FORM 10-Q/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant To Section 13 or 15 (d) of
The Securities and Exchange Act of 1934
QUARTER ENDED March 28, 1998 COMMISSION FILE NO. 33-80833
JITNEY-JUNGLE STORES OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
STATE OF INCORPORATION I.R.S. EMPLOYER I.D. NO.
Mississippi 64-0280539
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE
1770 Ellis Avenue, Suite 200, Jackson, MS 39204
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE
601-965-8600
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, and (2) has
been subject to such filing requirements for the past 90 days.
YES (X) NO
The number of shares of Registrant's Common Stock, par value one
cent ($.01) per share, outstanding at May 1, 1998, was 424,150
shares.
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JITNEY-JUNGLE STORES OF AMERICA, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
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Item 1.Financial Statements:
Condensed Consolidated Balance Sheets
March 28, 1998 (restated) (Unaudited) and
January 3, 1998 2
Condensed Consolidated Statements of Operations
Twelve (12) Week Period Ended
March 28, 1998 (restated) (Unaudited) and
Twelve (12) Week Period Ended
March 29, 1997 (Unaudited) 3
Condensed Consolidated Statements of Changes in
Stockholders' Deficit Twelve (12) Week Periods
Ended March 28, 1998 (restated) (Unaudited) and
March 29, 1997 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Twelve (12) Week Periods Ended
March 28, 1998 (restated)(Unaudited) and
March 29, 1997 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements
March 28, 1998 (restated) (Unaudited)
March 29, 1997 (Unaudited) 6-8
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II.OTHER INFORMATION
Item 1.Legal Proceedings 12
Item 2.Change in Securities 12
Item 3.Defaults Upon Senior Securities 12
Item 4.Submission of Matters to a Vote of Security Holders 12
Item 5.Other Information 12
Item 6.Exhibits and Reports on Form 8-K 12-13
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PART I. ITEM 1. FINANCIAL STATEMENTS
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) March 28, January 3,
1998 1998
(Unaudited)
(as restated
see note 8)
ASSETS ----------- -----------
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Current assets:
Cash and cash equivalents $ 10,203 $ 11,984
Receivables 14,017 13,833
Merchandise inventories 154,005 162,786
Prepaid expenses and other 12,909 11,570
Deferred income taxes 10,917 15,681
---------- ----------
Total current assets 202,105 215,854
---------- ----------
PROPERTY AND EQUIPMENT - net 294,974 303,774
---------- ----------
Other assets
Goodwill, net of amortization of $1,831 at
March 28, 1998 and $1,105 at January 3, 1998 126,773 142,415
Other assets - net 34,655 32,237
---------- ----------
Total other assets 161,428 174,652
---------- ----------
TOTAL ASSETS $ 658,507 $ 694,280
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 107,300 $ 112,641
Accrued expenses 71,874 102,195
Current portion of capitalized leases 6,772 6,760
Restructuring obligations 11,194 14,927
---------- ----------
Total current liabilities 197,140 236,523
Noncurrent liabilities:
Long-term debt 490,114 449,831
Obligations under capitalized leases, excluding
current installments 66,997 68,321
Restructuring obligations, excluding current
installments 25,268 40,588
Other liabilities 181
Deferred income taxes - 3,875
---------- ----------
Total liabilities 779,700 799,138
Commitments and contingencies
Redeemable Preferred stock (aggregate liquidation
preference value of $66,970 at March 28, 1998 and
$65,077 at January 3, 1998) 64,983 63,042
Stockholders' deficit:
Class C Preferred stock - Series 1(at liquidation
value) 9,279 9,071
Common stock ($.01 par value, authorized 5,000,000
shares, issued 425,000 shares) 4 4
Additional paid-in capital (302,326) (302,326)
Retained earnings 106,877 125,351
---------- ----------
Total (186,166) (167,900)
Less - 850 shares in 1998 held in treasury at cost (10)
---------- ----------
Total stockholder's deficit (186,176) (167,900)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 658,507 $ 694,280
========= =========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Amounts)
Twelve Weeks Ended
March 28, March 29,
1998 1997
(Unaudited) (Unaudited)
(as restated,
see note 8)
------------ -----------
NET SALES $ 474,209 $ 281,623
------------ -----------
