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 March 30, 2002
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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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (863) 688-1188
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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 April 30, 2002 was 197,669,393.
Page 1 of 11 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
March 30, 2002 December 29, 2001
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(Unaudited)
Current Assets
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Cash and cash equivalents $ 462,410 251,337
Short-term investments 2,558 5,176
Trade receivables 142,772 129,435
Merchandise inventories 803,341 840,115
Deferred tax assets 63,995 54,172
Prepaid expenses 8,762 3,001
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Total Current Assets 1,483,838 1,283,236
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Long-term investments 335,028 339,048
Other noncurrent assets 48,895 43,911
Property, plant and equipment 4,289,162 4,142,807
Accumulated depreciation (1,466,111) (1,403,217)
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Total Assets $4,690,812 4,405,785
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
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Accounts payable $ 707,143 691,071
Accrued contribution to retirement plans 118,948 232,925
Accrued salaries and wages 80,055 56,560
Accrued self-insurance reserves 112,664 103,048
Federal and state income taxes 120,822 13,030
Other 209,858 152,863
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Total Current Liabilities 1,349,490 1,249,497
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Deferred tax liabilities, net 180,743 172,440
Self-insurance reserves 138,880 137,474
Accrued postretirement benefit cost 70,001 70,151
Other noncurrent liabilities 11,861 13,672
Stockholders' Equity
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Common stock of $1 par value. Authorized
300,000,000 shares; issued 199,053,347
shares at March 30, 2002 and 197,111,536
shares at December 29, 2001 199,053 197,112
Additional paid-in capital 421,711 343,834
Reinvested earnings 2,356,286 2,226,768
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2,977,050 2,767,714
Less 758,141 treasury shares
at March 30, 2002, at cost (31,084) ---
Accumulated other comprehensive earnings (6,129) (5,163)
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Total Stockholders' Equity 2,939,837 2,762,551
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Total Liabilities and Stockholders'
Equity $4,690,812 4,405,785
========== ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
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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
March 30, 2002 March 31, 2001
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(Unaudited)
Revenues
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Sales $ 4,194,016 3,917,490
Other operating income 23,645 21,330
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Total revenues 4,217,661 3,938,820
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Costs and expenses
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Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 3,050,945 2,896,455
Operating and administrative expenses 865,509 823,790
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Total costs and expenses 3,916,454 3,720,245
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Operating profit 301,207 218,575
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Investment income, net 6,144 12,616
Other income, net 4,724 4,520
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Earnings before income tax expense 312,075 235,711
Income tax expense 116,906 84,825
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Net earnings $ 195,169 150,886
============ ===========
Weighted average number of common
shares outstanding 196,920,363 205,241,255
============ ===========
Basic and diluted earnings per common
share based on weighted average shares
outstanding $ .99 .74
============ ===========
Cash dividends paid per common share None None
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
March 30, 2002 March 31, 2001
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(Unaudited)
Net earnings $ 195,169 150,886
Other comprehensive earnings
Unrealized (loss) gain on investment
securities available-for-sale,
net of tax effect of ($763) and
$1,949 in 2002 and 2001, respectively (1,215) 3,103
Reclassification adjustment for net
realized loss (gain) on investment
securities available-for-sale, net
of tax effect of $156 and ($265) in
2002 and 2001, respectively 249 (422)
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Comprehensive earnings $ 194,203 153,567
============ ===========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)
Three Months Ended
March 30, 2002 March 31, 2001
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(Unaudited)
Cash flows from operating activities
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Cash received from customers $ 4,208,902 3,956,095
Cash paid to employees and suppliers (3,640,130) (3,515,285)
Dividends and interest received 6,872 13,220
Income taxes paid (10,027) (25,230)
Payment for self-insured claims (45,135) (41,134)
Other operating cash receipts 234 218
Other operating cash payments (2,664) (1,464)
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Net cash provided by operating
activities 518,052 386,420
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Cash flows from investing activities
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Payment for property, plant and
equipment (158,843) (155,665)
Proceeds from sale of property, plant
and equipment 920 502
Payment for investment securities -
available-for-sale (AFS) (64,017) (49,163)
Proceeds from sale and maturity of
