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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 June 29, 2000
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-11556
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UNI-MARTS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 25-1311379
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 East Beaver Avenue, State College, PA 16801-5690
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(Address of principal executive offices) (Zip Code)
(8l4) 234-6000
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(Registrant's telephone number, including area code)
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(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
----- ----
7,016,539 Common Shares were outstanding at August 10, 2000.
This Document Contains 81 Pages.
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UNI-MARTS, INC. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
- ------------------------------ PAGE(S)
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 29, 2000 and September 30, 1999 3-4
Condensed Consolidated Statements of Operations -
Quarter Ended and Three Quarters Ended
June 29, 2000 and July 1, 1999 5
Condensed Consolidated Statements of Cash Flows -
Three Quarters Ended June 29, 2000 and July 1, 1999 6-7
Notes to Condensed Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 14-16
Exhibit Index 18
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 29, September 30,
2000 1999
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 5,037,256 $ 1,944,358
Accounts receivable - less allowances of
$291,700 and $288,000 5,445,841 2,524,734
Inventories 14,085,373 11,737,029
Prepaid and current deferred taxes 2,063,779 2,079,155
Property held for sale 1,697,970 1,410,810
Prepaid expenses and other 755,249 1,099,484
Loan due from officer - current portion 60,000 60,000
------------ -----------
TOTAL CURRENT ASSETS 29,145,468 20,855,570
PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation and
amortization of $52,761,900 and
$50,424,700 98,631,496 61,713,278
LOAN DUE FROM OFFICER 420,000 480,000
NET INTANGIBLE AND OTHER ASSETS 8,290,888 5,425,771
------------ -----------
TOTAL ASSETS $136,487,852 $88,474,619
============ ===========
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
June 29, September 30,
2000 1999
------------- -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 16,368,321 $10,967,476
Gas taxes payable 3,118,963 2,183,410
Accrued expenses 7,016,797 5,222,855
Credit line payable 0 1,800,000
Current maturities of long-term debt 2,175,614 958,811
Current obligations under capital leases 340,661 264,310
------------ -----------
TOTAL CURRENT LIABILITIES 29,020,356 21,396,862
LONG-TERM DEBT, less current maturities 71,133,151 33,264,639
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 911,060 875,977
DEFERRED TAXES 2,635,600 2,561,500
DEFERRED INCOME AND OTHER LIABILITIES 4,557,748 2,429,835
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, par value $.10 per share:
Authorized 15,000,000 shares
Issued 7,359,134 and 7,327,088
shares, respectively 735,913 732,709
Additional paid-in capital 23,857,215 24,030,665
Retained earnings 5,819,567 5,646,956
------------ -----------
30,412,695 30,410,330
Less treasury stock, at cost - 347,292
and 400,962 shares of Common Stock,
respectively ( 2,182,758) ( 2,464,524)
------------ -----------
28,229,937 27,945,806
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $136,487,852 $88,474,619
============ ===========
See notes to consolidated financial statements
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
QUARTER ENDED THREE QUARTERS ENDED
June 29, July 1, June 29, July 1,
2000 1999 2000 1999
----------- ----------- ------------ -----------
REVENUES:
Merchandise sales $47,997,857 $37,735,120 $119,896,689 $107,821,078
Gasoline sales 50,755,430 26,594,447 116,800,351 73,668,757
Other income 432,807 271,062 1,364,476 1,487,195
----------- ----------- ------------ ------------
99,186,094 64,600,629 238,061,516 182,977,030
COSTS AND EXPENSES: ----------- ----------- ------------ ------------
Cost of sales 78,351,125 47,946,108 185,440,836 133,445,197
Selling 14,802,586 13,014,567 39,225,105 39,569,045
General and administrative 1,623,497 1,840,045 4,785,358 5,522,451
Depreciation and amortization 1,800,352 1,452,492 4,679,070 4,537,187
Interest 1,715,631 960,797 3,628,039 2,943,348
Provision for asset impairment 56,397 100,000 56,397 200,000
----------- ----------- ------------ ------------
98,349,588 65,314,009 237,814,805 186,217,228