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COSTS AND EXPENSES:
Cost of goods sold 358,122 210,937
Direct store expenses 94,223 44,803
Warehouse, administrative
and general expenses 18,121 16,246
Interest expense - net 15,223 8,355
Acquisition integration costs
and other special charges 13,996
----------- -----------
Total costs and expenses 499,685 280,341
----------- -----------
Earnings (loss) before taxes on (25,476) 1,282
Income tax expense (benefit) (9,151) 477
------------ -----------
NET EARNINGS (LOSS) $ (16,325) $ 805
============ ===========
EARNINGS (LOSS) PER COMMON
SHARE - BASIC $ (43.57) $ (2.62)
============ ===========
EARNINGS (LOSS) PER COMMON
SHARE - DILUTED
$ (43.57) $ (2.62)
============ ===========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE TWELVE (12) WEEK PERIODS ENDED MARCH 28, 1998 (Unaudited)
AND MARCH 29, 1997 (Unaudited)
(Dollars in thousands)
Class C
Preferred Stock
Series 1 Common Stock Additional Treasury
No. of No. of Paid-In Retained Stock at
Shares Amount Shares Amount Capital Earnings Cost
------- ------ ------ ------ ---------- -------- --------
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Balance
Jan 4, 1997 76,042 $ 7,604 425,000 $ 4 $(302,312) $ 147,513
Net earnings 805
Accretion of discount on Class A
Preferred stock (48)
Cumulation of dividends on Class A
Preferred stock (928)
Merger costs (10)
Balance ------- ------ ------- ------ --------- -------- --------
March 29, 1997 76,042 $ 7,604 425,000 $ 4 $(302,322) $ 147,342 $ -
======= ====== ======= ====== ========= ======== ========
Balance
Jan 3, 1998 76,042 $ 9,071 425,000 $ 4 $(302,326) $ 125,351 $ -
Net loss (as restated, see note 8) (16,325)
Purchase of 850 shares of
treasury stock (10)
Accretion of discount on Class A
Preferred stock (48)
Cumulation of dividends on
Preferred stock 208 (2,101)
Balance ------ ------ ------- ------ --------- -------- --------
March 28, 1998 (as restated, see note 8) 76,042 $ 9,279 425,000 $ 4 $(302,326) $106,877 $ (10)
====== ====== ======= ====== ========= ======== ========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited) Twelve Weeks Ended
March 28, March 29,
1998 1997
(as restated
see note 8)
OPERATING ACTIVITIES: ----------- -----------
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Net earnings (loss) $ (16,325) $ 805
Adjustment to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 14,037 7,533
Gain on disposition of property and ot (39) (39)
Deferred income tax expense (benefit) (4,462) 49
Changes in current assets and liabilities,
net of effects of acquisition:
Receivables (184) 1,869
Store and warehouse inventories 9,561 180
Prepaid expenses (1,339) 2,669
Accounts payable (5,341) 11,834
Accrued expenses (13,812) (5,168)
Restructuring obligations (714)
---------- ----------
Net cash provided by (used in) (18,618) 19,732
operating activities ---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (6,064) (3,093)
Proceeds from sale of property and other assets 920 345
Purchase of Delchamps, Inc. (9,559)
Increase in other assets (3,302)
---------- ----------
Net cash used in investing
activities (18,005) (2,748)
---------- ----------
FINANCING ACTIVITIES:
Proceeds (payments) on long-term debt - net 40,283 (15,824)
Payments on capitalized lease obligations (1,312) (991)
Other (806)
Merger cost (10)
Purchase of treasury stock (10)
Restructuring obligations (3,313)
---------- ----------
Net cash provided by (used in) 34,842 (16,825)
financing activities ---------- ----------
(INCREASE) DECREASE IN CASH AND CASH EQUIVALENTS (1,781) 159
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 11,984 7,642
---------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 10,203 $ 7,801
========== ==========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 25,534 $ 14,555
========== ==========
Cash paid for income taxes, net of refunds $ 11 $ 5
========== ==========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 28, 1998 (Unaudited) AND MARCH 29, 1997
(Unaudited)
(Dollars in thousands)
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements
include those of Jitney-Jungle Stores of America, Inc. and its
wholly-owned subsidiaries, Southern Jitney Jungle Company,
Interstate Jitney-Jungle Stores, Inc., McCarty-Holman Co., Inc.
and subsidiary, Jitney-Jungle Bakery, Inc., Delchamps Inc. and
subsidiary and JJ Construction Corp. All material intercompany
profits, transactions and balances have been eliminated.
