-----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, RIkVS1BgrK4SYgCUc4KDE0jg2RrZc6fqXTXu3omcL15Rxl1/6KK6oCMWUC15OZ34 WfPpKFw9cP/IO/UylOyDKQ== 0000912057-97-012912.txt : 19970415 0000912057-97-012912.hdr.sgml : 19970415 ACCESSION NUMBER: 0000912057-97-012912 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970301 FILED AS OF DATE: 19970414 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CONSUMERS INC CENTRAL INDEX KEY: 0000004811 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 581033765 STATE OF INCORPORATION: GA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05815 FILM NUMBER: 97580073 BUSINESS ADDRESS: STREET 1: PO BOX 2328 STREET 2: 418A BATTLEFIELD PKWY CITY: FORT OGLETHORPE STATE: GA ZIP: 30742 BUSINESS PHONE: 7068613347 MAIL ADDRESS: STREET 1: P O BOX 2328 STREET 2: 418-A BATTLEFIELD PARKWAY CITY: FORT OGLETHORPE STATE: GA ZIP: 30742 10-Q 1 10-Q Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 1, 1997 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 No. 0-5815 AMERICAN CONSUMERS, INC. (Exact name of registrant as specified in its charter) GEORGIA 58-1033765 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) P.O. BOX 2328, 418A BATTLEFIELD PKWY., FORT OGLETHORPE, GA 30742 (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, including Area Code: (706) 861-3347 N/A (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. Class Outstanding at April 4, 1997 COMMON STOCK - $.10 PAR VALUE 922,222 NON VOTING COMMON STOCK - $.00 PAR VALUE 0 NON VOTING PREFERRED STOCK - $.00 PAR VALUE 0
Exhibit Index on Page 10 (1) PAGE 1 OF 11 PAGES FINANCIAL INFORMATION AMERICAN CONSUMERS, INC. CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED -------------------- ---------------------- March 1, March 2, March 1, March 2, 1997 1996 1997 1996 ------- ------- -------- -------- NET SALES $7,048,867 $7,582,683 $21,008,687 $22,084,742 COST OF GOODS SOLD 5,517,995 5,906,488 $16,479,854 17,403,821 ---------- ---------- ----------- ----------- Gross Margin 1,530,872 1,676,195 4,528,833 4,680,921 OPERATING EXPENSES 1,477,627 1,547,320 4,382,302 4,476,194 ---------- ---------- ----------- ----------- Operating Income 53,245 128,875 146,531 204,727 OTHER INCOME (EXPENSE) Interest income 10,086 5,186 31,129 17,348 Other income 14,076 13,964 41,704 39,060 Loss on sale of assets -- (15,705) (31,095) (21,497) Interest expense (18,235) (5,025) (55,262) (14,657) ---------- ---------- ----------- ----------- Income Before Income Taxes 59,172 127,295 133,007 224,981 PROVISION FOR INCOME TAXES 25,383 50,427 50,009 79,560 ---------- ---------- ----------- ----------- NET INCOME 33,789 76,868 82,998 145,421 RETAINED EARNINGS: Beginning 1,659,893 1,499,023 1,666,324 1,467,651 Cash dividends -- -- (55,479) (37,093) Redemption of common stock -- (24) (161) (112) ---------- ---------- ----------- ----------- Ending 1,693,682 1,575,867 1,693,682 1,575,867 ---------- ---------- ----------- ----------- ---------- ---------- ----------- ----------- PER SHARE: Net income $0.037 $0.083 $0.090 $0.157 ---------- ---------- ----------- ----------- ---------- ---------- ----------- ----------- Cash dividends $0.000 $0.000 $0.060 $0.040 ---------- ---------- ----------- ----------- ---------- ---------- ----------- ----------- WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 922,222 927,011 923,352 926,760 ---------- ---------- ----------- ----------- ---------- ---------- ----------- -----------
See Notes to Financial Statements (2) PAGES 2 OF 11 PAGES FINANCIAL INFORMATION AMERICAN CONSUMERS, INC. CONDENSED BALANCE SHEETS
March 1, June 1, 1997 1996 -------- ------- --A S S E T S-- CURRENT ASSETS: Cash $ 599,875 $ 606,399 Securities purchased under agreement to resell 457,434 371,150 Certificate of deposit 365,033 355,932 Accounts receivable 138,092 190,225 Refundable income taxes 27,568 -- Inventories 1,695,733 1,663,304 Prepaid expenses 23,358 55,264 ---------- ---------- Total current assets 3,307,093 3,242,274 ---------- ---------- PROPERTY - At cost: Property 2,866,379 2,856,592 Less accumulated depreciation 1,759,727 1,614,687 ---------- ---------- Property - Net 1,106,652 1,241,905 ---------- ---------- OTHER ASSETS 17,106 18,491 ---------- ---------- TOTAL ASSETS $4,430,851 $4,502,670 ---------- ---------- ---------- ---------- - -LIABILITIES AND STOCKHOLDERS' EQUITY- - CURRENT