-----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, XZMxkoAKZ2cn/6ShJ1SFdVraM65hWooohfXQyNEl1oh3M+6KSHcyqTcJCR2pgLAm /vg/oGu6SbI9w/oBkwIxjw== 0000041289-95-000005.txt : 199507030000041289-95-000005.hdr.sgml : 19950703 ACCESSION NUMBER: 0000041289-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950520 FILED AS OF DATE: 19950630 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GIANT FOOD INC CENTRAL INDEX KEY: 0000041289 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 530073545 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04434 FILM NUMBER: 95551624 BUSINESS ADDRESS: STREET 1: 6400 SHERIFF RD STREET 2: DEPT 593 CITY: LANDOVER STATE: MD ZIP: 20785 BUSINESS PHONE: 3013414100 MAIL ADDRESS: STREET 1: P O BOX 1804 DEPT 593 STREET 2: 6400 SHERIFF ROAD CITY: LANDOVER STATE: MD ZIP: 20785 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Twelve Weeks ended May 20, 1995 Commission File Number 1-4434 Giant Food Inc. (Exact name of Registrant as specified in its charter) Delaware 53-0073545 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 6300 Sheriff Road, Landover, Maryland 20785 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (301) 341-4100 NONE (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (l) 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 The number of shares outstanding of each of the registrant's classes of common stock as of this date is as follows: Title of stock Number of shares class ($l par) Outstanding "A" non-voting 59,026,493 "AC" voting 125,000 "AL" voting 125,000 59,276,493 - 1 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - MAY 20, 1995 AND FEBRUARY 25, 1995 Dollar amounts in thousands ASSETS May 20, February 25, 1995 1995 (Unaudited) Current assets: Cash and cash equivalents $ 134,091 $ 157,045 Short-term investments (Note 2) 84,072 92,757 Receivables 50,428 43,867 Inventories (Note 3) 242,158 237,978 Prepaid expenses 23,794 24,692 Total current assets 534,543 556,339 Property, plant and equipment 1,354,783 1,329,399 Less accumulated depreciation 629,832 609,214 724,951 720,185 Property under capital leases, net of accumulated amortization, (5/20/95, $61,210; 2/25/95, $59,876) 104,169 105,502 Other assets 40,851 34,684 $ 1,404,514 $ 1,416,710 See notes to consolidated financial statements. - 2 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - MAY 20, 1995 AND FEBRUARY 25, 1995 Dollar amounts in thousands LIABILITIES AND SHAREHOLDERS' EQUITY May 20, February 25, 1995 1995 (Unaudited) Current liabilities: Current portion of long-term debt $ 12,236 $ 28,136 Accounts payable 224,294 225,829 Accrued liabilities 77,401 85,309 Dividends payable 11,309 10,663 Income taxes 17,616 16,808 Total current liabilities 342,856 366,745 Long-term debt, net of current portion: Notes and mortgages 57,665 57,805 Obligations under capital leases 139,983 140,946 197,648 198,751 Other liabilities 96,587 95,758 Shareholders' equity Common stock, $1 par, all classes 60,257 60,257 Net unrealized loss on short-term investments (785) (1,648) Retained earnings 731,355 720,784 790,827 779,393 Less class "A" stock held in treasury, at cost (5/20/95 980,127 2/25/95, 1,002,464 shares) 23,404 23,937 767,423 755,456 $ 1,404,514 $ 1,416,710 See notes to consolidated financial statements. - 3 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME TWELVE WEEKS ENDED MAY 20, 1995 AND MAY 21, 1994 (Unaudited) Dollar amounts in thousands except for per share data Twelve Weeks 1995 1994 Sales $ 869,235 $ 829,697 Cost of goods sold 611,609 583,850 Operating expenses 219,420 210,504 Interest: Notes and mortgages 1,368 1,941 Lease obligations 3,698 3,757 Income (3,296) (2,024) Other income (1,978) 832,799 796,050 Income before provision for income taxes 36,436 33,647 Provision for income taxes 14,330 13,233 Net income $ 22,106 $ 20,414 Net income per share $ .37 $ .34 Dividends per share $ .185 $ .18 Average number of shares 59,261,777 59,553,243 See notes to consolidated financial statements. - 4 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS TWELVE WEEKS ENDED MAY 20, 1995 AND MAY 21, 1994 (Unaudited) Dollar amounts in thousands Twelve Weeks 1995 1994 Cash flows from operating activities: Net income $ 22,106 $ 