-----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, c2K/m6nytMvvujf01gN8EbUtgpGG9FPArWHPIx0H5k+pLSDUi//dRmZ/rz88DJDz 8T35hFed9RaFCOsgGR909w== 0000354950-95-000004.txt : 19950608 0000354950-95-000004.hdr.sgml : 19950608 ACCESSION NUMBER: 0000354950-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950526 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME DEPOT INC CENTRAL INDEX KEY: 0000354950 STANDARD INDUSTRIAL CLASSIFICATION: 5211 IRS NUMBER: 953261426 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08207 FILM NUMBER: 95542709 BUSINESS ADDRESS: STREET 1: 2727 PACES FERRY RD CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 4044338211 MAIL ADDRESS: STREET 1: 2727 PACES FERRY RD CITY: ATLANTA STATE: GA ZIP: 30339 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE XX SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1995 ______________ - OR - TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _________________ Commission file number 1-8207 THE HOME DEPOT, INC. (Exact name of registrant as specified in its charter) Delaware 95-3261426 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2727 Paces Ferry Road Atlanta, Georgia 30339 (Address of principal executive offices) (Zip Code) (404) 433-8211 (Registrant's telephone number, including area code) __________________________________________________ (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 X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. $.05 par value 476,083,855 Shares, as of May 19, 1995 Page 1 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q April 30, 1995 Page Part I. Financial Information: Item 1. Financial Statements CONSOLIDATED STATEMENTS OF EARNINGS - Three-Month Period Ended April 30, 1995 and May 1, 1994................................. 3 CONSOLIDATED CONDENSED BALANCE SHEETS - As of April 30, 1995 and January 29, 1995...................... 4 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - Three-Month Period Ended April 30, 1995 and May 1, 1994................................. 5 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS........................................... 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition...................................................... 7-9 Part II. Other Information: Item 4. Submission of Matters to a Vote of Security Holders... 10 Item 6. Exhibits and Reports on Form 8-K...................... 10 Signature Page................................................. 11 Index to Exhibits.............................................. 12 Page 2 of 12 PART I. FINANCIAL INFORMATION THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In Thousands, Except Per Share Data) Three Months Ended April 30, 1995 May 1, 1994 Net Sales $3,568,962 $2,872,129 Cost of Merchandise Sold 2,571,441 2,063,372 Gross Profit 997,521 808,757 Operating Expenses: Selling and Store Operating 665,977 519,389 Pre-opening 12,535 9,713 General and Administrative 64,856 51,891 Total Operating Expenses 743,368 580,993 Operating Income 254,153 227,764 Interest Income (Expense): Interest and Investment Income 4,200 8,397 Interest Expense (2,238) (8,567) Interest, Net 1,962 (170) Earnings Before Income Taxes 256,115 227,594 Income Taxes 98,350 87,860 Net Earnings $ 157,765 $ 139,734 Earnings Per Common and Common Equivalent Share $ .34 $ .31 Dividends Per Share $ .04 $ .03 Weighted Average Number of Common and Common Equivalent Shares 477,320 453,976 See accompanying notes to consolidated condensed financial statements.
Page 3 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (In Thousands) April 30, January 29, 1995 1995 ----------- ------------- ASSETS Current Assets: Cash and Cash Equivalents $ 48,675 $ 1,154 Short-Term Investments, including current maturities of long-term investments 73,290 56,712 Accounts Receivable, Net 229,154 272,225 Merchandise Inventories 1,995,032 1,749,312 Other Current Assets 58,604 53,560 Total Current Assets 2,404,755 2,132,963 Property and Equipment, at cost 4,088,839 3,747,268 Less: Accumulated Depreciation and Amortization (383,203) (350,031) Net Property and Equipment 3,705,636 3,397,237 Long-Term Investments Held Available for Sale 82,976 98,022 Notes Receivable 50,133 32,528 Cost in Excess of the Fair Value of Net Assets Acquired, Net 91,025 88,513 Other 31,899 28,778 $6,366,424 $5,778,041 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $1,016,049 $ 681,291 Accrued Salaries and Related Expenses 224,188 192,151 Sales Taxes Payable 103,391 101,011 Other Accrued Expenses 230,119 208,377 Income Taxes Payable 93,656 8,717 Current Installments of Long-Term Debt 31,472 22,692 Total Current Liabilities 1,698,875 1,214,239 Convertible Subordinated Debt --- 804,985 Commercial Paper 10,000 100,000 Long-Term Debt, excluding current installments 87,133 78,384 Other Long-Term Liabilities 74,049 67,953 Deferred Income Taxes 18,445 19,258 Minority Interest 60,170 50,999 Stockholders' Equity: Common Stock - 475,366,000 shares outstanding at 04/30/95 and 453,365,000 shares outstanding at 01/29/95 23,768 22,668 Paid-in Capital 2,350,252 1,526,463 Retained Earnings 2,076,767 1,937,284 Cumulative Translation Adjustments (514) (10,887) Unrealized Holding Loss on Investments (666) (1,495) 4,449,607 3,474,033 Less Notes Receivable from ESOP 31,609 31,810 Less Shares held in Employee Benefit Trust 246 --- Total Stockholders' Equity 4,417,752 3,442,223 $6,366,424 $5,778,041 See accompanying notes to consolidated condensed financial statements.
