SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20049
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 27, 1995 Commission File Number 33-19645
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Exact name of registrant as specified in its charter)
ALABAMA 63-0393676
(State of Incorporation) (I.R.S. Employer identification No.)
2400 J. Terrell Wooten Drive, Bessemer, Alabama 35020
(Address of principal executive office and zip code)
Registrant's telephone number, including area code (205) 481-2300
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 of
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each for the issuer's class of
common stock, as of the latest practical date.
Class Outstanding at January 27, 1995
Common 72,077
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
INDEX
Part 1. Financial Information
Balance Sheets - January 27, 1995 and July 29, 1994 3-4
Statements of Income - Thirteen weeks and twenty-six
weeks ended January 27, 1995 and January 28, 1994 5
Statements of Stockholders' Equity - Thirteen weeks
and twenty-six weeks ended January 27, 1995 and
January 28, 1994 6
Statements of Cash Flows - Thirteen weeks and twenty-
six weeks ended January 27, 1995 and January 28, 1994 7-8
Notes to Financial Statements 9
Management's Discussion and Analysis of Financial
Conditions and Results of Operations 10
Part II. OTHER INFORMATION 11
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
January 27, 1995
Piggly Wiggly Alabama Distributing Co., Inc. and July 29, 1994
Assets January July
Current assets
Cash $ 1,634,234 $ 2,815,253
Short-term investments 104,247 1,142,228
Receivables
Trade accounts 9,249,787 9,152,077
Other 150,787 315,851
Inventories 19,258,979 18,495,239
Prepaid expenses 254,218 196,561
Advanced taxes 107,200 107,200
Total current assets 30,759,452 32,224,409
Deferred accounts receivable 1,382,188 1,471,353
Property, plant and equipment, at cost
net of accumulated depreciation of
$9,685,291 (1994, $9,016,911) 17,268,349 17,710,689
Leased property under capital leases,
net of amortization of $2,103,574
(1994, $1,793,634) 995,822 1,110,882
Other assets
Unamortized loan costs 480,673 325,815
Property held for sale or lease 1,397,503 1,412,472
Construction in progress 3,674,755 -
Total Assets $55,958,742 $54,255,620
See accompanying notes to unaudited financial information.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
January 27, 1995
Piggly Wiggly Alabama Distributing Co., Inc. and July 29, 1994
Liabilities and Stockholders' Equity January July
Current liabilities
Notes payable - operators $ 1,275,000 $ 100,000
Current installments on long-term
debt 1,921,116 1,970,536
Accounts payable - trade 14,215,349 14,265,082
Accrued income taxes 70,000 15,850
Accrued expenses 544,540 887,096
Accrued patronage dividend 3,145,045 1,909,272
Total current liabilities 21,171,050 19,147,836
Long-term debt, excluding current
installments
Notes payable 10,589,134 12,054,862
Capitalized lease obligations 643,467 900,242
Patronage notes 7,866,904 6,748,758
Deferred compensation 155,145 184,513
Deferred income taxes 291,200 291,200
Total long-term debt 19,545,850 20,179,575
Total liabilities $40,716,900 $39,327,411
Stockholders' equity
Common stock of $.01 par value
per share, authorized 200,000
shares, issued 72,077
(1994, 68,999) shares $ 721 $ 690
Additional paid-in capital 12,986,603 12,213,162
Common stock purchase deposits 561,478 1,031,944
Retained earnings 1,693,040 1,682,413
Total stockholders' equity $15,241,842 $14,928,209
Total liabilities and stock-
holders' equity $55,958,742 $54,255,620
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Thirteen Weeks Ended Twenty-six Weeks Ended
January 27, January 28, January 27, January 28,
1995 1994 1995 1994
Sales 101,747,822 92,989,894 200,843,848 182,690,385
Cost of sales 96,658,844 88,133,664 190,850,242 173,181,160
Gross profit on sales 5,088,978 4,856,230 9,993,606 9,509,225
Purchase discounts 1,530,244 1,358,493 3,019,626 2,672,303
Other operating income 770,587 253,943 1,129,808 442,717
Gross profit 7,389,809 6,468,666 14,143,040 12,624,245
Depreciation & amortization 522,765 509,637 1,053,634 1,000,462
Other operating expenses 4,832,137 4,380,931 9,553,699 8,559,684
Total operating expenses 5,354,902 4,890,568 10,607,333 9,560,146
Operating income 2,034,907 1,578,098 3,535,707 3,064,099
Interest expense 421,390 604,710 863,166 1,129,135
Patronage dividends 1,513,517 873,388 2,472,541 1,734,964
Income before income
taxes 100,000 100,000 200,000 200,000
Provision for income
taxes 34,000 31,500 70,000 63,000
Net income 66,000 68,500 130,000 137,000
Earnings per common share
