<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 22, 1997
--------------
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
COMMISSION FILE NUMBER 1-6814
BIG V SUPERMARKETS, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 14-1459448
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
176 NORTH MAIN STREET, FLORIDA, NEW YORK 10921
(Address of principal executive offices) (Zip Code)
(914) 651-4411
(Registrant's telephone number, including area code)
NOT APPLICABLE.
(Former name, former address and former fiscal year,
if changed since last report)
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 [_]
Shares of Common Stock outstanding as of April 30, 1997: 1,000 shares
This quarterly report on Form 10-Q is being filed voluntarily and shall not be
deemed to be subject to Section 18 of the Securities Exchange Act of 1934.
<PAGE>
BIG V SUPERMARKETS, INC.
FORM 10-Q FOR THE 12 WEEKS ENDED MARCH 22, 1997
INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Unaudited Consolidated Statements of Loss..................... 3
Unaudited Consolidated Balance Sheets......................... 4
Unaudited Consolidated Statements of Cash Flows............... 5
Notes to Unaudited Consolidated Financial Statements.......... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 7-10
PART II
OTHER INFORMATION
Item 1. Legal Proceedings............................................. 11
Item 2. Changes in Securities......................................... 11
Item 3. Defaults upon Senior Securities............................... 11
Item 4. Submission of Matters to a Vote of Security Holders........... 11
Item 5. Other Information............................................. 11
Item 6. Exhibits and Reports on Form 8-K.............................. 11
SIGNATURES............................................................... 12
</TABLE>
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<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Twelve For the Twelve
Weeks Ended Weeks Ended
March 22, 1997 March 23, 1996
---------------- ----------------
<S> <C> <C>
SALES $170,978,320 $175,552,807
---------------- ----------------
COSTS AND EXPENSES:
Cost of Sales (exclusive of
depreciation and amortization
shown separately below) 128,320,240 131,913,075
Selling, general and administrative 34,709,620 35,911,844
Depreciation and amortization 3,858,833 4,167,770
Interest expense, net of interest
income of $44,486 and $77,298
for the 12 weeks ended
March 22, 1997 and March 23, 1996,
respectively 5,948,795 5,756,930
---------------- ----------------
Total costs and expenses 172,837,488 177,749,619
---------------- ----------------
LOSS BEFORE INCOME TAXES (1,859,168) (2,196,812)
INCOME TAX BENEFIT 145,836 1,054,139
---------------- ----------------
NET LOSS $ (1,713,332) $ (1,142,673)
================ ================
</TABLE>
See notes to unaudited consolidated financial statements.
- 3 -
<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 22, 1997 DECEMBER 28, 1996/1/
----------------- ---------------------
<S> <C> <C>
ASSETS
- ----------------------------------
CURRENT ASSETS:
Cash $ 11,424,680 $ 10,595,208
Accounts receivable 10,938,756 13,066,647
Inventories 32,581,172 35,436,972
Refundable income taxes 100,660 120,000
Prepaid expenses and other current assets 3,141,295 3,433,463
------------- --------------------
Total current assets 58,186,563 62,652,290
PROPERTY AND EQUIPMENT - At cost, less accumulated
depreciation and amortization of $73,090,826 at
March 22, 1997 and $70,004,649
at December 28, 1996 69,579,190 72,304,447
GOODWILL - Less accumulated amortization of
$11,378,062 at March 22, 1997 and
$10,913,661 at December 28, 1996 67,931,069 68,395,470
INVESTMENT IN WAKEFERN FOOD CORPORATION 11,236,370 11,236,370
WAKEFERN WAREHOUSE AGREEMENT - Less accumulated
amortization of $6,443,875 at March 22, 1997
and $6,205,213 at December 28, 1996 34,924,213 35,162,875
OTHER ASSETS 15,319,895 14,865,650
------------- --------------------
TOTAL ASSETS $ 257,177,300 $ 264,617,102
============= ====================
LIABILITIES AND STOCKHOLDER'S DEFICIT
- -------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 33,518,241 $ 39,738,270
Accrued expenses and taxes other than
income taxes 12,892,583 15,028,037
Income taxes payable 2,491 17,000
Deferred income taxes 6,027,314 6,313,500
Current portion of long-term debt 10,029,344 10,959,354
Current portion of capitalized lease obligations 447,183 447,183
------------- --------------------
Total current liabilities 62,917,156 72,503,344
------------- --------------------
OTHER LONG-TERM LIABILITIES 6,434,322 6,246,950
------------- --------------------
LONG-TERM DEBT - Less current portion 169,514,729 165,589,901
------------- --------------------
CAPITALIZED LEASE OBLIGATIONS - Less current portion 36,510,968 36,614,164
------------- --------------------
DEFERRED INCOME TAXES 7,973,000 7,973,000
------------- --------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S DEFICIT
Common stock, par value, $1.00 per share;
authorized, 1,000 shares; issued, 1,000 shares 1,000 1,000
Paid-in capital 8,515,102 8,664,388
Accumulated deficit (34,688,977) (32,975,645)
------------- --------------------
Total stockholder's deficit (26,172,875) (24,310,257)
------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 257,177,300 $ 264,617,102
============= ====================
</TABLE>
/1/ Taken from the audited consolidated financial statements for the year
ended December 28, 1996.
