-----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, Tjv+5CMKU25rbMdhch//9Bzzh8/GGuWPROb9t5dBxHs/UM4m5taVxzTDJ7mrMFrg DViGcSOyO1VP3NKcWobAEg== 0000912057-95-009635.txt : 19951202 0000912057-95-009635.hdr.sgml : 19951202 ACCESSION NUMBER: 0000912057-95-009635 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950929 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN BEEF INC /DE/ CENTRAL INDEX KEY: 0000081942 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 112042612 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04485 FILM NUMBER: 95589374 BUSINESS ADDRESS: STREET 1: 47 05 METROPOLITAN AVE CITY: RIDGEWOOD STATE: NY ZIP: 11385 BUSINESS PHONE: 7188210011 FORMER COMPANY: FORMER CONFORMED NAME: QUAREX INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: RANCHERS PACKING CORP DATE OF NAME CHANGE: 19830713 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 29,1995 Commission File Number 0-4485 WESTERN BEEF, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 13-3266114 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 47-05 Metropolitan Avenue, Ridgewood, New York 11385 ---------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (718)-417-3770 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months 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 close of the period covered by this report. 5,463,317 shares of Common Stock, $.05 par value as of October 18, 1995 - - -------------------------------------------------------------------------------- INDEX WESTERN BEEF, INC. AND SUBSIDIARIES PAGE ---- PART I-FINANCIAL INFORMATION Item 1. Financial statements Condensed consolidated balance sheets as of September 29, 1995 and December 30, 1994. 2 Condensed consolidated statements of income for the thirty-nine weeks and the thirteen weeks ended September 29, 1995 and September 30, 1994. 3 Condensed consolidated statements of cash flows for the thirty-nine weeks ended September 29, 1995 and September 30, 1994. 4 Notes to the condensed consolidated financial statements. 5 Item 2. Management's discussion and analysis of financial condition and results of operations. 6 PART II-OTHER INFORMATION 7 Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K SIGNATURES 8 WESTERN BEEF, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value)
SEPTEMBER 29, DECEMBER 30, 1995 1994 ---- ---- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,090 $ 4,311 Accounts receivable, net of allowance for doubtful accounts ( $532 and $142) 7,849 6,907 Inventories 15,215 13,339 Prepaid expenses and other current assets 1,760 2,390 Deferred income taxes 978 907 ------- ------- Total current assets 26,892 27,854 Property, plant and equipment, net of accumulated depreciation and amortization ($14,430 and $14,437) 30,431 25,276 Deferred income taxes 358 176 Other assets 1,948 887 ------- ------- Total assets $59,629 $54,193 ------- ------- ------- ------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 1,729 $ 1,563 Current portion of obligations under capital leases 109 101 Accounts payable 13,499 12,597 Accrued expenses and other liabilities 2,268 1,482 Income taxes payable 326 - ------- ------- Total current liabilities 17,931 15,743 Long-term debt, net of current portion 5,799 5,779 Obligations under capital leases, net of current portion 1,362 1,445 ------- ------- Total liabilities 25,092 22,967 ------- ------- Shareholders' equity: Preferred stock, $.05 par value; shares authorized 2,000; none issued - - Common stock, $.05 par value; 15,000 shares authorized; 5,463 shares issued and outstanding 273 273 Capital in excess of par value 11,516 11,516 Retained earnings 22,748 19,437 ------- ------- Total shareholders' equity 34,537 31,226 ------- ------- Total liabilities and shareholders' equity $59,629 $54,193 ------- ------- ------- -------
See accompanying notes to condensed consolidated financial statements. -2- WESTERN BEEF, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
THIRTY-NINE WEEKS ENDED THIRTEEN WEEKS ENDED SEPTEMBER 29, SEPTEMBER 30, SEPTEMBER 29, SEPTEMBER 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Net sales $219,039 $219,626 $78,407 $73,584 Cost of sales 166,599 168,832 59,198 56,860 -------- -------- ------- ------- Gross profit on sales 52,440 50,794 19,209 16,724 -------- -------- ------- ------- Operating expenses: Rent expense-affiliates 2,089 2,066 690 875 Interest expense 586 485 198 153 Selling, general and administrative expenses 43,703 42,096 15,930 13,209 -------- -------- ------- ------- Total operating expenses 46,378 44,647 16,818 14,237 -------- -------- ------- ------- Income before income taxes 6,062 6,147 2,391 2,487 Provision for income taxes 2,751 2,765 1,031 1,153 -------- -------- ------- ------- Net income $ 3,311 $ 3,382 $ 1,360 $ 1,334 -------- -------- ------- ------- -------- -------- ------- ------- Weighted average number of common shares outstanding 5,463 5,463 5,463 5,463 -------- -------- ------- ------- -------- -------- ------- ------- Earnings per common share $ .61 $ .62 $ .25 $ .25 -------- -------- ------- ------- -------- -------- ------- -------
