-----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, CWbbSoROk/epth0VS3oOaIgo5MoOMJEYfmtBGIiMPFskAKHR8ARB/f2tXP2oT/rd RDCmjqnE5iOhytu9zg2z3Q== 0000897069-98-000338.txt : 19980609 0000897069-98-000338.hdr.sgml : 19980609 ACCESSION NUMBER: 0000897069-98-000338 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980425 FILED AS OF DATE: 19980608 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHULTZ SAV O STORES INC CENTRAL INDEX KEY: 0000087588 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 390600405 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00549 FILM NUMBER: 98643855 BUSINESS ADDRESS: STREET 1: 2215 UNION AVE CITY: SHEBOYGAN STATE: WI ZIP: 53081 BUSINESS PHONE: 4144574433 MAIL ADDRESS: STREET 1: 2215 UNION AVE CITY: SHEBOYGAN STATE: WI ZIP: 53081 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________ FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 25, 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 0-549 SCHULTZ SAV-O STORES, INC. (Exact Name of Registrant as Specified in its Charter) WISCONSIN 39-0600405 (State or other jurisdiction (I.R.S. Employer of incorporation of organization) Identification No.) 2215 UNION AVENUE 53082-0419 SHEBOYGAN, WISCONSIN (Zip Code) (Address of principal executive offices) Registrant's telephone number including area code 920-457-4433 Former name, former address and former fiscal year, if changed since last report Indicate by check mark v 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 (of for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark v whether the registrant has filed all reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of June 1, 1998, 6,812,779 shares of Common Stock, $0.05 par value, were issued and outstanding. SCHULTZ SAV-O STORES, INC. FORM 10-Q INDEX PAGE NUMBER PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets 3 Unaudited Consolidated Statements of Earnings 4 Unaudited Consolidated Statements of Cash Flows 5 Notes to Unaudited Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 10 PART I FINANCIAL INFORMATION Item 1. Financial Statements SCHULTZ SAV-O STORES, INC. CONSOLIDATED BALANCE SHEETS Unaudited Audited April 25, January 3, Assets 1998 1998 Current assets: Cash and equivalents $25,081,000 $23,124,000 Receivables 10,991,000 9,718,000 Inventories 21,631,000 21,741,000 Other current assets 3,700,000 3,635,000 Deferred income taxes 4,131,000 4,131,000 ---------- ---------- Total current assets 65,534,000 62,349,000 Noncurrent receivable under capital subleases 7,116,000 7,270,000 Property under capital leases, net 2,698,000 2,786,000 Other noncurrent assets 3,842,000 3,782,000 Property and equipment, net 22,064,000 22,679,000 ----------- ----------- Total Assets $101,254,000 $98,866,000 Liabilities and Shareholders' Investment Current liabilities: Accounts payable $23,978,000 $21,305,000 Accrued salaries and benefits 4,305,000 4,395,000 Accrued insurance 3,341,000 3,095,000 Retail repositioning reserve 560,000 610,000 Other accrued liabilities 1,818,000 2,861,000 Current obligations under capital leases 691,000 665,000 Current maturities of long-term debt 149,000 201,000 ---------- ---------- Total current liabilities 34,842,000 33,132,000 ---------- ---------- Long-term obligations under capital leases 10,946,000 11,177,000 Long-term debt 3,096,000 3,165,000 Deferred income taxes 1,008,000 1,008,000 Shareholders' investment: Common stock 438,000 438,000 Additional paid-in capital 14,111,000 13,940,000 Retained earnings 52,533,000 51,299,000 Treasury stock (15,720,000) (15,293,000) ---------- ---------- Total shareholders' investment 51,362,000 50,384,000 ----------- ----------- Total Liabilities and Shareholders' Investment $101,254,000 $98,866,000 =========== =========== SCHULTZ SAV-O STORES, INC. UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS For the 16-weeks ended April 25, April 19, 1998 1997 Net sales $42,142,000 $138,826,000 Costs and expenses: Cost of products sold 119,079,000 116,749,000 Operating and administrative expenses 20,301,000 19,500,000 Operating income 2,762,000 2,577,000 Interest income 305,000 266,000 Interest expense (271,000) (263,000) --------- --------- Earnings before income taxes 2,796,000 2,580,000 Provision for income taxes 1,085,000 993,000 --------- --------- Net earnings $1,711,000 $1,587,000 ========= ========= Earnings per share - basic $0.25 $0.23 ===== ===== Earnings