-----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, DSVn8feB0AJdULuZZGl0AJKa7PylUJrIUmL/QUYkIKjpiHEJomaadrMASu4TPT7N 7dz1v9qPsei3NhKJKYCvVw== 0000081061-98-000029.txt : 19981111 0000081061-98-000029.hdr.sgml : 19981111 ACCESSION NUMBER: 0000081061-98-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980926 FILED AS OF DATE: 19981110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIX SUPER MARKETS INC CENTRAL INDEX KEY: 0000081061 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 590324412 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00981 FILM NUMBER: 98741649 BUSINESS ADDRESS: STREET 1: PO BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802-0407 BUSINESS PHONE: 9416887407 MAIL ADDRESS: STREET 1: P O BOX 407 STREET 2: P O BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 26, 1998 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____________ to ______________ Commission File Number 0-981 ---------------------------- PUBLIX SUPER MARKETS, INC. ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Florida 59-0324412 - ------------------------------- ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1936 George Jenkins Blvd. Lakeland, Florida 33815 - --------------------------------------- ------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (941) 688-1188 -------------- 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 --------- --------- The number of shares outstanding of the Registrant's common stock, $1.00 par value, as of October 30, 1998 was 216,763,389. Page 1 of 10 pages PART I. FINANCIAL INFORMATION Item 1. Financial Statements - -----------------------------
PUBLIX SUPER MARKETS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts are in thousands, except share amounts) ASSETS September 26, 1998 December 27, 1997 ------------------ ----------------- (Unaudited) Current Assets - -------------- Cash and cash equivalents $ 694,060 $ 530,018 Short-term investments 13,824 46,847 Trade receivables 60,032 71,318 Merchandise inventories 597,756 638,044 Deferred tax assets 53,876 66,402 Prepaid expenses 4,118 2,153 ---------- ---------- Total Current Assets 1,423,666 1,354,782 ---------- ---------- Long-term investments 409,429 331,659 Other noncurrent assets 9,137 9,036 Property, plant and equipment 2,897,842 2,757,707 Accumulated depreciation (1,189,243) (1,158,204) ---------- ---------- Total Assets $3,550,831 $3,294,980 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities - ------------------- Accounts payable $ 581,820 $ 562,536 Accrued contributions to retirement plans 149,733 138,858 Accrued salaries and wages 77,543 47,367 Accrued self-insurance reserves 78,236 57,415 Accrued nonrecurring charge 2,417 69,249 Federal and state income taxes 9,097 15,583 Other 129,220 97,094 ---------- ---------- Total Current Liabilities 1,028,066 988,102 ---------- ---------- Deferred tax liabilities, net 118,146 114,807 Self-insurance reserves 91,034 90,068 Accrued postretirement benefit cost 47,256 42,612 Other noncurrent liabilities 32,176 40,092 Stockholders' Equity - -------------------- Common stock of $1 par value. Authorized 300,000,000 shares; issued 220,458,183 shares at September 26, 1998 and 217,419,178 shares at December 27, 1997 220,458 217,419 Additional paid-in capital 236,374 100,757 Reinvested earnings 1,904,231 1,696,659 ---------- ---------- 2,361,063 2,014,835 Less treasury shares of 3,943,280 at September 26, 1998, at cost (130,136) --- Accumulated other comprehensive earnings 3,226 4,464 ---------- ---------- Total Stockholders' Equity 2,234,153 2,019,299 ---------- ---------- Total Liabilities and Stockholders' Equity $3,550,831 $3,294,980 ========== ==========
See accompanying notes to condensed consolidated financial statements. -2-
PUBLIX SUPER MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts are in thousands, except per share and share amounts) Three Months Ended September 26, 1998 September 27, 1997 ------------------ ------------------ (Unaudited) Revenues $ 2,932,792 $ 2,710,522 Other income, net 28,549 26,809 ------------ ------------ Total revenues 2,961,341 2,737,331 ------------ ------------ Costs and expenses Cost of merchandise sold, including store occupancy, warehousing and delivery expenses 2,199,616 2,067,928 Operating and administrative expenses 626,834 561,217 ------------ ------------ Total costs and expenses 2,826,450 2,629,145 ------------ ------------ Earnings before income tax expense 134,891 108,186 Income tax expense 47,360 38,836 Net earnings $ 87,531 $ 69,350 ============ ============ Weighted average number of common shares outstanding 217,133,830 218,740,721 ============ ============ Net earnings per common share $ .40 $ .32 ============ ============ Cash dividends per common share none none
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Amounts are in thousands) Three Months Ended September 26, 1998 September 27, 1997 ------------------ ------------------ (Unaudited) Net earnings $ 87,531 $ 69,350 Other comprehensive earnings - net unrealized gain (loss) on investment securities available-for-sale, net of tax benefit of $623 in 1998 and tax expense of $684 in 1997 (993) 1,088 ------------ ------------ Comprehensive earnings $ 86,538 $ 70,438 ============ ============