and common share equivalent $ 0.89 $ 1.04 $ 1.75 $ 1.94
Earnings per common share
and common share equivalent -
assuming full dilution $ 0.89 $ 1.04 $ 1.75 $ 1.94
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Thirteen Weeks Ended Twenty-six Weeks Ended
January 27, January 28, January 27, January 28,
1995 1994 1995 1994
Common Stock
Beginning balance $ 727 $ 691 $ 690 $ 655
New issues 6 4 59 45
Redemptions (12) (8) (28) (13)
Ending balance $ 721 $ 687 $ 721 $ 687
Additional Paid-in
Capital
Beginning balance $13,103,274 $12,155,426 $12,213,162 $11,353,721
Premiums received 125,850 74,269 1,262,402 956,708
Refund of premiums
upon redemption (242,521) (116,132) (488,961) (196,866)
Ending balance $12,986,603 $12,113,563 $12,986,603 $12,113,563
Common Stock
Purchase Deposits
Beginning balance $ 341,664 $ 277,652 $ 1,031,944 $ 772,093
Cash collections 345,670 339,331 791,995 727,370
Stock issued (125,856) (74,273) (1,262,461) (956,753)
Ending balance $ 561,478 $ 542,710 $ 561,478 $ 542,710
Retained Earnings
Beginning balance $ 1,651,278 $ 1,590,229 $ 1,682,413 $ 1,550,784
Net income 66,000 68,500 130,000 137,000
Excess of stock
redemption price
over purchase price (24,238) (48,878) (119,373) (77,933)
Ending balance $ 1,693,040 $ 1,609,851 $ 1,693,040 $ 1,609,851
Total Stockholders'
equity $15,241,842 $14,266,811 $15,241,842 $14,266,811
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Thirteen Weeks Ended Twenty-six Weeks Ended
January 27 January 28 January 27 January 28
1995 1994 1995 1994
Cash flows from operating
activities:
Received from customers 102,593,165 93,173,865 200,736,697 181,066,068
Paid for cost of sales
& inventories (93,289,405) (85,263,725) (188,956,402) (169,848,000)
Paid to other
supplies & employees (4,673,179) (4,240,204) (9,658,375) (8,673,483)
Paid for patronage dividends (497) - (497) -
Interest received 80,147 42,364 44,929 105,649
Interest paid (421,224) (564,792) (874,354) (1,089,217)
Income taxes paid - (15,293) (15,850) (189,262)
Miscellaneous income received 455,852 199,965 735,935 326,183
Net cash provided (used) by
operating activities 4,744,859 3,332,180 2,112,083 1,697,938
Cash flows from investing
activities:
Purchase of equipment - (911,935) (206,313) (1,108,725)
Loan costs (30,000) - (189,860) -
Construction in process (3,198,678) - (3,674,755) -
Notes receivable - net 60,406 57,411 254,229 105,571
Decrease in short-term
investments 1,037,981 - 1,037,981 -
Proceeds - sale of property 17,511 20,145 18,435 22,895
Net cash provided (used) by
investing activities (2,112,780) (834,379) (2,760,283) (980,259)
Cash flows from financing
activities:
Checks outstanding - net (1,212,260) (898,482) - -
Proceeds - operator loans 700,000 - 1,175,000 -
Debt reduction - long-term (564,484) (857,952) (1,891,452) (1,294,110)
Proceeds from collections
on stock subscriptions 345,673 339,331 791,995 727,370
Redemption cost of common
stock (266,774) (165,018) (608,362) (274,812)
Net cash provided (used) by
financing activities (997,845) (1,582,121) (532,819) (841,552)
Net increase (decrease) in
cash and cash equivalents 1,634,234 915,680 (1,181,019) (123,873)
Cash and cash equivalents at
beginning of the period - - 2,815,253 1,039,553
Cash and cash equivalents at
end of the period 1,634,234 915,680 1,634,234 915,680
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Thirteen Weeks Ended Twenty-six Weeks Ended
January 27 January 28 January 27 January 28
1995 1994 1995 1994
Reconciliation of net income
to net cash provided by
operating activities:
Net income $ 66,000 $ 68,500 $ 130,000 $ 137,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation & amortization 522,765 509,637 1,053,634 1,000,462
(Gain) Loss on sale of property,
plant & equipment (253,290) 35,316 (258,385) 36,045
Changes in assets and liabilities:
(Increase) decrease in trade
receivables 864,045 137,040 (97,710) (1,671,248)
(Increase) decrease in
inventories 3,349,465 605,846 (763,740) (2,088,287)
(Increase) decrease in
prepaid expense 270,428 123,745 (57,657) (233,120)
(Increase) decrease in deferred
tax assets - 1 - (162,713)
Increase (decrease) in
accounts payable and
accrued expenses (1,589,592) 993,180 (392,289) 2,933,753
Increase in accrued income
taxes payable 34,000 31,500 54,150 51,745
(Decrease) in deferred patronage
dividends payable 1,513,020 873,393 2,472,044 1,734,964
Increase in deferred compensa-
tion payable (31,982) (30,685) (27,964) (25,370)
Increase in deferred income
taxes payable - (15,293) - (15,293)
Net cash (used) by
operating activities $4,744,859 $3,332,180 $2,112,083 $1,697,938
See accompanying notes to unaudited financial information.
