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 26, 1996 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 26, 1996
______ _______________________________
Common 77,234
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
INDEX
Part 1. Financial Information
Balance Sheets - January 26, 1996 and July 28, 1995 3-4
Statements of Income - Thirteen weeks and twenty-six
weeks ended January 26, 1996 and January 27, 1995 5
Statements of Stockholders' Equity - Thirteen weeks
and twenty-six weeks ended January 26, 1996 and
January 27, 1995 6
Statements of Cash Flows - Twenty-six weeks ended
January 26, 1996 and January 27, 1995 7-8
Notes to Financial Statements 9
Management's Discussion and Analysis of Financial
Conditions and Results of Operations 10
Part II. OTHER INFORMATION
Exhibit 27 11
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
January 26, 1996
Piggly Wiggly Alabama Distributing Co., Inc. and July 28, 1995
Assets January July
Current assets
Short-term investments $ 10,675 $ 110,675
Receivables
Trade accounts 11,596,898 10,426,382
Other 159,000 160,494
Inventories 22,141,582 18,219,615
Prepaid expenses 257,570 54,063
Advanced taxes 7,700 7,700
----------- -----------
Total current assets 34,173,425 28,978,929
Deferred accounts receivable 1,204,650 1,273,710
Property, plant and equipment, at cost
net of accumulated depreciation of
$11,394,692 (1995, $10,453,925) 28,282,281 23,043,157
Leased property under capital leases,
net of amortization of $832,767
(1995, $504,185) 2,542,489 2,806,111
Other assets
Unamortized loan costs 413,329 448,332
Property held for sale or lease 1,397,503 1,397,503
Construction in progress - 5,926,364
----------- -----------
Total other assets 1,810,832 7,772,199
----------- -----------
Total Assets $68,013,677 $63,874,106
----------- -----------
----------- -----------
See accompanying notes to unaudited financial information.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
January 26, 1996
Piggly Wiggly Alabama Distributing Co., Inc. and July 28, 1995
Liabilities and Stockholders' Equity January July
Current liabilities
Checks outstanding $ 2,304,513 $ 822,440
Current installments on long-term
debt 2,137,000 2,039,845
Accounts payable - trade 16,402,519 16,403,289
Accrued income taxes 72,000 -
Accrued expenses 979,452 1,933,105
Accrued patronage dividend 2,797,404 2,018,506
----------- -----------
Total current liabilities 24,692,888 23,217,185
Long-term debt, excluding current
installments
Notes payable 11,264,173 9,931,732
Notes payable - operators 3,520,431 3,115,427
Capitalized lease obligations 2,191,086 2,420,177
Patronage notes 9,117,627 8,573,059
Deferred compensation 139,915 171,585
Deferred income taxes 372,300 372,300
----------- -----------
Total long-term debt 26,605,532 24,584,280
----------- -----------
Total liabilities $51,298,420 $47,801,465
Stockholders' equity
Common stock of $.01 par value
per share, authorized 200,000
shares, issued 77,234
(1995, 73,236) shares $ 772 $ 732
Additional paid-in capital 14,208,987 13,252,912
Common stock purchase deposits 654,303 1,006,262
Retained earnings 1,851,195 1,812,734
----------- -----------
Total stockholders' equity $16,715,257 $16,072,640
----------- -----------
Total liabilities and stock-
holders' equity $68,013,677 $63,874,105
----------- -----------
----------- -----------
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 26, January 27, January 26, January 27,
1996 1995 1996 1995
Sales $111,166,990 $101,747,822 $215,888,319 $200,843,848
Cost of sales 105,701,088 96,658,844 205,283,735 190,850,242
------------ ------------ ------------ ------------
Gross profit on sales 5,465,902 5,088,978 10,604,584 9,993,606
Purchase discounts 1,677,532 1,530,244 3,278,329 3,019,626
Other operating income 245,467 770,587 1,029,236 1,129,808
------------ ------------ ------------ ------------
Gross profit 7,388,901 7,389,809 14,912,149 14,143,040
Depreciation & amortization 688,196 522,765 1,391,309 1,053,634
Other operating expenses 5,593,328 4,832,137 10,809,302 9,553,699
------------ ------------ ------------ ------------
Total operating expenses 6,281,524 5,354,902 12,200,611 10,607,333
------------ ------------ ------------ ------------
Operating income 1,107,377 2,034,907 2,711,538 3,535,707
Interest expense 544,340 421,390 1,047,385 863,166
Patronage dividends 463,037 1,513,517 1,464,153 2,472,541
------------ ------------ ------------ ------------
Income before income
taxes 100,000 100,000 200,000 200,000
Provision for income
taxes 36,000 34,000 72,000 70,000
------------ ------------ ------------ ------------
Net income $ 64,000 $ 66,000 $ 128,000 $ 130,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings per common share
and common share equivalent $ 0.82 $ 0.89 $ 1.63 $ 1.75
------ ------ ------ ------
------ ------ ------ ------
Earnings per common share
and common share equivalent -
assuming full dilution $ 0.82 $ 0.89 $ 1.63 $ 1.75
------ ------ ------ ------
------ ------ ------ ------
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 26, January 27, January 26, January 27,
1996 1995 1996 1995
Common Stock
Beginning balance $ 769 $ 727 $ 732 $ 690
New issues 6 6 57 59
Redemptions (3) (12) (17) (28)
----------- ----------- ----------- -----------
Ending balance $ 772 $ 721 $ 772 $ 721
Additional Paid-in
Capital
Beginning balance $14,123,649 $13,103,274 $13,252,912 $12,213,162
Premiums received 141,887 125,850 1,247,230 1,262,402
Refund of premiums
upon redemption (56,549) (242,521) (291,155) (488,961)
----------- ----------- ----------- -----------
Ending balance $14,208,987 $12,986,603 $14,208,987 $12,986,603