See accompanying notes to condensed consolidated financial statements. -3- WESTERN BEEF, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
THIRTY-NINE WEEKS ENDED SEPTEMBER 29, SEPTEMBER 30, 1995 1994 ------------- ------------- Cash flows from operating activities: Net income $3,311 $3,382 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,998 2,167 Deferred income tax benefit (253) - Provision for losses on accounts receivable 390 315 (Increase) decrease in assets: Accounts receivable (1,332) (876) Inventories (1,876) (1,145) Prepaid expenses and other current assets 630 1,042 Prepaid income taxes - (345) Other assets 6 (334) (Decrease)increase in liabilities: Accounts payable 902 (627) Accrued expenses and other liabilities 786 1,001 Payroll and related taxes payable - (279) Income taxes payable 326 - ------ ------ Net cash provided by operating activities 4,888 4,301 ------ ------ Cash flows from investing activities: Capital expenditures (7,153) (1,922) Low income housing investment (907) - ------ ------ Net cash used in investing activities (8,060) (1,922) ------ ------ Cash flows from financing activities: Net repayments under line of credit agreement - (750) Proceeds from issuance of long-term debt 1,603 3,219 Payments on long-term debt and capital leases (1,652) (834) Net advances to affiliates and shareholders - (254) ------ ------ Net cash provided by (used in) financing activities (49) 1,381 ------ ------ Net increase (decrease) in cash and cash equivalents (3,221) 3,760 Cash and cash equivalents, beginning of period 4,311 1,080 ------ ------ Cash and cash equivalents, end of period $1,090 $4,840 ------ ------ ------ ------ Cash paid during the thirty-nine weeks for: Interest $ 586 $ 485 Income taxes $3,311 $3,858
See accompanying notes to condensed consolidated financial statements. -4- WESTERN BEEF, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the thirty-nine weeks ended September 29, 1995, are not necessarily indicative of the results that may be expected for the year ending December 29, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 30, 1994. (2) OTHER ASSETS: Included in the caption "Other assets," are investments of approximately, $1,067,000 which the Company made in two limited partnerships during the year and as a result has generated qualified low income housing tax credits. These investments are accounted for under the effective yield method. (3) Income Taxes: The Company's effective tax rate for the thirty-nine weeks ended September 29, 1995, was reduced by 1.1% as a result of the utilization of low income housing tax credits of approximately $74,000. The Company has qualified low income housing tax credits of $1,855,000 which are available to reduce future regular federal income taxes for the years ending 1996 through 2005. -5- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the third fiscal quarter of 1995 were $78,407,000, an increase of $4,823,000 from the comparable quarter of 1994. On a year-to-date basis, net sales were $219,039,000, a decrease of $587,000 from 1994. The two new stores which opened at the end of the second quarter had sales of $7,316,000 and $9,455,000 for the quarter and year-to-date periods, respectively. Excluding sales of the two new stores, sales declined as a result of decreases of 2.1% and 5.6% in same store sales for the quarter and year-to-date periods ended September 29, 1995, and the sale of a small wholesale produce business in the second quarter of 1995. Management's efforts of resetting stores, better advertising and merchandising are having a positive effect on slowing the decline in same store sales. For the third quarter of 1995, the decline in same store sales results primarily from the opening of our new stores. For the remainder of the year management expects same store sales, exclusive of the effect of the new stores, to remain comparable to the similar period in the prior year. Gross profit, as a percentage of sales, increased to 24.5% in the third fiscal quarter of 1995 from 22.7% in the same quarter of 1994. On a year-to-date basis, gross profit increased to 23.9% as compared with 23.1%, last year. The increase in gross profit is attributable to higher sales of Western Beef brand products and purchasing efficiencies. Operating expenses including, selling general and administrative expenses, rent