Notes to Quarterly Financial Statements
(UNAUDITED)
January 17, 1995 and January 28, 1994
1. Primary earnings per common share and common share equivalent were
computed by dividing net income by the weighted average number of shares and
share equivalents outstanding during the period. Fully diluted earnings per
common share and common share equivalents were computed as above, except that
the issue of common shares under subscription is assumed to take place at the
beginning of the fiscal year when the result is dilutive.
2. In the opinion of management all adjustments have been made which are
necessary to reflect a fair statement of the results of operations of the
interim periods. These adjustments were of a normal recurring nature and
there were no unusual or nonrecurring adjustments necessary.
The accounting policies followed by the Company are set forth in note 1 of the
Company's financial statements in the Form 10-K report for the year ended July
29, 1994 which is incorporated by reference.
3. The results of operations for the twenty-six weeks ended January 27, 1995
and January 28, 1994 are not necessarily indicative of the results to be
expected for the full year.
4. Bad debts are charged to expense when deemed uncollectible under the
specific write-off method, which approximates the amount of bad debts had the
reserve method been used. These statements include no bad debt expense. Bad
debts have not exceeded 0.01% of sales in any year in the last 5 years.
5. Property held for sale or lease is valued at the lower of cost or net
realizable value; currently that is cost.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - During the quarters presented, cash was
provided by operating activities. During the fiscal 1995 quarters, this was
primarily due to increases in deferred patronage dividends. During the
fiscal 1994 quarters, this was primarily due to increase in accounts payable
and deferred patronage dividends.
During the 1995 quarters, the payments for construction of the warehouse
expansion ($3,675,000) resulted in the use of cash by investing activities.
Included in the the second quarter of 1994 is the replacement of 8 tractors in
the capital lease and the addition of 3 tractors to the lease. This
transaction totaled approximately $700,000.
During the quarters ended January 27, 1995 and January 28, 1994, cash was used
in financing activities to retire long-term debt. In the second quarter of
1994, Patronage Dividend notes due in 1998 and 1999 were paid. This
transaction amounted to approximately $985,000. These payments were made in
order to save interest costs. In the first quarter of fiscal 1995, an extra
payment of $750,000 was made on the long-term debt. This payment was made
under the provisions of the new loan agreement for this debt without
prepayment penalty. During the 1995 quarters, $1,175,000 was borrowed from
the operators at 80% of the prime rate. These loans are due on demand. Other
sources and uses of cash in financing activities were the routine sale of
stock and reduction in long-term debt.
Operating Results - During the twenty-six weeks ended January 27, 1995
compared to the twenty-six weeks ended January 28, 1994, sales increased 9.9%
($18,153,000) and gross profits increased 12.0% ($484,000). Gross profits
increased at a greater rate than sales due to increases in other operating
income ($687,000), primarily the gain on the early cancelation of the
operating lease on the tractors and increases in advertising rebates earned by
the warehouse. Operating expenses increased 11.0% ($1,047,000) due to
increases in costs of labor resulting from improvements in output quality by
the shipping departments and reduced efficiency due to crowded conditions in
the warehouse. Due to the above mentioned changes, operating income
increased 15.4% ($472,000) and, combined with a 42.5% ($266,000) decrease in
interest expense due to long-term debt reduction, resulted in a 42.5%
($738,000) increase in patronage dividends for the period.
These trends were also reflected in the thriteen weeks ended January 27, 1995.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports of Form 8-K - There were no reports on form
8-K for the twenty-six weeks ended January 27, 1995.
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 hereto duly authorized.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Registrant)
Dated: 3/7/95
D.T. Stewart, President and Chief
Executive Officer
Dated: 3/7/95
Bobby L. Martin, Vice-President of
Finance and Controller