UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2001
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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 0-981
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PUBLIX SUPER MARKETS, INC.
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(Exact name of Registrant as specified in its charter)
Florida 59-0324412
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1936 George Jenkins Blvd.
Lakeland, Florida 33815
- --------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (863) 688-1188
--------------
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 _______
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The number of shares outstanding of the Registrant's common stock, $1.00 par
value, as of July 31, 2001 was 202,047,959.
Page 1 of 12 pages
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts are in thousands, except share amounts)
ASSETS
June 30, 2001 December 30, 2000
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(Unaudited)
Current Assets
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Cash and cash equivalents $ 184,689 396,906
Short-term investments 13,546 21,028
Trade receivables 82,019 102,126
Merchandise inventories 782,992 814,985
Deferred tax assets 59,185 55,598
Prepaid expenses 9,643 2,274
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Total Current Assets 1,132,074 1,392,917
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Long-term investments 468,652 434,226
Other noncurrent assets 37,110 28,354
Property, plant and equipment 3,846,441 3,657,252
Less accumulated depreciation (1,290,031) (1,290,929)
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Net property, plant and equipment 2,556,410 2,366,323
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Total Assets $4,194,246 4,221,820
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
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Accounts payable $ 634,287 676,924
Accrued contribution to retirement plans 156,916 250,832
Accrued salaries and wages 83,486 57,090
Accrued self-insurance reserves 93,073 84,095
Federal and state income taxes 4,814 29,668
Other 129,124 117,532
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Total Current Liabilities 1,101,700 1,216,141
---------- ----------
Deferred tax liabilities, net 153,542 152,830
Self-insurance reserves 117,815 109,423
Accrued postretirement benefit cost 66,344 62,986
Other noncurrent liabilities 17,032 18,005
Stockholders' Equity
- --------------------
Common stock of $1 par value. Authorized
300,000,000 shares; issued 207,716,755
shares at June 30, 2001 and 204,972,803
shares at December 30, 2000 207,717 204,973
Additional paid-in capital 344,337 212,947
Reinvested earnings 2,457,186 2,252,661
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3,009,240 2,670,581
Less 5,503,991 treasury shares
at June 30, 2001, at cost (266,535) ---
Accumulated other comprehensive earnings (4,892) (8,146)
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Total Stockholders' Equity 2,737,813 2,662,435
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Total Liabilities and Stockholders'
Equity $4,194,246 4,221,820
========== ==========
See accompanying notes to condensed consolidated financial statements.
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share and share amounts)
Three Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Revenues
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Sales $ 3,708,866 3,476,602
Other income, net 36,763 37,428
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Total revenues 3,745,629 3,514,030
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Costs and expenses
- ------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 2,731,948 2,569,497
Operating and administrative expenses 827,439 744,266
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Total costs and expenses 3,559,387 3,313,763
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Earnings before income tax expense 186,242 200,267
Income tax expense 66,380 72,001
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Net earnings $ 119,862 128,266
============ ===========
Weighted average number of common
shares outstanding 204,101,245 212,300,255
============ ===========
Basic and diluted earnings per common
share based on weighted average shares
outstanding $ .59 .60
============ ===========
Cash dividends paid per common share $ .32 .27
============ ===========
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Net earnings $ 119,862 128,266
Other comprehensive earnings
Unrealized gain on investment
securities available-for-sale,
net of tax effect of $25 and
$898 in 2001 and 2000, respectively 40 1,430
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $335 and $120 in
2001 and 2000, respectively 533 191
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Comprehensive earnings $ 120,435 129,887
============ ===========
See accompanying notes to condensed consolidated financial statements.
-3-
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share and share amounts)
Six Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Revenues
- --------
Sales $ 7,626,356 7,090,924
Other income, net 76,524 72,357
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Total revenues 7,702,880 7,163,281
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Costs and expenses
- ------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 5,628,403 5,261,327
Operating and administrative expenses 1,652,524 1,479,461
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Total costs and expenses 7,280,927 6,740,788
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Earnings before income tax expense 421,953 422,493
Income tax expense 151,205 151,864
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Net earnings $ 270,748 270,629
============ ===========
Weighted average number of common
shares outstanding 204,671,305 213,066,482
============ ===========
Basic and diluted earnings per common
share based on weighted average shares
outstanding $ 1.32 1.27
============ ===========
Cash dividends paid per common share $ .32 .27
============ ===========
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Six Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Net earnings $ 270,748 270,629
Other comprehensive earnings
Unrealized gain (loss) on investment
securities available-for-sale,
net of tax effect of $1,974 and
($2,221) in 2001 and 2000, respectively 3,143 (3,536)
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $70 and $990 in
2001 and 2000, respectively 111 1,576
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Comprehensive earnings $ 274,002 268,669
============ ===========
See accompanying notes to condensed consolidated financial statements.
