-----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, SRlp6ne55hN+Vn0w8JXSv3iXDmc7oKqMpAJd+sDWsiYcN4h06ZpyaOvVCD/wcGd3 WhYa6Z7bDjnSFyB/cDu+5g== 0001045969-99-000938.txt : 19991215 0001045969-99-000938.hdr.sgml : 19991215 ACCESSION NUMBER: 0001045969-99-000938 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991030 FILED AS OF DATE: 19991214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHOPPERS FOOD WAREHOUSE CORP CENTRAL INDEX KEY: 0001043065 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 522014682 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-32825 FILM NUMBER: 99774392 BUSINESS ADDRESS: STREET 1: 4600 FORBES BLVD CITY: LANHAM STATE: MD ZIP: 20706 BUSINESS PHONE: 3013068600 MAIL ADDRESS: STREET 1: 4600 FORBES BLVD CITY: LENHAM STATE: MD ZIP: 20706 10-Q 1 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 ended October 30, 1999. ( ) 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 December 14, 1999, 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. 1 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 30, 1999, 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, although Shoppers believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be 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 30, 1999. 2 SHOPPERS FOOD WAREHOUSE CORP. CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands, except per share data)
Thirteen Weeks Ended Thirty-nine Weeks Ended ------------------------------------ -------------------------------------- October 30, October 31, October 30, October 31, 1999 1998 1999 1998 --------------- ------------------ ----------------- ------------------- Sales $215,815 $220,431 $655,668 $658,956 Cost of sales 162,018 165,278 491,287 500,566 ------------ -------------- ------------ ----------- Gross profit 53,797 55,153 164,381 158,390 Selling and administrative expenses 43,605 42,711 131,504 127,627 Depreciation and amortization 3,618 3,200 11,341 9,900 ------------ -------------- ------------- ----------- Operating income 6,574 9,242 21,536 20,863 Interest Interest income 1,186 949 2,912 3,235 Interest expense 3,944 4,113 12,602 14,279 ------------ -------------- ------------ ----------- Net interest expense 2,758 3,164 9,690 11,044 Earnings before income taxes 3,816 6,078 11,846 9,819 Provision for income taxes 2,215 2,925 6,630 5,337 ------------ -------------- ------------ ----------- Net earnings $ 1,601 $ 3,153 $ 5,216 $ 4,482 ============ ============== ============ =========== Net earnings per common share (basic and dilutive): Net earnings per common share $ 48.03 $ 94.59 $ 156.48 $ 134.46 ============= ============== ============ =========== Weighted average common shares outstanding 33 33 33 33 ------------- -------------- ------------ -----------
The accompanying notes are an integral part of these statements. 3 SHOPPERS FOOD WAREHOUSE CORP. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
October 31, January 30, 1999 1999 ------------- ------------ (Unaudited) Assets Current assets: Cash and cash equivalents $ 4,184 $ 6,602 Accounts receivable, net 7,721 13,263 Merchandise inventories 36,256 31,477 Other current assets 8,033 5,044 -------- -------- Total current assets 56,194 56,386 Property, plant and equipment, net 59,508 52,901 Goodwill, net 308,030 311,371 Lease rights 28,231 29,031 Note receivable and other assets 42,419 40,100 -------- -------- Total assets $494,382 $489,789 ======== ======== Liabilities and stockholders' equity Current liabilities: Accounts payable $ 15,599 $ 12,283 Accrued payroll and benefits 4,865 5,401 Due to affiliates 45,433 26,038 Accrued interest 7,175 2,378 Other accrued expenses 13,063 14,577 -------- -------- Total current liabilities 86,135 60,677 Senior notes due 2004 182,592 211,764 Capital lease obligations 12,182 12,709 Deferred income taxes 16,824 12,832 Other liabilities 6,453 6,827 Stockholders' 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 178,924 178,924 Retained earnings 11,105 5,889 -------- -------- Total stockholders' equity 190,196 184,980 -------- -------- Total liabilities and stockholders' equity $494,382 $489,789 ======== ========
The accompanying notes are an integral part of these balance sheets. 4 SHOPPERS FOOD WAREHOUSE CORP. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In thousands)
Thirty-nine weeks ended -------------------------------------- October 30, October 31, 1999 1998 ------------- -------------- Cash Flows from Operating Activities: Net earnings $ 5,216 $ 4,482 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 11,341 9,900 Amortization of deferred financing costs - 763 Amortization of bond premium (2,515) (1,608) Increase in deferred rent liability - 706 Changes in assets and liabilities: Accounts receivable 5,542 (4,203) Merchandise inventories (4,779) 3,608 Other assets (5,251) 1,158 Accounts payable 3,316 (11,599) Due to affiliates 19,395 (3,626) Accrued expenses (104) 7,655 Deferred income and income taxes 4,758 (654) ----------- ---------- Net cash provided by operating activities 36,919 6,582 ----------- ---------- Cash Flows from Investing Activities: Capital expenditures (12,219) (5,604) Purchase of short-term investments - (3,604) Sales/maturities of short-term investments - 4,121 Purchase of bonds and bond premium (26,657) - ----------- ---------- Net cash used in investing activities (38,876) (5,087) Cash Flows from Financing Activities: Payments for acquisition and deferred financing costs - (294) Principal payments under capital lease obligations (461) (261) ----------- ---------- Net cash used in financing activities (461) (555) Net increase (decrease) in cash and cash equivalents (2,418) 940 Cash and cash equivalents at beginning of period 6,602 4,027 ----------- ---------- Cash and cash equivalents at end of period $ 4,184 $ 4,967 =========== ==========
