-----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, fZvyMzsVpPNUD8PrI0iR2XsZ4svBQ/6udsXqMSzNaKVhsgTdIvakBqvYS21kLXtY C9yCZ9dmavvGD76z2XZZFA== 0000014920-94-000003.txt : 19941117 0000014920-94-000003.hdr.sgml : 19941117 ACCESSION NUMBER: 0000014920-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940924 FILED AS OF DATE: 19941108 SROS: NASD 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: 1934 Act SEC FILE NUMBER: 000-06544 FILM NUMBER: 94558100 BUSINESS ADDRESS: STREET 1: P O BOX 2486 CITY: BIRMINGHAM STATE: AL ZIP: 35201 BUSINESS PHONE: 2059409400 MAIL ADDRESS: STREET 1: PO BOX 2486 CITY: BIRMINGHAM STATE: AL ZIP: 35201 10-Q 1 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 September 24, 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 September 24, 1994, IS 78,096,941 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 ( ) BRUNO'S, INC. Index Page No. Financial Statements: Condensed Consolidated Balance Sheets September 24, 1994, and July 2, 1994. 2 Condensed Consolidated Statements of Income and Retained Earnings for the Twelve (12) Week Periods Ended September 24, 1994, and September 25, 1993. 3 Condensed Consolidated Statements of Cash Flows for the Twelve (12) Week Periods Ended September 24, 1994, and September 25, 1993. 4 Notes to Condensed Consolidated Financial Statements. 5 Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 Other Information 11 Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 24, 1994 AND JULY 2, 1994 (In Thousands Except Share And Per Share Amounts) (Unaudited)
9-24-94 7-2-94 _________ _________ ASSETS - - - --------- Current Assets - Cash and Cash Equivalents $ 2,410 $ 30,259 Receivables 40,278 34,770 Inventories at LIFO 259,521 255,047 Prepaid Expenses and Other 11,893 10,665 _________ _________ Total Current Assets 314,102 330,741 Property, Equipment, Leasehold Improvements, Leasehold Interests and Investment in Property under Capital Leases, Net 520,511 540,139 Intangibles and Other Assets 56,590 56,328 _________ _________ Total Assets 891,203 927,208 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT --------- Current Liabilities - Current Portion of Long-Term Debt and Capitalized Lease Obligations and Short-Term Borrowings 2,627 4,092 Accounts Payable 99,227 108,712 Other Accrued Expenses 35,686 43,545 Accrued Income Taxes 6,321 -- _________ _________ Total Current Liabilities 143,861 156,349 _________ _________ Long-Term Debt and Capitalized Lease Obligations 271,051 296,460 _________ _________ Deferred Income Taxes 51,136 51,136 _________ _________ Deferred Compensation 2,024 1,909 _________ _________ Shareholders' Investment - Common Stock ($.01 par value, 200,000,000 shares authorized, 78,096,941 and 78,090,441 shares respectively, issued and outstanding) 781 781 Paid-In Capital 41,999 41,999 Retained Earnings 358,030 378,574 _________ _________ 427,810 421,354 Treasury Stock (595,000 shares) (4,679) -- _________ _________ Total Shareholders' Investment 423,131 421,354 _________ _________ Total Liabilities and Shareholders' Investment 891,203 927,208 ========= ========= 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 TWELVE WEEK PERIODS ENDED SEPTEMBER 24, 1994, AND SEPTEMBER 25.1993 (In Thousands Except Per Share Amounts) (Unaudited)
Twelve Weeks Ended _____________________________ 9-24-94 9-25-93 ___________ ___________ Net Sales $ 653,621 $ 640,911 ----------- ----------- Cost and Expenses: Cost of Products Sold $ 497,576 $ 493,080 Store Operating, Selling and Administrative Expenses 120,340 113,803 Depreciation and Amortization 12,686 11,611 Interest Expense 5,958 4,412 Interest Income (1,538) (421) ___________ ___________ $ 635,022 $ 622,485 ___________ ___________ Income Before Provision For Income Taxes and Extraordinary Item $ 18,599 $ 18,426 Provison For Income Taxes (Note 3) 7,067 9,226 ----------- ----------- Income Before Extraordinary Item $ 11,532 $ 9,200 Extraordinary Item, Net (Note 5) -- (3,288) ___________ ___________ Net Income $ 11,532 $ 5,912 Cash Dividends (5,076) (4,684) Retained Earnings, Beginning Of Period 378,574 360,022 ___________ ___________ Retained Earnings, End Of Period $ 385,030 $ 361,250 =========== =========== Earnings Per Common Share: Income Before Extraordinary Item $ 0.15 $ 0.12 Extraordinary Item, Net -- (0.04) ___________ ___________ Net Income $ 0.15 $ 0.08 =========== =========== Cash Dividends Per Common Share $ 0.065 $ 0.06 =========== =========== 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 TWELVE WEEK PERIODS ENDED SEPTEMBER 24, 1994, AND SEPTEMBER 25,1993 (In Thousands) (Unaudited)
