-----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, HRW2EXvMfDgiVNt7/hLCDzeqDAmK8DBDo8p3cNJz6633VOY68F1LDpkABrxvKpGB mnKYulr73E5z6YknCPwxog== 0000912057-94-003999.txt : 19941205 0000912057-94-003999.hdr.sgml : 19941205 ACCESSION NUMBER: 0000912057-94-003999 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941008 FILED AS OF DATE: 19941122 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASH FINCH CO CENTRAL INDEX KEY: 0000069671 STANDARD INDUSTRIAL CLASSIFICATION: 5140 IRS NUMBER: 410431960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00785 FILM NUMBER: 94561399 BUSINESS ADDRESS: STREET 1: 7600 FRANCE AVE STREET 2: PO BOX 355 CITY: SOUTH MINNEAPOLIS STATE: MN ZIP: 55435-0355 BUSINESS PHONE: 6128320534 FORMER COMPANY: FORMER CONFORMED NAME: NASH CO DATE OF NAME CHANGE: 19710617 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES /x/ EXCHANGE ACT OF 1934 For the forty weeks ended October 8, 1994 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES / / OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File no. 0-785 NASH-FINCH COMPANY (Exact Name of Registrant as Specified in its Charter) DELAWARE 410431960 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7600 FRANCE AVE. SOUTH, MINNEAPOLIS, MINNESOTA 55435 (Address of principal executive offices) (Zip Code) (612) 832-0534 (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 (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 --- --- Number of shares of common stock outstanding at November 18, 1994: 10,874,180 shares ----------------- PART I - FINANCIAL INFORMATION This report is for the forty week interim period beginning January 2, 1994, through October 8, 1994. The accompanying financial information has been prepared in conformity with generally accepted accounting principles and practices, and methods of applying accounting principles and practices, (including consolidation practices) as reflected in the financial information included in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission for the preceding fiscal year. The financial statements included in this quarterly report include all adjustments which are, in the opinion of management, necessary to a fair presentation of the Company's financial position and results of operations for the interim period. The information contained herein has not been audited by independent certified public accountants and is subject to any adjustments which may develop in connection with the annual audit of its accounts by KPMG Peat Marwick LLP, the Company's independent public accountants. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
October 8, January 1, ASSETS 1994 1994 ----------- ---------- Current assets: (Unaudited) Cash on hand $ 993 890 Accounts and notes receivable, net 101,134 95,952 Inventories 203,173 186,637 Prepaid expenses 9,764 7,391 Deferred tax assets 3,748 4,055 --------- --------- Total current assets 318,812 294,925 Investments at net equity 7,801 7,137 Notes receivable, noncurrent 22,982 20,187 Property, plant and equipment: Land 25,122 26,652 Buildings and improvements 106,158 105,650 Furniture, fixtures, and equipment 213,527 209,172 Leasehold improvements 24,877 26,016 Construction in progress 8,650 5,914 Assets under capitalized leases 9,958 9,210 --------- --------- 388,292 382,614 Less accumulated depreciation and amortization (203,451) (196,350) --------- --------- Net property, plant and equipment 184,841 186,264 --------- --------- Intangible assets, net 8,316 9,512 Other assets 2,302 3,629 --------- --------- Total assets $ 545,054 521,654 --------- --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Outstanding checks, net of cash in banks $ 18,158 14,301 Short-term debt payable to banks 39,100 38,300 Current maturities of long-term debt and capitalized lease obligations 5,978 3,980 Accounts payable 136,249 119,970 Accrued expenses 32,388 27,032 Income taxes 4,307 4,315 Other current liabilities -- 7,123 --------- --------- Total current liabilities 236,180 215,021 Long-term debt 85,491 89,811 Capitalized lease obligations 8,417 8,076 Deferred compensation 8,566 9,065 Other 1,145 417 Stockholders' equity: Preferred stock - no par value Authorized 500 shares; none issued -- -- Common stock of $1.66 2/3 par value Authorized 25,000 shares, issued 11,224 shares 18,706 18,706 Additional paid-in capital 11,974 11,954 Retained earnings 177,631 171,670 --------- --------- Less cost of 349 and 351 shares of common 208,311 202,330 stock in treasury, respectively (3,056) (3,066) --------- --------- Total stockholders' equity 205,255 199,264 --------- --------- Total liabilities and stockholders' equity $ 545,054 521,654 --------- --------- --------- --------- - - ------------------------- See accompanying notes to consolidated financial statements.
NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) (In thousands, except per share amounts)
16 Weeks Ended 40 Weeks Ended ----------------------- ----------------------- October 8, October 9, October 8, October 9, 1994 1993 1994 1993 ---------- ---------- ---------- ---------- Revenues: Net sales $ 867,787 840,117 2,134,268 2,055,030 Other revenues 19,169 16,434 41,215 33,853 --------- --------- --------- --------- Total revenues 886,956 856,551 2,175,483 2,088,883 Cost and Expenses: Cost of sales 754,113 726,926 1,847,976 1,783,874 Selling, general and administrative and other operating expenses 113,143 111,864 275,085 257,645 Depreciation and amortization 9,690 9,377 24,162 22,156 Interest expense 3,204 3,000 8,373 7,585 --------- --------- --------- --------- Total costs and expenses 880,150 851,167 2,155,596 2,071,260 Earnings before income taxes 6,806 5,384 19,887 17,623 Income taxes 2,756 2,364 8,054 7,137 --------- --------- --------- --------- Net earnings $ 4,050 3,020 11,833 10,486 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of common shares outstanding 10,874 10,872 10,873 10,872 --------- --------- --------- --------- --------- --------- --------- --------- Earnings per share $ .37 .27 1.09 .96 --------- --------- --------- --------- --------- --------- --------- ---------
See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Forty Weeks Ended -------------------------------- October 8, 1994 October 9, 1994 --------------- --------------- Cash flows from operating activities: Net earnings $ 11,833 10,486 Adjustments to reconcile net income to net cash: provided by operating activies: Depreciation and amortization 24,162 22,156 Provision for bad debts 825 7,979 Provision for losses on closed lease locations 204 (323) Deferred income taxes 1,927 (51) Deferred compensation (499) (279) Earnings of equity investments (1,270) (1,165) Other 46 76 Changes in current assets and liabilities: Accounts and notes receivable (14,603) 1,013 Inventories (11,417) 10,658 Prepaid expenses (2,225) (2,779) Accounts payable 16,277 23,244 Accrued expenses 5,356 13,379 Income taxes (8) (8,194) -------- -------- Net cash provided by operating activites 30,608 76,200 -------- -------- Cash flows from investing activities: Dividends received 617 506 Disposal of property, plant and equipment 7,597 9,014 Additions to property, plant and equipment excluding capital leases (24,229) (30,392) Business acquired (8,614) (27,087) Loans to customers (7,123) (10,387) Payments from customers on loans 5,482 6,048 Other (34) (224) -------- -------- Net cash used for investing activities (26,304) (52,522) -------- -------- Cash flows from financing activities: Dividends paid (5,872) (5,871) Proceeds/(Payment) of short-term debt 800 (10,300) Payments of long-term debt (2,510) (2,902) Payments of capitalized lease obligations (506) (282) Other 30 14 -------- -------- Net cash used for financing activities (8,058) (19,341) -------- -------- Net (decrease) increase in cash $ (3,754) 4,337 -------- -------- -------- --------
See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity - - --------------------------------------------------------------------------------
Fiscal period ended October 8, 1994, January 1, 1994 and January 2, 1993 (In thousands, except per share amounts) Common stock Additional Treasury stock Total ----------------- paid-in Retained ---------------- stockholders' Shares Amount capital earnings Shares Amount equity - - ----------------------------------------------------------------------------------------------------------------------------- Balance at December 28, 1991 11,224 $18,706 11,938 151,274 (353) $(3,072) 178,846 Net earnings -- -- -- 20,068 -- -- 20,068 Dividend declared of $.71 per share -- -- -- (7,718) -- -- (7,718) Treasury stock issued upon exercise of options and other insignificant items -- -- 6 -- 1 2 8 ------- ------- ------- ------- ------ ------- ------- Balance at January 2, 1993 11,224 18,706 11,944 163,624 (352) (3,070) 191,204 Net earnings -- -- -- 15,874 -- -- 15,874 Dividend declared of $.72 per share -- -- -- (7,828) -- -- (7,828) Treasury stock issued upon exercise of options and other insignificant items -- -- 10 -- 1 4 14 ------- ------- ------- ------- ------ ------- ------- Balance at January 1, 1994 11,224 18,706 11,954 171,670 (351) (3,066) 199,264 Net earnings -- -- -- 11,833 -- -- 11,833 Dividend declared of $.54 per share -- -- -- (5,872) -- -- (5,872) Treasury stock issued upon exercise of options and other insignificant items -- -- 20 2 10 (7,828) 30 ------- ------- ------- ------- ------ ------- ------- Balance at October 8, 1994 11,224 $18,706 11,974 177,631 (349) $(3,056) 205,255 ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------- ------ ------- -------