The accompanying notes are an integral part of these statements. 5 SHOPPERS FOOD WAREHOUSE CORP. NOTES TO 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 October 30, 1999, and for the 13 and 39 weeks ended October 30, 1999, and October 31, 1998, have not been audited. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles ("GAAP") 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 October 30, 1999, and the results of its operations for the 13 and 39 week periods ended October 30, 1999, and October 31, 1998. As a result of the Dart Acquisition on May 18, 1998, in which Richfood Holdings, Inc. ("Richfood") acquired all of the outstanding stock of Dart Group Corporation, the indirect parent of the Company, the results of operations for the 13 and 39 week periods ended October 30, 1999 are not necessarily indicative of the results that may be achieved for the fiscal year ending January 29, 2000. NOTE 2 - ACQUISITION/MERGER On August 31, 1999, 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. Certain financial statement and related footnote amounts for periods prior to the Richfood acquisition may not be comparable to corresponding amounts subsequent to the acquisition. In addition, the results of operations for the 13 and 39 week periods ended October 30, 1999 are not necessarily indicative of the results that may be achieved for the fiscal year ended January 29, 2000. NOTE 3 - INCOME TAXES The Company's effective income tax rate increased to 58.0% and 56.0% for the 13 and 39 weeks ended October 30, 1999, respectively, from 48.1% and 54.4% for the 13 and 39 weeks ended October 31, 1998, respectively. The increase is primarily attributable to decreased taxable earnings in relation to the fixed amount of acquisition non-deductible goodwill associated with the Dart Acquisition. NOTE 4 - TRANSACTIONS WITH AFFILIATES The October 30, 1999 Consolidated Balance Sheet includes $45.3 million due to affiliates. This amount consists primarily of amounts due to affiliates for the purchase of bonds and amounts due for income taxes, 6 inventory purchases and general and administrative expenses. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Outlook Except for historical information, statements in this Management's Discussion and Analysis of Results of Operations and Financial Condition are forward- looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may differ materially due to a variety of factors, including the Company's ability to open new stores and the effect of regional economic conditions. Shoppers undertakes no obligation and does not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements that may be made to reflect future events or circumstances, other than through its regular quarterly and annual reports filed with the Securities and Exchange Commission. On August 31, 1999, 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. Results of Operations Sales decreased by $4.6 million, or 2.1%, from $220.4 million during the 13 weeks ended October 31, 1998, to $215.8 million during the 13 weeks ended October 30, 1999. This decrease was due primarily to the closing of one store during the first quarter ($3.4 million) and competitive new store openings. Sales decreased by $3.3 million, or 0.5%, from $659.0 million during the 39 weeks ended October 31, 1998, to $655.7 million during the 39 weeks ended October 30, 1999. The sales decrease for the 39 weeks ended October 30, 1999 was due primarily to the closure of one store in the 39 week period ended October 30, 1999, offset, in part, by the opening of one new store during the 1998 period, and competitive new store openings recently in the area. Comparable store sales decreased 0.5% and 1.4% for the 13 weeks and 39 weeks ended October 30, 1999, respectively, compared to the corresponding periods of the prior year. The decreases in comparable store sales was due primarily to the opening of a new Shoppers store cannibalizing existing stores, as well as increased competition. Gross profit decreased by $1.4 million, or 2.5%, from $55.2 million during the 13 weeks ended October 31, 1998, to $53.8 million during the 13 weeks ended October 30, 1999. Gross profit increased by approximately $6.0 million, or 3.8%, from $158.4 million during the 39 weeks ended October 31, 1998, to $164.4 million during the 39 weeks ended October 30, 1999. Gross profit, as a percentage of sales, remained essentially unchanged at 24.9% during the 13 weeks ended October 30, 1999, compared to 25.0% during the 13 weeks ended October 31, 1998. Gross profit, as a percentage of sales, increased to 25.1% during the 39 weeks ended October 30, 1999, compared to 24.0% during the 39 weeks ended October 31, 1998. The increase in the gross profit percentage during the 39 week period of the current year over the comparable period of the prior year was primarily attributable to a reduction of the number of items offered on special discount, better buying and the reduction of product shrinkage losses. 7 Selling and administrative expenses increased by $0.9 million, from $42.7 million during the 13 weeks ended October 31, 1998, to $43.6 million during the 13 weeks ended October 30, 1999. Selling and administrative expenses increased by approximately $3.9 million, from $127.6 million during the 39 weeks ended October 31, 1998, to $131.5 million during the 39 weeks ended October 30, 1999. The increases in these periods are primarily attributable to higher labor and benefits costs, as well as increased advertising cost during the current period. Selling and administrative expenses, as a percentage of sales, increased from 19.4% for both the 13 weeks and 39 weeks ended October 31, 1998, to 20.2% and 20.1% during the 13 weeks and 39 weeks ended October 30, 1999, respectively. Depreciation and amortization increased by $1.4 million from $9.9 million during the 39 weeks ended October 31, 1998, to $11.3 million during the 39 weeks ended October 30, 1999. The increase was primarily due to additional amortization of goodwill as a result of the Dart Acquisition. The Company's effective income tax rate increased to 58.0% and 56.0% for the 13 and 39 weeks ended October 30, 1999, respectively, from 48.1% and 54.4% for the 13 and 39 weeks ended October 31, 1998, respectively. The increase is primarily attributable to decreased taxable