-----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, Sn23bhACWVrxDFLdfmmeaBCyQ3tXHHetdJCTb4uSs6DrYKHAnFjYbu1mGdooKPfe jD5zCCfrqeWufxrKeTacrA== 0000041289-96-000003.txt : 19960701 0000041289-96-000003.hdr.sgml : 19960701 ACCESSION NUMBER: 0000041289-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960518 FILED AS OF DATE: 19960628 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: 96588425 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 18, 1996 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 59,382,723 "AC" voting 125,000 "AL" voting 125,000 59,632,723 - 1 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - MAY 18, 1996 AND FEBRUARY 24, 1996 Dollar amounts in thousands ASSETS May 18, February 24, 1996 1996 (Unaudited) Current assets: Cash and cash equivalents $ 143,237 $ 111,133 Short-term investments (Note 2) 129,366 134,677 Receivables 49,805 47,771 Inventories (Note 3) 219,141 225,801 Prepaid expenses 27,506 26,889 Total current assets 569,055 546,271 Property, plant and equipment 1,436,264 1,405,084 Less accumulated depreciation 664,409 643,693 771,855 761,391 Property under capital leases, net of accumulated amortization, (5/18/96, $66,402; 2/24/96, $65,018) 104,455 105,839 Other assets 35,625 33,638 $ 1,480,990 $ 1,447,139 See notes to consolidated financial statements. - 2 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - MAY 18, 1996 AND FEBRUARY 24, 1996 Dollar amounts in thousands LIABILITIES AND SHAREHOLDERS' EQUITY May 18, February 24, 1996 1996 (Unaudited) Current liabilities: Current portion of long-term debt $ 12,284 $ 12,156 Accounts payable 227,439 219,253 Accrued liabilities 84,481 85,763 Dividends payable 11,323 11,009 Income taxes 16,099 9,061 Total current liabilities 351,626 337,242 Long-term debt, net of current portion: Notes and mortgages 45,802 45,959 Obligations under capital leases 141,779 142,863 187,581 188,822 Other liabilities 103,095 98,318 Shareholders' equity Common stock, $1 par, all classes 60,926 60,645 Net unrealized loss on short-term investments (810) (108) Retained earnings 793,460 779,000 853,576 839,537 Less class "A" stock held in treasury, at cost (5/18/96 623,897 2/24/96, 702,782 shares) 14,888 16,780 838,688 822,757 $ 1,480,990 $ 1,447,139 See notes to consolidated financial statements. - 3 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME TWELVE WEEKS ENDED MAY 18, 1996 AND MAY 20, 1995 (Unaudited) Dollar amounts in thousands except for per share data Twelve Weeks 1996 1995 Sales $ 895,627 $ 869,235 Cost of goods sold 624,483 611,609 Operating expenses 227,322 219,420 Interest: Notes and mortgages 815 1,368 Lease obligations 3,746 3,698 Income (3,236) (3,296) 853,130 832,799 Income before provision for income taxes 42,497 36,436 Provision for income taxes 16,714 14,330 Net income $ 25,783 $ 22,106 Net income per share $ .43 $ .37 Dividends per share $ .19 $ .185 Average number of shares 59,589,692 59,261,777 See notes to consolidated financial statements. - 4 - GIANT FOOD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS TWELVE WEEKS ENDED MAY 18, 1996 AND MAY 20, 1995 (Unaudited) Dollar amounts in thousands Twelve Weeks 1996 1995 Cash flows from operating activities: Net income $ 25,783 $ 22,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20,623 20,618 Amortization of property under capital leases 1,384 1,333 Other adjustments, net 375 400 Net change in cash from changes in operating assets and liabilities, detailed below 23,426 (18,210) Net cash provided by operating activities 71,591 26,247 Cash flows from investing activities: Purchase of short-term investments (34,168) (8,956) Maturity of short-term investments 13,588 Sale of short-term investments 24,734 18,955 Capital expenditures (31,133) (31,862) Other investing activities (2,316) Net cash used in investing activities (29,295) (21,863) Cash flows from financing activities: Repayments of notes and mortgages (139) (16,125) Repayments of obligations under capital leases (974) (879) Issuance of common stock 1,930 329 Dividends paid (11,009) (10,663) Net cash used in financing activities (10,192) (27,338) Net change in cash and cash equivalents 32,104 (22,954) Cash and cash equivalents, beginning of year 111,133 157,045 Cash and cash equivalents, end of quarter $ 143,237 $ 134,091 Increase (decrease) in cash from changes in operating assets and liabilities: Accounts receivable $ (2,034) $ (6,561) Inventory 6,660 (4,180) Prepaid expenses (617) 898 Accounts payable 8,186 (1,535) Accrued expenses (1,282) (7,908) Income taxes payable 7,281 808 Deferred taxes (561) Other liabilities 5,232 829 $ 23,426 $ (18,210) See notes to consolidated financial statements. - 5 - GIANT FOOD INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TWELVE WEEKS ENDED MAY 18, 1996 AND MAY 20, 1995 (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 18, 1996 and May 20, 1995 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 18, 1996: GROSS UNREALIZED HOLDING COST (LOSSES) FAIR VALUE U.S. Treasury securities $105,175 $(1,081) $104,094 Federal agency securities 24,675 (253) 24,422 Corporate bonds & other 850 850 $130,700 $(1,334) $129,366 As of February 24, 1996: GROSS UNREALIZED HOLDING COST (LOSSES) FAIR VALUE U.S. Treasury securities $111,021 $ (168) $110,853 Federal agency securities 22,920 ( 9) 22,911 Corporate bonds or other 913 913 $134,854 $ (177) $134,677 Maturities of short-term investments at May 18, 1996, were as follows: COST FAIR VALUE Due within one year $ 68,532 $ 68,635 Due after one year through five years 62,168 60,731 $130,700 $129,366 - 6 - 3. Inventories: The inventories valued using the LIFO method were approximately 84% of the Company's inventories as at May 18, 1996 and 84% as at February 24, 1996. Under the FIFO method, these inventories would have been higher by $86,793 and $85,713, respectively. The pre-tax LIFO charge was $1,080 for the twelve week period ended May 18, 1996 and $900 for the twelve week period ended May 20, 1995. 