-----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, OQ5tZfbJ5PYUZWFMjh30gElIK+k8QVuJygM9pt1dqW1OLyL/+pxIUDdX/8EiEJy6 Hhgv50YjLSnIBf3lMxOvsQ== 0000950152-97-006827.txt : 19970929 0000950152-97-006827.hdr.sgml : 19970929 ACCESSION NUMBER: 0000950152-97-006827 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970802 FILED AS OF DATE: 19970926 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAIRY MART CONVENIENCE STORES INC CENTRAL INDEX KEY: 0000721675 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CONVENIENCE STORES [5412] IRS NUMBER: 042497894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-11627 FILM NUMBER: 97685748 BUSINESS ADDRESS: STREET 1: ONE VISION DR CITY: ENFIELD STATE: CT ZIP: 06082 BUSINESS PHONE: 2037414444 10-Q/A 1 DAIRY MART CONVENIENCE STORES, INC. FORM 10-Q/A 1 FORM 10-Q/A AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended AUGUST 2, 1997 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0-12497 ------------------ DAIRY MART CONVENIENCE STORES, INC. (Exact name of registrant as specified in its charter) Delaware 04-2497894 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 210 BROADWAY EAST, CUYAHOGA FALLS, OHIO 44222 (Address of principal executive offices) Registrant's telephone number, including area code (330) 923-0421 -------------------- 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 --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: SHARES OF CLASS A COMMON STOCK OUTSTANDING AUGUST 2, 1997 - 3,042,283 SHARES OF CLASS B COMMON STOCK OUTSTANDING AUGUST 2, 1997 - 2,783,060 2 This Form 10-Q/A Amendment No. 1 amends the Form 10-Q of Dairy Mart Convenience Stores, Inc. (the "Company") filed for the fiscal quarter ended August 2, 1997 to amend and restate the following in their entirety: (i.) the notes to the consolidated financial statements in Part I; and (ii.) exhibit 27.1. -2- 3 DAIRY MART CONVENIENCE STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AUGUST 2, 1997 (Unaudited) The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented, and which are of a normal, recurring nature. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K, filed with the Securities and Exchange Commission on May 1, 1997. 1. Accounting Policies ------------------- The financial statements included herein have been prepared in accordance with the accounting policies described in Note 1 to the February 1, 1997 audited consolidated financial statements included in the Company's Form 10-K. Certain prior year amounts have been reclassified to conform to the presentation used for the current year. 2. Supplemental Balance Sheet Information -------------------------------------- The composition of the Company's accrued expenses in the Consolidated Balance Sheets is as follows:
August 2, February 1, 1997 1997 ------------------------------- Accrued salaries and wages $ 4,049 $ 4,089 Accrued environmental assessment and remediation 3,668 1,782 Accrued income taxes 2,634 (563) Other accrued expenses 8,663 7,859 ------- ------- Accrued Expenses $19,014 $13,167 ------- -------
3. Changes in Capital Accounts --------------------------- An analysis of the capital stock accounts for the first two fiscal quarters ended August 2, 1997 follows:
COMMON STOCK ------------------------------------------------------------------------ CLASS A SHARES CLASS B SHARES PAID-IN CAPITAL ISSUED AT ISSUED AT IN EXCESS OF $.01 PAR VALUE $.01 PAR VALUE AMOUNT PAR VALUE -------------- -------------- --------- --------------- Balance February 1, 1997 3,509,576 2,959,017 $ 64,686 $ 30,560,173 Employee stock purchase plan 11,082 - 111 42,934 Stock options exercised 43,250 - 433 121,105 ---------- ---------- --------- ------------- Balance August 2, 1997 3,563,908 2,959,017 $ 65,230 $ 30,724,212 ---------- ---------- --------- -------------