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)
Six Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Cash flows from operating activities
- ------------------------------------
Cash received from customers $ 7,698,284 7,163,292
Cash paid to employees and suppliers (6,893,400) (6,375,222)
Dividends and interest received 24,178 29,454
Income taxes paid (180,977) (159,285)
Payment for self-insured claims (90,044) (71,571)
Other operating cash receipts 431 399
Other operating cash payments (4,362) (3,099)
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Net cash provided by operating
activities 554,110 583,968
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Cash flows from investing activities
- ------------------------------------
Payment for property, plant and
equipment (323,684) (246,819)
Proceeds from sale of property, plant
and equipment 1,063 1,491
Payment for investment securities -
available-for-sale (AFS) (102,500) (33,230)
Proceeds from sale and maturity of
investment securities - AFS 78,546 26,951
Other, net (8,536) 110
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Net cash used in investing activities (355,111) (251,497)
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Cash flows from financing activities
- ------------------------------------
Proceeds from sale of common stock 53,667 47,445
Payment for acquisition of common stock (398,660) (448,402)
Dividends paid (66,223) (57,816)
Other, net --- (131)
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Net cash used in financing activities (411,216) (458,904)
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Net decrease in cash and cash equivalents (212,217) (126,433)
Cash and cash equivalents at beginning
of period 396,906 626,636
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Cash and cash equivalents at end of period $ 184,689 500,203
=========== ==========
See accompanying notes to condensed consolidated financial statements.
(Continued)
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts are in thousands)
Six Months Ended
June 30, 2001 June 24, 2000
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(Unaudited)
Reconciliation of net earnings to net cash
provided by operating activities
Net earnings $ 270,748 270,629
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 123,124 110,110
Retirement contributions paid or payable
in common stock 111,207 111,876
Deferred income taxes (4,918) 1,335
Loss on sale of property, plant and
equipment 9,432 5,978
Loss on sale of investments 181 2,566
Self-insurance reserves in excess of
current payments 17,370 10,491
Postretirement accruals in excess of
current payments 3,358 3,585
Decrease in advance purchase allowances (973) (3,130)
Other, net 1,884 2,144
Change in cash from:
Trade receivables 20,107 26,776
Merchandise inventories 31,993 62,735
Prepaid expenses (7,369) (5,759)
Accounts payable and accrued expenses 2,820 (6,612)
Federal and state income taxes (24,854) (8,756)
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Total adjustments 283,362 313,339
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Net cash provided by operating activities $ 554,110 583,968
========= =======
See accompanying notes to condensed consolidated financial statements.
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PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed consolidated financial statements included herein
are unaudited; however, in the opinion of management, such information
reflects all adjustments (consisting solely of normal recurring adjustments)
which are necessary for the fair statement of results for the interim period.
These condensed consolidated financial statements should be read in
conjunction with the fiscal 2000 Form 10-K Annual Report of the Company.
2. Due to the seasonal nature of the Company's business, the results for the
three months and six months ended June 30, 2001 are not necessarily
indicative of the results for the entire 2001 fiscal year.
3. The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
4. Certain 2000 amounts have been reclassified to conform with the 2001
presentation.
5. In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities," (SFAS 133) effective for fiscal years beginning
after June 15, 1999. In June 1999, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133" (SFAS 137) which deferred the effective date
of adoption of SFAS 133 for one year. SFAS 133 requires that derivatives be
carried at fair value and provides for hedge accounting when certain
conditions are met. The Company does not have derivatives or enter into
hedging activities as defined by SFAS 133, therefore, the adoption of SFAS
133 did not have any material effect on the Company's financial condition,
results of operations or cash flows.
6. In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 141, "Business Combinations," (SFAS 141)
and Statement of Financial Accounting Standard No. 142, "Goodwill and Other
Intangible Assets," (SFAS 142). SFAS 141 requires that all business
combinations initiated after June 30, 2001 be accounted for under the
purchase method and addresses the initial recognition and measurement of
goodwill and other intangible assets acquired in a business combination. The
Company is required to adopt SFAS 141 immediately. Since the Company has not
completed any business combinations since June 30, 2001, there was no effect
on the Company from the adoption of SFAS 141. SFAS 142 addresses the initial
recognition and measurement of intangible assets acquired outside of a
business combination and the accounting for goodwill and other intangible
assets subsequent to their acquisition. SFAS 142 provides that intangible
assets with finite useful lives be amortized and that goodwill and intangible
assets with indefinite useful lives will not be amortized, but instead will
be tested at least annually for impairment. SFAS 142 is effective for fiscal
years beginning after December 15, 2001. The Company is currently evaluating
the effect of adopting SFAS 142.