investment securities - AFS 68,357 22,303
Other, net (4,916) (6,031)
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Net cash used in investing activities (158,499) (188,054)
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Cash flows from financing activities
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Proceeds from sale of common stock 27,592 25,817
Payment for acquisition of common stock (175,930) (133,260)
Other, net (142) ---
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Net cash used in financing activities (148,480) (107,443)
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Net increase in cash and cash equivalents 211,073 90,923
Cash and cash equivalents at beginning
of period 251,337 396,906
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Cash and cash equivalents at end of period $ 462,410 487,829
=========== ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
(Continued)
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PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts are in thousands)
Three Months Ended
March 30, 2002 March 31, 2001
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(Unaudited)
Reconciliation of net earnings to net cash
provided by operating activities
Net earnings $ 195,169 150,886
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 72,600 60,867
Retirement contributions paid or payable
in common stock 72,891 61,840
Deferred income taxes (913) (6,513)
Loss on sale of property, plant and
equipment 1,873 4,497
Loss (gain) on sale of investments 405 (687)
Self-insurance reserves in excess of
current payments 11,022 10,710
Postretirement accruals (less than)
in excess of current payments (150) 1,439
Decrease in advance purchase allowances (1,680) (1,566)
Other, net 241 1,152
Change in cash from:
Trade receivables (13,337) 12,899
Merchandise inventories 36,774 40,287
Prepaid expenses (5,761) (5,331)
Accounts payable and accrued expenses 41,126 (10,168)
Federal and state income taxes 107,792 66,108
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Total adjustments 322,883 235,534
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Net cash provided by operating activities $ 518,052 386,420
========= =======
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
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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 2001 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 ended March 30, 2002 are not necessarily indicative of the
results for the entire 2002 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 2001 amounts have been reclassified to conform with the 2002
presentation.
5. In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 143, "Accounting for Asset Retirement
Obligations," (SFAS 143) effective for fiscal years beginning after June 15,
2002. SFAS 143 addresses the financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. SFAS 143 requires the Company to
record the fair value of an asset retirement obligation as a liability in the
period in which it incurs a legal obligation associated with the retirement
of tangible long-lived assets. The Company would also record a corresponding
asset which is depreciated over the life of the asset. Subsequent to the
initial measurement of the asset retirement obligation, the obligation will
be adjusted at the end of each period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The
Company is currently evaluating the effect of adopting SFAS 143.
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PUBLIX SUPER MARKETS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Liquidity and Capital Resources
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Cash and cash equivalents, short-term and long-term investments totaled
approximately $800.0 million at March 30, 2002, compared to $973.7 million at
March 31, 2001. Net cash provided by operating activities was approximately
$518.1 million for the three months ended March 30, 2002, as compared with
$386.4 million for the three months ended March 31, 2001. Any net cash in excess
of the amount needed for current operations is invested in short-term and
long-term investments.
Net cash used in investing activities was approximately $158.5 million for
the three months ended March 30, 2002, as compared with $188.1 million for the
three months ended March 31, 2001. The primary use of net cash in investing
activities was funding capital expenditures. During the three months ended March
30, 2002, capital expenditures totaled approximately $158.8 million. These
expenditures were primarily incurred in connection with the opening of 16 new
stores and remodeling or expanding 26 stores. In addition, the Company closed
five stores. The net impact of new and closed stores (net new stores) added an
additional .51 million square feet in the first quarter of 2002, a 1.65%
increase. During the three months ended March 31, 2001, capital expenditures
totaled approximately $155.7 million. These expenditures were primarily incurred
in connection with the opening of 11 new stores and remodeling or expanding 19
stores. In addition, the Company closed nine stores. Net new stores added an
additional .17 million square feet in the first quarter of 2001, a .59%
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 for the remainder of 2002, primarily made up of new
store, warehouse and office construction, remodeling and expanding of certain
existing stores and new or enhanced information technology applications, are
expected to be approximately $606.2 million. This capital program is subject to
continuing change and review. The remaining 2002 capital expenditures are
expected to be financed by internally generated funds, liquid assets or the
committed line of credit described below. In the normal course of operations,
the Company replaces stores and closes stores that are not meeting performance
expectations. The impact of future store closings is not expected to be
material.
