-----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, KmOC2YjmZg8WMp0D/bDNyDk15E6hFOf212p90UAy4uf9j3OamOseRQvGk6WbV8T8 C+pps0Kwg6nS+4vPhY8PlA== 0001275287-05-002577.txt : 20050720 0001275287-05-002577.hdr.sgml : 20050720 20050720063606 ACCESSION NUMBER: 0001275287-05-002577 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050720 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20050720 DATE AS OF CHANGE: 20050720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERVALU INC CENTRAL INDEX KEY: 0000095521 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 410617000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0222 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05418 FILM NUMBER: 05962697 BUSINESS ADDRESS: STREET 1: 11840 VALLEY VIEW RD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 9528284000 MAIL ADDRESS: STREET 1: 11840 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: SUPER VALU STORES INC DATE OF NAME CHANGE: 19920703 8-K 1 sv3099.txt ================================================================================ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 20, 2005 SUPERVALU INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-5418 41-0617000 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 11840 Valley View Road Eden Prairie, Minnesota 55344 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (952) 828-4000 ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02. Results of Operations and Financial Condition. On July 20, 2005, SUPERVALU INC. issued a News Release announcing its financial results for the quarterly period ended June 18, 2005, and reaffirming its fiscal 2006 earnings per share guidance. A copy of the News Release issued by SUPERVALU INC. in connection with this Item 2.02 is attached as Exhibit 99.1 and incorporated by reference herein. The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing. 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. Dated: July 20, 2005 SUPERVALU INC. By: /s/ John P. Breedlove ---------------------------------- John P. Breedlove Associate General Counsel, Corporate Secretary (Authorized Officer of Registrant) EXHIBIT INDEX Exhibit Description of Exhibit - ------- --------------------------------------------------- 99.1 News Release of SUPERVALU INC., dated July 20, 2005 EX-99.1 2 sv3099ex991.txt Exhibit 99.1 SUPERVALU REPORTS FIRST QUARTER RESULTS AND REAFFIRMS DILUTED EARNINGS PER SHARE GUIDANCE FOR FISCAL 2006 OF $2.30 TO $2.45 MINNEAPOLIS, July 20 /PRNewswire-FirstCall/ -- SUPERVALU INC. (NYSE: SVU) today reported results for the first quarter of fiscal 2006, which ended June 18, 2005. The company reported net sales of $6.0 billion compared to $5.9 billion last year, net earnings of $91.2 million compared to $149.4 million, basic earnings per share of $0.67 compared to $1.10, and diluted earnings per share of $0.64 compared to $1.04. First quarter earnings per share exceeds Wall Street consensus of $0.61. Last year's first quarter results included a net after-tax gain on the sale of the company's minority interest in WinCo Foods, Inc. (Winco) of $68.3 million, or $0.47 diluted earnings per share. Jeff Noddle, SUPERVALU chairman and chief executive officer said, "Overall, we are pleased with our results during the first quarter, which reflect the diversified business mix of our company. Last year, we reported a gain in the first quarter on the sale of Winco. When you exclude the gain from last year's results, we achieved a record first quarter net earnings and diluted earnings per share. We are also affirming our full-year diluted earnings per share guidance for fiscal 2006 of $2.30 to $2.45. Our efforts this year are directed at programs to drive sales performance. We recognize the importance of top line growth in addition to our return on invested capital goal to leverage the excellent progress we made last year." Segment Results Retail Food Segment -- First quarter retail net sales were $3.2 billion, an increase of 1.7 percent compared to last year's first quarter. Sales performance reflects new regional banner store openings partially offset by the impact of store closings, primarily at Save-A-Lot, as well as a more competitive retail environment. Comparable store sales growth for the quarter was negative 0.4z percent, including slightly negative