earnings in relation to the fixed amount of acquisition non-deductible goodwill associated with the Dart Acquisition. Interest income increased approximately $0.3 million, from $0.9 million for the 13 weeks ended October 31, 1998, to $1.2 million for the 13 weeks ended October 30, 1999. For the 39 weeks ended October 30, 1999, interest income decreased approximately $0.3 million, from $3.2 million for the 39 weeks ended October 31, 1998, to $2.9 million for the current period. Liquidity and Capital Resources The Company's principal source of liquidity is expected to be cash flows from operations. It is anticipated that Shoppers' principal uses of liquidity will be to provide working capital, finance capital expenditures and meet debt service requirements. During the 39 weeks ended October 30, 1999, operating activities generated net cash of $36.9 million, compared to generating net cash of $6.6 million during the 39 weeks ended October 31, 1998. The increase was primarily due to the increase in the balance due to affiliates. The balance due to affiliates was $45.4 million at October 30, 1999 compared to $26.0 million at January 31, 1999. During the 39 weeks ended October 30, 1999, investing activities used approximately $12.2 million of capital expenditures primarily for store remodels and $26.7 million for the purchase of bonds. For the 39 weeks ended October 31, 1998, investing activities used approximately $5.6 million for capital expenditures. Financing activities used $0.5 million of the Company's funds during the 39 week period ended October 30, 1999, compared to $0.6 million during the 39 weeks ended October 31, 1998. 8 The Company believes that cash flows from Shoppers' operations will be adequate to meet its anticipated requirements for working capital and debt service in the future. Year 2000 Compliance References herein to Richfood are based on information provided by Richfood to the Company. The "Year 2000" issue is the result of computer systems and software programs using two digits rather than four to define a year. As a result, computer systems that have date-sensitive software and embedded systems may recognize a date using "00" as the year 1900 rather than the year 2000. Unless remedied, the Year 2000 issue could result in system failures, miscalculations, and the inability to process necessary transactions or engage in similar normal business activities. As a result of the Dart Acquisition, the Company's computer systems and software programs were incorporated into Richfood's systems and programs. Richfood has developed and implemented a strategic, long-term information technology plan (the "Strategic Plan") to upgrade its core application systems. Concurrently, Richfood has developed and implemented a plan (the "Y2K Plan") to ensure that its information systems are Year 2000 compliant. The Y2K Plan focuses on the following three major areas: [] Information technology systems ("IT"), [] Embedded technology and other systems ("Non-IT") and [] Key third party relationships. Based on the Strategic Plan and assessments conducted as part of the Y2K Plan, Richfood determined that it would be necessary to modify or replace portions of its software and certain hardware systems so that such systems will properly recognize dates beyond December 31, 1999. Richfood presently believes that with the modification or replacement of existing software and certain hardware systems, the Year 2000 issue will be significantly mitigated. Richfood's Y2K Plan, as it pertains to the Company, involves the following three phases: [] Assessment -- locating, listing and prioritizing the specific technology that is potentially subject to Year 2000 issues assessing the actual exposure of such technology to the Year 2000 issue, and planning/scheduling the allocation of internal and third party resources for the remediation effort. [] Remediation/Testing of non-compliant systems - selecting and executing the method necessary to resolve the Year 2000 issues that were identified, including replacement, upgrade, repair or abandonment, and testing the remediated or converted technology to determine the efficacy of the resolutions. [] Implementation - placing remediated technology into operation. 9 The assessment phase has been completed with respect to IT and Non-IT systems that Richfood believes could be adversely affected by the Year 2000 issue. The assessment indicated that many of the Company's significant information systems could be adversely affected, particularly the general ledger, human resources, payroll, and point of sale systems. Non-IT systems, including telephones, loss- prevention and food production systems, have also been validated; however, the Company believes that non-compliance of the Non-IT systems would not pose a significant risk to the Company's financial condition or results of operations. With respect to IT systems, the remediation/testing phase and the implementation phase have been substantially completed. Certain point of sale software systems and all time and attendance systems have been upgraded or replaced during 1999. Additionally, human resources, payroll and general ledger system software upgrades were completed in August 1999. The majority of the Company's Non-IT systems are currently Year 2000 compliant; however, certain systems, which include telephones, had to be upgraded or replaced. The Non-IT systems remediation/testing phase was completed in November 1999. Richfood's evaluation of the Year 2000 readiness of the Company's material suppliers (Richfood is the Company's primary supplier), customers and other third parties, has not identified any class of third party providers that could materially impact the Company's results of operations in the event of their failure to become Year 2000 compliant. However, there can be no assurance that the failure of any unrelated third parties to become Year 2000 compliant in a timely manner would not result in a material adverse effect on the Company's results of operations or financial condition. Total costs associated with the