UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 2, 1999
Commission file number 33-80833
JITNEY-JUNGLE STORES OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Mississippi 64-0280539
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
1770 Ellis Avenue, Suite 200, Jackson, MS 39204
(Address of principal executive offices) (Zip Code)
(601) 965-8600
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or
any amendment to this form 10-K. (X )
The Company is closely-held and is not actively traded;
therefore, the aggregate market value of voting stock held
by nonaffiliates is not applicable.
The number of shares of registrant's Common Stock, par
value one cent ($.01) per share, outstanding at April 2,
1999, was 425,280.
<PAGE>
CAUTIONARY NOTICE
This Annual Report on Form 10-K may contain
forward-looking statements regarding future expectations
about the Company's business, management's plans for
future operations or similar matters. The Company's actual
results could differ materially from those anticipated in
such forward-looking statements due to several important
factors including the following: deterioration in economic
conditions generally or in the Company's markets, unusual
or unanticipated costs or consequences relating to, or
changes in any acquisition and/or divestiture plans,
demands placed on management by the substantial increase
in the Company's size due to the acquisition of Delchamps,
unanticipated or unusual distribution problems, breakdown
of quality control, competitive pressures, restrictions and
costs associated with the Company's leveraged capital
structure and limitations imposed by its debt agreements,
labor disturbances, and customer dissatisfaction. Forward-
looking statements speak only as of the date made, and the
Company undertakes no obligation to update or revise such
statements to reflect new circumstances or unanticipated
events as they may occur.
<PAGE>
JITNEY-JUNGLE STORES OF AMERICA, INC.
TABLE OF CONTENTS
ITEM PAGE
PART I
1. Business 3
2. Properties 8
3. Legal Proceedings 11
4. Submission of Matters to a Vote of
Security Holders 11
PART II
5. Market for the Registrant's Common Equity and
Related Stockholder Matters 12
6. Selected Financial Data 14
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 15
8. Financial Statements and Supplementary Data 29
9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 27
PART III
10. Directors and Executive Officers of the
Registrant 28
11. Executive Compensation 33
12. Security Ownership of Certain Beneficial
Owners and Management 38
13. Certain Relationships and Related Transactions 41
PART IV
14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 42
<PAGE>
Item 1. Business
General
Jitney-Jungle Stores of America, Inc. and
subsidiaries (the "Company") is a leading operator of
supermarkets in the Southeast. As of January 2, 1999 the
Company operated 198 stores located throughout
Mississippi, Alabama and Louisiana and in selected
markets in Tennessee, Arkansas and Florida. The
Company is the largest supermarket operator in
Mississippi, with 82 stores.
On July 8, 1997, the Company entered into a
definitive merger agreement with Delchamps, Inc.
("Delchamps"), an Alabama corporation. On September
12, 1997, Delta Acquisition Corporation ("DAC") a wholly
owned subsidiary of the Company, completed an all cash
tender offer for shares of Delchamps and accepted for
payment approximately 75% of such shares. On November
4, 1997, DAC was merged with and into Delchamps.
Delchamps was the surviving corporation and became a
wholly-owned subsidiary of the Company. In connection
with the acquisition, the Company, among other things, (i)
issued and sold $200 million of unsecured senior
subordinated notes due 2007 (the "Senior Subordinated
Notes") and (ii) entered into a $150 million revolving
credit agreement (the "Senior Credit Facility") with Fleet
Bank, N.A., which replaced the then existing $100 million
revolving credit agreement ("Credit Facility") with Fleet
Bank, N.A.
The proceeds from the sale of the Senior
Subordinated Notes and the borrowing under the Senior
Credit Facility and the use of existing cash balances of the
Company were used to repay certain outstanding
Delchamps indebtedness, purchase Common Stock from
Delchamps shareholders and pay fees and expenses related
to the acquisition of Delchamps.
Through a public offering, the Company issued and
sold the Senior Subordinated Notes which bear interest at a
rate of 10 3/8% per annum, payable semi-annually on
March 15 and September 15 of each year. In addition, the
Company entered into a revolving credit agreement on
March 5, 1996 which provided a $100 million Credit
Facility and subsequently, on September 15, 1997 the
Company amended and restated the agreement to provide a
$150 million Senior Credit Facility. The Senior Credit
Facility was further amended and restated on March 1,
1999 to provide a $162.3 million facility. The borrowings
outstanding under the Senior Credit Facility at January 2,
1999 were $112.9 million. The commitments under the
Senior Credit Facility will terminate, and all loans
outstanding thereunder will be required to be repaid in full
on March 15, 2004. Both the Senior Subordinated Notes
and the Senior Credit Facility restrict future payment of
dividends.
On November 16, 1995, the Company and JJ
Acquisitions Corp. ("JJAC") entered into an Agreement
and Plan of Exchange and of Merger (the "Merger"). In
connection with the Merger on March 5, 1996, JJAC
among other things, (i) issued and sold $200 million of
unsecured senior notes due 2006 (the "Senior Notes"), (ii)
entered into a $100 million revolving credit agreement
("the Credit Facility") with Fleet Bank, N.A. (formerly
<PAGE>
NatWest Bank, N.A.), (iii) issued and sold Common Stock
and a warrant in the aggregate amount of $7.4 million, and
(iv) issued and sold three classes of Preferred Stock in the
aggregate amount of $57.6 million. The proceeds from the
sale of the notes, the Common Stock, warrants and
Preferred Stock, together with borrowing under the Credit
Facility and the use of existing cash balances of the
Company were used to repay certain outstanding
indebtedness, purchase Common Stock from existing
shareholders and pay fees and expenses related to the
Merger. JJAC was merged with and into the Company,
with the Company continuing as the surviving corporation.
Upon the completion of the Merger, Bruckmann, Rosser,
Sherrill & Co., L.P., owned 356,250 shares or
approximately 83.82% of the Company's outstanding
Common Stock on an undiluted basis.
Through a public offering, JJAC issued and sold the
Senior Notes which bear interest at a rate of 12% per
annum, payable semiannually on March 1 and September 1
of each year. In addition, on March 5, 1996, the Company
entered into the Credit Facility (which has been replaced by
the Senior Credit Facility). The Senior Notes restrict
future payment of dividends.
Store Formats
Through its 80 years of operations in the Southeast,
the Company has developed a strong consumer franchise,
with many of its stores located in prime, high-traffic sites
that provide significant competitive advantages. The
Company currently operates supermarkets under three
formats, each targeting specific market segments: (i)
conventional supermarkets operating under the "Jitney-
Jungle" and "Delchamps" name, (ii) combination food and
drug supermarkets operating primarily under the "Jitney
Premier" and "Delchamps Premier" name and (iii) discount
supermarkets operating primarily under the "Sack and
Save" name. The Company currently operates 198
supermarkets (161 conventional stores averaging
approximately 35,000 square feet, 21 Premier combination
stores averaging approximately 52,000 square feet and 16
discount stores averaging approximately 61,500 square
feet), 54 gasoline stations and 10 liquor stores including
recent changes made subsequent to fiscal year end. Of the
161 conventional stores, 54 have departments sufficient to
be combination stores but have not been converted to the
Premier format. All of the Company's conventional and
combination supermarkets utilize a "Hi-Lo" pricing
strategy (featuring competitive prices on all product
offerings as well as a selection of items that are promoted
at lower prices to generate increased customer traffic),
offer a wide range of specialty departments and deliver
high levels of service to customers. The Company has
developed its "Gold Card" frequent shopper program
(which gives customers discounts and promotions not
available to non-participating customers). This program
has been in effect in the Jitney stores since January 1997
and was introduced in the Delchamps stores during the
first half of 1998. Also, the 21 combination supermarkets
offer expanded general and specialty merchandise, a wider
range of full-service departments, expanded beauty care
and pharmacy departments, and superior customer service.
The Company's 16 discount supermarkets utilize an
everyday low price strategy (featuring consistently low
prices aimed at the value conscious shopper). The discount
supermarkets have lower operating costs than the
<PAGE>
conventional and combination supermarkets due to fewer
service departments, lower customer service levels and
enhanced productivity methods. The Company also
operates 54 gasoline stations and 10 liquor stores at
selected supermarket sites. The Company features
nationally advertised and distributed merchandise, and also
markets food products under a private label program.
Competition
The Company's business is highly competitive.
Competition is based primarily on supermarket location,
price, service, convenience, cleanliness and product quality
and variety. The Company competes with several national,
regional and local supermarket chains. The Company is
also in competition with convenience stores, stores owned
and operated or otherwise affiliated with large food
wholesalers, unaffiliated independent food stores,
merchandise clubs, discount drugstore chains and discount
general merchandise chains. The Company's principal
competitors have greater financial resources than the
Company and could use those resources to take steps which
could adversely affect the Company's competitive position
and financial performance, and the Company's ability to
compete may be adversely affected by its high leverage and
the limitations imposed by its debt agreements.
Employees
As of March 31, 1999, the Company employed
approximately 17,000 people, of whom approximately 44%
were full-time and 56% were part-time employees. None
of the employees of the Company are covered by a
collective bargaining agreement.
The Company has an incentive compensation plan
covering its key management staff under which incentive
compensation for store operations is based upon the results
of profitability of the operations within the scope of their
management responsibility. Also, the Company has
established a Stock Option Plan pursuant to which certain
key management have been granted options to acquire
shares of common stock of the Company (subject to certain
restrictions) at a price determined at the time of issuance to
be an estimate of fair market value.
Trade Names, Service Marks, Trademarks and Franchises
The Company uses a variety of trade names, service
marks and trademarks. Except for "Jitney-Jungle", "Sack
and Save", and "Pump and Save", the Company does not
believe any of such trade names, service marks or
trademarks are material to its business. "Jitney-Jungle" is
registered with the U.S. Patent and Trademark Office and
"Sack and Save", and "Pump and Save" are registered in
the various states where the company operates. The
Company is in the process of registering "Delchamps" with
the U.S. Patent and Trademark Office.
Environmental Matters
The Company is subject to federal, state and local
laws and regulations including those relating to
environmental protection, workplace safety, public health
and community right-to-know. The Company's
<PAGE>
supermarkets are not highly regulated under environmental
laws since the Company does not engage in any industrial
activities at these locations. The principal environmental
requirements applicable to the Company's operations relate
to the ownership or use of tanks for the storage of
petroleum products, such as gasoline and diesel fuel, the
operation of on-site paper trash incinerators, and the
operation of an on-site printing facility. The Company
operates 56 locations (including all 54 of the Pump and
Save locations), and has retained responsibility for three
former facilities, at which petroleum products were stored
in underground tanks. The Company has instituted an
environmental compliance program designed to insure that
these tanks are in compliance with applicable technical,
operational and regulatory requirements, including periodic
inventory reconciliation and integrity testing. The
Company also operates small incinerators at 18 locations
which burn paper trash and has air permits for these
facilities. In addition, the Company's printing facility is
subject to air and hazardous waste regulations. The
Company's locations may have asbestos-containing
materials which must be managed in accordance with
environmental laws and regulations. However, the
Company does not believe that the cost of such
management will be material. The Company believes that
the locations where it currently operates are in substantial
compliance with regulatory requirements.
The Company has undertaken programs to comply
with all current regulatory obligations. First, at five
locations, the Company had to comply with petroleum tank
upgrade or closure requirements under the Resource
Conservation and Recovery Act of 1980, as amended,
("RCRA") (including all applicable requirements of state
regulatory agencies) which were met by the end of 1998.
Second, during 1999, the Company is planning to complete
retrofitting of its chlorofluorocarbons ("CFC") chiller units
to utilize non-CFC based refrigerants pursuant to the phase-
out of CFCs under the Clean Air Act. Future events, such
as changes in existing laws and regulations or their
interpretation and the approach of other compliance
deadlines may or will give rise to additional compliance
costs or liabilities. Compliance with more stringent laws or
regulations, as well as different interpretations of existing
laws, may require additional expenditures by the Company
which may be material.
The Company may also be subject to requirements
related to the remediation of, or the liability for
remediation of, substances that have been released to the
environment at properties owned or operated by the
Company or at properties to which the Company sends
substances for treatment or disposal. Such remediation
requirements may be imposed without regard to fault and
liability for environmental remediation can be substantial.
Other than one previously owned property for which the
Company retained responsibility for a clean-up in progress
at the time of the sale, the Company has not been notified
of any such releases relating to off-site treatment or
disposal or to previously owned properties. However, 16
of the Company's locations have been or currently are the
subject of environmental investigations or remediation, 12
as a consequence of known or suspected petroleum-related
leaks or spills from storage tanks and four for minor spills
or releases unrelated to tank usage.
The Company may be eligible for reimbursement or
payment for remediation costs associated with future
releases from its regulated underground storage tanks and
<PAGE>
has obtained such reimbursement in the past. The states in
which the Company operates each maintain a fund to assist
in the payment of remediation costs and injury or damage
to third parties from releases from certain registered
underground tanks. Subject to certain deductibles, the
availability of funds, compliance status of the tanks and the
nature of the release, these funds have been and may be
available to the Company for use in remediating releases
from its tank systems. Due to the availability of such
funds, the Company's unreimbursed cost for remediation at
all of the facilities which have had leaks or spills from
underground storage tanks has not been material. All
significant required expenditures in connection with the
clean up of such leaks and spills have been made at such
locations, except at two locations which are undergoing
remediation investigation and three other locations which
are currently being monitored. Remediation expenses at all
the locations which are currently the subject of
environmental investigation or remediation are anticipated
to cost up to $240,000 in fiscal 1999 and approximately
$125,000 per year thereafter, substantially all of which is
subject to reimbursement as described above. In addition,
the Company has obtained insurance coverage for bodily
injury, property damage and corrective action expenses
resulting from releases of petroleum products from
underground storage tanks during the covered period at all
55 underground storage tank locations (54 Pump and Save
locations plus a transportation fuel island located in
Jackson, MS).
Other than expenditures relating to the remediation
of tank leaks and spills described above, the Company's
expenditures to comply with environmental laws and
regulations have primarily consisted of those related to tank
upgrading and retrofitting CFC chiller units. The
Company spent $170,000, $130,000, $914,000 and
$468,000 for such activities during fiscal 1998, 1997 stub,
fiscal 1997 and 1996, respectively. Between
approximately $175,000 and $200,000 in expenditures are
contemplated for retrofitting the CFC units in fiscal 1999.
All expenditures necessary to upgrade all Pump and Save
tanks to comply with 1998 tank standards were completed
in fiscal 1998. These regulatory compliance costs are not
covered by insurance.
Governmental Regulation
The Company is subject to regulation by a variety
of governmental agencies, including but not limited to the
United States Food and Drug Administration, the United
States Department of Agriculture and other federal, state
and local agencies.
Fiscal Year Change
The Company reports results of operations on a 52
or 53 week fiscal year. For fiscal years 1996 and 1997 the
fiscal year ended on the Saturday nearest to April 30 of
each year. The Company changed its fiscal year end on
January 3, 1998 to the closest Saturday to December 31 of
each year. This change created a "stub" year of 35 weeks
for fiscal year ended January 3, 1998.
<PAGE>
Item 2. Properties
The following table recaps store data for fiscal
1998, 1997stub, 1997 and 1996:
:
<PAGE>
<TABLE>
<CAPTION>
Fiscal
_______________________________________________________
1998 1997 stub 1997 1996
_______ _________ ________ _______
<S> <C> <C> <C> <C> <C>
Stores Beginning of Year 217 105 103 106
Acquired 118
Opened 3 2 4
Closed 22 6 7
_______ _________ ________ _______
End of Year 198 217 105 103
======= ========= ======== =======
Store Composition Conventional 165 185 76 72
at Year End Combination 17 11 2 2
Discount 16 21 27 29
_______ _________ ________ _______
Total 198 217 105 103
======= ========= ======== =======
Average Square Feet Conventional 35,300 35,000 26,500 26,000
Combination 52,000 56,000 56,900 56,100
Discount 61,500 60,000 57,800 57,100
Store Locations Mississippi 82 89 73 71
at Year End Alabama 49 53 11 11
Arkansas 5 5 5 5
Florida 15 17 2 2
Tennessee 6 7 7 7
Louisiana 41 46 7 7
_______ _________ ________ _______
Total 198 217 105 103
======= ========= ======== =======
Gasoline Stations Beginning of Year 54 53 46 37
Opened 2 2 7 11
Closed 2 1 0 2
_______ _________ ________ _______
End of Year 54 54 53 46
======= ========= ======== =======
Gasoline Station Mississippi 45 45 43 38
Locations Alabama 2 2 2 2
at Year End Arkansas 2 2 2 1
Florida 0 1 1 1
Tennessee 5 4 4 3
Louisiana 0 0 1 1
_______ _________ ________ _______
Total 54 54 53 46
======= ========= ======== =======
</TABLE>
All of the Company's store properties are leased,
with the exception of one store. These leases generally
obligate the Company to pay its proportionate share of real
estate taxes, common area maintenance charges and
insurance costs. In addition, such leases generally provide
for percentage of sales rent when sales from the store
exceed a certain dollar amount. These leases are usually
long-term, with one or more renewal options. With the
<PAGE>
exception of three leases which will expire in 1999 (two of
which are in negotiations for new leases) and with the
exception of four leases, one of which will expire in each
of the years 2001 through 2004, all leases will expire
between 2005 and 2043 if the Company exercises all of its
renewal options. The Company owns all of its furnishing
and fixtures in all supermarkets except for approximately
$3.2 million of supermarket point-of-sale equipment which
is leased, and has made various leasehold improvements to
these supermarket sites. It is anticipated that the Company
will own the furnishings and fixtures in all supermarkets
under construction.
At the beginning of the year, certain parties
affiliated with the Company held 20 leases, representing
approximately 23% of the dollar amount of the Company's
capital leases. Through disposition by these parties and/or
the Company, this number was reduced to 8 leases by the
end of the year and now represents approximately 6% of
the dollar amount of the Company's capital leases.
Management believes that each of these leases was
contracted for on an arm's length basis and contains terms
that are no less favorable to the Company than could have
been obtained with non-affiliated parties at the time each
was entered into.
The Company owns all of its warehouse and
distribution facilities except for a 120,000 square-foot dry
grocery and health and beauty care facility and a 177,000
square foot dry grocery warehouse which the Company
occupied in July 1998. The leases on these facilities expire
on July 31, 2004 and September 30, 2006, respectively
(including all renewal options). The table below details
Jitney-Jungle's warehousing and distribution facilities by
function. These warehouses and distribution facilities are
located in Jackson, Mississippi.
<TABLE>
<CAPTION>
Function Square Feet
<S> <C>
Dry Grocery .............................. 415,000
Dry Grocery (new) ........................ 177,000
Meat and Dairy ........................... 90,000
Dry Grocery and Health and Beauty Care.... 120,000
Transportation and Damage Reclaim ........ 73,000
Produce, Eggs and Floral.................. 67,000
Frozen Foods.............................. 79,000
_________
Total Warehouse.................. 1,021,000
=========
</TABLE>
During the year, management consolidated the
corporate headquarters of the Company's combined
operations into the existing corporate headquarters of
Jitney-Jungle in Jackson, Mississippi. A divisional office
was opened in Mobile and the Delchamps' Mobile
headquarters which occupied a 65,000 square-foot building
was closed and is presently being offered for sale. A 2.7
acre parcel adjacent to the headquarters was sold in
December 1998. In addition, the 665,900 square-foot
Hammond warehouse was closed and is also being offered
for sale (including a 175-acre parcel adjacent to the
warehouse). Likewise, ten undeveloped parcels of land
owned by the Company are presently being offered for
sale.
<PAGE>
Item 3. Legal Proceedings and Legal Matters
In May 1998, the Company's wholly-owned
subsidiary Delchamps, Inc. instituted a proceeding in the
Circuit Court of Mobile County, Alabama petitioning the
court to determine the fair value (as defined in the Alabama
Business Corporation Act) of 689,884 shares of former
Delchamps, Inc. common stock held by persons purporting
to exercise dissenters' rights in connection with the
Delchamps Acquisition. Delchamps, Inc. estimates such
fair value to be $20 per share; the dissenting shareholders
have demanded payment of $68 per share. The Company
has deposited $20 per share in cash with the clerk of the
court, as required by law. In its financial statements, the
Company has accounted for the acquisition of these shares
at a price of $30 per share, which was the price paid by the
Company to other former Delchamps, Inc. shareholders.
