-----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, HpDfkCEh69W+uERVy/Jjc5nmY4nINLRsqAipu3Y+FBLoeYAzKXBnsEyBQPJYCR+X zKwu26wHHbawbKSL63qL1Q== 0000912057-96-009306.txt : 19960701 0000912057-96-009306.hdr.sgml : 19960701 ACCESSION NUMBER: 0000912057-96-009306 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN BEEF INC /DE/ CENTRAL INDEX KEY: 0000081942 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 133266114 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: 96562120 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 FORM 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 March 29, 1996 ------------------ 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. As of May 6, 1996, 5,463,317 shares of Common Stock par value $.05 per share, were issued and outstanding. - - -------------------------------------------------------------------------------- INDEX WESTERN BEEF, INC. AND SUBSIDIARIES PAGE ---- PART I-FINANCIAL INFORMATION - - ---------------------------- Item 1. Financial statements Condensed consolidated balance sheets as of March 29, 1996 and December 29, 1995. 2 Condensed consolidated statements of income for the thirteen weeks ended March 29,1996 and March 31, 1995. 3 Condensed consolidated statements of cash flows for the thirteen weeks ended March 29, 1996 and March 31, 1995. 4 Notes to the condensed consolidated financial statements. 5 Item 2. Management 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)
MARCH 29, DECEMBER 29, 1996 1995 ASSET (Unaudited) - - ------ ----------- ------------ Current assets: Cash and cash equivalents $ 3,637 $ 2,431 Accounts receivable, net of allowance for doubtful accounts ( $456 and $326) 7,730 8,754 Inventories 16,432 15,959 Prepaid expenses and other current assets 2,058 2,020 Deferred income taxes 794 702 ------- ------- Total current assets 30,651 29,866 Property, plant and equipment, net of accumulated depreciation and amortization ($14,321 and $15,026) 35,958 31,733 Other assets 1,696 1,714 ------- ------- Total assets $68,305 $63,313 ------- ------- ------- ------- LIABILITIES AND STOCKHOLDERS' EQUITY - - ------------------------------------ Current liabilities: Current portion of long-term debt $ 2,427 $ 1,997 Current portion of obligations under capital leases 199 193 Accounts payable 12,605 13,134 Accrued expenses and other liabilities 3,700 3,190 Income taxes payable 16 - ------- ------- Total current liabilities 18,947 18,514 Deferred income taxes payable 1,439 1,249 Long-term debt, net of current portion 9,421 6,280 Obligations under capital leases, net of current portion 1,373 1,411 ------- ------- Total liabilities 31,180 27,454 ------- ------- Stockholders' 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 11,379 11,379 Retained earnings 25,633 24,371 Deferred compensation (160) (164) ------- ------- Total stockholders' equity 37,125 35,859 ------- ------- Total liabilities and stockholders' equity $68,305 $63,313 ------- ------- ------- -------
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)
THIRTEEN WEEKS ENDED MARCH 29, 1996 MARCH 31, 1995 -------------- -------------- Net sales $79,349 $67,574 Cost of sales 59,760 52,048 ------- ------- Gross profit on sales 19,589 15,526 ------- ------- Expenses: Rent expense-affiliates 623 698 Selling, general and administrative expenses 16,426 13,119 Interest expense 208 195 ------- ------- Total expenses 17,257 14,012 ------- ------- Income before income taxes 2,332 1,514 Provision for income taxes 1,070 717 ------- ------- Net income $ 1,262 $ 797 ------- ------- ------- ------- Weighted average number of common shares and equivalents outstanding 5,492 5,463 ------- ------- ------- ------- Earnings per common share $ .23 $ .15 ------- ------- ------- -------
See accompanying notes to condensed consolidated financial statements. -3- WESTERN BEEF, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
THIRTEEN WEEKS ENDED MARCH 29, 1996 MARCH 31, 1995 -------------- -------------- Cash flows from operating activities: Net income $1,262 $ 797 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 741 596 Deferred income tax benefit 98 (13) Provision for losses on accounts receivable 130 130 (Increase) decrease in assets: Accounts receivable 894 (404) Inventories (473) (628) Prepaid expenses and other current assets (38) 136 Other assets 18 (34) (Decrease) increase in liabilities: Accounts payable (529) 874 Accrued expenses and other liabilities 510 414 Income taxes payable 16 391 ------ ------ Net cash provided by operating activities 2,629 2,259 ------ ------ Cash flows from investing activities: Capital expenditures (5,039) (2,279) Proceeds from sale of property, plant and equipment 77 - ------ ------ Net cash used in investing activities (4,962) (2,279) ------ ------ Cash flows from financing activities: Proceeds from issuance of long-term debt 4,007 - Payments on long-term debt and capital leases (468) (547) ------ ------ Net cash provided by (used in) financing activities 3,539 (547) ------ ------ Net increase (decrease) in cash and cash equivalents 1,206 (567) Cash and cash equivalents, beginning of period 2,431 4,311 ------ ------ Cash and cash equivalents, end of period $3,637 $3,744 ------ ------ ------ ------ Cash paid during the thirteen weeks for: Interest Income taxes $ 208 $ 195 $ 730 $ 320