Company's Year 2000 remediation are approximately $5.5 million to date. Of this amount, approximately $3.9 million has been capitalized in accordance with GAAP. Of the remaining costs, all but $0.1 million have been expensed to date, with the remainder planned to be used for monitoring and supporting contingency and transition plans. All expenditures by the Company related to the Y2K Plan will be funded by cash flows from operations and are not expected to impact other operating or investment plans. No material information technology projects have been deferred as a result of the implementation of the Y2K Plan. The aforementioned costs of the Y2K Plan and the completion dates are based on management's best estimates, which were derived from assumptions of future events, including the availability of resources, key third party modification plans and other factors. There can be no assurance that these estimates will prove to be accurate, and actual results could vary due to uncertainties. Although the Y2K Plan is expected to be adequate to address the Company's Year 2000 concerns, the Company could experience a material adverse effect on its results of operations or financial condition if material suppliers, customers and other businesses encounter serious problems in their Year 2000 remediation efforts. Therefore, Richfood and the Company are in the process of developing plans to address such contingencies, with a focus on mission critical systems. The Company and Richfood expect to complete contingency plans by the end of December 1999 and expect that such plans may include provisions relating to, among other things, manual workarounds and adjusting staffing strategies, as well as communications, 10 operations and IT activities that will be utilized if the contingency plans must be executed. Richfood's Year 2000 efforts are ongoing and the Y2K Plan will continue to evolve as new information becomes available. The failure to correct a material Year 2000 issue could result in an interruption in certain normal business activities and operations. Due to the general uncertainty inherent in the Year 2000 issue, resulting in part from the uncertainty of the Year 2000 readiness of third parties upon whom Richfood and the Company rely, the Company is unable to determine at this time whether the consequences of Year 2000 failures will have a material adverse effect on the Company's financial condition or results of operations. However, the Company believes that, with the implementation of the Y2K Plan as scheduled, the possibility of significant interruptions of normal operations should be reduced. Item 3. Quantitative and Qualitative Disclosures About Market Risk Omitted 11 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 3(ii) Bylaws, as adopted August 31, 1999. 27.1 Financial Data Schedule (B) Reports on Form 8-K None 12 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 CORP. Date: December 14, 1999 By: /s/ Pamela K. Knous ------------------------- Pamela K. Knous Executive Vice President, Chief Financial Officer (authorized officer of the registrant and principal financial officer) 13 EX-3.II 2 SHOPPERS FOOD WAREHOUSE CORP. BYLAWS EXHIBIT 3(ii) BYLAWS ------ SHOPPERS FOOD WAREHOUSE CORPORATION ----------------------------------- ARTICLE I. OFFICES Section 1.01. Offices. The corporation may have such offices, within or ------- without the State of Delaware as the Directors shall from time to time determine. ARTICLE II. MEETINGS OF SHAREHOLDERS Section 2.01. Place and Time of Meetings. Meetings of the shareholders -------------------------- may be held at any place, within or without the State of Delaware, designated by the Directors and, in the absence of such designation, shall be held at the office of the corporation in the State of Minnesota. The Directors shall designate the time of day for each meeting and, in the absence of such designation, every meeting of shareholders shall be held at ten o'clock a.m. Section 2.02. Annual Meetings. --------------- (a) The first annual meeting of the shareholders shall be held on a day designated by the Directors, which shall be not more than sixteen (16) months after the date of incorporation. Each subsequent annual meeting, subject to the power of the shareholders to change the date, shall be held on the same day or, if that day shall fall upon a legal holiday, on the next succeeding business day. (b) At the annual meeting the shareholders, voting as provided in the Articles of Incorporation, shall designate the number of Directors to constitute the Board of Directors, shall elect Directors and shall transact such other business as may properly come before them. Section 2.03. Special Meetings. Special meetings of the shareholders may ---------------- be held at any time and for any purpose and may be called by the Chairman of the Board, the President, any three Directors, or by one or more shareholders holding ten percent (10%) or more of the shares entitled to vote on the matters to be presented to the meeting. 1 Section 2.04. Quorum, Adjourned Meetings. The holders of a majority of -------------------------- the shares outstanding and entitled to vote shall constitute a quorum for the transaction of business at any annual or special meeting. In case a quorum shall not be present at a meeting, those present shall adjourn to such day as they shall, by majority vote, agree upon, and a notice of such adjournment shall be mailed to each shareholder entitled to vote at least five (5) days before such adjourned meeting. If a quorum is present, a meeting may be adjourned from time to time without notice other than announcement at the meeting. At adjourned meetings at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed. If a quorum is present, the shareholders may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 2.05. Voting. At each meeting of the shareholders at which a ------ quorum is present in person or by proxy, every shareholder having the right to vote shall be entitled to vote either in person or by proxy. Each shareholder, unless the