These interim financial statements have been prepared on the
basis of accounting principles used in the annual financial
statements for the 35 weeks ended January 3, 1998. In the
opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (all of
which were of a normal recurring nature) necessary for a fair
statement of consolidated financial position and results of
operations of the Company for the interim periods. The results
of operations of the Company for the twelve weeks ended March
28, 1998, are not necessarily indicative of the results which may
be expected for the entire year.
The Company changed its fiscal year end on January 3, 1998 to
the closest Saturday to December 31. Previously, the Company
reported its fiscal year end results as of the Saturday nearest to
April 30. Data included herein for the first quarter of fiscal 1997
reflects the unaudited results of operations for the twelve weeks
ended March 29, 1997.
2. ACQUISITION
In September 1997, the Company acquired the majority of the
common stock of Delchamps, Inc. Certain shareholders
dissented from the merger and indicated that they will pursue
their appraisal remedy under Alabama law. Management does
not expect this matter to have a material affect on operations or
the price of the acquisition. The acquisition was accounted for
as a purchase and, accordingly, Delchamps' results of
operations were included in the Company's consolidated
financial statements subsequent to the acquisition date.
The purchase price, net of cash acquired of $84, has been
allocated to the assets acquired and liabilities assumed based
upon the estimated fair values at the date of acquisition, as set
forth below. Any variation between such amounts and the final
allocation will change the amount of goodwill recognized in
connection with the Delchamps acquisition and the related
amortization expense. The allocation could be affected by,
among other things, a final determination of amounts to be paid
to former shareholders of Delchamps who dissented from the
merger (and related professional fees) and of costs to be
incurred related to Delchamps facilities identified by
management for closure. Management believes, however that
when the final valuation of the net assets acquired is complete,
the allocation of the purchase price will not differ materially
from the amounts shown herein.
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Receivables and other current assets $ 12,569
Inventory 101,199
Property, equipment and leasehold improvements 116,431
Deferred income tax asset 10,428
Other assets 2,106
Goodwill 135,454
Accounts payable and accrued expenses (74,643)
Notes payable and long-term debt, immediately repaid (14,463)
Capital lease obligations (10,794)
Restructuring obligation (41,967)
____________
Net purchase price $ 236,320
============
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3. RESTRUCTURING OBLIGATIONS
In connection with the Delchamps acquisition, the Company
recorded a restructuring obligation of $42,860 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. The $42,860 consists of
future rental payments, severance costs, loss on divestiture of
fixed assets, and miscellaneous expenses related mainly to the
shutdown of the Mobile and Hammond facilities.
Of the total restructuring costs, $41,967 was recorded as
goodwill as part of the purchase price allocation in the
Delchamps acquisition and $893 was included as a special
charge in the statement of operations, $599 in the 35 weeks
ended 1-3-98 and $294 in the first quarter of fiscal 1998.
4. ACQUISITION INTEGRATION COSTS AND OTHER SPECIAL CHARGES
Acquisition integration costs and other special charges consisted
of $13,452 of business integration costs related to Delchamps,
severance benefits of $250 and loss of $294 on stores sold
under the consent decree with the Federal Trade Commission in
the Delchamps acquisition.
5. LONG-TERM DEBT
Long-term debt consisted of the following:
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March 28, January 3,
1998 1998
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Senior notes at 12%, maturing in 2006 $ 200,000 $ 200,000
Senior subordinated notes at 10.38% 200,000 200,000
maturing in 2007
Senior Credit Facility 90,114 49,831
--------- ---------
Long-term debt $ 490,114 $ 449,831
========= =========
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The Company has available a Senior Credit Facility of $150
million under which letters of credit aggregating $12,152 were
outstanding at March 28, 1998.
6. EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is based on net income
(loss) after preferred stock dividend requirements and
the weighted average number of shares outstanding during each
interim period. Cumulative dividends not declared or paid on
preferred shares amounted to $2,101 for the twelve weeks
ended March 28, 1998. The number of shares used in
computing basic and diluted earnings (loss) per share was
424,150 for the twelve weeks ended March 28, 1998 and 425,000
for the twelve weeks ended March 29, 1997. Potential common shares
attributed to outstanding warrants were not included in the
computation of diluted earnings per share as their effect on
earnings (loss) per share would be antidilutive.
