-----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, Vfjv3SpilZACXQ9nr7inB9GNXUf2InIArvhgQSzAbs7lKXS0Rnci91ZHSbwsnWZN Ej6jXVjO9fashDEo/EzAlA== 0000014920-96-000002.txt : 19960708 0000014920-96-000002.hdr.sgml : 19960708 ACCESSION NUMBER: 0000014920-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960427 FILED AS OF DATE: 19960611 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: 96579479 BUSINESS ADDRESS: STREET 1: 800 LAKESHORE PKWY CITY: BIRMINGHAM STATE: AL ZIP: 35211 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 April 27, 1996 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 (205) 940-9400 OUTSTANDING COMMON STOCK AS OF April 27, 1996 is 25,147,639 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. PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Condensed Consolidated Balance Sheets at April 27, 1996 and January 27, 1996 2 Condensed Consolidated Statements of Operations for the Thirteen (13) Week Period Ended April 27, 1996 and the Fourteen (14) Week Period Ended April 8, 1995 3 Condensed Consolidated Statements of Cash Flows for the Thirteen (13) Week Period Ended April 27, 1996 and the Fourteen (14) Week Period Ended April 8, 1995 4 Notes to Condensed Consolidated Financial Statements 5-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 11 Item 2. Change in Securities 11 Item 3. Defaults Upon Senior Securities 11 Item 4. Other Information 11 Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF APRIL 27, 1996 AND JANUARY 27, 1996 (In Thousands Except Share and Per Share Amounts) - - -------------------------------------------------------------------------------------------
April 27, January 27, 1996 1996 (unaudited) ------------- ------------- ASSETS: Current assets: Cash and cash equivalents $ 65,517 $ 57,387 Receivables 28,149 25,294 Inventories, net of LIFO reserve of $9,655 and and $8,905, respectively 207,492 215,589 Prepaid expenses 10,490 11,225 Deferred income taxes 7,544 6,733 ------------- ------------- Total current assets 319,192 316,228 ------------- ------------- Property and equipment, net 493,420 491,664 ------------- ------------- Intangibles and other assets, net 64,580 65,254 ------------- ------------- Total $ 877,192 $ 873,146 ============= ============= LIABILITIES AND DEFICIENCY IN NET ASSETS: Current liabilities: Current maturities of long-term debt and capitalized lease obligations $ 1,936 $ 1,938 Accounts payable 159,745 167,283 Accrued income taxes 495 583 Accrued payroll and related expenses 16,555 17,975 Other accrued expenses 58,480 62,736 ------------- ------------- Total current liabilities 237,211 250,515 ------------- ------------- Noncurrent liabilities: Long-term debt 834,147 834,223 Capitalized lease obligations 17,559 17,963 Deferred income taxes 24,461 21,082 Other noncurrent liabilities 38,521 29,947 Deferred compensation 759 759 ------------- ------------- Total noncurrent liabilities 915,447 903,974 ------------- ------------- Deficiency in net assets: Common Stock, $.01 par value, 60,000,000 251 250 shares authorized; 25,147,639 and 25,007,015 issued and outstanding, respectively Paid-in capital (590,410) (592,096) Retained earnings 314,693 310,503 ------------- ------------- Total deficiency in net assets (275,466) (281,343) ------------- ------------- Total $ 877,192 $ 873,146 ============= ============= See notes to condensed consolidated financial statements.
2 Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THIRTEEN WEEK PERIOD ENDED APRIL 27, 1996 AND THE FOURTEEN WEEK PERIOD ENDED APRIL 8, 1995 (In Thousands Except Share and Per Share Amounts) - - -------------------------------------------------------------------------------------------
April 27, April 8, 1996 1995 (13 Weeks) (14 Weeks) (unaudited) (unaudited) -------------- -------------- NET SALES $ 732,721 $ 763,274 -------------- -------------- COST AND EXPENSES: Cost of products sold 554,124 588,246 Store operating, selling and administrative expenses 136,993 162,717 Depreciation and amortization 13,706 13,491 Interest expense, net 21,140 6,199 -------------- -------------- Total cost and expenses 725,963 770,653 -------------- -------------- Income (loss) before provision for income taxes 6,758 (7,379) INCOME TAXES (BENEFIT) 2,568 (2,804) -------------- -------------- Net income (loss) $ 4,190 $ (4,575) ============== ============== NET INCOME (LOSS) PER COMMON SHARE $ 0.17 $ (0.06) ============== ============== CASH DIVIDENDS PER COMMON SHARE $ - $ 0.065 ============== ============== See notes to condensed consolidated financial statements.