comparable stores sales at company-operated Save-A-Lot's, when compared to last year's total retail comparable store sales growth of positive 1.8 percent. When adjusted for planned in-market store expansion, first quarter comparable store sales were flat. Save-A-Lot licensed stores also experienced sales softness. Total retail square footage, including licensed stores, increased by approximately 4.2 percent from last year's first quarter, with Save-A-Lot's total square footage increasing by approximately 5.0 percent. Reported retail operating earnings for the first quarter were $127.5 million compared to $128.8 million in last year's first quarter, a decrease of 1.0 percent, or flat when adjusted for last year's earnings from Winco. Reported operating earnings as a percent of sales were 4.0 percent compared to 4.1 percent in last year's first quarter. Operating earnings primarily reflect the soft sales performance. New store activity since last year's first quarter, including licensed stores, resulted in 91 new store openings, opened and acquired, and 34 store closings for 57 net new store openings. During the last 12 months, new store openings include 81 extreme value stores, and 10 regional banner stores. Store closings for the last 12 months include 33 extreme value stores and one regional banner store. As of June 18, 2005, Save-A-Lot, including licensed stores, operated 1,287 stores, of which 483 stores were combination stores compared to 314 combination stores at the end of last year's first quarter. Supply Chain Services Segment -- First quarter net sales for supply chain services (formerly the food distribution segment) were $2.8 billion, a slight increase from last year's first quarter. Sales growth reflects new business, primarily the recently acquired third-party logistics service business and new business growth that offset customer attrition. Reported supply chain services operating earnings for the first quarter were $71.4 million compared to $62.9 million in last year's first quarter, an increase of 13.4 percent. Reported operating earnings as a percent of sales were 2.6 percent compared to 2.3 percent in last year's first quarter, primarily reflecting the higher-margin third-party logistics service business. Outlook SUPERVALU's fiscal 2006 outlook includes business assumptions, such as: -- Consumer spending will continue to be pressured by higher fuel prices and modest food inflation; -- Comparable store sales, when adjusted for planned in-market store expansion, are projected to increase by approximately one percent for the year; -- Overall square footage growth for SUPERVALU's retail store network, including licensee stores, is expected to be approximately five percent for the year. Store development plans, including licensee stores, are approximately 65 to 85 extreme values stores and approximately 10 to 12 new regional banner stores. Remodeling activities, including licensee stores, are approximately 75 extreme value combination store conversions and approximately 40 regional banner major and minor store remodels; -- Annual sales attrition in the traditional food distribution business will be in the historical range of two to four percent when excluding the cycling of three large customer transitions to other suppliers in fiscal 2005; -- Total capital spending is projected to be approximately $500 to $550 million, including approximately $90 million in capital leases; -- The fiscal 2006 effective tax rate is estimated to be 37 percent; -- Zero Zone, a refrigeration case and system manufacturer, will be divested in fiscal 2006 as it is non-core to the company's food retail and supply chain service businesses. Zero Zone was acquired February 7, 2005, in conjunction with the company's acquisition of Total Logistics, Inc. SUPERVALU affirms the full-year fiscal 2006 basic earnings per share range of $2.43 to $2.58 and the diluted earnings per share range of $2.30 to $2.45. Both basic and diluted earnings per share ranges include costs of approximately $0.05 to $0.07 for new growth and return initiatives including supply chain technology investments and the W. Newell & Co. produce business launch. On a comparable basis, Fiscal 2005 basic earnings per share was $2.35 and diluted earnings per share was $2.24 when eliminating the gain on the sale of