Any final determination that the shares formerly held by
dissenting shareholders have a fair value of less or more
than $30 per share would be reflected as a decrease or
increase in the Company's goodwill, which is being
amortized over a 40 year period. The Company does not
expect the outcome of this matter to have a material effect
on the Company's results of operations or the price of the
acquisition, although no assurances can be given.
Pursuant to a Federal Trade Commission Consent
Order dated January 28, 1998, approving the Agreement
Containing Consent Order entered into in September 1997
by the Company in connection with the Delchamps
Acquisition, the Company may not acquire or lease any
supermarket for a 10-year period in Hancock, Harrison,
Jackson, Lamar, Forrest and Warren Counties in
Mississippi and Escambia County in Florida without
complying with notice and waiting period requirements
similar to those imposed under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Such counties,
generally, are those where stores were located which were
required to be divested by the Federal Trade Commission
in connection with the Delchamps Acquisition.
Metropolitan areas located in such counties include
Vicksburg, Hattiesburg, Gulfport, Biloxi, Pascagoula and
Waveland, Mississippi and Pensacola, Florida. The
Company is permitted to construct supermarkets in such
counties without prior notice to the Federal Trade
Commission. In addition, the Company is prohibited from
attempting to restrict the ability of any other person to
operate a supermarket that the Company (including
Delchamps) formerly owned in those counties.
Other than with respect to the foregoing matters, the
Company is not a party to any material pending legal
proceedings except ordinary litigation incidental to the
conduct of its business and the ownership of its properties.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of
security holders during the fourth quarter of its fiscal
period ended January 2, 1999.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters
The Company is closely held and is not actively
traded at this time; therefore, there is not a current market.
As of January 2, 1999, there were thirty-five (35)
holders of record of Common Stock.
There were no dividends paid by Jitney-Jungle to its
shareholders during fiscal 1998, fiscal 1997 stub, fiscal
1997 or fiscal 1996. The Senior Subordinated Notes and
the Senior Credit Facility entered into by the Company
restrict future payment of dividends.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected historical
financial information of Jitney-Jungle for the four fiscal years
ended May 3, 1997, for the 35-week transition period ended
January 3, 1998 and for the fiscal year ended January 2, 1999.
The selected financial information for the year ended
January 2, 1999, for the 35-week transition period ended
January 3, 1998 and each of the two years in the period ended
May 3, 1997 was derived from the audited consolidated
financial statements of Jitney-Jungle included elsewhere in
this document. The selected financial information for the two
years ended April 29, 1995 was derived from audited
consolidated financial statements of Jitney-Jungle. The
following table should be read in conjunction with "
Management's Discussion and Analysis of Financial
Condition and Results of Operations of Jitney-Jungle" and the
historical consolidated financial statements of Jitney-Jungle
included elsewhere in this document.
<PAGE>
<TABLE>
<CAPTION>
(52 weeks) (35 weeks) (53 weeks) (52 weeks) (52 weeks) (52 weeks)
(Dollars in Thousands January 2, January 3, May 3, April 27, April 29, April 30,
Except Per Share Amounts) 1999 1998 1997 1996 1995 1994
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Results:
Net sales $2,054,126 $1,145,129 $1,228,533 $1,179,318 $1,173,927 $1,152,333
Gross profit 542,141 285,669 303,087 292,063 288,188 276,546
Interest expense (net) 72,343 31,608 36,215 13,000 10,823 11,626
Earnings (loss) before income
taxes and extraordinary item (35,870) (13,131) 1,085 24,977 30,220 27,135
Income taxes (benefit) (5,689) (3,224) 339 9,062 11,417 9,956
Earnings (loss) before
extraordinary item (30,181) (9,907) 746 15,915 18,803 17,179
Extraordinary item (net of tax) - (870) - (1,456) - -
Net earnings (loss) ($30,181) ($10,777) $746 $14,459 $ 18,803 $ 17,179
Net earnings (loss) as a percent
of sales (1.47%) (0.94%) 0.06% 1.23% 1.60% 1.49%
______________________________________________________________________________________
Common Stock Data:
Earnings (loss) per common
share-assuming dilution:
Earnings (loss) before
extraordinary item ($92.92) ($36.39) ($16.26) $162.88 $ 923.15 $ 843.42
Extraordinary item - (2.05) - (15.96) - -
Net earnings (loss) ($92.92) ($38.44) ($16.26) $146.92 $ 923.15 $ 843.42
______________________________________________________________________________________
Financial Position:
Total assets $691,146 $694,280 $267,845 $279,003 $ 312,415 $ 296,803
Working capital 10,778 (20,669) (92) 26,449 71,929 60,385
Long-term debt, including
current portion 517,071 449,831 208,000 239,059 38,727 40,628
Capitalized lease
obligations (including current) 68,724 75,081 62,260 62,165 60,471 62,186
Restructuring obligation
(including current) 32,287 55,515 2,202 1,237
Redeemable preferred stock 71,452 63,042 57,921 49,988
Stockholders' equity (deficit) (206,470) (167,900) (152,002) (144,815) 140,216 124,857
______________________________________________________________________________________
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion of the Company's results
of operations and of its liquidity and capital resources
should be read in conjunction with the Consolidated
Financial Statements and the notes thereto contained
elsewhere in this report.
Results of Operations
General
As of January 2, 1999 the Company operated a
chain of 198 supermarkets and 54 gasoline stations. Net
sales from gasoline stations during fiscal 1998, 1997 stub,
1997, and 1996 were 3.9%, 7.1%, 6.9%, and 5.2%,
respectively, of the Company's net sales for such periods.
The Company reports results of operations on a 52 or 53
week fiscal year. For fiscal years 1995, 1996 and 1997 the
fiscal year ended on the Saturday nearest to April 30 of
each year. The Company changed its fiscal year end on
January 3, 1998 to the closest Saturday to December 31 of
each year. This change created a "stub" year of 35 weeks
for fiscal year ended January 3, 1998. The Company's first
three fiscal quarters are 12 weeks, and the last quarter is 16
or 17 weeks. The consolidated statements of operations
include 35 weeks for a short year ended January 3, 1998,
53 weeks of operations for fiscal 1997 and 52 weeks for
fiscal 1998 and 1996. The Company acquired Delchamps
on September 12, 1997 and the results of operations for
those stores are included subsequent to that date. Except as
indicated below, management believes that the results of
operations for the 35 weeks ended January 3, 1998, as a
percentage of sales, are indicative of the results for a 52
week period.
The following sets forth, for the periods indicated,
selected financial information expressed as a percentage of
net sales.
<PAGE>
<TABLE>
<CAPTION>
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Net sales 100.00% 100.00% 100.00% 100.00%
Gross profit 26.39 24.95 24.67 24.77
Direct store, warehouse
and administrative
expense 20.65 20.33 18.86 19.23
Depreciation and
amortization 2.81 2.57 2.43 2.27
Acquistion integration
costs and other special
charges 1.16 0.27 0.22 0.00
_______ ________ _______ _______
Operating income 1.77 1.78 3.16 3.27
Interest expense, net 3.52 2.92 3.07 1.15
_______ ________ _______ _______
Earnings (loss) before
income taxes and
extraordinary item (1.75) (1.14) 0.09 2.12
Benefit (provision) for
income taxes 0.28 0.28 (0.03) (0.77)
Extraordinary loss (net
of income tax
benefit) 0.00 (0.08) 0.00 (0.12)
_______ ________ _______ _______
Net earnings (loss) (1.47%) (0.94%) 0.06% 1.23%
======= ======== ======= =======
</TABLE>
Approximately 19% of the Company's non-
perishable sales result from its private label program.
Private label products generally have a lower unit sales
price than national brands, but provide a higher gross
margin to the Company due to lower unit costs.
During the past three years, an overall lack of
inflation in food prices and increasingly competitive
markets have made it difficult for the Company and other
supermarket operators to achieve comparable store sales
gains. Because sales growth has been difficult to attain,
many operators, including the Company, have attempted to
maintain market share through increased levels of
promotional activities and discount pricing, creating a more
difficult environment in which to increase year-over-year
sales gains consistently. In addition, because of the growth
in the Southeast market, many supermarket operators,
including the Company, have opened new stores, which
may result in an increase in market share, but a decline in
same store sales for the other stores in those areas.
Net Sales
The following sets forth, for the periods indicated,
net sales of the Company.
<PAGE>
<TABLE>
<CAPTION>
(dollars in millions)
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
________ ________ ________ _________
<S> <C> <C> <C> <C>
Net sales $ 2,054.1 $ 1,145.1 $ 1,228.5 $ 1,179.3
Percentage increase
(decrease) in
same store sales (4.04%) 0.34% (0.20%) (0.01%)
Number of stores at
period end 198 217 105 103
</TABLE>
The 1996 and 1997 fiscal years included sales only
from the Jitney-Jungle Stores, the 1997 stub year included
35 weeks of sales from the Jitney-Jungle stores and 16
weeks of sales from the Delchamps stores; and the 1998
fiscal year included 52 weeks of sales for both Jitney-
Jungle and Delchamps stores. The net sales increase of
$909.0 million in fiscal 1998 over fiscal 1997 stub was
primarily attributable to the Delchamps acquisition. Same
store sales declined 4.04% in fiscal 1998. Sales throughout
fiscal 1997 were positively impacted by the introduction of
the Company's Gold Card, its customer loyalty program, in
approximately 79 Jitney-Jungle and Jitney Premier
supermarkets in January 1997. Sales for most of fiscal
1998 were positively impacted by the introduction of the
Gold Card in 52 Delchamps supermarkets in March 1998
and in the remaining Delchamps supermarkets during April
1998. The decline in same store sales is attributable
primarily to competitive pressures (38 competitive
openings, of which 9 were replacement stores), distribution
problems which have been corrected, a decline in sales at
Delchamps supermarkets due to disruptions caused by the
transition process which was completed during the first half
of the year and the fact that the Gold Card introduction
positively impacted sales for most of fiscal 1997 but only
for only the last three quarters of fiscal 1998. During fiscal
1998, twenty-two supermarkets were sold or closed
(including 10 supermarkets which were required to be sold
by the Federal Trade Commission due to the Delchamps
acquisition). The Company opened three new
supermarkets (two of which were replacement stores),
opened 2 gasoline stations and closed 2 gasoline stations.
In fiscal 1997 stub, net sales decreased $83.4
million from fiscal 1997 due to the "stub" year having only
35 weeks. Same store sales increased 0.34% during fiscal
1997 stub. During fiscal 1997 stub, the Company acquired
118 Delchamps supermarkets and 10 liquor stores and
closed 6 supermarkets. In addition, the Company opened 2
gasoline stations and closed one.
The net sales increase of 4.2% in 1997 was
primarily due to the opening of two supermarkets, the
opening of seven new gasoline stations and the extra "53rd"
week. Without this extra "53rd" week, sales would have
increased approximately 2.2%. Same store sales declined
0.01% during fiscal 1997. The Company launched the
Gold Card (the Company's customer loyalty program) at
the beginning of the 4th quarter in approximately 79 Jitney-
Jungle and Jitney Premier supermarkets and, as a result,
sales and customer count increased.
<PAGE>
Gross Profit
The following sets forth, for the periods indicated,
gross profit of the Company.
<TABLE>
<CAPTION>
(dollars in millions)
__________________________________________________________
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Gross profit $ 542.1 $ 285.7 $ 303.1 $ 292.1
Gross profit as of
percentage of net
sales 26.39% 24.95% 24.67% 24.77%
</TABLE>
The increase in gross profit, as a percentage of net
sales, for fiscal 1998 over the fiscal 1997 stub was
primarily attributable to increased purchasing leverage
resulting from the Delchamps acquisition and increased
promotional allowances. In addition, gross margin
improvements have been achieved as the Company
remodels stores and expands the offering of higher margin
perishable departments. The Company also initiated
additional shrink control programs which have resulted in
improved gross margins. Cost of sales for fiscal 1998 also
includes $2,070 of excess shrink associated with the
Delchamps acquisition.
Gross profit, as a percentage of net sales, was
relatively constant during the 1996 and 1997 fiscal years
and the 1997 stub year primarily as a result of
improvements in product acquisition cost (net of
allowances) offset by low overall retail price inflation
(which was primarily the result of pricing and promotional
changes by certain competitors) and discounts associated
with the Jitney-Jungle Gold Card (frequent shopper card).
Direct Store, Warehouse and Administrative Expenses
The following sets forth, for the periods indicated,
direct store, warehouse and administrative expenses
(excluding acquisition and other nonrecurring costs and
depreciation and amortization expense) for the Company.
<PAGE>
<TABLE>
<CAPTION>
(dollars in millions)
____________________________________________________________
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Direct store, warehouse
and administrative
expenses $ 424.2 $ 232.8 $ 231.7 $ 226.8
Expenses as a percentage
of net sales 20.65% 20.33% 18.86% 19.23%
</TABLE>
In fiscal 1998, direct store, warehouse and
administrative expenses increased 0.3%, as a percentage of
net sales, over the fiscal 1997 stub and was primarily
attributable to rent expense, store labor costs and
warehouse expenses. Rent expense as a percentage of net
sales in the Delchamps stores is more than twice that of the
other Company stores. The increase in store labor as a
percentage of net sales was principally due to a temporary
increase in the number of employees, dedicated to
complete retraining at the Delchamps supermarkets. The
increase in warehouse expenses, as a percentage of net
sales, was principally due to distribution problems resulting
from the Delchamps transaction. The Company closed the
Delchamps' Hammond warehouse in early 1998, which the
Company expected would lead to substantial cost savings.
However, the resulting increase in volume at the
Company's Jackson warehouse facilities created operating
inefficiencies which adversely impacted fiscal 1998
operations but which have subsequently been resolved.
The Company has experienced a reduction in
administrative expenses, as a percentage of net sales, due to
additional sales attributable to the Delchamps transaction
combined with a decrease in administrative expenses as a
result of the closing of the Delchamps' Mobile
headquarters in April 1998.
In fiscal 1997 stub, direct store, warehouse and
administrative expenses increased, as a percentage of net
sales, principally due to the higher cost of operations of the
Delchamps stores as a percentage of net sales (primarily
rent expense).
For fiscal 1997, the improvement in direct store,
warehouse and administrative expenses, as a percentage of
net sales, over fiscal 1996 was primarily the result of
reductions in supplies and advertising expense combined
with an increase in backhaul income offset by increased
group insurance and closed store expenses.
Depreciation and Amortization
The following sets forth, for the periods indicated,
depreciation and amortization for the Company.
<PAGE>
<TABLE>
<CAPTION>
(dollars in millions)
____________________________________________________________
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Depreciation and
amortization $ 57.7 $ 29.4 $ 29.9 $ 26.7
Depreciation and
amortization as
a percentage of
net sales 2.81% 2.57% 2.43% 2.27%
</TABLE>
In fiscal 1998, depreciation and amortization, as a
percentage of net sales, increased 0.2 % over the fiscal
1997 stub principally due to acquisitions of property and
equipment (including capital leases) associated with the
Company's new and remodeled stores and gasoline
stations, and the Delchamps acquisition.
In fiscal 1997 stub, the increase in depreciation and
amortization, as a percentage of net sales, was primarily
attributable to the Delchamps acquisition.
The increase in depreciation and amortization, as a
percentage of net sales, in fiscal 1997 was principally due
to acquisitions of property and equipment (including
capital leases) associated with the Company's remodeling
program and acquisition of new stores and gasoline
stations.
Acquisition Integration Costs and Other Special Charges
The following sets forth, for the periods indicated,
acquisition integration costs and other special charges
for the Company.
<TABLE>
<CAPTION>
(dollars in millions)
________________________________________________________________
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Acquisition integration
costs and other
special charges $ 23.8 $ 3.1 $ 2.7 $ -
Acquisition integration
costs and other
special charges
as a percentage of
sales 1.16% 0.27% 0.22% 0.00%
</TABLE>
The Company incurred significant costs as
a result of combining the Delchamps and Jitney-Jungle
operations. In accordance with EITF Releases 94-3 and 95-3
the Company has allocated certain of
these costs to goodwill. However, certain other costs
attributable to the Delchamps acquisition, including costs
incurred in consolidating warehouse operations,
<PAGE>
remerchandising of the Delchamps stores, and training of
Delchamps employees have been written off as acquisition
sots in accordance with the EITF guidelines. Other special
charges included long-lived asset impairment charges ($3.2
million); loss on stores sold under the consent decree with
the Federal Trade Commission in connection with the
Delchamps acquisition ($0.3 million); pre-acquisition
contingencies from the Delchamps acquisition ($1.2
million); severance benefits ($0.7 million); and other
abandoned transaction costs ($1.0 million).
In fiscal 1997 stub, special charges consisted of
severance benefits ($0.5 million), fees related to bridge
financing in the Delchamps acquisition ($2.0 million) and
loss on stores sold under the consent decree with the
Federal Trade Commission in the Delchamps acquisition
($0.6 million).
In fiscal 1997, special charges consisted of costs
($1.8 million) associated with the employment contract of
the Company's former Chief Executive Officer and the
severance benefits ($.9 million) of various associates (a)
who retired early or (b) whose positions were eliminated.
Operating Income
The following sets forth, for the periods indicated,
operating income for the Company.
<TABLE>
<CAPTION>
(dollars in millions)
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Operating income $ 36.5 $ 20.3 $ 38.7 $ 38.6
Operating income
as a percentage
of net sales 1.77% 1.78% 3.16% 3.27%
</TABLE>
Changes in operating income are due to the factors
reflected above.
EBITDA
The following sets forth, for the periods indicated,
EBITDA of the Company.
<TABLE>
<CAPTION>
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C>
$ 117.4 $ 51.9 $ 70.3 $ 64.9
5.71% 4.53% 5.72% 5.50%
</TABLE>
<PAGE>
EBITDA represents income before interest, income
taxes, depreciation, amortization, acquisition and other
nonrecurring costs and LIFO charges (credits). EBITDA as
presented is consistent with the definition used for
covenant purposes contained in the Indenture. EBITDA is
a widely accepted financial indicator of a company's ability
to service debt. However, EBITDA should not be
construed as an alternative to operating income, net
income, or cash flows from operating activities (as
determined in accordance with generally accepted
accounting principles) and should not be construed as an
indication of the Company's operating performance or as a
measure of liquidity. However, management believes it to
be a useful measure and therefore it has been presented.
Net Interest Expense
The following sets forth, for the periods indicated,
net interest expense of the Company.
<TABLE>
<CAPTION>
(dollars in millions)
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Net interest expense $ 72.3 $ 33.4 $ 37.6 $ 13.6
Net interest expense
as a percentage of
net sales 3.52% 2.92% 3.06% 1.15%
</TABLE>
The increase in net interest expense, as a percentage
of net sales, for fiscal 1998 was primarily attributable to
interest expense on the $200 million senior subordinated
notes issued in September 1997 and the associated increase
in debt issue cost related to the Delchamps acquisition.
The decrease in net interest expense, as a percentage
of net sales, for fiscal 1997 stub was primarily attributable
to the increase in sales due to the Delchamps acquisition.
The increase in net interest expense as a percentage
of net sales of 1.9% for fiscal 1997 was primarily due to
interest expense on the Senior Notes and the Credit facility,
<PAGE>
which were in place all of fiscal 1997 and only two months
of fiscal 1996; and increased debt issue costs related to the
Merger.
Income Taxes
The following sets forth, for the periods indicated, income
taxes of the Company.
<TABLE>
<CAPTION>
(dollars in millions)
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Income tax expense
(benefit) $ (5.7) $ (3.2) $ 0.3 $ 9.1
Income tax (benefit)
effective rate (16.30%) (24.55%) 31.24% 36.28%
</TABLE>
The increase in income tax benefit for fiscal 1998
was principally due to an increase in pretax loss. The
income tax benefit was 16.3% of pretax loss compared to
the federal and state statutory rate of 37.3%; the difference
in rates occurred primarily because goodwill relating to the
Delchamps acquisition is deductible for financial reporting
purposes but not for income tax purposes and the impact of
recording a valuation allowance for the company's net deferred
tax asset.
The decrease in income taxes for fiscal 1997 stub
was due to a loss in pretax earnings. The income tax
benefit was 24.6% of pretax loss compared to the federal
and state statutory rate of 37.3%; the difference in rates
occurred primarily because goodwill relating to the
Delchamps acquisition is deductible for financial reporting
purposes but not for income tax purposes.
