-----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, J0EihZ9+LtSxOu9ogjOb3ALa2NY+jAsbSqcyVqWmMvh0BQBbuFvB9whfC9iw+gpD DsywAPPUSWwxnZcMvxOigA== /in/edgar/work/20000613/0001045969-00-000434/0001045969-00-000434.txt : 20000919 0001045969-00-000434.hdr.sgml : 20000919 ACCESSION NUMBER: 0001045969-00-000434 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000429 FILED AS OF DATE: 20000613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHOPPERS FOOD WAREHOUSE CORP CENTRAL INDEX KEY: 0001043065 STANDARD INDUSTRIAL CLASSIFICATION: [5411 ] IRS NUMBER: 522014682 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-32825 FILM NUMBER: 654373 BUSINESS ADDRESS: STREET 1: 11840 VALLEY VIEW RD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 3013068600 MAIL ADDRESS: STREET 1: 4600 FORBES BLVD CITY: LENHAM STATE: MD ZIP: 20706 10-Q 1 0001.txt FORM 10-Q UNITED STATES 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 (13 weeks) ended April 29, 2000. ( ) 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 333-32825 SHOPPERS FOOD WAREHOUSE CORP. (Exact name of registrant as specified in its charter) Delaware 53-0231809 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4600 Forbes Blvd., Lanham, Maryland, 20706 (Address of principal executive office) (Zip Code) (301) 306-9600 -------------- (Registrant's telephone number, including area code) 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 for such shorter period 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 ----- ----- At June 5, 2000, the registrant had 23,333 shares of Class A Common Stock, non-voting, $5.00 par value per share, outstanding and 10,000 shares of Class B Common Stock, voting, $5.00 par value per share, outstanding. The common stock of Shoppers Food Warehouse Corp. is not publicly traded. The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format. Part I - Financial Information Item 1. Financial Statements The consolidated financial statements included herein have been prepared by Shoppers Food Warehouse Corp. ("Shoppers" or the "Company") without audit (except for the consolidated balance sheet as of January 29, 2000, which has been derived from the audited consolidated balance sheet as of that date) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted because they are not applicable or not required. It is suggested that these consolidated financial statements are read in conjunction with the consolidated financial statements and notes thereto included in Shoppers' Annual Report on Form 10-K for the fiscal year ended January 29, 2000. SHOPPERS FOOD WAREHOUSE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
April 29, January 29, 2000 2000 ----------- ----------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 1,081 $ 3,390 Accounts receivable, net 10,254 10,275 Merchandise inventories 34,493 31,324 Deferred income taxes 4,185 4,185 Other current assets 3,083 2,761 -------- -------- Total current assets 53,096 51,935 Property and equipment, net 76,866 64,017 Goodwill, net of accumulated amortization 303,644 305,431 Leasehold rights, net of accumulated amortization 27,659 27,945 Note receivable 43,447 42,491 Other assets 699 751 -------- -------- Total assets $505,411 $492,570 ======== ======== Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 8,175 $ 6,245 Accrued interest 6,088 2,058 Accrued insurance 7,197 7,740 Accrued expenses 12,846 13,908 Due to affiliates 49,254 51,992 Accrued income taxes 9,546 9,315 Other current liabilities 618 618 -------- -------- Total current liabilities 93,724 91,876 Senior notes due 2004 180,901 181,748 Capital lease obligations 22,542 12,034 Deferred income taxes 14,218 14,218 Other liabilities 728 803 -------- -------- Total liabilities 312,113 300,679 -------- -------- Stockholder's equity: Class A common stock, nonvoting, par value $5 per share, 25,000 shares authorized; 23,333 1/3 shares issued and outstanding 117 117 Class B common stock, voting, par value $5 per share, 25,000 shares authorized; 10,000 shares issued and outstanding 50 50 Additional paid-in capital 189,241 189,241 Retained earnings 3,890 2,483 -------- -------- Total stockholder's equity 193,298 191,891 -------- -------- Total liabilities and stockholder's equity $505,411 $492,570 ======== ========
The accompanying notes are an integral part of these statements. SHOPPERS FOOD WAREHOUSE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands)