per share - diluted $0.24 $0.22 ===== ===== Cash dividends paid per share $0.070 $0.067 ===== ===== Weighted average shares and equivalents 7,140,000 7,200,000 ========= ========= SCHULTZ SAV-O STORES, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS For the 16-weeks ended April 25, April 19, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $1,711,000 $1,587,000 Adjustments to reconcile net earnings to net cash flows from operating activities Depreciation and amortization 1,574,000 1,307,000 Changes in assets and liabilities Receivables (1,273,000) (3,082,000) Inventories 110,000 1,895,000 Other current assets (265,000) (285,000) Accounts payable 2,673,000 903,000 Accrued liabilities (766,000) (1,053,000) ---------- ---------- Net cash flows from operating activities 3,764,000 1,272,000 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property and equipment (749,000) (487,000) Receipt of principal amounts under capitalsublease agreements 136,000 168,000 Proceeds from asset sales 36,000 125,000 --------- --------- Net cash flows from investing activities (577,000) (194,000) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment for acquisition of treasury stock (659,000) (602,000) Payment of cash dividends (477,000) (465,000) Proceeds from exercise of stock options 232,000 164,000 Principal payments under capital lease obligations (205,000) (229,000) Principal payments on long-term debt (121,000) (113,000) --------- --------- Net cash flows from financing activities (1,230,000) (1,245,000) --------- --------- CASH AND EQUIVALENTS: Net change 1,957,000 (167,000) Balance, beginning of period 23,124,000 27,531,000 ---------- ---------- Balance, end of period $25,081,000 $27,364,000 ========== ========== SCHULTZ SAV-O STORES, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The financial statements included herein have been prepared by the Company, without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. The interim financial statements furnished with this report reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. It is suggested that these financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Company's 1997 annual report to shareholders, as incorporated by reference in the Company's Form 10-K for the fiscal year ended January 3, 1998. (2) Interest Expense For the 16-weeks ended April 25, April 19, 1998 1997 Imputed - capital leases $145,000 $153,000 Long-term debt 100,000 110,000 Other 26,000 - ------- ------- Interest expense $271,000 $263,000 ======= ======= (3) Other Current Assets April 25, January 3, 1998 1998 Property held for resale $1,446,000 $1,663,000 Prepaid expenses 1,193,000 1,209,000 Retail systems for resale and other assets 600,000 320,000 Receivable under capital subleases 461,000 443,000 --------- --------- Other current assets $3,700,000 $3,635,000 ========= ========= (4) Supplementary Disclosure of Cash Flow Information Interest and taxes paid included in the Company's cash flow from operations were as follows: April 25, April 19, 1998 1997 Interest paid $293,000 $295,000 Taxes paid 1,068,000 1,990,000 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Selected costs and results as a percent of net sales: For the 16-weeks ended April 25, April 19, 1998 1997 Cost of products sold . . . . . . . . . . . 83.7% 84.1% Operating and administrative expenses . . . 14.3 14.0 Earnings before income taxes . . . . . . . 2.0 1.9 Net earnings . . . . . . . . . . . . . . . 1.2 1.1 Net Sales Net sales for the 16-week period ended April 25, 1998 were $142,142,000 compared to the 16-week period ended April 19, 1997 net sales of $138,826,000. The increase of $3,316,000, or 2.4%, was due primarily to increased wholesale business volume resulting from additions and enhancements to the Company's "virtual chain" base of franchised and corporate supermarkets. Since April 19, 1997, the Company has added two corporate stores in the greater Appleton, Wisconsin area and has added or expanded franchised stores in Milton, DePere, Manitowoc, Evansville, Waterloo, Poynette and Howards Grove, Wisconsin. Additionally, the Company completed in October 1997 the two-year implementation of the Piggly Wiggly Preferred Club/R/ electronic card marketing program. The increased volume was offset by the fact that: (i) since March 1998, two large supermarkets opened in the same market area as the Company's new store, thereby