________________________ 9-24-94 9-25-93 _________ _________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 11,532 $ 5,912 _________ _________ Adjustments to reconcile net income to net cash provided by operating activities- Depreciation & amortization $ 12,686 $ 11,611 LIFO provision (credit) 615 (1,062) Change in assets and liabilities (22,995) (13,360) _________ _________ Total adjustments $ (9,694) $ (2,811) _________ _________ Net cash provided by operating $ 1,838 $ 3,101 activities _________ _________ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property $ 17,875 $ 7,763 Capital expenditures (10,933) (19,810) _________ _________ Net cash provided by (used in) investing activities $ 6,942 $ (12,047) _________ _________ CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings (repayments) line of credit, net $ -- $ (35,000) Reduction of long-term debt (26,874) (143,470) Proceeds form issuance of long-term debt -- 200,000 Purchase of treasury stock (4,679) -- Proceeds from issuance of stock -- 167 Dividends paid (5,076) (4,684) _________ _________ Net cash provided by (used in) financing activities $ (36,629) $ 17,013 _________ _________ Net increase (decrease) in cash $ (27,849) $ 8,067 Cash beginning of period 30,259 20,093 _________ _________ Cash end of period $ 2,410 $ 28,160 ========= ========= See accompanying notes to condensed consolidated financial statements.
-4- Commission File No. 0-6544 BRUNO'S, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 24, 1994 AND SEPTEMBER 25, 1993 (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 twelve (12) weeks ended September 24, 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 (77,797,000 and 78,048,000, respectively). Outstanding stock options are common stock equivalents but were excluded from earnings per common share computations as their effect was either not material or antidilutive. 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 changed the Company's effective income tax rate to approximately 38% and required an adjustment in the first quarter 1994 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 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 $2,700. 5. DEBT RESTRUCTURE On September 1, 1993, the Company redeemed $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 first quarter of fiscal 1994 statement 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:
TWELVE WEEKS ENDED _______________________ 9-24-94 9-25-93 ________ ________ Net Sales 100.0 % 100.0 % Cost Of Products Sold 76.1 76.9 ________ ________ Gross Profit 23.9 % 23.1 % Store Operating, Selling, and Administrative Expenses 18.4 17.8 Depreciation and Amortization 1.9 1.8 Net Interest Expense 0.8 0.6 ________ ________ Income Before Provision For Income Taxes and Extraordinary Item 2.8 % 2.9 % Provision for Income Taxes 1.0 1.5 ________ ________ Income Before Extraordinary Item 1.8 % 1.4 % Extraordinary Item, Net 0.0 (0.5) ________ ________ Net Income 1.8 % 0.9 % ======== ========
A summary of the period to period changes in certain items included in the condensed statements of income is as follows:
COMPARISON OF 12 WEEKS ENDED 9-24-94 and 9-25-93 ______________________________ Increase (Decrease) (Dollars in Thousands Except Per Share Amounts) Net Sales $ 12,710 2.0 Cost Of Products Sold 4,496 0.9 Store Operating, Selling, and Administrative Expenses 6,537 5.7 Depreciation and Amortization 1,075 9.3 Net Interest Expense 429 10.7 Income Before Extraordinary Item 2,332 25.3 Extraordinary Item, Net (3,288) 100.0 Net Income 5,620 95.1 Income Per Common Share Before Extraordinary Item 0.03 25.0 Net Income Per Common Share 0.07 87.5
- 7 - Commission File No. 0-6544 BRUNO'S, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales increased $12.7 million or 2.0% in the twelve week period ended September 24, 1994, as compared to the twelve week period ended September 25, 1993. The net sales increase was primarily attributable to the Company's recent focus on existing stores and stressing the importance of customer service. This strategy has resulted in positive same store sales growth despite continued competitive pressures. In addition, sales for the 1994 fourth of July holiday weekend are included in the first quarter of fiscal 1995 sales while a majority of the 1993 fourth of July holiday weekend sales were included in the fourth quarter of fiscal 1993. Gross profit as a percentage of net sales was 23.9% for the first quarter of fiscal 1995 as compared to 23.1% for the first quarter of fiscal 1994. The increase in gross profit percentage from the first quarter of the prior year is due to increased retail prices over the prior year and the continued decline in the cost of