First quarter (13 weeks) ended ----------------------------------- April 29, May 1, 2000 1999 --------------- -------------- (Post-SUPERVALU (Pre-SUPERVALU acquisition) acquisition) --------------- -------------- Sales $214,636 $220,069 Cost of sales 161,223 164,985 -------- -------- Gross profit 53,413 55,084 Selling and administrative expenses 47,651 47,767 -------- -------- Operating income 5,762 7,317 Interest income 1,021 874 Interest expense 3,554 4,329 -------- -------- Net interest expense 2,533 3,455 Earnings before income taxes 3,229 3,862 Provision for income taxes 1,822 2,162 -------- -------- Net earnings $ 1,407 $ 1,700 ======== ========
The accompanying notes are an integral part of these statements. SHOPPERS FOOD WAREHOUSE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
First quarter (13 weeks) ended ----------------------------------- April 29, May 1, 2000 1999 --------------- -------------- (Post-SUPERVALU (Pre-SUPERVALU acquisition) acquisition) --------------- -------------- Net cash provided by operating activities $ 4,730 $ 8,668 ------- -------- Cash flows from investing activities: Capital expenditures (3,899) (786) Purchase of short-term investments - (45) ------- -------- Net cash used in investing activities (3,899) (831) ------- -------- Cash flows from financing activities: Cash provided to affiliated companies (2,738) (12,819) Principal payments under capital lease obligations (402) (172) ------- -------- Net cash used in financing activities (3,140) (12,991) ------- -------- Net decrease in cash and cash equivalents (2,309) (5,154) Cash and cash equivalents at beginning of period 3,390 6,602 ------- -------- Cash and cash equivalents at end of period $ 1,081 $ 1,448 ======= ======== Supplemental Cash Flow Information: Disclosure of noncash investing activity Assets acquired under capital lease $10,910 $ - ======= ========
The accompanying notes are an integral part of these statements. SHOPPERS FOOD WAREHOUSE CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - GENERAL The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. The accompanying consolidated financial statements of the Company as of April 29, 2000, and for the 13 weeks ended April 29, 2000, and May 1, 1999, have not been audited. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying consolidated financial statements. In the opinion of the Company, the accompanying consolidated financial statements reflect all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position of the Company as of April 29, 2000, and the results of its operations for the 13-week periods ended April 29, 2000, and May 1, 1999. NOTE 2 - ACQUISITION On August 31, 1999, Richfood Holdings, Inc. ("Richfood") was acquired in a merger by a wholly-owned subsidiary of SUPERVALU INC., a Delaware corporation ("SUPERVALU"), and the Company became an indirect, wholly-owned subsidiary of SUPERVALU at that time ("the SUPERVALU acquisition"). Prior to August 31, 1999, the Company was an indirect, wholly-owned subsidiary of Richfood. SUPERVALU has accounted for the acquisition of Richfood using the purchase method of accounting and, accordingly, a new accounting basis was established as of August 30, 1999 and was used for the remaining twenty-two weeks of fiscal 2000. The assets and liabilities of Shoppers were restated to reflect their estimated fair market values as of that date. The excess of the purchase price paid for the Company over its net assets acquired (goodwill) of $310,076 has been pushed down to the Company. The goodwill is being amortized on a straight-line basis over 40 years. Certain financial statements and related footnote amounts for periods prior to the SUPERVALU acquisition may not be comparable to corresponding amounts subsequent to the acquisition. NOTE 3 - TRANSACTIONS WITH AFFILIATES The April 29, 2000 consolidated balance sheet includes $49.3 million due to affiliates compared to $52.0 million at January 29, 2000. The $49.3 million consists primarily of amounts due to SUPERVALU for the purchase of bonds and amounts due for inventory purchases and general and administrative expenses. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private - ------------------------------------------------------------------------------- Securities Litigation Reform Act of 1995 - ---------------------------------------- Any statements in this report regarding Shoppers' outlook for its businesses and their respective markets, such as projections of future performance, statements of management's plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on management's assumptions and beliefs. Such statements may be identified by such words or phrases as "will likely result," "are expected to," "will continue," "outlook," "is anticipated," "estimate," "project," "management believes" or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, Shoppers claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Results of Operations - --------------------- Sales