-----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, PLu4Xy8iUk4WL0s+9Un321xtvGmB268zeJ0hTAk6Itf4uzG93dkT0N1TvWgLzONF ep77K8nQOnKssfqOsmKlNw== 0000041289-95-000008.txt : 19951121 0000041289-95-000008.hdr.sgml : 19951121 ACCESSION NUMBER: 0000041289-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950812 FILED AS OF DATE: 19950922 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GIANT FOOD INC CENTRAL INDEX KEY: 0000041289 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95575544 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 August 12, 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 59,084,930 "AC" voting 125,000 "AL" voting 125,000 59,334,930 - 1 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - AUGUST 12, 1995 AND FEBRUARY 25, 1995 Dollar amounts in thousands ASSETS August 12, February 25, 1995 1995 (Unaudited) Current assets: Cash and cash equivalents $ 133,140 $ 157,045 Short-term investments (Note 2) 103,180 92,757 Receivables 45,502 43,867 Inventories (Note 3) 213,015 237,978 Prepaid expenses 24,185 24,692 Total current assets 519,022 556,339 Property, plant and equipment 1,333,679 1,329,399 Less accumulated depreciation 594,684 609,214 738,995 720,185 Property under capital leases, net of accumulated amortization, (8/12/95, $62,543; 2/25/95, $59,876) 102,835 105,502 Other assets 38,702 34,684 $ 1,399,554 $ 1,416,710 See notes to consolidated financial statements. - 2 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - AUGUST 12, 1995 AND FEBRUARY 25, 1995 Dollar amounts in thousands LIABILITIES AND SHAREHOLDERS' EQUITY August 12, February 25, 1995 1995 (Unaudited) Current liabilities: Current portion of long-term debt $ 12,334 $ 28,136 Accounts payable 217,710 225,829 Accrued liabilities 80,739 85,309 Dividends payable 10,965 10,663 Income taxes 10,482 16,808 Total current liabilities 332,230 366,745 Long-term debt, net of current portion: Notes and mortgages 56,261 57,805 Obligations under capital leases 139,021 140,946 195,282 198,751 Other liabilities 95,715 95,758 Shareholders' equity Common stock, $1 par, all classes 60,257 60,257 Net unrealized loss on short-term investments (514) (1,648) Retained earnings 738,592 720,784 798,335 779,393 Less class "A" stock held in treasury, at cost (8/12/95 921,690 2/25/95, 1,002,464 shares) 22,008 23,937 776,327 755,456 $ 1,399,554 $ 1,416,710 See notes to consolidated financial statements. - 3 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME TWENTY-FOUR WEEKS ENDED AUGUST 12, 1995 AND AUGUST 13, 1994 (Unaudited) Dollar amounts in thousands except for per share data Twenty-four Weeks Twelve Weeks 1995 1994 1995 1994 Sales $ 1,725,750 $ 1,656,097 $ 856,515 $ 826,400 Cost of goods sold 1,214,067 1,167,749 602,458 583,899 Operating expenses 442,277 425,522 222,857 215,018 Interest: Notes and mortgages 2,480 3,778 1,112 1,837 Lease obligations 7,378 7,521 3,680 3,764 Income (6,173) (4,324) (2,877) (2,300) Other income (1,978) 1,660,029 1,598,268 827,230 802,218 Income before provision for income taxes 65,721 57,829 29,285 24,182 Provision for income taxes 25,850 22,744 11,520 9,511 Net income $ 39,871 $ 35,085 $ 17,765 $ 14,671 Net income per share $ .67 .59 $ .30 $ .25 Dividends per share .37 .36 $ .185 $ .18 Average number of shares 59,278,951 59,476,236 59,296,126 59,399,179 See notes to consolidated financial statements. - 4 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS TWENTY-FOUR WEEKS ENDED AUGUST 12, 1995 AND AUGUST 13, 1994 (Unaudited) Dollar amounts in thousands Twenty-four Weeks 1995 1994 Cash flows from operating activities: Net income $ 39,871 $ 35,085 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 41,446 41,792 Amortization of property under capital leases 2,667 2,668 Other adjustments, net (1,251) 760 Net change in cash from changes in operating assets and liabilities, detailed below 4,042 (3,644) Net cash provided by operating activities 86,775 76,661 