-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZH0Twb3qMgAi+kSzH0QnW5glIoLhmMA11gH0D7CKz6sQKtFxfwDHg5D9g06yfDwF 9bOINyCeIMh3zDlz+cvhng== 0000014920-94-000001.txt : 19940216 0000014920-94-000001.hdr.sgml : 19940216 ACCESSION NUMBER: 0000014920-94-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940101 FILED AS OF DATE: 19940215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRUNOS INC CENTRAL INDEX KEY: 0000014920 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 630411801 STATE OF INCORPORATION: AL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-06544 FILM NUMBER: 94508698 BUSINESS ADDRESS: STREET 1: P O BOX 2486 CITY: BIRMINGHAM STATE: AL ZIP: 35201 BUSINESS PHONE: 2059409400 10-Q 1 SECOND QUARTER 10Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15 (d) of The Securities and Exchange Act of 1934 QUARTER ENDED January 1, 1994 COMMISSION FILE NO. 0-6544 BRUNO'S, INC. STATE OF INCORPORATION Alabama I.R.S. EMPLOYER I.D. NO. 63-0411801 ADDRESS OF PRINCIPAL EXECUTIVE OFFICE (INCLUDING ZIP CODE) 800 Lakeshore Parkway, Birmingham, Alabama 35211 REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE Area Code 205 - 940-9400 OUTSTANDING COMMON STOCK AS OF January 1, 1994, IS 78,065,441 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, and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( ) Commission File No. 0-6544 BRUNO'S, INC. Index Page No. Financial Statements: Condensed Consolidated Balance Sheets January 1, 1994, and July 3, 1993. 2 Condensed Consolidated Statements of Income and Retained Earnings for the Twenty-Six (26) Week Periods and Fourteen (14) Week Periods Ended January 1, 1994, and December 26, 1992. 3 Condensed Consolidated Statements of Cash Flows for the Twenty-Six (26) Week Periods Ended January 1, 1994, and December 26, 1992. 4 Notes to Condensed Consolidated Financial Statements. 5 Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 Submission of Matters to Vote of Security Holders 11 Other Information 12 Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JANUARY 1, 1994 AND JULY 3, 1993 (In Thousands Except Share And Per Share Amounts) (Unaudited)
1-1-94 7-3-93 _________ _________ ASSETS - ------ Current Assets - Cash and Cash Equivalents $ 9,816 $ 20,093 Receivables 42,172 25,303 Inventories at LIFO 270,434 259,239 Prepaid Expenses and Other 10,989 9,276 _________ _________ Total Current Assets 333,411 313,911 Property, Equipment, Leasehold Improvements, Leasehold Interests and Investment in Property under Capital Leases, Net 547,558 543,877 Intangibles and Other Assets 57,967 59,135 _________ _________ Total Assets 938,936 916,923 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- Current Liabilities - Current Portion of Long-Term Debt and Capitalized Lease Obligations and Short-Term Borrowings 4,541 38,133 Accounts Payable 111,634 116,752 Other Accrued Expenses 37,320 40,963 Accrued Income Taxes 2,347 553 _________ _________ Total Current Liabilities 155,842 196,401 _________ _________ Long-Term Debt and Capitalized Lease Obligations 323,338 269,046 _________ _________ Deferred Income Taxes 48,900 46,955 _________ _________ Deferred Compensation 2,103 1,854 _________ _________ Shareholders' Investment - Common Stock ($.01 par value, 200,000,000 shares authorized, 78,065,441 and 78,047,341 shares respectively, issued and outstanding) 781 780 Paid-In Capital 42,191 42,072 Retained Earnings 365,885 360,022 _________ _________ 408,857 402,874 Deferred Compensation (104) (207) _________ _________ Total Shareholders' Investment 408,753 402,667 _________ _________ Total Liabilities and Shareholders' Investment 938,936 916,923 ========= ========= See accompanying notes to condensed consolidated financial statements.