Articles of Incorporation provide otherwise, shall have one vote for each share having voting power registered in his name on the books of the corporation. Upon the demand of any shareholder, the vote upon any question before the meeting shall be by ballot. All questions shall be decided by a majority vote of the number of shares entitled to vote and represented at the meeting at the time of the vote except where otherwise required by statute, the Articles of Incorporation or these Bylaws. Section 2.06. Closing of Books. The Board of Directors may fix a time, ---------------- not exceeding sixty (60) days preceding the date of any meeting of shareholders, as a record date for the determination of the shareholders entitled to notice of, and to vote at, such meeting, notwithstanding any transfer of shares on the books of the corporation after any record date so fixed. The Board of Directors may close the books of the corporation against the transfer of shares during the whole or any part of such period. If the Board of Directors fails to fix a record date for determination of the shareholders entitled to notice of, and to vote at, any meeting of shareholders, the record date shall be the twentieth (20th) day preceding the date of such meeting. 2 Section 2.07. Notice of Meetings. There shall be mailed to each ------------------ shareholder shown by the books of the corporation to be a holder of record voting shares, at his address as shown by the books of the corporation, a notice setting out the time and place of each annual meeting and each special meeting, which notice shall be mailed at least three (3) days prior thereof; except that notice of a meeting at which an agreement of merger or consolidation is to be considered shall be mailed to all shareholders of record, whether entitled to vote or not, at least two (2) weeks prior thereto; and except that notice of a meeting at which a proposal to dispose of all, or substantially all, of the property and assets of the corporation is to be considered shall be mailed to all shareholders of record, whether entitled to vote or not, at least ten (10) days prior thereto; and except that notice of a meeting at which a proposal to dissolve the corporation or to amend the Articles of Incorporation is to be considered shall be mailed to all shareholders of record, whether entitled to vote or not, at least ten (10) days prior thereto. Every notice of any special meeting shall state the purpose or purposes for which the meeting has been called, pursuant to Section 2.03, and the business transacted at all special meetings shall be confined to the purpose stated in the call. Section 2.08. Waiver of Notice. Notice of any annual or special meeting ---------------- may be waived either before, at, or after such meeting in a writing signed by each shareholder or representative thereof entitled to vote the shares so represented. Section 2.09. Written Action. Any action which might be taken at a -------------- meeting of the shareholders may be taken without a meeting if done in writing and signed by all of the shareholders. ARTICLE III. DIRECTORS Section 3.01. General Powers. The property affairs and business of the -------------- corporation shall be managed by the Board of Directors. Section 3.02. Number, Qualification and Term of Office. The number of ---------------------------------------- Directors shall be established by resolution of the shareholders (subject to the authority of the Board of Directors to increase the number of Directors as permitted by law) but shall not be less than the lesser of (i) the number of shareholders of record and beneficially, or (ii) two (2). In the absence of such shareholder resolution, the 3 number of Directors shall be the number last fixed by the shareholders or the Board of Directors or the Articles of Incorporation. Directors need not be shareholders. Each of the Directors shall hold office until the annual meeting of shareholders next held after his election and until his successor shall have been elected and shall qualify, or until he shall resign, or shall have been removed as hereinafter provided. Section 3.03. Annual Meeting. As soon as practicable after each annual -------------- election of Directors, the Board of Directors shall meet at the registered office of the corporation, or at such other place within or without the State of Delaware as may be designated by the Board of Directors, for the purpose of electing the officers of the corporation and for the transaction of such other business as shall come before the meeting. Section 3.04. Regular Meetings. Regular meetings of the Board of ---------------- Directors shall be held from time to time at such time and place within or without the State of Delaware as may be fixed by resolution adopted by a majority of the whole Board of Directors. Section 3.05. Special Meetings. Special meetings of the Board of ---------------- Directors may be called by the Chairman of the Board, the President, the Secretary or by any two of the Directors and shall be held from time to time at such time and place as may be designated in the notice of such meeting. Section 3.06. Notice of Meetings. No notice need be given of any annual ------------------ or regular meeting of the Board of Directors. Notice of each special meeting of the Board of Directors shall be given by the Secretary who shall give at least forty-eight (48) hours' notice thereof to each Director by mail, telephone, telegram or in person. Section 3.07. Waiver of Notice. Notice of any meeting of the Board of ---------------- Directors may be waived either before, at or after such meeting in writing signed by each Director. A Director, by his attendance and participation in the action taken at any meeting of the Board of Directors, shall be deemed to have waived notice of such meeting. Section 3.08. Quorum. A majority of the whole Board of Directors shall ------ constitute a quorum for the transaction of business except that when a vacancy or vacancies exist, a majority of the remaining 4 Directors (provided such