Page 4 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Three Months Ended April 30, 1995 May 1, 1994 -------------- ------------- Cash Provided from Operations: Net Earnings $ 157,765 $ 139,734 Reconciliation of Net Earnings to Net Cash Provided by Operations: Depreciation and Amortization 39,313 28,374 Increase in Accounts Payable and Accrued Expenses 388,753 318,635 Increase in Merchandise Inventories (243,521) (210,977) Increase in Income Taxes Payable 90,179 59,029 Increase in Receivables, Net 40,119 5,057 Other 20,949 6,734 Net Cash Provided by Operations 493,557 346,586 Cash Flows From Investing Activities: Capital Expenditures (347,345) (260,246) Payment for Purchase of Partnership Interest --- (161,548) Proceeds from Sale of Short-Term Investments, Net 4,773 88,142 Purchase of Long-Term Investments (6,912) (46,997) Proceeds from Maturities of Long-Term Investments 1,882 6,916 Proceeds from Sale of Long-Term Investments --- 161,197 Proceeds from Sale of Property and Equipment 10,145 12,697 (Advances) Repayments of Advances Secured by Real Estate, Net (14,411) 21,104 Net Cash Used in Investing Activities (351,868) (178,735) Cash Flows From Financing Activities: Repayments of Obligations for Commercial Paper (90,000) --- Proceeds from Sale of Common Stock, Net 14,664 13,515 Cash Received from ESOP 201 --- Principal Repayments of Long-Term Debt (522) (287) Shares Purchased for Employee Benefit Trust (246) --- Cash Dividends Paid to Stockholders (18,282) (13,515) Net Cash (Used In) Provided by Financing Activities (94,185) (287) Effect of Exchange Rate Changes on Cash 17 --- Increase in Cash and Cash Equivalents 47,521 167,564 Cash and Cash Equivalents, Beginning of Period 1,154 99,997 -------------- -------------- Cash and Cash Equivalents, End of Period $ 48,675 $ 267,561 See accompanying notes to consolidated condensed financial statements.
Page 5 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies: Basis of Presentation The accompanying consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal reoccurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 29, 1995, as filed with the Securities and Exchange Commission (File No. 1-8207). 2. Redemption of Convertible Notes On February 28, 1995, the Company announced its decision to redeem, on March 31, 1995, all of its outstanding 4.5% Convertible Subordinated Notes due June 15, 1997 (the "Notes") at a redemption price of $1,016.75 (which includes premium and interest) per $1,000 principal amount of Notes. The Notes were convertible into Common Stock at the rate of one share for each $38.75 principal amount of Notes owned. All of the Notes were converted to Common Stock. Beginning in the second fiscal quarter of 1994, the Notes had a dilutive effect on earnings per share and accordingly, the Company has reported earnings per share for the first fiscal quarter of 1995 assuming the Notes had converted at the beginning of the accounting period. Page 6 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The data below reflect selected sales data, the percentage relationship between sales and major categories in the Consolidated Statements of Earnings and the percentage change in the dollar amounts of each of the items.