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PUBLIX SUPER MARKETS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Liquidity and Capital Resources
- -------------------------------
Operating activities continue to be the Company's primary source of
liquidity. Net cash provided by operating activities was approximately $554.1
million in the six months ended June 30, 2001, as compared with $584.0 million
in the six months ended June 24, 2000. Cash and cash equivalents totaled $184.7
million as of June 30, 2001, as compared with $500.2 million as of June 24,
2000. Short-term and long-term investments totaled approximately $482.2 million
as of June 30, 2001, as compared with $425.3 million as of June 24, 2000.
Capital expenditures totaled approximately $323.7 million in the six months
ended June 30, 2001. These expenditures were primarily incurred in connection
with the opening of 27 new stores and remodeling or expanding 38 stores. In
addition, the Company closed ten stores. The net impact of new and closed
stores (net new stores) added an additional .86 million square feet in the six
months ended June 30, 2001, a 3.0% increase. Significant expenditures were also
incurred in the expansion of warehouses in Lakeland, Florida and the
development of an online grocery shopping service, PublixDirect. Capital
expenditures totaled approximately $246.8 million in the six months ended June
24, 2000. These expenditures were primarily incurred in connection with the
opening of 27 new stores and remodeling or expanding 31 stores. In addition,
the Company closed four stores. Net new stores added an additional 1.1 million
square feet in the six months ended June 24, 2000, a 3.8% increase. Significant
expenditures were also incurred in the expansion of warehouses in Lakeland,
Florida.
Capital expenditures for the remainder of 2001, primarily made up of new
store, warehouse and office construction, remodeling or expanding of many
existing stores, new or enhanced information technology applications and the
continued development of PublixDirect, are expected to be approximately $376.3
million. This capital program is subject to continuing change and review. The
remaining 2001 capital expenditures are expected to be financed by internally
generated funds and current liquid assets. In the normal course of operations,
the Company replaces stores and closes unprofitable stores. The impact of
future store closings is not expected to be material.
The Company currently repurchases common stock at the stockholders' request
in accordance with the terms of the Company's Employee Stock Purchase Plan. Net
common stock repurchases under this plan totaled approximately $345.0 million
in the six months ended June 30, 2001, as compared with $401.0 million in the
six months ended June 24, 2000. The Company expects to continue to repurchase
its common stock, as offered by its stockholders from time to time, at its then
currently appraised value. However, such purchases are not required and the
Company retains the right to discontinue them at any time.
The Company paid a cash dividend of $.32 per share on June 1, 2001, to
stockholders of record as of the close of business March 30, 2001.
Cash generated in excess of the amount needed for current operations,
capital expenditures and common stock repurchases is invested in short-term and
long-term investments. Management believes the Company's liquidity will
continue to be strong.
-8-
Operating Results
- -----------------
Sales increased 6.7% in the second quarter of 2001 to $3.7 billion, an
increase of $232.3 million compared to the same quarter in 2000. This reflects
an increase of $121.7 million or 3.5% in sales from stores that were open for
all of both quarters (comparable stores) and sales of $110.6 million or 3.2%
from net new stores since March 25, 2000.
Sales increased 7.6% in the six months ended June 30, 2001, to $7.6
billion, an increase of $535.4 million over the six months ended June 24, 2000.
This reflects an increase of $269.5 million or 3.8% in sales from comparable
stores and sales of $265.9 million or 3.8% from net new stores since the
beginning of 2000.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses, as a percentage of sales, was approximately 73.7% and 73.9%
in the quarters ended June 30, 2001 and June 24, 2000, respectively. These cost
of sales percentages were 73.8% and 74.2% for the six months ended June 30,
2001 and June 24, 2000, respectively. The decreases in cost of merchandise
sold, as a percentage of sales, were primarily due to continuing improvements
in buying practices, promotional efficiencies and a shifting of the sales mix
toward higher margin products.
Operating and administrative expenses, as a percentage of sales, were
approximately 22.3% and 21.4% for the quarters ended June 30, 2001 and June 24,
2000, respectively. The operating and administrative expenses, as a percentage
of sales, were 21.7% and 20.9% for the six months ended June 30, 2001 and June
24, 2000, respectively. The increases in operating and administrative expenses,
as a percentage of sales, were primarily due to higher employee benefit costs
and utility costs.
