-----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, Ej06kMWajZeCUxOxOCMHwuTo1Tdr0D++fJFSMN6ltxIZj2BkoKOXTvSCFe4e3pvX P7/cW5lpPetrQ/r7iz44MA== 0000014920-95-000001.txt : 19950615 0000014920-95-000001.hdr.sgml : 19950615 ACCESSION NUMBER: 0000014920-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950214 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: 95509768 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 December 31, 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 December 31, 1994, IS 78,097,741 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 as of December 31, 1994, July 2, 1994. 2 Condensed Consolidated Statements of Income and Retained Earnings for the Twenty-Six (26) and Fourteen (14) Week Periodsriods Ended December 31, 1994, and January 1, 1994. 3 Condensed Consolidated Statements of Cash Flows for the Twenty-Six (26) Week Periods Ended December 31, 1994, and January 1, 1994. 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 DECEMBER 31, 1994 AND JULY 2, 1994 (In Thousands Except Share And Per Share Amounts) (Unaudited)
12-31-94 7-2-94 ----------- ----------- ASSETS - - - ------ Current Assets - Cash and Cash Equivalents $ 5,486 $ 30,259 Receivables 45,692 34,770 Inventories at LIFO 266,969 255,047 Prepaid Expenses and Other 12,892 10,665 ---------- ---------- Total Current Assets 331,039 330,741 Property, Equipment, Leasehold Improvements, Leasehold Interests and Investment in Property under Capital Leases, Net 517,293 540,139 Intangibles and Other Assets 56,144 56,328 ---------- ---------- Total Assets $ 904,476 $ 927,208 ========== ========== LIABILITIES AND SHAREHOLDERS' INVESTMENT - - - ---------------------------------------- Current Liabilities - Current Portion of Long-Term Debt and Capitalized Lease Obligations and Short-Term Borrowings $ 42,052 $ 4,092 Accounts Payable 110,506 108,712 Other Accrued Expenses 41,519 43,545 Accrued Income Taxes 4,433 -- ---------- ---------- Total Current Liabilities 198,510 156,349 ---------- ---------- Long-Term Debt and Capitalized Lease Obligations 220,541 296,460 ---------- ---------- Deferred Income Taxes 51,136 51,136 ---------- ---------- Deferred Compensation 2,159 1,909 ---------- ---------- Shareholders' Investment - Common Stock ($.01 par value, 200,000,000 shares authorized, 78,097,741 and 78,090,441 shares issued respectively) 781 781 Paid-In Capital 42,004 41,999 Retained Earnings 394,024 378,574 ---------- ---------- 436,809 421,354 Treasury Stock (595,000 shares) (4,679) -- ---------- ---------- Total Shareholders' Investment 432,130 421,354 ---------- ---------- Total Liabilities and Shareholders' Investment $ 904,476 $ 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 TWENTY-SIX AND FOURTEEN WEEK PERIODS ENDED DECEMBER 31, 1994 AND JANUARY 1, 1994 (In Thousands Except Per Share Amounts) (Unaudited)
Twenty-Six Weeks Ended Fourteen Weeks Ended ___________________________ _________________________ 12-31-94 1-1-94 12-31-94 1-1-94 -------------- ------------- ------------ ------------ Net Sales $ 1,437,741 $ 1,409,155 $ 784,120 $ 768,244 -------------- ------------- ------------ ------------ Cost and Expenses: Cost of Products Sold $ 1,096,570 $ 1,088,446 $ 598,994 $ 595,366 Store Operating, Selling and Administrative Expenses 262,072 252,545 141,732 138,742 Depreciation and Amortization 27,994 26,306 15,308 14,695 Interest Expense 12,726 10,177 6,768 5,765 Interest Income (2,914) (1,778) (1,376) (1,357) ------------- ------------- ------------ ------------ $ 1,396,448 $ 1,375,696 $ 761,426 $ 753,211 ------------- ------------- ------------ ------------ Income Before Provision For Income Taxes and Extraordinary Item $ 41,293 $ 33,459 $ 22,694 $ 15,033 Provison For Income Taxes 15,691 14,938 8,624 5,712 ------------- ------------- ------------- ------------ Income Before Extraordinary Item $ 25,602 $ 18,521 $ 14,070 $ 9,321 Extraordinary Item, Net -- (3,288) -- -- ------------- ------------- ------------- ------------ Net Income $ 25,602 $ 15,233 $ 14,070 $ 9,321 Cash Dividends (10,152) (9,370) (5,076) (4,686) Retained Earnings, Beginning Of Period 378,574 360,022 385,030 361,250 ------------- ------------- ------------- ------------ Retained Earnings, End Of Period $ 394,024 $ 365,885 $ 394,024 $ 365,885 ============= ============= ============= ============ Earnings Per Common Share: Income Before Extraordinary Item $ 0.33 $ 0.24 $ 0.18 $ 0.12 Extraordinary Item, Net -- (0.04) -- -- ------------- -------------- ------------ ------------ Net Income $ 0.33 $ 0.20 $ 0.18 $ 0.12 ============= ============= ============ ============ Cash Dividends Per Common Share $ 0.13 $ 0.12 $ 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 TWENTY-SIX WEEK PERIODS ENDED DECEMBER 31, 1994, AND JANUARY 1,1994 (In Thousands) (Unaudited)
