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 April 28, 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 April 28, 1995
Common 72,177
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
INDEX
Part 1. Financial Information
Balance Sheets - April 28, 1995 and July 29, 1994 3-4
Statements of Income - Thirteen weeks and thirty-nine
weeks ended April 28, 1995 and April 29, 1994 5
Statements of Stockholders' Equity - Thirteen weeks
and twenty-six weeks ended April 28, 1995 and
April 29, 1994 6
Statements of Cash Flows - Thirty-nine weeks ended
April 28, 1995 and April 29, 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)
April 28, 1995
Piggly Wiggly Alabama Distributing Co., Inc. and July 29, 1994
Assets April July
Current assets
Cash $ -0- $ 2,815,253
Short-term investments 104,247 1,142,228
Receivables
Trade accounts 10,125,748 9,152,077
Other 152,797 315,851
Inventories 20,344,869 18,495,239
Prepaid expenses 132,018 196,561
Advanced taxes 107,200 107,200
----------- -----------
Total current assets 30,966,879 32,224,409
Deferred accounts receivable 1,343,093 1,471,353
Property, plant and equipment, at cost
net of accumulated depreciation of
$10,040,014 (1994, $9,016,911) 17,023,127 17,710,689
Leased property under capital leases,
net of amortization of $349,639
(1994, $1,793,634) 2,960,657 1,110,882
Other assets
Unamortized loan costs 465,833 325,815
Property held for sale or lease 1,397,503 1,412,472
Construction in progress 7,810,129 -
----------- -----------
Total Assets $61,967,221 $54,255,620
See accompanying notes to unaudited financial information.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
April 28, 1995
Piggly Wiggly Alabama Distributing Co., Inc. and July 29, 1994
Liabilities and Stockholders' Equity April July
Current liabilities
Checks outstanding - net $ 475,744 -0-
Notes payable - operators 2,845,000 $ 100,000
Current installments on long-term
debt 3,963,241 1,970,536
Accounts payable - trade 14,632,689 14,265,082
Accrued income taxes 102,000 15,850
Accrued expenses 721,019 887,096
Accrued patronage dividend 1,916,157 1,909,272
----------- -----------
Total current liabilities 24,655,850 19,147,836
Long-term debt, excluding current
installments
Notes payable 10,235,729 12,054,862
Capitalized lease obligations 2,556,432 900,242
Patronage notes 8,470,711 6,748,758
Deferred compensation 159,163 184,513
Deferred income taxes 291,200 291,200
----------- -----------
Total long-term debt 21,713,235 20,179,575
----------- -----------
Total liabilities $46,369,085 $39,327,411
Stockholders' equity
Common stock of $.01 par value
per share, authorized 200,000
shares, issued 72,177
(1994, 68,999) shares $ 722 $ 690
Additional paid-in capital 13,011,012 12,213,162
Common stock purchase deposits 829,361 1,031,944
Retained earnings 1,757,041 1,682,413
----------- -----------
Total stockholders' equity $15,598,136 $14,928,209
----------- -----------
Total liabilities and stock-
holders' equity $61,967,221 $54,255,620
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Thirteen Weeks Ended Thirty-nine Weeks Ended
April 28, April 29, April 28, April 29,
1995 1994 1995 1994
Sales 98,894,843 92,655,840 299,738,691 275,346,225
Cost of sales 93,952,893 87,579,613 284,803,135 260,760,773
---------- ---------- ----------- -----------
Gross profit on sales 4,941,950 5,076,227 14,935,556 14,585,452
Purchase discounts 1,442,542 1,395,976 4,462,168 4,068,279
Other operating income 708,485 359,420 1,838,293 802,137
---------- ---------- ----------- -----------
Gross profit 7,092,977 6,831,623 21,236,017 19,455,868
Depreciation & amortization 526,772 531,360 1,580,406 1,531,822
Other operating expenses 4,576,960 4,152,977 14,130,659 12,712,661
---------- ---------- ----------- -----------
Total operating expenses 5,103,732 4,684,337 15,711,065 14,244,483
Operating income 1,989,245 2,147,286 5,524,952 5,211,385
Interest expense 529,471 357,804 1,392,637 1,486,939
Patronage dividends 1,359,774 1,689,482 3,832,315 3,424,446
---------- ---------- ----------- -----------
Income before income
taxes 100,000 100,000 300,000 300,000
Provision for income
taxes 32,000 38,000 102,000 101,000
---------- --------- ----------- -----------
Net income 68,000 62,000 198,000 199,000
Earnings per common share
and common share equivalent $ 0.89 $ 0.99 $ 2.64 $ 2.93
------ ------ ------ ------
Earnings per common share
and common share equivalent -
assuming full dilution $ 0.89 $ 0.99 $ 2.64 $ 2.93
------ ------ ------ ------
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Thirteen Weeks Ended Thirty-nine Weeks Ended
April 28, April 29, April 28, April 29,
1995 1994 1995 1994
Common Stock
Beginning balance $ 721 $ 687 $ 690 $ 655
New issues 4 9 63 54
Redemptions (3) (15) (31) (28)
----------- ----------- ----------- -----------
Ending balance $ 722 $ 681 $ 722 $ 681
Additional Paid-in
Capital
Beginning balance $12,986,603 $12,113,563 $12,213,162 $11,353,721
Premiums received 87,877 191,263 1,350,279 1,147,971
Refund of premiums
upon redemption (63,468) (290,405) (552,429) (487,271)
----------- ----------- ----------- -----------
Ending balance $13,011,012 $12,014,421 $13,011,012 $12,014,421
Common Stock
Purchase Deposits
Beginning balance $ 561,478 $ 542,710 $ 1,031,944 $ 772,093