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 thirteen weeks ended March 29, 1996 are not necessarily indicative of the results that may be expected for the year ending January 3, 1997. 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 29, 1995. In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation," ("SFAS No. 123"). SFAS No. 123 established a fair value method for accounting for stock-based compensation plans either through recognition or disclosure. The Company adopted the employee stock-based compensation provisions of SFAS No.123, and will disclose the pro forma net income and pro forma net income per share amounts assuming the fair value method for fiscal year 1996 at year end. The adoption of this standard will not impact the Company's consolidated results of operations, financial position or cash flows. Stock arrangements with non-employees as applicable, will be recorded at fair value. (2) LITIGATION: There has been no material change in litigation from the year ended December 29, 1995. See Part II of this report for further disclosure. -5- ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the thirteen weeks ended March 29, 1996, Western Beef, Inc., ("the Company") achieved net income of $1,262,000 or $0.23 per share on net sales of $79,349,000, as compared to net income of $797,000 or $0.15 per share on net sales of $67,574,000 for the thirteen weeks ended March 31, 1995. Cost of sales, as a percentage of net sales, decreased to 75.3% from 77% with a resultant increase in the gross profit percentage to 24.7% from 23%. Net sales increased $11,775,000 or 17% primarily from the sales generated by the three new stores that were opened after the first quarter of 1995. Same store sales were up 1.1% for the first quarter of 1996 as compared to the first quarter of 1995. Gross profits increased because of improved buying and merchandising and higher retail sales which produce larger gross profits than wholesale sales. Operating expenses including, selling, general and administrative expenses, rent expense - affiliates and interest expense, as a percentage of sales, increased to 21.7% for the thirteen weeks ended March 29, 1996 from 20.7% for the same period in 1995. These additional costs of $3,245,000 are a result of the increased payrolls and store operating costs of the three new stores. The selling, general and administrative cost category includes payroll, bonuses and operating costs. The ratio of such costs to retail sales is higher than is the ratio of such costs to wholesale sales. The 1996 increase in retail sales, therefore, brings with it a corresponding increase in selling, general and administrative expenses as a percentage of sales. Liquidity and Capital Resources: Cash flows from operations were $2,629,000 for the thirteen weeks ended March 29, 1996 as compared to $2,259,000 for the comparable period of 1995. The increase is primarily a a result of the increase in net income for the period. Capital expenditures of $5,039,000 included the exercise of an option to purchase for $3,000,000, funded by a 20 year mortgage at 8.25% per annum with a balloon payment of $2,084,095 due on the tenth anniversary date of the purchase, one of the Company's retail locations currently leased from a non-affiliated company. The remaining capital expenditures were for equipment and improvements at the new store in Manhattan and for the renovation of the College Point store. The Company funded these expenditures with cash flow from operations and by borrowing an additional $1,000,000 for five years at 7.54% from a finance company. The Company believes that cash on hand and its $3,000,000 bank line of credit which expires on July 31, 1996 and which is expected to be renewed by the bank, will be sufficient to meet its operational needs. The Company also has several financial institutions that would be available to finance new store equipment, usually over a five year period. As of March 31, 1996 there are no material commitments for capital expenditures. -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. (27) Financial Data Schedule -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: May 6, 1996 -8- EX-27 2 EXHIBIT 27 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE WESTERN BEEF, INC. QUARTERLY REPORT ON FORM 10Q FOR THE QUARTER ENDED MARCH 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-03-1997 DEC-30-1995 MAR-29-1996 3,637 0 7,730 456 16,432 30,651 35,958 14,321 68,305 18,947 10,794 273 0 0 (160) 68,305 79,349 79,349 59,760 59,760 17,257 0 208 2,332 1,070 1,262 0 0 0 1,262 .23 .23
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