-----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, DALGmZHl6ZsamL81dy+pNjBYX1V0UerABX6iF6HhQBo64tEwS+btjf8PgU+SYxFw zW5JQfxU6gOz7tp14pnJjw== 0000948688-95-000014.txt : 19951119 0000948688-95-000014.hdr.sgml : 19951119 ACCESSION NUMBER: 0000948688-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95591565 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 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 September 30, 1995 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) (334) 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. 7,108,781 shares at October 31, 1995. DELCHAMPS, INC. AND SUBSIDIARY Index Page No. -------- Part 1. Financial Information Item 1. Financial Statements Condensed Balance Sheets - September 30, 1995 and July 1, 1995 1 Condensed Statements of Earnings - Thirteen Weeks Ended September 30, 1995 and October 1, 1994 2 Condensed Statements of Cash Flows - Thirteen Weeks Ended September 30, 1995 and October 1, 1994 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 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)
September 30, 1995 July 1, 1995* --------------------- ------------------- Amount %Assets Amount %Assets ---------- --------- -------- --------- ASSETS ------ Current assets: Cash and cash equivalents $ 7,487 2.88 15,906 5.90 Trade accounts receivable 10,952 4.21 9,214 3.42 Merchandise inventories 91,739 35.25 93,808 34.82 Prepaid expenses 2,509 .96 1,420 .53 Income taxes receivable 5,598 2.15 6,549 2.43 Deferred income taxes 2,045 .78 2,045 .76 -------- ------- ------- ------- Total current assets 120,330 46.23 128,942 47.86 Property and equipment: Land 13,334 5.12 13,312 4.94 Buildings and improvements 56,935 21.87 56,632 21.02 Fixtures and equipment 220,102 84.56 220,903 81.99 Construction in progress 4,920 1.90 2,649 .99 -------- ------- ------- ------- 295,291 113.45 293,496 108.94 Less accumulated depreciation and amortization (157,672) (60.58) (155,411) (57.69) -------- ------- ------- ------- Net property and equipment 137,619 52.87 138,085 51.25 Other assets 2,339 .90 2,385 .89 -------- ------- ------- ------- Total assets $ 260,288 100.00 296,412 100.00 ======== ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Notes payable $ 30,000 11.53 30,000 11.14 Current portion of obligations under capital 665 .26 665 .25 leases Current portion of long-term debt 3,760 1.44 3,760 1.40 Current portion of guaranteed ESOP debt 2,000 .77 2,000 .74 Current portion of restructure obligation 6,364 2.44 6,364 2.36 Accounts payable 37,536 14.42 45,063 16.73 Accrued expenses 20,133 7.73 18,170 6.73 -------- ------- ------- ------- Total current liabilities 100,458 38.59 106,022 39.35 Obligations under capital leases, excluding current 10,988 4.22 11,147 4.14 portion Long-term debt, excluding current portion 13,659 5.25 14,598 5.42 Restructure obligation, excluding current portion 18,057 6.94 19,219 7.13 Deferred income taxes 5,847 2.25 5,464 2.03 Other liabilities 2,756 1.06 2,920 1.08 -------- ------- ------- ------- Total liabilities 151,765 58.31 159,370 59.15 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 7,108,781 shares 71 .03 71 .03 Additional paid-in capital 19,603 7.53 19,603 7.28 Retained earnings 91,098 35.00 92,637 34.38 -------- ------- ------- ------- 110,772 42.56 112,311 41.69 Less: Guaranteed ESOP debt (2,000) (.77) (2,000) (.74) Unamortized restricted stock awards (249) (.10) (269) (.10) -------- ------- ------- ------- Total stockholders' equity 108,523 41.69 110,042 40.85 Total liabilities and stockholders' equity $ 260,288 100.00 269,412 100.00 ======== ======= ======= =======
See accompanying notes to condensed financial statements. * Condensed from Balance Sheet included in the 1995 Annual Report. DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Earnings - (In thousands except per share amounts) (Unaudited)
Thirteen Weeks Ended ------------------------------------------ September 30, 1995 October 1, 1994 --------------------- ------------------ Amount % Sales Amount % Sales --------- -------- ------- -------- Sales $ 284,689 100.00 266,205 100.00 Cost of sales 220,219 77.35 200,403 75.28 --------- -------- ------- -------- Gross profit 64,470 22.65 65,802 24.72 Selling, general and administrative expenses 63,810 22.41 62,454 23.46 --------- -------- ------- -------- Operating income 660 .24 3,348 1.26 Interest expense, net 1,784 .63 1,119 .43 --------- -------- ------- -------- (Loss) earnings before income taxes (1,124) (.39) 2,229 .83 Income tax (benefit) expense (368) (.12) 754 .28 --------- -------- ------- -------- Net (loss) earnings $ (756) (.27) 1,475 .55 ========= ======== ======= ======== Net (loss) earnings per common share $ (.11) .21 ========= ======= Weighted average number of common shares 7,109 7,114 ========= ======= Dividends declared per common share $ .11 .11 ========= =======
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 -------------------- 9/30/95 10/01/94 -------- -------- Cash flows from operating activities: Net (loss) earnings $ (756) 1,475 Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Depreciation and amortization 5,189 4,827 Loss reserve on closed stores (164) (28) Restricted stock award compensation expense 20 56 Restructure obligation (1,162) - Decrease (increase) in merchandise inventories 2,069 (38) Decrease in accounts payable and accrued expenses (5,563) (1,862) Decrease in income taxes receivable, net 951 1,969 Other, net (2,656) (1,872) -------- -------- Net cash flows (used in) provided by operating (2,072) 4,527 activities Cash flows from investing activities: Additions to property and equipment (4,569) (11,319) Proceeds from sale of property and equipment 103 180 -------- -------- Net cash used in investing activities (4,466) (11,139) Cash flows from financing activities: Proceeds from notes payable 8,030 Principal payments on obligations under capital (159) (459) leases Principal payments on long-term debt (940) (941) Dividends paid (782) (782) -------- -------- Net cash (used in ) provided by financing (1,881) 5,848 activities Net decrease in cash and cash equivalents (8,419) (764) Beginning of period cash and cash equivalents 15,906 15,378 -------- -------- End of period cash and cash equivalents $ 7,487 14,614 ======== ======== Supplemental Disclosures of Cash Flow Information: ------------------------------------------------- Cash paid for: Interest expenses $ 1,880 1,195 ======== ======== Income taxes $ - 6 ======== ========