12-31-94 1-1-94 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 25,602 $ 15,233 ------------ ------------ Adjustments to reconcile net income to net cash provided by operating activities- Depreciation & amortization $ 27,994 $ 26,306 LIFO provision (credit) 771 (905) Change in operating assets and liabilities (21,391) (32,477) ------------ ------------ Total adjustments $ 7,374 $ (7,076) Net cash provided by operating ------------ ------------ activities $ 32,976 $ 8,157 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property $ 22,358 $ 8,899 Capital expenditures (27,322) (38,886) ------------ ------------ Net cash used in investing activities $ (4,964) $ (29,987) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings (repayments) line of credit, net $ -- $ (35,000) Purchase of treasury stock (4,679) -- Proceeds from issuance of stock 5 223 Dividends paid (10,152) (9,370) Reduction of long-term debt (37,959) (144,300) Proceeds form issuance of long-term debt -- 200,000 ------------ ------------ Net cash provided by (used in) financing activities $ (52,785) $ 11,553 ------------ ------------ Net decrease in cash $ (24,773) $ (10,277) Cash beginning of period 30,259 20,093 ------------ ------------ Cash end of period $ 5,486 $ 9,816 ============ ============ See accompanying notes to condensed consolidated financial statements.
-4- Commission File No. 0-6544 BRUNO'S, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1994 AND JANUARY 1, 1994 (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 subsidiaries. Significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation 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 December 31, 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 (77,639,000 and 78,057,000 for the twenty-six week periods, respectively and 77,503,000 and 78,065,000 for the fourteen week periods, 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 changes the Company's effective income tax rate to approximately 38% and required a charge to income in the first quarter of fiscal 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 twenty-six week period ended January 1, 1994 of 45%. -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; accordingly, no provision for any liability that may result has been made in the accompanying condensed consolidated financial statements. 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 statement of income for the twenty-six week period ended January 1, 1994. -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 _______________________ _________________________ 12-31-94 1-1-94 12-31-94 1-1-94 ________ ________ ________ ________ Net Sales 100.0 % 100.0 % 100.0 % 100.0 % Cost Of Products Sold 76.3 % 77.2 % 76.4 % 77.5 % -------- -------- -------- -------- Gross Profit 23.7 % 22.8 % 23.6 % 22.5 % Store Operating, Selling, and Administrative Expenses 18.2 % 17.9 % 18.1 % 18.1 % Depreciation and Amortization 1.9 % 1.9 % 1.9 % 1.9 % Net Interest Expense 0.7 % 0.6 % 0.7 % 0.6 % -------- -------- -------- -------- Income Before Provision For Income Taxes and Extraordinary Item 2.9 % 2.4 % 2.9 % 1.9 % Provision for Income Taxes 1.1 % 1.1 % 1.1 % 0.7 % -------- -------- -------- -------- Net Income Before Extraordinary Item 1.8 % 1.3 % 1.8 % 1.2 % Extraordinary Item, Net 0.0 % 0.2 % 0.0 % 0.0 % -------- -------- -------- -------- Net Income 1.8 % 1.1 % 1.8 % 1.2 % ======== ======== ======== ========
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 12-31-94 and 1-1-94 12-31-94 and 1-1-94 _______________________ __________________________________ Increase (Decrease) (Dollars in Thousands Except Per Share Amounts) Net Sales $28,586 2.0 % $15,876 2.1 % Cost Of Products Sold 8,124 0.7 % 3,628 0.6 % Store Operating, Selling, and Administrative Expenses 9,527 3.8 % 2,990 2.2 % Depreciation and Amortization 1,688 6.4 % 613 4.2 % Net Interest Expense 1,413 16.8 % 984 22.3 % Net Income Before Extraordinary Item 7,081 38.2 % 4,749 50.9 % Extraordinary Item, Net 3,288 100.0 % 0 0.0 % Net Income $10,369 68.1 % $4,749 50.9 % Income Per Common Share Before Extraordinary Item $0.09 37.5 % $0.06 50.0 % Net Income Per Common Share $0.13 65.0 % $0.06 50.0 %
- 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 2.0% ($28,586) and 2.1% ($15,876), respectively, in the twenty-six and fourteen week periods ended December 31, 1994, as compared to the applicable periods in the prior year. The net sales increase was primarily attributed to the Company's recent focus on existing stores and stressing the importance of customer service. During the twenty-six week period ended December 31, 1994, the Company opened five new stores and remodeled over 15 stores to a more customer service oriented format. This strategy has resulted in positive same store sales growth despite competitive pressures. Same stores sales improved for the third consecutive quarter, increasing 1.6%. Gross profit as a percentage of net sales was 23.7% and 23.6%, respectively, in the twenty-six and fourteen week periods ended December 31, 1994, as compared to a gross profit percentage of 22.8% and 22.5% for the applicable periods in the prior fiscal year. The increase in gross profit is due to effective merchandising and the Company's continued emphasis on its larger format stores. These larger stores carry a greater percentage of