Percentage Three Months Ended Increase (Decrease) April 30, May 1, in Dollar Amounts 1995 1994 Three Months Selected Consolidated Statements of Earnings Data Net Sales 100.0% 100.0% 24.3% Gross Profit 27.9 28.1 23.3 Operating Expenses: Selling and Store Operating 18.7 18.1 28.2 Pre-Opening .3 .3 29.1 General and Administrative 1.8 1.8 25.0 Total Operating Expenses 20.8 20.2 27.9 Operating Income 7.1 7.9 11.6 Interest Income (Expense): Interest and Investment Income .1 .3 (50.0) Interest Expense - (.3) (73.9) Interest, Net .1 - (1,254.1) Earnings Before Income Tax 7.2 7.9 12.5 Income Taxes 2.8 3.0 11.9 Net Earnings 4.4% 4.9% 12.9% Selected Consolidated Sales Data Number of Customer Transactions 84,624,000 70,859,000 19.4% Average Amount of Sales Per Transaction $ 42.17 $ 40.53 4.0 Weighted Average Weekly Sales Per Operating Store $791,000 $796,000 (0.6) Weighted Average Sales Per Square Foot $ 396 $ 409 (3.2)
Page 7 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) RESULTS OF OPERATIONS Sales for the first quarter of fiscal 1995 increased 24% to $3,568,962,000 compared to sales of $2,872,129,000 for the first quarter of fiscal 1994. This sales increase was attributable to new stores (359 at the end of the first quarter of fiscal 1995 compared to 287 at the end of the first quarter of fiscal 1994) and a comparable store for store sales increase of 5%. In addition, inclement weather adversely affected approximately one-third of the Company's stores during portions of the first quarter of fiscal 1995. Gross profit as a percent of sales was 27.9% for the first quarter of fiscal 1995 compared to 28.1% for the comparable period of fiscal 1994. This gross profit decrease as a percent of sales resulted primarily from more emphasis on building materials, lumber products and floor coverings which are lower margin categories as well as lower margins in our paint department resulting from cost increases and departmental sales mix. Operating expenses as a percent of sales increased to 20.8% the first quarter of fiscal 1995 compared to 20.2% for the first quarter of fiscal 1994. Selling and store operating expenses as a percent of sales increased to 18.7% for the first quarter of fiscal 1995 compared to 18.1% for the comparable period in fiscal 1994. This increase was attributable to, among other things, higher store payroll expenses due to staffing for higher seasonal sales which did not materialize, higher advertising costs as a percent to sales resulting from lower sales than expected, and higher expenses associated with three store relocations and other real estate expenses compared to five relocations in the first quarter of fiscal 1994. Pre-opening expenses as a percent of sales were 0.3% for both the first quarter of fiscal 1995 and fiscal 1994. General and administrative expenses as a percent of sales were 1.8% for both the first quarter of fiscal 1995 and fiscal 1994. Interest income as a percent of sales decreased to 0.1% for the first quarter of fiscal 1995 from 0.3% for the first quarter of fiscal 1994. This decrease was attributable to a lower investment base partially offset by higher effective yields. Interest expense as a percent of sales decreased to 0% for the first quarter of fiscal 1995 compared to 0.3% for the first quarter of fiscal 1994. This decrease was attributable to the conversion of the 4.5% Convertible Subordinated Notes on March 31, 1995 and higher capitalized interest due to more stores under construction. The Company's combined Federal and state effective income tax rate decreased to 38.4% for the first quarter of fiscal 1995 from 38.6% for the comparable period of fiscal 1994. In the fourth quarter of fiscal 1994, the Company's combined Federal and state effective income tax rate was adjusted to 38.3% for the fiscal year. The increase in the rate for the first quarter of fiscal 1995 was due to a higher effective state tax rate and the loss of targeted jobs tax credits. Net earnings as a percent of sales decreased to 4.4% for the first quarter of fiscal 1995 compared to 4.9% for the same period of fiscal 1994. This decrease was attributable to lower gross profits and higher operating expenses partially offset by higher net interest income and a lower effective income tax rate, as described above. Page 8 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES Cash flow generated from store operations provides the Company with a significant source of liquidity. Additionally, a significant portion of the Company's inventory is financed under vendor credit terms. During the first three months of fiscal 1995, the Company opened 19 stores and relocated three ofits existing stores. During the remainder of fiscal 1995, the Company plans to open approximately 72 additional new stores and relocate two existing stores. Of the planned 91 new stores and five relocations, it is expected that 88 will be owned and eight will be leased. The Company currently plans to open approximately 112 new stores and may relocate eight stores during fiscal 1996. Although some of these locations will be leased directly, it is expected that many may be obtained through the purchase of pre-existing leasehold interests, the acquisition of land parcels and the construction or purchase of buildings during fiscal 1995. While the cost of