intensifying the competitive environment in Appleton; (ii) the closure of one underperforming franchise supermarket in Plover, Wisconsin in September 1997; and (iii) the closure of one noncompetitive corporate retail store in Appleton in November 1997 as a result of the acquisition of two operating units from Nash Finch Company. As of April 25, 1998, the Company had 69 franchised and 18 corporate supermarkets compared to 68 franchised and 16 corporate supermarkets at April 19, 1997. Consistent with the Company's business strategy to expand its wholesale volume, since April 25, 1998, the Company has added a non-traditional specialty retail unit customer in Shorewood, Wisconsin. Additionally, the Company completed one replacement franchise supermarket in Lomira, Wisconsin increasing the aggregate square footage of selling space by more than 50%, to nearly 26,000. Currently, there are six retail store expansion or renovation projects in various phases of planning or construction, with completions scheduled throughout 1998 and 1999. These projects involve four additions to existing franchise stores in Waupaca, Beaver Dam, Kiel and Crivitz, Wisconsin; one replacement supermarket in Fort Atkinson, Wisconsin; and one renovation to the acquired corporate supermarket in Appleton, Wisconsin. On an aggregate basis, these six new facilities, upon completion, are expected to add approximately 40,000 square feet of store selling space. Additionally, the Company expects these projects to continue to help the Company position itself against competitive pressures in these local marketplaces. Cost of Products Sold Cost of products sold, as a percent of sales, decreased 0.4% to 83.7% for the 16-week period ended April 25, 1998, compared to the same period in 1997. This nominal decrease was principally a direct result of an increase in higher margin retail sales from additional corporate stores. With additional corporate stores in Appleton and Oshkosh, Wisconsin since April 19, 1997, the Company's percentage of higher margin retail sales volume increased relative to the lower margin wholesale sales. Operating and Administrative Expenses Operating and administrative expenses amounted to 14.3% of net sales for the 16-weeks ended April 25,1998, compared to 14.0% for the same period in 1997. Total operating and administrative expenses increased to $20,301,000 for the first quarter of 1998 due principally to additional corporate supermarkets in Appleton and Oshkosh, Wisconsin. These additional operating expenses were offset partially by lower provisions for self-insured health programs due to continuing reduced frequency and severity of claims. Due to the highly competitive nature of the industry, certain of the Company's franchise operators and corporate retail stores continue to experience operational difficulties in their respective marketplaces. As a result, the Company continues to incur receivable realization charges from its underperforming franchise operators. Additionally, the Company continues to evaluate various business alternatives relating to the operations of its underperforming corporate retail stores. The Company's business alternatives include the sale and subsequent conversion of these stores into franchise units, the closing of noncompetitive stores or the implementation of other operational changes. Similar to prior years, implementation of these changes may result in the Company incurring certain repositioning or restructuring charges involving the termination costs of replaced, closed or sold stores. These actions can negatively impact net earnings in the short-term, but management believes that such actions will help improve the Company's long-term profitability. Net Earnings After applying the effective tax rate to earnings before income taxes, net earnings for the 16-week ended April 25, 1998, increased 7.8% to $1,711,000 compared with net earnings of $1,587,000 for the same period in 1997. With improvements in sales and productivity, the Company's net earnings-to-sales ratio for the 16-weeks ended April 25, 1998 improved nominally to 1.2%, compared to 1.1% for the same period in 1997. Additionally, the 16-weeks ended April 25, 1998 diluted earnings per share increased 9.1% to $0.24 from $0.22 for the same period in 1997. The number of consecutive quarters showing increases in net earnings over the prior year's quarter has