The decrease in income taxes for fiscal 1997
principally resulted from lower pretax earnings. The
income tax expense was 31.2% of pretax income compared
to the federal and state statutory rate of 37.3%; the
difference in rates occurred primarily due to credits
applicable to state income taxes.
Extraordinary Item
In the second quarter of fiscal 1997 stub, in
connection with the acquisition of Delchamps, the
Company incurred cost of $1.4 million for the early
retirement of debt, net of an income tax benefit of $0.5
million.
In the fourth quarter of 1996 in connection with the
Merger, the Company retired $35.7 million in long-term
debt prior to its scheduled maturity. Prepayment penalties
associated with early retirement of this debt resulted in an
extraordinary loss of $1.5 million, net of an income tax
benefit of $0.9 million.
<PAGE>
Net Earnings (Loss)
The following sets forth, for the periods indicated, net
operations of the Company.
<TABLE>
<CAPTION>
(dollars in millions)
_____________________________________________________________
FY98 FY97-stub FY97 FY96
(52 Wks) (35 Wks) (53 Wks) (52 Wks)
Ended Ended Ended Ended
1/2/99 1/3/98 5/3/97 4/27/96
______ ______ ______ _______
<S> <C> <C> <C> <C>
Net earnings (loss) $ (30.2) $ (10.8) $ 0.7 $ 14.5
Net earnings (loss)
percentage of
net sales (1.47%) (0.94%) (0.06%) 1.23%
</TABLE>
Changes in net earnings are due to the factors reflected
above.
Liquidity and Capital Resources
Historically, the Company has funded its working
capital requirements, capital expenditures and other needs
principally from operating cash flows. Due to the Merger
and acquisition of Delchamps, however, the Company has
become highly leveraged and has certain restrictions on its
operations imposed pursuant to the Senior Credit Facility
and indentures governing the Senior Notes and Senior
Subordinated Notes. At January 2, 1999, the Company had
$618.1 million of total long-term commitments (including
long-term debt, capitalized leases and restructuring
obligations) and a shareholders' deficit of $206.5 million.
The Company's principal uses of liquidity have
been to fund working capital, meet debt service
requirements and finance the Company's strategic plans.
The Company's principal sources of liquidity are expected
to be cash flow from operations and borrowings under the
Senior Credit Facility. Borrowings outstanding at January
2, 1999 under the Senior Credit Facility were $112,950 million.
The Company had outstanding at January 2, 1999 $11,331
million in letters of credit issued under the Senior Credit
Facility. The commitments under the Senior Credit
Facility will terminate, and all loans outstanding thereunder
will be required to be repaid in full on March 15, 2004.
Prior to March 1999, borrowings under the Senior Credit
Facility, including revolving loans and up to $30 million in
letters of credit, could not exceed the lesser of (i) the "Total
Commitment", which initially was $150.0 million, and (ii)
an amount equal to the sum of (A) up to 65% of eligible
inventory (valued at the lesser of FIFO cost or market
value, the "Borrowing Base") of the Company and (B) the
"Supplemental Availability", which initially was $53.0
million. Each of the Total Commitment and the
Supplemental Availability began reducing on a quarterly
basis commencing in September 1998. Effective March
1999 the Senior Credit Facility was amended to provide
that, among other things (i) the Total Commitment be
increased to $162.3 million and no longer be reduced
<PAGE>
by the amortized amount of the Supplemental Availability
and (ii) the Borrowing Base be increased from 65% to 70%
of eligible inventory for the periods March 1, 1999 through
April 30, 1999 and September 1, 1999 through October 31,
1999. In April 1999, certain financial covenants relating
to various periods in 1998 were amended and restated.
The Company makes significant capital
expenditures to remodel and construct supermarkets and, in
recent periods, to convert supermarkets to its combination
format. New stores, remodels, and conversions will
continue to be the most significant portion of planned
capital expenditures. Capital expenditure plans are
frequently modified from time to time depending on cash
availability and other economic factors, and are limited by
covenants under its Senior Credit Facility.
Cash provided by operating activities during fiscal
1998 was $18.4 million compared to $37.2 million in fiscal
stub 1997, $66.5 million for fiscal 1997 and $55.5 million
for fiscal 1996. In fiscal 1998, the decrease in cash
provided by operating activities was primarily due to
improved gross margins offset by increased interest
expense associated with the $200 million senior
subordinated notes issued in September 1997, increased
labor due to a temporary increase in number of employees
required in order to complete retraining at Delchamps
supermarkets, increased costs incurred in converting the
Delchamps retail stores to Company store formats,
increased rent associated with Delchamps stores, and
increased warehousing costs associated with the Delchamps
acquisition and an increase in working capital. In fiscal
1997 stub, cash provided by operating activities
decreased primarily due to an increase in overall
interest expense associated with the Delchamps acquisition.
In fiscal year 1997, inventories decreased due to an
inventory reduction plan implemented by management and
accounts payable increased by improving vendor terms to
industry standards. These working capital improvements
were partially offset by the reduction in net earnings due
principally to the increase in cash interest expense as a
result of additional borrowing activities resulting from the
Recapitalization in March 1996.
Net cash used in investing activities was $74.0 in
fiscal 1998, $239.2 million in fiscal 1997 stub and $22.3
million for fiscal 1997 and $4.2 million for fiscal 1996.
During fiscal 1998, the Company paid $5.0 million in cash
to former Delchamps shareholders and deposited $13.8
million in cash with the clerk of court of Mobile County
Alabama as required by law in connection with the
dissenters' rights proceeding (see Item 3-Legal
Proceedings). The Company's capital expenditures for
1998 of $71.8 million were higher than prior years as a
result of the Delchamps acquisition, and were offset by
proceeds from the sale of 10 stores required to be sold by
the Federal Trade Commission in connection with the
acquisition and the sale of two parcels of land for $5.4
million. Net cash used in investing activities for the 1997
stub was primarily the cash used to acquire Delchamps.
Net cash provided by financing activities was $61.6
in fiscal 1998. Net cash provided by financing activities
was $199.6 million in fiscal 1997 stub. Net cash used in
<PAGE>
financing activities was $35.4 million for fiscal 1997 and
$65.8 million for fiscal 1996. Net cash provided by
financing activities during fiscal 1998 was primarily due to
a net increase in the borrowings under the Senior Credit
Facility which were used to fund costs associated with the
Delchamps acquisition. The net cash provided by
financing activities during the 1997 stub was primarily
attributable to the issuance of the Senior Subordinated
Notes. The primary financing activities in fiscal year 1996
were the proceeds from the issuance of new Common
Stock and Senior Notes which were used to redeem the old
Common Stock and primary related merger costs.
The Company's expenditures to comply with
environmental laws and regulations at its grocery stores
primarily consist of those related to remediation of
underground storage tank leaks and spills and retrofitting
chlorofluorocarbon ("CFC") chiller units. The Company's
unreimbursed cost for remediation at the 16 facilities which
have had leaks or spills has not been material. All
significant required expenditures in connection with the
cleanup of such leaks and spills have been made at such
locations except at three recently discovered locations
which are still undergoing investigation and one location
awaiting state approval of its remediation plan. In
addition, the Company has obtained insurance coverage for
bodily injury, property damage and corrective action
expenses resulting from releases of petroleum products
from underground storage tanks during the covered period
at all 58 locations. The Company spent $170,000,
$130,000, $914,000 and $468,000 for retrofitting CFC-
containing chiller units during fiscal 1998, 1997 stub, fiscal
1997 and fiscal 1996, respectively. Between approximately
$175,000 and $200,000 in expenditures are contemplated
for retrofitting the CFC units in fiscal 1999. All
expenditures necessary to upgrade all Pump and Save tanks
to comply with 1998 tank standards were completed in
fiscal 1998. These regulatory compliance costs are not
covered by insurance.
The Company believes that cash flow from operations
as well as additional borrowing available under its credit
line are adequate to sustain its operations through fiscal 1999.
<PAGE>
Inflation
The Company's primary costs, inventory and
labor, are affected by a number of factors that are
beyond its control, including availability and price of
merchandise, the competitive climate and general and
regional economic conditions. As is typical of the
supermarket industry, the Company has generally been
able to maintain margins by adjusting its retail prices,
but competitive conditions may from time to time
render it unable to do so while maintaining its market
share.
Year 2000
During calendar years 1996, 1997 and 1998, the
Company's Information Services Department
conducted an extensive information services system
review of all primary systems, such as financial,
payroll, human resources, employee benefits,
purchasing, merchandising, retail/pricing, warehousing
and store management as well as secondary systems
such as catering, damage reclamation and loss
prevention. This review evaluated these systems in
terms of their Year 2000 compliance, flexibility to
absorb Delchamps' operations, capacity, general
efficiency, compatibility and competitive advantage.
The Information Services Department recommended,
and the Company is implementing, the replacement or
upgrading of all the Company's primary and secondary
systems, most of which were 10 to 15 years old. From
March 1997 to January 2, 1999, the Company spent,
excluding license fees, approximately $2,600,000 to
replace its financial, payroll, human resources and
employee benefits systems. The Company's other
primary systems (purchasing, merchandising,
retail/pricing, warehousing and store management) are
scheduled to be replaced and/or remediated by October
1, 1999, at an estimated cost of $2,850,000, at which
time all potential Year 2000 problems in the
Company's primary systems should be resolved.
Although the Company's operations are not dependent
on its secondary systems, the Company has spent
approximately $300,000 as of January 2, 1999
upgrading these systems and anticipates spending
approximately an additional $600,000 in order to
complete that project by the end of September 1999, at
which time all potential Year 2000 problems in the
Company's secondary systems should be resolved. No
assurances can be given, however, that all Year 2000
problems will be effectively resolved on schedule or
before the Year 2000. Any such problems, if not
resolved, could have a material adverse effect on the
Company's business, financial condition and results of
operations.
The Company has sent a survey to its third party
suppliers, financial institutions and insurance
companies (i) inquiring into their Year 2000
compliance status, (ii) seeking commitments of their
intention to become Year 2000 compliant and (iii)
gathering information to assess the effect of any non-
compliance on the Company's operations. No
assurances can be given that these third parties will
become Year 2000 compliant. Any such non-
compliance could have a material adverse effect on the
Company's business, financial condition and results of
operations.
<PAGE>
The most reasonably likely worst case Year 2000
scenario would result in the failure to order or acquire new
products for warehouse or store replenishment. The
Company has established a disaster recovery plan that is
available as a reasonable contingency plan. Through this
disaster recovery plan, manual processes are outlined that
will enable the Company to order and obtain available
products for delivery to the stores without reliance on
existing primary technology normally used by the
Company.
<PAGE>
Item 8. Financial Statements and Supplementary Data
<PAGE>
<TABLE>
<CAPTION>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands Except Per Share Amounts)
______________________________________________________________________________________
January 2, January 3,
ASSETS 1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,041 $ 11,984
Receivables 28,197 13,833
Refundable income taxes 16,862 5,663
Merchandise inventories 166,774 162,786
Prepaid expenses and other 5,655 5,907
Deferred income taxes 15,681
________ _________
Total current assets 235,529 215,854
PROPERTY AND EQUIPMENT, at cost:
Land 4,723 14,442
Buildings 31,666 34,776
Fixtures and equipment 272,321 264,192
Property under capitalized leases 83,676 88,995
Leasehold improvements 80,723 67,414
________ _________
Total 473,109 469,819
Less accumulated depreciation and amortization 175,655 166,045
________ _________
Net property and equipment 297,454 303,774
________ _________
GOODWILL, net of amortization of $4,250 and
and $1,105, respectively 131,206 142,415
OTHER ASSETS 26,957 32,237
________ _________
TOTAL ASSETS $ 691,146 $ 694,280
======== =========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
______________________________________________________________________________________
January 2, January 3,
LIABILITIES AND STOCKHOLDERS' DEFICIT 1999 1998
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 138,087 $ 112,641
Accrued expenses:
Personnel costs 3,053 13,823
Payable to dissenting Delchamps, Inc. shareholders 7,624 26,637
Taxes, other than income taxes 19,380 17,956
Insurance and self-insurance claims 15,408 19,886
Interest 17,159 15,017
Other 7,371 8,876
Current portion of capital leases 5,789 6,760
Current portion of restructuring obligation 10,880 14,927
________ ________
Total current liabilities 224,751 236,523
Long-term debt 517,071 449,831
Obligations under capital leases, excluding current
installments 62,935 68,321
Restructuring obligation, excluding current installments 21,407 40,588
Deferred income taxes 3,875
________ ________
Total liabilities 826,164 799,138
COMMITMENTS AND CONTINGENCIES (Notes 7, 8, 11 and 18)
REDEEMABLE PREFERRED STOCK, aggregate
liquidation preference value of $73,279 and
$65,077, respectively 71,452 63,042
STOCKHOLDERS' DEFICIT:
Class C Preferred Stock - Series 1
(at liquidation preference value) 9,973 9,071
Common stock ($.01 par value, authorized 5,000,000
shares, issued and outstanding 425,280 and 425,000
shares, respectively) 4 4
Additional paid-in capital (302,305) (302,326)
Retained earnings 85,858 125,351
________ ________
Total stockholders' deficit (206,470) (167,900)
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 691,146 $ 694,280
======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In Thousands Except Per Share Amounts)
__________________________________________________________________________________________________________
Year Ended
Year 35 Weeks ________________________
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C> <C>
NET SALES $ 2,054,126 $ 1,145,129 $ 1,228,533 $ 1,179,318
COSTS AND EXPENSES:
Cost of sales (including $2,070 in the
year ended in 1999 of excess shrink
associated with Delchamps acquisition) 1,511,985 859,460 925,446 887,255
Direct store expenses 413,623 206,945 205,250 198,579
Warehouse, administrative and general 68,287 55,293 56,379 54,912
Interest expense, net 72,343 33,445 37,636 13,595
Acquisition integration costs and
other special charges (Note 14) 23,758 3,117 2,737
--------- --------- ---------- ---------
Total costs and expenses 2,089,996 1,158,260 1,227,448 1,154,341
--------- --------- ---------- ---------
Earnings (loss) before income taxes
and extraordinary items (35,870) (13,131) 1,085 24,977
INCOME TAX EXPENSE (BENEFIT) (5,689) (3,224) 339 9,062
---------- ---------- --------- --------
Earnings (loss) before extraordinary items (30,181) (9,907) 746 15,915
========== ========== ========= ========
EXTRAORDINARY ITEMS, net of
income tax benefit of $518 and
$866, respectively (870) (1,456)
---------- ----------- --------- ---------
NET EARNINGS (LOSS) $ (30,181) $ (10,777) $ 746 $ 14,459
EARNINGS (LOSS) PER
COMMON SHARE:
Before extraordinary items $ (92.92) $ (36.39) $ (16.26) $ 185.85
Extraordinary items (2.05) (18.13)
Net earnings (loss) per common share $ (92.92) $ (38.44) $ (16.26) $ 167.72
EARNINGS (LOSS) PER COMMON
SHARE - ASSUMING DILUTION:
Before extraordinary items $ (92.92) $ (36.39) $ (16.26) $ 162.88
Extraordinary items (2.05) (15.96)
Net earnings (loss) per common
share - assuming dilution $ (92.92) $ (38.44) $ (16.26) $ 146.92
=========== ============ ========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(Dollars In Thousands Except Per Share Amount)
Class C Preferred
Stock, Series 1 Common Stock
----------------- ------------------- Additional
Number Number Paid-in Retained
of Shares Amount of Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C>
BALANCE, APRIL 30, 1995 20,368 $ 1,061 $ 1,807 $ 137,348
Issuance of shares and warrants 76,042 $ 7,604 425,000 4 7,377
Redemption of common stock (20,368) (1,061) (311,510)
Cash dividends ($92.15 per share) (1,877)
Net earnings 14,459
Accretion of discount on Class A
Preferred Stock (27)
-------- -------- -------- -------- --------- --------
BALANCE, APRIL 27, 1996 76,042 7,604 425,000 4 (302,326) 149,903
Net earnings 746
Accretion of discount on Class A
Preferred Stock (189)
Cumulation of dividends on
preferred stock 898 (8,642)
-------- -------- -------- -------- --------- --------
BALANCE, MAY 3, 1997 76,042 8,502 425,000 4 (302,326) 141,818
Net loss (10,777)
Accretion of discount on Class A
Preferred Stock (130)
Cumulation of dividends on
Preferred stock 569 (5,560)
-------- -------- -------- -------- --------- --------
BALANCE, JANUARY 3, 1998 76,042 9,071 425,000 4 (302,326) 125,351
Net loss (30,181)
Stock options exercised 280 21
Accretion of discount on Class A
Preferred Stock (208)
Cumulation of dividends on
preferred stock 902 (9,104)
-------- -------- -------- -------- --------- --------
BALANCE, JANUARY 2, 1999 76,042 $ 9,973 425,280 $ 4 $(302,305) $ 85,858
======== ======== ======== ======== ========= =========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Year 35 Weeks Year Ended
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1999 1997 1996
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings (loss) $ (30,181) $ (10,777) $ 746 $ 14,459
Adjustment to reconcile net earnings (loss) to
net cash provided by operating activities:
Extraordinary items 870 1,456
Depreciation and amortization 57,693 29,406 29,898 26,728
Amortization of deferred loan costs 3,683 1,837 1,421 595
Loss (gain) on disposition and write-down
of property and other assets 1,806 (250) 1,899 817
Deferred income tax expense (benefit) 6,766 (585) (3,574) 2,577
Decrease in restructuring obligation (5,313) (453)
Changes in current assets and liabilities, net of
effects of acquisition:
Receivables (25,447) (7,596) (571) 5,866
Inventories 6,593 (3,520) 12,826 5,826
Prepaid expenses and other (1,140) (936) 3,941 (2,011)
Accounts payable 17,134 18,861 9,970 1,562
Accrued expenses (13,187) 10,304 9,923 (2,356)
----------- ---------- ---------- ----------
Net cash provided by operating activities 18,407 37,161 66,479 55,519
----------- ---------- ---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (71,808) (36,951) (24,099) (30,011)
Proceeds from sale of property and other assets 16,773 1,069 1,477 2,617
Purchase of Delchamps, Inc., net of cash acquired (204,036)
Cash paid for dissenting
former shareholders of Delchamps, Inc. (18,956)
Purchase of investments in debt securities (23,026)
Maturities of investments in debt securities 738 337 46,301
----------- ---------- ---------- ----------
Net cash used in investing activities (73,991) (239,180) (22,285) (4,219)
----------- ---------- ---------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 172,613 249,831 239,059
Proceeds from issuance of stock and warrants 21 35,840
Redemption of common stock (286,824)
Payments on long-term debt (105,373) (22,463) (31,059) (38,412)
Debt issue costs (24,852) (8,214)
Payments on capital lease obligations (5,620) (2,939) (4,385) (5,355)
Dividends paid (1,877)
----------- ---------- ---------- ----------
Net cash provided by (used in)
financing activities 61,641 199,577 (35,444) (65,783)
----------- ---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 6,057 (2,442) 8,750 (14,483)
CASH AND CASH EQUIVALENTS:
Beginning of period 11,984 14,426 5,676 20,159
----------- ---------- ---------- ----------
End of period $ 18,041 $ 11,984 $ 14,426 $ 5,676
=========== ========== ========== ==========
(Continued)
</TABLE>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended
Year 35 Weeks ___________________
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C> <C>
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Purchase of Delchamps, Inc. - portion unpaid
and payable to dissenting shareholders $ 26,637
==========
Accrued direct acquisition costs of Delchamps, Inc. $ 5,704
Capital lease obligations incurred $ 6,181 $ 3,538 $ 7,971
Preferred stock issued during Recapitalization: ========== ========= =========
in exchange for receivables and common stock $ 184
settlement of deferred compensation obligation 712
in redemption of common stock 27,446
Common stock issued during Recapitalization:
in exchange for notes receivable 176
in redemption of common stock 588
==========
$29,106
==========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 66,782 $ 21,021 $ 35,902 $12,915
========= ========= ========= =========
Cash paid (received) for
income taxes, net $ (2,397) $ 4,799 $ (1,521) $ 7,700
========= ========= ========= =========
See notes to consolidated financial statements. (Concluded)
</TABLE>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED JANUARY 2, 1999, THIRTY-FIVE WEEKS ENDED JANUARY 3, 1998,
AND THE YEARS ENDED MAY 3, 1997 AND APRIL 27, 1996
(Dollars in Thousands Except Per Share Amounts)
____________________________________________________________________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Nature of Operations and Basis of Presentation -
The Company operates retail supermarkets in six
southeastern states primarily using distribution centers
located in Jackson, Mississippi. Supermarkets are
operated in various formats and sizes (conventional,
combination food and drugs and discount) and in
certain locations include retail gasoline stations.