-3- 4 As of August 2, 1997, there were 521,625 shares of Class A Common Stock and 175,957 shares of Class B Common Stock held as treasury stock at an aggregate cost of $5,004,847, leaving 3,042,283 Class A shares and 2,783,060 Class B shares outstanding. 4. Earnings (Loss) Per Share ------------------------- Earnings (loss) per share is based on the weighted average number of shares outstanding, including the dilutive effect of stock options, if appropriate, during each period. The Company's note receivable from DM Associates Limited Partnership is secured by 1,220,000 shares of the Company's Class B Common Stock, which shares are treated similar to treasury stock for earnings (loss) per share purposes. During 1997, the Financial Accounting Standards Board issued SFAS 128, "Earnings per Share". The statement will revise the methods and disclosures regarding earnings per share. The Company is required to adopt SFAS 128 in the fourth quarter of fiscal 1998. 5. Seasonality ----------- The results of operations for the first two fiscal quarters ended August 2, 1997 are not necessarily indicative of results to be expected for the full fiscal year. The convenience store industry in the Company's marketing areas experiences a higher percentage of revenues and profit margins during the summer months than during the winter months. Historically, the Company has achieved more favorable financial results in its second and third fiscal quarters, as compared to its first and fourth fiscal quarters. -4- 5 6. Unaudited Pro Forma Information ------------------------------- On June 21, 1997, the Company completed the sale of the assets relating to 156 convenience store and retail gasoline locations in Connecticut, Massachusetts, Rhode Island, and New York. The principal assets sold by the Company include inventories, convenience store and gasoline fixtures and equipment, land, buildings, and building and leasehold improvements. The following unaudited pro forma information of the Company for the fiscal year ended February 1, 1997 and the first two fiscal quarters ended August 2, 1997, has been prepared assuming that the sale of the 156 convenience store and retail gasoline locations had occurred as of the beginning of the fiscal year ended February 1, 1997. The unaudited pro forma information is not necessarily indicative of the results which would have been reported if the transaction had occurred at the beginning of the fiscal year ended February 1, 1997, or which may be reported in the future. The unaudited pro forma information reflects the exclusion, for both fiscal periods shown, of historical revenues, cost of goods sold, operating expenses, and direct and indirect administrative expenses associated with the 156 retail locations sold. Additionally, the unaudited pro forma information reflects the elimination of historical interest expense related to debt retired based on the assumption that proceeds from the sale of the 156 retail locations had been received at the beginning of the fiscal year ended February 1, 1997, and also reflects the elimination of the estimated income tax effect of the associated excluded results of operations for the 156 retail locations sold. The unaudited pro forma information is as follows: -5- 6 (Unaudited) (in thousands, except per share amounts)
FOR THE TWO FISCAL FOR THE FISCAL QUARTERS ENDED YEAR ENDED ------------------ -------------- AUGUST 2, FEBRUARY 1, 1997 1997 ---------------------------------------------------------------------------------------------------------- Revenues................................ $ 234,044 $ 471,969 ---------- --------- Loss before income taxes................ (1,192) (4,012) ---------- ---------- Net loss................................ $ (667) $ (2,889) ---------------------------------------------------------------------------------------------------------- Loss per share.......................... $ (0.15) $ (0.65) ----------------------------------------------------------------------------------------------------------