----------- ----------- ------------ ------------
EARNINGS (LOSS) BEFORE INCOME TAXES 836,506 ( 713,380) 246,711 ( 3,240,198)
INCOME TAX PROVISION (BENEFIT) 251,000 ( 180,200) 74,100 ( 989,200)
----------- ----------- ------------ ------------
NET EARNINGS (LOSS) $ 585,506 ($ 533,180) $ 172,611 ($ 2,250,998)
=========== =========== ============ ============
BASIC EARNINGS (LOSS) PER SHARE $ 0.08 ($ 0.08) $ 0.02 ($ 0.33)
=========== =========== ============ ============
DILUTED EARNINGS (LOSS) PER
SHARE $ 0.08 ($ 0.08) $ 0.02 ($ 0.33)
=========== =========== ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,008,384 6,893,660 6,977,873 6,878,710
=========== =========== ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
ASSUMING DILUTION 7,069,185 6,893,660 7,003,124 6,878,710
=========== =========== ============ ============
See notes to consolidated financial statements
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE QUARTERS
ENDED
June 29, July 1,
2000 1999
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $237,324,468 $180,983,962
Cash paid to suppliers and employees ( 223,615,148) ( 179,368,165)
Dividends and interest received 61,481 91,904
Interest paid ( 3,157,063) ( 3,001,273)
Income taxes received (paid) 15,376 ( 32,632)
------------ ------------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 10,629,114 ( 1,326,204)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business ( 41,239,924) 0
Receipts from sale of capital assets 492,128 1,727,882
Purchase of property, equipment and
Improvements ( 4,147,829) ( 2,744,848)
Note receivable from officer 60,000 40,121
Cash advanced for intangible and other
Assets ( 171,650) ( 458,481)
Cash received for intangible and other
Assets 606,793 238,678
------------ ------------
NET CASH USED BY INVESTING ACTIVITIES ( 44,400,482) ( 1,196,648)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under revolving credit agreement ( 1,800,000) ( 1,000,000)
Additional long-term borrowings 39,809,551 0
Principal payments on debt ( 1,149,623) ( 778,337)
Purchases of treasury stock 0 ( 6,529)
Proceeds from issuance of common stock 4,338 0
------------ ------------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES 36,864,266 ( 1,784,866)
------------ ------------
NET INCREASE (DECREASE) IN CASH 3,092,898 ( 4,307,718)
CASH:
Beginning of period 1,944,358 5,838,318
------------ ------------
End of period $ 5,037,256 $ 1,530,600
============ ============
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(Unaudited)
THREE QUARTERS ENDED
June 29, July 1,
2000 1999
----------- ----------
RECONCILIATION OF NET EARNINGS (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES:
NET EARNINGS (LOSS) $ 172,611 ($2,250,998)
ADJUSTMENTS TO RECONCILE NET EARNINGS (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES:
Depreciation and amortization 4,679,070 4,537,187
Loss (gain) on sale of capital assets and other 136,986 ( 148,690)
Provision for asset impairment 56,397 200,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable ( 2,913,807) ( 337,951)
Inventories ( 2,348,344) ( 167,160)
Prepaid expenses 498,472 129,062
Increase (decrease) in:
Accounts payable and accrued expenses 8,130,340 ( 1,654,539)
Deferred income taxes and other
liabilities 2,217,389 ( 1,633,115)
----------- ----------
TOTAL ADJUSTMENTS TO NET EARNINGS (LOSS) 10,456,503 924,794
----------- ----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $10,629,114 ($1,326,204)
=========== ==========
Supplemental schedule of noncash investing activities:
Liabilities assumed in acquisition $ 2,500,000 $ 0
Fixed assets acquired under captial
leases $ 426,143 $ 0
See notes to consolidated financial statements
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UNI-MARTS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. FINANCIAL STATEMENTS:
The consolidated balance sheet as of June 29, 2000, the consolidated
statements of operations and the consolidated statements of cash flows for
the three quarters ended June 29, 2000 and July 1, 1999 have been prepared
by Uni-Marts, Inc. (the "Company") without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position of the Company at June 29,
2000 and the results of operations and cash flows for all periods presented
have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1999. Certain reclassifications
have been made to the September 30, 1999 financial statements to conform to
classifications used in fiscal year 2000. The results of operations for the
interim periods are not necessarily indicative of the results to be obtained
for the full year.