20,414 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20,618 20,668 Amortization of property under capital leases 1,333 1,329 Other adjustments, net 400 380 Net change in cash from changes in operating assets and liabilities, detailed below (18,210) (11,802) Net cash provided by operating activities 26,247 30,989 Cash flows from investing activities: Purchase of short-term investments (8,956) (3,798) Sale of short-term investments 18,955 13,230 Capital expenditures (31,862) (29,616) Other investing activities (2,088) Net cash used in investing activities (21,863) (22,272) Cash flows from financing activities: Repayments of notes and mortgages (16,125) (222) Repayments of obligations under capital leases (879) (796) Purchases of treasury stock (3,566) Issuance of common stock 329 124 Dividends paid (10,663) (10,395) Net cash used in financing activities (27,338) (14,855) Net change in cash and cash equivalents (22,954) (6,138) Cash and cash equivalents, beginning of year 157,045 111,845 Cash and cash equivalents, end of quarter $ 134,091 $ 105,707 Increase (decrease) in cash from changes in operating assets and liabilities: Accounts receivable $ (6,561) $ (2,836) Inventory (4,180) 9,546 Prepaid expenses 898 (1,920) Accounts payable (1,535) (19,517) Accrued expenses (7,908) (4,493) Income taxes payable 808 6,787 Deferred taxes (561) Other liabilities 829 631 $ (18,210) $ (11,802) See notes to consolidated financial statements. - 5 - GIANT FOOD INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TWELVE WEEKS ENDED MAY 20, 1995 AND MAY 21, 1994 (Unaudited) Dollar amounts in thousands 1. Consolidated financial statements: The accompanying unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Such results for the twelve weeks ended May 20, 1995 and May 21, 1994 are not necessarily indicative of results to be expected for the full year. 2. Short-term investments: Short-term investments consisted of: As of May 20, 1995: GROSS UNREALIZED HOLDING COST (LOSSES) FAIR VALUE U.S. Treasury securities $ 61,976 $ (961) $ 61,015 Federal agency securities 23,410 (353) 23,057 $ 85,386 $(1,314) $ 84,072 As of February 25, 1995: GROSS UNREALIZED HOLDING COST (LOSSES) GAINS FAIR VALUE U.S. Treasury securities $ 71,052 $(1,767) $ 69,285 Federal agency securities 18,788 (984) 17,804 Corporate bonds or other 5,653 15 5,668 $ 95,493 $(2,736) $ 92,757 Maturities of short-term investments at May 20, 1995, were as follows: COST FAIR VALUE Due within one year $ 22,775 $ 22,613 Due after one year through five years 62,611 61,459 $ 85,386 $ 84,072 - 6 - 3. Inventories: The inventories valued using the LIFO method were approximately 84% of the Company's inventories as at May 20, 1995 and 83% as at February 25, 1995. Under the FIFO method, these inventories would have been higher by $81,867 and $80,967, respectively. The pre-tax LIFO charge was $900 for the twelve week period ended May 20, 1995 and $900 for the twelve week period ended May 21, 1994. 4. Net cash flows from operating activities reflects cash payments for interest and income taxes as follows: 12 weeks ended May 20, May 21, 1995 1994 Interest paid $ 5,388 $ 7,641 Income taxes paid 13,520 6,168 Non - cash investing and financing activities, for the twelve weeks ending May 21, 1994 excluded from the Consolidated Statements of Cash Flows the of recording of a capital lease aggregating $3,754. - 7 - GIANT FOOD INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations: The following is Management's discussion and analysis of certain significant factors which have affected the Company's earnings and financial condition during the periods included in the accompanying Consolidated Balance Sheets and Consolidated Statements of Income. Results of Operations: A summary of the principal income statement percentages are tabulated below: 12 Weeks Ended 12 Weeks Ended May 20, 1995 May 21, 1994 % % Gross Profit 29.64 29.63 Operating Expenses 25.24 25.37 Interest Expense-Notes & Mortgages .16 .23 Interest Expense-Lease Obligations .43 .45 Interest (Income) ( .38) ( .24) Other Income ( .24) Income Before Income Taxes 4.19 4.06 Provision for Income Taxes 1.65 1.60 Income before cumulative effect of change in accounting for deferred