Net cash used in financing activities was approximately $148.5 million for
the three months ended March 30, 2002, as compared with $107.4 million for the
three months ended March 31, 2001. The primary use of net cash in financing
activities was funding net common stock repurchases. 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 $148.3 million for the three
months ended March 30, 2002, as compared with $107.4 million for the three
months ended March 31, 2001. 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.
On February 26, 2002, the Company declared a cash dividend on its common
stock of $.33 per share or $65.4 million, payable on June 3, 2002, to
stockholders of record as of the close of business March 29, 2002.
-7-
In December 2001, the Company executed an agreement for a committed line of
credit totaling $100 million. This 364-day line of credit facility is available
to fund liquidity requirements if necessary. The interest rate is based on LIBOR
or prime. There were no amounts outstanding on this line of credit as of March
30, 2002.
Based on the Company's financial position, it is expected that short-term
and long-term borrowings would be readily available to support the Company's
liquidity requirements if needed.
Results of Operations
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Sales for the first quarter ended March 30, 2002, were $4.2 billion as
compared with $3.9 billion in the same quarter in 2001, a 7.1% increase. This
reflects an increase of $86.2 million or 2.2% in comparable store sales (stores
open for the same weeks in both periods, including replacement stores) and
$190.3 million or 4.9% from net new store sales since the beginning of the first
quarter of 2001. Additionally, the first quarter of 2002 benefited from the
early Easter holiday, which was in the second quarter of 2001. During the first
quarter of 2002, the Company modified its calculation of comparable store sales
to include replacement stores. The comparable store sales calculation was
modified to improve the comparability of this key performance measure to others
in the food retailing industry. If the current comparable store sales
calculation had been used for the quarter ended March 31, 2001, the comparable
store sales increase would have been 4.8%, as compared to the previously
reported comparable store sales increase of 4.1%.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses, as a percentage of sales, was approximately 72.7% and 73.9%
for the three months ended March 30, 2002 and March 31, 2001, respectively. The
decrease in cost of merchandise sold, as a percentage of sales, was primarily
due to continuing improvements in buying practices including centralized product
procurement, promotional efficiencies including category management, shrink
reduction, a shifting of the sales mix toward higher margin value-added products
and more efficient distribution channels.
Operating and administrative expenses, as a percentage of sales, were
approximately 20.6% and 21.0% for the three months ended March 30, 2002 and
March 31, 2001, respectively. The decrease in operating and administrative
expenses, as a percentage of sales, was primarily due to decreases in payroll
and other general expenses. These decreases were partially offset by increases
in employee benefit costs and depreciation.
Net earnings were $195.2 million or $.99 per share and $150.9 million or
$.74 per share for the three months ended March 30, 2002 and March 31, 2001,
respectively.
-8-
Cautionary Note Regarding Forward-Looking Statements
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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. 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.
-9-
PUBLIX SUPER MARKETS, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
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As reported in the Company's Form 10-K for the year ended December 29,
2001, the Company is 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
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Not Applicable.
Item 3. Defaults Upon Senior Securities
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Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
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Not Applicable.
Item 5. Other Information
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Not Applicable.
Item 6(a) Exhibits
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21. Subsidiaries of the Registrant.
Item 6(b) Reports on Form 8-K
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No reports on Form 8-K were filed during the quarter ended March 30, 2002.
-10-
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: May 10, 2002 /s/ John A. Attaway, Jr.
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John A. Attaway, Jr., Secretary
Date: May 10, 2002 /s/ David P. Phillips
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David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
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