-----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, t2ztnekz5z0C0m51nWiM6oqxn2Oz9MqQ/89dgLP9QrFETYGak6SX0xf8Yk2asDe9 J5kPIAs1QOkWCloa5O7WUw== 0000002024-95-000047.txt : 19950516 0000002024-95-000047.hdr.sgml : 19950516 ACCESSION NUMBER: 0000002024-95-000047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACE HARDWARE CORP CENTRAL INDEX KEY: 0000002024 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070] IRS NUMBER: 360700810 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-55860 FILM NUMBER: 95538562 BUSINESS ADDRESS: STREET 1: 2200 KENSINGTON COURT CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7089906600 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter ended March 31, 1995 Commission File Number 2-63880 ACE HARDWARE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 36-0700810 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2200 Kensington Court, Oak Brook, IL 60521 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (708) 990-6600 NONE Former name, former address and former fiscal year, if changed since last report. 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES XX NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding at March 31, 1995 Class A Voting Stock - $1,000 par value 3,892 shares Class B Stock - $1,000 par value 3,192 shares Class C Stock - $ 100 par value 1,625,897 shares ACE HARDWARE CORPORATION INDEX Part I. - Financial Information: Page No. Balance Sheet - March 31, 1995 and December 31, 1994 1 Statement of Earnings - Three Months Ended March 31, 1995 and 1994 2 Statement of Cash Flows - Three Months Ended March 31, 1995 and 1994 3 Notes to Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II. - Other Information 6 PART I FINANCIAL INFORMATION ACE HARDWARE CORPORATION BALANCE SHEET
MARCH 31, DECEMBER 31, 1995 1994 (000'S OMITTED) ASSETS Current assets: Cash and Cash Equivalents $ 104 $ 4,868 Accounts receivable, net 312,445 259,611 Merchandise inventory 302,926 270,391 Prepaid expenses and other current assets 7,574 6,810 Total current assets 623,049 541,680 Property and equipment, net 180,865 177,098 Other assets 8,023 6,703 Total assets $ 811,937 $ 725,481 LIABILITIES AND MEMBER DEALERS' EQUITY Current liabilities: Current installments of long-term debt $ 7,363 $ 7,369 Short-term borrowings 91,000 30,000 Accounts payable 318,151 293,088 Patronage dividends payable in cash 32,703 27,302 Patronage refund certificates payable 12,784 1,315 Accrued expenses 32,373 38,627 Total current liabilities 494,374 397,701 Long-term debt: Notes Payable 61,895 63,530 Industrial development revenue bonds and variable rate bonds 393 500 Capitalized leases 169 257 Total long-term debt 62,457 64,287 Patronage refund certificates payable 51,550 63,666 Member dealers' equity: Class A stock of $1,000 par value 3,970 3,924 Class B stock of $1,000 par value 6,499 6,499 Class C stock of $100 par value 164,996 164,666 Class C stock of $100 par value, issuable to dealers for patronage dividends 27,964 21,766 Additional stock subscribed, net of unpaid portion 576 555 Retained Earnings 5,355 5,624 Contributed Capital 3,295 3,295 212,655 206,329 Less: Treasury stock, at cost 9,099 6,502 203,556 199,827 Total liabilities and member dealers' equity $ 811,937 $ 725,481
See accompanying notes to financial statements. -1- ACE HARDWARE CORPORATION STATEMENT OF EARNINGS
THREE MONTHS ENDED MARCH 31, 1995 1994 (000's omitted) Net Sales $ 559,487 $ 515,830 Cost of Sales 518,121 477,718 Gross Profit 41,366 38,112 Operating expenses: Warehouse and distribution 8,287 6,702 Selling, general and administrative 16,798 14,911 Total operating expenses 25,085 21,613 Operating income 16,281 16,499 Interest expense (3,066) (2,976) Other income, net 1,146 626 Income taxes (373) (283) Net earnings 13,988 13,866 Distribution of net earnings Patronage Dividends $ 14,257 $ 14,474 Retained earnings (269) (608) Net Earnings $ 13,988 $ 13,866 See accompanying notes to financial statements.
