-----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, AuDPba78IXL/DpjM1bfbRGmNNoFDqIy5ydmJlwxXDmuM4vwhUsS6up7eR0IutcHL /52YMnIF0/saNbguaODlKA== 0000003333-03-000011.txt : 20030320 0000003333-03-000011.hdr.sgml : 20030320 20030320164148 ACCESSION NUMBER: 0000003333-03-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030130 ITEM INFORMATION: Other events FILED AS OF DATE: 20030320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBERTSONS INC /DE/ CENTRAL INDEX KEY: 0000003333 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 820184434 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06187 FILM NUMBER: 03610803 BUSINESS ADDRESS: STREET 1: 250 PARKCENTER BLVD STREET 2: P O BOX 20 CITY: BOISE STATE: ID ZIP: 83726 BUSINESS PHONE: 2083956200 MAIL ADDRESS: STREET 1: 250 PARKCENTER BLVD STREET 2: P O BOX 20 CITY: BOISE STATE: ID ZIP: 83726 8-K 1 abs8k031903.txt MAIN DOCUMENT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): March 19, 2003 --------------------- ALBERTSON'S, INC. (Exact name of registrant as specified in its charter) Delaware 1-6187 82-0184434 - ----------------------------- -------------------- ---------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 250 Parkcenter Blvd., P.O. Box 20, Boise, Idaho 83726 ------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (208) 395-6200 ---------------------------------------------------------------------------- Item 9. Regulation FD Disclosure On March 19, 2003, the Company released its earnings for the fourth quarter of 2002 and for fiscal year 2002. The text of that release is attached hereto as Exhibit 99.1 solely for the purpose of incorporating it by reference into this Item 9. The press release and the statements set forth below should be read together with the information contained in the reports that we file with the Securities and Exchange Commission, including the financial statements and related notes contained in those reports. 2003 Guidance: Economic & Competitive Environment: Unchanged Earnings per diluted share: Range between $2.08 - $2.13 Square footage growth: 2.0%, excluding acquisitions and operational closings Identical store sales growth Positive by year end Capital expenditures: $1.5 billion in total $1.4 billion in cash capital expenditures $0.1 billion in leases Depreciation: $950 - 1,000 million Interest Expense: $400 - 420 million Gross Margin: Investing throughout the year S,G & A: Flat by year-end, continued cost cutting throughout the year Total Debt at year end 2003: $4.95 billion Tax rate: 38.4% New, relocated grocery or combo stores: 43 New, relocated drug stores: 22 Remodels: 191 New fuel centers: 37 Pension discount rate: 6.5% Pension assumed rate of return: 8.0%
Predictions regarding future results of operations and other future events are subject to inherent uncertainties, and actual results and outcomes may vary differ materially from these projected or suggested above. In particular, our ability to increase sales and earnings, and the other expectations set forth above, could be adversely affected by changes in the general economy; changes in interest rates; changes in consumer spending; actions taken by new or existing competitors (including nontraditional competitors), particularly those intended to improve their market share (such as pricing and promotional activities); and other factors affecting our business in or beyond our control. These factors include changes in the rate of inflation; changes in state or federal legislation or regulation; adverse determinations with respect to litigation or other claims (including environmental matters); labor negotiations; the cost and stability of energy sources; our ability to recruit, retain and develop employees; our ability to develop new stores or complete remodels as rapidly as planned; our ability to implement new technology successfully; stability of product costs; our ability to integrate the operations of acquired or merged companies; the our ability to execute our restructuring plans; and our ability to achieve our five strategic imperatives. In addition, our capital expenditures, square footage growth and numbers of new, relocated and remodeled stores and new fuel centers could vary if we are unable to develop new stores or fuel centers or complete remodels as rapidly as planned. Our capital expenditures could also vary if development costs exceed those budgeted or if our technology projects are not completed within in the anticipated time frame or as budgeted. Depreciation may vary from our estimates due to the timing of new store openings, and interest expense could vary with changes in capital markets. In addition, pension discount rates and assumed rates of return could vary due to changes in interest rates and changes in market conditions affecting the value of equity and debt securities. SIGNATURE 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. ALBERTSON'S, INC. BY: /s/ Felicia D. Thornton ----------------------------- Felicia D. Thornton Executive Vice President and Chief Financial Officer