expense-affiliates and interest expense, as a percentage of sales, increased to 21.5% in the third fiscal quarter of 1995 from 19.4% in the same quarter of 1994. On a year-to-date basis operating expenses including, selling, general and administrative expenses, rent expense-affiliates and interest expense, increased to 21.2% as compared with 20.3% in 1994. The selling, general and administrative cost category includes payroll, bonuses and operating costs. These increases are primarily due to 1995 store opening costs of approximately $900,000, of which $294,000 was incurred in the third quarter. Liquidity and Capital Resources Cash flows from operations were $4,888,000 for the thirty-nine weeks ended September 29, 1995 as compared to $4,301,000 for the comparable period of 1994. The increases in accounts receivable and inventory were offset by increases in accounts payable, accrued expenses and taxes payable. The increases in inventory and accounts payable resulted from the two new stores that opened in the second quarter of 1995. Cash flow from operations plus cash on hand were sufficient to pay for capital expenditures and long-term debt requirements. The equipment purchased and improvements made for the two new stores, a third new store which opened on October 30, 1995 and the upgrading of the point-of-sale equipment at three existing locations accounted for the majority of capital expenditures. The Company believes that cash on hand and its $3,000,000 bank line of credit which expires on July 31, 1996, will be sufficient to meet its operational needs and to fund the remaining costs to open another new store in early 1996, on West End Avenue in Manhattan. The Company also has financial institutions that would be available to refinance new store equipment, usually over a five year period. -6- PART II-OTHER INFORMATION Item 1. Legal Proceedings The Company has various outstanding litigation matters which it considers to be in the ordinary course of business. In the opinion of management, the outcome of these litigation matters will not materially, adversely affect the Company's financial position. In April 1991 in New York Supreme Court, Putnam County, an action was commenced against the Company to prevent a scheduled foreclosure of certain collateral held by the Company as security for its loan to one of the plaintiffs in the original principal amount of $85,000 of which approximately $65,000 was outstanding. Thereafter, in a complaint served in March 1992, plaintiffs interposed three causes of action on behalf of themselves and a previously unnamed plaintiff, C.B. Foods, Inc., which was owned by the plaintiffs and was a customer of the Company's wholesale business, seeking (1) a declaration that the loan had been repaid; (2) compensatory damages of $30,000,000 and exemplary damages of $10,000,000 for fraud allegedly committed by the Company; and (3) compensatory damages of $2,000,000 and exemplary damages of $10,000,000 for abuse of process allegedly committed by the Company. In its answer, the Company denied liability and all material allegations of the complaint. Following a motion by the Company the court ordered plaintiffs' third cause of action for abuse of process dismissed for failure to state a claim and ordered all claims of C.B. Foods, Inc., struck from the complaint on the ground that it was not a party to the action. Plaintiffs have appealed the court's order. By order made on the record on January 19, 1994, the court dismissed the complaint for plaintiff's disobedience of prior court orders and their failure to prosecute their claims. Plaintiffs have moved to modify the January 19, 1994 order. If they are not successful, an appeal is anticipated, which the Company would vigorously defend. The Company believes the resolution of this matter will not adversely affect its financial position. Item 2. Changes in Securities None Item 3. Default upon 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 The registrant has not filed a report on Form 8-K during the quarter just ended. -7- SIGNATURE 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. WESTERN BEEF, INC. By: /s/ Robert C. Ludlow ----------------------------------- Robert C. Ludlow Senior Vice-President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: October 31, 1995 -8- EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANICAL INFORMATION EXTRACTED FROM THE WESTERN BEEF, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 29, 1995 1,000 9-MOS DEC-29-1995 DEC-31-1994 SEP-29-1995 1090 0 8381 532 15215 26892 44861 30431 59629 17931 7161 273 0 0 34264 59629 78407 78407 59198 59198 16620 0 198 2391 1031 1360 0 0 0 1360 .25 .25
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