majority consists of not less than the lesser of (i) the number of Directors required by Section 3.02, or (ii) two (2) Directors) shall constitute a quorum. Section 3.09. Vacancies; Newly Created Directorships. Vacancies in the -------------------------------------- Board of Directors of this corporation occurring by reason of death, resignation, increase in the number of Directors by the shareholders to the minimum number required by Section 3.02 or otherwise, shall be filled for the unexpired term by a majority of the remaining Directors of the Board although less than a quorum; newly created directorships resulting from an increase in the authorized number of Directors by action of the Board of Directors as permitted by Section 3.02 may be filled by two-thirds (2/3) vote of the Directors serving at the time of such increase; and each person so elected shall be a Director until his successor is elected by the shareholders, who may make such election at their next annual meeting or at any meeting duly called for that purpose. Section 3.10. Removal. The entire Board of Directors or any individual ------- Director may be removed from office, with or without cause, by a vote of the shareholders holding a majority of the shares entitled to vote at an election of Directors. In the event that the entire Board or any one or more Directors be so removed, new Directors shall be elected at the same meeting. Section 3.11. Executive Committee. The Board of Directors, by unanimous ------------------- affirmative action of the entire Board, may establish an Executive Committee consisting of two (2) or more Directors. Such Committee may meet at stated times or on notice to all given by any of their own number. During the intervals between meetings of the Board of Directors, such Committee shall advise and aid the officers of the corporation in all matters concerning the business and affairs of the corporation and, generally, perform such duties and exercise such powers as may be directed or delegated by the Board of Directors from time to time. The Board of Directors may, by unanimous affirmative action of the entire Board, delegate to such Committee authority to exercise all the powers of the Board of Directors, except the power to amend the Bylaws, while the Board of Directors is not in session. Vacancies in the membership 5 of the Committee shall be filled by the Board of Directors at a regular meeting or at a special meeting called for that purpose. Section 3.12. Other Committees. The Board of Directors may establish ---------------- other committees from time to time making such regulations, as it deems advisable, with respect to the membership, authority and procedures of such committees. Section 3.13. Written Action. Any action which might be taken at a -------------- meeting of the Board of Directors may be taken without a meeting if done in writing and signed by the number of Directors that would be required to take the same action at a meeting of the Board of Directors at which all Directors were present. Any action which may be taken at a meeting of any duly constituted committee of the Board of Directors may be taken without a meeting if done in writing and signed by all of the committee members. Section 3.14. Conference Communications. Directors may participate in any ------------------------- meeting of the Board of Directors, or of any duly constituted committee thereof, by means of a conference telephone conversation or other comparable communication technique whereby all persons participating in the meeting can hear and communicate to each other. For the purpose of establishing a quorum and taking any action at the meeting, such Directors participating pursuant to this Section 3.14 shall be deemed present in person at the meeting; and the place of the meeting shall be the place or origination of the conference telephone conversation or other comparable communication technique. Section 3.15. Compensation. Directors shall receive no compensation ------------ for attendance at Board meetings except as may be determined from time to time by vote of the shareholders. All Directors shall receive their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof. Nothing herein contained shall be construed to preclude any Director from serving this corporation in any other capacity and receiving proper compensation therefor. 6 ARTICLE IV. OFFICERS Section 4.01. Number. The officers of the corporation shall consist of a ------ Chairman of the Board (if one is elected by the Board); the President, who shall be the chief executive officer of the corporation; one or more Vice Presidents (if desired by the Board); a Secretary; a Treasurer, and such other officers and agents as may from time to time be elected by the Board of Directors. Any two offices, except those of President and Vice President, may be held by one person. Section 4.02. Election, Term of Office and Qualifications. At each annual ------------------------------------------- meeting of the Board of Directors, the Board shall elect, from within or without their number, the President, the Secretary, the Treasurer, and such other officers as may be deemed advisable. Such officers shall hold office until the next annual meeting of the Directors or until their successors are elected and qualify. Section 4.03. Removal and Vacancies. Any officer may be removed from his --------------------- office by a majority of the whole Board of Directors, with or without cause. If there be a vacancy among the officers of the corporation by reason of death, resignation or otherwise, such vacancy shall be filled for the unexpired term by the Board of Directors. Section 4.04. Chairman of the Board. The Chairman of the Board, if one is --------------------- elected, shall preside at all meetings of the shareholders and Directors and shall have such other duties as may be prescribed from time to time by the Board of Directors. Section 4.05. President. The President shall have general active --------- management of the business of the corporation. In the absence of the Chairman of the Board, he shall preside at all meetings of the shareholders and Directors. He shall be the chief executive officer of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall be exofficio a member of all standing committees. He may execute and deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation and, in general, shall perform all duties usually incident to the office of President. He shall have such other duties as may from time to time be prescribed by the Board of Directors. 