Date: March 20, 2003 ---------------------------------------------------------------------------- Exhibit Index Exhibit (99.1): Press Release dated March 19, 2003 EX-99 3 abs8k031903exhibit99-1.txt PRESS RELEASE Exhibit 99.1 ALBERTSONS ANNOUNCES 4Q AND 2002 RESULTS 2002 Net Earnings Rise +15.6% Before Accounting Change Total Year EPS Up +2.9% Before One-Time Items 4Q Results Meet Guidance & Consensus . . . Sales Trends Improve BOISE, Idaho - Albertsons, Inc. (ABS:NYSE), one of the world's largest food and drug retailers, today announced fourth quarter and total year 2002 results. For the year, earnings before one-time items totaled $2.13 per diluted share, up 2.9% versus the $2.07 per share earned in 2001. Fourth quarter EPS on the same basis totaled $0.52 per share, in line with both Company guidance and the First Call consensus of industry analysts, versus the $0.63 per share for the same period a year earlier. Reported net earnings for FY 2002 increased 15.6% to $579 million before the effect of an accounting change, versus $501 million on the same basis in the prior year. For the quarter, reported net earnings totaled $205 million versus $290 million in last year's fourth quarter. Reported net earnings, including the accounting change and one-time items, totaled $485 million for the year, 3% lower than the $501 million in the year earlier on the same basis. Sales for the year totaled $35.6 billion, 2.7% lower than the prior year, reflecting the impact of the Company's planned restructuring program. During the year, the Company completed the sale or closure of 226 unprofitable or non-strategic stores. Since the Company began its major restructuring program in April 2001, it has closed or sold 441 unprofitable or non-strategic stores. Quarterly sales totaled $9.1 billion versus $9.3 billion in last year's fourth quarter. Comparable store sales for the quarter declined 0.8% while identical store sales fell 1.2%. This was an 80 basis point improvement versus third quarter 2002 results, reflecting the effectiveness of the Company's previously announced program to improve sales trends. For 2002, comparable store sales ended the year down 0.4% while identical store sales fell 0.9%. -more- Page 2 - ALBERTSONS ANNOUNCES 4Q AND 2002 RESULTS Cash flow from operations for the year totaled $2.063 billion, a $54 million increase from last year's $2.009 billion. This strong cash performance allowed the Company to continue investments in its store base. During the year, the Company opened 93 new stores and remodeled 207. Remodels in 2002 increased over 100%, making a major shift in the Company's deployment of capital to boost ROIC. In addition, the Company returned $862 million in cash to shareowners during the year by repurchasing shares of its stock, $315 million of which it repurchased during the fourth quarter. Gross margin from continuing operations was 28.56% in the fourth quarter, down 32 basis points from 28.88% in the same period last year, reflecting the Company's previously stated decision to invest in more aggressive pricing and promotion. During the quarter, Selling, General, and Administrative Expenses rose 76 basis points to 23.97% versus 23.21% in the fourth quarter of 2001. The increase in SG&A was primarily driven by this quarter's challenging sales environment, increased employee benefit costs and rising insurance expenses. Commenting on the Company's broad cost-out program, Larry Johnston, Albertsons chairman & chief executive officer, said, "In 2002 we met our phase one goal of $250 million in cost-out by mid year. I am proud to report that by year end 2002, we achieved $446 million of the $500 million phase two goal that we plan to reach by mid-2003. The Company continues to be focused on our overall goal of $750 million in cost-out by year end 2004, and we are currently on track in achieving that target." In fiscal year 2002, the Company adopted a new accounting change for vendor allowances. This new accounting policy also complies with recent guidelines issued by the FASB's Emerging Issues Task Force (EITF 02-16). In adopting this change, the Company moved from its previous accounting method which was consistent with GAAP guidelines. Under the new accounting method, these allowances will reside in inventory with the product and not be recognized until sold. This change will not alter the Company's historical practice of having all vendor allowances, regardless of classification, being recognized as a reduction of cost of goods sold. Rather, the change in method has only served to change -more- Page 3 - ALBERTSONS ANNOUNCES 4Q AND 2002 RESULTS the timing of the recognition of these items. This change resulted in a cumulative, non-cash, one-time adjustment retroactive to the first quarter of 2002 of $93.7 million, net of tax. Excluding the effect of the one-time adjustment, for the full year the change increased net earnings by $3.4 million and reduced fourth quarter net earnings by $6.1 million. This annual change in net earnings was less than 1/4 of one percent