-----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, L5dr+7hS14CDbUKd01g2ds25LoDKDTRJwGuw4BjUWGGR7QAHqDM7JVQtvhavNamb 7vlydjGOUC+lHy6j9eHHQQ== 0000037914-98-000004.txt : 19980318 0000037914-98-000004.hdr.sgml : 19980318 ACCESSION NUMBER: 0000037914-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980317 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOODARAMA SUPERMARKETS INC CENTRAL INDEX KEY: 0000037914 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 210717108 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05745 FILM NUMBER: 98567254 BUSINESS ADDRESS: STREET 1: 922 HIGHWAY 33 STREET 2: BLDG 6 CITY: FREEHOLD STATE: NJ ZIP: 07728 BUSINESS PHONE: 732-462-4700 MAIL ADDRESS: STREET 1: 922 HIGHWAY 33 STREET 2: BLDG 6 CITY: FREEHOLD STATE: NJ ZIP: 07728 10-Q 1 10Q - 1ST QTR 1998 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly period ended January 31, 1998 Commission file number 1-5745-1 FOODARAMA SUPERMARKETS, INC. (Exact name of registrant as specified in its charter) New Jersey 21-0717108 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 922 Highway 33, Freehold, N.J. 07728 (Address of principal executive offices) Telephone #732-462-4700 (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 and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. OUTSTANDING AT CLASS March 13,1998 Common Stock 1,117,150 shares $1 par value FOODARAMA SUPERMARKETS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Consolidated Balance Sheets January 31, 1998 and November 1, 1997 Unaudited Consolidated Statements of Operations for the thirteen weeks ended January 31, 1998 and February 1, 1997 Unaudited Consolidated Statements of Cash Flows for the thirteen weeks ended January 31, 1998 and February 1, 1997 Notes to the Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Certain information included in this report and other Registrant filings (collectively, "SEC filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC filings) contain or may contain forward-looking information that is (i) based upon assumptions which, if changed, could produce significantly different results; or (ii) subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are matters related to national and local economic conditions, the effect of certain governmental regulations and programs on the Registrant, year 2000 issues related to computer applications and competitive conditions in the marketplace in which the Registrant operates. The forward-looking statements are made as of the date of this Form 10-Q and the Registrant assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those projected in such forward-looking statements. See "Management's Discussion and Analysis of Financial Condition and Results of Operations." PART I FINANCIAL INFORMATION FOODARAMA SUPERMARKETS, INC AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) January 31, November 1, 1998 1997 (Unaudited) (1) ASSETS Current assets: Cash and cash equivalents $ 7,030 $ 3,678 Merchandise inventories 35,210 33,585 Receivables and other current assets 3,640 3,576 Prepaid income taxes - 392 Related party receivables - Wakefern 2,770 5,389 Related party receivables - other 255 238 48,905 46,858 Property and equipment: Land 308 93 Buildings and improvements 1,220 829 Leaseholds and leasehold improvements 32,409 32,064 Equipment 66,648 65,935 Property and equipment under capital leases 19,443 19,443 Construction in progress 2,837 0 122,865 118,364 Less accumulated depreciation and amortization 64,319 62,210 58,546 56,154 Other assets: Investments in related parties 9,256 9,256 Intangibles 4,966 5,100 Other 1,541 2,847 Related party receivables - Wakefern 1,216 1,191 Related party receivables - other 87 94 17,066 18,488 $124,517 $121,500 (continued) (1) Derived from the Audited Consolidated Financial Statements for the year ended November 1, 1997. See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands except share data) January 31, November 1, 1998 1997 (Unaudited) (1) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 6,935 $ 6,647 Current portion of long-term debt, related party 901 738 Current portion of obligations under capital leases 460 469 Deferred income tax liability 945 945 Accounts payable: Related party 27,976 23,723 Others 5,320 3,763 Accrued expenses 7,943 7,055 50,480 43,340 Long-term debt 13,709 17,874 Long-term debt, related party 1,508 1,797 Obligations under capital leases 17,221 17,325 Deferred income taxes 3,728 3,828 Other long-term liabilities 5,773 6,021 41,939 46,845 Shareholders' equity: Common stock, $1.00 par; authorized 2,500,000 shares; issued 1,621,627 shares 1,622 1,622 Capital in excess of par 2,351 2,351 Retained earnings 34,754 33,971 38,727 37,944 Less 504,477 shares January 31, 1998 and November 1, 1997, held in treasury, at cost 6,629 6,629 32,098 31,315 $ 124,517 $ 121,500 (1) Derived from the Audited Consolidated Financial Statements for the year ended November 1, 1997. See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Unaudited (in thousands - except per share data) 13 Weeks Ended January 31, February 1, 1998 1997 Sales $ 170,231 $ 163,356 Cost of merchandise sold 127,797 122,768 Gross profit 42,434 40,588 Operating, general and administrative expenses 40,345 39,246 Income from operations 2,089 1,342 Other (expense) income: Interest expense ( 960) (1,077) Interest income 58 29 ( 902) (1,048) Income before taxes 