grocery and meat prices. Store operating, selling and administrative expenses as a percentage of net sales increased from 17.8% for the twelve weeks ended September 25, 1993, to 18.4% for the twelve weeks ended September 24, 1994. This increase as a percentage of net sales is primarily due to increased costs associated with new store openings and the Company's concerted efforts at improving customer service by maintaining more personnel in certain format stores and renovating certain existing stores to a different more customer service oriented store format. The $1.1 million increase in depreciation and amortization expense in the first quarter of fiscal 1995 as compared to the first quarter of fiscal 1994 is the result of an increase in the Company's depreciable asset base due to new store openings and store renovations. The increase in net interest expense of $429,000 from the first quarter level in 1994 to the first quarter level in 1995 is due to an increase in interest rates which effected the Company's net interest position on its $80 million notional interest rate swap. The Company paid approximately $26.9 million on long-term debt at the end of the first quarter of fiscal 1995 which did not effect interest expense in that quarter but will serve to reduce interest expense in future periods. -8- Commission File No. 0-6544 The decrease in the provision for income taxes as a percentage of sales from 1.5% in the first quarter of fiscal 1994 to 1.0% in the first quarter of fiscal 1995 results from the fiscal 1994 increase in statutory rates which became effective retroactively to January 1, 1994. See Note 3 of the Notes to Condensed Consolidated Financial Statements for a further discussion of the increased statutory rates and impact on the Company's effective tax rate. As 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 $3.3 million (net of the applicable income tax benefit of $2.0 million). 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 $1.8 million and $3.1 million, respectively, in cash in each of the periods ended September 24, 1994, and September 25, 1993. The Company has at its disposal a $75 million unsecured line of credit (no amounts outstanding at September 24, 1994) to meet any short-term cash requirements. Cash flow provided by (used in) investing activities were $6.9 million and ($12.0) million for the twelve weeks ended September 24, 1994 and September 25, 1993, respectively. Proceeds from the sale of certain property totaled $17.9 million during the first quarter of fiscal 1995 compared to $7.8 million during the first quarter of fiscal 1994. There were no material gains or losses generated from these sales. The Company has continued its expansion and remodeling of stores programs during fiscal 1995. Capital expenditures were $10.9 million compared with $19.8 million in the first quarter of fiscal 1995 and fiscal 1994, respectively. Capital expenditures were financed with internally generated funds. 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. -9- Commission File No. 0-6544 The Company estimates capital expenditures for the remainder of fiscal 1995 to be approximately $49 million 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. The primary uses of cash in financing activities during the first quarter of fiscal 1995 were a $26.9 million reduction in long-term debt, $5.1 million in cash dividends paid, and $4.7 million purchase of 595,000 shares of treasury stock. 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 proceeds of a $200 million term loan. In addition, during the first quarter of fiscal 1994, the Company paid off its line of credit borrowings of $35 million and paid cash dividends of $4.7 million. OTHER On July 22, 1994, the Company's Board of Directors approved the repurchase on the open market of up to $25 million of the Company's common stock. As noted above, during the first quarter of fiscal 1995 the Company purchased 595,000 shares at a total price of $4.7 million. -10- 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 twelve (12) weeks ended September 24, 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 _____________________________________ _____________________________________ Glenn J. Griffin Executive Vice President, and Chief Financial Officer * *Both duly authorized officer and principal financial officer. -11- EX-27 2
5 1,000 QTR-1 JUL-02-1994 JUL-03-1994 SEP-24-1994 2,410 0 40,278 0 259,521 314,102 805,923 285,412 891,203 143,861 271,051 781 0 0 395,350 891,203 653,621 653,621 497,576 497,576 137,446 0 5,958 18,599 7,067 11,532 0 0 0 11,532 .15 .15
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