-----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, KeZWPCAAI5ARVhVxmlwMv3IgqD96N0838pYxWx+7vCt2lTRt2gtiK2KlzWQM1/SR n7smDE7MplkWhSO7xZqzew== 0000906280-94-000025.txt : 19940602 0000906280-94-000025.hdr.sgml : 19940602 ACCESSION NUMBER: 0000906280-94-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELCHAMPS INC CENTRAL INDEX KEY: 0000729970 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 630245434 STATE OF INCORPORATION: AL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12923 FILM NUMBER: 94527181 BUSINESS ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: P O BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 BUSINESS PHONE: 2054330431 MAIL ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: PO BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 10-Q 1 FORM 10-Q Securities And Exchange Commission Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the 13-Week Period Ended April 2, 1994 Commission File Number 0-12923 Delchamps, Inc. ----------------------------------------- (Exact name of registrant as specified in its charter) Alabama 63-0245434 - - ----------------------------- --------------------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 305 Delchamps Drive, Mobile, AL 36602 - - ---------------------------- --------------------------- (Address of principal executive (Zip code) offices) (205) 433-0431 - - ---------------------------- (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 ----- ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. 7,113,581 shares at April 29, 1994. DELCHAMPS, INC. AND SUBSIDIARY Index Page No. ------------- Part 1. Financial Information Item 1. Financial Statements Condensed Balance Sheets - April 2, 1994 and July 3, 1993 1 Condensed Statements of Earnings - Thirteen Weeks Ended April 2, 1994 and March 27, 1993 2 Thirty-nine Weeks Ended April 2, 1994 and March 27, 1993 2 Condensed Statements of Cash Flows - Thirteen Weeks Ended April 2, 1994 and March 27, 1993 3 Thirty-nine Weeks Ended April 2, 1994 and March 27, 1993 3 Notes to Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 6 Signatures 6 Part I. Financial Information DELCHAMPS, INC. AND SUBSIDIARY Condensed Balance Sheets - (In thousands) (Unaudited) April 2, 1994 July 3, 1993* ---------------- ------------------ Amount % Asset Amount % Asssets ------ ------- ------ --------- ASSETS Current assets: Cash and cash equivalents $ 15,083 5.84 12,070 4.79 Trade accounts receivable 8,736 3.38 7,941 3.15 Merchandise inventories 99,793 38.66 97,083 38.52 Prepaid expenses 2,171 .84 1,242 .49 Deferred income taxes 1,976 .78 2,129 .84 ------- ------ ------- ------ Total current assets 127,759 49.50 120,465 47.79 Property and equipment: Land 6,312 2.45 6,495 2.58 Buildings and improvements 51,129 19.81 49,492 19.64 Fixtures and equipment 191,343 74.13 185,211 73.48 Construction in progress 7,936 3.07 3,339 1.32 ------- ------ ------- ------ 256,720 99.46 244,537 97.02 Less accumulated depreciation and amortization -133,973 -51.91 -120,271 -47.72 ------- ------ ------- ------ Net property and equipment 122,747 47.55 124,266 49.30 Other assets 2,366 .92 1,954 .78 Goodwill 5,249 2.03 5,367 2.13 ------- ------ ------- ------ Total assets $ 258,121 100.00 252,052 100.00 ======= ====== ======= ====== LIABILITIES AND STOCKHOLERS' EQUITY - - ----------------------------------- Current liabilities: Notes Payable $ 9,288 3.60 3,847 1.53 Current portion of obligations under capital leases 1,705 .66 1,705 .68 Current portion of long-term debt 3,760 1.46 3,759 1.49 Current portion of guaranteed ESOP debt 2,000 .77 2,000 .79 Accounts payable 41,004 15.89 39,785 15.78 Accrued expenses 14,861 5.76 18,427 7.31 Income taxes 789 .30 1,431 .57 ------- ------ ------- ------ Total current liabilities 73,407 28.44 70,954 28.15 Obligations under capital leases, excluding current portion 12,128 4.70 13,387 5.31 Long-term debt, excluding current portion 19,297 7.48 22,116 8.77 Guaranteed ESOP debt, excluding current portion 4,000 1.55 4,000 1.59 Deferred income taxes 14,781 5.73 14,785 5.87 Other liabilities 468 .17 548 .22 ------- ------ ------- ------ Total liabilities 124,081 48.07 125,790 49.91 Stockholders' equity: Junior participating preferred stock of no par value- authorized 5,000,000 shares; no shares issued - - - - Common stock of $.01 par value - authorized 25,000,000 shares; issued 7,113,581 shares 71 .03 71 .03 Additional paid-in capital 19,731 7.64 19,731 7.83 Retained earnings 121,228 46.97 113,611 45.07 ------- ------ ------- ------ 141,030 54.64 133,413 52.93 Less: Guaranteed ESOP debt -6,000 -2.32 -6,000 -2.38 Unamortized restricted stock awards -990 -.39 -1,151 -.46 ------- ------ ------- ------ Total stockholders' equity 134,040 51.93 126,262 50.09 Total liabilities and stockholders' equity $ 258,121 100.00 252,052 100.00 ======= ====== ======= ====== See accompanying notes to condensed financial statements. * Condensed from Balance Sheet included in the 1993 Annual Report. DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Earnings - (In thousands except per share amounts) (Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended -------------------- ----------------------- April 2, 1994 March 27, 1993 April 2, 1994 March 27, 1993 ------------------- ------------------ ---------------- ----------------- Amount % Sales Amount % Sales Amount % Sales Amount % Sales ------ ------- ------ ------- ------ ------- ------ ------- Sales $ 265,146 100.00 246,521 100.00 806,222 100.00 752,123 100.00 Cost of sales 197,407 74.45 182,425 74.00 602,356 74.71 559,014 74.32 ------- ------ ------- ------ ------- ------ ------- ------ Gross profit 67,739 25.55 64,096 26.00 203,866 25.29 193,109 25.68 Selling, general and administrative expenses 61,300 23.13 57,268 23.23 186,476 23.13 173,286 23.05 ------- ------ ------- ------ ------- ------ ------- ------ Operating income 6,439 2.42 6,828 2.77 17,390 2.16 19,823 2.63 Other expenses 1,019 .38 1,321 .54 3,090 .38 3,994 .53 ------- ------ ------- ------ ------- ------ ------- ------ Earnings before 5,420 2.04 5,507 2.23 14,300 1.78 15,829 2.10 income taxes and cumulative effect of change in accounting for income taxes Income taxes 1,858 .70 1,973 .80 5,046 .63 5,769 .76 ------- ------ ------- ------ ------- ------ ------- ------ Earnings before 3,562 1.34 3,534 1.43 9,254 1.15 10,060 1.34 cumulative effect of change in accounting for income taxes Cumulative effect of change in accounting for income taxes - - - - 900 .11 - - ------- ------ ------- ------ ------- ------ ------- ------ Net earnings $ 3,562 1.34 3,534 1.43 10,154 1.26 10,060 1.34 ======= ====== ======= ====== ======= ====== ======= ====== Earnings per common share: Earnings before cumulative effect of change in accounting for income taxes $ .50 .50 1.30 1.41 Cumulative effect of change in accounting for income taxes - - .13 - ------- ------- ------- ------- Net earnings per common share $ .50 .50 1.43 1.41 ======= ======= ======= ======= Weighted average number of common shares 7,114 7,114 7,114 7,114 ======= ======= ======= ======= Dividends declared per common share $ .11 .11 .33 .33 ======= ======= ======= ======= See accompanying notes to condensed financial statements. DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Cash Flows - (In thousands) Increase (Decrease) In Cash and Cash Equivalents (Unaudited) Thirteen Weeks Ended Thirty-nine Weeks Ended --------------------- ----------------------- 04/02/94 03/27/93 04/02/94 03/27/93 -------- -------- -------- -------- Cash flows from operating activities: Net earnings $ 3,562 3,534 10,154 10,060 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,630 4,541 14,061 13,465 Loss reserve on closed stores -27 -24 -80 -70 Restricted stock award compensation expense 54 54 161 161 Cumulative effect of change in accounting for income taxes - - -900 - Decrease (increase) in merchandise inventories 1,244 2,479 -2,710 1,990 Decrease in accounts payable and accrued expesnes -4,014 -1,765 -2,536 -6,645 (Decrease) increase in income taxes, net -180 -19 -489 2,298 Other, net 2,067 2,179 -1,242 -1,738 ------ ------ ------ ------ Net cash flows provided by operating activities 7,336 10,979 16,419 19,521 Cash flows from investing activities: Additions to property and equipment -7,352 -5,386 -12,494 -21,630 Proceeds from sale of property and equipment 29 412 71 437 ------ ------ ------- ------- Net cash used in investing activities -7,323 -4,974 -12,423 -21,193 Cash flows from financing activities: (Payments on) proceeds from notes payable -82 -5,767 5,441 5,687 Principal payments on obligations under capital leases -432 -478 -1,259 -1,392 Principal payments on long-term debt -939 -1,130 -2,819 -3,391 Proceeds from long-term debt 750 750 Dividends paid -782 -782 -2,346 -2,346 ------ ------ ------ ------ Net cash used in financing activities -2,235 -7,407 -983 -692 Net (decrease) increase in cash and cash equivalents -2,222 -1,402 3,013 -2,364 Beginning of period cash and cash equivalents 17,305 10,361 12,070 11,323 ------ ------ ------ ------ End of period cash and cash equivalents $ 15,083 8,959 15,083 8,959 ====== ====== ====== ====== Supplemental Disclosures of Cash Flow Information: Cash paid for: Interest expenses $ 1,055 1,383 3,204 4,146 ====== ====== ====== ====== Income taxes $ 1,630 1,458 4,638 4,054 ====== ====== ====== ====== See accompanying notes to condensed financial statements. DELCHAMPS, INC. AND SUBSIDIARY Notes to Condensed Financial Statements (Unaudited) (A) Basis of Presentation --------------------- The accompanying unaudited consolidated financial statements include the results of operations, account balances and cash flows of the