-2- ACE HARDWARE CORPORATION STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, (000's OMITTED) 1995 1994 Operating Activities: Net earnings $ 13,988 $ 13,866 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation 4,176 4,087 Loss on sale of property & equipment 1 118 Increase in accounts receivable, net (52,834) (52,868) Increase in inventories (32,535) (13,963) (Increase) Decrease in prepaids and other current assets (764) 1,058 Increase in accounts payable and accrued expenses 18,809 2,470 Net cash used by operating activities (49,159) (45,232) Investing Activities: Purchases of property and equipment (7,945) (5,850) Proceeds from sale of property and equipment 1 0 Increase in other assets (1,320) (624) Net cash used in investing activities (9,264) (6,474) Financing Activities: Proceeds from short-term borrowings 61,000 69,500 Principal payments on long-term debt (1,836) (8,599) Payments on refund certificates and patronage financing programs (3,306) (11,940) Proceeds from sale of common stock 398 240 Repurchase of common stock (2,597) (1,637) Net cash provided by financing activities 53,659 47,564 Decrease in cash and cash equivalents (4,764) (4,142) Cash and cash equivalents at beginning of period $ 4,868 $ 4,142 Cash and cash equivalents at end of period $ 104 $ 0 See accompanying notes to financial statements.
-3- ACE HARDWARE CORPORATION NOTES TO FINANCIAL STATEMENTS 1) General The accompanying financial statements have not been examined by independent public accountants except for the December 31, 1994 balance sheet but in the opinion of the Company reflect all adjustments necessary to present fairly the financial position as of March 31, 1995 and 1994 and the results of operations and cash flows for the three months then ended. These interim figures are not necessarily indicative of the results to be expected for the full year. 2) Patronage Dividends The Company operates as a cooperative organization and will pay patronage dividends to member dealers based on the earnings derived from business done with such dealers. It has been the practice of the Company to distribute substantially all patronage sourced earnings in the form of patronage dividends. Net earnings and patronage dividends will normally be the same with approximately 99% of the Company's patronage sourced net earnings being paid to consenting member dealers. International dealers signed under an International Retail Merchant Agreement are not eligible for patronage dividends and related earnings are not included in patronage sourced earnings. 3) Reclassifications Certain financial statement reclassifications have been made to prior year and prior quarter amounts to conform to comparable classifications followed in 1995. -4- ACE HARDWARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended March 31, 1995 compared to Three Months Ended March 31, 1994. Results of Operations Net sales increased 8.5% in 1995 primarily due to increases in volume from existing dealers. International sales have decreased 4.4% exclusively related to the peso decline in Mexico and resulting decreases in exports to that country. Gross profit increased 8.5% paralleling first quarter sales growth and remained comparable to 1994 as a percent of sales. A slight shift in the mix of sales resulting in lower handling charges as a percent of sales was offset by increased vendor allowances and manufacturing gross profit. Warehouse and distribution expenses increased vs. 1994 and as a percent of sales due to reduced net traffic revenues, increased building costs and labor cost increases to support the sales growth. Selling, general and administrative expenses increased vs. 1994 and as a percent of sales due to increased personnel costs for field retail support, increased data processing costs and reduced advertising income. Interest expense increased as a result of higher interest rates vs. the first quarter of 1994. Other income increased due to increased income from dealer financing programs. Liquidity and Capital Resources The Company expects that internally generated funds, along with established lines of credit and long-term financing, will be the primary financing sources for capital expenditures in the future. The Company believes that those sources, along with retail growth of the membership leading to patronage stock growth, will provide adequate liquidity for the long-term. -5- PART II. OTHER INFORMATION ACE HARDWARE CORPORATION Item 6. Exhibits and Reports on Form 8-K. (b) There were no reports on Form 8-K filed for the three month period ended March 31, 1995. -6- 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. ACE HARDWARE CORPORATION RITA D. KAHLE DATE Rita D. Kahle Vice President, Finance (Principal Financial and Accounting Officer, and duly authorized Officer of the registrant) EX-27 2 EXHIBIT 27 (FDS) FILED WITH FORM 10-Q
5 This schedule contains summary financial information extracted from SEC Form 10-Q and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1995 MAR-31-1995 104 0 314103 1658 302926 623049 305504 124639 811937 494374 0 204005 0 0 8650 811937 559487 559487 518121 518121 25085 0 3066 14361 373 13988 0 0 0 13988 0 0
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