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 1995 Annual Report. The balance sheet at July 1, 1995 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 6.94% for the thirteen-week period compared with the corresponding period last year. Sales of stores open during both the current and prior year periods ("same store sales") increased 7.02%. This increase in same store sales reflects the second consecutive quarter in which positive same store sales were reported. The improved same store sales resulted primarily from positive customer response to the Company's "Strategy 2000" program implemented in March, 1995. The "Strategy 2000" program included retail price reductions on thousands of items, an increase in the amount in which coupons are doubled (from $.49 to $.50), and a new advertising campaign to promote these changes. At September 30, 1995, the Company operated 116 supermarkets and ten liquor stores compared with 120 supermarkets and twelve liquor stores at October 1, 1994. During the thirteen-week period, the Company closed two under performing supermarkets, closed two liquor stores, and renovated fifteen supermarkets. Gross Profit: ------------ Gross profit as a percentage of sales decreased from 24.72% to 22.65% for the current thirteen-week period. The decrease was primarily the result of retail price reductions on thousands of items as part of the "Strategy 2000" program noted above. Selling, General and Administrative Expenses ("SG & A"): ------------------------------------------------------- Selling, general and administrative expenses as a percentage of sales decreased from 23.46% to 22.41% for the current thirteen-week period. The decrease resulted from higher sales in the current thirteen-week period as noted above. SG and A dollars increased by $1.36 million over last year's quarter since stores wages increased $.23 million on increased sales, advertising increased $.44 million primarily because of the promotion of the "Strategy 2000" campaign, store depreciation expense increased $.37 million due to equipment additions from new stores and remodeled stores, and legal expenses increased $.15 million primarily for costs related to union matters. Interest Expense, Net --------------------- Interest expense, net increased by $.67 million over last year's quarter because of interest expense related to restructuring charges and increased interest rates on the Company's short-term indebtedness. Management's Discussion And Analysis Of Financial Condition And Results Of Operations Income Taxes: ------------ The effective rate for the income tax benefit was 32.74% in the current quarter compared to an effective rate of 33.82% for income tax expense in last year's quarter. The income tax benefit in the current quarter was a result of the loss in earnings before taxes. 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 a short-term revolving loan. The Company may borrow up to $75 million under the revolving loan of which $40 million is available for future use. The revolving loan expires in June, 1998. Working capital decreased from $22,920,000 at July 1, 1995 to $19,872,000 as of September 30, 1995. Additions to property and equipment were $4,569,000 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 October 24, 1995. At the meeting, James M. Cain, William W. Crawford, and Richard W. La Trace were elected as directors for three-yearterms expiring at the 1998 annual meeting, and Timothy E. Kullman was elected as director for a termexpiring at the 1996 annual meeting. Other board members continuing to serve are Carl F. Bailey andJohn A. Caddell whose terms expire at the 1996 annual meeting, and J. Thomas Arendall, Jr., E. E. Bishop, and David W. Morrow whose terms expire at the 1997 annual meeting. The shareholders also ratified the appointment of KPMG Peat Marwick LLP as the Company'sindependent auditors for the fiscal year ending June 29, 1996. A summary of voting results follows (in thousands):
For Against/Abstain Total Votes ----------- --------------- ------------ Amount % Amount % Amount % ------ --- -------- ----- ------ ---- Directors: James M. Cain 4,688 92.2 398 7.8 5,086 100.0 William W. Crawford 4,729 93.0 357 7.0 5,086 100.0 Richard W. La Trace 4,725 92.9 361 7.1 5,086 100.0 Timothy E. Kullman 4,750 93.4 336 6.6 5,086 100.0 Appointment of KPMG Peat Marwick LLP 5,056 98.5 79 1.5 5,135 100.0
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 thirteen-weeks ended September 30, 1995. 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. ---------------- Registrant Date: November 10, 1995 /s/David W. Morrow ----------------------------- David W. Morrow, Chairman of the Board and Chief Executive Officer Date: November 10, 1995 /s/Richard W. La Trace ------------------------------ Richard W. La Trace, President Date: November 10, 1995 /s/ Timothy E. Kullman ------------------------------- Timothy E. Kullman, Senior Vice President and Chief Financial Officer, Treasurer and Secretary EX-27 2
5 3-MOS JUL-01-1995 SEP-30-1995 5,370,000 2,117,000 6,952,000 0 91,739,000 120,333,000 295,291,000 (157,672,000) 260,288,000 100,458,000 24,647,000 71,000 0 0 (2,249,000) 260,288,000 284,687,000 284,687,000 220,067,000 63,960,000 0 0 1,784,000 (1,124,000) (367,000) 0 0 0 0 (757,000) (.11) 0
-----END PRIVACY-ENHANCED MESSAGE-----