WinCo. Noddle added, "We remain committed to our strategy, which includes innovative retail merchandising programs and network expansion and the delivery of best-in-class supply chain services across the grocery retail channel and beyond. The establishment of our new 18 percent return on invested capital goal guides all of our important initiatives across the company." Other Items General corporate expense for the first quarter was $17.1 million compared to $20.3 million last year. Net interest expense during the first quarter was $36.9 million compared to $42.3 million last year. Last year's net interest expense included $5.7 million of costs related to the early redemption of $250 million of notes. Cash on hand at the end of the first quarter was $545 million, up from $464 million at fiscal year end, reflecting strong cash flow from operations. The effective tax rate for first quarter was 37 percent. Capital spending during the quarter was $102.3 million, including $23.9 million in capitalized leases, primarily funding retail store expansion and store remodeling. Total debt to capital was 39.2 percent at the end of first quarter compared to 40.1 percent at fiscal 2005 year-end. The total debt to capital ratio is calculated as total debt, which includes notes payable, current debt and obligations under capital leases, long-term debt and obligations under capital leases, divided by the sum of total debt and total stockholders' equity. Diluted weighted average shares outstanding in the quarter were 145.6 million shares reflecting the 7.8 million shares under the company's outstanding contingently convertible debentures. As of June 18, 2005, SUPERVALU had 135.7 million shares outstanding. A conference call to review the first quarter results is scheduled for today at 9:00 a.m. (CDT). A live Web cast of the call will be available at http://www.supervalu.com . An archive of the call is accessible via telephone by dialing (630) 652-3041 with passcode 12115763 and through the company's Web site at http://www.supervalu.com . The conference call archive will be available through August 3, 2005. As of June 18, 2005 SUPERVALU's retail store network consists of 1,555 stores in 40 states, including 1,287 Save-A-Lot extreme value stores - 411 corporate-owned Save-A-Lot stores, 876 licensed Save-A-Lot stores; 268 regional banner stores including Cub Foods, Shop 'n Save, Shoppers Food & Pharmacy, bigg's, Farm Fresh, Scott's Foods and Hornbacher's stores. SUPERVALU serves as primary supplier to approximately 2,200 stores and SUPERVALU's own regional banner store network of 268 stores, while serving as secondary supplier to approximately 400 stores. Celebrating its 135th year of fresh thinking, SUPERVALU INC., a Fortune 500 company, is one of the largest companies in the United States grocery channel. With annual revenues of approximately $20 billion, SUPERVALU holds leading market share positions across the U.S. with its 1,555 retail grocery locations, including licensed Save-A-Lot locations. With its Save-A-Lot format, the company holds the number one market position in the extreme value grocery retail sector. Through SUPERVALU's geographically diverse supply chain network, the company provides distribution and related logistics support services to grocery retailers across the nation. In addition, SUPERVALU's third-party logistics business provides end-to-end supply chain management solutions that deliver value for manufacturers, consumer products retailers and food service customers. SUPERVALU currently has more than 57,000 employees. For more information about SUPERVALU visit http://www.supervalu.com . The statements contained in this news release that are not historical fact are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain important factors could cause results to differ materially from those anticipated by such forward-looking statements, including the impact of competition, the nature and extent of the consolidation of the retail food and food distribution industries, the ability to attract and retain customers for the company's supply chain services operations and to control food distribution costs, the ability of the company to grow through acquisitions and assimilate the acquired entities, increases in employee benefit costs, potential work disruptions from