See accompanying notes to condensed consolidated financial statements. -3-
PUBLIX SUPER MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts are in thousands, except per share and share amounts) Nine Months Ended September 26, 1998 September 27, 1997 ------------------ ------------------ (Unaudited) Revenues - -------- Sales $ 8,926,952 $ 8,299,068 Other income, net 94,424 85,028 ------------ ------------ Total revenues 9,021,376 8,384,096 ------------ ------------ Costs and expenses - ------------------ Cost of merchandise sold, including store occupancy, warehousing and delivery expenses 6,718,159 6,349,237 Operating and administrative expenses 1,843,166 1,650,406 ------------ ------------ Total costs and expenses 8,561,325 7,999,643 ------------ ------------ Earnings before income tax expense 460,051 384,453 Income tax expense 165,102 139,554 ------------ ------------ Net earnings $ 294,949 $ 244,899 ============ ============ Weighted average number of common shares outstanding 217,586,570 219,348,046 ============ ============ Net earnings per common share $ 1.36 $ 1.12 ============ ============ Cash dividends per common share $ .20 $ .15 ============ ============
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Amounts are in thousands) Nine Months Ended September 26, 1998 September 27, 1997 ------------------ ------------------ (Unaudited) Net earnings $ 294,949 $ 244,899 Other comprehensive earnings - net unrealized gain (loss) on investment securities available-for-sale, net of tax benefit of $777 in 1998 and tax expense of $1,419 in 1997 (1,238) 2,260 ------------ ------------ Comprehensive earnings $ 293,711 $ 247,159 ============ ============
See accompanying notes to condensed consolidated financial statements. -4-
PUBLIX SUPER MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts are in thousands) Nine Months Ended September 26, 1998 September 27, 1997 ------------------ ------------------ (Unaudited) Cash Flows From Operating Activities - ------------------------------------ Cash received from customers $8,996,901 $8,360,837 Cash paid to employees and suppliers (8,204,380) (7,690,641) Income taxes paid (154,946) (152,046) Payment for self-insured claims (89,068) (80,575) Other, net 36,706 27,663 ---------- ---------- Net Cash Provided by Operating Activities 585,213 465,238 ---------- ---------- Cash Flows From Investing Activities - ------------------------------------ Payment for property, plant and equipment (249,644) (183,808) Payment for investment securities - available-for-sale (163,324) (429,378) Proceeds from sale of investment securities - available-for-sale 110,515 296,075 Other, net 4,085 2,159 ---------- ---------- Net Cash Used in Investing Activities (298,368) (314,952) ---------- ---------- Cash Flows From Financing Activities - ------------------------------------ Proceeds from sale of common stock 87,742 48,364 Payment for acquisition of common stock (166,662) (98,417) Dividends paid (43,752) (33,003) Other, net (131) (238) ---------- ---------- Net Cash Used in Financing Activities (122,803) (83,294) ---------- ---------- Net increase in cash and cash equivalents 164,042 66,992 Cash and cash equivalents at beginning of period 530,018 457,405 ---------- ---------- Cash and cash equivalents at end of period $ 694,060 $ 524,397 ========== ========== See accompanying notes to condensed consolidated financial statements. -5- PUBLIX SUPER MARKETS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments deemed necessary to fairly reflect the financial position, results of operations and changes in cash flows of the Company for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the fiscal 1997 Form 10-K Annual Report of the Company. 2. Due to the seasonal nature of the Company's business, the results for the three months and nine months ended September 26, 1998 are not necessarily indicative of the results for the entire 1998 fiscal year. 3. Certain 1997 amounts have been reclassified to conform with the 1998 presentation. 4. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 130, "Reporting Comprehensive Income," (SFAS 130) effective for fiscal years beginning after December 15, 1997. SFAS 130 sets forth standards for the reporting of comprehensive income (earnings) in the financial statements. Comprehensive earnings includes net earnings and other comprehensive earnings. Other comprehensive earnings includes revenues, expenses, gains and losses that have been excluded from net earnings and recorded directly in the stockholders' equity section of the balance sheet. Accumulated other comprehensive earnings consists of net unrealized gains on investment securities available-for-sale. The following is a summary of the change in the balance of accumulated other comprehensive earnings as of September 26, 1998 (amounts are in thousands): Balance as of beginning of year $4,464 Current period change (1,238) ------ Balance as of September 26, 1998 $3,226 ====== 