7. Supplemental Consolidating Financial Information (unaudited) ------------------------------------------------------------ The Company's payment obligations under the Series A and Series B Senior Subordinated Notes are guaranteed by certain of the Company's subsidiaries ("Guarantor Subsidiaries"). The Notes are fully and unconditionally guaranteed on an unsecured, senior subordinated, joint and several basis by each of the guarantor subsidiaries. The following supplemental financial information sets forth, on a consolidating basis, statement of operations, balance sheet, and cash flow information for the Company ("Parent Company Only"), for the Guarantor Subsidiaries and for Financial Opportunities, Inc. ("FINOP"), the Company's non-guarantor subsidiary. Separate complete financial statements of the respective Guarantor Subsidiaries would not provide additional information which would be useful in assessing the financial condition of the Guarantor Subsidiaries, and are accordingly omitted. Investments in subsidiaries are accounted for by the Parent Company on the equity method for purpose of the supplemental consolidating presentation. Earnings of the subsidiaries are, therefore, reflected in the Parent Company's investment accounts and earnings. The principle elimination entries eliminate the Parent Company's investments in subsidiaries and intercompany balances and transactions. -6- 7 Supplemental Consolidating Statement of Operations for the Two Fiscal Quarters Ended August 2, 1997
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated ------- ------------ ----- ------------ ------------ (in thousands) Revenues ............................. $ 267 $ 275,607 $ 219 $ -- $ 276,093 Cost of goods sold and expenses: Cost of goods sold ............... -- 202,095 -- -- 202,095 Operating and administrative expenses ....................... 139 67,983 15 -- 68,137 Interest expense ................. 4,883 401 176 -- 5,460 Gain on disposition of properties, net ................ -- (1,633) -- -- (1,633) --------- --------- ----- --------- --------- 5,022 268,846 191 -- 274,059 --------- --------- ----- --------- --------- Income (loss) before income taxes and equity in income of consolidated subsidiaries ....... (4,755) 6,761 28 -- 2,034 (Provision for) benefit from income taxes ........................ 2,092 (2,975) (12) -- (895) --------- --------- ----- --------- --------- Income (loss) before equity in income of consolidated subsidiaries ................... (2,663) 3,786 16 -- 1,139 Equity in income of consolidated subsidiaries ........... 3,802 16 -- (3,818) -- --------- --------- ----- --------- --------- Net income ........................ $ 1,139 $ 3,802 $ 16 $ (3,818) $ 1,139 ========= ========= ===== ========= =========
-7- 8 Supplemental Consolidating Balance Sheets August 2, 1997
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated ------- ------------ ----- ------------ ------------ (in thousands) ASSETS Current Assets: Cash ............................ $ 1,623 $ 3,836 $ 930 $ -- $ 6,389 Short-term investments .......... -- 19,878 2,334 -- 22,212 Accounts and notes receivable ... 103 14,285 562 -- 14,950 Inventory ....................... -- 17,638 -- -- 17,638 Prepaid expenses and other current assets ........... 142 2,460 -- -- 2,602 Deferred income taxes ........... 2,272 2,346 -- -- 4,618 -------- -------- ------ ---------- -------- Total current assets ......... 4,140 60,443 3,826 -- 68,409 -------- -------- ------ ---------- -------- Assets Held For Sale ............... -- 5,386 -- -- 5,386 Property and Equipment, net ........ -- 74,533 -- -- 74,533 Intangible Assets, net ............. -- 15,988 -- -- 15,988 Other Assets, net .................. 1,251 7,246 1,978 -- 10,475 Investment in and Advances to Subsidiaries ..................... 119,021 1,398 636 (121,055) -- -------- -------- ------ ---------- ------- Total assets ....................... $124,412 $164,994 $6,440 $(121,055) $174,791 - ---------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term obligations ......... $ 808 $ 347 $ -- $ -- $ 1,155 Accounts payable ................ 18,733 13,752 -- -- 32,485 Accrued expenses ................ 1,626 17,368 20 -- 19,014 Accrued interest ................ 3,435 -- 117 -- 3,552 -------- -------- ------ ---------- -------- Total current liabilities .... 24,602 31,467 137 -- 56,206 -------- -------- ------ ---------- -------- Long-Term Obligations, less current portion above ........ 90,593 954 4,230 -- 95,777 Other Liabilities .................. -- 13,552 39 -- 13,591 Stockholders' Equity ............... 9,217 119,021 2,034 (121,055) 9,217 -------- -------- ------ ---------- -------- Total liabilities and stockholders' equity ............. $124,412 $164,994 $6,440 $(121,055) $174,791 ======== ======== ====== ========== ========