3 Commission File No. 0-6544 BRUNO'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THIRTEEN WEEK PERIOD ENDED APRIL 27, 1996 AND THE FOURTEEN WEEK PERIOD ENDED APRIL 8, 1995 (Amounts In Thousands) - - -------------------------------------------------------------------------------------------
April 27, April 8, 1996 1995 (13 Weeks) (14 Weeks) (unaudited) (unaudited) ------------ ------------ OPERATING ACTIVITIES: Net income (loss) $ 4,190 $ (4,575) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 13,706 13,491 LIFO provision 750 398 Change in assets and liabilities 3,571 37,968 ------------ ------------ Total adjustments 18,027 51,857 ------------ ------------ Net cash provided by operating activities 22,217 47,282 ------------ ------------ INVESTING ACTIVITIES: Proceeds from sale of property -- 1,062 Capital expenditures (15,292) (12,247) ------------ ------------ Net cash used in investing activities (15,292) (11,185) ------------ ------------ FINANCING ACTIVITIES: Reductions of long-term debt (482) (15,676) Sale of common stock 1,687 -- Dividends paid -- (5,077) ------------ ------------ Net cash provided by (used in) financing activities 1,205 (20,753) ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 8,130 15,344 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 57,387 5,486 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 65,517 $ 20,830 ============ ============ See notes to condensed consolidated financial statements.
4 Commission File No. 0-6544 BRUNO'S, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEK PERIOD ENDED APRIL 27, 1996 AND THE FOURTEEN WEEK PERIOD ENDED APRIL 8, 1995 (In Thousands Except Share and Per Share Amounts) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial state- ments 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 consolidated financial statements contain all adjustments necessary for a fair statement of the consolidated financial position and results of operations of the Company for the interim periods. The Company changed its fiscal year to a 52 or 53 week year ending on the Saturday closest to January 31 from the Saturday closest to June 30. As a result of the change in year end, a Transition Report on Form 10-K was filed for the thirty week period ended January 27, 1996 which included comparative unaudited results of operations for the thirty week period ended January 28, 1995. The unaudited condensed statement of cash flows with respect to the same period is presented in Note 4 of this Form 10-Q. Due to the change in year end described above, the consolidated statements of operations compare the thirteen (13) week period ended April 27, 1996 to the fourteen (14) week period ended April 8, 1995. The results of operations of the Company for the thirteen weeks ended April 27, 1996, are not necessarily indicative of the results which may be expected for the entire year. 2. INCOME (LOSS) PER SHARE Income (loss) per share was computed based on the weighted average number of common shares outstanding during the respective periods (25,110,952 and 77,503,000, respectively). As a result of the merger of Crimson Acquisition Corp. with and into the Company on August, 18, 1995, 25,147,639 shares are outstanding at April 27, 1996. Stock options outstanding during the period ended April 8, 1995 are common stock equivalents but were excluded from income (loss) per common share computations as their effect was either not material or would be antidilutive to the calculation of net income (loss) per share. 3. CONTINGENCIES In 1991, the Company received a favorable termination letter with respect to the termination of the employee pension plan of a supermarket chain acquired by the Company in 1989. Pursuant to that termination, distributions were made to all participants of that employee pension plan. After all of the benefit liabilities were paid, remaining plan assets of approximately $2,700 were transferred to the Company as a reversion of excess pension assets. On June 15, 1992, the Company received a letter from the Pension Benefit Guaranty Corporation ("PBGC") contending that inappropriate actuarial assumptions were used to determine the value of the employees' benefits 5 Commission File No. 0-6544 distributed and that additional distributions must be made to numerous former participants of said plan. In August 1994, the Company filed suit in the U.S. District Court for the Northern District of Alabama challenging the PBGC's determination. In April 1995, the District Court entered summary judgment against the Company and in favor of the PBGC. The Company appealed the District Court's ruling to the U.S. Court of Appeals for the Eleventh Circuit which ruled against the Company. At April 27, 1996, the Company had provided a $2,700 liability for this matter in its consolidated financial statements. In addition, 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. 6 Commission File No. 0-6544 4.ADDITIONAL FINANCIAL INFORMATION BRUNO'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THRITY WEEK PERIODS ENDED JANUARY 27, 1996 AND JANUARY 28, 1995 (Amounts In Thousands) - - -------------------------------------------------------------------------------------------
