-----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, OkaNSxqeX7S4KqpdzT5aUen1pdaVVKoidZ5bInFjCN45DgBKztlpEb06vnyqnrzj Jq2xWOhtVtD/TIc17+wJNg== 0000354950-96-000004.txt : 19960711 0000354950-96-000004.hdr.sgml : 19960711 ACCESSION NUMBER: 0000354950-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960428 FILED AS OF DATE: 19960530 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: 96574024 BUSINESS ADDRESS: STREET 1: 2455 PACES FERRY ROAD CITY: ATLANTA STATE: GA ZIP: 30339-4024 BUSINESS PHONE: 770-433-8211 MAIL ADDRESS: STREET 1: 2455 PACES FERRY ROAD CITY: ATLANTA STATE: GA ZIP: 30339-4024 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 28, 1996 - 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 30339-4089 (Address of principal executive offices) (Zip Code) (770) 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. $0.05 par value 478,834,000 Shares, as of May 16, 1996 THE HOME DEPOT, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q APRIL 28, 1996 Page Part I. Financial Information: Item 1. Financial Statements CONSOLIDATED STATEMENTS OF EARNINGS - Three-Month Periods Ended April 28, 1996 and April 30, 1995. . . . . . . . . . 3 CONSOLIDATED CONDENSED BALANCE SHEETS - As of April 28, 1996 and January 28, 1996. . . . . . . . . 4 CONSOLIDATED STATEMENTS OF CASH FLOWS - Three-Month Periods Ended April 28, 1996 and April 30, 1995. . . . . . . . . . 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 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 28, April 30, 1996 1995 ------------ ------------ Net Sales $ 4,362,215 $ 3,568,962 Cost of Merchandise Sold 3,142,285 2,571,441 --------- --------- Gross Profit 1,219,930 997,521 Operating Expenses: Selling and Store Operating 816,009 665,977 Pre-Opening 12,859 12,535 General and Administrative 72,100 64,856 --------- --------- Total Operating Expenses 900,968 743,368 --------- --------- Operating Income 318,962 254,153 Interest Income (Expense): Interest and Investment Income 4,126 4,200 Interest Expense (2,329) (2,238) --------- --------- Interest, Net 1,797 1,962 --------- --------- Earnings Before Income Taxes 320,759 256,115 Income Taxes 125,740 98,350 --------- --------- Net Earnings $ 195,019 $ 157,765 ========= ========= Earnings Per Common and Common Equivalent Share $ 0.41 $ 0.34 ========= ========= Dividends Per Share $ 0.05 $ 0.04 ========= ========= Weighted Average Number of Common and Common Equivalent Shares 480,187 477,320 ========= =========
See accompanying notes to consolidated condensed financial statements. THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (In Thousands, Except Share Data)
April 28, January 28, 1996 1995 ASSETS ---------- ----------- - - ------ Current Assets: Cash and Cash Equivalents $ 48,172 $ 53,269 Short-Term Investments 27,958 54,756 Receivables, Net 270,647 325,384 Merchandise Inventories 2,530,332 2,180,318 Other Current Assets 63,315 58,242 --------- --------- Total Current Assets 2,940,424 2,671,969 Plant and Equipment, at cost 5,220,928 4,968,895 Less: Accumulated Depreciation and Amortization (553,698) (507,871) --------- --------- Net Property and Equipment 4,667,230 4,461,024 Long-Term Investments 13,831 25,436 Notes Receivable 59,110 54,715 Cost in Excess of the Fair Value of Net Assets Acquired 87,658 87,238 Other 61,121 53,651 --------- --------- $ 7,829,374 $ 7,354,033 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 1,232,048 $ 824,808 Accrued Salaries and Related Expenses 197,273 198,208 Sales Taxes Payable 154,871 113,066 Other Accrued Expenses 328,812 242,859 Income Taxes Payable 143,342 35,214 Current Installments of Long-Term Debt 2,188 2,327 --------- --------- Total Current Liabilities 2,058,534 1,416,482 Long-Term Debt, excluding current installments 297,834 720,080 Other Long-Term Liabilities 140,680 115,917 Deferred Income Taxes 37,923 37,225 Minority Interest 84,592 76,563 Stockholders' Equity: Common Stock, par value $0.05. Authorized: 1,000,000,000 shares; issued and outstanding - 478,684,000 shares at April 28, 1996 and 477,106,000 shares at January 28, 1996 23,933 23,855 Paid -in Capital 2,453,789 2,407,815 Retained Earnings 2,750,184 2,579,059 Cumulative Translation Adjustments (1,335) (6,131) Unrealized Loss on Investments, Net (41) (47) --------- --------- 5,226,530 5,004,551 Less: Notes Receivable from ESOP 16,226 16,539 Shares Held in Employee Benefit Trust 493 246 --------- --------- Total Stockholders' Equity 5,209,811 4,987,766 --------- --------- $7,829,374 $ 7,354,033 ========= =========