been extended to 21. Liquidity and Capital Resources The Company's favorable first quarter 1998 operating results continued to enhance its strong financial position. As was the case in the prior year, the primary source of liquidity was cash generated from operations. Cash provided by operating activities for the first 16 weeks of 1998 was $3,764,000, compared to $1,272,000 for the same period in 1997. The increase was due principally to timing of cash receipts, cash payments and changes in short-term financing to its wholesale customers for the purchases of new store equipment. The cash flow from operations has enabled the Company to internally fund its capital expenditures and pay for cash dividends. Net cash outflows from investing activities for the first 16 weeks of 1998 totaled $577,000, compared to net cash outflows of $194,000 during the same period in 1997. The increase in cash outflows was due primarily to higher capital expenditures for the first 16 weeks of 1998 compared to the same period in 1997. The Company has a 1998 capital budget of $4,300,000, of which approximately $3,550,000 remain for future expenditures in 1998. The Company anticipates financing these needs from internally generated capital. Net cash outflows from financing activities for the 16-week periods ended April 25, 1998 and April 19, 1997 were very comparable at $1,230,000 and $1,245,000, respectively. The Company expects the strong operating profits to continue to provide much of the funding necessary for the Company's capital expansion. The Company maintains a revolving credit facility agreement through April 30, 1999 with two banks to provide up to $16 million of borrowings at rates not to exceed the banks' prime rates. At April 25, 1998 and April 19, 1997, there were no borrowings outstanding under this agreement. In summary, cash and equivalents increased $1,957,000 during the 16-weeks ended April 25, 1998, compared to a decrease of $167,000 during the same period in 1997. In view of the Company's significant cash and other liquid assets, its consistent ability to generate cash flows from operations and the availability of external financing, the Company foresees no difficulty in providing financing necessary to fund its capital commitments and working capital needs for the foreseeable future. Special Note Regarding Forward-Looking Statements Certain matters discussed in this Form 10-Q are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward- looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this report and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Exhibit 10.1 Letter Agreement, dated January 30, 1998, between Schultz Sav-O Stores, Inc. and Frank D. Welch. Exhibit 10.2 Amendment No. 2 to Piggly Wiggly Master Franchise Agreement, dated as of June 3, 1998 between Schultz Sav-O Stores, Inc. and Piggly Wiggly Corporation. Exhibit 27 Financial Data Schedule. (b) No reports of Form 8-K were filed by the Company during the first 16 weeks of fiscal 1998. 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. SCHULTZ SAV-O STORES, INC. (Registrant) June 8, 1998 /s/ Armand C. Go (Date) Armand C. Go, Treasurer and Chief Accounting Officer EXHIBIT INDEX Exhibit 10.1 Letter Agreement, dated January 30, 1998, between Schultz Sav-O Stores, Inc. and Frank D. Welch. Exhibit 10.2 Amendment No. 2 to Piggly Wiggly Master Franchise Agreement, dated as of June 3, 1998 between Schultz Sav-O Stores, Inc. and Piggly Wiggly Corporation. Exhibit 27 Financial Data Schedule. EX-10.1 2 SCHULTZ SAV-O STORES, INC. __________________________________ Piggly Wiggly Supermarkets 2215 Union Avenue, P.O. Box 419, Sheboygan, WI 53082-0419 - (920) 457-4433 - Fax (920) 457-6295 January 30, 1998 Mr. Frank D. Welch Vice President - Engineering Schultz Sav-O Stores, Inc. 2215 Union Avenue Sheboygan, Wisconsin 53081 Dear Frank: This letter is intended to set forth the terms of your continued employment with Schultz Sav-O Stores, Inc. (the "Company"). You will be employed by the Company in such capacities as the Board of Directors of the Company shall determine from time to time (initially as Vice President - Engineering). During the term of your employment hereunder, you agree to devote substantially all of your business time, attention and energies to the business and interests of the Company. In consideration of the services to be rendered by you hereunder, the