Cash flows from investing activities: Purchase of short-term investments (30,586) (12,245) Sale of short-term investments 12,032 39,000 Maturity of short-term 10,000 Capital expenditures (63,023) (50,972) Net cash used in investing activities (71,577) (24,217) Cash flows from financing activities: Repayments of notes and mortgages (17,513) (1,505) Repayments of obligations under capital leases (1,758) (1,603) Purchases of treasury stock (5,779) Issuance of common stock 1,817 135 Dividends paid (21,649) (21,128) Net cash used in financing activities (39,103) (29,880) Net change in cash and cash equivalents (23,905) 22,564 Cash and cash equivalents, beginning of year 157,045 111,845 Cash and cash equivalents, end of quarter $ 133,140 $ 134,409 Increase (decrease) in cash from changes in operating assets and liabilities: Accounts receivable $ (1,635) $ (3,286) Inventory 24,963 25,731 Prepaid expenses 507 1,005 Accounts payable (8,119) (28,570) Accrued expenses (4,570) 160 Income taxes payable (6,326) 183 Deferred taxes (1,086) Other liabilities 308 1,133 $ 4,042 $ (3,644) See notes to consolidated financial statements. - 5 - GIANT FOOD INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TWENTY-FOUR WEEKS ENDED AUGUST 12, 1995 AND AUGUST 13, 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 August 12, 1995 and August 13, 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 August 12, 1995: GROSS UNREALIZED HOLDING COST (LOSSES) FAIR VALUE U.S. Treasury securities $ 80,192 $ (672) $ 79,520 Federal agency securities 18,174 (153) 18,021 Corporate bonds or other 5,680 (41) 5,639 $104,046 $ (866) $103,180 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 August 12, 1995, were as follows: COST FAIR VALUE Due within one year $ 37,397 $ 37,653 Due after one year through five years 66,649 65,527 $104,046 $103,180 - 6 - 3. Inventories: The inventories using the LIFO method were valued at approximately 84% of the Company's inventories as at August 12, 1995 and 83% as at February 25, 1995. Under the FIFO method, these inventories would have been higher by $82,767 and $80,967, respectively. The pre-tax LIFO charge was $1,800 for both the twenty-four week period ended August 12, 1995 and August 13, 1994. 4. Net cash flows from operating activities reflects cash payments for interest and income taxes as follows: 24 weeks ended August 12, August 13, 1995 1994 Interest paid $10,806 $12,285 Income taxes paid 17,750 16,399 Non - cash investing and financing activities for the twenty-four weeks ending August 13, 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: 24 Weeks Ended 12 Weeks Ended August 12, August 13, August 12, August 13, 1995 1994 1995 1994 % % % % Gross Profit 29.65 29.49 29.66 29.34 Operating Expenses 25.63 25.70 26.02 26.02 Interest Expense: Notes & Mortgages .14 .23 .13 .22 Lease Obligations .43 .45 .43 .45 Interest (Income) ( .36) ( .26) ( .34) ( .28) Other Income ( .12) Income Before Income Taxes 3.81 3.49 3.42 2.93 Provision for Income Taxes 1.50 1.37 1.35 1.15 Net Income 2.31 2.12 2.07 1.78 Below are the differences for the periods ended August 12, 1995 compared with August 13, 1994 in thousands of dollars and percentages: Increase (Decrease) Increase (Decrease) Twenty-four Weeks Twelve Weeks $ % $ % Sales 69,653 4.2% 30,116 3.6% Gross Profit 23,335 4.8% 11,556 4.8% Operating Expenses 16,755 3.9% 7,839 3.6% Interest Expense: Notes & Mortgages (1,298) -34.4% (725) -39.5% Lease Obligations (143) -1.9% (84) -2.2% Interest Income (1,849) 42.8% (577) 25.1% Other Income (1,978) Income Before Income Taxes 7,892 13.6% 5,103 21.1% Provision for Income Taxes 3,106 13.6% 2,009 21.1% Net Income 4,786 13.6% 3,094 21.1% - 8 - GIANT FOOD INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued): Results of Operations (Twenty-four weeks ended August 12, 1995 vs. twenty- four weeks ended August 13, 1994): Sales increased $69.7 million or 4.2%. The increase in sales for