-----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, G9uhb3GkNLPmilgb2cSsWy5hQwx2u23NzKqfw8NxsyWiNhyGXe0Xc/tAIcbydYX6 8GXfC+gA5BOpcKmT/d+nKQ== 0000948688-96-000015.txt : 19960515 0000948688-96-000015.hdr.sgml : 19960515 ACCESSION NUMBER: 0000948688-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950330 FILED AS OF DATE: 19960514 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: 96563429 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 March 30, 1996 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. 7,111,950 shares at May 10, 1996. DELCHAMPS, INC. AND SUBSIDIARY Index Page No. -------- Part 1. Financial Information Item 1. Financial Statements Condensed Balance Sheets - March 30, 1996 and July 1, 1995 1 Condensed Statements of Earnings - Thirteen Weeks Ended March 30, 1996 and April 1, 1995 2 Thirty-nine Weeks Ended March 30, 1996 and April 1, 1995 2 Condensed Statements of Cash Flows - Thirteen Weeks Ended March 30, 1996 and April 1, 1995 3 Thirty-nine Weeks Ended March 30, 1996 and April 1, 1995 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 1. Legal Proceedings 8 Item 2. Changes in Securities 8 Item 3. Defaults upon Senior Securities 8 Item 4. Submission of Matters to a Vote of Security Holders 8 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 Signatures 9
Part I. Financial Information DELCHAMPS, INC. AND SUBSIDIARY Condensed Balance Sheets - (In thousands) (Unaudited) March 30, 1996 July 1, 1995* _________________ _________________ Amount %Assets Amount %Assets ______ _______ ______ _______ ASSETS Current assets: Cash and cash equivalents $ 10,256 3.88 15,906 5.90 Trade accounts receivable 11,030 4.17 9,214 3.42 Merchandise inventories 99,971 37.80 93,808 34.82 Prepaid expenses 2,029 0.77 1,420 0.53 Income taxes receivable 2,252 0.85 6,549 2.43 Deferred income taxes 2,045 0.77 2,045 0.76 _______ _______ _______ _______ Total current assets 127,583 48.24 128,942 47.86 Property and equipment: Land 15,207 5.75 13,312 4.94 Buildings and improvements 57,627 21.79 56,632 21.02 Fixtures and equipment 219,050 82.84 220,903 81.99 Construction in progress 5,540 2.09 2,649 0.99 _______ _______ _______ _______ 297,424 112.47 293,496 108.94 Less accumulated depreciation and amortization (162,736) (61.54) (155,411) (57.69) _______ _______ _______ _______ Net property and equipment 134,688 50.93 138,085 51.25 Other assets 2,187 0.83 2,385 0.89 _______ _______ _______ _______ Total assets $ 264,458 100.00 269,412 100.00 ======= ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 30,000 11.34 30,000 11.14 Current portion of obligations under capital leases 665 0.25 665 0.25 Current portion of long-term debt 3,760 1.42 3,760 1.40 Current portion of guaranteed ESOP debt 2,000 0.76 2,000 0.74 Current portion of restructure obligation 6,364 2.41 6,364 2.36 Accounts payable 44,681 16.90 45,063 16.73 Accrued expenses 21,577 8.15 18,170 6.73 _______ _______ _______ _______ Total current liabilities 109,047 41.23 106,022 39.35 Obligations under capital leases, excluding current portion 10,656 4.03 11,147 4.14 Long-term debt, excluding current portion 11,780 4.45 14,598 5.42 Restructure obligation, excluding current 14,046 5.31 19,219 7.13 Deferred income taxes 7,341 2.78 5,464 2.03 Other liabilities 2,569 0.98 2,920 1.08 _______ _______ _______ _______ Total liabilities 155,439 58.78 159,370 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 7,111,502 shares at March 30, 1996 and 7,108,781 shares at July 1, 1995 71 0.03 71 0.03 Additional paid-in capital 19,639 7.43 19,603 7.28 Retained earnings 91,491 34.59 92,637 34.38 _______ _______ _______ _______ 111,201 42.05 112,311 41.69 Less: Guaranteed ESOP debt (2,000) (0.76) (2,000) (0.74) Unamortized restricted stock awards (182) (0.07) (269) (0.10) _______ _______ _______ _______ Total stockholders' equity 109,019 41.22 110,042 40.85 Total liabilities and stockholders' equity $ 264,458 100.00 269,412 100.00 ======= ======= ======= =======
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 Thirty-nine Weeks Ended ___________________________________ ___________________________________ 03/30/96 04/01/95 03/30/96 04/01/95 ________________ ________________ ________________ ________________ Amount % Sales Amount % Sales Amount % Sales Amount % Sales ______ _______ ______ _______ ______ _______ ______ _______ Sales $280,225 100.00 255,592 100.00 841,967 100.00 782,249 100.00 Cost of sales 213,902 76.33 194,636 76.15 645,480 76.66 590,579 75.50 _______ _______ _______ _______ _______ _______ _______ _______ Gross profit 66,323 23.67 60,956 23.85 196,487 23.34 191,670 24.50 Selling, general and administrative expenses (S G & A): Other S G & A 62,722 22.38 64,454 25.22 189,096 22.47 190,329 24.33 Restructuring charge 15,000 5.87 15,000 1.92 _______ _______ _______ _______ _______ _______ _______ _______ Total S G & A 62,722 22.38 79,454 31.09 189,096 22.47 205,329 26.25 _______ _______ _______ _______ _______ _______ _______ _______ Operating income (loss) 3,601 1.29 (18,498) -7.24 7,391 0.87 (13,659) -1.75 Interest expense, net 1,704 0.61 1,254 0.49 5,328 0.63 3,662 0.47 _______ _______ _______ _______ _______ _______ _______ _______ Earnings (loss) before income tax 1,897 0.68 (19,752) -7.73 2,063 0.24 (17,321) -2.22 Income tax expense (benefit) 750 0.27 (8,107) -3.17 864 0.10 (7,319) -0.94 _______ _______ _______ _______ _______ _______ _______ _______ Net earnings (loss) $ 1,147 0.41 (11,645) -4.56 1,199 0.14 (10,002) -1.28 ======= ======= ======= ======= ======= ======= ======= ======= Net earnings (loss) per common share $ 0.16 -1.64 0.17 -1.41 ======= ======= ======= ======= Weighted average number of common shares 7,110 7,114 7,110 7,114 ======= ======= ======= ======= Dividends declared $ 0.11 0.11 0.33 0.33 per common share ======= ======= ======= =======
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 ____________________ _______________________ 3/30/96 4/1/95 3/30/96 4/1/95 _______ ______ _______ ______ Cash flows from operating activities: Net earnings (loss) $ 1,147 (11,645) 1,199 (10,002) Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation and amortization 5,610 4,888 16,910 14,610 Loss (gain) on sale of property and equipment 6 335 (284) 298 Loss reserve on closed stores (95) 10 (351) (48) Restricted stock award compensation expense 20 90 87 202 Restructure obligation (860) 14,679 (2,762) 14,677 (Increase) decrease in merchandise inventories (5,222) 798 (6,163) 5,853 Increase (decrease) in accounts payable and accrued exp 5,548 3,652 3,026 (4,881) Decrease (increase) in income taxes receivable, net 3,625 (3,089) 4,297 (3,166) Other, net 472 (4,551) (2,353) (5,744) _______ ______ ______ ______ Net cash flows provided by operating activities 10,251 5,167 13,606 11,799 Cash flows from investing activities: Additions to property and equipment (3,784) (9,337) (14,108) (32,405) Proceeds from sale of property and equipment 9 37 508 297 _______ ______ ______ ______ Net cash used in investing activities (3,775) (9,300) (13,600) (32,108) Cash flows from financing activities: (Payments on) proceeds from notes payable (2,000) 7,610 16,010 Principal payments on obligations under capital leases (168) (488) (491) (1,421) Principal payments on long-term debt (939) (941) (2,819) (2,821) Dividends paid (782) (782) (2,346) (2,346) _______ ______ ______ ______ Net cash (used in) provided by financing activities (3,889) 5,399 (5,656) 9,422 Net increase (decrease) in cash and cash equivalents 2,587 1,266 (5,650) (10,887) Beginning of period cash and cash equivalents 7,669 3,225 15,906 15,378 _______ ______ ______ ______ End of period cash and cash equivalents $ 10,256 4,491 10,256 4,491 ======= ====== ====== ====== Supplemental Disclosures of Cash Flow Information: Cash paid for: Interest expenses $ 1,730 1,364 5,482 3,720 ======= ====== ====== ====== Income taxes $ 7 70 51 1,437 ======= ====== ====== ======
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 9.64% for the thirteen-week period and 7.63% for the thirty-nine week period, compared with corresponding periods last year. Sales for stores open during the current and prior year periods increased 10.17% for the thirteen-week period and 7.92% for the thirty- nine week period. The increase in sales for both periods was primarily the result of positive customer response to the Company's sales and merchandise program which was implemented in April, 1995. This program included reduced retail prices on thousands of items, an increase in the amount of which coupons are doubled (from $.49 to $.50), and a new advertising campaign to promote these changes. At March 30, 1996, the Company operated 117 supermarkets and ten liquor stores compared with 120 supermarkets and twelve liquor stores at April 1, 1995. During the thirty-nine week period, the Company opened one supermarket, opened one liquor store, renovated forty-two supermarkets, remodeled and expanded one supermarket, closed two supermarkets, and closed three liquor stores. Gross Profit: Gross profit as a percentage of sales decreased from 23.85% to 23.76% for the thirteen-week period and decreased from 24.50% to 23.34% for the thirty-nine week period. The decreases for both periods were the result of reduced retail prices related to the sales and merchandise program noted above. Selling, General and Administration Expenses: Selling, general and administrative ("S G & A") expenses decreased $16.73 million and $16.23 million for the thirteen and thirty-nine week periods, respectively. The thirteen and thirty-nine week periods for last year included a $15.00 million restructuring charge which was primarily related to closed stores that could not be subleased in whole or in part. Excluding the restructuring charge from last year's periods, S G & A decreased $1.73 million and $1.23 million for the thirteen and thirty-nine week periods, respectively. The decreases for both periods were due to reductions in store wages (which resulted from improved