1,187 294 Income tax provision 404 118 Net income $ 783 $ 176 Per share information: Net income per common share, basic and diluted $ .70 $ .13 Weighted average number of common shares outstanding 1,117,150 1,117,150 Dividends per common share -0- -0- See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows - Unaudited (in thousands) 13 Weeks Ended January 31, February 1, 1998 1997 Cash flows from operating activities: Net income $ 783 $ 176 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,941 2,019 Amortization, intangibles 134 94 Amortization, deferred financing costs 153 171 Amortization, deferred rent escalation 66 108 Amortization, other assets - 181 Deferred income taxes (100) - (Increase) decrease in Merchandise inventories (1,625) (1,042) Receivables and other current assets ( 64) (1,290) Prepaid income taxes 392 - Related party receivables-Wakefern 2,594 2,923 Other assets 1,153 1,037 Increase (decrease) in Accounts payable 5,810 1,684 Other liabilities 574 237 11,811 6,298 Cash flows from investing activities: Cash paid for the purchase of property and equipment ( 890) ( 702) Construction in progress (2,837) - Decrease(increase) in related party receivables-other ( 10) 448 (3,737) ( 254) Cash flows from financing activities: Principal payments under long-term debt (5,377) (5,335) Principal payments under capital lease obligations ( 113) 21 Proceeds from issuance of debt 894 - Preferred stock dividend payments - ( 34) Principal payments under long-term debt, related party ( 126) ( 13) (4,722) (5,361) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,352 683 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,678 3,114 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,030 $ 3,797 See accompanying notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 Basis of Presentation The unaudited Consolidated Financial Statements as of or for the period ending January 31, 1998, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and rule 10-01. The balance sheet at November 1, 1997 has been taken from the audited financial statements at that date. In the opinion of the management of the Registrant, all adjustments (consisting only of normal recurring accruals) which the Registrant considers necessary for a fair presentation of the results of operations for the period have been made. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The reader is referred to the consolidated financial statements and notes thereto included in the Registrant's annual report on Form 10-K for the year ended November 1, 1997. These results are not necessarily indicative of the results for the entire fiscal year. Note 2 Adoption of Accounting Standards Earnings per Share Effective December 15, 1997, the Registrant adopted Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." This Statement establishes standards for computing and presenting earnings per share and applies to entities with publicly held common stock or potential common stock. This Statement simplifies the standards for computing earnings per share and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. There was no material impact from adopting the provisions of SFAS No. 128 in the quarter ended January 31, 1998. Part I - Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition and Liquidity The Registrant is a party to an Amended and Restated Revolving Credit and Term Loan Agreement ("the Credit Agreement") with one financial institution. The Credit Agreement is secured by substantially all of the Registrant's assets and provides for a total commitment of $31,700,000, including a revolving credit facility of up to $17,500,000 and term loans referred to as Term Loan C in the amount of $11,000,000, the Stock Redemption Facility in the amount of $1,700,000 and a loan in the amount of $1,500,000, made in November 1997, to fund the acquisition of a building in, and refurbishment of, the Registrant's prepared food and meat processing facility (the"Expansion Loan"). As of January 31, 1998 the Registrant owed $8,500,000 on Term Loan C, $1,700,000 on the Stock Redemption Facility and $1,475,000 on the Expansion Loan. Term Loan C and the Stock Redemption Loan are to be paid quarterly through December 31, 1999 with final payments of $500,000 and $1,020,000, respectively, on February 15, 2000. The revolving credit facility also matures February 15, 2000 and the Expansion Loan is payable in monthly installments over its seven year term based on a ten year amortization. Interest rates are fixed on Term Loan C and the Stock Redemption Facility at 8.38% and on the Expansion Loan at 9.18%. The interest rate on the revolving credit facility floats at the Base Rate (defined below) plus .25%. The Base Rate is the rate which is the greater of (i) the bank prime loan rate as published by the Board of Governors of the Federal Reserve System, or (ii) the Federal Funds rate, plus .50%. Additionally, the Registrant has the ability to use the London Interbank Offered Rate ("LIBOR") plus 2.25% to determine the interest rate on the revolving credit facility. The Credit Agreement contains certain affirmative and negative covenants which, among other matters will require the maintenance of a debt service coverage ratio. The Registrant was in compliance with such covenants through January 31, 1998. The Registrant's compliance with the major financial covenant under the Credit Agreement