-8- 9 Supplemental Consolidating Statement of Cash Flows for the Two Fiscal Quarters Ended August 2, 1997
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated ------- ------------ ----- ------------ ------------ (in thousands) Net cash provided by operating activities ............................ $ 5,518 $ 8,191 $ 138 $ -- $ 13,847 -------- -------- -------- ------- ------- Cash flows from investing activities: Purchase of and change in short-term investments ............... -- (19,878) (801) -- (20,679) Purchase of property and equipment .... -- (13,438) -- -- (13,438) Net proceeds from sale of property, equipment and assets held for sale ... -- 28,838 -- -- 28,838 Investment in and advances to subsidiaries ......................... 7,763 (7,970) 207 -- -- Increase in long-term notes receivable -- (18) -- -- (18) Proceeds from collection of long-term receivables ................ -- 21 210 -- 231 Increase in intangibles and other assets ..................... 29 1,682 4 -- 1,715 -------- -------- -------- ------- -------- Net cash provided by (used by) investing activities ............................ 7,792 (10,763) (380) -- (3,351) -------- -------- -------- ------- -------- Cash flows from financing activities: Decrease in revolving loan, net ....... (10,280) -- -- -- (10,280) Repayment of long-term obligations .... (1,672) (1,610) -- -- (3,282) Issuance of common stock .............. 165 -- -- -- 165 -------- -------- -------- ------- -------- Net cash used by financing activities ................... (11,787) (1,610) -- -- (13,397) -------- -------- -------- ------- -------- Increase (decrease) in cash .............. 1,523 (4,182) (242) -- (2,901) Cash at beginning of fiscal year ......... 100 8,018 1,172 -- 9,290 -------- -------- -------- ------- ------- Cash at end of second fiscal quarter ..... $ 1,623 $ 3,836 $ 930 $ -- $ 6,389 ======== ======== ======== ======= =======
-9- 10 Supplemental Consolidating Statement of Operations for the Two Fiscal Quarters Ended August 3, 1996
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated ------- ------------ ----- ------------ ------------ (in thousands) Revenues ........................... $ 135 $ 297,056 $ 271 $ -- $297,462 Cost of goods sold and expenses: Cost of goods sold .............. -- 219,542 -- -- 219,542 Operating and administrative expenses ....................... 138 69,293 -- -- 69,431 Interest expense ................ 5,077 253 174 -- 5,504 Gain on disposition of properties, net ................ -- (89) -- -- (89) -------- --------- ------- --------- -------- 5,215 288,999 174 -- 294,388 -------- --------- ------- --------- -------- Income (loss) before income taxes and equity in income of consolidated subsidiaries ... (5,080) 8,057 97 -- 3,074 (Provision for) benefit from income taxes ...................... 2,037 (3,264) (6) -- (1,233) -------- --------- ------- --------- -------- Income (loss) before equity in income of consolidated subsidiaries ................. (3,043) 4,793 91 -- 1,841 Equity in income of consolidated subsidiaries ................. 4,884 91 -- (4,975) -- -------- --------- ------- --------- -------- Net income ...................... $ 1,841 $ 4,884 $ 91 $ (4,975) $ 1,841 ======== ========= ======= ========= ========
-10- 11 Supplemental Consolidating Balance Sheets February 1, 1997
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated -------- -------- ------ ---------- -------- (in thousands) ASSETS Current Assets: Cash ............................ $ 100 $ 8,018 $1,172 $ -- $ 9,290 Short-term investment ........... -- -- 1,533 -- 1,533 Accounts and notes receivable ... 20 12,897 671 -- 13,588 Inventory ....................... -- 20,184 -- -- 20,184 Prepaid expenses and other current assets ........... 20 3,259 -- -- 3,279 Deferred income taxes ........... 933 878 -- -- 1,811 -------- -------- ------ ---------- -------- Total current assets ......... 1,073 45,236 3,376 -- 49,685 -------- -------- ------ ---------- -------- Assets Held For Sale ............... -- 9,543 -- -- 9,543 Property and Equipment, net ........ -- 89,448 -- -- 89,448 Intangible Assets, net ............. -- 17,039 -- -- 17,039 Other Assets, net .................. 