labor disputes or national emergencies, the availability of favorable credit and trade terms, food price changes, general economic or political conditions that affect consumer buying habits generally or war-time activities, threats or general acts of terror directed at the food industry that affect consumer behavior, other risk factors inherent in the supply chain services business and retail businesses, and other factors discussed from time to time in reports filed by the company with the Securities and Exchange Commission. SUPERVALU INC. and Subsidiaries Consolidated Composition of Net Sales and Operating Earnings The following table sets forth the composition of the company's net sales and earnings. (In thousands) First Quarter First Quarter (16 weeks) ended (16 weeks) ended (unaudited) June 18, 2005 June 19, 2004 - --------------------------------- ---------------- ---------------- Net sales Retail Food $ 3,184,528 $ 3,130,196 % of total 53.3% 53.0% Supply Chain Services 2,787,762 2,780,453 % of total 46.7% 47.0% Total net sales $ 5,972,290 $ 5,910,649 100.0% 100.0% Earnings Retail Food operating earnings $ 127,540 $ 128,797 % of sales 4.0% 4.1% Supply Chain Services operating earnings 71,356 62,899 % of sales 2.6% 2.3% Subtotal 198,896 191,696 % of sales 3.3% 3.2% General corporate expense (17,053) (20,335) Gain on sale of WinCo Foods, Inc. - 109,238 Restructure and other charges (186) (279) Total operating earnings 181,657 280,320 % of sales 3.0% 4.7% Interest expense, net (36,892) (42,292) Earnings before income taxes 144,765 238,028 Income tax expense (53,563) (88,617) Net earnings $ 91,202 $ 149,411 NOTE 1: Pretax LIFO expense $ 1,659 $ 1,800 NOTE 2: Pretax depreciation and amortization Retail Food Segment $ 64,088 $ 61,515 Supply Chain Services Segment 29,967 31,104 General Corporate 109 376 Total Company $ 94,164 $ 92,995 CONSOLIDATED STATEMENTS OF EARNINGS SUPERVALU INC. and Subsidiaries (In thousands, except per share data)
First Quarter First Quarter (16 weeks) ended (16 weeks) ended --------------------------- ---------------------------- June 18, % of June 19, % of (unaudited) 2005 sales 2004 sales - ------------------------------- ------------ ------------ ------------ ------------ Net sales $ 5,972,290 100.0% $ 5,910,649 100.0% Costs and expenses: Cost of sales 5,102,739 85.5% 5,065,612 85.7% Selling and administrative expenses 687,708 11.5% 673,676 11.4% Gain on sale WinCo Foods Inc. - 0.0% (109,238) 1.8% Restructure and other charges 186 0.0% 279 0.0% Interest Expense, net 36,892 0.6% 42,292 0.7% Total costs and expenses 5,827,525 97.6% 5,672,621 96.0% Earnings before income taxes 144,765 2.4% 238,028 4.0% Income tax expense 53,563 0.9% 88,617 1.5% Net earnings $ 91,202 1.5% $ 149,411 2.5% Net earnings per common share - basic $ 0.67 $ 1.10 Net earnings per common share - diluted $ 0.64 $ 1.04 Weighted average number of common shares outstanding Basic 135,774 135,244 Diluted 145,603 145,378 Dividends declared per common share $ 0.1525 $ 0.1450
CONDENSED CONSOLIDATED BALANCE SHEETS SUPERVALU INC. and Subsidiaries (In thousands) First Quarter Fiscal (unaudited) Year End June 18, February 26, 2005 2005 ---------------- ---------------- Assets Current Assets Cash and cash equivalents $ 544,893 $ 463,915 Receivables, net 453,725 464,249 Inventories, net 1,027,053 1,032,034 Other current assets 155,837 161,922 Total current assets 2,181,508 2,122,120 Property, plant and equipment, net 2,188,669 2,190,888 Goodwill & Other Long Term Assets 1,961,262 1,960,954 Total assets $ 6,331,439 $ 6,273,962 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 1,158,976 $ 1,106,860 Current debt and obligations under capital leases 140,708 99,463 Other current liabilities 388,201 420,888 Total current liabilities 1,687,885 1,627,211 Long-term debt and obligations under capital leases 1,524,915 1,578,867 Other liabilities and deferred income taxes 540,201 557,323 Total stockholders' equity 2,578,438 2,510,561 Total liabilities and stockholders' equity $ 6,331,439 $ 6,273,962 SOURCE SUPERVALU INC. -0- 07/20/2005 /CONTACT: Investors, Yolanda Scharton, +1-952-828-4540, yolanda.scharton@supervalu.com, or Media, Haley Meyer, +1-952-828-4786, haley.m.meyer@supervalu.com, both of SUPERVALU INC./ /Web site: http://www.supervalu.com / -----END PRIVACY-ENHANCED MESSAGE-----