of the Company's total vendor allowances for the year. The Company believes that this accounting change provides the maximum level of transparency for investors on vendor allowances and continues Albertsons long history of conservative business practices. Commenting on the year's results and future outlook, Mr. Johnston said, "We are pleased with the respectable performance the Albertsons Team turned in during a year of major restructuring and economic uncertainty. Just 18 months into the turnaround we began in April 2001, the foundation of our Company has been significantly strengthened. With a strong focus on our five strategic imperatives, we now face the future more determined than ever to grow and release the untapped shareowner value that lies within this great company." For the year ahead, the Company expects earnings per diluted share of between $2.08 and $2.13. This forecast assumes that the current economic and competitive environment continues. Identical sales are expected to be positive by year end 2003, and total square footage is expected to expand by 2% before operational closures and acquisitions. Albertsons is one of the world's largest food and drug retailers. Based in Boise, Idaho, the company employs approximately 200,000 associates and operates retail stores in 30 states, under banners that include Albertsons, Jewel-Osco, Acme, Sav-on Drugs, Osco Drug, Albertsons-Osco, Albertsons-Sav-on, Super Saver and Max Foods. The Company will host an analyst conference call Wednesday, March 19, 2003 at 6:30 a.m. (MST). The call will be webcast on the Albertsons web site www.albertsons.com and on www.firstcallevents.com. A recorded replay will also be available on both web sites for approximately one-week. In addition, a telephone replay will be available through PostView with Global Crossing, beginning at 9:30 a.m. (MST) Wednesday, March 19 and ending at 5:30 p.m. (MST) Wednesday, March 26, 2003. To access PostView, call 1-800-633-8284; enter reservation number 21129728 and follow instructions. For calls placed outside U.S., dial 1/402-977-9140. -more- Page 4 - ALBERTSONS ANNOUNCES 4Q AND 2002 RESULTS * * * Certain statements contained in this press release, including statements regarding the Company's expected financial performance, are forward-looking information as defined in the Private Securities Litigation Reform Act of 1995. In reviewing such information about the future performance of the Company, it should be kept in mind that actual results may differ materially from those projected or suggested in such forward-looking information. These statements relate to, among other things: projected sales and earnings per share; investing to increase sales; changes in cash flow; increases in insurance and employee benefit costs; attainment of cost reduction goals; achieving sales increases and increases in identical sales; opening and remodeling stores; and our five strategic imperatives; and are indicated by words or phrases such as "expects," "plans," "believes," "estimate," and "goal." In reviewing such information about the future performance of the Company, it should be kept in mind that actual results may differ materially from those projected or suggested in such forward-looking information. Important assumptions and other important factors that could cause actual results to differ materially from those set forth in the forward-looking information include changes in the general economy; changes in interest rates; changes in consumer spending; actions taken by new or existing competitors (including nontraditional competitors), particularly those intended to improve their market share (such as pricing and promotional activities); and other factors affecting the Company's business in or beyond the Company's control. These factors include changes in the rate of inflation; changes in state or federal legislation or regulation; adverse determinations with respect to litigation or other claims (including environmental matters); labor negotiations; the cost and stability of energy sources; the Company's ability to recruit, retain and develop employees; the Company's ability to develop new stores or complete remodels as rapidly as planned; the Company's ability to implement new technology successfully; stability of product costs; the Company's ability to integrate the operations of acquired or merged companies; the Company's ability to execute its restructuring plans; and the Company's ability to achieve its five strategic imperatives. Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking information. The Company does not undertake to update forward-looking information contained herein or elsewhere to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Please refer to our reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. ALBERTSONS, INC. (Unaudited - In millions except per share data) Consolidated Earnings