stores in operation in both years was 2.1%. This same store sales change was impacted by new units drawing sales away from existing units. Without cannibalization same store sales would have increased 2.5%. Gross profit increased $23.3 million. Gross profit as a percent of sales was 29.65% compared to 29.49% for the prior year. The gross profit % increase resulted principally from more profits from processing and manufacturing, and lesser distribution costs. Operating expenses decreased from 25.70% of sales to 25.63%. Increases in payroll and related benefits percentage was below the sales percentage increase resulting in the lower expense in terms of percent to sales. Interest expense - notes and mortgages decreased by $1.3 million because of lower debt. Interest income increased by $1.8 million because of higher yields. In the prior year the Company realized other income of $2 million from the sale of its interest in a partnership that operates automatic teller machines in its stores. Pre-tax earnings increased $7.9 million, an increase of 13.6%. The effective tax rate was 39.3% for both the current and prior year. Net income was 2.31% of sales for the current period compared with 2.12% 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): Results of Operations (Twelve weeks ended August 12, 1995 vs. twelve weeks ended August 13, 1994): Sales increased $30.1 million or 3.6%. The increase in sales for stores in operation in both years was 1.7%. This same store sales change was impacted by new units drawing sales away from existing units. Without cannibalization same store sales would have increased 2.1%. Gross profit increased $11.6 million. Gross profit as a percent of sales was 29.66% compared to 29.34% for the prior year. The gross profit % increase resulted principally from more profits from processing and manufacturing, and lesser distribution costs. Operating expenses was 26.02% in both the current and prior year. The increase in expenses was matched by sales increases. Interest expense - notes and mortgages decreased by $725 million because of lower debt. Interest income increased by $577 million because of higher yields. Pre-tax earnings were up $5.1 million, an increase of 21.1%. The effective tax rate was 39.3% for both the current and prior year. Net income was 2.07% of sales for the current quarter compared with 1.78% for the same period of the prior year. - 10 - GIANT FOOD INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued): LIQUIDITY: Working capital decreased $2.8 million from February 25, 1995. At August 12, 1995 working capital ratio was 1.56 to 1, compared to 1.52 to 1 at February 25, 1995. Including LIFO reserves of $82.8 million at August 12, 1995, the working capital ratio was 1.81 to 1. At August 12, 1995, cash and cash equivalents were $133.1 million and short-term investments were $103.2 million totaling $236.3 million compared with $249.8 million as at February 25, 1995. During the twelve months ended August 12, 1995 notes and mortgage debt was reduced by $35.6 million. 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. 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 79.9% on August 12, 1995, compared to 79.2% on February 25, 1995 and 77.3% on August 13, 1994. - 11 - 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 August 12, 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 September 22, 1995 By /s/ Pete Manos Pete Manos President Date September 22, 1995 By /s/ David B Sykes David B Sykes Senior Vice President Finance, Treasurer Chief Financial Officer and Principal Accounting Officer - 12 - EX-27 2
5 6-MOS FEB-24-1996 AUG-12-1995 133140000 103180000 45502000 0 213015000 519022000 1333679000 594684000 1399554000 332230000 195282000 60257000 0 0 716070000 1399554000 1725750000 1725750000 1214067000 1660029000 0 0 9858000 65721000 25850000 39871000 0 0 0 39871000 .67 .67
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