-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UP53uBq2/iCaB+RoisUkcQt20zSRiaW4hY9zuMhFTetO+FeqjC3iE5JjNJ/ldIJt /LpYIBDr/E2qpElOmEXEHA== 0000890587-94-000026.txt : 19940322 0000890587-94-000026.hdr.sgml : 19940322 ACCESSION NUMBER: 0000890587-94-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940129 FILED AS OF DATE: 19940321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOODARAMA SUPERMARKETS INC CENTRAL INDEX KEY: 0000037914 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 210717108 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-05745 FILM NUMBER: 94516926 BUSINESS ADDRESS: STREET 1: 303 W MAIN ST CITY: FREEHOLD STATE: NJ ZIP: 07728 BUSINESS PHONE: 9084624700 10-Q 1 FOODARAMA SUPERMARKETS, INC. 10-Q FILING 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 29, 1994 Commission file number 1-5745-1 FOODARAMA SUPERMARKETS, INC. 303 West Main Street Freehold, N.J. 07728 I.D. # 21-0717108 Telephone #908-462-4700 Indicate by check mark whether the Registrant (1) has filed all annual, quarterly and other reports required to be filed with the Commission 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 period covered by this report. OUTSTANDING AT CLASS January 29, 1994 Common Stock 1,118,150 shares $1 par value FOODARAMA SUPERMARKETS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets January 29, 1994 and October 30, 1993 Consolidated Statements of Operations For the thirteen weeks ended January 29, 1994 and January 30, 1993 Consolidated Statements of Cash Flows for the thirteen weeks ended January 29, 1994 and January 30, 1993 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 5. Other Information Item 6. Exhibits and Reports on Form 8-K PART I FINANCIAL INFORMATION FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Balance Sheets - January 29, 1994 and October 30, 1993 (IN THOUSANDS)
ASSETS January 29, October 30, 1994 1993 (Unaudited) (Audited) Current assets: Cash and cash equivalents $ 4,451 $ 4,765 Merchandise inventories 32,587 33,983 Receivables and other 6,065 8,624 Total current assets 43,103 47,372 Property and equipment: Land 1,762 1,762 Buildings and improvements 2,132 2,132 Leaseholds and leasehold improvements 32,638 31,732 Equipment 49,458 48,042 Property under capital leases 9,649 9,649 Equipment under capital leases 8,859 8,859 104,498 102,176 Less accumulated depreciation and amortization including $9,397, 1994 and $8,984, 1993 relating to property and equipment under capital leases 40,843 39,474 63,655 62,702 Other assets: Investment in related party 8,626 8,626 Intangibles 7,748 8,145 Other 3,971 4,457 20,345 21,228 $127,103 $131,302
See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Balance Sheets - January 29. 1994 and October 30. 1993 (IN THOUSANDS - EXCEPT PER SHARE DATA) (continued) LIABILITIES AND SHAREHOLDERS' EQUITY
January 29, October 30, 1994 1993 (Unaudited) (Audited) Current liabilities: Current portion of long-term debt $ 8,724 $ 2,523 Current portion of long-term debt, related party 89 204 Long term obligation in default classified as current 28,379 34,415 Current portion of obligations under capital leases 1,200 1,245 Accounts payable: Related party 13,434 16,638 Other 15,472 12,112 Accrued expenses and other 6,449 10,009 Total current liabilities 73,747 77,146 Long-term debt 2,966 3,587 Long-term debt, related party 89 176 Obligations under capital leases 9,344 9,669 Deferred income taxes 4,921 4,921 Other long term liabilities 4,114 3,921 Mandatory redeemable preferred stock subscribed $12.50 par; authorized 1,000,000 shares; 136,000 shares issued 1,700 1,700 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 32,871 32,831 36,844 36,804 Less 503,477 shares, held in treasury, at cost 6,622 6,622 30,222 30,182 $ 127,103 $ 131,302
See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Unaudited (IN THOUSANDS - EXCEPT SHARE DATA)
13 weeks Ended 1/29/94 1/30/93 Sales $ 157,491 $ 172,719 Cost of Sales 118,789 129,505 Gross profit 38,702 43,214 Operating expenses 37,400 41,255 Income from operations 1,302 1,959 Interest - net 1,236 1,757 Income before income taxes 66 202 Income taxes 26 81 Net income $ 40 $ 121 Net income per share $ .01 $ .11 Weighted average of common shares outstanding 1,118,150 1,118,150 Dividends per share - 0 - - 0 -
See accompanying notes to consolidated financial statements. FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (IN THOUSANDS)