Company shall pay you base salary and bonus, if any, as determined from time to time by the Board of Directors of the Company or any committee thereof charged with determining compensation of executive officers, together with such other benefits as are afforded the Company's executive officers generally. Your employment hereunder is "at will" and either you or the Company may terminate such employment at any time, with or without cause, in which case the Company shall pay you the compensation and benefits otherwise payable to you hereunder through the last day of your actual employment by the Company. In addition, in the event that your employment terminates due to your death, disability or voluntary retirement at any time after the date hereof, you (or your legal representative) may exercise any options to purchase common stock of the Company then granted to you under the Company's 1990 Stock Option Plan or the Company's 1995 Equity Incentive Plan (together, the "Equity Plans"), regardless of the vesting schedule set forth in the relevant grant documents. All other terms of past and future stock option grants will be governed by the Equity Plans and the documents effecting such grants. You understand and agree that the Company continually obtains and develops valuable proprietary and confidential information concerning its business, business relationships and financial affairs (the "Confidential Information") which may become known to you in connection with your employment. You agree not to, whether during the term of your employment or thereafter, publish, disclose or otherwise make available to any third party, other than employees of the Company, any Confidential Information, except as expressly authorized in writing by the Company. You further agree not to use Confidential Information for your own benefit or for the benefit of any person or business entity other than the Company. You agree that, while you are employed by the Company and for a period of twelve (12) months thereafter, you shall not, without the Company's prior written consent, directly or indirectly, as a principal, employee, consultant, partner, or stockholder of, or in any other capacity with, any business enterprise (other than in your capacity as a holder of not more than 5% of the combined voting power of the outstanding stock of a publicly-held company) (i) engage in direct or indirect competition with the Company, (ii) conduct a business of the type or character engaged in by the Company at the time of termination or cessation of your employment or (iii) develop products or services competitive with those of the Company. You understand and agree that this Agreement does not create an obligation on the part of the Company to continue your employment with the Company and that your employment under this Agreement shall not be affected by any change in your position, title or function with, or compensation by, the Company. This Agreement supersedes all prior agreements, written or oral, with respect to the subject matter of this Agreement. This Agreement may be changed only by a written instrument signed by both parties hereto. If the foregoing accurately states our mutual agreement, please sign both copies of this letter as indicated below and return one signed copy to me. Very truly yours, /s/ James H. Dickelman Jim Dickelman Board Chairman, President and Chief Executive Officer ACCEPTED AND AGREED: /s/ Frank D. Welch January 30, 1998 Frank D. Welch Date EX-10.2 3 AMENDMENT NO. 2 TO PIGGLY WIGGLY MASTER FRANCHISE AGREEMENT THIS AMENDMENT NO. 2 TO MASTER FRANCHISE AGREEMENT ("Amendment"), dated as of June 3, 1998 by and between SCHULTZ SAV-O STORES, INC., a Wisconsin corporation ("Schultz"), and PIGGLY WIGGLY CORPORATION, a Delaware Corporation ("Piggly Wiggly"). WITNESSETH: A. WHEREAS, Piggly Wiggly and Commodores Point Terminal Corporation ("Commodores Point") entered into a Master Franchise Agreement dated April 23, 1982 (with Exhibit D thereto dated May 1, 1982), a copy of which, excluding all exhibits other than Exhibit D, is attached hereto and marked as Exhibit A ("Master Franchise Agreement"); B. WHEREAS, on August 2, 1982, Commodores Point assigned all of its right, title and interest in, to and under the Master Franchise Agreement to Schultz pursuant to the Agreement attached hereto and marked as Exhibit B ("Assignment"); C. WHEREAS, Schultz and Piggly