See accompanying notes to consolidated condensed financial statements. THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands) Three Months Ended April 28, 1996 April 30, 1995 -------------- -------------- Cash Provided from Operations: Net Earnings $ 195,019 $ 157,765 Reconciliation of Net Earnings to Net Cash Provided by Operations: Depreciation and Amortization 52,973 39,313 Increase in Receivables, Net 49,213 40,119 Increase in Merchandise Inventories (348,348) (243,521) Increase in Accounts Payable and Accrued Expenses 556,022 388,753 Increase in Income Taxes Payable 111,786 90,179 Other 8,370 11,778 -------- -------- Net Cash Provided by Operation 625,035 484,386 -------- -------- Cash Flows From Investing Activities: Capital Expenditures (279,083) (347,345) Proceeds from Sales of Property and Equipment 5,396 10,145 Sales and Maturities of Short-Term Investments, Net 38,408 4,773 Purchase of Long-Term Investments --- (6,912) Proceeds from Maturities of Long-Term Investments --- 1,882 Advances Secured by Real Estate, Net 2,051 (14,411) -------- -------- Net Cash Used in Investing Activities (233,228) (351,868) -------- -------- Cash Flows From Financing Activities: Repayments of Commercial Paper Obligations (421,570) (90,000) Repayments of Notes Receivable from ESOP 313 201 Principal Repayments of Long-Term Debt (823) (522) Proceeds from Sale of Common Stock, Net 42,499 14,664 Shares Purchased for Employee Benefit Trust (247) (246) Cash Dividends Paid to Stockholders (23,894) (18,282) Minority Interest Contributions to Partnership 6,847 9,171 -------- -------- Net Cash Provided by Financing Activities (396,875) (85,014) -------- -------- Effect of Exchange Rate Changes on Cash (29) 17 Increase (Decrease) in Cash and Cash Equivalents 5,097 47,521 Cash and Cash Equivalents at Beginning of Period 53,269 1,154 -------- -------- Cash and Cash Equivalents at End of Period $ 48,172 $ 48,675 ======== ========
See accompanying notes to consolidated condensed financial statements. 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 recurring 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 28, 1996, as filed with the Securities and Exchange Commission (File No. 1-8207). 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 Increase(Decrease) Three Months Ended in Dollar Amounts April 28, April 30, Three 1996 1995 Months ----------- ---------- ---------------- Selected Consolidated Statements of Earnings Data Net Sales 100.0% 100.0% 22.2% Gross Profit 28.0 27.9 22.3 Operating Expenses: Selling and Store Operating 18.7 18.7 22.5 Pre-Opening 0.3 0.3 2.6 General and Administrative 1.7 1.8 11.2 ---- ---- Total Operating Expenses 20.7 20.8 21.2 Operating Income 7.3 7.1 25.5 Interest Income (Expense): Interest and Investment Income 0.1 0.1 (1.8) Interest Expense - - 4.1 ---- ---- Interest, Net 0.1 0.1 (8.4) Earnings Before Income Taxes 7.4 7.2 25.2 Income Taxes 2.9 2.8 27.8 ---- ---- Net Earnings 4.5% 4.4% 23.6 Selected Consolidated Sales Data Number of Transactions 104,209,000 84,624,000 23.1 Average Amount of Sale Per Transaction $ 41.86 $ 42.17 (0.7) Weighted Average Weekly Sales Per Operating Store $ 782,000 $ 791,000 (1.1) Weighted Average Sales Per Square Foot $ 387 $ 396 (2.3)
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 1996 increased 22% to $4,362,215,000 compared to attributable to new stores (441 at the end of the first quarter of fiscal 1996 compared to 359 at the end of the first quarter of fiscal 1995) and a comparable store-for-store sales increase of 3%. Gross profit as a percent of sales was 28.0% for the first quarter of fiscal 1996 compared to 27.9% for the comparable period of fiscal 1995. The gross profit increase as a percent of sales resulted primarily from delays and changes in merchandise mix resulting from late Spring weather in many markets. Operating expenses as a percent of sales decreased to 20.7% for the first quarter of fiscal 1996 compared to 20.8% for the first quarter of fiscal 1995. Selling and store operating expenses as a percent of sales were 18.7% for both the first quarter of fiscal 1996 and fiscal 1995. Pre-opening expenses as a percent of sales were 