Oct. 31, 1993 Nov. 1, 1992 to Jan. 29, 1994 to Jan. 30, 1993 Cash flows from operating activities: Net income $ 40 $ 121 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 2,272 2,598 Amortization, other 749 833 Changes in assets and liabilities: (Increase) Decrease in inventories 1,396 ( 369) (Increase) Decrease in receivables and other 2,559 826 Decrease (Increase) in other assets 134 ( 606) Increase (Decrease) in accounts payable 156 2,911 Increase (Decrease) in other liabilities (3,367) (1,807) Net cash provided by operating activities 3,939 4,507 Cash flows from investing activities: Purchase of property, plant and equipment (3,225) (2,529) Net cash used in investing activities (3,225) (2,529) Cash flows from financing activities: Principal payments under long-term debt ( 658) ( 836) Principal payments under capital lease obligations ( 370) ( 402) Net cash used in financing activities (1,028) (1,238) Net (Decrease) Increase in cash and cash equivalents ( 314) 740 Cash and cash equivalents, beginning of period 4,765 8,348 Cash and cash equivalents, end of period $ 4,451 $ 9,088
See accompanying notes to consolidated financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 Basis of Presentation The unaudited condensed Consolidated Financial Statements as of January 29, 1994, included herein, 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 October 30, 1993 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 notes thereto included in the Registrant's annual report on Form 10-K ended October 30, 1993. These results are not necessarily indicative of the results for the entire fiscal year. Note 2 Postretirement Benefits other than Pensions Effective October 31, 1993, the Registrant adopted Statement of Financial Ac- counting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits other than Pensions." The Registrant provides limited postretirement medical benefits to certain individuals under deferred compensation agreements. The Registrant does not provide such benefits to most of its non-union workforce and benefits related to its union employees are covered by collective bargaining agreements which require monthly contributions and which are not subject to the provisions of SFAS No. 106 requiring an accrual for such benefits. SFAS No. 106 requires the Registrant to accrue the estimated cost of retiree benefit payments during the years the employee provides services. The Registrant previously expensed the costs of such benefits. The Registrant recognized the cumulative effect of this liability on the immediate recognition basis. The cumulative effects as of January 29, 1994 of adopting SFAS No.106 were an increase in accrued post-retirement benefits and a decrease in pre tax earnings of $146,000 ($.08 pershare), which has been included in the Registrant's financial statements for the fiscal quarter ended January 29, 1994. The Registrant's liability for such post-retirement benefits are not funded. The effect of SFAS No. 106 on earnings for the fiscal quarter ended January 29, 1994 was not material. Note 3 Income Taxes Income taxes have been provided at a rate of 40% of pre-tax income for both periods. In the fiscal quarter ended January 29, 1994, the Registrant adopted statement of Financial Accounting Standards (SFAS) No. 109. "Accounting for Income Taxes", effective October 31, 1993. The effect of adopting SFAS No. 109 on the Registrant's financial statements was immaterial as well as for fiscal quarter ended January 29, 1994. The Registrant provided a valuation allowance against all deferred tax assets recorded as of October 30, 1993. There was no charge in the valuation allowance for the fiscal quarter ended January 29, 1994. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition and Liquidity As of January 29, 1994, the Registrant was not in compliance with several covenants under its credit agreements with its senior lenders. Due to the covenant violations, as of January 29, 1994, the Registrant has classified its debt to these lenders totaling $30.3 million as a current liability. The Registrant has retained an independent financial advisor to assist in the preparation of a business plan which is anticipated to form the basis for the negotiation of amended credit agreements with such lenders. The Registrant has made all required principal and interest payments under such credit agreements on a timely basis. The Registrant anticipates that all future payments can be made, including principal payments of $2.5 million on June 1, 1994 and $4.3 million on October 31, 1994, although no such assurances can be given. The Registrant is pursuing actions to increase operating cash flow through inventory and expense reductions and to provide positive cash flow from investing activities through limitations on capital expenditures and the sale of certain operating and nonoperating assets. The ability of the Registrant to continue as a going concern is dependent on its ability to successfully implement the plans and actions described above with regard to improving its