B. BUSINESS ACQUISITION:
In April 2000, pursuant to an asset purchase agreement, the Company purchased
the operating assets of Orloski Service Station, Inc. and its owners
(collectively "OSSI") for approximately $41.2 million in cash, including
professional fees of $476,000 and the assumption of $2.5 million of OSSI
debt. The transaction was accounted for as a purchase, and accordingly,
operations of the acquired OSSI assets are included in the consolidated
financial statements from the date of acquisition. The allocation of the
purchase price to individual assets and liabilities is preliminary pending
the finalization of fair value information.
The following table summarizes, on an unaudited pro forma basis, the
estimated combined statements of operations for the three quarters ended
June 29, 2000 and July 1, 1999 as though the acquisition took place on
October 1, 1998. This pro forma information does not purport to be
indicative of the results of operations that would have been obtained if the
acquisition had occurred on October 1, 1998.
Three Quarters Ended
June 29, July 1,
2000 1999
------------ ------------
Revenues $286,416,000 $239,013,000
Net earnings (loss) $ 151,000 ($ 1,534,000)
Net earnings (loss) per
share $ 0.02 ($ 0.22)
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C. INTANGIBLE AND OTHER ASSETS:
Intangible and other assets consist of the following:
June 29, September 30,
2000 1999
------------ --------------
Goodwill $ 8,854,320 $5,803,443
Lease acquisition costs 584,068 674,570
Other intangible assets 422,068 99,111
Other assets 1,037,252 1,483,038
----------- ----------
10,897,708 8,060,162
Less accumulated amortization 2,606,820 2,634,391
----------- ----------
$ 8,290,888 $5,425,771
=========== ==========
Goodwill represents the excess of costs over the fair value of net assets
acquired in business combinations and is amortized on a straight-line basis
over periods of 13 to 40 years. Lease acquisition costs are the bargain
element of acquired leases and are being amortized on a straight-line basis
over the related lease terms. It is the Company's policy to periodically
review and evaluate the recoverability of the intangible assets by assessing
current and future profitability and cash flows and to determine whether the
amortization of the balances over their remaining lives can be recovered
through expected future results and cash flows.
D. REVOLVING CREDIT AGREEMENT:
On April 20, 2000, the Company completed a 3-year secured $10.0 million
revolving loan agreement with $3.5 million available for letters of credit.
Provisions of the revolving loan agreement require the maintenance of
certain covenants related to minimum tangible net worth, interest and fixed
charge coverage ratios. The Company was in compliance with these covenants
as of June 29, 2000. On April 20, 2000, borrowings from this new revolving
credit facility were utilized to repay amounts outstanding on a former
secured $10.0 million revolving loan agreement. At June 29, 2000, letters
of credit of $3.0 million were outstanding. This facility bears interest at
the Company's option based on a rate of either prime plus 1% or LIBOR plus
3.0%. The interest rate at June 29, 2000 was 10.50%.
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E. LONG-TERM DEBT:
June 29, September 30,
2000 1999
------------ -------------
Mortgage Loan. Principal and interest will
be paid in 217 monthly installments. The
loan bears interest at a rate of 9.08%. $33,206,708 $33,630,236
Mortgage Loan. Principal and interest will
be paid in 239 monthly installments. The
loan bears interest at LIBOR plus 3.75%.
