-----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, TJf9NHW27SKZwb0/jNWmoh12AZdasUmLfgmhvXFZ0o7MF05DDwd7LlrGtH6Fmqf3 1xJME3hlxyj7UF0XQ9a6SA== 0000912057-95-010285.txt : 19951122 0000912057-95-010285.hdr.sgml : 19951122 ACCESSION NUMBER: 0000912057-95-010285 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951007 FILED AS OF DATE: 19951121 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: 95595358 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, DC 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 forty weeks ended October 7, 1995 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 (IRS 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 16, 1995: 10,876,185 shares ----------------- PART I - FINANCIAL INFORMATION ------------------------------ This report is for the forty week interim period beginning January 1, 1995, through October 7, 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 auditors. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) (In thousands, except per share amounts)
Sixteen Weeks Ended Forty Weeks Ended --------------------------- --------------------------- October 7, October 8, October 7, October 8, 1995 1994 1995 1994 ----------- ---------- ---------- ----------- Revenues: Net sales $ 898,104 867,787 2,175,709 2,134,268 Other revenues 20,721 19,169 43,228 41,215 ----------- ---------- ---------- ----------- Total revenues 918,825 886,956 2,218,937 2,175,483 Cost and Expenses: Cost of sales 785,623 754,113 1,895,516 1,847,976 Selling, general and administrative and other operating expenses 112,558 113,143 269,267 275,085 Depreciation and amortization 9,024 9,690 22,594 24,162 Interest expense 3,129 3,204 8,715 8,373 ----------- ---------- ---------- ----------- Total costs and expenses 910,334 880,150 2,196,092 2,155,596 Earnings before income taxes 8,491 6,806 22,845 19,887 Income taxes 3,439 2,756 9,252 8,054 ----------- ---------- ---------- ----------- Net earnings $ 5,052 4,050 13,593 11,833 ----------- ---------- ---------- ----------- ----------- ---------- ---------- ----------- Weighted average number of common shares outstanding 10,875 10,874 10,875 10,873 ----------- ---------- ---------- ----------- ----------- ---------- ---------- ----------- Earnings per share $ 0.46 0.37 1.25 1.09 ----------- ---------- ---------- ----------- ----------- ---------- ---------- -----------
- ------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
October 7, December 31, Assets 1995 1994 - ------ ----------- ----------- Current assets: (Unaudited) Cash on hand $ 1,071 1,078 Short-term investments 5,969 -- Accounts and notes receivable, net 95,711 98,859 Inventories 207,141 198,637 Prepaid expenses 11,408 8,626 Deferred tax assets 4,204 2,322 ----------- ----------- Total current assets 325,504 309,522 Investments at net equity 8,599 7,432 Notes receivable, noncurrent 4,124 16,441 Property, plant and equipment: Land 28,138 27,556 Buildings and improvements 107,611 107,149 Furniture, fixtures, and equipment 211,926 214,564 Leasehold improvements 27,368 28,205 Construction in progress 5,890 2,039 Assets under capitalized leases 12,901 12,423 ----------- ----------- 393,834 391,936 Less accumulated depreciation and amortization (210,964) (204,985) ----------- ----------- Net property, plant and equipment 182,870 186,951 ----------- ----------- Intangible assets, net 6,664 7,810 Other assets 2,039 3,448 ----------- ----------- Total assets $ 529,800 531,604 ----------- ----------- ----------- ----------- Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Outstanding checks, net of cash in banks $ 20,420 18,649 Short-term debt payable to banks 300 41,400 Current maturities of long-term debt and capitalized lease obligations 13,842 5,685 Accounts payable 148,533 122,602 Accrued expenses 35,885 29,585 Income taxes 5,653 2,144 ----------- ----------- Total current liabilities 224,633 220,065 Long-term debt 72,148 85,289 Capitalized lease obligations 10,265 10,671 Deferred compensation 7,719 8,526 Other 1,028 784 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 11,989 11,977 Foreign currency translation adjustment - net of a $381 deferred tax benefit (572) (572) Retained earnings 186,933 179,212 ----------- ----------- 217,056 209,323 Less cost of 349 shares of common stock in treasury (3,049) (3,054) ----------- ----------- Total stockholders' equity 214,007 206,269 ----------- ----------- Total liabilities and stockholders' equity $ 529,800 531,604 ----------- ----------- ----------- -----------
- ------------------------------------------------------------ See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Forty Weeks Ended ------------------------------------ October 7, 1995 October 8, 1994 --------------- --------------- Cash flows from operating activities: Net earnings $ 13,593 11,833 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 22,594 24,162 Provision for bad debts 2,881 825 Provision for losses on closed lease locations (44) 204 Deferred income taxes (1,882) 1,927 Deferred compensation (806) (499) Earnings of equity investments (879) (1,270) Other 208 46 Changes in current assets and liabilities: Accounts and notes receivable 31 (14,603) Inventories (8,504) (11,417) Prepaid expenses (2,782) (2,225) Accounts payable 25,931 16,277 Accrued expenses 6,300 5,356 Income taxes 3,508 (8) -------------- -------------- Net