-----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, CUgCwLAbD+9JY6mMB8ohIc3wc7/h/gL/SvXtTze3ICrpLBMbiDXVGcn3VbTi7RdL 0JS/U+AKuliqVUfmjrPYLQ== 0000912057-95-003250.txt : 19950508 0000912057-95-003250.hdr.sgml : 19950508 ACCESSION NUMBER: 0000912057-95-003250 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950325 FILED AS OF DATE: 19950505 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASH FINCH CO CENTRAL INDEX KEY: 0000069671 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [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: 95535069 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 FORM 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 twelve weeks ended March 25, 1995 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES / / EXCHANGE ACT OR 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 1, 1995: 10,874,915 SHARES PART I - FINANCIAL INFORMATION This report is for the twelve week interim period beginning January 1, 1995, through March 25, 1995. 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 Ernst & Young LLP, 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 25, 1995 March 26, 1994 -------------- -------------- Income: Net sales $ 613,898 610,135 Other revenues 9,700 8,030 -------------- -------------- Total revenues 623,598 618,165 Cost and expenses: Cost of sales 534,312 527,696 Selling, general and administrative and other operating expenses 75,038 76,635 Depreciation and amortization 6,790 7,063 Interest expense 2,939 2,451 -------------- -------------- Total costs and expenses 619,079 613,845 Earnings before income taxes 4,519 4,320 Income taxes 1,830 1,749 -------------- -------------- Net earnings $ 2,689 2,571 -------------- -------------- -------------- -------------- Weighted average number of common shares outstanding 10,874 10,872 -------------- -------------- -------------- -------------- Earnings per share $ .25 .24 -------------- -------------- -------------- --------------
- ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
March 25, December 31, Assets 1995 1994 - ------ ----------- ------------ Current assets: (Unaudited) Cash on hand $ 908 1,078 Accounts and notes receivable, net 93,592 98,859 Inventories 185,388 198,637 Prepaid expenses 16,439 8,626 Deferred tax assets 2,105 2,322 ----------- ----------- Total current assets 298,432 309,522 Investments at net equity 7,709 7,432 Notes receivable, noncurrent 14,882 16,441 Property, plant and equipment: Land 27,565 27,556 Buildings and improvements 107,197 107,149 Furniture, fixtures, and equipment 211,453 214,564 Leasehold improvements 27,228 28,205 Construction in progress 2,402 2,039 Assets under capitalized leases 11,754 12,423 ----------- ----------- 387,599 391,936 Less accumulated depreciation and amortization (204,473) (204,985) ----------- ----------- Net property, plant and equipment 183,126 186,951 ----------- ----------- Intangible assets, net 7,409 7,810 Other assets 3,341 3,448 ----------- ----------- Total assets $ 514,899 531,604 ----------- ----------- ----------- ----------- Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Outstanding checks, net of cash in banks $ 3,021 18,649 Short-term debt payable to banks 37,800 41,400 Current maturities of long-term debt and capitalized lease obligations 4,053 5,685 Accounts payable 121,335 122,602 Accrued expenses 34,834 29,585 Income taxes 3,702 2,144 ----------- ----------- Total current liabilities 204,745 220,065 Long-term debt 83,691 85,289 Capitalized lease obligations 10,546 10,671 Deferred compensation 8,162 8,526 Other 755 784 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 11,977 11,977 Foreign curency translation adjustment - net of a $381 deferred tax benefit (572) (572) Retained earnings 179,943 179,212 ----------- ----------- 210,054 209,323 Less cost of 349 shares of common stock in treasury (3,054) (3,054) ----------- ----------- Total stockholders' equity 207,000 206,269 ----------- ----------- Total liabilities and stockholders' equity $ 514,899 531,604 ----------- ----------- ----------- -----------
- ------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Twelve Weeks Ended ----------------------------------- March 25, 1995 March 26, 1994 ---------------- ---------------- Cash flows from operating activities: Net earnings $ 2,689 2,571 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,790 7,063 Provision for bad debts 448 (4) Provision for losses on closed lease locations (84) 64 Deferred income taxes 216 2,974 Deferred compensation (363) (192) Earnings of equity investments (278) (373) Other 55 9 Changes in current assets and liabilities: Accounts and notes receivable 5,649 2,538 Inventories 13,249 (1,936) Prepaid expenses (7,813) (6,371) Accounts payable (1,267) (2,682) Accrued expenses 5,249 5,823 Income taxes 1,558 (2,993) ---------------- ---------------- Net cash provided by operating activities $ 26,098 6,491 ---------------- ---------------- Cash flows from investing activities: Disposal of property, plant and equipment 928 4,894 Additions to property, plant and equipment excluding capital leases (3,418) (6,477) Business acquired __ (8,307) Loans to customers (1,508) (2,028) Payments from customers on loans 2,271 1,662 Other __ (7) ---------------- ---------------- Net cash used for investing activities $ (1,727) (10,263) ---------------- ---------------- Cash flows from financing activities: Dividends paid (1,958) (1,958) (Payments) Proceeds of short-term debt (3,600) 5,200 Payments of long-term debt (3,221) (523) Payments of capitalized lease obligations (134) (118) ---------------- ---------------- Net cash (used for) provided by financing activities (8,913) 2,601 ---------------- ---------------- Net increase (decrease) in cash $ 15,458 (1,171) ---------------- ---------------- ---------------- ----------------
- ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity
- ------------------------------------------------------------------------------- Fiscal period ended March 25 1995, December 31, 1994 and January 1, 1994 (In thousands, except per share amounts) Common Stock Addional ------------------- paid-in Retained Shares Amount capital earnings - ------------------------------------------------------------------------------- Balance at January 2, 1993 11,224 $ 18,706 11,944 163,624 Net earnings -- -- -- 15,874 Dividend declared of $.72 per share -- -- -- (7,828) Treasury stock issued upon exercise of options and other insignificant items -- -- 10 -- -------- -------- -------- -------- Balance at January 1, 1994 11,224 18,706 11,954 171,670 Net earnings -- -- -- 15,480 Dividend declared of $.73 per share -- -- -- (7,938) Treasury stock issued upon exercise of options and other insignificant items -- -- 23 -- Foreign curency translation adjustment - net of a $381 deferred tax benefit -- -- -- -- -------- -------- -------- -------- Balance at December 31, 1994 11,224 18,706 11,977 179,212 Net earnings -- -- -- 2,689 Dividend declared of $.18 per share -- -- -- (1,958) -------- -------- -------- -------- Balance at March 25, 1995 11,224 $ 18,706 11,977 179,943 -------- -------- -------- -------- -------- -------- -------- -------- Foreign currency Treasury stock Total translation --------------- stockholders' adjustment Shares Amount equity - ------------------------------------------------------------------------------- Balance at January 2, 1993 -- (352) $ (3,070) 191,204 Net earnings -- -- -- 15,874 Dividend declared of $.72 per share -- -- -- (7,828) Treasury stock issued upon exercise of options and other insignificant items -- 1 4 14 -------- -------- -------- -------- Balance at January 1, 1994 -- (351) (3,066) 199,264 Net earnings -- -- -- 15,480 Dividend declared of $.73 per share -- -- -- (7,938) Treasury stock issued upon exercise of options and other insignificant items -- 2 12 35 Foreign curency translation adjustment - net of a $381 deferred tax benefit (572) -- (572) -------- -------- -------- -------- Balance at December 31, 1994 (572) (349) (3,054) 206,269 Net earnings -- -- 2,689 Dividend declared of $.18 per share -- -- (1,958) -------- -------- -------- -------- Balance at March 25, 1995 (572) (349) $ (3,054) 207,000 -------- -------- -------- -------- -------- -------- -------- --------
- ------------------------------------------ See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 25, 1995 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 25, 1995 and December 31, 1994, and the results of operations for the 12-week ending March 25, 1995 and March 26, 1994, and the changes in cash flows for the 12-week periods ending March 25, 1995 and March 26, 1994, 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 approximately $43.9 million higher at March 25, 1995 and at December 31, 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 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 $2.5 million at March 25, 1995. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues during the first quarter of fiscal 1995 increased .9% over the same period last year. Improvements in wholesale segment revenues of 5.9%, resulting from the addition of several new accounts, were offset by a reduction in retail sales due to the sale or closing of a number of corporate retail stores since last year. During the quarter the Company sold two stores to an existing customer, thereby retaining the wholesale business, and closed six other stores that did not meet the Company's sales and earnings expectations. Same store sales showed a 3.3% decline compared to last year due to new competition in certain market areas and unusually low sales in January. Gross margins were 14.3% for the first quarter compared to 14.6% for the same twelve week period last year. The overall decrease resulted from a greater proportion of wholesale sales which contribute lower gross margins. In spite of this overall decline, margins improved at retail level in the non-perishable grocery and specialty departments. In addition, Midwest wholesale operations showed higher margins, which we believe resulted from programs currently being implemented to improve product procurement processes. However, margins of distribution centers servicing convenience store customers