5. In the Company's Form 10-K for the fiscal year ended December 27, 1997, the Company disclosed two purported class action suits, the Dyer and Middleton cases. No material developments have occurred in he Dyer or Middleton cases since the Form 10-K filing, except as reported in the Company's Form 10-Q for the quarterly period ended June 27, 1998. -6- PUBLIX SUPER MARKETS, INC. Item 2. Management's Discussion and Analysis of Financial Condition and - ---------------------------------------------------------------------------- Results of Operations - --------------------- Liquidity and Capital Resources - ------------------------------- Operating activities continue to be the Company's primary source of liquidity. Net cash provided by operating activities was approximately $585.2 million in the nine months ended September 26, 1998, as compared with $465.2 million in the nine months ended September 27, 1997. Cash and cash equivalents totaled $694.1 million as of September 26, 1998. Capital expenditures totaled $249.6 million in the nine months ended September 26, 1998. These expenditures were primarily incurred in connection with the opening of 24 new stores and the remodeling or enlarging of 26 stores which added 1.05 million square feet. In addition, the Company closed six stores. Capital expenditures in the nine months ended September 27, 1997, totaled $183.8 million. These expenditures were primarily incurred in connection with the opening of 25 new stores and the remodeling or enlarging of 15 stores which added .95 million square feet. In addition, the Company closed four stores. The Company has budgeted approximately $90.4 million for the remainder of 1998 for new store construction and the remodeling or enlarging of several existing stores. The capital budget is subject to continuing change and review. The remaining capital expenditures are expected to be financed by internally generated funds and current liquid assets. Cash generated in excess of the amount needed for current operations and capital expenditures is invested in short-term and long-term investments. Management believes the Company's liquidity will continue to be strong. Operating Results - ----------------- Sales increased 8.2% in the third quarter of 1998 to $2,932.8 million, an increase of $222.3 million compared to the same quarter in 1997. This represents an increase of $119.4 million or 4.4% additional sales from stores that were open for all of both quarters (comparable stores) and additional sales of $102.9 million or 3.8% from the net impact of new and closed stores since June 28, 1997. Sales increased 7.6% in the nine months ended September 26, 1998, to $8,927.0 million, an increase of $627.9 million over the nine months ended September 27, 1997. This reflects an increase of $299.0 million or 3.6% in sales from comparable stores and sales of $328.9 million or 4.0% from the net impact of new and closed stores since the beginning of 1997. Cost of merchandise sold including store occupancy, warehousing and delivery expenses, as a percentage of sales, was approximately 75.0% and 76.3% in the quarters ended September 26, 1998 and September 27, 1997, respectively. These cost of sales percentages were 75.3% and 76.5% for the nine months ended September 26, 1998 and September 27, 1997, respectively. The decreases in cost of merchandise sold, as a percentage of sales, are due to buying and merchandising efficiencies. Operating and administrative expenses, as a percentage of sales, were approximately 21.4% and 20.7% for the quarters ended September 26, 1998, and September 27, 1997, respectively. The operating and administrative expenses, as a percentage of sales, were 20.6% and 19.9% for the nine months ended September 26, 1998 and September 27, 1997, respectively. The significant components of operating and administrative expenses are payroll costs, employee benefits and depreciation. -7- PUBLIX SUPER MARKETS, INC. Year 2000 - --------- The Company has developed a plan to address potential problems within the Company's operations that could result from the century change in the Year 2000. The plan addresses three main areas: information technology (IT) systems, non-IT systems (including embedded systems), and supply chain readiness (including inventory and non-inventory suppliers). To oversee the plan, the Company has established a Year 2000 Project Office. The Project Office is staffed with representatives from the Company's Information Systems Department and outside consultants. Additional consultants are used on an as needed basis. The Project Office has identified potential deficiencies related to Year 2000 in the Company's IT systems, both hardware and software, and is in the process of addressing them through upgrades, replacements, and other remediation. The Company believes that it is approximately 55% complete with this process. With respect to non-IT systems and other equipment with date sensitive operating controls such as manufacturing equipment, security, and other similar systems, the Company is in the process of identifying and addressing those items