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended January 30, 2003 January 31, 2002 January 30, 2003 January 31, 2002 - ---------------------------------------------- -------------------- -------------------- -------------------- -------------------- Sales $9,107 100.00% $9,340 100.00% $35,626 100.00% $36,605 100.00% Cost of sales 6,507 71.44 6,642 71.12 25,242 70.85 26,179 71.52 - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Gross profit 2,600 28.56 2,698 28.88 10,384 29.15 10,426 28.48 Selling, general and administrative expenses 2,183 23.97 2,169 23.21 8,604 24.15 8,731 23.85 Restructuring (credits) charges and other (8) (0.08) (8) (0.08) (37) (0.10) 468 1.28 Gain on Sale of NE Drug - - (54) (0.58) - - (54) (0.15) Merger-related credits - - - - - - (15) (0.04) - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Operating profit 425 4.67 591 6.33 1,817 5.10 1,296 3.54 Other expenses: Interest, net (101) (1.11) (99) (1.06) (396) (1.11) (425) (1.16) Other, net 1 0.01 11 0.13 (16) (0.04) (8) (0.02) - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Earnings from continuing operations before income tax 325 3.57 503 5.40 1,405 3.95 863 2.36 Income tax expense 126 1.37 214 2.29 540 1.51 367 1.00 - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Earnings from continuing operations 199 2.20 289 3.11 865 2.44 496 1.36 Discontinued operations: Operating (loss) income 8 0.09 2 0.02 (429) (1.20) 10 0.03 Tax (benefit) expense 2 0.03 1 0.01 (143) (0.40) 5 0.01 - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Net (loss) income from discontinued operations 6 0.06 1 0.01 (286) (0.80) 5 0.02 - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Cumulative effect of change in accounting principle - - - - (154) (0.43) - - Tax benefit - - - - 60 0.17 - - - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Cumulative Effect (Net) - - - - (94) (0.26) - - - ---------------------------------------------- -------- --------- -------- --------- --------- -------- -------- -------- Net Earnings $ 205 2.26% $ 290 3.12% $ 485 1.38% $ 501 1.38% ======== ========= ======== ========= ========= ======== ======== ======== Earnings Per Share: Basic Continuing Operations $0.53 $0.71 $2.18 $1.22 Discontinued Operations 0.01 0.00 (0.72) 0.01 Cumulative effect of change in accounting principle - - (0.24) - -------- -------- --------- -------- Net Earnings $0.54 $0.71 $1.22 $1.23 ======== ======== ========= ========= Diluted Continuing Operations $0.53 $0.71 $2.17 $1.21 Discontinued Operations 0.01 - (0.72) 0.01 Cumulative effect of change in accounting principle - - (0.23) - -------- -------- --------- --------- Net Earnings $0.54 $0.71 $1.22 $1.23 ======== ======== ========= ========= Weighted Average Common Shares Outstanding: Basic 379 406 397 406 Diluted 380 409 399 408
Supplemental Consolidated Earnings Information
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended January 30, 2003 January 31, 2002 January 30, 2003 January 31, 2002 - ---------------------------------------------- -------------------- -------------------- -------------------- -------------------- Sales $9,107 100.00% $9,340 100.00% $35,626 100.00% $36,605 100.00% Cost of sales 6,506 71.44 6,642 71.12 25,241 70.85 26,144 71.42 - ---------------------------------------------- --------- ---------- --------- -------- --------- -------- --------- -------- Gross profit 2,601 28.56 2,698 28.88 10,385 29.15 10,461 28.58 Selling, general and administrative expenses 2,183 23.96 2,183 23.37 8,596 24.13 8,635 23.59 - ---------------------------------------------- --------- ---------- --------- -------- --------- -------- --------- -------- Operating profit 418 4.60 515 5.51 1,789 5.02 1,826 4.99 Other expenses: Interest, net (101) (1.11) (99) (1.06) (396) (1.11) (425) (1.16) Other, net 1 0.01 11 0.13 (16) (0.04) (8) (0.02) - ---------------------------------------------- --------- ---------- --------- -------- --------- -------- --------- -------- Earnings before income taxes 318 3.50 427 4.58 1,377 3.87 1,393 3.81 Income tax expense 123 1.34 168 1.80 529 1.48 548 1.50 - ---------------------------------------------- --------- ---------- --------- -------- --------- -------- --------- -------- Net Earnings $ 195 2.16% $ 259 2.78% $ 848 2.39% $ 845 2.31% ========= ========== ========= ======== ========= ======== ========= ======== Earnings Per Share: Basic $0.52 $0.63 $2.14 $2.08 Diluted $0.52 $0.63 $2.13 $2.07 Return on average stockholders' equity (1) 14.7% 17.8% 15.3% 14.6% Return on average assets (1) 5.1% 6.5% 5.4% 5.3% Effective tax rate 38.4% 39.4% 38.4% 39.4% LIFO charge/(income) before income taxes ($12) ($17) ($2) $5
(1) Annualized - - Certain reclassifications have been made in the prior year to conform to classifications used in the current year. The following table provides information about the adjustments made to the Company's Consolidated Earnings as reflected in the Supplemental Consolidated Earnings Information. The primary adjustments relate to i) the impact of our restructuring plan adopted in the second quarter of 2001 and iii) the impact of the adoption of SFAS 142, which required that goodwill amortization cease at the end of our fiscal year 2001.