7 Section 4.06. Vice President. Each Vice President shall have such powers -------------- and shall perform such duties as may be specified in the Bylaws or prescribed by the Board of Directors or by the President. In the event of absence or disability of the President, Vice Presidents shall succeed to his power and duties in the order designated by the Board of Directors. Section 4.07. Secretary. The Secretary shall be secretary of and shall --------- attend all meetings of the shareholders and Board of Directors and shall record all proceedings of such meetings in the minute book of the corporation. The Secretary shall give proper notice of meetings of shareholders and Directors. The Secretary shall keep the seal of the corporation and shall affix the same to any instrument requiring it and may, when necessary, attest the seal by the Secretary's signature. The Secretary shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President. In the absence of the Secretary, any Assistant Secretary may perform the duties of the Secretary. Section 4.08. Treasurer. The Treasurer shall keep accurate accounts of --------- all monies of the corporation received or disbursed. The Treasurer shall deposit all monies, drafts and checks in the name of, and to the credit of, the corporation in such banks and depositories as a majority of the whole Board of Directors shall from time to time designate. The Treasurer shall have power to endorse, for deposit, all notes, checks and drafts received by the corporation. The Treasurer shall disburse the funds of the corporation, as ordered by the Board of Directors, making proper vouchers therefor. The Treasurer shall render to the President and the Directors, whenever required, an account of all his/her transactions as Treasurer and of the financial condition of the corporation and shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President. In the absence of the Treasurer, any Assistant Treasurer may perform the duties of the Treasurer. Section 4.09. Compensation. The officers of this corporation shall ------------ receive such compensation for their services as may be determined from time to time by resolution of the Board of Directors. Section 4.10. Authority to Execute Agreements. The Chairman of the Board, ------------------------------- President and Vice Presidents, and any one of them, are hereby authorized to execute or cause to be executed in the name 8 and on behalf of this corporation, all contracts, agreements, deeds, mortgages, bonds, options, leases, lease and other guarantees of the obligations of others, including subsidiary corporations and customers, stock transfer documents, and such other instruments as may be necessary or desirable in the conduct of the business of the corporation; and said officers are further authorized to sign and affix, or cause to be signed and affixed, the seal of the corporation on any instrument requiring the same, which seal shall be attested by the signature of the Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer. ARTICLE V. SHARES AND THEIR TRANSFER Section 5.01. Certificates for Shares. Every owner of shares of the ----------------------- corporation shall be entitled to a certificate, to be in such form as shall be prescribed by the Board of Directors, certifying the number of shares of the corporation owned by him. The certificates for such shares shall be numbered in the order in which they shall be issued and shall be signed, in the name of the corporation, by the President or a Vice President and by the Secretary or an Assistant Secretary or by such officers as the Board of Directors may designate. Such signatures may be by facsimile if authorized by the Board of Directors. Every certificate surrendered to the corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 5.04. Section 5.02. Issuance of Shares. Subject to the preemptive rights of the ------------------ shareholders of this corporation as established and prescribed by the General Corporation Law of Delaware, the Board of Directors is authorized to cause to be issued shares of the corporation up to the full amount authorized by the Articles of Incorporation in such amounts as may be determined by the Board of Directors and as may be permitted by law. No shares shall be allotted except in consideration of cash. The amount of consideration to be received in cash shall not be less than the par value of the shares so allotted. Section 5.03. Transfer of Shares. Transfer of shares on the books of the ------------------ corporation may be authorized only by the shareholder named in the certificate, or the shareholder's legal representative, or 9 the shareholder's duly authorized attorney-in-fact, and upon surrender of the certificate or the certificates for such shares. The corporation may treat, as the absolute owner of shares of the corporation, the person or persons in whose name shares are registered on the books of the corporation. Section 5.04. Loss of Certificates. Any shareholder claiming a -------------------- certificate for shares to be lost or destroyed shall make an affidavit of that fact in such form as the Board of Directors shall require and shall, if the Board of Directors so requires, give the corporation a bond of indemnity in form and amount, and with one or more sureties satisfactory to the Board of Directors, to indemnify the corporation against any claim which may be made against it on account of the reissue of such certificate, whereupon a new certificate may be issued in the same tenor and for the same number of shares