Accordingly, the Company operates in one business
segment.
<PAGE>
The consolidated financial statements include those
of Jitney-Jungle Stores of America, Inc. and its
wholly-owned subsidiaries, Delchamps, Inc.,
Southern Jitney Jungle Company, Interstate Jitney
Jungle Stores, Inc., McCarty-Holman Co., Inc. and
subsidiary, and Jitney Jungle Bakery, Inc. All
material intercompany profits, transactions and
balances have been eliminated.
b. Use of Estimates - The consolidated financial
statements are prepared in conformity with generally
accepted accounting principles which require
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at
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.
c. Inventories - Substantially all inventories are stated
at the lower of cost (using the last-in, first-out method)
or market.
d. Capitalization, Depreciation and Amortization -
The cost of property, fixtures, equipment and
improvements is depreciated and amortized by the
straight-line method over the estimated useful lives of
the assets. The estimated useful lives of buildings
range up to forty years and the estimated useful life of
fixtures and equipment is eight years. Assets under
capital leases are recorded at the lower of fair value or
the present value of future minimum lease payments.
Assets under capital lease and leasehold
improvements are amortized by the straight-line
method over their primary lease term. License and
franchise rights are amortized by the straight-line
method over twenty years. Debt issue costs are
amortized over the life of the related debt by the
interest method. At each balance sheet date the
Company evaluates the recoverability of property,
equipment and other long-term assets based upon
expectations of nondiscounted cash flows and
operating income.
e. Goodwill - Goodwill relates primarily to the excess of
purchase price over fair value of net assets acquired in
the acquisition of Delchamps, Inc. and is being
amortized over 40 years by the straight-line method.
f. Store Opening/Closing Costs - Non-capital
expenditures incurred for new or remodeled retail
stores are expensed as incurred. When a store is
closed, the remaining investment in fixtures and
leasehold improvements, net of expected salvage, is
charged against operations; the present value of any
remaining lease liability, net of expected sublease
recovery, is also expensed.
g. Advertising - The Company expenses all advertising
expenditures as incurred. Advertising expenses for
the fiscal year ended January 2, 1999, the thirty five
weeks ended January 3, 1998 and the fiscal years ended
in 1997 and 1996 were $5,974, $9,340, $4,952 and
$6,180, respectively.
h. Income Taxes - Deferred tax liabilities and assets are
determined based on the differences between the
financial statement and tax bases of assets and
liabilities using enacted tax rates in effect in the years
in which the differences are expected to reverse.
i. Cash Equivalents - For purposes of reporting cash
flows, cash equivalents include investments with
maturities of three months or less when purchased.
j. Per Share Amounts - Earnings (loss) per common
share and earnings (loss) per common share -
assuming dilution are based on net income (loss) after
preferred stock dividend requirements and the
<PAGE>
weighted average number of shares outstanding during
each period. Earnings (loss) per common share -
assuming dilution includes shares attributed to
outstanding warrants and options granted to purchase
common stock unless inclusion results in antidilution
of per share amounts.
k. Accounting Standard to be Adopted in the
Future - In June 1998, the FASB issued SFAS 133,
"Accounting for Derivative Instruments and Hedging
Activities," effective for fiscal years beginning after
June 15, 1999. SFAS 133 requires, among other
things, that derivatives be recorded on the balance
sheets at fair value. Changes in the fair value of
derivatives may, depending on circumstances, be
recognized in operations or deferred as a component of
shareholders' deficit until a hedged transaction occurs.
The Company has not determined what impact, if
any, the adoption of SFAS 133 will have on its
financial position or results of operations.
l. Reclassifications - Certain reclassifications have been
made in the consolidated financial statements of prior
periods to conform to the method of presentation used in
the current year.
2. TRANSITIONAL PERIOD FINANCIAL DATA
In September 1997, the Company elected to change its
fiscal year end from the Saturday nearest April 30 to the
Saturday nearest December 31. The change of fiscal year
resulted in a transition period of thirty-five weeks
beginning May 4, 1997 and ending January 3, 1998. The
fiscal years ended January 2, 1999 (fiscal 1998) and April
27, 1996 include the operations of fifty-two weeks and the
fiscal year ended May 3, 1997 includes the operations of
fifty-three weeks. Unless otherwise indicated, reference to
a fiscal year or period of the Company refers to the calendar
year in which such fiscal year or period commences.
Presented below are the unaudited consolidated results of
operations for the comparable thirty-six week period ended
January 4, 1997.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Net sales $ 832,905
Cost of sales 637,296
Direct store expense 128,908
Warehouse, administrative and general expense 39,953
Interest expense, net 26,185
----------
Earnings before income taxes 563
Income taxes 210
----------
Net Earnings $ 353
Loss per common share $ (11.26)
</TABLE>
3. DELCHAMPS ACQUISITION
On September 12, 1997, Delta Acquisition Corporation ("DAC"),
a wholly-owned subsidiary of the Company, completed an all
cash tender offer for shares of Delchamps, Inc. ("Delchamps"), an
Alabama corporation, and accepted for payment approximately
75% of such shares. On November 4, 1997, DAC was merged
with and into Delchamps. Delchamps was the surviving
corporation and became a wholly-owned subsidiary of the
Company. Delchamps is engaged in the business of retail food
distribution through supermarkets located in Alabama, Florida,
Louisiana, and Mississippi. The acquisition was accounted for by
the purchase method of accounting. An affiliate of the
Company's majority shareholder was paid fees of approximately
$4,000 for services rendered in connection with the acquisition,
including the arranging of financing.
Holders of certain Delchamps shares dissented from the
merger and indicated their intent to pursue their legal
remedy under Alabama law. At January 3, 1998, the
Company had recorded a liability of $26,637, representing
approximately 888,000 shares at a purchase price of $30
per share. At January 2, 1999, the liability had
been reduced to $7,624 as a result of payments
in 1998 to former shareholders upon surrender of their
shares and $13,800 deposited in 1998 with the clerk of court
of the Circuit Court of Mobile County, Alabama, for
689,884 shares at $20 per share held by former shareholders
purporting to exercise dissenters' rights under Alabama law.
Any final determination of a fair value of more or less than
$30 per share will result in an adjustment of the purchase
price of Delchamps and be reflected as an increase or
decrease to goodwill. Management of the Company does
not expect the outcome of this matter to have a material
effect on the Company's results of operations or the price of
the acquisition.
The ultimate purchase price, net of cash acquired of $84 and
including direct acquisition costs, has been allocated to the
assets acquired and liabilities assumed based upon the fair
values at the date of acquisition, as follows:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Receivables and other current assets $ 12,569
Inventories 101,199
Property, equipment and leasehold improvement 116,431
Deferred income tax assets 10,428
Other assets 2,106
Goodwill 135,454
Accounts payable and accrued expenses (74,643)
Notes payable and long-term debt, immediately (14,463)
Capital lease obligations (10,794)
Restructuring obligation (41,967)
-----------
Purchase price $ 236,320
===========
</TABLE>
Certain long-term lease obligations for closed Delchamps
stores (included in restructuring obligation) were initially
recorded on an undiscounted basis at date of acquisition in
1997 and were adjusted in 1998 to their net present value.
This 1998 adjustment resulted in a decrease in the
restructuring obligation, deferred income tax assets and
goodwill of $13,439, $5,040 and $8,399, respectively. The
impact of recording these lease obligations at net present
value was not material to the 35 weeks ended January 3,
1998, therefore, no change was made to the net loss for that
35-week period.
Cost of sales for fiscal 1998 also includes $2,070 of excess
shrink associated with the Delchamps acquisition.
The results of operations of Delchamps have only been
included in the Company's consolidated financial
statements subsequent to September 12, 1997. The
following unaudited pro forma information presents a
summary of consolidated results of operations of the
Company and Delchamps as if the acquisition had occurred
at the beginning of the periods presented.
<PAGE>
<TABLE>
<CAPTION>
35 Weeks Year Ended
Ended Jan- May 3,
uary 3, 1998 1997
<S> <C> <C>
Net sales $ 1,434,059 $ 2,159,542
Cost of sales 1,071,595 1,596,277
Expenses, net of interest 324,792 492,250
Interest expense, net 42,945 67,816
Income tax benefit (130) 2,994
------------- ------------
Net earnings (loss) $ (5,143) $ 205
============= ============
Loss per common share $ (25.18) $ (17.53)
============= ============
</TABLE>
These unaudited pro forma results have been prepared for
comparative purposes only and include certain adjustments,
such as additional depreciation expense as a result of the
step-up in the basis of fixed assets, additional amortization
of goodwill, increased interest expense on acquisition debt
and certain synergies expected to result from the integration
of Delchamps' operations with those of the Company.
They do not purport to be indicative of the results of
operations that would have occurred if the acquisition had
<PAGE>
been made as of those dates. In addition, the pro forma
information is not intended to be a projection of future
results.
In connection with the Delchamps acquisition, the
Company recorded a restructuring obligation relating to
(i) stores closed by Delchamps prior to the acquisition;
(ii) Delchamps stores to be closed after the acquisition
because of unprofitability; (iii) Company and
Delchamps stores required to be divested under a
consent decree with the Federal Trade Commission; (iv)
closure of the Delchamps headquarters in Mobile,
Alabama; and (v) closure of the Delchamps warehouse
facility in Hammond, Louisiana. This obligation
consisted principally of the present value of future
rental payments for closed locations, severance costs,
anticipated loss on divestiture of fixed assets, and other
miscellaneous items.
Of the total restructuring costs, $41,967 was recorded
as goodwill as part of the purchase price allocation in
the Delchamps acquisition and $599 was included as
acquisition integration costs and other special charges
in the statement of operations for the 35 weeks ended
January 3, 1998.
A rollforward of the restructuring obligation is as
follows:
<TABLE>
<CAPTION>
Activity During 35 Weeks Activity During Year
Ended January 3, 1998 Ended January 2, 1999
__________________________ _______________________
Net
Balance at Adjustment Balance at
1997 January 3, Against Payments January 2,
Initial Payments 1998 Goodwill and Other 1999
<S> <C> <C> <C> <C> <C> <C>
Stores to be closed $ 47,812 $ (771) $ 47,041 $ (10,848) $ (4,156) a $ 32,037
Severance 1,591 1,591 (204) (1,387)
Fixed assets losses 474 474 (474)
Other 7,008 (599) 6,409 (746) (5,413) 250
_________ _________ _________ _________ __________ _________
$ 56,885 $ (1,370) $ 55,515 $ (11,798) $ (11,430) $ 32,287
========= ========= ========= ========= ========== =========
a Net of accretion of interest of $2,181.
b Includes $2,521 of lease obligations relating to Jitney-Jungle Stores.
</TABLE>
4. RECAPITALIZATION
On March 5, 1996, JJ Acquisitions Corp. (JJAC) merged
with and into the Company with the Company continuing
as the surviving corporation (the "Recapitalization"). JJAC
was a wholly-owned subsidiary of Bruckmann, Rosser,
Sherrill & Co., L.P. (the "Fund"). Upon consummation of
the Recapitalization, the Fund and related investors
received 83.82% of the Company's common stock and
11.76% was retained by the shareholders at the time of the
Recapitalization.
The Recapitalization was accounted for by a charge to
equity of $312,571 to reflect the redemption of common
stock of the Company outstanding immediately prior to the
Recapitalization. A closing fee of $4,000 was paid to the
Fund Manager in connection with the Recapitalization.
Prior to the Recapitalization JJAC issued 425,000 shares of
common stock for an aggregate of $6,500, issued an
aggregate of $22,500 in liquidation preference of Class A
Preferred Stock, issued $10,000 in liquidation preference of
Class C Preferred Stock, and issued warrants to purchase
75,000 shares of common stock to the then holder (along
with related investors) of 100% of the Class A Preferred
Stock and 15% of the Class C Preferred Stock. The
Company issued $27,446 in liquidation preference of Class
B Preferred Stock as part of the consideration to
shareholders at the time of the Recapitalization. In the
Recapitalization the common stock, Class A Preferred
Stock, and Class C Preferred Stock issued by JJAC were
converted into like shares of the Company and the
Company assumed the obligations of JJAC under the
warrants.
5. INVENTORIES
Had the cost for all inventories been determined on the
first-in, first-out method, inventories would have been
higher by approximately $15,950 at January 2, 1999 and
$16,497 at January 3, 1998 (resulting in a LIFO credit
of 547 for the year ended January 2, 1999). LIFO
liquidations resulted in an increase in net earnings
of $708 and $148 in the 35
<PAGE>
weeks ended January 3, 1998 and the fiscal year ended May
3, 1997, respectively. The effect on net earnings of LIFO
liquidations in fiscal years ended January 2, 1999 and April
27, 1996 was not material.
6. OTHER ASSETS
Other assets, net of accumulated amortization of $6,383
(1998) and $6,862 (1997), consisted of the following:
<PAGE>
<TABLE>
<CAPTION>
January 2, January 3,
1999 1998
<S> <C> <C>
Debt issue costs $ 24,317 $ 27,770
License and franchise rights 923 1,749
Other 1,717 2,718
---------- ----------
Total $ 26,957 $ 32,237
========== ==========
</TABLE>
7. PROPERTY UNDER CAPITAL LEASES AND LEASE COMMITMENTS
<PAGE>
<TABLE>
<CAPTION>
January 2, January 3,
1999 1998
<S> <C> <C>
Store property $ 78,598 $ 85,826
Equipment 5,078 3,169
Less accumulated depreciation (35,114) (34,925)
----------- -----------
$ 48,562 $ 54,070
=========== ===========
</TABLE>
Most store leases provide for contingent rentals based on
percentages of sales in excess of stipulated amounts. The
leases have primary terms ranging from five to twenty years
and generally contain renewal options. Portions of store
space are sublet under leases. The present value of future
minimum lease payments relative to capital leases is
included in the financial statements as obligations under
capital leases. Lease liabilities are amortized over the lease
term using the interest method.
The future minimum rental commitments for capital leases
and noncancellable operating leases as of January 2, 1999,
were as follows:
<PAGE>
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
<S> <C> <C>
1999 $ 15,819 $ 53,928
2000 15,393 49,754
2001 13,917 46,882
2002 13,051 46,094
2003 11,937 44,199
Remaining balance 67,337 234,458
---------- --------
Total minimum lease commitments $137,454 $475,315
less amount representing estimated executory costs =========
(taxes, maintenance and insurance) 2,869
----------
Net minimum lease commitments 134,454
Less amount representing imputed interest 65,860
----------
Present value of minimum lease commitments 68,724
Current portion of obligations under capital 5,789
----------
Obligations under capitalized leases, less current
installments $ 62,935
==========
</TABLE>
Minimum rental commitments have not been reduced by
minimum sublease rentals of $702 applicable to capital
leases and $585 applicable to operating leases due in the
future under noncancellable subleases.
The following schedule shows the composition of total
rental expense for all operating leases:
<PAGE>
<TABLE>
<CAPTION>
Year Ended
Year 35 Weeks _____________________
Ended Jan -Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 19 1997 1996
<S> <C> <C> <C> <C>
Minimum rentals $ 60,339 $ 17,612 $ 10,717 $ 10,211
Contingent rentals 329 230 325 346
Sublease rentals (974) (262) (288) (219)
---------- ----------- ---------- --------
$ 59,694 $ 17,580 $ 10,754 $ 10,338
========== =========== ========== ========
</TABLE>
Rents, paid to entities partially owned by certain
directors and stockholders of the Company under
long-term lease commitments were as follows:
<PAGE>
<TABLE>
<CAPTION>
Year Ended
Year 35 Weeks ______________________
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C> <C>
Capital leases $ 1,295 $ 1,999 $ 3,062 $ 3,017
Operating leases 338 369 331 334
--------- --------- --------- ---------
$ 1,633 $ 2,368 $ 3,393 $ 3,351
========= ========= ========= =========
</TABLE>
Obligations under capital leases to such affiliated entities
were $1,902 at January 2, 1999 and $11,639 at January 3,
1998. Management believes that these leases were entered
<PAGE>
into on an arm's length basis on terms that are no less
favorable to the Company than could have been obtained
with non-affiliated parties.
8. LONG-TERM DEBT
Long-term debt consisted of the following:
<PAGE>
<TABLE>
<CAPTION>
January 2, January 3,
1999 1998
<S> <C> <C>
Senior Notes $200,000 $200,000
Senior Subordinated Notes 200,000 200,000
Senior Credit Facility 112,950 49,831
Other 4,121
--------- --------
Long-term debt $517,071 $449,831
========= ========
</TABLE>
Aggregate maturities of long-term debt for the fiscal years
following January 2, 1999 are as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
2003 $ 4,121
2004 112,950
2006 200,000
2007 200,000
-----------
517,071
===========
</TABLE>
In September 1997 the Company issued $200,000 of
unsecured Senior Subordinated Notes which mature in
September 2007 and accrue interest at the rate of 10 3/8%
per annum payable semi-annually. The proceeds from
issuance of the Senior Subordinated Notes were used to
fund a portion of the Delchamps acquisition consideration
(see Note 3). The Senior Subordinated Notes are
subordinated in right of payment to the Senior Notes and
the Senior Credit Facility. Except under certain conditions,
the Senior Subordinated Notes are not redeemable at the
Company's option prior to September 15, 2002. Thereafter,
the Senior Subordinated Notes are subject to redemption at
the option of the Company at 105.188% of principal
amount if redeemed during the twelve-month period
beginning September 15, 2002 decreasing to 100% of the
principal amount if redeemed during the twelve-month
period beginning September 15, 2005 and thereafter plus
accrued and unpaid interest thereon.
In March 1996 the Company issued $200,000 of unsecured
Senior Notes which mature on March 1, 2006 and accrue
interest at the rate of 12% per annum payable semi-
annually. The proceeds from issuance of the Senior Notes
were used to fund a portion of the Recapitalization
consideration (see Note 4). Except under certain
conditions, the Senior Notes are not redeemable at the
Company's option prior to March 1, 2001. Thereafter, the
Senior Notes are subject to redemption at the option of the
Company at 106% of principal amount if redeemed during
the twelve-month period beginning March 1, 2001
decreasing to 100% of the principal amount if redeemed
during the twelve-month period beginning March 1, 2004
and thereafter plus accrued and unpaid interest thereon.
<PAGE>
In the event of a change of control as defined in the
Indenture, holders of Senior Notes and the Senior
Subordinated Notes have the right to require the Company
to repurchase all or any part of such holder's notes at a price
in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon.
The Company entered into a revolving credit agreement in
March 1996 with several banks which provided a $100,000
Credit Facility and subsequently, in September 1997 and
March 1999, the Company amended and restated the
agreement to provide, respectively, a $150,000 and
$162,300 Senior Credit Facility. The Credit Facility and
the Senior Credit Facility were used to finance a portion of
the Delchamps acquisition and the Recapitalization
consideration, to refinance certain indebtedness, and to
provide for working capital requirements. The
commitments under the Senior Credit Facility will
terminate and all loans outstanding thereunder will be
required to be repaid in full in March 2004. Prior to March
1999 borrowings under the Senior Credit Facility, including
revolving loans and up to $30,000 in letters of credit, could
not exceed to the lesser of (i) the "total commitment" which
initially was $150,000 and (ii) an amount equal to the sum
of (a) up to 65% of eligible inventory of the Company
(valued at the lesser of FIFO cost or market value) and (b)
the "supplemental availability" which initially was $53,000
and had been reduced to $50,500 at January 2, 1999. The
total commitment and the supplemental availability began
reducing on a quarterly basis in September 1998. The
interest rates on borrowings under the Senior Credit Facility
are, at the Company's option, a function of the bank's
prime rate or LIBOR. The weighted average interest rate of
loans under the Senior Credit Facility was 8.05% at January
2, 1999 and 8.89% at January 3, 1998. The agreement
requires the Company to pay a facility fee at an annual rate
of .50% of the unused amount available under the Senior
Credit Facility. Letters of credit aggregating $11,331 at
January 2, 1999 and $7,461 at January 3, 1998 were
outstanding under the Senior Credit Facility.