in the Southeast continue to be negatively affected by lower margins on tobacco products. The Company's internally measured inflation index measured slight deflation for the quarter. This resulted in a LIFO credit of $135,000 this year compared to a $500,000 credit in the prior year. Selling, general and administrative expenses as a percent of total revenues were 12.0% compared to 12.4% last year. Again, the change in the mix of business from retail to wholesale, which operates at lower expense levels, was the principal reason for the percentage decline. Depreciation and amortization expenses for the quarter were down 3.8% from the prior year. The decrease reflects the reduction in retail property, plant and equipment resulting from the sale and closing of retail stores since last year. Interest expense increased 19.9% compared to last year because of higher interest rates partially offset by lower average short-term borrowings during the quarter. The effective tax rate for both the first quarter this year and last year was 40.5%. Income tax expense increased over last year because of higher pretax earnings. Net earnings in the first quarter were $2.7 million, an increase of 4.6% over last year. The earnings increase is attributed to better operating results of corporate retail stores during the quarter despite lower sales. LIQUIDITY AND CAPITAL RESOURCES Net cash provided from operations was $26.1 million in the first quarter of 1995 compared with $6.5 million in the first quarter in 1994. The primary reason for this increase was a reduction in distribution center inventories of approximately $11 million and retail inventories of $2.5 million in the quarter compared to an inventory increase of $1.9 million during the same period of 1994. Outstanding checks net of cash in banks decreased from $18.6 at year end to $3.0 million at the end of the first quarter of 1995. This decrease was an anomaly related to the timing of the Easter holiday in 1995 compared with 1994 and is reflected in the net increase in cash in 1995. Capital expenditures totaled $3.4 million for the quarter down from $6.5 million in the similar period in 1994. The capital budget for 1995 is $31.3 million down from actual expenditures of $35.0 million in 1994. There were no other significant factors affecting liquidity and capital resources in the first quarter of 1995. PART II - OTHER INFORMATION Items 2, 3, 4 and 5 are not applicable. ITEM 1, LEGAL PROCEEDINGS. In November 1992, Jin Ku Kim, currently an employee of the Company, commenced an action against the Company in U.S. District Court for the Northern District of Iowa claiming damages as a result of the alleged failure to promote Mr. Kim to the position of shipping foreman in November 1990 and April 1992 because of his national origin and race, and the alleged retaliation against him in terms and conditions of employment after he filed charges of employment discrimination. On September 16, 1994, a jury verdict in the amount of $8,786,000 including $36,000 in back pay, $1,750,000 in mental anguish and loss of enjoyment of life and $7,000,000 in punitive damages, was entered in favor of the plaintiff. On April 13, 1995, the U.S. District Court reduced the amount of damages to $421,000 plus attorneys' fees and expenses. The plaintiff and the Company have each filed a notice of appeal of the Court's decision. The Company will continue to vigorously pursue all avenues for eliminating or further reducing the damages and other relief awarded to the plaintiff. Although no assurance can be given that the Company will be successful in its defense against the plaintiff's appeal or in pursuing the Company's appeal, the Company believes that the reserves it has established are reasonably adequate to cover its liability in this case. ITEM 6, EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS: 27. Financial Data Schedule. (b) REPORTS ON FORM 8-K: A Form 8-K, dated February 14, 1995, was filed February 22, 1995 by the registrant with the Securities and Exchange Commission to report the dismissal of KPMG Peat Marwick LLP as the registrant's independent accountants upon completion of the audit for the fiscal year ended December 31, 1994 and the engagement of Ernst & Young LLP as the registrant's independent accountants for the fiscal year ending December 30, 1995. Amendments No. 1 and 2 on Form 8-K/A, amending the February 22, 1995 Form 8-K filing, were filed on March 6, 1995 and March 21, 1995, respectively. 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 5, 1995 BY /s/ Alfred N. Flaten ------------- ------------------------ Alfred N. Flaten President and Chief Executive Officer Date May 5, 1995 BY /s/ Robert F. Nash ------------- ------------------------ Robert F. Nash Vice President and Treasurer EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-30-1995 JAN-01-1995 MAR-25-1995 908 0 94,613 (1,021) 185,388 298,432 387,599 204,473 514,899 204,745 83,691 18,706 0 0 188,294 514,899 613,898 623,598 534,312 81,380 0 448 2,939 4,519 1,830 2,689 0 0 0 2,689 .25 .25
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