-----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, GnSUjDu+r1s+impKQAaiUjyMBxii4QKGoxAXZH5QQ/m8s9fMapqOH891DYsPL09H 3rRFc+wGl93yUtI24INWxw== 0000912057-94-001625.txt : 19940518 0000912057-94-001625.hdr.sgml : 19940518 ACCESSION NUMBER: 0000912057-94-001625 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940326 FILED AS OF DATE: 19940510 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: 94526769 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) /x/ OF THE SECURITIES EXCHANGE ACT OF 1934 For the twelve weeks ended March 26, 1994 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) / / 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 May 4, 1994: 10,872,424 shares PART I - FINANCIAL INFORMATION This report is for the twelve-week interim period beginning January 2, 1994, through March 26, 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, the Company's independent public accountants. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) (In thousands, except per share amounts)
Twelve Weeks Ended -------------------------------- March 26, 1994 March 27, 1993 -------------- -------------- Income: Net sales $ 610,135 592,973 Other revenues 8,030 8,093 ------------ ---------- Total revenues 618,165 601,066 Cost and expenses: Cost of sales 527,696 516,583 Selling, general and administrative and other operating expenses 76,635 71,913 Depreciation and amortization 7,063 6,423 Interest expense 2,451 2,126 ------------ ---------- Total costs and expenses 613,845 597,045 Earnings before income taxes 4,320 4,021 Income taxes 1,749 1,568 ------------ ---------- Net earnings $ 2,571 2,453 ------------ ---------- ------------ ---------- Weighted average number of common shares outstanding 10,872 10,872 ------------ ---------- ------------ ---------- Earnings per share $ .24 .23 ------------ ---------- ------------ ----------
- - ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
March 26, January 1, Assets 1994 1994 - - ------ ----------- ---------- Current assets: (Unaudited) Cash on hand $ 911 890 Accounts and notes receivable, net 88,332 95,952 Inventories 193,678 186,637 Prepaid expenses 13,984 7,391 Deferred tax assets 1,081 4,055 --------- --------- Total current assets 297,986 294,925 Investments at net equity 7,521 7,137 Notes receivable, noncurrent 19,137 20,187 Property, plant and equipment: Land 25,097 26,652 Buildings and improvements 105,840 105,650 Furniture, fixtures, and equipment 215,497 209,172 Leasehold improvements 26,097 26,016 Construction in progress 3,733 5,914 Assets under capitalized leases 9,930 9,210 --------- --------- 386,194 382,614 Less accumulated depreciation and amortization (199,403) (196,350) --------- --------- Net property, plant and equipment 186,791 186,264 --------- --------- Intangible assets, net 9,111 9,512 Other assets 3,572 3,629 --------- --------- Total assets $ 524,118 521,654 --------- --------- --------- --------- Liabilities and Stockholders' Equity - - ------------------------------------ Current liabilities: Outstanding checks, net of cash in banks $ 15,493 14,301 Short-term debt payable to banks 43,500 38,300 Current maturities of long-term debt and capitalized lease obligations 6,747 3,980 Accounts payable 119,246 119,970 Accrued expenses 32,856 27,032 Income taxes 1,322 4,315 Other current liabilities -- 7,123 ---------- ----------- Total current liabilities 219,164 215,021 Long-term debt 86,747 89,811 Capitalized lease obligations 8,870 8,076 Deferred compensation 8,873 9,065 Other 587 417 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 11,954 11,954 Retained earnings 172,283 171,670 --------- --------- Less cost of 351 shares and 352 shares of 202,943 202,330 common stock in treasury, resectively (3,066) (3,066) --------- --------- Total stockholders' equity 199,877 199,264 --------- --------- Total liabilities and stockholders' equity $ 524,118 521,654 --------- --------- --------- ---------
- - ------------------------------------------------------------ See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Twelve Weeks Ended --------------------------------------- March 26, 1994 March 27, 1993 ----------------- ------------ Cash flows from operating activities: Net earnings $ 2,571 2,453 Adjustments to reconcile net income to net cash provided by operting activities: Depreciation and amortization 7,063 6,423 Provision for bad debts (4) 767 Provision for losses on closed lease locations 64 (298) Deferred income taxes 2,974 (51) Deferred compensation (192) 31 Earnings of equity investments (373) (418) Other 9 (137) Changes in current assets and liabilities: Accounts and notes receivable 2,538 (5,615) Inventories (1,936) 9,851 Prepaid expenses (6,371) (7,160) Accounts payable (2,682) 6,691 Accrued expenses 5,823 6,563 Income taxes (2,993) (3,720) -------------- -------------- Net cash provided by operating activities $ 6,491 15,380 -------------- -------------- Cash flows from investing activities: Disposal of property, plant and equipment 4,894 4,731 Additions to property, plant and equipment excluding capital leases (6,477) (8,383) Business acquired (8,307) -- Loans to customers (2,028) (2,954) Payments from customers on loans 1,662 1,140 Other (7) (104) -------------- -------------- Net cash used for investing activities $ (10,263) (5,570) -------------- -------------- Cash flows from financing activities: Dividends paid (1,958) (1,957) Proceeds of short-term debt 5,200 3,800 Payments of long-term debt (523) (1,364) Payments of capitalized lease obligations (118) (63) -------------- -------------- Net cash provided by financing activities 2,601 416 -------------- -------------- Net (decrease) increase in cash $ (1,171) 10,226 -------------- -------------- -------------- --------------
- - ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity
- - ---------------------------------------------------------------------------------------------------------------------------------- Fiscal period ended March 26, 1994, January 1, 1994 and January 2, 1993 (In thousands, except per share amounts) Additional Total Common stock paid-in Retained Treasury stock 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 -- -- -- 2,571 -- -- 2,571 Dividend declared of $.18 per share -- -- -- (1,958) -- -- (1,958) Treasury stock issued upon exercise of options and other insignificant items -- -- -- -- -- -- Balance at March 26, 1994 11,224 $ 18,706 11,954 172,283 (351) $ (3,066) 199,877 -------- ---------- -------- --------- ------ --------- -------- -------- ---------- -------- --------- ------ --------- --------
- - ------------------------------------------------------------ See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 26, 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 March 26, 1994 and January 1, 1994, and the results of operations for the 12-week period ending March 26, 1994 and March 27, 1993 the changes in cash flows for 12-week periods ending March 26, 1994 and March 27, 1993, respectively. 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 $42.0 million and $42.5 million higher at March 26, 1994 and at January 1, 1994, respectively. 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, Inc., a former customer with 23 stores located in the Carolina's. Under the terms of the agreement, assets with a fair market value of approximately $12.4 million were to be transferred to the Company in exchange for a maximum $1.8 million in cash, of which $1.3 million was paid at closing, the assumption of liabilities of $3.2 million and the forgiveness of $7.4 million in debt, net of a bad debt reserve established by the Company. This transaction was accounted for as a troubled debt restructuring during the quarter and will be subject to final purchase price adjustments in the second quarter of 1994. 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 $3.6 million at March 26, 1994. The Company is contingently liable should these notes become uncollectible. During the quarter, $7.0 million in notes were repurchased as a part of a troubled debt restructuring of Food Folks Inc., a former customer. 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 first quarter of fiscal 1994 increased 2.8% over the comparable period last year. The increase is principally due to growth in retail sales resulting from the acquisition of the Easter's store chain which occurred in June 1993 and the 23-store Food Folks chain acquired from a former customer at the end of January 1994. Revenues otherwise were flat due to continued deflation in food prices and severe weather conditions in certain areas of the Midwest and East Coast which occurred in January and February. Gross margins were 14.6% for the first quarter of fiscal 1994 compared to 14.1% for the same twelve week period last year. The increase resulted from a greater proportion of retail sales which typically achieve higher gross margins. Also, a change in sales mix to higher margin specialty departments contributed to an overall improvement in retail margins. Selling, general and administrative expenses as a percent of total revenues were 12.4% compared to 12.0% last year. Again, the principal reason for the increase was the greater proportion of retail business which operates at higher expense levels as a percent of sales. Depreciation and amortization expenses for the first quarter were up 10.0% due to increases in net capital expenditures and intangible assets since last year. Interest expense increased 15.3% compared to the same period last year as a result of higher average short-term borrowings during the quarter and slightly higher borrowing rates. Income tax expense increased due to higher pretax earnings and a higher effective tax rate. The effective tax rate for the first quarter was 40.5% compared to 39.0% for the same quarter last year. The rate increase reflects new federal tax legislation enacted during the third quarter of 1993. Net earnings in the first quarter were $2.6 million, an increase of 4.8% over the comparable period last year. The earnings increase is attributed to improved performance at the retail level during the quarter. LIQUIDITY & CAPITAL RESOURCES Primary sources of capital available to the Company are from internally generated funds and bank lines of credit. Net cash provided from operating activities during the first quarter was $6.5 million, compared to $15.4 million in 1993. The decrease is primarily attributed to an increase in cash outlays for inventories of $1.9 million this year, compared to a reduction of $9.8 million for the same period last year The prior year quarter reflected the sell-off of large cigarette inventories on hand at the end of fiscal 1992. Capital expenditures in the first quarter were $6.5 million, exclusive of acquisitions. Of the anticipated capital expenditures for 1994 of $40.9 million, $10.5 million are planned for improvements to distribution center facilities, $21.1 million for retail facilities and the balance for other corporate purposes. In the first quarter of 1994, the Company acquired the assets and assumed certain liabilities of Food Folks, Inc., a retail supermarket chain located primarily in southeast North Carolina. Notes representing loans to Food Folks previously sold in April 1992 were repurchased for $7.0 million cash at the time of the acquisition. The Company's long-term debt rating of A- from Standard & Poors, short-term bank credit facilities, internal cash flow and the availability of favorable lease financing will provide the Company with flexibility to meet its future financial needs. PART II - OTHER INFORMATION 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 May 9, 1994 By /s/ Harold B. Finch, Jr. ------------------------------------ Harold B. Finch, Jr. Chairman of the Board and Chief Executive Officer Date May 9, 1994 By /s/ Robert F. Nash ------------------------------------ Robert F. Nash Vice President and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----