0.3% for both the first quarter of fiscal 1996 and fiscal 1995. General and administrative expenses as a percent of sales were 1.7% for the first quarter of fiscal 1996 compared to 1.8% for the first quarter of fiscal 1995. This decrease as a percent of sales was due to the Company's continuing focus on controlling costs. Interest income as a percent of sales was 0.1% for both the first quarter of fiscal 1996 and fiscal 1995. Interest expense as a percent of sales was 0% for both the first quarter of fiscal 1996 and fiscal 1995. The Company s combined Federal and state effective income tax rate increased to 39.2% for the first quarter of fiscal 1996 from 38.4% for the comparable period of fiscal 1995. In the fourth quarter of fiscal 1995, the Company's combined Federal and state effective income tax rate was adjusted to 38.8% for the fiscal year. The increase in the rate for the first quarter of fiscal 1996 was due to a higher effective state tax rate. Net earnings as a percent of sales increased to 4.5% for the first quarter of fiscal 1996 compared to 4.4% for the same period of fiscal 1995. This increase was attributable to higher gross profits and lower operating expenses partially offset by a higher effective income tax rate, as described above. 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 1996, the Company opened 18 stores and relocated four existing stores. During the remainder of fiscal 1996, the Company plans to open approximately 72 additional new stores and relocate three existing stores. Of the planned 90 new stores and seven relocations, it is expected that 76 will be owned and 21 will be leased. The Company currently plans to open approximately 123 new stores, including relocations, during fiscal 1997. 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 1996. 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 $13,600,000 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 $2,800,000 to finance inventories, net of vendor financing. As of April 28, 1996, the Company had $89,961,000 in cash and short-term investments and $13,831,000 in long-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. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders During the first quarter of fiscal 1996, 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 27. Financial Data Schedule (only submitted to SEC in electronic format) (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended April 28, 1996. 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/ Marshall L. Day Marshall L. Day Senior Vice President Chief Financial Officer 5/28/96 (Date) THE HOME DEPOT, INC. AND SUBSIDIARIES INDEX TO EXHIBITS Exhibit Description 11.1 Computation of Earnings per Common and Common Equivalent Share 27 Financial Data Schedule EX-11.1 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 28, April 30, 1996 1995 ---------- ---------- Net earnings applicable to common and common equivalent shares $ 195,019 $ 157,765 Tax effected interest expense, net of interest capitalized, attributable to convertible subordinated notes --- 2,415 --------- --------- $ 195,019 $ 160,180 ========= ========= Shares: Weighted average number of common and common equivalent shares assuming average market price 480,187 456,546 Additional shares from conversion of notes --- 20,774 --------- --------- 480,187 477,320 ========= ========= Primary earnings per common and common equivalent share $ 0.406 $ 0.336 ========= =========
(1) Common equivalent shares represent shares granted under the Company s stock option plans and an employee stock purchase plan. (2) The Company's 4.5% Convertible Subordinated Notes, issued in 1992, were common stock equivalents prior to their conversion in March 1995. For the three months ended April 30, 1995, the Notes were dilutive and, accordingly, are assumed to be converted as of the beginning of the accounting period for purposes of calculating earnings per share. (3) Fully diluted earnings per share is not presented because the impact of a higher ending market price on weighted average common equivalent shares was not material for the three month period ended April 28, 1996, and was not calculated for the three month period ending April 30, 1995, because the ending price of the stock was lower than the average price. EX-27 3
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