The interest rate at June 29, 2000 was
10.40%. 21,852,763 0
Mortgage Loan. Principal and interest will
be repaid in 239 monthly installments. The
loan bears interest at a rate of 10.39%. 6,754,452 0
Mortgage Loans. Principal and interest
are paid in monthly installments. The loans
expire in 2009 and 2010. Interest ranges
from the prime rate to the prime rate plus
0.5%. The blended interest rate at
June 29, 2000 was 9.41%. 1,047,938 208,661
Equipment Loan. Principal and interest will be
paid in 119 monthly installments. The loan
expires in 2010 and bears interest at LIBOR
plus 3.75%. The interest rate at June 29,
2000 was 10.40%. 9,146,296 0
Equipment Loan. Principal and interest will be
paid in 119 monthly installments. The loan
expires in 2010 and bears interest at a
rate of 10.73%. 1,073,372 0
Equipment Loan. Principal and interest are
paid in monthly installments. The loan
expires in 2001 and bears interest at a
rate of 9.75%. 227,236 384,553
----------- -----------
73,308,765 34,223,450
Less current maturities 2,175,614 958,811
----------- -----------
$71,133,151 $33,264,639
=========== ===========
The mortgage loans are collateralized by $76,601,300 of property, at cost.
F. CONTINGENCIES:
Litigation - The Company is involved in litigation and other legal matters
which have arisen in the normal course of business. Although the ultimate
results of these matters are not currently determinable, management does not
expect that they will have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
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ITEM 2.
UNI-MARTS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Set forth below are selected unaudited consolidated financial data of the
Company for the
periods indicated:
QUARTER ENDED THREE
QUARTERS ENDED
June 29, July 1, June 29, July 1,
2000 1999 2000 1999
---------- ---------- ---------- ---------
Revenues:
Merchandise sales 48.4% 58.4% 50.4% 58.9%
Gasoline sales 51.2 41.2 49.0 40.3
Other income 0.4 0.4 0.6 0.8
----- ----- ----- -----
Total revenues 100.0 100.0 100.0 100.0
Cost of sales 79.0 74.2 77.9 72.9
----- ----- ----- -----
Gross profit:
Merchandise (as a percentage of
merchandise sales) 33.1 35.2 33.5 35.4
Gasoline (as a percentage of
gasoline sales) 8.9 11.7 9.5 13.5
Total gross profit 21.0 25.8 22.1 27.1
Costs and expenses:
Selling 14.9 20.1 16.5 21.6
General and administrative 1.6 2.8 2.0 3.0
Depreciation and amortization 1.8 2.3 2.0 2.5
Interest 1.7 1.5 1.5 1.6
Provision for asset impairment 0.1 0.2 0.0 0.1
----- ----- ----- -----
Total expenses 20.1 26.9 22.0 28.8
Earnings (loss) before income taxes 0.9 ( 1.1) 0.1 ( 1.7)
Income tax provision (benefit) 0.3 ( 0.3) 0.0 ( 0.5)
----- ----- ----- -----
Net earnings (loss) 0.6% ( 0.8)% 0.1% ( 1.2)%
===== ===== ===== =====
OPERATING DATA (RETAIL LOCATIONS ONLY):
Average per store, for stores open two
full comparable periods:
Merchandise sales $ 154,446 $ 147,301 $ 432,959 $ 411,747
Gasoline sales $ 192,614 $ 136,210 $ 535,755 $ 368,198
Gallons of gasoline sold 155,222 157,234 465,077 469,854
Total gallons of gasoline sold 40,793,444 30,295,783 100,342,155 92,205,944
Gross profit per gallon of
Gasoline $ 0.111 $ 0.101 $ 0.111 $ 0.104
STORE INFORMATION:
Company-operated stores 289 250 289 250
Franchisee-operated stores 7 10 7 10
Locations with self-service gasoline 235 195 235 195
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RESULTS OF OPERATIONS:
Matters discussed below should be read in conjunction with "Statements of
Operations Data" and "Operating Data (Retail Locations Only)" on the preceding
pages. Certain statements contained in this report are forward looking, such as
statements regarding the Company's plans and strategies or future financial
performance. Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge, investors and
prospective investors are cautioned that such statements are only projections
and that actual events or results may differ materially from those expressed
in any such forward-looking statements. In addition to the factors discussed
elsewhere in this report, the Company's actual consolidated quarterly or annual
operating results have been affected in the past, or could be affected in the
future, by additional factors, including, without limitation, general economic,
business and market conditions; environmental, tax and tobacco legislation or
regulation; volatility of gasoline prices, margins and supplies; merchandising
margins; customer traffic; weather conditions; labor costs and the level of
capital expenditures.