LIABILITIES: Accounts payable $ 762,139 $ 731,029 Note payable to principal stockholder 193,000 201,000 Obligations under capital leases, current portion 141,009 109,102 Accrued sales tax 73,882 170,433 Accrued income taxes -- 24,067 Other accrued liabilities 159,902 161,585 ---------- ---------- Total Current Liabilities 1,329,932 1,397,216 ---------- ---------- DEFERRED INCOME TAX LIABILITY 51,518 40,333 ---------- ---------- DEFERRED INCOME 130,702 146,598 ---------- ---------- OBLIGATIONS UNDER CAPITALIZED LEASE AGREEMENTS 363,735 388,646 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Note 2) STOCKHOLDERS' EQUITY: Non voting preferred stock; authorized 5,000,000 shares of no par value; no shares issued -- -- Non voting common stock; authorized 5,000,000 shares of $.10 par value; no shares issued -- -- Common stock; authorized 5,000,000 shares of $.10 par value; issued 940,234 92,222 92,465 Additional paid-in capital 769,060 771,088 Retained earnings 1,693,682 1,666,324 ---------- ---------- Total Stockholders' Equity 2,554,964 2,529,877 ---------- ---------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $4,430,851 $4,502,670 ---------- ---------- ---------- ----------
See Notes to Financial Statements (3) PAGE 3 OF 11 PAGES FINANCIAL INFORMATION AMERICAN CONSUMER, INC. CONDENSED STATEMENTS OF CASH FLOWS
THIRTY-NINE WEEKS ENDED March 1, March 2, CASH FLOWS FROM OPERATING ACTIVITIES 1997 1996 -------- -------- Net income $ 82,998 $145,421 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 232,425 120,228 Deferred income taxes 11,185 (2,000) (Gain) loss on sale of property 31,095 22,075 Deferred income (15,896) (15,896) Change in operating assets and liabilities: Certificate of Deposit (9,101) (9,612) Accounts receivable 52,133 26,909 Refundable income taxes (27,568) -- Inventories (32,429) (65,517) Prepaid expenses 31,906 (2,228) Accounts payable 31,110 109,843 Accrued sales tax (96,551) 10,051 Accrued income taxes (24,067) 15,471 Other accrued liabilities (1,684) 68,111 ---------- --------- Net Cash provided by (used in) operating activities 265,556 422,856 ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property (37,550) (63,560) Proceeds from disposal of property 9,000 4,648 Other 1,385 16,435 ---------- --------- Net cash used in investing activities (27,165) (42,477) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in short-term borrowings (8,000) 3,000 Principal payments on obligations under capital leases (92,721) -- Cash dividends (55,479) (37,093) Redemption of common stock (2,431) (1,691) ---------- --------- Net cash provided by (used in) financing activities (158,631) (35,784) ---------- --------- Net increase (decrease) in cash 79,760 344,595 Cash and cash equivalents at beginning of period 977,549 604,156 ---------- --------- Cash and cash equivalents at end of period $1,057,309 $948,751 ---------- --------- ---------- --------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Income taxes $ 93,672 $ 68,929 ---------- --------- ---------- --------- Interest $ 55,262 $ 14,657 ---------- --------- ---------- --------- NONCASH FINANCING ACTIVITIES Capital lease obligations incurred for use of equipment $ 99,716 $ -- ---------- --------- ---------- ---------
See Notes to Financial Statements (4) PAGE 4 OF 11 PAGES AMERICAN CONSUMERS, INC. NOTES TO FINANCIAL STATEMENTS (1) Basis of Presentation. The financial statements have been prepared in conformity with generally accepted accounting principles and general practices within the industry. The interim financial statements should be read in conjunction with the notes to the financial statements presented in the Corporation's 1996 Annual Report to Shareholders. The quarterly financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for interim periods. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of results to be expected for the complete fiscal year. (2) Commitments and Contingencies. Capital expenditures are not expected to exceed $100,000 during the current fiscal year. The Company adopted a retirement plan effective January 1, 1995. The plan is a 401(k) plan administered by BISYS Qualified Plan Services. Participation in the plan is available to all full-time employees after one year of service and age 19. Any contribution by the Company will be at the discretion of the Board of Directors, which will make such decisions annually at its quarterly meeting in January. At the Board Meeting in January 1997, the Board voted to contribute $15,000 to the plan on behalf of plan participants. The expense for this contribution is included in the accompanying financial statements. None of the Company's employees are represented by a union. (3) Securities Purchased Under Agreement to Resell. The Company invests excess funds in the U.S. Government for U.S. Government Agency securities which are purchased under an agreement to resell (reverse repurchase agreement). The securities are purchased from a bank but do not constitute deposits at the bank and are not insured by the Federal Deposit Insurance Corporation. The bank maintains possession of the securities, but title of ownership passes to the Company according to the terms of the agreement. The bank repurchases the securities the business day immediately following the Company's purchase date. The carrying amount of securities purchased under agreement to resell approximates fair value. Risk of market value deterioration is mitigated by the short-term nature of the transaction and the type of securities purchased. Amounts outstanding under the agreement were $457,434 at March 1, 1997, and $371,150 at June 1, 1996. (5) PAGE 5 OF 11 PAGES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED -------------------- ----------------------- March 1, March 2, March 1, March 2, 1997 1996 1997 1996 -------- -------- -------- -------- Sales $7,048,867 $7,582,683 $21,008,687 $22,084,742 % Sales Increase (Decrease) (7.04) 4.32 (4.87) 3.93 Gross Margin % 21.72 22.11 21.56 21.20 Operating and Administrative Expense: Amount 1,477,627 1,547,320 4,382,302 4,476,194 % of Sales 20.96 20.41 20.86 20.27 Net Income 33,789 76,868 82,998 145,421
Overall, sales decreased 7.04% from sales for the same quarter last year. This decrease is attributable to decreased sales at five of the Company's six stores. Management believes that this decrease is primarily due to (1) the opening of a new competitor at one location and (2) increased competition experienced by two of the Company's other locations due to the presence of a Wal-Mart Super Center in their area. Management believes that the store location which was impacted by the opening of a new competitor (which represented the most significant component of the overall sales decrease) may regain a portion of its lost volume once the competitor has completed the initial phase of heavy sales promotions typically associated with the opening of a new location in the grocery store industry. The Company's prior experience indicates that this promotional phase typically lasts for approximately one year following the introduction of the new location. In addition to the installation of scanning equipment, which has improved the Company's pricing efficiency and its control of inventory costs, the Company continuously seeks to improve its profitability by obtaining the lowest cost available for its goods and by containing the expansion of its labor costs. The Company will also continue to explore other means of improving results, including consideration of the possible acquisition of additional store locations in areas where some of the Company's larger competitors have not yet established a significant presence. At present, the Company has no definite plans for any such acquisition. Operating and administrative expense increased as a percent of sales between the quarter and year to date periods presented. Increases in operating expenses such as depreciation, due to the capital leases pertaining to the Company's scanning equipment and group insurance due to the Company's having absorbed the last premium increase rather than passing it on to employees, are the reasons for the increased expense. Interest expense also increased as a result of the recording of the capital leases. These increases in fixed charge components of the Company's operating expenses have also resulted in an increase in the Company's overall proportion of fixed expenses relative to total expenses, as reflected in the results for both the quarter and year to date periods presented. Refundable income taxes at March 1, 1997 are a result of estimated taxes paid exceeding the liability due. At June 1, 1996 a liability of $24,067 was recorded. (6) PAGE 6 OF 11 PAGES Inventories, up $84,111 from June 1, is consistent for this time of year. At December 2, 1995 inventories were $1,763,656. Accrued sales taxes have decreased due to the State of Georgia reducing the sales tax rate on food by two percent, resulting in a smaller monthly liability for the Company. Income Taxes: The provision for income taxes for the quarter ended March 1, 1997 was $25,383 and $50,427 for the quarter ended March 2, 1996. The provision for income taxes does not vary significantly from the statutory rate of 34%. Inflation: Although not a current significant factor, the Company continues to seek ways to cope with the threat of renewed inflation. To the extent permitted by competition, increased costs of goods and services to the Company are reflected in increased selling prices for the goods sold by the Company. FINANCIAL CONDITION Liquidity and Capital Resources: The Company finances its working capital requirements principally through its cash flow from operations and short-term borrowing. Short-term borrowing to finance inventory purchases is provided by the Company's $800,000 line of credit with a regional bank. An additional line of credit in the amount of $300,000 is also available from its principal inventory supplier. No borrowings were outstanding under either of these lines during the periods presented. Long-term borrowing generally finances capital expansion. Accounts payable consist of trade debt paid in the ordinary course of the Company's business. Short-term borrowings consist of unsecured notes payable to a principal stockholder. The notes to stockholder, in the sum of $193,000 and $201,000 as of March 1, 1997 and as of June 1, 1996 respectively, are payable on demand and bear interest at .25% below the base rate charged by the regional bank which provides the Company with its line of credit. The ratio of current assets to current liabilities was 2.49 to 1 at the end of the latest quarter, March 1, 1997 as compared to 2.30 to 1 on March 2, 1996 and 2.32 to 1 at the end of the fiscal year ended June 2, 1996. Cash and cash equivalents constituted 31.97% of the total current assets at March 1, 1997 as compared to 29.15% at March 2, 1996 and 30.15% at June 1, 1996. During the quarter ended March 1, 1997 retained earnings decreased as a result of the Company's net loss for the quarter. (7) PAGE 7 OF 11 PAGES AMERICAN CONSUMERS, INC. PART II OTHER INFORMATION Item 6 EXHIBITS AND REPORTS OF FORM 8-K (a) The following exhibits are filed as a part of the report. (11) Statement re: computation of per share earnings. (b) During the most recent quarter, the Company has not filed a report on Form 8-K. EXH 27 - Financial Data Schedule (8) PAGE 8 OF 11 PAGES 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. AMERICAN CONSUMERS, INC. (Registrant) Date: 4/10/97 /s/ Michael A. Richardson ------------------------------------- Michael A. Richardson CHAIRMAN (Principal Executive Officer) Date: 4/10/97 /s/ Paul R. Cook ------------------------------------- Paul R. Cook EXECUTIVE VICE PRESIDENT - TREASURER (Principal Financial Officer & Chief Accounting Officer) (9) PAGE 9 OF 11 PAGES EX-11 2 EX-11 AMERICAN CONSUMERS, INC. NET INCOME PER COMMON SHARE EXHIBIT 11
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED -------------------- ----------------------- March 1, March 2, March 1, March 2, 1997 1996 1997 1996 -------- -------- -------- -------- Net income for computing earnings per common share $ 33,789 $ 76,868 $ 82,998 $145,421 -------- -------- -------- -------- -------- -------- -------- -------- Weighted average number of common shares outstanding during each period 922,222 927,011 923,352 926,760 -------- -------- -------- -------- -------- -------- -------- -------- Net income per common share $ 0.037 $ 0.083 $ 0.090 $ 0.157 -------- -------- -------- -------- -------- -------- -------- --------
PAGE 11 OF 11 PAGES EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF AMERICAN CONSUMERS, INC. FOR THE QUARTERLY PERIOD ENDED MARCH 1, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-01-1996 MAR-01-1997 964,908 457,434 138,092 0 1,695,733 3,307,093 2,866,379 1,759,727 4,430,851 1,329,932 0 0 0 92,222 2,462,742 4,430,851 21,008,687 21,008,687 16,479,854 16,479,854 4,382,302 0 55,262 133,007 50,009 82,998 0 0 0 82,998 0.090 0.090
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