7. COMMITMENTS AND CONTINGENCIES
The Company is a party to certain litigation incurred in the
course of business. In the opinion of management, the ultimate
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.
8. RESTATEMENT
Subsequent to the issuance of the Company's Quarterly
Report on Form 10-Q for the 12 weeks ended March 28,
1998, the Company determined that certain amounts
recorded in connection with the Delchamps acquisition,
during the quarter ended March 28, 1998, should have been
charged to expense as incurred.
During the 12 weeks ended March 28, 1998, the
Company recorded additional goodwill and restructuring
obligations related primarily to consolidating
warehouse and office facilities, remerchandising
of Delchamps stores, training of Delchamps
employees, and other related items.
Such amounts should have been recognized as cost of
goods sold and expenses as incurred.
A summary of the significant effects of the restatement are
as follows:
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As
Previously As
Reported Restated
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At March 28, 1998
Goodwill $ 150,982 $ 126,773
Restructuring obligations, current 12,780 11,194
Restructuring obligations, excluding current
portion 37,275 25,268
Retained earnings 117,780 106,877
For the twelve weeks ended March 28, 1998
Cost of goods sold 356,052 358,122
Acquisition integration costs and other
special charges 544 13,996
Total costs and expenses 482,891 499,685
Earnings before taxes on income (8,682) (25,476)
Income tax benefit (3,260) (9,151)
Net earnings (5,422) (16,325)
Net loss per share - basic and diluted $ (17.73) $ (43.57)
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands)
The following is management's discussion and analysis of
significant factors affecting the Company's earnings during the
periods included in the accompanying condensed consolidated
statements of operations.
Subsequent to the issuance of the Company's Quarterly
Report on Form 10-Q for the 12 weeks ended March 28,
1998, the Company determined that certain amounts
recorded in connection with the Delchamps acquisition,
during the quarter ended March 28, 1998, should have
been charged to expense as incurred.
During the 12 weeks ended March 28, 1998, the
Company recorded additional goodwill and certain of these
costs (princpally related to store closures) have not been
restated while 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 Emerging Issues Task Force (EITF)
Releases 94-3 ("Recognite of Liabilities in connection with
a Purchase Business Combination"). The effects of the
restatement are presented in Note 8 of Notes to Condensed
Consolidated Financial Statements and have been reflected
herein.
A table showing the percentage of net sales represented by certain
items in the Company's condensed consolidated statements of
operations is as follows:
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Twelve Weeks Ended
March 28, March 29,
1998 1997
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Net sales 100.0 % 100.0 %
Gross profit 24.5 25.1
Direct store expenses 19.9 15.9
Warehouse, administrative
and general expenses 3.8 5.8
Operating income 0.8 3.4
Interest expense, net 3.2 3.0
Acquisition integration costs and other 3.0
special charges
Earnings (loss) before income taxes (5.4) 0.5
Provisions for income taxes (1.9) 0.2
Net earnings (loss) (3.4) 0.3
EBITDA 3.6 6.1
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A summary of the period to period changes in certain items
included in the condensed consolidated statements of operations for
the twelve week periods ended March 28, 1998 and March 29, 1997
is as follows:
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Period-to-Period Changes
Twelve Weeks Ended
March 28, 1998
$ %
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Net sales $ 192,586 68.4 %
Gross profit 45,401 n/m
Direct store expenses 49,420 n/m
Warehouse, administrative
and general expenses 1,875 7.0
Operating income (5,894) (61.2)
Interest expense, net 6,868 82.2
Acquisition integration and other 13,996 n/m
special charges
Earnings (loss) before income taxes (26,758) n/m
Provision for income taxes (9,628) n/m
Net earnings (loss) (17,130) n/m
EBITDA 437 2.5
(n/m - not meaningful comparison)
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RESULTS OF OPERATIONS
NET SALES
Net sales increased $192,586 or 68.4% in the twelve week period
ended March 28, 1998 as compared to the corresponding period
ended March 29, 1997. The net sales increase was primarily
attributable to the acquisition of Delchamps, Inc. Same store sales
decreased approximately 6.3% for the twelve week period ended
March 28, 1998. Same store sales were impacted by Easter being
in March last year and April this year. In addition, sales for this
quarter are matching up against strong sales for the same period last
year due to the launching of a frequent shopper card in
approximately 79 supermarkets in January 1997. Additionally,
toward the end of the first quarter of fiscal 1998, the Company
launched the frequent shopper card in 52 Delchamps supermarkets
and has launched the frequent shopper card in the remaining
Delchamps stores subsequent to the end of the quarter. Another
factor which affected sales included 17 stores which were sold or
closed during the first quarter ended March 28, 1998 including 10
stores which were required to be sold by the Federal Trade
Commission due to the Delchamps acquisition. The Company's
store count at the end of the quarter was 200 supermarkets (20
discount stores, 169 conventional stores and 11 combination stores)
and 53 gasoline stations as compared to 105 supermarkets (27
discount stores, 76 conventional stores and 2 combination stores)
and 52 gasoline stations at March 29, 1997.