-2- Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE TWNETY-SIX AND FOURTEEN WEEK PERIODS ENDING JANUARY 1, 1994, AND DECEMBER 26, 1992 (In Thousands Except Per Share Amounts) (Unaudited)
Twenty-Six Weeks Ended Fourteen Weeks Ended _____________________________ _____________________________ 1-1-94 12-26-92 1-1-94 12-26-92 ___________ ___________ ___________ ___________ Net Sales $ 1,409,155 $ 1,388,591 $ 768,244 $ 746,867 ----------- ----------- ----------- ----------- Cost and Expenses: Cost of Products Sold $ 1,088,446 $ 1,075,560 $ 595,366 $ 574,417 Store Operating, Selling and Administrative Expenses 252,545 234,896 138,742 128,138 Depreciation and Amortization 26,306 23,685 14,695 13,057 Interest Expense 10,177 8,845 5,765 5,375 Interest Income (1,778) (151) (1,357) (19) ___________ ___________ ___________ ___________ $ 1,375,696 $ 1,342,835 $ 753,211 $ 720,968 ___________ ___________ ___________ ___________ Income Before Provision For Income Taxes and Extraordinary Item $ 33,459 $ 45,756 $ 15,033 $ 25,899 Provison For Income Taxes (Note 3) 14,938 16,518 5,712 9,348 ----------- ----------- ----------- ----------- Income Before Extraordinary Item $ 18,521 $ 29,238 $ 9,321 $ 16,551 Extraordinary Item, Net (Note 5) (3,288) -- -- -- ___________ ___________ ___________ ___________ Net Income $ 15,233 $ 29,238 $ 9,321 $ 16,551 Cash Dividends (9,370) (8,795) (4,686) (4,290) Retained Earnings, Beginning Of Period 360,022 330,511 361,250 338,693 ___________ ___________ ___________ ___________ Retained Earnings, End Of Period $ 365,885 $ 350,954 $ 365,885 $ 350,954 ========== =========== =========== =========== Earnings Per Common Share: Income Before Extraordinary Item $ 0.24 $ 0.37 $ 0.12 $ 0.21 Extraordinary Item, Net (0.04) -- -- -- ___________ ___________ ___________ ___________ Net Income $ 0.20 $ 0.37 $ 0.12 $ 0.21 =========== =========== =========== =========== Cash Dividends Per Common Share $ 0.12 $ 0.11 $ 0.06 $ 0.055 =========== =========== =========== =========== See accompanying notes to condensed consolidated financial statements.
-3- Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWENTY-SIX WEEK PERIODS ENDING JANUARY 1, 1994, AND DECEMBER 26, 1992 (In Thousands) (Unaudited)
________________________ 01-01-94 12-26-92 _________ _________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 15,233 $ 29,238 _________ _________ Adjustments to reconcile net income to net cash provided by (used in) operating activities- Depreciation & Amortization $ 26,306 $ 23,685 LIFO provision (credit) (905) (2,839) Change in assets and liabilities (32,477) (50,918) _________ _________ Total Adjustments $ (7,076) $ (30,072) _________ _________ Net cash provided by (used in) operating $ 8,157 $ (834) activities _________ _________ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property $ 8,899 $ -- Capital expenditures (38,886) (76,826) _________ _________ Net cash used in investing activities $ (29,987) $ (76,826) _________ _________ CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings (repayments) line of credit, net $ (35,000) $ 45,000 Purchase of stock -- (49,387) Proceeds form issuance of stock 223 560 Dividends paid (9,370) (8,795) Reductions of long-term debt (144,300) (1,465) Proceeds from issuance of long-term debt 200,000 100,000 _________ _________ Net cash provided by financing activities $ 11,553 $ 85,913 _________ _________ Net increase (decrease) in cash $ (10,277) $ 8,253 Cash beginning of period 20,093 19,507 _________ _________ Cash end of period $ 9,816 $ 27,760 ========= ========= See accompanying notes to condensed consolidated financial statements.