cash provided by operating activites 60,149 30,608 -------------- -------------- Cash flows from investing activities: Dividends received 890 617 Disposal of property, plant and equipment 5,286 7,597 Additions to property, plant and equipment excluding capital leases (22,211) (24,229) Business acquired -- (8,614) Loans sold, including current portion 13,744 -- Short-term investments (5,969) -- Loans to customers (6,883) (7,123) Payments from customers on loans 6,851 5,482 Investment in an unconsolidated company (1,179) -- Other (112) (34) -------------- -------------- Net cash used for investing activities (9,583) (26,304) -------------- -------------- Cash flows from financing activities: Dividends paid (5,872) (5,872) Proceeds(Payments) of short-term debt (41,100) 800 Payments of long-term debt (4,957) (2,510) Payments of capitalized lease obligations (433) (506) Other 17 30 -------------- -------------- Net cash used for financing activities (52,345) (8,058) -------------- -------------- Net decrease in cash $ (1,779) (3,754) -------------- -------------- -------------- --------------
- ------------------------------------------------------------ See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity
(Unaudited) - ----------------------------------------------------------------------------------------------------- FISCAL PERIOD ENDED OCTOBER 7, 1995, DECEMBER 31, 1994 AND JANUARY 1, 1994 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) COMMON STOCK ADDITIONAL -------------------------- 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 currency translation adjustment - net of a $381 deferred tax benefit -- -- -- -- ------- ------- ------- --------- Balance at December 31, 1994 11,224 18,706 11,977 179,212 Net earnings -- -- -- 13,593 Dividend declared of $.54 per share -- -- -- (5,872) Treasury stock issued upon exercise of options and other insignificant items -- -- 12 -- ------- ------- ------- --------- Balance at October 7, 1995 11,224 $ 18,706 11,989 186,933 ------- ------- ------- --------- ------- ------- ------- --------- 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 currency translation adjustment - net of a $381 deferred tax benefit (572) -- -- (572) ------- ------- ------- --------- Balance at December 31, 1994 (572) (349) (3,054) 206,269 Net earnings -- -- 13,593 Dividend declared of $.54 per share -- -- (5,872) Treasury stock issued upon exercise of options and other insignificant items -- -- 5 17 ------- ------- ------- --------- Balance at October 7, 1995 (572) (349) $ (3,049) 214,007 ------- ------- ------- --------- ------- ------- ------- ---------
- ------------------------------------------------------------- See accompanying notes to consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 7, 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 October 7, 1995 and December 31, 1994, and the results of operations for the 40-weeks ending October 7, 1995 and October 8, 1994, and the changes in cash flows for the 40 week periods ending October 7, 1995 and October 8, 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 $44.3 million and $43.9 million higher at October 7, 1995 and at December 31, 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 On September 8, 1995 the Company entered into an agreement with a financial institution whereby the Company sold $13.7 million in customer notes, and can continue to sell on an ongoing basis additional customer notes receivable. 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. At October 7, 1995, remaining balances on all notes receivable sold with recourse during fiscal 1992 and 1995 were $1.5 million and $13.5 million, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues for the third quarter of 1995 increased 3.6% over the same period last year. The improvement is primarily due to growth in wholesale revenues, particularly from increased military sales and business from new retail customers added since last year. During the quarter, wholesale revenues represented 68.2% of total revenues compared to 65.3% last year. Revenue gains at wholesale were partially offset by a decrease in retail sales due to a net reduction of nine stores, since the prior year quarter. Since the third quarter of 1994, the Company sold six stores to existing customers, closed thirteen under-performing stores and acquired ten from existing or former customers. Same store sales declined .8% during the third quarter and 2.0% on a year to date basis compared to last year. Although growing competition in certain market areas continues to negatively impact sales, the rate of decline in same store sales has narrowed during the third quarter. Gross Margins were 14.5% for the third quarter this year compared to 15.0% for the same period last year. On a year to date basis, margins were 14.6% compared to 15.1% last year. The decrease for both periods resulted from a greater proportion of wholesale sales which typically achieve lower gross margins. Although consolidated gross margins are lower because of the changing mix of sales between wholesale and retail, margins of each respective segment have actually improved compared to last year. Centralization of buying functions for several warehouses and better margins on perishable products contributed to the improvement during the quarter for the wholesale segment. On