Business Acquisition
- --------------------
On April 21, 2000, the Company acquired the operating assets and business of
Orloski Service Station, Inc. and its affiliates (collectively "OSSI"). OSSI
operated a chain of 43 convenience stores in northeastern Pennsylvania. The
acquisition has had a significant impact on levels of revenues and expenses
in the quarter ended June 29, 2000.
QUARTERS ENDED JUNE 29, 2000 AND JULY 1, 1999
- ---------------------------------------------
Total revenues in the quarter ended June 29, 2000 were $99.2 million, compared
to $64.6 million in the same quarter of fiscal year 1999. The increase of $34.6
million, or 53.5%, consists primarily of a $10.3 million increase in merchandise
sales and $24.2 million increase in gasoline sales. These sales volume
increases are largely the result of sales at the group of 43 stores acquired on
April 21, 2000 and a $0.37 increase in the average price per gallon of gasoline
sold in comparison to the quarter ended July 1, 1999. The Company acquired or
opened 44 stores in the quarter ended June 29, 2000 and closed three
underperforming stores. Merchandise sales increased due to the increase in the
number of stores as well as a $1.7 million sales increase at existing stores.
The increase in gasoline sales is due to the large retail price increase
discussed above and the sale of an additional 10.4 million gallons at the stores
acquired in April 2000. Gasoline gallons sold at existing stores increased by
100,000 gallons.
Gross profits on merchandise sales increased $2.6 million, or 19.5%, due
primarily to profits on merchandise sales at the newly acquired stores. Gross
profits on gasoline sales increased by $1.4 million, or 45.2%, also due largely
to sales at the newly acquired stores as well as an increase in the gross profit
per gallon sold.
Selling expenses increased by $1.8 million, or 13.7%, due to expenses at the 43
stores acquired in April 2000. General and administrative expense declined
$217,000, or 11.8%, due to the continuation of certain cost-cutting measures.
Depreciation and amortization expense increased $348,000, or 23.9%, due largely
to depreciation of buildings and equipment acquired in April 2000. Interest
expense increased by $755,000, or 78.6%, due to higher borrowing levels and
interest rates. The higher borrowing levels are the result of borrowings to
finance the April 2000 acquisition of 43 stores. The Company recorded a $56,000
provision for asset impairment in the quarter ended June 29, 2000 compared to a
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$100,000 provision in the prior year quarter ended July 1, 1999. In fiscal
year 2000, the Company recorded pre-tax profits of $837,000 in the quarter
ended June 29, 2000 compared to a $713,000 pre-tax loss in the same quarter of
fiscal year 1999, an increase of $1.5 million. The provision for income taxes
increased by $431,000 for the same period. The Company had net earnings of
$586,000, or $0.08 per share, in the quarter ended June 29, 2000 compared to a
loss of $533,000, or $0.08 per share, in the quarter ended July 1, 1999.
THREE QUARTERS ENDED JUNE 29, 2000 AND JULY 1, 1999
- ---------------------------------------------------
Total revenues for the three quarters ended June 29, 2000 increased by $55.1
million, or 30.1%, in comparison to total revenues in the first three quarters
of fiscal year 1999. This increase is the result of the same factors that
affected revenues in the third quarter - sales at 43 stores acquired in April
2000 and a $0.37 increase in the average price per gallon of gasoline sold.
Merchandise sales increased by $12.1 million, or 11.2%, as a result of sales at
the newly acquired stores and increased sales at existing locations. Gasoline
sales increased by $43.1 million due to the large retail price increase and
the sale of an additional 8.1 million gallons. The stores acquired in April
2000 sold 10.4 million gallons of gasoline. Gallon sales at existing stores
declined by 2.3 million gallons, primarily in the first two quarters of the
fiscal year.