GROSS PROFIT
Gross profit for the first quarter of fiscal 1998 increased $45,401 to
$116,087, or 24.5% of net sales, compared to $70,686, or 25.1% of
net sales, for the first quarter of fiscal 1997. Gross profit increased
primarily due to the increase in net sales (due to the Delchamps
acquisition). The decrease in gross profit as a percentage of net
sales is principally due to having a different product mix this year
compared to last year. In addition, in the first quarter of 1998,
$2,070 was charged to excess shrink associated with Delchamps
acquisition in the consolidated statement of operations.
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DIRECT STORE EXPENSES
Direct store expenses were $94,223 or 19.9% of net sales and
$44,803 or 15.9% of net sales for the twelve week period ended
March 28, 1998 and March 29, 1997, respectively. Direct store
expenses increased primarily due to an increase in net sales (due to
the Delchamps acquisition). The increase in direct store expenses
as a percentage of net sales in the first quarter of fiscal 1998 was
primarily in the areas of rent, labor and advertising expense. Rent
expense in the Delchamps stores is more than twice that of the other
Company stores. The store labor increase as a percentage of sales
was principally due to the Delchamps transition. The increase in
advertising as a percentage of sales was primarily due to the
launching of the frequent shopper card in the Delchamps stores and
also attributable to running two advertising departments (one in
Mobile, AL and the other in Jackson, MS) for part of the quarter.
The advertising department in Mobile was closed in the first quarter
of fiscal 1998.
WAREHOUSE, ADMINISTRATIVE AND GENERAL EXPENSES
Warehouse, administrative and general expenses were $18,121 or
3.8% of net sales and $16,246 or 5.8% of net sales for the twelve
week period ended March 28, 1998 and March 29, 1997
respectively. The decrease in warehouse, administrative and
general expenses as a percent of sales was primarily due to (i)
additional sales, (ii) a decrease in warehouse costs as a result of the
closing of the Hammond, LA distribution center during the quarter
and (iii) a decrease in administrative expenses as a result of the
closing of the Mobile headquarters (which was approximately 80%
complete at the end of the first quarter of fiscal 1998).
ACQUISITION INTEGRATION COSTS AND OTHER SPECIAL CHARGES
Acquisition integration costs and other special charges were
$13,996 for the twelve week period ended March 28, 1998.
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,
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remerchandising of the Delchamps stores, and training of
Delchamps employees have been written off as acquisition
costs in accordance with the EITF guidelines. Other special
charges included severance benefits of $250 and loss of $294
on stores sold under the consent decree with the Federal Trade
Commission in the Delchamps acquisition and business integration
costs of $13,452 related to Delchamps.
OPERATING INCOME
Operating income was $3,743 or 0.8% of net sales for the twelve
week period ended March 28, 1998 as compared to $9,637 or 3.4%
of net sales for the twelve week period ended March 29, 1997. The
decrease in operating income was due to the factors discussed
above.
EBITDA
EBITDA (net income before interest income, special charges,
interest expense, income taxes, depreciation and amortization and
LIFO charges/credits) was $17,607 or 3.7% of net sales in the first
quarter of fiscal 1998 as compared to $17,170 or 6.1% of net sales
in the first quarter of fiscal 1997. 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.