was as follows as of January 31, 1998. Actual Financial Credit (As defined in the Covenant Agreement Credit Agreement) Debt Service Coverage Ratio Not less than 1.00 to 1.00 1.24 to 1.00 No cash dividends have been paid on the Common Stock since 1979, and the Registrant has no present intentions or ability to pay any dividends in the near future on its Common Stock. The Credit Agreement does not permit the payment of any cash dividends on the Registrant's Common Stock. Working Capital At January 31, 1998, the Registrant had a working capital deficiency of $1,575,000 compared to positive working capital of $3,518,000 at November 1, 1997 and a deficiency of $126,000 at February 1, 1997. The decline in working capital from November 1, 1997 was primarily due to the collection of $3,200,000 of current related party receivables which were used to reduce the Revolving Note which is classified as long term borrowings. The Registrant normally requires small amounts of working capital since inventory is generally sold at approximately the same time that payments to Wakefern Food Corporation and other suppliers are due and most sales are for cash or cash equivalents. Working capital ratios were as follows: January 31, 1998 .97 to 1.0 November 1, 1997 1.08 to 1.0 February 1, 1997 1.00 to 1.0 Cash flows (in millions) were as follows: 1/31/98 2/1/97 Operating activities... $11.8 $ 6.3 Investing activities... (3.7) ( .2) Financing activities... (4.7) (5.4) Totals $ 3.4 $ 0.7 The Registrant had $15,500,000 of available credit, at January 31, 1998, under its revolving credit facility, and short term investments of $2,983,000. The Registrant believes that its capital resources are adequate to meet its operating needs, scheduled capital expenditures and its debt service in fiscal 1998. For the 13 weeks ended January 31, 1998 depreciation was $1,941,000 while capital expenditures totaled $1,496,000, compared to $2,019,000 and $702,000 respectively in the prior year period. Results of Operations (13 weeks ended January 31, 1998 compared to 13 weeks ended February 1, 1997) Sales: Same store sales from the twenty stores in operation in both periods increased 4.21%. Sales for the current period totaled $170.2 million as compared to $163.4 million in the prior year period. An increase in promotion expense in the current period, primarily for the Thanksgiving holiday period, contributed to this increase. Gross Profit: Gross profit as a percent of sales increased slightly to 24.9% of sales compared to 24.8% in the prior year period. Patronage dividends, applied as a reduction of the cost of merchandise sold, were $1.1 million in the current period compared to $1.3 million in the prior year period. Operating Expenses: Operating, general and administrative expenses as a percent of sales were 23.7% versus 24.0% in the prior year period. The decrease in operating, general and administrative expenses as a percent of sales was primarily due to decreases in certain expense categories as a percentage of sales which resulted from the increase in comparable store sales in the current period and fixed expenses remaining stable period to period. As a percentage of sales, labor and related fringe benefits decreased .12%, supplies decreased .07%, occupancy decreased .09% and the amortization of deferred pre-store opening costs decreased .11%. These decreases were partially offset by an increase in other store expense of .05%. Interest Expense: Interest expense decreased to $960,000 from $1,077,000, while interest income was $58,000 compared to $29,000 for the prior period. The decrease in interest expense for the current year period was due to a decrease in outstanding debt since February 1, 1997 and a decrease in the interest rate paid on debt. Income Taxes: An income tax rate of 34% has been used in the current period based on the expected effective tax rate for fiscal 1998, while a rate of 40% was used in the prior year period. Net Income: Net income was $783,000 in the current year period compared to $176,000 in the prior year period. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the current period were $4,383,000 as compared to $3,915,000 in the prior year period. Net income per common share, both basic and diluted, was $.70 in the current period compared to $.13 in the prior year period. Per share calculations are based on 1,117,150 shares outstanding in the both periods and a provision of $34,000 for preferred stock dividends in the prior year period. There were no dividends paid on the preferred stock in the current year period since the preferred stock was redeemed on March 31, 1997. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit (27) - Financial Data Schedule (b) No reports on Form 8-K were required to be filed for the 13 weeks ended January 31, 1998 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. FOODARAMA SUPERMARKETS, INC. (Registrant) Date: March 17, 1998 /S/ MICHAEL SHAPIRO (Signature) Michael Shapiro Senior Vice President Chief Financial Officer Date: March 17, 1998 /S/ JOSEPH C. TROILO (Signature) Joseph C. Troilo Senior Vice President Principal Accounting Officer EX-27 2
5 1000 3-MOS OCT-31-1998 JAN-31-1998 7,030 0 4,284 (633) 35,210 48,905 122,865 (64,319) 124,517 50,480 0 0 0 1,622 30,476 124,517 170,231 0 127,797 0 40,345 0 902 1,187 404 783 0 0 0 783 .70 .70
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