Gross profits on merchandise sales increased $2.0 million, or 5.2%, due
to increased sales, primarily at the newly acquired stores. Gasoline
gross profits increased by $1.2 million, or 11.8%, due to the sale of additional
gallons as well as a slight increase in the gross profit per gallon sold.
Selling expense declined $344,000, or 0.9%, as a result of lower
expenses in the first two quarters of fiscal year 2000 offset by increased third
quarter selling expenses resulting from the operation of the stores acquired in
April 2000. General and administrative expense declined by $737,000, or 13.3%,
due to certain cost-cutting measures. Depreciation and amortization expense
increased by $142,000, or 3.1%, reflecting depreciation of the newly acquired
buildings and equipment. Interest expense increased by $685,000, or 23.3%, due
primarily to the April 2000 acquisition of 43 stores. The Company recorded a
$56,000 provision for asset impairment.
In the first three quarters of fiscal year 2000, the Company had pre-tax
earnings of $247,000 compared to a loss of $3.2 million in the same period of
fiscal year 1999. The provision for income taxes was $74,000 in fiscal year
2000 compared to a loss benefit of $989,000 in fiscal year 1999. Net earnings
in the three quarters ended June 29, 2000 were $173,000, or $0.02 per share,
compared to a net loss in the same period of fiscal year 1999 of $2.3 million,
or $0.33 per share.
LIQUIDITY AND CAPITAL RESOURCES:
Most of the Company's sales are for cash and its inventory turns over rapidly.
As a result, the Company's daily operations do not generally require large
amounts of working capital. From time to time, the Company utilizes substantial
portions of its cash to acquire and construct new stores and renovate existing
locations.
On April 20, 2000, the Company terminated it's $10 million revolving loan
agreement with a bank and repaid amounts outstanding under this facility with
borrowings from a $10 million revolving loan agreement with a new bank. (See
Note D)
On April 21, 2000, the Company purchased the operating assets and business of
OSSI for approximately $41.2 million in cash and assumption of debt. OSSI was
-13-
the operator of a 43-store chain of convenience stores and gasoline dispensing
stations in northeastern Pennsylvania. The transaction is being accounted for
using the purchase method of accounting with the purchase price being allocated
based upon the values of the individual assets acquired. Among the assets
acquired were 39 fee properties. The transaction was financed with four loans
aggregating $39.7 million through Franchise Finance Corporation of America
("FFCA"). The loans closed on April 21, 2000 and consist of two mortgage loans
and two equipment loans. The two mortgage loans will be amortized over 20 years
and bear interest at a variable rate of 10.40% and a fixed rate of 10.39%. The
two equipment loans will be amortized over ten years and bear interest at a
variable rate of 10.40% and a fixed rate of 10.73%. Provisions of the FFCA loan
agreements require the Company's maintenance of certain covenants related to
minimum net worth and fixed charge coverage ratios.
Capital requirements for the remainder of fiscal year 2000 for debt service and
capital leases are approximately $682,000. The Company expects capital
expenditures from operating cash flows of $426,000 in the remainder of fiscal
year 2000 and capital expenditures pursuant to a financing commitment from FFCA
of $3.0 million.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1 Amended and Restated Certificate of Incorporation of the Company
(Filed as Exhibit 3.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference thereto).
3.2 By-Laws of the Company (Filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the period ended March 30,
1995 and incorporated herein by reference thereto).
4.1 Form of the Company's Common Stock Certificate (Filed as Exhibit
4.3 to the Company's Quarterly Report on Form 10-Q for the
period ended April 1, 1993, File No. 1-11556, and incorporated
herein by reference thereto).
10.1 Uni-Marts, Inc. Amended and Restated Equity Compensation Plan
(Filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference hereto).
10.2 Uni-Marts, Inc. Retirement Savings & Incentive Plan (Filed as
Exhibit 4.2 to the Company's Registration Statement on Form S-8,
File No. 33-9807, filed on July 10, 1991, and incorporated
herein by reference thereto).
10.3 Form of Indemnification Agreement between Uni-Marts, Inc. and
each of its Directors (Filed as Exhibit A to the Company's
Definitive Proxy Statement for the February 25, 1988 Annual
Meeting of Stockholders, File No. 0-15164, and incorporated
herein by reference thereto).