Effective March 1999 the Senior Credit Facility was
amended to provide that, among other things (i) the total
commitment be increased to $162.3 million and no longer
be reduced by the amortized amount of the supplemental
availability and (ii) the "borrowing base" be increased from
65% to 70% of eligible inventory for the periods March 1,
1999 through April 30, 1999 and September 1, 1999
through October 31, 1999. In April, 1999, certain financial
covenants were amended.
The Senior Notes and Senior Subordinated Notes are
guaranteed on a full, unconditional and joint and several
basis by each of the Company's subsidiaries. The Senior
Credit Facility is guaranteed by each of the Company's
subsidiaries. In addition, obligations under the Senior
Credit Facility are secured by a first lien on all of the
Company's and its subsidiaries' assets.
The Senior Credit Facility and the Indenture pursuant to
which the Senior Notes and Senior Subordinated Notes
were issued contain numerous covenants which, among
other things, restrict or limit the incurrence of indebtedness,
payments of dividends and distributions, and capital
expenditures. The Senior Credit Facility also contains
numerous financial covenants, the more significant of
which relate to leverage ratio, interest coverage ratio and
cash flows. As of January 2, 1999 the Company was in
compliance with the covenants under its debt agreements.
10. INCOME TAXES
Income taxes were composed of the following:
<PAGE>
<TABLE>
<CAPTION>
Year Ended
Year 35 Weeks _____________________
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C>
Current provision (benefit) $ (12,455) $ (3,157) $ 3,913 $ 5,619
Deferred provision (benefit) 6,766 (585) (3,574) 2,577
----------- ---------- --------- --------
Total $ (5,689) $ (3,742) $ 339 $ 8,196
=========== ========== ========= ========
</TABLE>
The income tax provision (benefit) varied from the federal
statutory rate of 35% as follows:
<PAGE>
<TABLE>
<CAPTION>
Year Ended
Year 35 Weeks ___________________
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C> <C>
Federal tax (benefit) at statutory rate $(11,800) $(5,081) $ 3,913 $ 7,929
State income taxes, net of federal tax effect (789) (291) (25) 400
Non-deductible amortization 1,112 574
IRS assessments 428
Valuation allowance and other items 5,059
Other 729 628 (16) (133)
---------- --------- --------- ---------
Income tax provision (benefit) $ (5,689) $(3,742) $ 339 $ 8,196
========== ========= ========= =========
</TABLE>
The sources of temporary differences and the related
deferred income tax effects were as follows:
<PAGE>
<TABLE>
<CAPTION>
January 2, January 3,
1999 1998
<S> <C> <C>
Current Deferred Tax Assets (Liabilities):
Inventories (7,835) (4,445)
Restructuring obligation 3,449 5,433
Accrued compensation and benefits 1,264 1,697
Deferred income 3,068 1,303
Accrued insurance claims 1,038 6,766
Other 356 4,927
Valuation allowance (1,340)
------- ------
Total 0 15,681
======= ======
Noncurrent Deferred Tax (Assets) Liabilities:
Property and equipment 26,764 25,310
Net operating loss carryover (11,410)
Restructuring obligation (8,098) (15,447)
Capital leases (8,106) (6,069)
Other (905) 81
Valuation allowance 1,755
------- -------
Total 0 3,875
======= =======
</TABLE>
Operating losses for the year ended January 2, 1999 resulted
in a net operating loss carryover for income tax purposes of
$32,390 which expires in 2013. Refundable income taxes
of $16,862 at January 2, 1999 represent the carryback of net
operating losses. Refundable income taxes of $5,663 at
January 3, 1998 represent an overpayment of estimated
taxes.
The Company has been notified by the Internal Revenue
Service of the intent to examine the Company's income tax
return for each of its three fiscal tax years in the period
ended May 2, 1998.
11. CAPITAL STOCK
Preferred Stock
Preferred stock consisted of the following:
<PAGE>
<TABLE>
<CAPTION>
January 2, 1999 January 3, 1998
Dividend Outstanding Liquidation Carrying Liquidation Carrying
Class Rate Shares Preference Amount Preference Amount
<S> <C> <C> <C> <C> <C> <C>
A 15% 225,000 34,141 32,314 29,479 27,444
B 10% 274,460 35,996 35,996 32,740 32,740
C - Series 2 10% 23,958 3,142 3,142 2,858 2,858
0 ------- ------- ------- -------
Total Mandatorily Redeemable 73,279 71,452 65,077 63,042
======= ======= ======= =======
C - Series 1 10% 76,042 9,973 9,973 9,071 9,071
</TABLE>
<PAGE>
The excess of liquidation preference over the carrying
amount of the Class A Preferred Stock is being accreted by
periodic charges to retained earnings to the mandatory
redemption date.
Dividends on Class A Preferred Stock are payable quarterly.
Through March 2001, such dividends are payable, at the
Company's option, either by cumulation to liquidation
preference or in cash and thereafter are payable in cash.
Dividends on Class B Preferred Stock and Class C
Preferred Stock cumulate on a compounding basis until
paid. Cumulative dividends not declared or paid on
preferred shares aggregated $23,306 at January 2, 1999.
The Class A Preferred Stock is redeemable at the
Company's option, (i) at any time after March 1, 2001 at a
price equal to the then applicable liquidation preference,
which would include accrued and unpaid dividends and a
prepayment premium or (ii) on or prior to March 1, 1999
with the proceeds of a public offering of common stock at a
price per share equal to 114% of the then applicable
liquidation preference, which would include accrued and
unpaid dividends thereon. All of the Class A Preferred
Stock is required to be redeemed on or before March, 2008
at a price per share equal to the then applicable liquidation
preference, which would include accrued and unpaid
dividends thereon.
The Class B Preferred Stock and Class C Preferred Stock,
Series 2, are redeemable at the Company's option at any
time, in whole or in part, at a price per share equal to the
then applicable liquidation preference, which would include
accrued and unpaid dividends. All of the Class B Preferred
Stock and all of the Class C Preferred Stock, Series 2, are
required to be redeemed in March, 2010 and March, 2011,
respectively, at a price per share equal to the then applicable
liquidation preference, which would include accrued and
unpaid dividends. The Class C Preferred Stock, Series 1, is
not redeemable by the Company at any time.
Upon a change in control, the Company is required to offer
to repurchase all shares of the Class A Preferred Stock at
101% of the then applicable liquidation preference, which
would include accrued and unpaid dividends and all shares
of Class B Preferred Stock and all shares of Class C
Preferred Stock, Series 1 and Series 2, at 100% of the
liquidation preference thereof, which would include accrued
and unpaid dividends thereon. In addition, the Company is
required to offer to apply, subject to certain limitations, net
proceeds raised through a primary issuance of securities
junior to Class B Preferred Stock to repurchase shares of
Class B Preferred Stock.
Except as required by law and with respect to certain
specified matters, Class A Preferred Stock has no voting
rights. Neither the Class B Preferred Stock nor the Class C
Preferred Stock has any voting rights, except as required by
law.
The Class A Preferred Stock is exchangeable (with
cumulated dividends) at the Company's option, in whole
but not in part, for subordinated exchange debentures of the
Company. The exchange debentures will pay interest from
the date of the exchange at the rate of 15% per annum,
consisting of, at the Company's option, additional exchange
debentures or cash on or prior to March 2001 and cash
thereafter. The exchange debentures will mature in March
2008.
Class A Preferred Stock ranks senior to Class B Preferred
Stock and Class C Preferred Stock in right of payment of
cash dividends, liquidation preference and redemption (both
mandatory and optional). The Class C Preferred Stock
ranks junior to the Class B Preferred Stock in right of such
cash payments.
<PAGE>
The Senior Credit Facility and the Indenture (See Note 8)
restrict the Company's ability to pay cash dividends,
exchange Class A Preferred Stock for exchange debentures
and redeem or repurchase Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock and exchange
debentures.
Warrants
Warrants to purchase 75,000 shares of common stock were
issued in conjunction with the Recapitalization (See Note 4)
and were outstanding as of January 2, 1999 and January 3,
1998. The warrants were recorded at fair value of $881 at
date of issue. The warrants have an exercise price of $.01
per share and will expire in 2008.
12. STOCK OPTION PLAN
During the 35 weeks ended January 3, 1998, the Company
adopted the Jitney-Jungle Stores of America, Inc. 1997
Stock Plan (the "1997 Plan"). The 1997 Plan authorizes
grants of stock options covering 50,000 shares of the
Company's common stock. Grants under the 1997 Plan
may take the form of incentive or non-qualified stock
options and vest one-third each year. With certain
exceptions, the options are granted for a term of ten years.
Grants under the 1997 Plan are made at a price that is not
less than the fair market value as determined by the Board
of Directors or a Committee of the Board at the effective
date of grant.
<PAGE>
The following is a summary of the stock option activity:
<PAGE>
<TABLE>
<CAPTION>
Options Weighted Average
Outstanding Exercise Price
<S> <C> <C>
Balance at May 3, 1997
Granted 37,660 $ 98.57
----------
Balance at January 3, 1998 37,660 98.57
Exercised (280) 74.80
Cancelled (1,845) 74.80
----------
Balance at January 2, 1999 35,535 $ 99.99
==========
</TABLE>
The following table summarizes information about stock
options outstanding at January 2, 1999:
<PAGE>
<TABLE>
<CAPTION>
Options Weighted Average Weighted Average
Exercise Range Outstanding Remaining Contractual Life Exercise Price
<S> <C> <C> <C>
$62.50 - $72.50 16,000 8.09 $ 71.69
$124.00 19,535 8.91 $ 124.00
--------
35,535
========
</TABLE>
At January 2, 1999, and January 3, 1998, options covering 12,812
shares and 1,533 were exercisable at a weighted average price of
$97.17 per share and $62.50 per share, respectively.
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No.
123") encourages, but does not require, companies to record
compensation cost for stock-based employee compensation
plans at fair value. The Company has chosen to adopt the
disclosure-only provisions of SFAS No. 123 and to
continue to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and its related interpretations. Accordingly,
no compensation cost has been recognized for the stock
options granted under the various stock option plans to
associates and directors. Had compensation cost for the
Company's stock option plans been determined based on
the fair value on the date of grant consistent with the
provisions of SFAS No. 123, the Company's net loss and
loss per share would have been reduced to the pro forma
amounts indicated below for loss in the periods ended
January 2, 1999 and January 3, 1998, as follows:
<PAGE>
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net loss, as reported (30,181) (10,777)
Pro forma net loss (30,397) (10,870)
Loss per share, as reported (92.92) (38.44)
Pro forma per share (93.42) (38.66)
</TABLE>
<PAGE>
The Company estimated the fair value of stock options
granted in 1997 using the Black-Scholes method and the
following assumptions:
<TABLE>
<CAPTION>
<S> <C>
Expected dividend yield None
Expected option life 6 years
Risk-free interest rate 6.14%
</TABLE>
Based on the results of the computations, the weighted-
average fair value per option on the date of grant was
$30.48 in 1997.
13. EMPLOYEE BENEFIT AND COMPENSATION PLANS
The Company has a profit-sharing plan covering
substantially all employees with one or more years' service.
Contributions are made at the discretion of the Board of
Directors of the Company. Contribution expense totaled
$1,046 in the fiscal year ended January 2, 1999, $1,013 in
the 35 weeks ended January 3, 1998 and $1,200 in fiscal
years ended in 1998 and 1997.
Prior to March 1996, the Company had a Phantom Stock
Plan for certain key officers whereby deferred
compensation units (expressed in shares of common stock)
were earned to the extent that performance targets
(expressed in terms of growth in stockholders' equity) were
met. The amounts payable in accordance with the
provisions of the Phantom Stock Plan became fully vested
and immediately payable at the time of the Recapitalization
(see Note 4). Effective with the Recapitalization $4,252
was paid to the participants and $712 was applied against
the purchase price for shares of Class C Preferred Stock
acquired by them in connection with the Recapitalization.
The Company has entered into employment contracts with
three executive officers that provide for stipulated amounts
of annual salary, annual bonus and payments to be made by
the Company upon termination of employment. The
agreements are cancelable by either party upon 30 days
notice and include one year non-compete agreements. The
three officers have also entered into change of control
agreements with the Company that provide for certain
lump-sum payments upon a change of control, as defined in
the agreements.
<PAGE>
14. ACQUISITION INTEGRATION COSTS AND OTHER SPECIAL CHARGES
The Company incurred significant costs during the year
ended January 2, 1999 as a result of integrating the
Delchamps and Jitney-Jungle operations. As discussed in
footnote 3, certain of these costs (principally related to store
closures) were allocated to goodwill. However, other costs
attributable to the Delchamps acquisition, including costs
incurred in consolidating warehouse operations,
remerchandising of Delchamps stores, and training of
Delchamps employees have been expensed as acquisition
integration costs in accordance with the guidelines set forth
in Emercing Issues Task Force (EITF) Releases 94-3 and
95-3 ("Recognition of Liabilities in Connection with a
Purchase Business Combination"). Acquisition integration
costs and other special charges include the following:
<TABLE>
<CAPTION>
35 Weeks
Year Ended Ended Year Ended
January 2, January 3, May 3,
1999 1998 1997
<S> <C> <C> <C>
Acquisition integration costs $ 17,377
Long-lived asset impairment charges 3,196
Bridge financing fees in the Delchamps acquisition $ 2,008
Loss on stores to be sold under consent decree
with the Federal Trade Commission in the
Delachamps acquisition 294 599
Delchamps pre-acquisition litigation accruals 1,150
Abandoned transaction costs 1,030
Severance benefits 711 510 $ 958
Amounts due former chief executive officer 1,779
__________ _________ _________
$ 23,758 $ 3,117 $ 2,737
========== ========= =========
</TABLE>
15. EXTRAORDINARY ITEMS
In connection with the Delchamps purchase in the 35 week
period ended January 3, 1998 and the Recapitalization in
the fiscal year ended April 27, 1996, the Company retired
certain long-term debt prior to its scheduled maturity. Early
retirement of such debt resulted in extraordinary losses of
$870 during the 35 weeks ended January 3, 1998 and
$1,456 for the year ended April 27, 1996, net of income tax
benefits of $518 and $866, respectively.
16. EARNINGS (LOSS) PER COMMON SHARE
The following is a reconciliation of earnings (loss) before
extraordinary item as reported in the accompanying
statements of operations to earnings (loss) attributable to
common stockholders used in computing earnings (loss)
per common share and in computing earnings (loss) per
common share - assuming dilution. Also presented is a
reconciliation of weighted average common shares
outstanding used in computing earnings (loss) per common
share to weighted average common shares used in
computing earnings (loss) per common share - assuming
dilution.
<PAGE>
<TABLE>
<CAPTION>
Year 35 Weeks Year Ended
Ended Jan- Ended Jan- May 3, April 27,
uary 2, 1999 uary 3, 1998 1997 1996
<S> <C> <C> <C> <C>
Earnings (loss) before extraordinary item (30,181) (9,907) 746 15,915
Preferred stock dividends (9,312) (5,560) (7,655) (987)
--------- -------- --------- ---------
Earnings (loss) attributable to common
stockholders (39,493) (15,467) (6,909) 14,928
========= ======== ======== =========
Weighted average common shares
outstanding 425,035 425,000 425,000 80,321
Warrants 0 0 0 10,920
--------- -------- -------- ---------
Weighted average common shares
outstanding - assuming dilution 425,035 425,000 425,000 91,241
========= ======== ======== =========
</TABLE>
Warrants issued in 1995 to purchase 75,000 shares of
common stock have not been included in calculations for
the year ended January 2, 1999, the 35 weeks ended January
3, 1998, and the year ended May 3, 1997 and, for the year
ended January 2, 1999 and the 35 weeks ended January 3,
1998, unexercised options granted to certain executives and
key officers to purchase 35,535 shares of common stock
have not been included to calculate the weighted average
common shares used in computing earnings (loss) per
common share - assuming dilution because to do so would
have been antidilutive for those periods.
17. FAIR VALUES OF FINANCIAL INSTRUMENTS
In accordance with Statement of Financial Accounting
Standards (SFAS) No. 107, "Disclosures About Fair Value
of Financial Instruments", information is provided about
the fair value of certain financial instruments for which it is
practicable to estimate that value. The fair value amounts
disclosed represent management's best estimate of fair
value. Certain financial instruments and all nonfinancial
instruments are excluded, in accordance with SFAS No.
107. The aggregate fair value amounts presented are not
intended to represent the underlying aggregate fair value of
the Company.
The estimated fair values are significantly affected by
assumptions used, principally the timing of future cash
flows, the discount rate, judgments regarding current
economic conditions, risk characteristics of various
financial instruments and other factors. Because
assumptions are inherently subjective in nature, the
estimated fair values cannot be substantiated by comparison
to independent quotes and, in many cases, the estimated fair
values could not necessarily be realized in an immediate
sale or settlement of the instrument. The following
methods and assumptions were used by the Company in
estimating fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount
reported in the balance sheets approximates fair
value.
Receivables, accounts payable and accrued expenses:
The carrying amount reported in
the balance sheets approximates fair value.
<PAGE>
Long-term debt: The fair value of the Company's Senior
Notes and Subordinated Notes is based on quoted market
prices. The interest rates on borrowings under the Senior
Credit Facility reset periodically. Consequently, the
carrying value of borrowings under the Senior Credit
Facility approximates fair value.
Redeemable preferred stock: The fair value of
redeemable preferred stock is estimated at
carrying value as such stock is not traded in the open
market and a market price is not readily
available.
The carrying amounts and fair values of the Company's
financial instruments were as follows:
<PAGE>
<TABLE>
<CAPTION>
January 2, 1999 January 3, 1998
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and cash equivalents 18,041 18,041 11,984 11,984
Receivables 45,059 45,059 19,496 19,496
Accounts payable 138,087 138,087 112,641 112,641
Accrued expenses 69,995 69,995 102,195 102,195
Long-term debt:
Senior Notes 200,000 236,900 200,000 237,182
Subordinated Notes 200,000 203,792 200,000 210,867
Senior Credit Facility 112,950 112,950 49,831 49,831
Other 4,121 3,973
Redeemable preferred stock 71,452 71,452 63,042 63,042
</TABLE>
18. COMMITMENTS AND CONTINGENCIES
The Company is defendant in certain litigation incurred in
the normal course of business. Management, after
consulting legal counsel, is of the opinion that the liability,
if any, which may result from this litigation will not have a
material adverse effect on the Company's financial position
or results of operations.
During 1998, certain of the Company's stores incurred
damage as a result of Hurricane Georges. The Company's
property and business interruption loss is covered by
insurance. At January 2, 1999, the Company has accrued
remaining amounts due for its property loss but has not yet
recognized the business interruption portion of its insurance
claim as the ultimate amount of recovery is not presently
determinable.
In 1996, the Company entered into a five-year supply
agreement, which replaced a previously existing agreement,
relating to merchandise purchases for stores located in
Memphis, Tennessee and Little Rock and Pine Bluff,
Arkansas.
In April 1997, the Company sold the operating assets of its
bakery subsidiary for $750 and received $5,250 as
consideration for entering into a five-year supply agreement
with the purchaser of such operating assets. The $5,250 is
being amortized over the term of the supply agreement.
In connection with the Delchamps acquisition, the
Company amended a pre-existing agreement whereby the
Fund Manager is entitled to receive $1,000 per year from
the Company as a management fee for the performance of
strategic and financial planning services. The amount of
the annual management fee may be increased up to one
<PAGE>
percent of the Company's earnings before interest, income
taxes, depreciation, amortization and certain special
charges, computed on a quarterly basis. Management fees
for the fiscal year ended January 2, 1999, the 35 weeks
ended January 3, 1998 and the fiscal year ended May 3,
1997 approximated $1,210, $515 and $1,000, respectively.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Jitney-Jungle Stores of America, Inc.:
We have audited the accompanying consolidated balance sheets
of Jitney-Jungle Stores of America, Inc. and subsidiaries ("the
Company") as of January 2, 1999 and January 3, 1998 and the
related consolidated statements of operations, changes in
stockholders' deficit, and cash flows for the year ended January
2, 1999, the thirty-five weeks ended January 3, 1998 and for each
of the two years in the period ended May 3, 1997. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Jitney-
Jungle Stores of America, Inc. and subsidiaries as of January 2,
1999 and January 3, 1998, and the results of their operations and
their cash flows for the year ended January 2, 1999, the thirty-
five weeks ended January 3, 1998 and for each of the two years
in the period ended May 3, 1997, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
April 19, 1999
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
There has been no change of accountants or
reporting disagreements on any matters of accounting
principle, practice, financial statement disclosure or
auditing scope or procedure during fiscal 1998, fiscal
1997 stub, fiscal 1997 and fiscal 1996.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Company's Board of Directors currently has
ten directors, each serving a one-year term of office (or
until a successor is duly elected and qualified). Executive
officers of the Company serve at the discretion of the
Board of Directors. For information concerning certain
arrangements with respect to the election of directors, see
Certain Relationships and Related Transactions'
Shareholders Agreement.