new stores to be constructed and owned by the Company varies widely, principally due to land costs, new store costs (including land, building and fixtures) are currently estimated to average approximately $12,600,000 per location. The Company may purchase leasehold interests at varying amounts depending upon the value of such properties. The cost to remodel (including leasehold interests) and fixture stores to be leased is expected to average approximately $4,000,000 per store. In addition, each new store will require approximately $2,700,000 to finance inventories, net of vendor financing. On February 28, 1995, the Company announced its decision to redeem, on March 31, 1995, all of its outstanding 4.5% Convertible Subordinated Notes due June 15, 1997 (the "Notes") at a redemption price of $1,016.75 (which includes premium and interest) per $1,000 principal amount of Notes. The Notes were convertible into Common Stock at the rate of one share for each $38.75 principal amount of Notes owned. All of the $1,000 Notes were converted to Common Stock. Beginning in the second fiscal quarter of 1994, the Notes had a dilutive effect on earnings per share and accordingly, the Company has reported earnings per share for the first fiscal quarter of 1995 assuming the Notes had converted at the beginning of the accounting period. As of April 30, 1995, the Company had $121,965,000 in cash and short-term investments as well as $82,976,000 in long-term investments. In the first quarter of fiscal 1995, the Company reduced its outstanding borrowings related to Commercial Paper from $100,000,000 at fiscal year-end to $10,000,000 due to the maturation of short-term investments. Management believes that its current cash position, the proceeds from short-term and long-term investments, internally generated funds, its commercial paper program, and/or the ability to obtain alternate sources of financing should enable the Company to complete its capital expenditure programs, including store expansion and renovation, through the next several fiscal years. IMPACT OF INFLATION AND CHANGING PRICES Although the Company cannot accurately determine the precise effect of inflation on its operations, it does not believe inflation has had a material effect on sales or results of operations. Page 9 of 12 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders During the first quarter of fiscal 1995, no matters were submitted to a vote of security holders. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11.1 Computation of Earnings per Common and Common Equivalent Share (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended April 30, 1995. Page 10 of 12 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. THE HOME DEPOT, INC. (Registrant) By: /s/ Arthur M. Blank Arthur M. Blank President /s/ Ronald M. Brill Ronald M. Brill Executive Vice President Chief Financial Officer May 26, 1995 (Date) Page 11 of 12 THE HOME DEPOT, INC. AND SUBSIDIARIES INDEX TO EXHIBITS Exhibit Description Page 11.1 Computation of Earnings per Common and Common Equivalent Share.................................. 13 Page 12 of 12 EX-11 2 Exhibit 11.1 THE HOME DEPOT, INC. AND SUBSIDIARIES
Computation of Earnings Per Common and Common Equivalent Share (In Thousands, Except Per Share Data) Three Months Ended April 30, 1995 May 1, 1994 Primary -------------- -------------- Net earnings applicable to common to common and common equivalent shares $157,765 $139,734 Taxes effected interest expense, net of interest capitalized, attributable to Convertible Subordinated Notes 2,415 --- $160,180 $139,734 Shares: Weighted average number of common and common equivalent shares assuming average market price for period 456,546 453,976 Additional shares from conversion of the Notes 20,774 --- 477,320 453,976 Primary earnings per common and common equivalent share $ .336 $ .308 Fully Diluted Net earnings applicable to common and common equivalent shares $ N/A $139,734 Tax effected interest expense, net of interest capitalized, attributable to Convertible Subordinated Notes $ N/A $ 5,260 $ N/A $144,994 Shares: Weighted average number of common and common equivalent shares at higher of ending or average market price N/A 454,068 Additional shares from Convertible Subordinated Notes N/A 20,774 N/A 474,842 Fully diluted earnings per common & common equivalent share $ N/A $ .305 (1) Common equivalent shares represent shares granted under three stock option plans and an employee stock purchase plan. (2) The Company's 4% convertible notes, issued in 1992 were common stock equivalents prior to their conversion in March, 1995. Fully diluted earnings per share shows the effect on earnings per share assuming conversion of the 4% convertible notes as of the beginning of the accounting periods presented. (3) For the three month period ended April 30, 1995, the ending price of the stock was lower than the average price and therefore there is no fully dilutive earnings per share presented.
EX-27 3
5 The Home Depot, Inc. 1996 1st Qtr. EXHIBIT 27 FDS 1000 3-MOS JAN-28-1996 APR-30-1995 48675 73290 229154 0 1995032 2404755 4088839 383203 6366424 1698875 87133 23768 0 0 4393984 6366424 3568962 3568962 2571441 743368 0 0 (1962) 256115 98350 157765 0 0 0 157765 .34 0
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