Net earnings were $119.9 million or $0.59 per share and $128.3 million or
$0.60 per share for the quarters ended June 30, 2001 and June 24, 2000,
respectively. Net earnings were $270.7 million or $1.32 per share and $270.6
million or $1.27 per share for the six months ended June 30, 2001 and June 24,
2000, respectively.
Cautionary Note Regarding Forward-Looking Statements
- ----------------------------------------------------
From time to time, information provided by the Company, including written
or oral statements made by its representatives, may contain forward-looking
information about the future performance of the Company which is based on
management's assumptions and beliefs in light of the information currently
available to them. When used in this document, the words "plan," "estimate,"
"project," "intend," "believe" and other similar expressions, as they relate to
the Company, are intended to identify such forward-looking statements. These
forward-looking statements are subject to uncertainties and other factors that
could cause actual results to differ materially from those statements
including, but not limited to: competitive practices and pricing in the food
and drug industries generally and particularly in the Company's principal
markets; changes in the general economy; changes in consumer spending; 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 and Federal legislation or regulation, adverse determinations with
respect to litigation or other claims, ability to recruit and train employees,
ability to construct new stores or complete remodels as rapidly as planned and
stability of product costs.
-9-
Other factors and assumptions not identified above could also cause the actual
results to differ materially from those set forth in the forward-looking
statements. The Company assumes no obligation to update publicly these
forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- --------------------------------------------------------------------
The Company does not have any material exposure to market risk associated
with activities in derivative financial instruments, other financial
instruments and derivative commodity instruments.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
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In the Company's Form 10-K for the fiscal year ended December 30, 2000, the
Company discussed the filing of a proposed Consent Decree (reflecting a
proposed settlement) in the Federal District Court for the Middle District of
Florida (the "Court") by the parties in the class action filed against the
Company in April 1997 by Lemuel Middleton and other present or former
employees, individually and on behalf of all other persons similarly situated
(the "Middleton case"). On June 18, 2001, the Court conducted a hearing on the
fairness of the proposed settlement, and on July 12, 2001, the Court approved
the terms of the settlement as fair, adequate and reasonable and entered the
proposed Consent Decree as an order of the Court. As a result, the Company no
longer considers the Middleton case to be material.
There have been no material developments in the other legal proceedings
described in the Company's Form 10-K for the year ended December 30, 2000.
The Company is also a party in various legal claims and actions considered
in the normal course of business. In the opinion of management, the ultimate
resolution of these legal proceedings will not have a material adverse effect
on the Company's financial condition, results of operations or cash flows.
Item 2. Changes in Securities
- -------------------------------
Not Applicable.
Item 3. Defaults Upon Senior Securities
- -----------------------------------------
Not Applicable.
-10-
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
The Annual Meeting of Stockholders of the Company was held on May 15, 2001,
for the purpose of electing a board of directors. Proxies for the meeting were
solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934 and
there were no solicitations in opposition to management's solicitation. All of
management's nominees for directors as listed below were elected. The term of
office of the directors will be until the next annual meeting or until their
successors shall be elected and qualified.
Votes For Votes Withheld
--------- --------------
Carol Jenkins Barnett 152,686,637 192,064
Hoyt R. Barnett 152,669,386 209,315
W. Edwin Crenshaw 152,552,850 325,851
Mark C. Hollis 152,422,416 456,285
Charles H. Jenkins, Jr. 152,683,314 195,387
Howard M. Jenkins 152,697,264 181,437
Tina P. Johnson 152,579,975 298,726
E. Vane McClurg 152,583,074 295,627
Kelly E. Norton 151,774,371 1,104,330
Item 5. Other Information
- ---------------------------
Not Applicable.
Item 6(a) Exhibits
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10. Indemnification Agreement, between the Company and all of its current
directors and officers, is incorporated by reference to the exhibits to the Form
10-Q of the Company for the quarter ended March 31, 2001. Such subsequent
indemnified directors and officers are listed as follows:
Kelly E. Norton
10.1 Non-Employee Directors Stock Purchase Plan Summary Plan Description,
as registered in the Form S-8 filed with the Securities and Exchange Commission
on June 21, 2001.
21. Subsidiaries of the Company.
Item 6(b) Reports on Form 8-K
- -----------------------------
No reports on Form 8-K were filed during the quarter ended June 30, 2001.
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
PUBLIX SUPER MARKETS, INC.
Date: August 10, 2001 /s/ John A. Attaway, Jr.
------------------------------------------
John A. Attaway, Jr., Secretary
Date: August 10, 2001 /s/ David P. Phillips
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David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
-12-