Cash collections 355,764 399,204 1,147,759 1,126,574
Stock issued (87,881) (191,272) (1,350,342) (1,148,025)
----------- ----------- ----------- -----------
Ending balance $ 829,361 $ 750,642 $ 829,361 $ 750,642
Retained Earnings
Beginning balance $ 1,693,040 $ 1,609,851 $ 1,682,413 $ 1,550,784
Net income 68,000 62,000 198,000 199,000
Excess of stock
redemption price
over purchase price (3,999) (45,503) (123,372) (123,436)
----------- ----------- ----------- -----------
Ending balance $ 1,757,041 $ 1,626,348 $ 1,757,041 $ 1,626,348
Total Stockholders'
equity $15,598,136 $14,392,092 $15,598,136 $14,392,092
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Thirty-nine Weeks Ended
April 28, April 29,
1995 1994
Cash flows from operating activities:
Received from customers 298,770,017 274,659,833
Paid for cost of sales
& inventories (281,976,945) (257,728,880)
Paid to other
suppliers & employees (14,078,818) (12,608,508)
Paid for patronage dividends (1,909,272) (1,023,229)
Interest received 232,020 203,661
Interest paid (1,416,003) (1,343,223)
Income taxes paid (15,850) (189,182)
Miscellaneous income received 1,302,784 593,504
------------ -----------
Net cash provided by
operating activities 907,933 2,563,976
Cash flows from investing activities:
Purchase of equipment (370,933) (1,296,408)
Loan costs (192,523) -0-
New lease (2,607,880) -0-
Construction in progress (7,810,129) -0-
Notes receivable - net 291,314 152,005
Decrease in short-term
investments 1,037,981 -0-
Proceeds - sale of property 18,435 12,045
------------ -----------
Net cash (used) by
investing activities (9,633,735) (1,132,358)
Cash flows from financing activities:
Checks outstanding - net 475,744 -0-
Proceeds - operator loans 2,745,000 -0-
Lease payments (440,967) 702,714
New capital lease 2,607,880 -0-
Bank loan 2,000,000 -0-
Debt reduction - long-term (1,949,035) (2,594,972)
Proceeds from collections
on stock subscriptions 1,147,759 1,126,574
Redemption cost of common stock (675,832) (610,735)
------------ ------------
Net cash provided (used) by
financing activities 5,910,549 (1,376,419)
Net increase (decrease) in
cash and cash equivalents (2,815,253) 55,199
Cash and cash equivalents at
beginning of the period 2,815,253 1,039,553
------------ ------------
Cash and cash equivalents at
end of the period -0- 1,094,752
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Thirty-nine Weeks Ended
April 28, April 29,
1995 1994
Reconciliation of net income
to net cash provided by
operating activities:
Net income 198,000 199,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation & amortization 1,580,406 1,531,822
Gain on sale of property,
plant & equipment (298,492) (12,045)
Changes in assets and liabilities:
Increase in trade receivables (973,671) (679,319)
Increase in inventories (1,849,630) (5,149,940)
(Increase) decrease in
prepaid expense 64,543 (92,293)
Increase in accounts payable
and accrued expenses 201,530 4,473,772
Increase in accrued income
taxes payable 86,150 89,745
Increase in accrued patronage
dividends payable 6,885 688,994
Increase in deferred patronage
dividends 1,916,158 1,712,223
Decrease in deferred compensa-
tion payable (23,946) (20,056)
Decrease in deferred income
taxes payable -0- (177,927)
---------- ----------
Net cash provided by
operating activities 907,933 2,563,976
See accompanying notes to unaudited financial information.
Notes to Quarterly Financial Statements
(UNAUDITED)
April 28, 1995 and April 29, 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 thirty-nine weeks ended
April 28, 1995 and April 29, 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 ($7,810,129) resulted in the use of cash by
investing activities. Included in the third quarter of 1995 is
the replacement of 38 tractors in the capital lease. This
transaction totaled approximately $2,600,000.
During the quarters ended April 28, 1995 and April 29, 1994, cash
was used in financing activities to retire long-term debt. In
the third quarter of 1995, a draw on the bank loan of $2,000,000
was made in order to finance the construction in progress. 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, $2,745,000 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 thirty-nine weeks ended April 28,
1995 compared to the thirty-nine weeks ended April 29, 1994,
sales increased 8.8% ($24,392,000) and gross profits increased
9.1% ($1,780,000). Gross profits increased at a greater rate
than sales due to increases in other operating income
($1,036,000), primarily the gain on the early cancellation of the
operating lease on the tractors and increases in advertising
rebates earned by the warehouse. Operating expenses increased
10.3% ($1,467,000) 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 6.0% ($314,000) and, combined with a 6.3% ($94,000)
decrease in interest expense due to long-term debt reduction,
resulted in a 11.9% ($408,000) increase in patronage dividends
for the period.
These trends were also reflected in the thirteen weeks ended
April 28, 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 thirty-nine weeks ended April 28, 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:
D.T. Stewart, President and Chief
Executive Officer
Dated:
Bobby L. Martin, Vice-President of
Finance and Controller