1,389 6,209 2,192 -- 9,790 Investment in and Advances to Subsidiaries ..................... 126,784 1,175 843 (128,802) -- -------- -------- ------ ---------- ------- Total assets ....................... $129,246 $168,650 $6,411 $(128,802) $175,505 - ---------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term obligations ......... $ 929 $ 454 $ -- $ -- $ 1,383 Accounts payable ................ 13,800 16,840 -- -- 30,640 Accrued expenses ................ 726 12,432 9 -- 13,167 Accrued interest ................ 3,520 -- 115 -- 3,635 -------- -------- ------ ---------- -------- Total current liabilities .... 18,975 29,726 124 -- 48,825 -------- -------- ------ ---------- -------- Long-Term Obligations, less current portion above ........ 102,358 2,457 4,230 -- 109,045 Other Liabilities .................. -- 9,683 39 -- 9,722 Stockholders' Equity ............... 7,913 126,784 2,018 (128,802) 7,913 -------- -------- ------ ---------- -------- Total liabilities and stockholders' equity ............. $129,246 $168,650 $6,411 $(128,802) $175,505 ======== ======== ====== ========== ========
-11- 12 Supplemental Consolidating Statement of Cash Flows for the Two Quarters Ended August 3, 1996
Parent Guarantor Company Subsidiaries FINOP Eliminations Consolidated ------- ------------ ----- ------------ ------------ (in thousands) Net cash provided by (used by) operating activities ............................ $(5,215) $ 19,580 $ 74 $ -- $ 14,439 ------- -------- ------- ---- -------- Cash flows from investing activities: Purchase of and increase in short-term investments ............... -- -- (1,532) -- (1,532) Purchase of property and equipment .... -- (9,429) -- -- (9,429) Net proceeds from sale of property, equipment and assets held for sale ... -- 2,233 -- -- 2,233 Investment in and advances to subsidiaries ......................... 9,606 (9,123) (483) -- -- Increase in long-term notes receivable -- (120) (1,248) -- (1,368) Proceeds from collection of long-term receivables ................ -- 60 911 -- 971 Increase in intangibles and other assets ..................... -- (428) 3 -- (425) ------- -------- ------- ---- -------- Net cash provided by (used by) investing activities ............................ 9,606 (16,807) (2,349) -- (9,550) ------- -------- ------- ---- -------- Cash flows from financing activities: Increase in long-term obligations ..... 300 350 -- -- 650 Repayment of long-term obligations .... (463) (226) (8) -- (697) Issuance of common stock .............. 158 -- -- -- 158 ------- -------- ------- ---- -------- Net cash provided by (used by) in financing activities ................ (5) 124 (8) -- 111 ------- -------- ------- ---- -------- Increase (decrease) in cash ............. 4,386 2,897 (2,283) -- 5,000 Cash at beginning of fiscal year ........ 1,739 7,871 3,044 -- 12,654 ------- -------- ------- ---- -------- Cash at end of second fiscal quarter .... $ 6,125 $ 10,768 $ 761 $ -- $ 17,654 ======= ======== ======= ==== ========
8. Subsequent Events ----------------- During fiscal 1996, the Company acquired a $10,000,000 note receivable ("Note") from DM Associates Limited Partnership collateralized by 1,220,000 shares of the Company's Class B Common Stock ("Pledged Shares"). The Note has been recorded as a reduction to stockholders' equity on the Consolidated Balance Sheets of the Company. Since the Note was not paid when it became due and payable on July 31, 1997, the Company, subsequent to the close of the current year second fiscal quarter, has received the Pledged Shares in satisfaction of the Note. -12- 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DAIRY MART CONVENIENCE STORES, INC. Date: September 26, 1997 /s/ Gregory G. Landry --------------------- Gregory G. Landry Executive Vice President Chief Financial Officer -13- EX-27 2 EXHIBIT 27
5 THIS SCEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED STATEMENTS OF OPERATIONS AND CONSOLIDATED BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JAN-31-1998 FEB-02-1997 AUG-02-1997 6,389 22,212 17,374 2,424 17,638 68,409 102,771 22,852 174,791 56,206 95,777 66 0 0 9,217 174,791 0 276,093 202,095 274,059 0 0 5,460 2,034 (895) 1,139 0 0 0 1,139 0.24 0.24
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