<TABLE>
<CAPTION>
Directors and Executive Officers
________________________________
Name Age Position
____________________ ___ ____________________________
<S> <C> <C>
W. H. Holman, Jr. 68 Chairman Emeritus, Director
Michael E. Julian 48 Chairman and Chief Executive
Officer
Ronald E. Johnson 48 Director, President and Chief
Operating Officer
R. Barry Cannada 43 Chief Administrative Officer,
Executive
Vice President, General
Counsel, and Assistant Secretary
Richard D. Coleman 44 Executive Vice President,
Chief Financial
Officer
Directors and Executive Officers (Continued)
_____________________________________________
Stephen R. Harmon 46 Executive Vice President -
Marketing and Merchandising
David R. Black 46 Senior Vice President, Finance -
Assistant Secretary
Jerry L. Jones 47 Senior Vice President -
Human Resources
Dane C. Truhett 41 Senior Vice President -
Information Services
W. H . Holman, III 35 Secretary
Donald D. Bennett 62 Director
Bruce C. Bruckmann 45 Director
Joseph H. Fernandez 46 Director
Roger P. Friou 64 Director
John M. Moriarty, Jr. 42 Director
Harold O. Rosser, II 50 Director
Stephen C. Sherrill 45 Director
</TABLE>
W. H. Holman, Jr., has been Chairman Emeritus
since August, 1998 and previously served as Chairman
from 1967 to 1998 and as Chief Executive Officer from
1967 until February 1997. Mr. Holman is the father of
W. H. Holman, III.
Michael E. Julian has been Chairman of the Board
since August, 1998 and Chief Executive Officer since
February 1997 and served as President from May 1997 to
December 1997. He has also served as a director since
April 1996. From September 1988 to May 1997, Mr.
Julian was Chairman, President and Chief Executive
Officer of Farm Fresh, Inc. ("Farm Fresh"). *
Directors and Executive Officers (Continued)
_____________________________________________
Ronald E. Johnson has been a director since May
1996 and President and Chief Operating Officer since
December 1997. He served as Chairman and Chief
Executive Officer of Farm Fresh from February 1997 to
March 1998. From January 1995 to January 1997, Mr.
Johnson served as Chairman, President and Chief
Executive Officer of Kash n' Karry Food Stores, Inc.
("Kash n' Karry") and prior to January 1995 as Executive
Vice President and Chief Operating Officer of Farm
Fresh.*
<PAGE>
R. Barry Cannada has been Chief
Administrative Officer since July of 1998 and Executive
Vice President, General Counsel, and Assistant Secretary
since January 1998. Mr. Cannada previously was as a
partner with the law firm of Butler, Snow, O'Mara,
Stevens & Cannada, PLLC from 1981 to 1997.
Richard D. Coleman was appointed as Executive
Vice President and Chief Financial Officer of the
Company effective January 4, 1999. Prior to joining the
Company, he served as Executive Vice President -
Administration and Chief Financial Officer of Farm
Fresh from March 1997 through March 1998. Mr.
Coleman was employed by Kash n' Karry as Vice
President and Controller from 1988 through 1995 and as
Senior Vice President of Administration and Chief
Financial Officer from 1996 until January 1997.*
Stephen R. Harmon has been Executive Vice
President-Marketing and Merchandising since June, 1997.
Mr. Harmon served as Retail Grocery-Senior Vice
President-Merchandising of Farm Fresh from 1982 to
June 1997.*
David R. Black has been the Senior Vice
President - Finance and Assistant Secretary since 1996.
From 1996 until January of 1999, he also served as Chief
Financial Officer. Mr. Black joined the Company in 1976
and has held various other positions with the Company
including Treasurer, Controller and Assistant Controller.
Directors and Executive Officers (Continued)
____________________________________________
Jerry L. Jones has been the Senior Vice President
of Human Resources since January of 1999. In the latter
half of 1998 he served as Senior Vice President of Risk
Management. Prior to that he served as Senior Vice
President of Special Projects. From April 1997 to
January 1998 he served as Senior Vice President of
Administration. He was the Senior Vice President -
Retail Operations from March 1996 to April 1997. He
previously served as Senior Vice President - Human
<PAGE>
Resources since 1991. Prior to that, he served as Vice
President, Human Resources from 1989.
Dane C. Truhett has been the Senior Vice
President of Information Services since January 1999,
Vice President of Information Services since November
1997, and Director of Application Development since
1994. Prior to that time, Mr. Truhett was employed by
IBM as a consultant.
W. H. Holman, III has been Secretary since 1996.
He is also President of Pump And Save, Inc., the
Company's gasoline station subsidiary. He has 13 years
of supermarket industry experience, and previously
served as the Company's Senior Vice President-Sales and
Marketing. Mr. Holman is the son of W. H. Holman, Jr.
Donald D. Bennett has been a director since
September 1997. Mr. Bennett has been Chairman of the
Board of Richfood Holdings, Inc. since 1980.
Bruce C. Bruckmann has been a director since
1996 and a principal of the BRS Fund since its formation
in 1995. Mr. Bruckmann was an officer and subsequently
a Managing Director of Citicorp Venture Capital from
1983 through 1995. Previously, Mr. Bruckmann was an
associate at the New York law firm of Patterson, Belknap,
Webb & Tyler. Mr. Bruckmann is a director of Mediq,
Incorporated, Penhall International, Inc. and Town Sports
International, Inc.
Directors and Executive Officers (Continued)
____________________________________________
Joseph H. Fernandez has been a director since
December 1998. He is currently an independent
investor. Previously he was the Chairman of the Board,
President and CEO of Buttrey Food and Drug Stores
Company from September 1996 to October 1998. From
September 1993 to September of 1996, Mr. Fernandez
served as President, CEO and director of the same
company.
Roger P. Friou has been a director since 1984 and
<PAGE>
a private investor since May 1997. Between March 1996
and May 1997 he served as President of the Company,
and between 1991 and 1996 he served as Vice Chairman,
Chief Financial Officer and Secretary. Other positions
previously held by Mr. Friou at the Company include
Executive Vice President and Vice President--Finance
and Controller. Mr. Friou is a director of Parkway
Properties, Inc.
John M. Moriarty, Jr. has been a director since
1996. He has been a Managing Director of Donaldson,
Lufkin & Jenrette Securities Corporation since 1989 and a
Managing Director of DLJ Merchant Banking, Inc. since
1996.
Harold O. Rosser II has been a director since 1996
and a principal of the BRS Fund since its formation in
1995. Mr. Rosser was an officer and subsequently a
Managing Director of Citicorp Venture Capital from 1987
through 1995. Previously, he spent 12 years with
Citicorp/Citibank in various management and corporate
finance positions. Mr. Rosser is a director of B&G Foods,
Inc. and Penhall International, Inc.
Stephen C. Sherrill has been a director since 1996
and a principal of the BRS Fund since its formation in
1995. Mr. Sherrill was an officer and subsequently a
Managing Director of Citicorp Venture Capital from 1983
through 1995. Previously, he was an associate at the New
York law firm of Paul, Weiss, Rifkind, Wharton &
Garrison. Mr. Sherrill is a director of Alliance Laundry
Systems, LLC, Galey & Lord, Inc., B&G Foods, Inc.,
Mediq Incorporated.
Directors and Executive Officers (Continued)
____________________________________________
*Farm Fresh filed a voluntary petition under
federal bankruptcy laws in connection with a "pre-
packaged" bankruptcy in January 1998, and the plan of
reorganization was confirmed by the Bankruptcy Court in
February 1998 and became effective in March 1998.
Kash n' Karry filed a voluntary petition under federal
bankruptcy laws in connection with a "pre-packaged"
bankruptcy in November 1994. The plan of
reorganization was confirmed by the Bankruptcy Court
<PAGE>
and became effective in December 1994.
Item 11. Executive Compensation
The following table summarizes the compensation
paid or accrued by the Company during fiscal 1998, 1997
stub, 1997 and 1996 for the Chief Executive Officer and
for each of the four most highly compensated executive
officers of the Company during fiscal 1998. The table
also includes one other individual who was not an
executive officer during fiscal 1998 but whose
compensation would have placed him among the most
highly compensated officers.
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
--------------------
Other
Annual Securities All Other
Compen- Underlying LTIP Compen-
Name and Principal Position Year Salary Bonus sation(FN1) Options(FN2) Payouts(FN2) sation
- ---------------------------------- ----- ------ ----- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael E. Julian, Chairman 1998 $450,000 $450,000 $ 7,089 $ 49,692 (FN5)
and Chief Executive Officer (4) 97stub 253,846 24,8077 1,353 13,100 263
1997 57,692 75,000 170,000 (FN6)
Ronald E. Johnson, President 1998 400,000 400,000 56,350 2,030 (FN7)
and Chief Operating Officer 97stub 30,769 30,769 10,400
W.H. Holman, Jr., Former Chairman, 1998 350,000 2,778 18,556 (FN8)
Current Chairman Emeritus (4) 97stub 235,577 117,788 1 988 10,583
1997 331,182 162,920 2,633 15,795
1996 315,100 121,193 2,216 1,894,039 15,840
R. Barry Cannada, Chief 1998 264,904 231,250 2,237 2,237 (FN9)
Administrative Officer, Executive 97 stub 5,385
Vice President, General Counsel
and Assistant Secretary
Stephen R. Harmon, Executive Vice 1998 175,000 87,503 11,888 8,687 (FN10)
President Merchandising and 97stub 114,231 67,115 1,200
Marketing
David R. Black, Senior Vice 1998 150,000 75,000 1,507 6,136 (FN11)
President- Finance 97 stub 94,330 76,775 1,112 850 2,024
1997 125,000 9,865 1,513 2,835
1996 120,768 13,846 1,327 2,820
</TABLE>
<FN1> Other annual compensation includes the annual estimated value
of an automobile furnished by the Company. Additionally, for
Messrs. Julian, Johnson and Harmon annual compensation also
includes $3,571, $52,795 and $9,425, respectively, for amounts
paid in connection with relocation.
<FN2> Represents number of shares of securities granted by stock option
in applicable periods.
<FN3> Includes distributions from the Company's deferred
compensation plan. During fiscal 1996, the Company recognized
a special charge of approximately $1.8 million attributable to an
employment agreement which allows future payments to be
received by Mr. Holman, of which $493,768 was received by Mr.
Holman in fiscal 1998.
<FN4> Effective August 14, 1998, Mr. Holman resigned his position as
Chairman of the Board and assumed the position of Chairman
Emeritus. Simultaneously, Mr. Julian was named Chairman of
the Board.
<FN5> Consists of $42,855 paid in premiums for a whole life insurance
policy for the benefit of Mr. Julian, $2,030 in premiums for
group term life insurance and $4,807 in Company contributions
under the 401(k) Plan.
<FN6> Consists of fees for consulting services provided to the Company
by Mr. Julian prior to his employment with the Company as
Chief Executive Officer.
<FN7> Consists of premiums for group term life insurance.
<FN8> Consists of $14,700 in premiums for group term life insurance
and $3,856 in Company contributions under the 401(k) Plan.
<FN9> Consists of premiums for group term life insurance.
<FN10>Consists of $1,045 in premiums for group term life insurance and
$1,683 in Company contributions under the 401(k) Plan.
<FN11>Consists of $871 in premiums for group term life insurance and
$5,265 in Company contributions under the 401(k) Plan.
STOCK OPTION PLAN
The Company has in effect an employee stock
option plan pursuant to which options to
purchase Common Stock of the Company are granted to
certain executives and key officers of
the Company. There were no option grants during the
1998 fiscal year.
Aggregated Exercised Options and
Fiscal Year-End Option Values
The following table summarizes the number and
value of all unexercised options held by
the aforementioned executive officers at January 2, 1999.
There were no options granted in Fiscal 1998.
<TABLE>
<CAPTION>
Value of
Name Shares Unexcercised
- ---- Acquired on Options In-the-Money
Exercised Value Excercisable at Fiscal Year
Options Realized Fiscal Year End ($)(FN1)
--------- --------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Michael E. Julian -- -- 4366.67/8733.34 224,883.50/
(FN2),(FN3) 449,767.01
Ronald E. Johnson -- -- 3466.67/6933.34 0/0
(FN2),(FN3)
R. Barry Cannada -- -- 1795/3590 0/0
(FN2),(FN3)
Stephen R. Harmon -- -- 400/800 (FN2) 0/0
David R. Black -- -- 566.67/283.33(FN2) 34,850.20/17,424.79
W. H. Holman, Jr. -- -- ----/---- 0/0
- ---------------------
</TABLE>
(1) Assumes the value of the Common Stock as of January
2, 1999 was equal to $ 124.00 per share, as set by the
Compensation Committee in December of 1998 for tax
reporting purposes. The value is based, as of January 1,
1998, upon the same formula used to acquire the stock
of the Company in the recapitalization of the Company
in March of 1996. In the opinion of the Compensation
Committee, the business of the Company and the
market factors since January of 1998 do not merit any
change in that assessment of value.
(2) Shares vest in 1/3 portions, the first third beginning on
the first anniversary of the Vesting Commencement
Date, and the second and third portions respectively on
the second and third anniversaries of the Vesting
Commencement Dates.
(3) Shares fully vest (a) upon the initial public offering, or
(b) change of control, subject to shareholder approval.
Compensation of Directors
Each non-employee director of the Company is
paid an annual retainer of $12,000 plus fees of $1,000 for
each board meeting attended and $500 for each
committee meeting attended. Directors are also eligible
to receive grants of stock options, stock purchase rights
and other stock-based awards under the Company's 1997
Stock Plan. Directors who are employees of the
Company do not receive additional compensation as
directors.
Employment Agreements
W. H. Holman, Jr. has an employment contract
with the Company providing for a term of employment
through February 28, 2001. The agreement provides that
Mr. Holman, Jr. will serve as Chairman of the Board and
as Chief Executive Officer, at the discretion of the Board
of Directors. The Board of Directors appointed Michael
E. Julian as Chief Executive Officer in January 1997 and
Chairman in August 1998. Pursuant to his employment
contract, Mr. Holman will continue to serve on the Board
of Directors as Chairman Emeritus until February 28,
2001, with a salary equal to his current salary until
February 28, 1999, and no less than $152,848 salary
thereafter.
Effective February 23, 1997, December 8, 1997,
January 1, 1998, respectively, the Company entered into
employment agreements with Messrs. Julian, Johnson and
Cannada. The agreements provide for an annual salary of
$450,000, $400,000 and $250,000 ($275,000 after July 1,
1998), and an annual bonus of up to 100%, 100% and
75% (100% after July 1, 1998) of such annual salary for
Messrs. Julian, Johnson and Cannada, respectively.
Either the Company or the officer may terminate the
agreement upon thirty days notice. If the Company
terminates the employment of Messrs. Julian, Johnson or
Cannada, without cause or the officer terminates for good
reason, the Company must pay such officer a sum equal
to his prorata bonus and severance equal to one year
salary plus estimated bonus. In addition, the officer will
be entitled to exercise any vested options within three
months of the termination of his employment. Each
executive has agreed not to compete for a period of one
year after the termination of his employment.
Messrs. Julian, Johnson, Cannada, each have
entered into change of control agreements with the
Company. These agreements provide that if the officer's
employment terminated within two years following a
change in control by the Company other than for cause or
by the officer for good reason, or if the officer is
terminated by the Company in anticipation of the change
of control, (i) the officer will be entitled to receive a lump
sum severance amount equal to two times such officer's
annual salary and bonus and, (ii) if any payment to the
officer pursuant to the change of control Agreement
would be subject to the 20% excise tax on excess
parachute payments, the officer's payment shall be
reduced to the greater of (i) the greatest amount that
would not be subject to such an excise tax, or (ii) the
amount that would result in the greatest after-tax benefit
to the executive. A change of control is generally defined
to occur upon (i) an acquisition of 20% or more of the
total voting power of the outstanding securities of the
Company (provided that as long as Bruckmann, Rosser,
Sherrill & Co., L.P., beneficially own either (a) more
common stock than the acquiring party, or (b) 20% or
more of the common stock of the Company, a change of
control shall not have occurred), (ii) a change in a
majority of the members of the Company's Board of
Directors, (iii) the consummation of certain mergers or
reorganizations, or (iv) approval by the stockholders of
dissolution or liquidation of the Company.
Committees and Meetings of the Board
The Board of Directors held four regular meetings
during Fiscal 1998. All directors attended at least 75% of
the total meetings of the Board of Directors and the
committees of which they were members.
The Company has a Compensation Committee of
the Board of Directors that is responsible for determining
annual salaries and bonuses paid to the Company's senior
management and administering the Company's stock
option and benefit programs. The current members of the
Compensation Committee are Messrs. Friou and Rosser.
There was one meeting of the Compensation Committee
during Fiscal 1998.
The Company has an Audit Committee that
reviews external and internal auditing matters and
recommends the selection of the Company's auditors for
approval by the Board of Directors. The members of the
Audit Committee are Messrs. Bruckmann, Friou and
Moriarty. There were three meetings of the Audit
Committee during Fiscal 1998.
401(k) Plan
The Company maintains the Jitney-Jungle Stores
of America, Inc. and Affiliates Profit Sharing Plan and
Trust (the 401(k) Plan) for the benefit of its employees
who have satisfied the plan's eligibility requirements.
Participants are permitted to make pretax salary reduction
contributions, up to the amount permitted under
applicable tax law. The Company makes a matching
contribution equal to 50% of each participant's salary
reduction contribution, up to a maximum of 2% of the
participant's compensation. In addition, the Company
may make additional profit sharing contributions at its
discretion. Although in prior years the Company has
made discretionary profit sharing contributions, it has no
obligation to do so in the future. Company contributions
become vested when the participant has been credited
with five years of service.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information
regarding the beneficial ownership
of Common and Preferred Stock as of January 2, 1999,
by (i) each director, (ii) the named executive officers set
forth in Item 11; and (iii) all executive officers and
directors as a group and (iv) the Company's principal
stockholders. Other than as set forth in the table below,
there are no persons known to the Company to
beneficially own more than 5% of the Common Stock.
No Company securities are owned by John M. Moriarty,
Jr., Donald D. Bennett or Joseph H. Fernandez, each of
whom is a director of the Company.
<TABLE>
<CAPTION>
Number and Number and Number and Number and
Name and Address Percentage of Percentage of Percentage of Percentage of
for Beneficial Shares of Shares of Class A Shares of Class B Shares of Class C
Owners over 5% Common Stock Preferred Stock Preferred Stock Preferred Stock
- ----------------- -------------- ----------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Bruckmann, Rosser,
Sherrill & Co., L.P. 353,750/83.18% ---- ---- 75,508/75.60%(FN1)
126 East 56th Street (FN1)
New York, NY 10022
W. H. Holman, Jr. 29,699/6.98%(FN2) ---- 21,516/7.84% (FN3) 4,742/4.75%
Jitney-Jungle Stores
of America, Inc.
P. O. Box 3409
Jackson, MS 39207
DLJ Merchant (FN4) ---- ---- 15,000/15.02%
Banking Partners, L.P.
and related investors
277 Park Avenue
New York, NY 10172
Michael E. Julian 2,500/* ---- ---- 579/*
Roger P. Friou 12,510/2.94% ---- 14/ * (FN3) 1,252/1.25%(FN3)
Bruce C. Bruckmann 353,750/83.18% ---- ---- 75,508/75.60%(FN1)
(FN1) (FN5)
Harold O. Rosser, II 353,750/83.18% ---- ---- 75,508/75.60%(FN1)
(FN1) (FN6)
Stephen C. Sherrill 353,750/83.18% ---- ---- 75,508/75.60%(FN1)
(FN1) (FN7)
Ronald E. Johnson ---- ---- ---- 20/*
R. Barry Cannada ---- ---- ---- 20*
Stephen R. Harmon 1,800/*
David R. Black 850/* ---- ---- 85/*
All directors and
executive officers
as a group (FN12) 406,108/95.49% ---- 21,530/7.84% 97,705/97.82%
(FN3)
*Owns less than 1% of the total outstanding Common Stock, Class B
Preferred Stock and Class C Preferred Stock.