cash flow. Due to the uncertainties associated with these plans, there can be no assurances that the Registrant will achieve its goals nor is there any assurance that the Registrant will be able to negotiate amended credit agreements with its lenders. The Registrant believes that such programs will be implemented successfully and that sufficient cash flow will be generated to meet its obligations they become due. The Registrant continues to employ thosestrategies of the business plan as outlined in its fiscal 1993 Annual Report. Wakefern by-laws provide for a service fee at the rate of 1% per week on the outstanding payable balance which, subject to certain conditions, Wakefern reduced retrospectively to one-quarter of 1% for the period 7/17/93 to 3/26/94. Fees at the rate of 1% per annum were reflected in the Registrant's fiscal year end financial statements, and were reflected at the reduced rate which aggregated approximately $167,000 in the quarter for the quarter ended January 29, 1994. Working Capital: As a result of several covenant violations at January 29, 1994, $28.4 million of debt due to senior lenders has been classified as a current liability thereby creating a working capital deficiency of $30.6 million. At October 30, 1993, the working capital deficiency was $29.8 million compared to positive working capital of $14 million at January 30, 1993. Cash flows (in millions) were as follows: 1/29/94 1/30/93
Operating activities... $ 3.9 $ 4.5 Investing activities... (3.2) (2.5) Financing activities... (1.0) (1.3) Totals $( .3) $ .7
Receivables and other decreased as a result of the divestiture of the New York division and faster collection of receivables for manufacturers coupons. The decrease in accrued expenses and other is primarily due to the divestiture of the New York division on October 18, 1993 coupled with a smaller accrual for interest and accelerated payments of worker's compensation premiums. The Registrant has no available lines of credit. No cash dividends have been paid since 1979, and the Registrant has no present intentions or ability to pay any dividends in the near future. Results of Operations (13 weeks ended 1/29/94 compared to 13 weeks ended 1/30/93) Sales for the twenty one stores in operation for the current quarter totaled $157.5 million, including one World Class replacement store opened 9/23/93. Sales for the twenty six stores in operation in the prior period totaled $172.7 million of which $23.3 million represented sales of five New York stores sold 10/18/93. Gross profit on sales for the current period was 24.6% compared to 25.0% in the prior year period. Operating expenses as a percent of sales were 23.7% compared to 23.9% in the prior year period. Current period expenses include Wakefern service fees of $167,000 and the cumulative effect of postretirement benefits of $146,000. Interest expense totaled $1,247,000 in the current period compared to $1,806,000 in the prior year period. The decrease is attributable to the overall reduction of debt levels. Of these amounts, $334,00 and $364,000, respectively, represent interest on capitalized leases. Interest income was $11,000 and $49,000 for the respective periods. Income taxes have been provided at a rate of 40% of pre-tax income for both periods. In the fiscal quarter ended January 29, 1994, the Registrant adopted statement of Financial Accounting Standards (SFAS) No. 109. "Accounting for Income Taxes". The effect of adopting SFAS No. 109 on the Registrant's financial statements was immaterial. The Registrant provided a valuation allowance against all deferred tax assets recorded as of October 31, 1993. There was no change in the valuation allowance for the fiscal quarter ended January 29, 1994. Net income of $40,00 or $.01 per share (after preferred stock dividend requirement of $34,000) was realized for the current quarter compared to $121,000 or $.11 per share in the prior year period. No preferred stock dividend was required in the prior year period. In each period 1,118,150 shares were outstanding. Despite the continued intense competition of the retail food industry and the lingering effects of the union strike in May 1993, the Registrant was able to record modest earnings for the fiscal quarter ended January 29, 1994. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: NONE (b) No reports on Form 8-K were required to be filed for the 13 weeks ended January 29, 1994. 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, 1994 /S/ JOSEPH J. SAKER (Signature) Joseph J. Saker, President Chief Executive Officer Date: March 17, 1994 /S/ JOSEPH C. TROILO (Signature) Joseph C. Troilo Senior Vice President (& Principal Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----