taxes 2.54 2.46 Below are the differences for the periods ended May 20, 1995 compared with May 21, 1994 in thousands of dollars and percentages: Increase (Decrease) Twelve Weeks $ % Sales 39,538 4.8% Gross Profit 11,779 4.8% Operating Expenses 8,916 4.2% Interest Expense-Notes & Mortgages (573) -29.5% Interest Expense-Lease Obligations (59) -1.6% Interest Income 1,272 62.8% Other Income (1,978) Income Before Income Taxes 2,789 8.3% Provision for Income Taxes 1,097 8.3% Income before cumulative effect of change in accounting for deferred taxes 1,692 8.3% - 8 - GIANT FOOD INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued): Results of Operations (Twelve weeks ended May 20, 1995 vs. twelve weeks ended May 21, 1994): Sales increased $39.5 million or 4.8%, including an increase of 2.6%, for stores in operation in both years. The strong trend in sales growth has been the result of an aggressive promotional program that began in the fourth quarter of the prior year. Gross profit increased $11.8 million. Gross profit as a percent of sales was 29.64% compared to 29.63% in the prior year. The stable level of gross profit is the result of the lower margins being offset by the gains from operating efficiencies in distribution, manufacturing and processing areas. Operating expenses decreased from 25.37% of sales to 25.24%. Operating efficiencies contributed to this decrease, with expenses increasing by 4.2% while sales increased by 4.8%. Interest expense on notes and mortgages decreased by $573 thousand because of repayment of mortgages. Interest income increased by $1.3 million because of higher yields. In the prior year the Company realized other income of $1.978 million from the sale of its interest in a partnership that operates the automatic teller machines in its stores. Pre-tax earnings increased $2.8 million, an increase of 8.3%. The effective tax rate was 39.3% for both the current and prior period. Net income was 2.54% of sales for the current quarter compared with 2.46% for the same period of the prior year. - 9 - GIANT FOOD INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued): LIQUIDITY: Working capital increased $2.1 million from February 25, 1995. At May 20, 1995 working capital ratio was 1.56 to 1, compared to 1.52 to 1 at February 25, 1995. Including LIFO reserves of $81.9 million at May 20, 1995, the working capital ratio was 1.80 to 1. At May 20, 1995, cash and cash equivalents were $134.1 million and short-term investments were $84.1 million totaling $218.2 million compared with $249.8 million as of February 25, 1995. The major factor in the reduction of cash was the payoff of a $16 million mortgage, which carried an interest rate of 9.73% It is estimated that cash, cash equivalents and short-term investments, together with cash flow from operations will be adequate to complete planned capital expenditures, debt reduction and dividend requirements. Capital expenditures include the announced plans for starting or opening 18 stores together with five shopping centers in the next year and half. The Company has a $50 million revolving credit facility, and has had no short- term bank borrowings for more than sixteen years. CAPITALIZATION: Shareholders' equity as a percentage of capitalization was 78.5% on May 20, 1995, compared to 76.9% on February 25, 1995 and 74.3% on May 21, 1994. - 10 - GIANT FOOD INC. AND SUBSIDIARIES OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K: The Company did not file any reports on Form 8-K during the twelve weeks ended May 20, 1995. SIGNATURE 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. Giant Food Inc. (Registrant) Date June 30, 1995 By/s/ Israel Cohen Israel Cohen Chairman of the Board Chief Executive Officer Date June 30, 1995 By/s/ David B Sykes David B Sykes Senior Vice President Finance, Treasurer Chief Financial Officer and Principal Accounting Officer - 11 - EX-27 2
5 3-MOS FEB-24-1996 MAY-20-1995 134091000 84072000 50428000 0 242158000 534543000 1354783000 629832000 1404514000 342856000 197648000 60257000 0 0 707166000 1404514000 869235000 869235000 611609000 832799000 0 0 50660000 36436000 14330000 22106000 0 0 0 22106000 .37 .37
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