Company and its wholly-owned subsidiary. All material intercompany balances have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the results of operations of the Company for the periods presented. The statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the accompanying notes included in the Company's 1993 Annual Report. The balance sheet at July 3, 1993 has been taken from the audited financial statements at that date. Management's Discussion And Analysis Of Financial Condition And Results Of Operations RESULTS OF OPERATIONS Sales: - - ----- Sales increased 7.56% for the thirteen-week period and 7.19% for the thirty-nine week period, compared with corresponding periods last year. Sales for stores open during the current and prior year periods increased 3.94% for the thirteen-weeek period and 3.08% for the thirty-nine week period. The increase in same store sales growth for both periods was primarily the result of increased promotional activities. These activities included featuring certain products at reduced retail prices and introducing a line of soft drink products with Delchamps as the brand name. Same store sales were also favorably impacted by the timing of the Easter holiday. At April 2, 1994, the Company operated 119 supermarkets and eleven liquor stores compared with 116 supermarkets and ten liquor stores at March 27, 1993. During the thirty-nine week period, the Company opened one supermarket, expanded three supermarkets, and opened one liquor store. Gross Profit: - - ------------ Gross profit as a percentage of sales decreased from 26.00% to 25.55% for the thirteen-week period and decreased from 25.68% to 25.29% for the thirty-nine week period. The decreases for both periods were the result of markdowns related to the promotional activities noted above. Selling, General and Administrative Expenses: - - -------------------------------------------- Selling, general and administrative ("S G & A") expenses as a percentage of sales were relatively unchanged for the thirteen- week and thirty-nine week periods. S G & A as a percentage of sales decreased from 23.23% to 23.13% for the thirteen-week period and increased from 23.05% to 23.13% for the thirty-nine week period. Other Expense: - - ------------- Other expense decreased $302,000 and $904,000 for the thirteen and thirty-nine week periods, respectively. The decreases result from lower interest expense which was caused by the Company refinancing a significant portion of long-term debt, lower levels of indebtedness, and a decline in interest rates. Income Taxes: - - ------------ The effective rate for income taxes decreased from 35.83% to 34.28% for the thirteen-week period and decreased from 36.45% to 35.29% for the thirty-nine week period. The effective rates decreased for both periods because of greater levels of targeted jobs tax credits. The effective rates were below the statutory rate because of targeted jobs tax credits. Other: - - ----- During the first quarter of the current fiscal year, the Company implemented Statement of Financial Accounting Standard No. 109, "Accounting For Income Taxes" ("SFAS No. 109"). SFAS No. 109 superseded SFAS No. 96 and requires that deferred taxes be recorded using the liability method and restricts the conditions under which a deferred tax asset may be recorded. The cumulative effect on the financial statements of adopting SFAS No. 109 was to increase net earnings $900,000. LIQUIDITY AND CAPITAL RESOURCES The Company leases its store locations, but makes substantial expenditures to equip new and expanded supermarkets. In addition, the Company makes substantial expenditures for distribution facilities and equipment. The Company plans to finance its capital expenditures with funds provided by operations. However, if an insufficient amount of funds are generated, the Company may draw on short-term credit lines. The Company has $105.0 million in credit lines from financial institutions of which $96.0 million is available for future use. These credit lines expire at various times throughout fiscal years 1994 and 1995, though the Company expects most to be renewed. Working capital increased from $49,511,000 at July 3, 1993 to $54,352,000 as of April 2, 1994. Additions to property and equipment were $12,494,000 during the same period and consisted primarily of purchases of store equipment. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. Reports on Form 8-K There were no reports on Form 8-K filed during the 13-weeks ended April 2, 1994 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. Delchamps, Inc. Date: May 11, 1994 /s/ Randy Delchamps Randy Delchamps, Chairman, President, and Chief Executive Officer Date: May 11, 1994 /s/ Roy W. Henderson Roy W. Henderson, Vice President, Finance, and Treasurer
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