-----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, HAITYqzmxj71YnllJXfp90n20R2ETsLMZF4GlBY34zqCjRCHAqeq+GcWDYyC+QaH RX0wqXQuuzqnv+fo1pPqwQ== 0000906280-95-000006.txt : 19950515 0000906280-95-000006.hdr.sgml : 19950515 ACCESSION NUMBER: 0000906280-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELCHAMPS INC CENTRAL INDEX KEY: 0000729970 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [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: 95509689 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 December 31, 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 January 31, 1995. DELCHAMPS, INC. AND SUBSIDIARY Index Page No. -------- Part 1. Financial Information Item 1. Financial Statements Condensed Balance Sheets - December 31, 1994 and July 2, 1994 1 Condensed Statements of Earnings - Thirteen Weeks Ended December 31, 1994 and January 1, 1994 2 Twenty-six Weeks Ended December 31, 1994 and January 1, 1994 2 Condensed Statements of Cash Flows - Thirteen Weeks Ended December 31, 1994 and January 1, 1994 3 Twenty-six Weeks Ended December 31, 1994 and January 1, 1994 3 Notes to Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 5 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 7 Item 6. Exhibits and Reports on Form 8-K 7 Signatures 8 Part I. Financial Information DELCHAMPS, INC. AND SUBSIDIARY Condensed Balance Sheets - (In thousands) (Unaudited)
December 31, 1994 July 2, 1994* _____________________ ___________________ Amount %Assets Amount %Assets __________ _________ _________ ________ ASSETS ______ Current assets: Cash and cash equivalents $ 3,225 1.24 15,378 5.84 Trade accounts receivable 9,243 3.54 9,475 3.60 Merchandise inventories 100,608 38.55 105,663 40.13 Prepaid expenses 2,063 .79 443 .17 Deferred income taxes 1,993 .76 1,587 .61 ________ _______ ________ _______ Total current assets 117,132 44.88 132,546 50.35 Property and equipment: Land 13,237 5.07 6,312 2.40 Buildings and improvements 53,080 20.34 51,742 19.65 Fixtures and equipment 211,594 81.08 198,746 75.49 Construction in progress 5,940 2.28 4,972 1.89 ________ _______ ________ _______ 283,851 108.77 261,772 99.43 Less accumulated depreciation and amortization -147,519 -56.53 -138,643 -52.66 ________ _______ ________ _______ Net property and equipment 136,332 52.24 123,129 46.77 Other assets 2,366 .91 2,384 .91 Goodwill 5,131 1.97 5,210 1.97 ________ _______ ________ _______ Total assets $ 260,961 100.00 263,269 100.00 ======== ======= ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY ____________________________________ Current liabilities: Notes payable $ 19,974 7.65 11,574 4.40 Current portion of obligations under capital leases 929 .36 1,576 .60 Current portion of long-term debt 3,760 1.44 3,760 1.43 Current portion of guaranteed ESOP debt 2,000 .77 2,000 .76 Accounts payable 34,053 13.05 43,578 16.55 Accrued expenses 16,316 6.25 15,132 5.74 Income taxes -135 -.05 - - ________ _______ ________ _______ Total current liabilities 76,897 29.47 77,620 29.48 Obligations under capital leases, excluding current poriton 11,525 4.42 11,811 4.49 Long-term debt, excluding current portion 16,478 6.31 18,358 6.97 Guaranteed ESOP debt, excluding current portion 2,000 .77 2,000 .76 Deferred income taxes 14,794 5.67 14,154 5.38 Other liabilities 2,968 1.13 3,026 1.15 ________ _______ ________ _______ Total liabilities 124,662 47.77 126,969 48.23 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 7.56 19,731 7.49 Retained earnings 121,321 46.49 121,434 46.13 ________ _______ ________ _______ 141,123 54.08 141,236 53.65 Less: Guaranteed ESOP debt -4,000 -1.53 -4,000 -1.52 Unamortized restricted stock awards -824 -.32 -936 -.36 ________ _______ ________ _______ Total stockholders' equity 136,299 52.23 136,300 51.77 Total liabilities and stockholders' equity $ 260,961 100.00 263,269 100.00 ======== ======= ======== ======= See accompanying notes to condensed financial statements. * Condensed from Balance Sheet included in the 1994 Annual Report.
DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Earnings - (In thousands except per share amounts) (Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended ____________________ ______________________ December 31, 1994 January 1, 1994 December 31, 1994 January 1, 1994 _________________ _________________ _________________ _________________ Amount % Sales Amount % Sales Amount % Sales Amount % Sales ______ _______ ______ _______ ______ _______ ______ _______ Sales $260,452 100.00 274,506 100.00 526,657 100.00 541,076 100.00 Cost of sales 195,540 75.08 207,139 75.46 395,943 75.18 404,949 74.84 _______ ______ _______ ______ _______ ______ _______ ______ Goss profit 64,912 24.92 67,367 24.54 130,714 24.82 136,127 25.16 Selling, general and administrative expenses 63,421 24.35 62,557 22.79 125,875 23.90 125,176 23.14 _______ ______ _______ ______ _______ ______ _______ ______ Operating income 1,491 .57 4,810 1.75 4,839 .92 10,951 2.02 Other expenses 1,289 .49 1,023 .37 2,408 .46 2,071 .38 _______ ______ _______ ______ _______ ______ _______ ______ Earnings before income taxes and cumulative effect of changes in accounting principles 202 .08 3,787 1.38 2,431 .46 8,880 1.64 Income taxes 34 .02 1,316 .48 788 .15 3,188 .59 _______ ______ _______ ______ _______ ______ _______ ______ Earnings before cumulative effect of changes in accounting principles 168 .06 2,471 .90 1,643 .31 5,692 1.05 Cumulative effect of changes in accounting for income taxes - - - - - - 900 .17 Cumulative effect of change in accounting for postemployment benefits (net of income tax benefits of $1,000) - - - - - - -1,600 -.30 _______ ______ _______ ______ _______ ______ _______ ______ Net earnings $ 168 .06 2,471 .90 1,643 .31 4,992 .92 ======= ====== ======= ====== ======= ====== ======= ====== Earnings per common share: Earnings before cumulative effect of changes in accounting principles $ .02 .35 .23 .80 Cumulative effect of change in accounting for income taxes - - - .13 Cumulative effect of change in accouning for postemployment benefits - - - -.23 _______ _______ _______ _______ Net earnings per common share $ .02 .35 .23 .70 ======= ======= ======= ======= Weighted average number of common shares 7,114 7,114 7,114 7,114 ======= ======= ======= ======= Dividends declared per common share $ .11 .11 .22 .22 ======= ======= ======= ======= 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 Twenty-six Weeks Ended __________________________________ __________________________________ December 31, 1994 January 1, 1994 December 31, 1994 January 1, 1994 _________________ _______________ _________________ _______________ Cash flows from operating activities: Net earnings $ 168 2,471 1,643 4,992 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,896 4,655 9,722 9,430 Loss reserve on closed stores -30 -27 -58 -53 Restricted stock award compensation expense 56 53 112 107 Cumulative effect of change in accounting for postemployment benefits - - - 1,600 Cumulative effect of change in accounting for income taxes - - - -900 Decrease (increase) in merchandise inventories 5,093 -373 5,055 -3,954 (Decrease) increase in accounts payable and accrued expenses -6,671 -1,014 -8,533 1,478 Decrease in income taxes, net -2,046 -1,144 -77 -309 Other, net 678 -931 -1,193 -3,308 ________ ________ ________ ________ Net cash flows provided by operating activities 2,144 3,690 6,671 9,083 Cash flows from investing activities: Additions to property and equipment -11,749 -2,402 -23,068 -5,142 Porceeds from sale of property and equipment 41 10 221 42 ________ ________ ________ ________ Net cash used in investing activities -11,708 -2,392 -22,847 -5,100 Cash flows from financing activities: Proceeds from notes payable 370 4,640 8,400 5,523 Principal payments on obligations under capital leases -474 -420 -933 -827 Principal payments on long-term debt -939 -941 -1,880 -1,880 Dividends paid -782 -782 -1,564 -1,564 ________ ________ ________ ________ Net cash (used in) provided by financing activities -1,825 2,497 4,023 1,252 Net (decrease) increase in cash and cash equivalents -11,389 3,795 -12,153 5,235 Beginning of period cash and cash equivalents 14,614 13,510 15,378 12,070 ________ ________ ________ ________ End of period cash and cash equivalents $ 3,225 17,305 3,225 17,305 ======== ======== ========= ======== Supplemental Disclosures of Cash Flow Information: _________________________________________________ Cash paid for: Interest expenses $ 1,410 1,032 2,554 2,149 ======== ======== ========= ======== Income taxes $ 1,361 2,571 1,367 3,008 ======== ======== ========= ======== 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 1994 Annual Report. The balance sheet at July 2, 1994 has been taken from the audited financial statements at that date. (B) Restructuring Plan __________________ Effective for the third quarter ending April 1, 1995, the Company will implement a new business plan titled "Delchamps Strategy 2000." This business plan includes recording a pre-tax restructuring charge in the amount of $15.0 million in the Company's third quarter. The restructuring charge relates primarily to four stores scheduled to be closed and ten existing closed stores and includes costs for the write-down for store assets, the unrealizable portion of the present value of remaining rent payments, and other costs associated with store closings such as costs to store and transfer reusable equipment. Management's Discussion And Analysis Of Results Of Operations And Financial Condition RESULTS OF OPERATIONS Sales: _____ Sales decreased 5.12% for the thirteen-week period and 2.66% for the twenty-six week period, compared with corresponding periods last year. Sales for stores open during the current and prior year periods decreased 7.84% for the thirteen-week period and 5.49% for the twenty-six week period. The decrease in sales was because of heavy competitive activity which included competitors opening new supermarkets and expanding existing supermarkets. At December 31, 1994, the Company operated 122 supermarkets and twelve liquor stores compared with 119 supermarkets and eleven liquor stores at January 1, 1994. During the thirteen- week period, the Company purchased seven supermarkets from The Kroger Co., opened one supermarket, closed four supermarkets, sold two supermarkets to The Kroger Co., and remodeled and expanded one supermarket. Gross Profit: ____________ Gross profit as a percentage of sales increased from 24.54% to 24.92% for the thirteen-week period and decreased from 25.16% to 24.82% for the twenty-six week period. The increase in the thirteen-week period was the result of an increase in the market department gross profit percentage due to greater retail price reductions during last year's holiday seasons. The decrease in the twenty-six week period was the result of an increase in inventory shrinkage, primarily in the perishable inventory departments, resulting from increased promotional activity. Selling, General and Administration Expenses: ____________________________________________ Selling, general and administrative expenses as a percentage of sales increased from 22.79% to 24.35% for the thirteen-week period and increased from 23.14% to 23.90% for the twenty-six week period. The increases for both periods were the result of lower sales in the current periods as noted above. Selling, general and administrative expense dollars increased slightly, even though the Company operated additional new supermarkets and additional service departments from expanded supermarkets in the current periods. The Company has continued to realize savings in selling, general and administrative expense dollars as a result of an ongoing cost control program. Other Expense: _____________ Other expense increased $266,000 and $337,000 for the thirteen and twenty-six week periods, respectively. The increases resulted from increased interest expense which was higher in the current year because of higher interest rates and increased levels of short-term indebtedness. Income Taxes: ____________ The effective rate for income taxes decreased from 34.75% to 16.83% for the thirteen-week period and decreased from 35.90% to 32.41% for the twenty-six week period. The effective rates decreased for both periods because of lower pretax earnings combined with greater levels of targeted jobs tax credits. The effective rates were below the statutory rate because of targeted jobs tax credits. Management's Discussion And Analysis of Results of Operations And Financial Condition 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 $85.0 million in credit lines from financial institutions of which $59.0 million is available for future use. These credit lines expire at various times throughout fiscal years 1995 and 1996, though the Company expects most to be renewed. Working capital decreased form $54,926,000 at July 2, 1994 to $40,235,000 as of December 31, 1994. Additions to property and equipment were $23,068,000 during the same period and consisted primarily of purchases of store equipment. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. The Company held its annual meeting of shareholders on November 10, 1994. At the meeting, J. Thomas Arendall, Jr., E. E. Bishop, and David W. Morrow were elected as directors for three-year terms expiring at the 1997 annual meeting. Other board members continuing to serve are James M. Cain, William W. Crawford, and T. W. Mitchell whose terms expire at the 1995 annual meeting, and Carl F. Bailey, John A. Caddell, and Randy Delchamps whose terms expire at the 1996 annual meeting. The shareholders also ratified the Director Compensation Plan and the appointment of KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year ending July 1, 1995. A summary of voting results follows (in thousands):
For Against Abstain Total Votes ______________ _____________ ______________ _________________ Amount % Amount % Amount % Amount % ______ ____ ______ ____ ______ ____ ______ _____ Directors: J. Thomas Arendall, Jr. 5,558 97.6 139 2.4 5,697 100.0 E. E. Bishop 5,638 98.7 73 1.3 5,711 100.0 David W. Morrow 5,637 98.7 73 1.3 5,710 100.0 Director Compensation Plan 5,058 87.8 584 10.1 120 2.1 5,762 100.0 Appointment of KPMG Peat Marwick LLP 5,682 98.6 54 .9 26 .5 5,762 100.0
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 December 31, 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: February 10, 1995 /s/ Randy Delchamps ___________________ Randy Delchamps, Chairman, President, and Chief Executive Officer Date: February 10, 1995 /s/ Timothy E. Kullman ______________________ Timothy E. Kullman, Senior Vice President and Chief Financial Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDING DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS JUL-01-1995 DEC-31-1994 3,225,000 0 9,243,000 0 100,608,000 117,132,000 283,851,000 147,519,000 260,961,000 76,897,000 30,003,000 71,000 0 0 136,228,000 260,961,000 260,452,000 260,452,000 195,540,000 63,421,000 1,289,000 0 0 202,000 34,000 0 0 0 0 168,000 .02 0
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