the retail side, margin improvements resulted from a greater distribution of sales from higher margin specialty departments of the stores. The Company reflected a LIFO charge of $545,000 and $425,000 for the quarter and year to date, respectively, compared to a charge of $620,000 and $50,000 for the prior year quarter and year to date, respectively. Selling, general and administrative expenses as a percent of total revenues were 12.3% for the quarter compared to 12.8% for the same period last year. On a year to date basis, operating expenses were 12.1% this year compared to 12.6% in 1994. Expense levels this year were favorably impacted by an increasing proportion of wholesale business which typically operates at lower expense levels. Incremental sales resulted in improved productivity at the wholesale level and a decrease in expenses as a percent of revenues for both the quarter and year to date. Partially offsetting these gains were costs associated with increased promotional and advertising activities in market areas where the Company is experiencing growing competition. Depreciation and amortization expenses decreased 6.8% and 6.5% for the quarter and year to date, respectively, compared to last year. The decrease reflects the reduction in property, plant and equipment resulting from the sale or closing of several corporate owned retail stores. Interest expense for the third quarter decreased 2.3% compared to last year due to a reduction in average outstanding short-term debt during the quarter. On a year to date basis, interest costs were 4.1% higher this year because of greater average short-term borrowings and higher interest rates. The effective tax rate for all periods was 40.5%. Income tax expense increased this year because of higher pretax earnings. Net earnings for the quarter were $5.1 million, an increase of 24.7% over last year. The earnings improvement is attributed to strong operating results at the wholesale level due to increased military business and sales to new independent accounts. Partially offsetting the wholesale gains were lower than expected earnings at retail largely due to competitive pressures in certain markets. LIQUIDITY AND CAPITAL RESOURCES On September 8, 1995, notes receivable from retail customers totaling $13.7 million were sold to a bank for cash. The proceeds from this sale were used to pay off short-term bank debt, with the balance invested in short-term securities. Merchandise inventory increased $18.1 million during the third quarter, largely the result of seasonally higher inventories at the distribution centers. Accounts payable increased $22.8 million during the quarter. This increase was related to seasonal increases in inventories and extended payment terms on certain seasonal products. Subsequent to the end of the third quarter, the Company entered into a purchase agreement to acquire the assets of Military Distributors of Virginia, Inc. for cash plus the assumption of certain liabilities. The Company is planning to finance the acquisition through a combination of the sale of notes to insurance companies and through a revolving loan facility with several banks. It is the opinion of the Company that funds will be available from these sources on a competitive basis. In addition, subsequent to the end of the quarter, the Company entered into an agreement to sell Thomas & Howard of Hickory, Inc., and its subsidiary, T & H Service Merchandisers, to H. T. Hackney. Proceeds will be used to pay off short-term bank debt. PART II - OTHER INFORMATION Items 1, 2, 3, 4 and 5 are not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS: 10.1 Excerpt from Board minutes relating to compensation of outside directors. 27. Financial Data Schedule. (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, 1995 By /s/ Alfred N. Flaten ---------------------------- Alfred N. Flaten President and Chief Executive Officer Date: November 21, 1995 By /s/ Robert F. Nash ---------------------------- Robert F. Nash Vice President and Treasurer INDEX TO EXHIBITS EXHIBIT 10.1 Excerpt from Board minutes relating to compensation of outside directors. 27 Financial Data Schedule. EX-10.1 2 EXHIBIT 10.1 EXHIBIT 10.1 EXCERPTS FROM MINUTES OF BOARD OF DIRECTORS MEETING OF NASH-FINCH COMPANY ON SEPTEMBER 19, 1995 RESOLVED, that effective as of October 1, 1995, outside members of the Board of Directors of the Company be compensated at the rate of $1,000 plus reasonable expenses incurred for each meeting of the Board of Directors of the Company attended, $1,100 per month retainer and $500 plus reasonable expenses incurred for attendance at meetings of committees of the Board. For the purposes of this resolution, an outside director is defined as any director who is not a present full time employee of Nash Finch Company or its subsidiaries. RESOLVED FURTHER, that upon becoming effective, the foregoing resolution shall supersede any resolution heretofore adopted by this Board of Directors pertaining to compensation of outside directors. EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-30-1995 JAN-01-1995 OCT-07-1995 1,071 5,969 96,625 914 207,141 325,504 393,834 (210,964) 529,800 224,633 72,148 18,706 0 0 198,350 529,800 2,175,709 2,218,937 1,895,516 288,980 0 2,881 8,715 22,845 9,252 13,593 0 0 0 13,593 1.25 1.25
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