January 27, January 28, 1996 1995 (30 Weeks) (30 Weeks) (unaudited) ----------- ----------- OPERATING ACTIVITIES: Net income (loss) $ (81,201) $ 27,978 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 35,453 32,156 LIFO provision 1,641 883 Increase in self-insurance 15,000 148 Impairment of long-lived assets 35,411 - Change in inventories 32,536 2,184 Change in accounts payable 52,622 (10,526) Change in assets and liabilities 6,470 1,806 ----------- ----------- Total adjustments 179,133 26,651 ----------- ----------- Net cash provided by operating activities 97,932 54,629 ----------- ----------- INVESTING ACTIVITIES: Proceeds from sale of property 911 22,911 Capital Expenditures (26,437) (30,821) ----------- ----------- Net cash used in investing activities (25,526) (7,910) ----------- ----------- FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 875,000 Debt issuance costs (39,900) Reductions of long-term debt (246,079) (48,101) Redemption of common stock (879,956) Sale of common stock 250,000 5 Purchase of treasury stock (4,679) Dividends paid (10,152) ----------- ----------- Net cash used in financing activities (40,935) (62,927) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 31,471 (16,208) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 25,916 30,259 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 57,387 $ 14,051 =========== ===========
7 Commission File No. 0-6544 ITEM II 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 operations. The period ended April 27,1996 is a thirteen week period and the period ended April 8, 1995 is a fourteen week period and accordingly, certain of the period-to-period changes are a consequence of such difference. A table showing the percentage of net sales represented by certain items in the Company's condensed consolidated statements of operations is as follows:
April 27, April 8, 1996 1995 (13 Weeks) (14 Weeks) Net sales 100.00% 100.00% Cost of products sold 75.63% 77.07% Store operations, selling, and administrative expenses 18.70% 21.32% ---------- ---------- EBITDA 5.67% 1.61% Depreciation and amortization 1.86% 1.77% Interest expense, net 2.89% 0.81% ---------- ---------- Income (loss) before provision for income taxes 0.92% -0.97% Income taxes (benefit) 0.35% -0.37% ---------- ---------- Net income (loss) 0.57% -0.60% ========== ==========
A summary of the period to period changes in certain items included in the condensed statements of operations is as follows:
Increase (Decrease) Dollars in Thousands Percentage Except Per Share Change Amounts -------------------- ---------- Net sales $ (30,553) -4.00% Cost of products sold (34,122) -5.80% Store operating, selling, and administrative expense (25,724) -15.81% ------------ EBITDA 29,293 237.94% Depreciation and amortization 215 1.59% Interest expense, net 14,941 241.02% ------------ Income (loss) before provision for income taxes 14,137 N/A Income taxes (benefit) 5,372 N/A ------------ Net income (loss) $ 8,765 N/A ============ Net income (loss) per common share $ 0.23 N/A ============
8 Commission File No. 0-6544 BRUNO'S, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in Thousands) RESULTS OF OPERATIONS Net Sales The period ended April 8,1995 included fourteen weeks, whereas the quarter ended April 27, 1996 included thirteen weeks. Excluding the impact of the fourteenth week in the period ended April 8, 1995, sales increased by $23,966 or 3.4%. The increase was due to increased promotional activities and the inclusion of Easter in the quarter ended April 27, 1996, whereas Easter fell in the quarter ended July 1, 1995 during the prior year. The Company does not report results of operations for the thirteen weeks ended April 29, 1995, however, same store sales increased 1.5% for the thirteen weeks ended April 27, 1996 compared to the thirteen weeks ended April 29, 1995. Gross Profit Gross profit (net sales less cost of products sold) as a percentage of net sales for the quarter ended April 27, 1996 was 24.4% as compared to 22.9% for the quarter ended April 8, 1995. The increase in gross profit was primarily due to an increased sales mix of higher margin perishable products. Gross profit was also positively impacted by the implementation of a new distribution center ordering system. Gross profit in the prior year was adversely impacted by the Company recognizing a lower level of vendor allowances in the quarter ended April 8, 1995 as compared to the 1996 period. Store Operating, Selling and Administrative Expenses Store operating, selling and administrative expenses as a percentage of net sales was 18.7% for the first quarter of fiscal 1996 compared to 21.3% for the quarter ended April 8, 1995. The decline was primarily the result of an unusual adjustment recorded in the quarter ended April 8, 1995 to increase the self-insurance reserve by $22,178. Excluding the self-insurance adjustment, store operating, selling and administrative expenses as a percentage of net sales increased to 18.7% for the thirteen (13) weeks ended April 27, 1996 from 18.4% for the fourteen (14) weeks ended April 8, 1995 due to costs associated with increased promotional activities. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) EBITDA increased $29,293 or 237.94% in the thirteen week period ended April 27, 1996 compared to the fourteen week period ended April 8, 1995. The quarter ended April 8, 1995 included the adjustment to increase the Company's self- insurance reserve and a lower level of vendor allowances as compared to the 1996 period. 9 Commission File No. 0-6544 Interest Expense, Net The $14,941 increase in net interest expense in the quarter ended April 27, 1996, as compared to the quarter ended April 8, 1995, resulted from the Company's increase in long-term debt from $246,917 at April 8, 1995 to $853,642 at April 27, 1996. The increase in long-term debt is attributable to financing incurred in connection with the Company's merger with Crimson Acquisition Corp. on August 18, 1995 (the "Merger"). Income Taxes The Company's effective income tax rate remained at 38% during the thirteen week period ended April 27, 1996 and the fourteen week period ended April 8, 1995. 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 generated $22,217 and $47,282, respectively, in cash in each of the periods ended April 27, 1996 and April 8, 1995. The Company believes that operating cash flows will be sufficient to fund store expansion and working capital needs; however, should the Company need additional cash, it has a $125 million undrawn revolving credit facility available. There were no borrowings outstanding under this facility during the thirteen week period ended April 27, 1996. Cash flows used in investing activities were $15,292 and $11,185 for the comparable periods ended April 27, 1996 and April 8, 1995, respectively. Capital expenditures were $15,292 in the quarter ended April 27, 1996 compared to $12,247 in the quarter ended April 8, 1995. The Company's capital expenditures are primarily related to the opening of new stores, the remodeling of existing stores and investments in purchasing and warehousing systems technology. The Company believes that capital expenditures for the remainder of fiscal 1996 will be financed through cash flows from operations, existing cash balances, and if necessary, borrowings under its revolving credit facility. The Company generated $1,205 in cash from financing activities which was attributable to a $1,687 management equity contribution that was partially offset by $482 in long term debt repayments. The Company's financing arrangements contain certain restrictions which limit its ability to make future borrowings beyond the amounts currently available. 10 Commission File No. 0-6544 PART II. OTHER INFORMATION Item 1. Legal Proceedings In 1991, the Company received a favorable termination letter with respect to the termination of the employee pension plan of a supermarket chain acquired by the Company in 1989. Pursuant to that termination, distributions were made to all participants of that employee pension plan. After all of the benefit liabilities were paid, remaining plan assets of approximately $2,700 were transferred to the Company as a reversion of excess pension assets. On June 15, 1992, the Company received a letter from the Pension Benefit Guaranty Corporation ("PBGC") contending that inappropriate actuarial assumptions were used to determine the value of the employees' benefits distributed and that additional distributions must be made to numerous former participants of said plan. In August 1994, the Company filed suit in the U.S. District Court for the Northern District of Alabama challenging the PBGC's determination. In April 1995, the District Court entered summary judgment against the Company and in favor of the PBGC. The company appealed the District Court's ruling to the U.S. Court of Appeals for the Eleventh Circuit which ruled against the Company. At April 27, 1996, the Company has provided a $2,700 liability for this matter in its consolidated financial statements. In addition, 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. Item 2. Change In Securities In connection with the Merger, the shareholders of the Company approved and the Company adopted Amended and Restated Articles of Incorporation, which among other things reduced the authorized shares of the Company's common stock from 200,000,000 to 60,000,000. The rights of the holders of the Company's common stock have not been materially modified. Item 3. Defaults Upon Senior Securities None Item 4. Other Information None 11 Commission File No. 0-6544 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRUNO'S, INC. James J. Hagan James J. Hagan, Senior Vice President-Finance and Chief Financial Officer Dated: June 10, 1996 12 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE FOR FIRST QTR. 10-Q
5 1,000 3-MOS Jan-27-1996 Jan-28-1996 Apr-27-1996 65,517 0 28,149 0 207,492 319,192 493,420 13,706 877,192 237,211 400,000 251 0 0 (275,466) 877,192 732,721 732,721 554,124 554,124 0 0 21,140 6,758 2,568 4,190 0 0 0 4,190 0.17 0.17
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