which may require upgrades, replacements, and other remediation. The Company believes that it is approximately 35% complete with this process. The Company estimates that all critical IT and non-IT systems will be Year 2000 compliant by approximately March 31, 1999. As for third parties, the Company is in the process of identifying and contacting key outside suppliers, both inventory and non-inventory, to determine to the extent practical the degree of such third-parties' Year 2000 compliance and to develop strategies for working with them. The Company expects to have a better understanding of the Year 2000 readiness of these third parties over the next several months. The Company anticipates spending approximately $41.9 million to address Year 2000 issues. This includes the estimated costs of all equipment upgrades, software modifications, the salaries of employees, and the fees of consultants addressing the issues. As of September 26, 1998, approximately $11.4 million of this amount has been spent. The funds to pay for addressing Year 2000 issues will be from liquid investment funds currently on hand. The Company believes that the cost of addressing the Year 2000 issues will not have a material effect on the Company's consolidated financial position or results of operations. Should the Company or any third party with whom the Company has a significant business relationship have a systems failure due to the century change, the Company believes that the most significant impact would likely be the inability, with respect to a store or group of stores, to conduct operations due to a power failure, to timely deliver inventory, to receive certain products from vendors, or to electronically process sales to the customer at the store level. The Company does not expect any such event to be material. However, the Company is in the process of developing contingency plans for such events and estimates such plans will be finalized by approximately March 31, 1999. -8- PUBLIX SUPER MARKETS, INC. Cautionary Note Regarding Forward-Looking Statements - ---------------------------------------------------- From time to time, information provided by the Company, including written or oral statements made by its representatives, may contain forward-looking information about the future performance of the Company which is based on management's assumptions and beliefs in light of the information currently available to them. When used in this document, the words "plan," "estimate," "project," "intend" and "believe" and other similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from those statements including, but not limited to: competitive practices and pricing in the food and drug industries generally and particularly in the Company's principal markets; changes in the general economy; changes in consumer spending; and other factors affecting the Company's business in or beyond the Company's control. These factors include changes in the rate of inflation, changes in state and Federal legislation or regulations, adverse determinations with respect to litigation or other claims, ability to recruit and train employees, ability to construct new stores or complete remodels as rapidly as planned, stability of product costs, and issues arising from addressing Year 2000 IT and non-IT problems. Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking statements. The Company assumes no obligation to update publicly these forward-looking statements. PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- In the Company's Form 10-K for the fiscal year ended December 27, 1997, the Company disclosed two purported class action suits, the Dyer and Middleton cases. No material developments have occurred in the Dyer or Middleton cases since the Form 10-K filing, except as reported in the Company's Form 10-Q for the quarterly period ended June 27, 1998. Item 6(a). Exhibits - -------------------- 27. Financial Data Schedule for the nine months ended September 26, 1998. Item 6(b). Reports on Form 8-K - ------------------------------- No reports on Form 8-K were filed during the three months ended September 26, 1998. -9- PUBLIX SUPER MARKETS, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed in its behalf by the undersigned thereunto duly authorized. PUBLIX SUPER MARKETS, INC. Date: November 6, 1998 /s/ S. Keith Billups -------------------------------------- S. Keith Billups, Secretary Date: November 6, 1998 /s/ David P. Phillips -------------------------------------- David P. Phillips, Vice President Finance and Treasurer (Principal Financial and Accounting Officer) -10-
EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the financial statements for the nine months ended September 26, 1998, and is qualified in its entirety by reference to such financial statements. 1,000 US DOLLARS 9-MOS DEC-26-1998 DEC-28-1997 SEP-26-1998 1 694,060 13,824 60,032 0 597,756 1,423,666 2,897,842 (1,189,243) 3,550,831 1,028,066 0 0 0 220,458 2,013,695 3,550,831 8,926,952 9,021,376 6,718,159 8,561,325 0 0 0 460,051 165,102 294,949 0 0 0 294,949 1.36 1.36 -----END PRIVACY-ENHANCED MESSAGE-----