perishable and other higher margin items such as health and beauty care and general merchandise products. Store operating, selling and administrative expenses as a percentage of net sales increased from 17.9% for the twenty-six weeks ended January 1, 1994, to 18.2% for the twenty-six weeks ended December 31, 1994. This increase as a percentage of net sales is primarily due to increased costs associated with new stores, and the Company's concerted efforts at improving customer service. The $1,688 increase in depreciation and amortization expense for the twenty-six week period ended December 31, 1994, compared to the applicable period in the prior year is due to an increase in the Company's depreciable asset base due to new store openings and store renovations. The $1,413 increase in net interest expense for the twenty-six week period ended December 31, 1994, compared to the applicable period in the prior year is due to an increase in interest rates which effected the Company's net interest position on its $80,000 notional interest rate swap. -8- Commission File No. 0-6544 The Company's effective income tax rate decreased from 45% for the twenty-six week period ended January 1, 1994, to 38% for the twenty-six week period ended December 31, 1994. See Note 3 to Condensed Consolidated Financial Statements for a complete discussion of income taxes. 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 the prior fiscal year. This redemption resulted in an extraordinary loss of $3,288 (net of the applicable income tax benefit of $2,015) as reflected in the accompanying condensed consolidated statement of income for the twenty-six week period ended January 1, 1994. 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 cash of $32,976 and $8,157, respectively, in each of the twenty-six week periods ended December 31, 1994, and January 1, 1994. In addition, the Company has at its disposal a $75,000 unsecured line of credit (no amounts outstanding at December 31, 1994) to meet any short-term cash requirements. Cash flows used in investing activities were $4,964 and $29,987 for the twenty-six week periods ended December 31, 1994, and January 1, 1994, respectively. Proceeds from the sale of certain property totaled $22,358 during the twenty-six week period ended December 31, 1994 compared to $8,899 during the applicable period in the prior year. There were no material gains or losses generated from these sales. The Company has continued its expansion and remodeling of stores program during fiscal 1995. Capital expenditures were $27,322 for the twenty- six week period ended December 31, 1994, compared to $38,886 for the applicable period in the prior year. Capital expenditures were primarily financed with internally generated funds and the proceeds from the sales of other property. 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 $30,000 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 these evaluations. The primary uses of cash in financing activities during the twenty-six week period ended December 31, 1994, were $37,959 in long-term debt principal payments, $10,152 in cash dividends paid, and a $4,679 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 the proceeds of a $200,000 term loan. In addition, during the twenty-six week period ended January 1, 1994, the Company paid off its line of credit borrowings of $35,000 and paid cash dividends of $9,370. OTHER On July 22, 1994, the Company's Board of Directors approved the repurchase on the open market of up to $25,000 of the Company's common stock. As noted above, during the twenty-six weeks ended December 31, 1994, the Company purchased 595,000 shares at a total price of $4,679. -10- Commission File No. 0-6544 BRUNO'S, INC. SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS 1994 PROXY TABULATION REPORT
WITHHOLD ELECTION OF DIRECTORS FOR AUTHORITY ABSTAIN ____________________________ ____________ ____________ _____________ Joseph S. Bruno 60,884,580 543,081 Ronald G. Bruno 60,900,630 527,031 Paul F. Garrison 60,900,224 527,437 Glenn J. Griffin 60,900,233 527,428 Kenneth J. Bruno 60,900,183 527,478 Judy M. Merritt 60,850,088 577,573 Benny M. LaRussa, Jr. 60,926,185 501,476 Richard Cohn 60,898,324 529,337 J. Mason Davis, Jr. 60,852,924 574,737 Bart Starr 60,115,154 1,312,507 ACCOUNTING FIRM OF ARTHUR ANDERSEN LLP 61,172,482 121,443 133,736 CUMULATIVE TOTALS THROUGH THIS DATE: TOTAL SHARES VOTED: 61,427,661 PERCENT OF OUTSTANDING 78.6%
-11- Commisssion 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 December 31, 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 13, 1995 Glenn J. Griffin Glenn J. Griffin Executive Vice President, and Chief Financial Officer * *Both duly authorized officer and principal financial officer. -12- EX-27 2
5 1,000 6-MOS JUL-02-1994 JUL-03-1994 DEC-31-1994 5,486 0 45,692 0 266,969 331,039 816,752 299,459 904,476 198,510 220,541 781 0 0 431,349 904,476 1,437,741 1,437,741 1,096,570 1,096,570 299,878 0 12,726 41,293 15,691 25,602 0 0 0 25,602 .33 .33
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