-4- Commission File No. 0-6544 BRUNO'S, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 1, 1994 AND DECEMBER 26, 1992 (Dollar Amounts in Thousands) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Bruno's, Inc. and its wholly owned sub- sidiaries. Significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the consolidated financial position and results of operations of the Company for the interim periods. The results of operations for the twenty-six (26) weeks ended January 1, 1994, are not necessarily indicative of the results which may be expected for the entire year. 2. EARNINGS PER SHARE Earnings per share was computed on the weighted average number of common shares outstanding during the respective periods (78,057,000 and 79,413,000 for the twenty-six week periods, respectively and 78,065,000 and 78,022,000 for the fourteen week periods, respectively). 3. INCOME TAXES On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993, was signed into law which increased Federal income tax rates from 34% to 35% for the Company retroactively effective to January 1, 1993. The new law changes the Company's effective income tax rate to approximately 38% for fiscal 1994, and required an adjustment of approximately $2,200 to retroactively restate the current and deferred income tax liabilities. This adjustment combined with the increased tax rate, resulted in an effective income tax rate for the first quarter of fiscal 1994 of 50%. -5- Commission File No. 06544 4. CONTINGENCIES The Company is a party to various legal and taxing authority proceedings incidental to its business. In the opinion of management, the ultimate liability with respect to these actions will not materially affect the financial position or results of operations of the Company. The Company is contingently liable for rent payments for three store sites sold during fiscal 1992 should these stores be closed during the initial term of the remaining lease and not subleased to another party. The contingent liability for two of the stores is $1,514 per year through 2014, while the third store has not yet been leased. The Company has received a notice from the Pension Benefit Guaranty Corporation ("PBGC") contending that inappropriate actuarial assumptions were used in connection with final distributions of a previously terminated plan. As such, the PBGC has taken a position that additional distributions must be made to former participants. The amount of the Company's liability, if any, and the ultimate outcome is unknown at the present time, but is not expected to exceed $1,700, net of income taxes. 5. DEBT RESTRUCTURE On September 1, 1993, the Company redeemed the $142,750 of 6.5% Convertible Subordinated Debentures at 103.9% of face value in accordance with the terms of the related indenture. The redemption was financed with the proceeds of a $200,000 term loan which will amortize over 10 to 15 years at rates ranging from 6.6% to 7.1%. This redemption resulted in a loss of $3,288 (net of the applicable income tax benefit of $2,015) which is classified as an extraordinary item in the accompanying fiscal 1994 statements of income and retained earnings. -6- Commission File No. 0-6544 BRUNO'S, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of significant factors affecting the Company's earnings during the periods included in the accompanying condensed consolidated statements of income. A table showing the percentage of net sales represented by certain items in the Company's condensed consolidated state- ments of income is as follows:
TWENTY-SIX WEEKS ENDED FOURTEEN WEEKS ENDED _________________________ _________________________ 1-1-94 12-26-92 1-1-94 12-26-92 ________ ________ ________ ________ Net Sales 100.0 % 100.0 % 100.0 % 100.0 % Cost Of Products Sold 77.2 77.5 77.5 76.9 ________ ________ ________ ________ Gross Profit 22.8 % 22.5 % 22.5 % 23.1 % Store Operating, Selling, and Administrative Expenses 17.9 16.9 18.1 17.2 Depreciation and Amortization 1.9 1.7 1.9 1.7 Net Interest Expense 0.6 0.6 0.6 0.7 ________ ________ ________ ________ Income Before Provision For Income Taxes and Extraordinary Item 2.4 % 3.3 % 1.9 % 3.5 % Provision For Income Taxes 1.1 1.2 0.7 1.3 ________ ________ ________ ________ Income Before Extraordinary Item 1.3 % 2.1 % 1.2 % 2.2 % Extraordinary Item, Net (0.2) -- -- -- ________ ________ ________ ________ Net Income 1.1 % 2.1 % 1.2 % 2.2 % ======== ======== ======== ========