See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 8, 1994 NOTE 1 The accompanying financial statements include all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company and its subsidiaries at October 8, 1994 and January 1, 1994, and the results of operations for the 16-week and 40-week periods ending October 8, 1994 and October 9, 1993, and the changes in cash flows for the 40-week periods ending October 8, 1994 and October 9, 1993. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements. Results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. NOTE 2 The Company uses the LIFO method for valuation of a substantial portion of inventories. If the FIFO method had been used, inventories would have been $42.5 million higher at October 8, 1994 and at January 1, 1994. NOTE 3 Earnings per share are computed by dividing net earnings by the weighted average number of common shares outstanding during each period presented. Options granted under the Company's qualified stock plan are considered common stock equivalents for the purpose of earnings per share data, but have been excluded from the computation since the dilutive effect is not material. NOTE 4 Effective January 31, 1994, the Company acquired the assets of Food Folks, a former customer with 23 stores located in North Carolina. Under the terms of the agreement, assets with a fair market value of approximately $12.1 million were transferred to the Company in exchange for $1.6 million in cash, the assumption of liabilities of $3.3 million and the forgiveness of $7.2 million in debt, net of a bad debt reserve established by the Company. This transaction was accounted for as a troubled debt restructuring. NOTE 5 On April 2, 1992, the Company sold customer notes totalling $22.8 million. The notes having maturities through the year 2000, were sold at face value with limited recourse as to certain notes. The Company is responsible for collection of the notes and remits the principal plus a floating rate of interest to the purchaser on a monthly basis. Proceeds from the sale of the notes receivable were used to pay off short-term bank debt. Remaining balances on the notes receivable sold totaled $3.0 million at October 8, 1994. The Company is contingently liable should these notes become uncollectible. On March 4, 1994, $7.0 million in notes were repurchased as a part of a troubled debt restructuring of Food Folks, a former customer (see Note 4). These notes were charged against a reserve for contingent losses on sold notes which totaled $7.1 million at January 1, 1994. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues for the third quarter of fiscal 1994 increased 3.5% over the same period last year. The improvement is primarily due to growth in wholesale sales to a number of new convenience store accounts in the Southeast, and the incremental retail sales resulting from the acquisition of the 23-store Food Folks chain acquired from a former customer in January 1994. On a year to date basis, the acquisition of Food Folks, as well as the Easter's store chain in June 1993, contributed to an increase of 4.1% in total revenues over last year. Consequently, retail segment revenues for the three quarters represent 33.3% of total revenues compared to 30.5% for the same period last year. Gross margins were 15.0% for the third quarter this year compared to 15.1% for the same 16-week period last year. The lower margin this year reflects price reductions and changes in promotional allowance practices by the tobacco industry. For the three quarters to date, gross margins are 15.1% compared to 14.6% in the prior