decreased by $5.5 million to $214.6 million during the 13 weeks ended April 29, 2000, compared to $220.1 million during the 13 weeks ended May 1, 1999, a decrease of 2.5%. This decrease was due primarily to a decrease in comparable store sales of 2.7% for the 13 weeks ended April 29, 2000, compared to the corresponding period of the prior year. The decrease in comparable store sales was due primarily to increased competition. Gross profit, as a percentage of sales, remained essentially flat at approximately 25.0% during both the 13 weeks ended April 29, 2000 and the 13 weeks ended May 1, 1999. Selling and administrative expenses, as a percentage of sales, were 22.2% for the 13 weeks ended April 29, 2000, compared to 21.7% for the 13 weeks ended May 1, 1999, reflecting flat expense levels year over year on a reduced sales basis. Operating income was $5.8 million for the 13 weeks ended April 29, 2000, compared to $7.3 million for the 13 weeks ended May 1, 1999. The decrease was primarily due to the decrease in sales. Interest income increased to approximately $1.0 million for the 13 weeks ended April 29, 2000, compared to $0.9 million for the 13 weeks ended May 1, 1999, due to an increase in the interest on the note receivable. Interest expense decreased approximately $0.7 million, to $3.6 million for the 13 weeks ended April 29, 2000, compared to $4.3 million for the 13 weeks ended May 1, 1999, an 18.6% decrease. The reduction in interest expense was due to the retirement of $24.6 million of the Senior Notes in October 1999. The effective income tax rate for the 13 weeks ended April 29, 2000, was 56.4% compared to 56.0% for the 13 weeks ended May 1, 1999. The increase is primarily attributable to decreased taxable earnings in relation to the fixed amount of acquisition non-deductible goodwill associated with the SUPERVALU acquisition. Net income was $1.4 million for the 13 weeks ended April 29, 2000 compared to $1.7 million for the 13 weeks ended May 1, 1999, a decrease of 17.6%. Liquidity and Capital Resources - ------------------------------- During the 13 weeks ended April 29, 2000, operating activities provided net cash of $4.7 million, compared to $8.7 million provided during the 13 weeks ended May 1, 1999. The decrease was due primarily to higher inventory levels, partially offset by an increase in accounts payable, and the decrease in deferred taxes. Investing activities used net cash of $3.9 million during the 13 weeks ended April 29, 2000, compared to $0.8 million for the 13 weeks ended May 1, 1999. The increase was due mainly to $14.8 million of capital expenditures occurring during the first quarter of fiscal 2001, of which $10.9 million were funded through capital leases. The Company estimates that it will make total capital expenditures of approximately $44.3 million during the 52 weeks ending January 27, 2001, of which $23.0 million relates to capital leases for new stores. Management expects that these capital expenditures will be financed primarily through cash flows from operations, cash provided by affiliated companies and capital leases. Financing activities used $3.1 million during the 13 weeks ended April 29, 2000, compared to using $13.0 million during the 13 weeks ended May 1, 1999. The decrease was primarily due to the change in cash provided to affiliated companies. The Company believes that cash flows from Shoppers' operations as well as cash provided by affiliated companies will be adequate to meet its anticipated requirements for working capital, debt service, and capital expenditures. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Omitted PART II - Other Information Item 1. Legal Proceedings None Item 2. Changes in Securities and Use of Proceeds Omitted Item 3. Defaults Upon Senior Securities Omitted Item 4. Submission of Matters to a Vote of Security Holders Omitted Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (A) Exhibits 27.1 Financial Data Schedule (B) Reports on Form 8-K None 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. SHOPPERS FOOD WAREHOUSE CORPORATION Date: June 13, 2000 By: /s/ Pamela K. Knous ----------------------------------- Pamela K. Knous Executive Vice President, Chief Financial Officer (authorized officer of the registrant and principal financial officer) EX-27.1 2 0002.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEK PERIOD ENDED APRIL 29, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-27-2001 JAN-30-2000 APR-29-2000 1,081 0 10,546 (292) 34,493 53,096 81,432 (4,566) 505,411 93,724 203,443 0 0 167 193,131 505,411 214,636 214,636 161,223 161,223 0 0 3,554 3,229 1,822 1,407 0 0 0 1,407 42.21 42.21
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