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended January 30, 2003 January 31, 2002 January 30, 2003 January 31, 2002 - ---------------------------------------------- -------------------- -------------------- -------------------- -------------------- Earnings from continuing operations before income taxes - reported $325 $503 $1,405 $ 863 Restructuring Plan: Inventory write-down (1) - (1) 35 Asset impairments and adjustments (5) (28) (17) 389 Severance (1) (28) 2 19 Lease termination and other - 20 (11) 83 ------- ------- -------- -------- (7) (36) (27) 526 Gain on Sale of New England Stores - (54) - (54) Goodwill Amortization - 14 - 56 Merger - - - (8) Other - - (1) 10 ------- ------- -------- -------- Earnings before income taxes - adjusted $318 $427 $1,377 $1,393 ======= ======= ======== ========
ALBERTSONS, INC. (Unaudited - In millions) Consolidated Balance Sheets
January 30, 2003 January 31, 2002 - ----------------------------------------- ------------------- ------------------- Assets Current Assets: Cash and cash equivalents $ 162 $ 61 Inventories 2,973 3,196 Assets held for sale 120 326 Other current assets 1,012 1,040 - ----------------------------------------- -------------------- ------------------- Total Current Assets 4,267 4,623 Other Assets 301 398 Goodwill and Other Intangibles, net 1,614 1,678 Land, Buildings and Equipment, net 9,029 9,282 - ----------------------------------------- -------------------- ------------------- Total Assets $15,211 $15,981 ==================== =================== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 2,009 $ 2,107 Current portions of long-term debt and capitalized lease obligations 119 137 Other current liabilities 1,320 1,352 - ----------------------------------------- -------------------- ------------------- Total Current Liabilities 3,448 3,596 Long-Term Debt 4,950 5,060 Capitalized Lease Obligations 307 276 Other Long-Term Liabilities and Deferred Credits 1,309 1,134 Stockholders' Equity 5,197 5,915 - ----------------------------------------- -------------------- ------------------- Total Liabilities and Stockholders' Equity $15,211 $15,981 ==================== =================== Total Common Shares Outstanding at End of Period 372 407
- - Certain reclassifications have been made in the prior year to conform to classifications used in the current year. ALBERTSONS, INC. (Unaudited - In millions) Consolidated Cash Flows
52 Weeks Ended 52 Weeks Ended January 30, 2003 January 31, 2002 - ----------------------------------------- -------------------- ------------------- Cash Flows From Operating Activities: Net earnings $ 485 $ 501 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 966 970 Goodwill amortization - 56 Discontinued Operations noncash charges 338 - Restructuring and other noncash charges (10) 442 Cumulative Effect of change in accounting principle 94 - Merger-related noncash credits - (13) Net gain on asset sales (9) (32) Net deferred income taxes and other 124 (106) Decrease in cash surrender value of Company-owned life insurance 17 17 Changes in operating assets and liabilities 58 174 - ----------------------------------------- -------------------- ------------------- Net cash provided by operating activities 2,063 2,009 - ----------------------------------------- -------------------- ------------------- Cash Flows From Investing Activities: Capital Expenditures (1,359) (1,455) Proceeds from disposal of land, building, and equipment 101 288 Proceeds from disposal of assets held for sale 578 118 Other 15 (31) - ----------------------------------------- -------------------- ------------------- Net cash used in investing activities (665) (1,080) - ----------------------------------------- -------------------- ------------------- Cash Flows From Financing Activities: Payments on long-term borrowings (143) (89) Proceeds from long-term borrowings - 623 Net commercial paper and bank line activity - (1,153) Proceeds from stock options exercised 14 23 Cash dividends paid (306) (309) Stock purchased and retired (862) - - ----------------------------------------- -------------------- ------------------- Net cash used in financing activities (1,297) (905) - ----------------------------------------- -------------------- ------------------- Net Increase in Cash and Cash Equivalents 101 24 Cash and Cash Equivalents at Beginning of Period 61 37 - ----------------------------------------- -------------------- ------------------- Cash and Cash Equivalents at End of Period $ 162 $ 61 ==================== ===================
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