as the one alleged to have been destroyed or lost. ARTICLE VI. DIVIDENDS, SURPLUS, ETC. Section 6.01. Dividends. Subject to the provisions of the Articles of --------- Incorporation, of these Bylaws and of law, the Board of Directors may declare dividends from paid-in surplus, earned surplus or from net earnings for the current or preceding fiscal year of the corporation whenever, and in such amounts as, in its opinion, the condition of the affairs of the corporation shall render it advisable. Section 6.02. Use of Surplus, Reserves. Subject to the provisions of the ------------------------ Articles of Incorporation and of these Bylaws, the Board of Directors, in its discretion, may use, and apply, any of the net assets or net profits of the corporation applicable for such purpose in purchasing or acquiring any of the shares of the corporation in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness, or from time to time may set aside from its net assets or net profits such sum or sums as it, in its absolute discretion, may think proper as a reserve fund for any purpose it may think proper. Section 6.03. Unrealized Appreciation. The Board of Directors, in ----------------------- computing the fair value of the assets of the corporation to determine whether the corporation may pay a dividend or purchase its shares, 10 shall not include unrealized appreciation of assets, except that readily marketable securities of other issuers may be valued at not more than market value. Section 6.04. Record Date. Subject to any provisions of the Articles of ----------- Incorporation, the Board of Directors may fix a date not exceeding forty (40) days preceding the date fixed for the payment of any dividend as the record date fixed for the determination of the shareholders entitled to receive payment of the dividend and, in such case, only shareholders of record on the date so fixed shall be entitled to receive payment of such dividend notwithstanding any transfer of shares on the books of the corporation after the record date. The Board of Directors may close the books of the corporation against the transfer of shares during the whole or any part of such period. ARTICLE VII. BOOKS AND RECORDS, AUDIT, FISCAL YEAR Section 7.01. Books and Records. The Board of Directors of the ----------------- corporation shall cause to be kept: (1) A share register, giving the names and addresses of the shareholders, the number and classes held by each and the dates on which the certificates therefor were issued; (2) Records of all proceedings of shareholders and Directors; and (3) Such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business. Section 7.02. Documents Kept at Registered Office. The Board of Directors ----------------------------------- shall cause to be kept at the registered office of the corporation originals or copies of: (1) Records of all proceedings of shareholders and Directors; (2) Bylaws of the corporation and all amendments thereto; and (3) Reports made to any or all of the shareholders within the next preceding three (3) years. Section 7.03. Fiscal Year. The fiscal year of the corporation shall be ----------- determined by the Board of Directors. 11 ARTICLE VIII. INSPECTION OF BOOKS Section 8.01. Examination by Shareholders. Every shareholder of the --------------------------- corporation and every holder of a voting trust certificate shall have a right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose, and at the place or places where usually kept, the share register, books of account, and records of proceedings of the shareholders and Directors and to make extracts therefrom. Section 8.02. Information to Shareholders. Upon request by a shareholder --------------------------- of the corporation, the Board of Directors shall furnish to him a statement of a profit and loss for the last fiscal year and a balance sheet containing a summary of the assets and liabilities as of the close of such fiscal year. ARTICLE IX. LOANS TO OFFICERS, DIRECTORS, SHAREHOLDERS Section 9.01. The corporation shall not lend any of its assets to any officer or Director of the corporation, nor shall it lend any of its assets to shareholders upon the security of its shares. If any such loan be made, the officers and Directors who make such loan, or assent thereto, shall be jointly and severally liable for repayment or return thereof. The corporation shall not take, as security for any debt, a lien upon its shares unless such lien be taken to secure a debt previously contracted. ARTICLE X. AMENDMENTS Section 10.01. These Bylaws may be amended or altered by a vote of the majority of the whole Board of Directors at any meeting provided that notice of such proposed amendment shall have been given to the Directors in the notice of such meeting. Such authority in the Board of Directors is subject to the power of the shareholders to change or repeal such Bylaws by a majority vote of the shareholders present or represented at any annual or special meeting of shareholders called for such purpose, and the Board of Directors shall not make or alter any Bylaws fixing their qualifications, classifications, term of office or number. 12 ARTICLE XI. Section 11.01. Except as otherwise stated herein or in the Articles of Incorporation, this corporation, together with its Directors and Officers, shall have all of the rights, powers, duties and responsibilities set forth in the General Corporation Law of Delaware. ARTICLE XII. SEAL Section 12.01. The Board of Directors may provide a corporate seal, but whether or not such seal is provided, its use shall not be required in order to validate any act or instrument. 13 EX-27.1 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTY-NINE WEEK PERIOD ENDED OCTOBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-29-2000 JAN-31-1999 OCT-30-1999 4,184 2,816 8,279 558 36,256 56,194 67,718 8,210 494,382 86,135 182,592 0 0 167 190,029 494,382 655,668 655,668 491,287 491,287 142,845 0 9,690 11,846 6,630 5,216 0 0 0 5,216 156.48 156.48
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