The statement relates to the measurement of compensation of stock options issued to employees. The statement gives entities a choice of recognizing related compensation expense by adopting a new fair value method determination or to continue to measure compensation using the former standard. If the former standard for measurement is elected, SFAS No. 123 requires supplemental disclosure to show the effects of using the new measurement criteria. The Company elected to continue to use the measurement prescribed by the former standard, and accordingly, the pronouncement had no effect on the Company's financial position or results of operations. The Company will present the supplemental disclosure in the fiscal 1997 annual report. Interest expense increased $20 million in the first quarter of fiscal 1997 compared to the same period in fiscal 1996. The increase is due to the additional long-term borrowings which have been used to finance the Company's expansion. Interest on short term borrowings decreased slightly due to lower borrowing rates and a decreasing commercial paper balance. Liquidity and Capital Resources Cash flows provided by operating activities were $1,640 million in the first quarter of fiscal 1997 compared to $17 million in the first quarter of fiscal 1996. The increase is primarily due to an increase in accounts payable and accrued liabilities and a smaller increase in inventory in the first quarter of fiscal 1997. The increased operating cash flow provided an excess of $787 million after investing $733 million in capital assets and paying dividends of $120 million. Under shelf registration statements previously filed with the Securities and Exchange Commission the Company may issue debt securities aggregating $751 million. Cash flow provided by operations along with available debt under the shelf registration statements and the Company's ability to obtain short-term financing should be adequate to fund the Company's expansion program, operational and other cash needs. At April 30, 1996, the Company had total assets of $38,249 million compared with $37,541 million at January 31, 1996. Working capital at April 30, 1996 was $6,109 million up $232 million from January 31, 1996. The ratio of current assets to current liabilities was 1.5 to 1.0 at April 30, 1996, January 31, 1996, and April 30, 1995. PART II. OTHER INFORMATION Item 5. Other Information The Private Securities Litigation Reform Act of 1995 ("the Act") provides a safe harbor for forward-looking statements made by or on behalf of the Company. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), expansion and other development trends of industry segments in which the Company is active, business strategy, expansion and growth of the Company's business and operations and other such matters are forward-looking statements. To take advantage of the safe harbor provided by the Act, Wal-Mart is identifying certain factors that could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by or on behalf of the Company. Many of these factors have previously been identified in filings or statements made by or on behalf of the Company. All phases of The Company's operations are subject to influences outside its control. Any one, or a combination, of these factors could materially affect the results of the Company's operations. These factors include: competitive pressures, inflation, consumer debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, political instability, interest rate fluctuations and other capital market conditions. Forward-looking statements made by or on behalf of the Company are based on a knowledge of its business and the environment in which it operates, but because of the factors listed above actual results may differ from those in the forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business or operations. Item 6. Exhibits and Reports on Form 8-K (a) The following document is filed as an exhibit to this Form 10-Q: Exhibit 27 - Financial Data Schedule (b) There were no reports on Form 8-K filed for the quarter ended April 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WAL-MART STORES, INC. Date: June 11, 1996 /s/David D. Glass________________ David D. Glass President and Chief Executive Officer Date: June 11, 1996 /s/John B. Menzer________________ John B. Menzer Executive Vice President and Chief Financial Officer EX-27 2
5 3-MOS JAN-31-1997 APR-30-1996 32 0 908 0 16,213 17,779 21,592 4,053 38,249 11,670 0 0 0 229 14,987 38,249 22,772 23,001 18,064 22,094 0 0 220 907 336 571 0 0 0 571 .25 .25
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