A summary of the period to period changes in certain items included in the condensed statements of income is as follows:
COMPARISON OF ________________________________________________________ TWENTY SIX WEEKS ENDED FOURTEEN WEEKS ENDED 1-1-94 and 12-26-92 1-1-94 and 12-26-92 ________________________________________________________ (Dollars in Thousands Except Per Share Amounts) Net Sales $ 20,564 1.5 % $ 21,244 2.7 % Cost Of Products Sold 12,886 1.2 20,949 3.6 Store Operating, Selling, and Administrative Expenses 17,649 7.5 10,604 Depreciation and Amortization 2,621 11.1 1,638 12.5 Net Interest Expense (295) (3.4) (948) (17.7) Income Before Extraordinary Item (10,717) (36.7) (7,230) (43.7) Extraordinary Item, Net (3,288) (100.0) -- -- Net Income (14,005) (47.9) (7,230) (43.7) Income Per Common Share Before Extraordinary Item (0.13) (35.1) (0.09) (42.9) Net Income Per Common Share (0.17) (45.9) (0.09) (42.9)
- 7 - Commission File No. 0-6544 BRUNO'S, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollar Amounts In Thousands) RESULTS OF OPERATIONS Net sales increased 1.5% ($20,564) and 2.7% (21,244), respectively, in the twenty-six and fourteen week periods ended January 1, 1994, as compared to the applicable periods in the prior year. The net sales increase was primarily attributed to the thirteen new stores opened in the past year which more than offset closed and relocated stores. Same store sales decreased .3% during the second quarter of fiscal 1994 as compared with the same period in fiscal 1993. Gross profit as a percentage of net sales was 22.8% and 22.5%, respectively, in the twenty-six and fourteen week periods ended January 1, 1994, as compared to a gross profit percentage of 22.5% and 23.1% for the applicable periods in fiscal 1993. The slight increase in gross profit percentage for the twenty-six week period represents the carryover effect of the improvements realized through increased prices in the first quarter of fiscal 1994. The slight decrease in gross profit percentage for the fourteen week periods is due to increased competition in the Company's primary markets and improved gross profits in perishable items in the prior year second quarter. Store operating, selling and administrative expenses as a percentage of net sales increased from 17.2% for the fourteen weeks ended December 26, 1992, to 18.1% for the fourteen weeks ended January 1, 1994. This increase as a percentage of net sales is a continuing trend of increased costs associated with new store openings, coupled with slower sales growth. The increase in depreciation and amortization expense as a percentage of sales in fiscal 1994 over fiscal 1993 is the result of store growth (and the related growth in depreciable assets) exceeding the applicable sales growth. Net interest expense has decreased in fiscal 1994 as compared to fiscal 1993 due to lower levels of short-term borrowings. The Company's effective income tax rate increased from 36.1% in the second quarter of fiscal 1993 to 38.0% in the second quarter of fiscal 1994, and increased from 36.1% for the twenty-six week periods ended December 26, 1992, to 44.6% for the same period in fiscal 1994. See Note 3 of Notes to Condensed Consolidated Financial Statements for a complete discussion of the increased provision for income taxes related to increased statutory Federal income tax rates. -8- Commission File No. 0-6544 As completely discussed in Note 5 of Notes to Condensed Consolidated Financial Statements, the Company redeemed its 6.5% Convertible Debentures at 103.9% of face value during the first quarter of fiscal 1994. This redemption resulted in an extraordinary loss of $3,288 (net of the applicable income tax benefit of $2,015). LIQUIDITY AND CAPITAL RESOURCES Historically, the Company has funded working capital requirements, capital expenditures and other cash requirements primarily through cash flow from operations. Operating activities have generated (utilized) $8,157 and $(834), respectively, in cash in each of the twenty-six week periods ended January 1, 1994, and December 26, 1992. Additional working capital was raised in the first quarter of fiscal 1993 and 1994 through proceeds from the issuance of term loans. Also, the Company has at its disposal a $75 million unsecured