</TABLE>
1) The 353,750 shares of Common Stock include
331,732 shares of common stock owned directly by
Bruckmann, Rosser, Sherrill & Co., Inc., L.P.
("BRS") and 22,018 shares to which BRS possesses
sole voting power. The 75,508 shares of Class C
Preferred Stock include 70,808 shares owned
directly by BRS and 4,700 shares in which it has a
beneficial interest. BRS is a limited partnership, the
sole general partner of which is BRS Partners and
the manager of which is BRS. The sole general
partner of BRS Partners is BRSE Associates. Bruce
C. Bruckmann, Harold O. Rosser, II, Stephen C.
Sherrill and Stephen F. Edwards are the only
stockholders of BRS and BRSE Associates and may
be deemed to share beneficial ownership of the
shares shown as beneficially owned by the Fund.
Such individuals disclaim beneficial ownership of
any such shares.
2) Includes 10,000 shares of common stock owned
directly and 19,699 shares to which Mr. Holman
possesses sole voting power.
3) All shares of Class B Preferred Stock, and 7,119
shares of Class C Preferred Stock, are owned by
Trustmark National Bank ("Trustmark") pursuant to
an escrow agreement by and among Trustmark, the
Company and former Common Stock shareholders
of the Company. Certain of the officers of the
Company own an interest in the escrow account
through which they have a beneficial interest in the
number of shares of Class B Preferred Stock and
Class C Preferred Stock listed in this table.
4) DLJ Merchant Banking Partners, L.P. ("DLJ") and
related investors have received outstanding warrants
to purchase 15.0%, on a fully diluted basis, of the
outstanding Common Stock of the Company as
outlined in the Shareholders Agreement referred to
under Item 13.
5) Includes 6,605 shares of common stock owned
directly and 347,145 shares to which BRS
possesses sole voting power.
6) Includes 1,327 shares of common stock owned
directly and 352,383 shares to which BRS
possesses sole voting power.
7) Includes 6,812 shares of common stock owned
directly and 349,327 shares to which BRS
possesses sole voting power.
Item 13. Certain Relationships and Related Transactions.
BRS is entitled to receive 1% of earnings before
interest, income taxes, depreciation, amortization and
certain special charges annually, with a minimum of
$1.0 million per year, computed on a quarterly basis
from the Company as a management fee for the
performance of strategic and financial planning services
in the future. BRS received $1.2 million during the
fiscal year ended 1998. Messrs. Bruckmann, Rosser,
Sherrill and Edwards (not a director of the Company)
are the only stockholders of BRS and BRSE Associates.
BRSE Associates is the sole general partner of BRS
Partners, which is the sole general partner of BRS. BRS
is the majority stockholder of the Company.
At the beginning of the year, W. H. Holman, Jr.,
W. H. Holman, III, Roger P. Friou and another officer
(Clyde Staley) owned in the aggregate noncontrolling
interests in certain partnerships that were landlords
under twenty (20) leases (involvement is Holman, Jr.,
18 leases; Holman, III, 6 leases; Staley, 5 leases; and
Friou, 9 leases) for stores or other facilities where the
Company and its subsidiaries are the tenants. Through
disposition by these parties and/or the Company, the
number was reduced to 8 leases by the end of the year
(Holman, Jr., 6 leases, Holman III, 2 leases, Friou, 6
leases and Staley, 3 leases). During fiscal year 1998, the
Company paid a combined total rent under these twenty
(20) leases of approximately $2.7 million. Management
believes that each of these leases was on an arm's length
basis and were on terms that are no less favorable to the
Company than could have been obtained with non-
affiliated parties at the time each lease was entered into.
Certain shareholders of the Company, entered
into a Shareholders Agreement which contains certain
agreements among such shareholders with respect to the
capital stock and corporate governance of the Company.
The shareholders involved are the Fund, DLJ, and
Messrs. W. H. Holman, Jr., Roger P. Friou, and W. H.
Holman, III. Agreements regarding corporate
governance and the capital stock of the Company were
also entered into by the Company, the Fund, Messrs.
W.H. Holman, Jr., Roger Friou, W.H. Holman, III,
Jerry Jones, Stephen R. Harmon, David R. Black and
various other current or former employees in the
Securities Purchase and Holders Agreement. Among
other matters, the various shareholder agreements bind
the parties to vote for a majority of the directors to be
designated by BRS, one director to be designated by
DLJ and one director to be W. H. Holman, Jr.
During fiscal 1998, the Company loaned Ronald
E. Johnson, President and Chief Operating Officer,
$300,000 in connection with his relocation to Jackson,
MS. This loan was subsequently repaid with interest at
the rate of 8.25% prior to the end of the fiscal year.
During fiscal 1998, the Company reacquired
1,700 shares of the Company's common stock from a
former employee. The Company reissued those shares at
the same price at which they were acquired to certain
employees including Stephen R. Harmon who acquired
600 shares.
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K
The following is an index of the financial
statements, schedules and exhibits included in this
Report or Incorporated herein by reference:
(a) 1. Financial Statements:
Consolidated Balance Sheets as of January 2,
1999 and January 3, 1998.
Consolidated Statements of Operations for the
fiscal year ended January 2, 1999,for the
thirty-five weeks ended January 3, 1998 and
for each of the two fiscal years ended May 3,
1997 and April 27, 1996, respectively
Consolidated Statements of Changes in
Stockholders' Equity for the fiscal year ended
January 2, 1999, for the thirty-five weeks
ended January 3, 1998 and for each of the two
fiscal years ended May 3, 1997 and April 27,
1996, respectively.
Consolidated Statements of Cash Flows for the
fiscal year ended January 2, 1999,for the
thirty-five weeks ended January 3, 1998 and
for each of the two fiscal years ended May 3,
1997 and April 27, 1996, respectively.
Notes to Consolidated Financial Statements
Independent Auditors' Report
2. Financial Statement Schedules:
There are no Financial Statement Schedules
included with this filing for the reason that
they are not applicable, are not required, or the
information is included in the financial
statements or notes thereto.
3. Exhibits
The following is an index of the exhibits
included in this Annual Report on Form 10-K
or incorporated herein by reference:
Exhibit No.
*2.1 Agreement and Plan of Exchange and
of Merger, dated as of November 16,
1995 by and among JJ Acquisitions
Corp. and Jitney-Jungle Stores of
America, Inc., Southern Jitney Jungle
Company, McCarty-Holman Co., Inc.
and Jitney-Jungle Bakery, Inc.
(incorporated by reference to Exhibit
No. 2.1 to Amendment No. 2 to Form
S-1 [No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*2.2 Agreement and Plan of Merger dated
July 8, 1997 by and among the
Company, Delchamps, Inc. and Delta
Acquisition Corporation (incorporated
by reference to Exhibit 2 to Form 8-K
[No. 33-80833] of the Company dated
July 14, 1997).
*3.1 Amended and Restated Articles of
Incorporation of Jitney-Jungle Stores of
America, Inc. (including designation
of Class B Preferred Stock)
(incorporated by reference to Exhibit
No. 3.3 to Amendment No. 2 to Form
S-1 [No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*3.2 Restated by-laws of Jitney-Jungle
Stores of America, Inc. (incorporated
by reference to Exhibit No. 3.6 to
Amendment No. 2 to Form S-1 [No.
33-80833] of JJ Acquisitions Corp.
filed with the Commission on February
27, 1996).
*3.3 Composite Amended and Restated
Articles of Incorporation of Delchamps,
Inc. (incorporated by reference to Exhibit
3.1 to Form 10-Q of Delchamps, Inc. for
the quarter ended September 28, 1996).
*3.4 Composite of By-Laws of Delchamps, Inc.
(incorporated by reference to Exhibit 3.2
to Form 10-Q of Delchamps, Inc. for the
quarter ended September 28, 1996.
*3.5 Amended and Restated Articles of
Incorporation of Interstate Jitney-Jungle
Stores Inc. (incorporated by reference to
Exhibit 3.5 to Amendment No. 1 to Form
S-4 [No. 333-38957] of Jitney-Jungle
Stores of America, Inc. filed with the
Commission on November 7, 1997).
*3.6 Restated By-Laws of Interstate Jitney-
Jungle Stores, Inc. (incorporated by
reference to Exhibit 3.6 to Amendment
No. 1 to Form S-4 [No. 333-38957] of
Jitney-Jungle Stores of America, Inc. filed
with the Commission on November 7,
1997).
*3.7 Amended and Restated Articles of
Incorporation of McCarty-Holman Co.,
Inc. (incorporated by reference to Exhibit
3.7 to Amendment No. 1 to Form S-4 [No.
333-38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on November 7, 1997).
*3.8 Restated By-Laws of McCarty-Holman
Co., Inc. (incorporated by reference to
Exhibit 3.8 to Amendment No. 1 to Form
S-4 [No. 333-38957] of Jitney-Jungle
Stores of America, Inc. filed with the
Commission on November 7, 1997).
*3.9 Amended and Restated Articles of
Incorporation of Southern Jitney Jungle
Company (incorporated by reference to
Exhibit 3.9 to Amendment No. 1 to Form
S-4 [No. 333-38957] of Jitney-Jungle
Stores of America, Inc. filed with the
Commission on November 7, 1997).
*3.10 Restated By-Laws of Southern Jitney
Jungle Company (incorporated by
reference to Exhibit 3.10 to Amendment
No. 1 to Form S-4 [No. 333-38957] of
Jitney-Jungle Stores of America, Inc. filed
with the Commission on November 7,
1997).
*3.11 Amended and Restated Articles of
Incorporation of Pump and Save, Inc.
(incorporated by reference to Exhibit 3.11
to Amendment No. 1 to Form S-4 [No.
333-38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on November 7, 1997).
*3.12 Restated By-Laws of Pump and Save, Inc.
(incorporated by reference to Exhibit 3.12
to Amendment No. 1 to Form S-4 [No.
333-38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on November 7, 1997).
*3.13 Amended and Restated Articles of
Incorporation of Supermarket Cigarettes
Sales, Inc. (incorporated by reference to
Exhibit 3.13 to Amendment No. 1 to Form
S-4 [No. 333-38957] of Jitney-Jungle
Stores of America, Inc. filed with the
Commission on November 7, 1997).
*3.14 By-Laws of Supermarket Cigarettes Sales,
Inc. (incorporated by reference to Exhibit
3.14 to Amendment No. 1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on November 7, 1997).
*3.15 Amended and Restated Articles of
Incorporation of Jitney-Jungle Bakery,
Inc. (incorporated by reference to Exhibit
3.15 to Amendment No. 1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on November 7, 1997).
*3.16 Restated By-Laws of Jitney-Jungle
Bakery, Inc. (incorporated by reference to
Exhibit 3.16 to Amendment No. 1 to Form
S-4 [No. 333-38957] of Jitney-Jungle
Stores of America, Inc. filed with the
Commission on November 7, 1997).
*4.1 Indenture dated as of September 15, 1997
among the Company, the Subsidiary
Guarantors from Marine Midland Bank as
Trustee, Donaldson Lufkin & Jenrette
Securities Corporation and Credit Suisse
First Boston (incorporated by reference to
Exhibit 4.1 to Form S-4 [No. 333-38957]
of Jitney-Jungle Stores of America, Inc.
filed with the Commission on October 29,
1997).
*4.2 Registration Rights Agreement dated as of
September 15, 1997 among the Company,
the Subsidiary Grantors, Donaldson,
Lufkin & Jenrette Securities Corporation
and Credit Suisse First Boston
(incorporated by reference to Exhibit 4.2
to Form S-4 [No. 333-38957] of Jitney-
Jungle Stores of America, Inc. filed with
the Commission on October 29, 1997).
*4.3 Form of the Company's 10 3/8% Senior
Subordinated Notes due 2007 (included in
Exhibit 4.1) (incorporated by reference to
Exhibit 4.3 to Form S-4 [No. 333-38957]
of Jitney-Jungle Stores of America, Inc.
filed with the Commission on October 29,
1997).
*4.4 Revolving Credit Agreement dated
September 15, 1997 by and among Fleet
Capital Corporation and the Company
(incorporated by reference to Exhibit 4.4
to Form S-4 [No. 333-38957] of Jitney-
Jungle Stores of America, Inc. filed with
the Commission on October 29, 1997).
*4.5 Indenture dated March 5, 1996 between
the Company and Marine Midland Bank,
as Trustee, relating to the issuance and
sale of $200,000,000 aggregate principal
amount of 12% Senior Notes due 2006
(incorporated by reference to Exhibit No.
4.2 Amendment No. 2 to Form S-1 [No.
33-80833] of JJ Acquisition Corp. filed
with the Commission on February 27,
1996).
*4.6 Warrant dated March 4, 1996 to
purchase 75,000 shares of Common
Stock of the Company by DLJ
Merchant Banking Partners, L.P. and
related investors (incorporated by
reference to Exhibit 4.3 to Amendment
No. 2 to Form S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*4.7 Memorandum of Agreement dated October 15,
1985 by and among the City of Jackson, Mississippi
and McCarty-Holman Co., Inc. ($3,650,000)
(incorporated by reference to Exhibit 4.8 to Amendment
No. 2 to Form S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*4.8 Amendment and Waiver Agreement
No.1 dated April 10, 1998 to Amended
and Restated Revolving Credit
Agreement dated September 15, 1997
by and among Fleet Capital
Corporation and the Company.
*4.9 Amendment and Waiver Agreement
No. 2 dated June 19, 1998 to Amended
and Restated Revolving Credit
Agreement dated September 15, 1997
by and among Fleet Capital
Corporation and the Company.
*4.10 Amendment and Waiver Agreement
No. 3 dated October 5, 1998 to the
Amended and Restated Revolving
Credit Agreement dated September 15,
1997 by and among Fleet Capital
Corporation and the Company.
4.11 Amended and Restated Revolving Credit
Agreement No.4 dated March 4, 1999 to
the Amended and Restated Revolving Credit
Agreement dated September 15, 1997 by
and among Fleet Capital Corporation and
the Company.
4.12 Amended and Restated Revolving Credit
Agreement No.5 dated March 26, 1999 to the
Amended and Restated Revolving Credit
Agreement dated September 15, 1997 by
and among Fleet Capital Corporation and
the Company.
4.13 Amended and Restated Revolving Credit
Agreement No.6 dated April 16, 1999 to
the Amended and Restated Revolving
Credit Agreement dated September 15,
1997 by and among Fleet Capital
Corporation and the Company.
*5.1 Opinion of Dechert Price & Rhoads
(incorporated by reference to Exhibit 5.1
to Amendment No. 1 to Form S-4 [No.
333-38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on November 7, 1997).
*9.1 Voting Trust Agreement dated
November 1, 1990 by and among
Carolyn Holman Kroeze, as Executrix
and the parties named therein
(incorporated by reference to Exhibit
9.1 to Amendment No. 2 to Form S-1
[No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*10.1 Purchase Agreement dated September 10,
1997 among the Company, Donaldson,
Lufkin & Jenrette Securities Corporation
and Credit Suisse First Boston with
respect to the 10 3/8% Senior
Subordinated Notes due 2007
(incorporated by reference to Exhibit 10.1
to Form S-4 [No. 333-38957] of Jitney-
Jungle Stores of America, Inc. filed with
the Commission on October 29, 1997).
*10.2 Supply Agreement dated March 19,
1989 as amended, by and among
Fleming Companies Inc. (successor in
interest to Malone & Hyde, Inc.), the
Company and Interstate Jitney-Jungle
Stores, Inc. (incorporated by reference
to Exhibit 10.2 to Amendment No. 2 to
Form S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*10.3 Membership in Topco Associates, Inc.
(Cooperative) by ownership of six
hundred (600) shares of Common
Stock, such stock certificate being
dated July 1, 1991 (incorporated by
reference to Exhibit 10.3 to
Amendment No. 2 to Form S-1 [No.
33-80833] of JJ Acquisitions Corp.
filed with the Commission on February
27, 1996).
*10.4 Flour Sale Confirmation and Contract
dated July 19, 1995 by and among
Cargill, Incorporated and Jitney-
Jungle Bakery, Inc. (incorporated by
reference to Exhibit 10.4 to
Amendment No. 2 to Form S-1 [No.
33-80833] of JJ Acquisitions Corp.
filed with the Commission on
February 27, 1996).
*10.5 Employment Agreement dated as of
February 15, 1995 by and among the
Company Roger P. Friou
(incorporated by reference to Exhibit
10.6 to Amendment No. 2 to Form S-
1 [No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*10.6 Employment Agreement dated as of
February 24, 1995 by and among the
Company and David K. Essary
(incorporated by reference to Exhibit
10.7 to Amendment No. 2 to Form S-
1 [No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*10.7 Employment Agreement dated as of
March 5, 1996 by and among the
Company and W. H. Holman, Jr.
(incorporated by reference to Exhibit
10.6 to the Company's Annual Report
on Form 10-K, dated July 24, 1996).
*10.8 Employment Agreement dated as of
March 5, 1996 by and among the
Company and W. H. Holman, III.
(incorporated by reference to Exhibit
10.7 to the Company's Annual Report
on Form 10-K, dated July 24, 1996).
*10.9 Restatement and Amendment by the
Entirety of the Jitney-Jungle Stores of
America, Inc. and Affiliates Profit
Sharing Plan and Trust (incorporated
by reference to Exhibit 10.8 to
Amendment No. 2 to Form S-1 [No.
33-80833] of JJ Acquisitions Corp.
filed with the Commission on
February 27, 1996).
*10.10 Deferred Compensation Plan for the
Company dated as of November 16,
1995 by and among Jitney-Jungle
Stores of America, Inc., Southern
Jitney Jungle Company, Jitney-Jungle
Bakery, Inc., McCarty-Holman Co.,
Inc. and W. H. Holman, Jr., Roger P.
Friou and David K. Essary
(incorporated by reference to Exhibit
10.9 to Amendment No. 2 to Form S-
1 [No. 33-80833] of JJ Acquisitions
Corp. filed with the Commission on
February 27, 1996).
*10.11 Shareholders Agreement dated as of
March 5, 1996 by and among DLJ
Merchant Banking Partners, L.P. JJ
Acquisitions Corp., and certain other
signatories party thereto
(incorporated by reference to Exhibit
10.10 to Amendment No. 2 to Form
S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*10.12 Securities Purchase and Holders
Agreement dated as of March 5, 1996
by and among JJ Acquisitions Corp.,
Bruckmann, Rosser, Sherrill & Co.,
L.P. and other parties thereto
(incorporated by reference to Exhibit
10.12 to Amendment No. 2 to Form
S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*10.13 Registration Rights Agreement dated
as of March 5, 1996 by and among
the Company and other parties named
therein (incorporated by reference to
Exhibit 10.13 to Amendment No. 2 to
Form S-1 [No. 33-80833] of JJ
Acquisitions Corp. filed with the
Commission on February 27, 1996).
*10.14 Membership and Licensing
Agreement dated August 1, 1973
between Topco Associates, Inc. and
Delchamps, Inc. and attached copy of
Articles of Incorporation and By-
Laws of Topco Associates, Inc.
(incorporated by reference to Exhibit
10(a) to the Registration Statement on
Form S-1 [No. 2-86926] of
Delchamps, Inc.)
*10.15 Agreement for Termination of
Employment dated as of September
19, 1997 between Delchamps, Inc. and
David W. Morrow (incorporated by
reference to Exhibit 10(j) to Form 10-
K of Delchamps, Inc. for fiscal year
ended June 28, 1997).
*10.16 Form of Director Indemnity Agreement
of Delchamps, Inc. (incorporated by
reference to Exhibit 10 to Form 10-Q of
Delchamps, Inc. for the quarter ended
September 28, 1996).
10.17 Employment Agreements dated effective
February 23, 1997, December 8, 1997
and January 1, 1998 by and among the
Company and Michael E. Julian,
Ronald E. Johnson and R. Barry
Cannada, respectively.
10.18 Change of Control Agreements dated
effective February 18, 1999 by and
among the Company and Michael E.
Julian, Ronald E. Johnson and R. Barry
Cannada, respectively.