See notes to unaudited consolidated financial statements.
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<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Twelve For the Twelve
Weeks Ended Weeks Ended
March 22, 1997 March 23, 1996
----------------- ---------------------
<S> <C> <C>
CASH BALANCE, BEGINNING OF PERIOD $ 10,595,208 $ 11,683,235
--------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (1,713,332) (1,142,673)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 3,858,833 4,167,770
Amortization of deferred debt costs 263,956 269,169
Amortization of discount on debt 36,427 (27,993)
Deferred income taxes (286,186) 349,740
Non-cash rent expense 187,372 154,834
Changes in assets and liabilities:
Decrease in accounts receivable 2,127,891 1,989,198
Decrease in inventories 2,855,800 1,263,343
Decrease (increase) in prepaid expenses 236,647 (495,854)
Decrease in refundable income taxes 19,340 48,000
Increase in other assets (718,201) (613,384)
Decrease in accounts payable (6,220,029) (7,298,380)
Decrease in accrued expenses (2,135,454) (2,932,942)
Decrease in income taxes payable (14,509) -
--------------- -------------------
Net cash used in operating activities (1,501,445) (4,269,172)
--------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (374,992) (764,742)
Sale of Connecticut stores - 6,706,261
--------------- -------------------
Net cash (used in) provided by
investing activities (374,992) 5,941,519
--------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt (3,070,362) (2,685,351)
Payments of capital lease obligations (103,196) (84,175)
Proceeds of long-term borrowings 28,753 25,709
Proceeds of revolver borrowings 6,000,000 500,000
Return of capital to Holding (149,286) -
--------------- -------------------
Net cash provided by
(used in) financing activities 2,705,909 (2,243,817)
--------------- -------------------
NET INCREASE (DECREASE) IN CASH 829,472 (571,470)
--------------- -------------------
CASH BALANCE, END OF PERIOD $ 11,424,680 $ 11,111,765
=============== ===================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 8,108,966 $ 8,222,807
Income taxes $ 14,509 $ 15,303
</TABLE>
During the period ended March 23, 1996, the Company's investment in Wakefern and
notes payable to Wakefern were reduced by $688,414 as a result of store
closings.
See notes to unaudited consolidated financial statements.
- 5 -
<PAGE>
BIG V SUPERMARKETS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. Basis of Presentation
---------------------
The unaudited consolidated financial statements as of March 22, 1997, included
herein have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and rule 10-01 of Regulation S-X promulgated by the Securities and
Exchange Commission. The balance sheet at December 28, 1996, has been taken
from the audited financial statements as of that date. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair presentation of the results of operations for the
period have been made; however, these results are not necessarily indicative of
the results for the entire fiscal year. Certain financial information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
Accordingly, reference is made to the consolidated financial statements and
notes thereto included in the Company's annual report on Form 10-K for the year
ended December 28, 1996.
2. Income Taxes
------------
Income taxes are based on the estimated effective tax rate expected to be
applicable for the full fiscal year in accordance with Accounting Standards
Board Opinion No. 28, "Interim Financial Reporting".
-6-
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
BASIS OF PRESENTATION
The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the unaudited financial
statements and notes thereto included elsewhere in this Form 10-Q.
<TABLE>
<CAPTION>
12 Weeks Ended 12 Weeks Ended
March 22, 1997 March 23, 1996
--------------- ---------------
<S> <C> <C>
INCOME STATEMENT DATA:
Sales................................................ 100.0% 100.0%
Gross profit......................................... 24.9 24.9
Selling, general and administrative.................. 20.3 20.5
EBITDA (1)........................................... 4.7 4.7
Depreciation and amortization........................ 2.3 2.4
Interest, net........................................ 3.5 3.3
------ ------
Loss before income taxes............................. (1.1) (1.3)
Income tax benefit................................... (0.1) (0.6)
------ ------
Net loss............................................. (1.0)% (0.7)%
====== ======
OTHER DATA (IN MILLIONS):
EBITDA............................................... $ 8.1 $ 8.2
====== ======
Net cash used in operating activities................ $ (1.5) $ (4.3)
====== ======
Net cash (used in) provided by investing activities $ (.4) $ 5.9
====== ======
Net cash provided by (used in) financing activities $ 2.7 $ (2.2)
====== ======
</TABLE>
__________
(1) EBITDA represents net earnings before interest expense, depreciation and
amortization, including non-cash losses on the sale of property, plant and
equipment, income taxes and LIFO provision/credit. EBITDA is a widely accepted
financial indicator of a company's ability to service and/or incur debt, and
also represents a primary debt covenant of the Company. Noncompliance with this
covenant would represent a default under the Company's debt agreements which
could subject the Company to debt acceleration if not waived or amended. EBITDA
should not be construed as an alternative to, or a better indicator of,
operating income (as determined in accordance with generally accepted accounting
principles) or to 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.