NET INTEREST EXPENSE
Interest expense was $15,222 in the first quarter of fiscal 1998 as
compared to $8,355 in the first quarter of fiscal 1997. The increase
in interest expense was primarily due to interest expense on the
$200 million Senior subordinated notes issued in September 1997.
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INCOME TAX EXPENSE (BENEFIT)
Income taxes were ($9,151) with an effective tax rate of 35.9% for
the first quarter of fiscal 1998 and $477 with an effective tax rate of
37.2% for the first quarter of fiscal 1997. The decrease in income
taxes was principally due to lower pretax earnings.
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. At March 28, 1998,
Jitney-Jungle had $563,883 of total long-term debt (including
capitalized leases and current installments) and a shareholders
deficit of $186,176.
The Company's principal uses of liquidity have been to fund
working capital, meet debt service requirements and finance Jitney-
Jungle's strategic plans. The Company's principal sources of
liquidity have been cash flow from operations and borrowings
under the Senior Credit Facility. Outstanding borrowings at March
28, 1998 were $90,114 under the Senior Credit Facility.
Cash used in operating activities during the twelve week period
ended March 28, 1998 was $18,618. Cash provided by operating
activities during the twelve week period ended March 29, 1997 was
$19,732. Accrued expenses decreased during the first quarter
primarily due to the payment of interest on Senior Notes, Senior
Subordinated Notes and the Senior Credit Facility. Inventories
decreased due to the consolidation of the warehouses and the
closure or sale of certain stores during the first quarter.
Net cash used in investing activities was $18,005 and $2,748 for the
twelve week period ended March 28, 1998 and March 29, 1997,
respectively. Cash was primarily used for the purchase of
Delchamps, Inc. and capital expenditures.
Net cash provided by financing activities was $34,842 for the
twelve week period ended March 28, 1998 and net cash used was
$16,825 for the twelve week period ended March 29, 1997. The
principal sources of funds in financing activities for the first quarter
of fiscal 1998 were the proceeds of principal on long-term debt.
The principal uses of funds in financing activities for the first
quarter of fiscal 1998 were the payment of capital lease obligations
and restructuring obligations.
The Company believes that capital expenditures for the remainder
of fiscal 1998 will be financed through cash flows from operations
and borrowings under its Senior Credit Facility. Capital
expenditure plans are continuously evaluated and modified from
time to time depending on cash availability and other economic
factors.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to certain litigation incurred in the course
of business. In the opinion of management, the ultimate 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.
ITEM 2. CHANGE IN SECURITIES
None.
<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
--------------
* 27.1 Financial Data Schedule
* Filed herewith.
(b) Reports on Form 8-K
On February 25, 1998, the Company filed a Current Report
on Form 8-K stating under "Item 2. Acquisition or Disposition of
Assets" that Jitney-Jungle sold ten grocery stores to Supervalu
Holdings, Inc. and affiliated companies (Supervalu") and four
grocery stores to Bruno's, Inc. (Bruno's). The sale to Supervalu
was finalized as of February 12, 1998. The sale to Bruno's was
finalized as of February 18, 1998.
SUPERVALU paid approximately $7.4 million in cash for
the equipment and inventory of ten stores located in Gulfport (three
stores), Hattiesburg (two stores), Biloxi, Vicksburg and Waveland,
Mississippi, and Pensacola, FL (two stores). Bruno's paid
approximately $2.3 million in cash for the equipment and inventory
of four stores located in Montgomery (two stores), Prattville and
Tuscaloosa, Alabama.
The sale to SUPERVALU was made pursuant to a Federal
Trade Commission ("FTC") Consent Order dated January 29, 1998,
approving the Agreement containing Consent Order entered into on
September 11, 1997, by and among Jitney-Jungle, Delchamps, Inc.,
Bruckmann, Rosser Sherrill & Co., L.P., Delta Acquisition
Corporation and the FTC in connection with the merger of Jitney-
Jungle and Delchamps, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
JITNEY-JUNGLE STORES OF AMERICA, INC.
(Registrant)
/s/ Richard D. Coleman
-----------------------
Richard D. Coleman
(Executive Vice President,
Chief Financial Officer)
(Principal Financial and
Accounting Officer)
Dated: May 12, 1998
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<PERIOD-START> JAN-04-1998
<PERIOD-END> MAR-28-1998
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