10.4 Uni-Marts, Inc. Deferred Compensation Plan (Filed as Exhibit
10.8 to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1990, File No. 0-15164, and
incorporated herein by reference thereto).
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10.5 Composite copy of Change in Control Agreements between
Uni-Marts, Inc. and its executive officers (Filed as Exhibit
10.10 to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1994 and incorporated herein by
reference thereto).
10.6 Uni-Marts, Inc. 1996 Equity Compensation Plan (Filed as
Exhibit A to the Company's Definitive Proxy Statement for the
February 22, 1996 Annual Meeting of Stockholders and
incorporated herein by reference thereto).
10.7 Amendment 1998-1 to the Uni-Marts, Inc. Equity Compensation Plan
(Filed as Exhibit 10.10 to the Annual Report of Uni-Marts, Inc.
on Form 10-K for the year ended September 30, 1998 and
incorporated herein by reference thereto).
10.8 Amended and Restated Note between Henry D. Sahakian and
Uni-Marts, Inc. dated January 25, 1999 (Filed as Exhibit 10.10
to the Company's Quarterly Report on Form 10-Q for the period
ended April 1, 1999 and incorporated herein by reference
thereto).
10.9 Loan Agreement between FFCA Acquisition Corporation and
Uni-Marts, Inc. dated June 30, 1998 (filed as Exhibit 10.10
to the Company's Quarterly Report on Form 10-Q for the period
ended on July 2, 1998 and incorporated herein by reference
thereto).
10.10 Uni-Marts, Inc. Employee Stock Purchase Plan (Filed as Exhibit A
to the Company's Definitive Proxy Statement for the February 25,
1999 Annual Meeting of Stockholders and incorporated herein by
reference thereto).
10.11 Loan Agreement between FFCA Acquisition Corporation and Uni
Realty of Wilkes-Barre, L.P. dated April 21, 2000 (Filed as
Exhibit 20.1 to the Company's Form 8-K filed on May 8, 2000 and
incorporated herein by reference thereto).
10.12 Loan Agreement between FFCA Funding Corporation and Uni Realty
of Luzerne, L.P. dated April 21, 2000 (Filed as Exhibit 20.2 to
the Company's Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.13 Equipment Loan Agreement between FFCA Acquisiton Corporation and
Uni-Marts, Inc. dated April 21, 2000 (Filed as Exhibit 20.3 to
the Company's Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.14 Equipment Loan Agreement between FFCA Funding Corporation and
Uni-Marts, Inc. dated April 21, 2000 (Filed as Exhibit 20.4
to the Company Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.15 Revolving Credit Loan Agreement between Provident Bank and Uni-
Marts, Inc. dated April 20, 2000.
11 Statement regarding computation of per share earnings (loss).
27 Financial Data Schedule.
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(b) REPORTS ON FORM 8-K
The Company filed a report on Form 8-K/A on July 5, 2000 as an amendment
to a Form 8-K filed on May 8, 2000 to report an acquisition and related
financing. Combined financial statements of OSSI for the three months ended
March 31, 2000 and December 31, 2000 and pro-forma condensed financial
statements of the Company for the two quarters ended March 31, 2000 and year
ended September 30, 1999 were included in the report on Form 8-K/A.
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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.
Uni-Marts, Inc.
----------------------------------
(Registrant)
Date August 14, 2000 /S/ Henry D. Sahakian
--------------- ----------------------------------
Henry D. Sahakian
Chairman of the Board
(Principal Executive Officer)
Date August 14, 2000 /S/ N. Gregory Petrick
--------------- ----------------------------------
N. Gregory Petrick
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
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UNI-MARTS, INC. AND SUBSIDIARY
EXHIBIT INDEX
Number Description Page(s)
- ------ ----------- -------
10.15 Revolving Credit Loan Agreement between
Provident Bank and Uni-Marts, Inc. dated
April 20, 2000. 19-78
11 Statement regarding computation of per
share earnings (loss). 79-80
27 Financial Data Schedule. 81
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