*12.1 Statement of Ratio of Earnings to Fixed
Charges (incorporated by reference to
Exhibit 12.1 to Form S-4 [No. 333-
38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on October 29, 1997).
21.1 Subsidiaries of the Company.
*23.1 Consent of Dechert Price & Rhoads
(included in Exhibit 5.1) (incorporated by
reference to Exhibit 23.1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on October 29, 1997).
*23.2 Consent of Deloitte & Touche LLP
(incorporated by reference to Exhibit
23.2 to Amendment No. 1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on November 7, 1997).
*23.3 Consent of KPMG Peat Marwick
(incorporated by reference to Exhibit
23.3 to Form S-4 [No. 333-38957] of
Jitney-Jungle Stores of America, Inc.
filed with the Commission on October
29, 1997).
*24 Power of Attorney (incorporated by
reference to Exhibit 24 to Form S-4 [No.
333-38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on October 29, 1997).
*25 Statement of Eligibility and
Qualifications, Form T-1, of Marine
Midland Bank (incorporated by reference
to Exhibit 25 to Form S-4 [No. 333-
38957] of Jitney-Jungle Stores of
America, Inc. filed with the Commission
on October 29, 1997).
27.1 Financial Data Schedule.
*99.1 Form of Letter of Transmittal
(incorporated by reference to Exhibit
23.2 to Amendment No. 1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on November 7, 1997).
*99.2 Form of Notice of Guaranteed Delivery
(incorporated by reference to Exhibit
23.2 to Amendment No. 1 to Form S-4
[No. 333-38957] of Jitney-Jungle Stores
of America, Inc. filed with the
Commission on November 7, 1997).
*Previously filed as indicated.
(b) Reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
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.
Jitney-Jungle Stores of
America, Inc.
(Registrant)
By /s/ Michael E. Julian
----------------------------
(Michael E. Julian
Chairman of the Board and
Chief Executive Officer)
(Principal Executive Officer)
Date April 2, 1999
----------------------------
By /s/ Richard D. Coleman
----------------------------
(Richard D. Coleman
Executive Vice President,
Chief Financial Officer)
(Principal Financial and Accounting
Officer)
Date April 2, 1999
----------------------------
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the Company and in
the capacities and on the dates indicated.
Signatures Position Date
- -------------------------- -------------------- -------------
/s/ Michael E. Julian Chairman of the Board and April 2, 1999
- -------------------------- Chief Executive Officer -------------
(Michael E. Julian)
/s/ Roger P. Friou Director April 2, 1999
- -------------------------- -------------
(Roger P. Friou)
/s/ Bruce C. Bruckmann Director April 2, 1999
- -------------------------- -------------
(Bruce C. Bruckmann)
/s/ Harold O. Rosser, II Director April 2, 1999
- -------------------------- -------------
(Harold O. Rosser, II)
/s/ Stephen C. Sherrill Director April 2, 1999
(Stephen C. Sherrill) -------------
/s/ John M. Moriarty, Jr. Director April 2, 1999
- -------------------------- -------------
(John M. Moriarty, Jr.)
/s/ Joseph H. Fernandez Director April 2, 1999
- -------------------------- -------------
(Joseph H. Fernandez)
/s/ Ronald E. Johnson Director April 2, 1999
- -------------------------- -------------
(Ronald E. Johnson)
/s/ Donald D. Bennett Director April 2, 1999
- -------------------------- -------------
(Donald D. Bennett)
Exhibit 21.1
SUBSIDIARIES OF JITNEY-JUNGLE STORES OF AMERICA, INC.
Percentage
of Voting
Securities
Jurisdiction of Owned by
Name Incorporation Registrant
- ------------------------------------- --------------- ----------
Interstate Jitney-Jungle Stores, Inc. Alabama 100%
Southern Jitney Jungle Company Mississippi 100%
McCarty-Holman Co., Inc. Mississippi 100%
Jitney-Jungle Bakery, Inc. Mississippi 100%
Delchamps, Inc. Alabama 100%
JJ Construction Corp. Mississippi 100%
Exhibit 21.1
SUBSIDIARIES OF JITNEY-JUNGLE STORES OF AMERICA, INC.
-----------------------------------------------------
SUBSIDIARIES OF MCCARTY-HOLMAN CO., INC.
----------------------------------------
Jurisdiction of
Name Incorporation
- -------------------------- ----------------
Pump and Save, Inc. Mississippi
SUBSIDIARIES OF JITNEY-JUNGLE STORES OF AMERICA, INC.
-----------------------------------------------------
SUBSIDIARIES OF DELCHAMPS, INC.
-------------------------------
Jurisdiction of
Name Incorporation
- -------------------------- ----------------
Supermarket Cigarette Sales, Inc. Louisiana
AMENDMENT NO. 5
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDMENT NO. 5 dated March 26,
1999 to the Amended and Restated Revolving Credit
Agreement dated as of September 15, 1997 (as heretofore
amended, and as may be further amended, restated,
modified or supplemented from time to time, the "Credit
Agreement") among Jitney-Jungle Stores of America, Inc.,
Southern Jitney Jungle Company, McCarty-Holman Co.,
Inc., Jitney-Jungle Bakery, Inc., Pump and Save, Inc.,
Interstate Jitney Jungle Stores, Inc., and Delchamps, Inc.
(each a "Borrower" and collectively, the "Borrowers"), the
Guarantors named therein, the Lenders named therein and
Fleet Capital Corporation, as Agent.
WHEREAS, the Lenders desire to amend
Schedule 2.01 to the Credit Agreement (as in effect prior to
this Amendment, the "Existing Schedule 2.01", and
thereafter, the "New Schedule 2.01");
WHEREAS, the parties hereto willing to
amend the Existing Schedule 2.01 of the Credit Agreement,
on the terms and conditions hereof.
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
1 SECTION CAPITALIZED TERMS. Capitalized
terms used herein and not defined shall have the respective
meanings assigned to such terms in the Credit Agreement.
1 SECTION AMENDMENTS TO THE CREDIT
AGREEMENT. The Credit Agreement shall be, and upon
the fulfillment of the conditions set forth in Section 4
hereof is, hereby amended by deleting the Existing
Schedule 2.01 in its entirety and substituting the New
Schedule 2.01 attached hereto therefore.
1 SECTION ADDITIONAL AGREEMENTS
2
2.1 SECTION The Lenders agree that all
accrued and unpaid interest and fees payable to the Lenders
pursuant to the Credit Agreement for the period beginning
on March 4, 1999 and ending on the date hereof shall be
paid to the Lenders in accordance with the Existing
Schedule 2.01 and thereafter in accordance with the New
Schedule 2.01.
1 SECTION CONDITIONS PRECEDENT
2
This Amendment shall become effective on
such date as the following conditions have been satisfied in
full or waived by the Agent in writing:
1.1 SECTION The Agent shall have received
in form and substance satisfactory to the Agent and its
counsel:
1.2
(a) Counterparts of this
Amendment executed by each Borrower, each
<PAGE>
Guarantor, each Grantor and each Lender shall have
been delivered to the Agent.
(b) Each Lender shall have
received Notes reflecting their respective
Commitments duly executed by the Borrowers.
(c) Such other approvals,
opinions or documents as the Agent may reasonably
request.
1.1 SECTION All representations and
warranties contained in this Amendment or otherwise made
in writing to the Agent in connection herewith shall be true
and correct in all material respects.
1.2
1.3 SECTION No unwaived Default or Event
of Default has occurred and is continuing.
1.4
1.5 SECTION Kaye, Scholer, Fierman, Hays
& Handler, LLP, counsel to the Agent, shall have received
payment in full for all legal fees charged, and all costs and
expenses incurred, by such counsel in connection with the
transactions contemplated under this Amendment and the
other Loan Documents and instruments in connection
herewith and therewith.
1 SECTION MISCELLANEOUS
2
2.1 SECTION Each of the Borrowers and
each Guarantor reaffirms and restates the representations
and warranties set forth in Article IV of the Credit
Agreement, as amended by this Amendment, and all such
representations and warranties shall be true and correct on
the date hereof with the same force and effect as if made on
such date (except insofar as such representation and
warranties relate expressly to an earlier date). Each of the
Borrowers and each Guarantor represents and warrants
(which representations and warranties shall survive the
execution and delivery hereof) to the Agent that:
(a) It has the corporate power and
authority to execute, deliver and carry out the terms
and provisions of this Amendment and has taken or
caused to be taken all necessary corporate action to
authorize the execution, delivery and performance
of this Amendment;
(a) No consent of any other person
(including, without limitation, shareholders or
creditors of any Borrower or a Guarantor), and no
action of, or filing with any governmental or public
body or authority is required to authorize, or is
otherwise required in connection with the
execution, delivery and performance of this
Amendment;
(b) This Amendment and the other
instruments and documents contemplated hereby
have been duly executed and delivered by a duly
authorized officer on behalf of such party, and
constitutes a legal, valid and binding obligation of
such party enforceable against such party in
accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors'
rights generally and the exercise of judicial
<PAGE>
discretion in accordance with general principles of
equity; and
(a) The execution, delivery and
performance of this Amendment and the other
instruments and documents contemplated hereby
will not violate any law, statute or regulation, or any
order or decree of any court or governmental
instrumentality, or conflict with, or result in the
breach of, or constitute a default under any
contractual obligation of such party.
1.1 SECTION Nothing herein shall be
deemed to be a waiver of any covenant or agreement
contained in the Credit Agreement, and each Borrower and
each Guarantor hereby agrees that all of the covenants and
agreements contained in the Credit Agreement and the
other Loan Documents are hereby ratified and confirmed in
all respects and shall remain in full force and effect in
accordance with their respective terms.
1.2
1.3 SECTION All references to the Credit
Agreement in the Credit Agreement or any other Loan
Document and the other documents and instruments
delivered pursuant to or in connection therewith shall mean
such Agreement as amended hereby and as each may in the
future be amended, restated, supplemented or modified
from time to time.
1.4
1.5 SECTION This Amendment may be
executed by the parties hereto individually or in
combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one
and the same agreement.
1.6
1.7 SECTION Delivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
1.1 SECTION This Amendment shall be
governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
1.2
1.3 SECTION The parties hereto shall, at any
time and from time to time following the execution of this
Amendment, execute and deliver all such further
instruments and take all such further action as may be
reasonably necessary or appropriate in order to carry out
the provisions of this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties have
caused this Amendment to be executed by their respective
officers thereunto duly authorized, as to the date first above
written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
McCARTY-HOLMAN CO., INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
<PAGE>
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
DELCHAMPS, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
JJ CONSTRUCTION CORP.,
as Guarantor
By__________________________________
Name:
Title:
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By__________________________________
Name:
Title:
<PAGE>
FLEET CAPITAL CORPORATION,
as Agent
By__________________________________
Name:
Title:
FLEET CAPITAL CORPORATION,
as Lender
By__________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By__________________________________
Name:
Title:
HELLER FINANCIAL INC.,
as Lender
By__________________________________
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORP.,
as Lender
By__________________________________
Name:
Title:
<PAGE>
NATIONAL BANK OF CANADA,
a Canadian Chartered Bank, as Lender
By__________________________________
Name:
Title:
NATIONAL CITY BANK,
as Lender
By__________________________________
Name:
Title:
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Lender
By__________________________________
Name:
Title:
FLEET BANK, N.A.,
as a Letter of Credit Issuer
By__________________________________
Name:
Title:
<PAGE>
SCHEDULE 2.01
Commitments
Lender Commitment
Fleet Capital Corporation $50,000,000.00
60 East 42nd Street
New York, New York 10017
Attention: Mr. Thomas Maiale
Tel #: (212) 885-8826
Fax #: (212) 885-8829
Heller Financial, Inc. $35,000,000.00
101 Park Avenue
New York, New York 10178
Attention: Mr. Tom Bukowski
Tel #: (212) 880-7169
Fax #: (212) 880-7002
PNC Bank, National Association $17,600,000.00
2 PNC Plaza 18th Floor
620 Liberty Avenue
Pittsburgh, PA 15222
Attention: Mr. Richard Muse
Tel #: (412) 762-4471
Fax #: (412) 762-4069
IBJ Whitehall Business Credit Corp. $15,400,000.00
One State Street
New York, New York 10004
Attention: Mr. Jim Steffy
Tel #: (212) 858-2094
Fax #: (212) 858-2151
National Bank of Canada, $14,300,000.00
a Canadian Chartered Bank
125 West 55th Street
New York, New York 10019
Attention: Mr. Jim Norvell
Tel #: (212) 632-8560
Fax #: (212) 632-8564
Deutsche Financial Services $20,000,000.00
Corporation
3225 Cumberland Boulevard Suite 700
Atlanta, GA 30339
Attention: Mr. Stephan Metts
Fax #: (770) 933-8571
<PAGE>
National City Bank $10,000,000.00
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Mr. Joseph D. Robison
Tel #: (216) 575-9254
Fax #: (216) 575-9396
Total Commitment $162,300,000.00
Execution Copy
AMENDMENT NO. 6
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDMENT NO. 6 dated April __,
1999 to the Amended and Restated Revolving Credit
Agreement dated as of September 15, 1997 (as heretofore
amended, and as may be further amended, restated,
modified or supplemented from time to time, the "Credit
Agreement") among Jitney-Jungle Stores of America, Inc.,
Southern Jitney Jungle Company, McCarty-Holman Co.,
Inc., Jitney-Jungle Bakery, Inc., Pump and Save, Inc.,
Interstate Jitney Jungle Stores, Inc., and Delchamps, Inc.
(each a "Borrower" and collectively, the "Borrowers"), the
Guarantors named therein, the Lenders named therein and
Fleet Capital Corporation, as Agent.
WHEREAS, the Borrowers have made
certain accounting adjustments for the fiscal quarters ended
March 28, 1998, June 20, 1998 and September 12, 1998
and have requested that the Required Lenders amend the
Credit Agreement as set forth herein;
WHEREAS, the parties hereto are willing to
amend Credit Agreement, on the terms and conditions
hereof.
NOW, THEREFORE, the Borrowers, the
Guarantors, the Required Lenders and the Agent hereby
agree as follows:
1 SECTION CAPITALIZED TERMS. Capitalized
terms used herein and not defined shall have the respective
meanings assigned to such terms in the Credit Agreement.
1 SECTION AMENDMENTS TO THE CREDIT
AGREEMENT. The Credit Agreement shall be, and upon
the fulfillment of the conditions set forth in Section 3
hereof is, hereby amended by adding the following as a
new Section 7.24.:
SECTION 7.24. Special Accounting
Adjustment. For the purposes of calculating the
Interest Coverage Ratio and the Leverage Ratio, in
each case, solely for the fiscal quarters ended March
28, 1998, June 20, 1998 and September 12, 1998
the Borrowers may increase EBITDA by
$5,300,000.
1 SECTION CONDITIONS PRECEDENT
2
This Amendment shall become effective on
such date as the following conditions have been satisfied in
full or waived by the Agent in writing:
1.1 SECTION The Agent shall have received
in form and substance satisfactory to the Agent and its
counsel:
1.2
(a) Counterparts of this
Amendment executed by each Borrower, each
Guarantor, each Grantor and the Required Lenders
shall have been delivered to the Agent.
<PAGE>
(b) Such other approvals,
opinions or documents as the Agent may reasonably
request.
1.1 SECTION All representations and
warranties contained in this Amendment or otherwise made
in writing to the Agent in connection herewith shall be true
and correct in all material respects.
1.2
1.3 SECTION No unwaived Default or Event
of Default has occurred and is continuing.
1.4
1.5 SECTION Kaye, Scholer, Fierman, Hays
& Handler, LLP, counsel to the Agent, shall have received
payment in full for all legal fees charged, and all costs and
expenses incurred, by such counsel in connection with the
transactions contemplated under this Amendment and the
other Loan Documents and instruments in connection
herewith and therewith.
1 SECTION MISCELLANEOUS
2
2.1 SECTION Each of the Borrowers and
each Guarantor reaffirms and restates the representations
and warranties set forth in Article IV of the Credit
Agreement, as amended by this Amendment, and all such
representations and warranties shall be true and correct on
the date hereof with the same force and effect as if made on
such date (except insofar as such representation and
warranties relate expressly to an earlier date). Each of the
Borrowers and each Guarantor represents and warrants
(which representations and warranties shall survive the
execution and delivery hereof) to the Agent that:
(a) It has the corporate power and
authority to execute, deliver and carry out the terms
and provisions of this Amendment and has taken or
caused to be taken all necessary corporate action to
authorize the execution, delivery and performance
of this Amendment;
(a) No consent of any other person
(including, without limitation, shareholders or
creditors of any Borrower or a Guarantor), and no
action of, or filing with any governmental or public
body or authority is required to authorize, or is
otherwise required in connection with the
execution, delivery and performance of this
Amendment;
(a) This Amendment and the other
instruments and documents contemplated hereby
have been duly executed and delivered by a duly
authorized officer on behalf of such party, and
constitutes a legal, valid and binding obligation of
such party enforceable against such party in
accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors'
rights generally and the exercise of judicial
discretion in accordance with general principles of
equity; and
(a) The execution, delivery and
performance of this Amendment and the other
instruments and documents contemplated hereby
will not violate any law, statute or regulation, or any
<PAGE>
order or decree of any court or governmental
instrumentality, or conflict with, or result in the
breach of, or constitute a default under any
contractual obligation of such party.
1.1 SECTION Nothing herein shall be
deemed to be a waiver of any covenant or agreement
contained in the Credit Agreement, and each Borrower and
each Guarantor hereby agrees that all of the covenants and
agreements contained in the Credit Agreement and the
other Loan Documents are hereby ratified and confirmed in
all respects and shall remain in full force and effect in
accordance with their respective terms.
1.2
1.3 SECTION All references to the Credit
Agreement in the Credit Agreement or any other Loan
Document and the other documents and instruments
delivered pursuant to or in connection therewith shall mean
such Agreement as amended hereby and as each may in the
future be amended, restated, supplemented or modified
from time to time.
1.4
1.5 SECTION This Amendment may be
executed by the parties hereto individually or in
combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one
and the same agreement.
1.6
1.7 SECTION Delivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
1.1 SECTION This Amendment shall be
governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
1.2
1.3 SECTION The parties hereto shall, at any
time and from time to time following the execution of this
Amendment, execute and deliver all such further
instruments and take all such further action as may be
reasonably necessary or appropriate in order to carry out
the provisions of this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties have
caused this Amendment to be executed by their respective
officers thereunto duly authorized, as to the date first above
written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
McCARTY-HOLMAN CO., INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
<PAGE>
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and as Guarantor
By__________________________________
Name:
Title:
DELCHAMPS, INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
JJ CONSTRUCTION CORP.,
as Guarantor
By_________________________________
Name:
Title:
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By_________________________________
Name:
Title:
<PAGE>
FLEET CAPITAL CORPORATION,
as Agent
By_________________________________
Name:
Title:
FLEET CAPITAL CORPORATION,
as Lender
By_________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By_________________________________
Name:
Title:
HELLER FINANCIAL INC.,
as Lender
By__________________________________
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORP.,
as Lender
By_________________________________
Name:
Title:
<PAGE>
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By_________________________________
Name:
Title:
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By_________________________________
Name:
Title:
NATIONAL CITY BANK, as Lender
By_________________________________
Name:
Title:
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Lender
By__________________________________
Name:
Title:
FLEET BANK, N.A.,
as a Letter of Credit Issuer
By__________________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> JAN-04-1998
<CASH> 18,041
<SECURITIES> 0
<RECEIVABLES> 45,059
<ALLOWANCES> 0
<INVENTORY> 166,774
<CURRENT-ASSETS> 235,529
<PP&E> 473,109
<DEPRECIATION> 175,655
<TOTAL-ASSETS> 691,146
<CURRENT-LIABILITIES> 224,751
<BONDS> 0
71,452
9,973
<COMMON> 4
<OTHER-SE> (216,447)
<TOTAL-LIABILITY-AND-EQUITY> 691,146
<SALES> 2,054,126
<TOTAL-REVENUES> 2,054,126
<CGS> 1,511,985
<TOTAL-COSTS> 2,089,996
<OTHER-EXPENSES> 23,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,343
<INCOME-PRETAX> (35,870)
<INCOME-TAX> (5,689)
<INCOME-CONTINUING> (30,181)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,181)
<EPS-PRIMARY> (92.92)
<EPS-DILUTED> (92.92)
</TABLE>