Common Stock
Purchase Deposits
Beginning balance $ 330,254 $ 341,664 $ 1,006,262 $ 1,031,944
Cash collections 466,120 345,670 895,328 791,995
Stock issued (142,071) (125,856) (1,247,287) (1,262,461)
----------- ----------- ----------- -----------
Ending balance $ 654,303 $ 561,478 $ 654,303 $ 561,478
Retained Earnings
Beginning balance $ 1,792,352 $ 1,651,278 $ 1,812,734 $ 1,682,413
Net income 64,000 66,000 128,000 130,000
Excess of stock
redemption price
over purchase price (5,157) (24,238) (89,539) (119,373)
----------- ----------- ----------- -----------
Ending balance $ 1,851,195 $ 1,693,040 $ 1,851,195 $ 1,693,040
Total Stockholders'
equity $16,715,257 $15,241,842 $16,715,257 $15,241,842
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Twenty-six Weeks Ended
January 26 January 27
1996 1995
Cash flows from operating
activities:
Received from customers $ 214,713,990 $ 200,736,697
Paid for cost of sales
& inventories (206,815,913) (188,956,402)
Paid to other
supplies & employees (11,086,696) (9,658,375)
Paid for patronage dividends 46,822 (497)
Interest received 60,449 144,929
Interest paid (1,066,504) (874,354)
Income taxes paid - (15,850)
Misc. income received 955,425 735,935
------------- -------------
Net cash provided (used) by
operating activities (3,192,427) 2,112,083
------------- -------------
Cash flows from investing
activities:
Purchase of equipment (405,444) (206,313)
Loan costs - (189,860)
Construction in process - (3,674,755)
Notes receivable - net 70,553 254,229
Decrease in short-term
investments 100,000 1,037,981
Proceeds - sale of property 17,175 18,435
------------- -------------
Net cash (used) by
investing activities (217,716) (2,760,283)
------------- -------------
Cash flows from financing
activities:
Checks outstanding - net 1,482,073 -
Proceeds - operator loans 410,003 1,175,000
Proceeds - bank loan 2,317,000 -
Debt reduction - long-term (1,313,550) (1,891,452)
Proceeds from collections
on stock subscriptions 895,328 791,995
Redemption cost of common stock (380,711) (608,362)
------------- -------------
Net cash provided (used) by
financing activities 3,410,143 (532,819)
------------- -------------
Net (decrease) in
cash and cash equivalents $ - $ (1,181,019)
------------- -------------
Cash and cash equivalents at
beginning of the period - 2,815,253
------------- -------------
Cash and cash equivalents at
end of the period $ - $ 1,634,234
------------- -------------
------------- -------------
See accompanying notes to unaudited financial information.
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Twenty-six Weeks Ended
January 26 January 27
1996 1995
Reconciliation of net income
to net cash provided by
operating activities:
Net income $ 128,000 $ 130,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation & amortization 1,391,309 1,053,634
(Gain) on sale of property,
plant & equipment (17,175) (258,385)
Changes in assets and liabilities:
(Increase) in trade receivables (1,175,516) (97,710)
(Increase) in inventories (3,921,967) (763,740)
(Increase) in prepaid expense (203,507) (57,657)
(Decrease) in accounts payable
and accrued expenses (954,424) (392,289)
Increase in accrued income
taxes payable 72,000 54,150
Increase in deferred patronage
dividends payable 1,510,975 2,472,044
(Decrease) in deferred compensa-
tion payable (27,122) (27,964)
----------- -----------
Net cash (used) by
operating activities $(3,192,427) $ 2,112,083
----------- -----------
----------- -----------
See accompanying notes to unaudited financial information.
Notes to Quarterly Financial Statements
(UNAUDITED)
January 26, 1996 and January 27, 1995
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 28, 1995 which is
incorporated by reference.
3. The results of operations for the twenty-six weeks ended
January 26, 1996 and January 27, 1995 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.
6. As of January 26, 1996, the Company classified $3,520,431 of
Operator Notes as long-term debt. The Company has both the
intent and the ability, through its revolving credit agreement,
to refinance these amounts on a long-term basis.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - During the 1996 quarters
presented, cash was used by operating activities due to increases
in inventory and accounts receivable. During the fiscal 1995
quarters, cash was provided by operating activities. This was
primarily due to increases in deferred patronage dividends.
During the quarter ended January 26, 1996, the company received
cash of $2,317,000 from the construction line of credit with the
lead bank which is due in three years. The company repaid
$5,000,000 on the construction line of credit which was borrowed
the preceding quarter.
Operating Results - During the twenty-six weeks ended January 26,
1996 compared to the twenty-six weeks ended January 27, 1995, sales
increased 7.5% ($15,044,000) and gross profits increased 5.4%
($769,000). Gross profits increased at a lower rate than sales due
to changes in the product mix and decreases in other operating
income ($101,000). Operating expenses increased 15.0% ($1,593,000)
due to increases in depreciation. Due to the above mentioned
changes, operating income decreased 23.3% ($824,000) and, combined
with a 21.3% ($184,000) increase in interest expense due to the
increase long-term debt resulted in a 40.8% ($1,008,000) decrease
in patronage dividends for the period.
These trends were also reflected in the thirteen weeks ended
January 26, 1996.
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 26, 1996.
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