line of credit to meet any short-term cash requirements. The primary cash used in investing activities relates to the Company's capital expenditures. The Company has continued its expansion and remodeling of stores programs during fiscal 1994. Capital expenditures were $38,886 compared with $76,826 in fiscal 1994 and fiscal 1993, respectively. The fiscal 1994 capital expenditures were financed with internally generated funds and borrowings under the Company's line of credit. The Company plans to continue to expand through the opening of new stores and may acquire existing stores or one or more supermarket chains, if attractive acquisition opportunities become available. The Company anticipates that funds necessary for the expansion of its business during the foreseeable future will be financed through available cash reserves, internally generated funds and short-term borrowings. However, the Company may use for such purposes additional sources of financing, which may include long-term borrowings and the issuance of additional debt or equity securities. The Company estimates capital expenditures for the remainder of fiscal 1994 to be approximately $31,000 and plans to finance these expenditures through internally generated funds or other available resources. These estimated capital expenditures are primarily related to the opening of new stores and the remodeling of existing stores. Management continuously evaluates all stores based upon volume, profitability, location, age, demographics, etc. and makes closure decisions based upon the evaluations. -9- Commission File No. 0-6544 As stated earlier, the Company has at its disposal a $75 million unsecured line of credit to meet short-term cash requirements. At July 3, 1993, $35 million of borrowings was outstanding under this line of credit, while no borrowings were outstanding at January 1, 1994. The other primary use of cash in financing activities relates to the payment of cash dividends which aggregated $9,370 and $8,795 during the first two quarters of fiscal 1994 and 1993, respectively. During the first quarter of fiscal 1993, the Company issued a term bank loan for $100,000 to finance a stock repurchase and repay short-term borrowings. As fully discussed in Note 5 of Notes to Condensed Consolidated Financial Statements, during the first quarter of fiscal 1994, the Company redeemed its 6.5% Convertible Subordinated Debentures with the proceeds of a $200,000 term loan. -10- Commission File No. 0-6544 BRUNO'S, INC. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 1993 PROXY TABULATION REPORT Cumulative Totals Through October 22, 1993 Total Shares Outstanding & Entitled To Vote: 78,074,341 Total Share Voted Through October 22, 1993: 63,731,450 Percent Represented For Quorum: 81.63% DETAIL VOTING SUMMARY
% AGAINST/ DIRECTOR/PROPOSAL FOR FOR NOT AUTHORIZED ABSTAIN NOT VOTED ____________________________ ____________ ___________ _______________ _____________ _____________ Joseph S. Bruno 63,601,521 81.46% 129,929 14,342,891 Ronald G. Bruno 63,604,234 81.47% 127,216 14,342,891 Paul F. Garrison 63,597,729 81.46% 133,721 14,342,891 Glenn J. Griffin 63,597,329 81.46% 134,121 14,342,891 Kenneth J. Bruno 63,602,221 81.46% 129,229 14,342,891 Judy M. Merritt 63,558,700 81.41% 172,750 14,342,891 Benny M. LaRussa, Jr. 63,582,749 81.44% 148,701 14,342,891 Richard Cohn 63,581,914 81.44% 149,536 14,342,891 J. Mason Davis, Jr. 63,556,152 81.40% 175,298 14,342,891 Bart Starr 63,554,672 81.40% 176,778 14,342,891 Proposal to Approve Employee Stock Option Plan 62,745,973 80.37% 700,631 284,846 14,342,891 Proposal to Ratify Appointment of Auditors 63,501,864 81.34% 91,503 138,083 14,342,891 Discretionary Authority on Other Matters 48,461,177 62.07% 3,234,069 26,379,095
-11- Commission File No. 0-6544 BRUNO'S, INC. OTHER INFORMATION The Company was not required to report material unusual charges or credits to income pursuant to Item 10 (a) or a change in independent accountants pursuant to Item 12 of Form 8-K for any of the twenty-six (26) weeks ended January 1, 1994. 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. BRUNO'S, INC. REGISTRANT February 11, 1994 Date Glenn J. Griffin Glenn J. Griffin Executive Vice President, and Chief Financial Officer * *Both duly authorized officer and principal financial officer. -12- -----END PRIVACY-ENHANCED MESSAGE-----