4. Effective February 25,1996, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for Impairment of Long- Lived Assets to be Disposed Of," and SFAS No. 123, "Accounting for Stock-Based Compensation". In accordance with SFAS No. 121, the recoverability of long-lived assets is assessed annually or whenever adverse effects and changes in circumstances indicate that undiscounted cash flows previously anticipated warrants a reassessment. In accordance with the provions of SFAS No. 123, the Company has elected to continue to measure compensation expense for its stock- based employee compensation plans using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and will provide pro forma disclosures of net income and earnings per share as if the fair value-based method prescribed by SFAS No. 123 had been applied in measuring compensation expense. The adoption of these standards did not have a material effect on the Company's financial position or results of operation. 5. Net cash flows from operating activities reflects cash payments for interest and income taxes as follows: 12 weeks ended May 18, May 20, 1996 1995 Interest paid $ 5,074 $ 5,388 Income taxes paid 9,433 13,520 - 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 18, 1996 May 20, 1995 % % Gross Profit 30.27 29.64 Operating Expenses 25.38 25.24 Interest Expense-Notes & Mortgages .09 .16 Interest Expense-Lease Obligations .41 .43 Interest (Income) ( .36) ( .38) Income Before Income Taxes 4.75 4.19 Provision for Income Taxes 1.87 1.65 Net Income 2.88 2.54 Below are the differences for the periods ended May 18, 1996 compared with May 20, 1995 in thousands of dollars and percentages: Increase (Decrease) Twelve Weeks $ % Sales 26,392 3.0% Gross Profit 13,518 5.2% Operating Expenses 7,902 3.6% Interest Expense-Notes & Mortgages (553) -40.4% Interest Expense-Lease Obligations 48 1.3% Interest Income 60 -1.8% Income Before Income Taxes 6,061 16.6% Provision for Income Taxes 2,384 16.6% Net Income 3,677 16.6% - 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 18, 1996 vs. twelve weeks ended May 20, 1995): Sales increased $26.4 million or 3.0%. Stores in operation both years showed a modest increase of .2%. Same store sale change was impacted by the opening of four food-drug stores since November 1995 in the Washington/Baltimore area. Eliminating this cannibalization effect, same stores sales would have been up 1.0%. Gross profit increased $13.5 million. Gross profit as a percent of sales was 30.27% compared to 29.64% in the prior year. The gross profit percentage reflects the continuation of the gross profit level achieved in the most recent quarter (ended February 24, 1996) which was 30.25%. Operating expenses increased from 25.24% of sales to 25.38%. The primary factor for the increase is the occupancy costs related to the seven stores that were opened in the last twelve months. Interest expense on notes and mortgages decreased by $553 thousand because of reduction of debt during 1995. Pre-tax earnings increased $6.1 million, an increase of 16.6%. The effective tax rate was 39.3% for both the current and prior period. Net income was 2.88% of sales for the current quarter compared with 2.54% 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 $8.4 million from February 24, 1996. At May 18, 1996 working capital ratio was 1.62 to 1, compared to 1.61 to 1 at February 24, 1996. Including LIFO reserves of $86.8 million at May 18, 1996, the working capital ratio was 1.86 to 1. At May 18, 1996, cash and cash equivalents were $143.2 million and short-term investments were $129.4 million totaling $272.6 million compared with $245.8 million as of February 24, 1996. 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, required debt reduction and dividend requirements. Capital expenditures include the announced plans for opening eight stores in the current fiscal year, of which two are in the Washington/Baltimore area, five in New Jersey and the first store in Pennsylvania. The Company has a $50 million revolving credit facility, a $10 million credit line and has had no short-term bank borrowings for more than seventeen years. CAPITALIZATION: Shareholders' equity as a percentage of capitalization was 80.8% on May 18, 1996, compared to 80.4% on February 24, 1996 and 78.5% on May 20, 1995. - 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 18, 1996. 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 28, 1996 By /s/ Pete L. Manos Pete L. Manos President and Chief Executive Officer Date June 28, 1996 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-22-1997 MAY-18-1996 143237000 129366000 49805000 0 219141000 569055000 1436264000 664409000 1480990000 351626000 187581000 60926000 0 0 777762000 1480990000 895627000 895627000 624483000 853130000 0 0 4561000 42497000 16714000 25783000 0 0 0 25783000 .43 .43
-----END PRIVACY-ENHANCED MESSAGE-----