year, continuing to reflect a greater proportion of retail sales which typically achieve higher margins. Selling, general and administrative expenses as a percent of total revenues were 12.8% and 12.6% for the quarter and year to date, respectively, compared to 13.1% and 12.3% for the prior year quarter and year to date, respectively. Prior year's expenses included a bad debt provision of $3.6 and $5.0 million for the quarter and year to date, respectively, relating to a bankruptcy filing involving a customer in the Southeast. Excluding this charge, operating expenses this year have increased for the quarter and year to date largely because of the greater proportion of retail business, which operates at higher expense levels as a percent of revenues. Depreciation and amortization expenses increased 3.3% and 9.1% for the quarter and year to date, respectively. The additional expense reflects fixed asset additions and intangible costs resulting from the Easter acquisition which occurred last year. RESULTS OF OPERATIONS (CONTINUED) Interest expense increased 6.8% for the quarter and 10.4% year to date compared to last year due to higher interest rates and somewhat higher average short-term borrowings. Income tax expense increased due to higher pretax earnings for the quarter and year to date. The effective tax rate for the current year quarter was 40.5%, compared to 43.9% last year, which reflected the retroactive effect of a higher tax rate established by new federal tax legislation. On a year to date basis, the effective rate was 40.5% for both periods. Net earnings for the quarter were $4.0 million, an increase of 34.1% over last year. For the year to date, net earnings of $11.8 million represented a 12.8% increase over last year. However, eliminating the affect of the previously mentioned bad debt provision from the prior year results, last year's net earnings would have been $2.1 and $3.0 million higher for the quarter and year to date, respectively. Conversely, an internally measured food price index for non-perishable inventories showed inflation for the quarter. The difference between the resulting LIFO charge this year and the credit taken in 1993 amounted to $1.3 million and $1.5 million for the quarter and year to date, respectively, on an after tax basis. Earnings improvements this year have been slowed by a downturn in results from both the corporate retail segment and certain wholesale distribution centers in the Southeast. LIQUIDITY & CAPITAL RESOURCES Net cash from operations was $30.6 million for the year to date in 1994 compared with $76.2 million in 1993. The main reason for the difference is that inventories increased by $11.4 million in 1994 compared with a decrease of $10.7 million in 1993. The decrease in 1993 resulted from a reduction in cigarette inventories held at the end of the previous year. The increase in inventories in 1994 resulted from seasonal increases of merchandise in the Company's distribution centers. In addition, the accounts and notes receivable increase since year-end 1993 was attributable to an increase in notes receivable on loans to customers and seasonal increases at Nash DeCamp, the Company's produce subsidiary. PART II - OTHER INFORMATION Items 1, 2, 3, 4 and 5 not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS: 27. Financial Data Schedule filed on EDGAR in accordance with Article 5 of Regulation S-X on Form 10-Q for 3rd Quarter of fiscal 1994. (b) REPORTS ON FORM 8-K: NOT APPLICABLE 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. NASH-FINCH COMPANY Registrant Date November 21, 1994 By /s/ Alfred N. Flaten -------------------------- ------------------------------- Alfred N. Flaten President and Chief Executive Officer Date November 21, 1994 By /s/ Robert F. Nash ------------------------- ------------------------------- Robert F. Nash Vice President and Treasurer EX-27 2 EXHIBIT 27 FDS
5 1,000 9-MOS DEC-31-1994 JAN-02-1994 OCT-08-1994 993 0 101,994 (860) 203,173 318,812 388,292 203,451 545,054 236,180 85,491 18,706 0 0 189,605 545,054 2,134,268 2,175,483 1,847,976 298,421 0 826 8,373 19,887 8,054 11,833 0 0 0 11,833 1.09 1.09
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