scheduling) and reductions in store supply costs (which resulted from new training programs). S G & A as a percentage of sales decreased from 31.09% to 22.38% for the thirteen week period and decreased from 26.25% to 22.47% for the thirty-nine week period. Excluding the restructuring charge from last year's periods, S G & A decreased from 25.22% to 22.38% for the thirteen week period and decreased from 24.33% to 22.47% for the thirty- nine week period. The decreases for both periods were the result of higher sales in the current periods combined with reduced expenses as noted above. Management's Discussion And Analysis Of Financial Condition and Results of Operations Interest Expense, Net Interest expense, net increased by $.45 million in the thirteen week period and by $1.67 million in the thirty-nine week period. The increases for both periods result from interest expense related to restructuring charges (which the Company did not incur during last year's periods) and from increased levels of short-term indebtedness. Income Taxes: The effective rate for income taxes was 39.54% and 41.88% for the current thirteen and thirty-nine week periods, respectively. Last year's periods had pretax losses, and therefore had income tax benefits at effective rates of 41.04% and 42.26% for the thirteen and thirty- nine week periods, respectively. Last year's periods included tax savings from targeted jobs tax credits. The current year's periods did not include savings from targeted jobs tax credits since the credit expired. LIQUIDITY AND CAPITAL RESOURCES Cash flows generated by operating activities were $10.251 million for the thirteen week period and $13.606 million for the thirty-nine week period. Last year's corresponding amounts were $5.167 million and $11.799 million for the thirteen and thirty-nine week periods, respectively. Historically, the Company has funded working capital requirements, capital requirements, and other cash requirements primarily through cash flows from operations. However, if an insufficient amount of cash flows 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 $45 million is available for future use. The revolving loan expires June, 1998. Cash used in investing activities was $3.775 million and $13.600 million for the current thirteen and thirty-nine week periods, respectively. Corresponding amounts from last year's periods were $9.300 million and $32.108 million for the thirteen and thirty-nine week periods, respectively. The decrease in investing activities was because of reductions in purchases of equipment for new supermarkets, reductions in purchases of equipment for expanded supermarkets, and reductions in purchases of equipment for the Company's distribution facility. In addition, last year's thirty-nine week period included the purchase of seven supermarkets (with equipment) from the Kroger Co. The Company's investing activities include purchases of store equipment, distribution center equipment, and investments in new technology. Historically, store buildings are leased and are not included in investing activities. Cash (used in) provided by financing activities was ($3.889) million and ($5.656) million for the current thirteen and thirty-nine week periods, respectively. Corresponding amounts from last year's periods were $5.399 million and $9.422 million, respectively. The decreases in cash provided by financing activities was because of decreased borrowing (as compared to last year's periods) under the Company's short-term borrowing facilities. At the end of the quarter ended March 30, 1996, the Company was in compliance with all financial covenants under the revolving loan agreement and its note payable agreement. PART II. OTHER INFORMATION Item 1. Legal Proceedings For the thirteen week period ended March 30, 1996, the Company had no significant developments related to legal matters. The Company is involved in various claims, administrative proceedings, and other legal proceedings which arise from time to time in connection with the ordinary conduct of the Company's business. Item 2. Changes in Securities - None Item 3. Defaults in Senior Securities - None Item 4. Submission of Matters to a Vote of Security Holders - None Item 5. Other Information - None Item 6. Exhibits and Reports on Form 8-K - None 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: May 10, 1996 /s/ David W. Morrow David W. Morrow, Chairman of the Board and Chief Executive Officer Date: May 10, 1996 /s/ Richard W. La Trace Richard W. La Trace, President Date: May 10, 1996 /s/ Timothy E. Kullman Timothy E. Kullman, Senior Vice President, Chief Financial Officer, Treasurer and Secretary EX-27 2
5 9-MOS JUL-01-1995 MAR-30-1996 10,256,000 0 11,030,000 0 99,971,000 127,583,000 297,424,000 (162,736,000) 264,458,000 109,047,000 22,436,000 71,000 0 0 (2,182,000) 264,458,000 280,225,000 0 213,902,000 62,722,000 0 0 1,704,000 1,897,000 750,000 0 0 0 0 1,147,000 .16 0
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