Wiggly entered into an Amendment to Master Franchise Agreement dated as of October 15, 1982 ("Original Amendment" and, together with the Master Franchise Agreement and the Assignment, the "AMFA"); D. WHEREAS, Schultz and Piggly Wiggly desire to further amend the AMFA to expand Schultz's exclusive franchise territory, among other things, under the terms and conditions hereinafter set forth; and E. WHEREAS, all defined terms used herein which are not otherwise defined shall have the same meaning as set forth in the AMFA. NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained and in consideration of the additional amounts payable by Schultz to Piggly Wiggly hereunder, the parties legally agree as follows: 1. New Exclusive Territory. Section 1 of the AMFA is hereby amended and supplemented by adding to Schultz's current existing exclusive franchise territory described on Exhibit D thereto dated May 1, 1982 ("Existing Territory") the new exclusive territory described on Schedule 1 hereto ("New Territory" and sometimes together with the Existing Territory, the "Combined Territory"). Additionally, all direct or indirect references to the "territory" contained in the AMFA shall hereby be amended to mean the Combined Territory, except to the extent otherwise set forth in this Amendment, so that Schultz shall have the exclusive right to establish, operate, franchise, license, subfranchise and sublicense retail grocery stores under the name "Piggly Wiggly" in the Combined Territory pursuant to the AMFA, as hereby amended. The current existing Piggly Wiggly store located in Hillsboro City, Vernon County, Wisconsin which is directly franchised by Piggly Wiggly is hereby specifically excluded from the New Territory and the other provisions of the AMFA, as hereby amended. 2. Franchise Fee for Stores in New Territory. Section 7 of the AMFA is hereby amended and supplemented by adding the following to the end of such Section: "Schultz agrees to pay Piggly Wiggly a sum equal to 0.10% of the gross sales of all merchandise of whatsoever nature sold by all Piggly Wiggly stores in the New Territory which Schultz franchises pursuant to this AMFA, out of the payments actually received by Schultz from such Piggly Wiggly store operators, within 15 days after the close of each monthly period during term hereof. Schultz also agrees to pay Piggly Wiggly a sum equal to 0.10% of the gross sales of merchandise of whatsoever nature sold by all Schultz-owned Piggly Wiggly stores in the New Territory, as may from time to time be operating pursuant to this AMFA, within 15 days after the close of each monthly period during the term hereof. The amounts stated in this Section 7 are Piggly Wiggly's sole compensation under this AMFA, as amended hereby." 3. Remainder of AMFA Unaffected. Except to the extent herein specifically amended or supplemented as set forth above, all other terms and conditions of the AMFA remain unaffected by this Amendment and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their elected officers on the day and year first written above. PIGGLY WIGGLY CORPORATION SCHULTZ SAV-O STORES, INC. By: /s/ Larry Wright By: /s/ James H. Dickelman Larry Wright James H. Dickelman President President and Chief Executive Officer Attachments SCHEDULE 1 NEW TERRITORY COUNTIES WISCONSIN ILLINOIS ASHLAND LA CROSSE BUREAU LEE BARRON MONROE CARROLL OGLE BAYFIELD ONEIDA DEKALB PUTNAM BUFFALO PEPIN GRUNDY ROCK ISLAND BURNETT PIERCE HENRY WHITESIDE CHIPPEWA POLK KENDALL WILL CLARK PRICE LASALLE CRAWFORD RICHLAND DOUGLAS RUSK DUNN ST. CROIX EAU CLAIRE SAWYER FLORENCE TAYLOR FOREST TREMPEALEAU IRON VERNON JACKSON VILAS WASHBURN MINNESOTA IOWA FILLMORE WABASHA ALLAMAKEE DUBUQUE HOUSTON WINONA BLACK HAWK FAYETTE OLMSTEAD BREMER HOWARD BUCHANAN JACKSON CEDAR JONES CHICKASAW LINN CLAYTON MUSCATINE CLINTON SCOTT DELAWARE WINNESHIEK MICHIGAN IRON KEWEENAW MARQUETTE DELTA GOGEBIC ALGER ONTONAGON SCHOOLCRAFT HOUGHTON EX-27 4
5 1 OTHER JAN-02-1999 JAN-04-1998 APR-25-1998 25,081,000 0 10,991,000 0 21,631,000 65,534,000 58,097,000 36,033,000 101,254,000 34,842,000 3,096,000 438,000 0 0 50,924,000 101,254,000 142,142,000 142,142,000 119,079,000 0 20,301,000 0 271,000 2,796,000 1,085,000 1,711,000 0 0 0 1,711,000 0.25 0.24 Net of "Allowances for doubtful accounts" Amounts included in "Other costs and expenses". 16 weeks.
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