-7-
<PAGE>
RESULTS OF OPERATIONS
12 WEEKS ENDED MARCH 22, 1997 COMPARED TO 12 WEEKS ENDED MARCH 23, 1996
SALES
Total sales were $171.0 million and same store sales were $167.0 million
for the 12 week period ended March 22, 1997 compared to $175.6 million and
$171.4 million, respectively, for the comparable period in 1996. This represents
a decrease in total store and same store sales of 2.6%.
The decrease in total and comparable store sales was primarily the result
of the mild 1997 winter when compared to the record breaking snowfalls of 1996.
Sustained competitive activity in certain markets also contributed to the
decrease.
GROSS PROFIT
The gross profit percentage was 24.9% of sales for the 12 week periods
ended March 22, 1997 and March 23, 1996. The sustained gross profit percentage
was the result of scheduled margin reductions on product shipped to stores
offset by reductions in stock loss and continued improvements in mix. The lower
margins on product shipped to stores is to stimulate sales in response to
competitive activity.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The decrease in selling, general and administrative expense of .2% of
sales for the 12 week period ended March 22, 1997 over the prior period was
attributable to reduced medical expenses, reduced advertising and promotion
expense, and a lower Corporate payroll.
EBITDA
EBITDA was $8.1 million for the 12 week period ended March 22, 1997 and
$8.2 million for the 12 week period ended March 23, 1996. This represents a
1.4% decrease compared to the prior year period and was the direct result of the
decrease in total sales offset by savings in selling, general and administrative
expenses.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization, as a percentage of sales, was relatively
constant for the 12 week periods ended March 22, 1997 and March 23, 1996. The
whole dollar decrease of $0.3 million was due to the sale of the Connecticut
store assets in the first quarter of 1996.
-8-
<PAGE>
INTEREST, NET
The increase in interest, net, of approximately $0.2 million or 0.1% of
sales, for the 12 week period ended March 22, 1997 over the comparable period of
1996, resulted primarily from increased variable interest rates associated with
the senior bank term loans and higher average daily borrowings under the senior
bank revolving loans. The increase was partially offset by the impact of
paydowns on the senior bank term loans.
NET LOSS
Net loss was $1.7 million for the 12 weeks ended March 22, 1997, and $1.1
million for the 12 weeks ended March 23, 1996. Net loss increased .3% of sales
in the current quarter compared to the 1996 period and was directly attributable
to a .5% of sales decrease in the recorded income tax benefit. The decreased
tax benefit is the result of the Company's taxable income being offset by tax
loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
The Company's long-term debt (including current maturities and capital
leases) at March 22, 1997, was approximately $216.5 million. All mandatory
principal payments required by the various debt agreements were satisfied during
the 12 week period ended March 22, 1997.
The Company had a working capital ratio of approximately .9:1 at March 22,
1997 and December 28, 1996. The Company typically requires small amounts of
working capital since inventory is generally sold prior to the time that
payments to Wakefern Food Corp. and other suppliers are due. The Company's
primary source of liquidity during the 12 weeks ended March 22, 1997 were cash
flows generated through operations supplemented by increased revolver
borrowings.
Net cash used in operating activities was $1.5 million for the 12 week
period ended March 22, 1997 and $4.3 million for the 12 week period ended March
23, 1996. The decrease in net cash used in operating activities during the
current 12 week period was primarily due to the paydown in accounts payable and
accrued expenses partially offset by decreases in inventory and accounts
receivable.
Net cash used in investing activities was $0.4 million for the 12 week
period ended March 22, 1997. Net cash provided by investing activities was $5.9
million for the 12 week period ended March 23, 1996. The decrease in the
current 12 week period was related principally to the sale of the two
Connecticut stores on January 28, 1996.
-9-
<PAGE>
Net cash provided by financing activities was $2.7 million for the 12 week
period ended March 22, 1997 and net cash used in financing activities was $2.2
million for the 12 week period ended March 23, 1996. The increase in net cash
provided by financing activities during the current 12 week period was primarily
due to additional revolver borrowings offset by scheduled principal paydowns.
During the 12 weeks ended March 22, 1997, the aggregate effect of net cash
used in operating activities of $1.5 million, net cash used in investing
activities of $0.4 million and net cash provided by financing activities of $2.7
million, resulted in a net increase in cash of $0.8 million at March 22, 1997,
as compared to December 28, 1996.
For the 52 weeks ending December 27, 1997, the Company estimates that its
major uses of cash will be as follows: (i) cash interest payments (including
capitalized leases) of $23.1 million; (ii) capital expenditures of $12.9
million; and (iii) scheduled debt and capital lease payments of $16.6 million
(including the non-recourse demand note payable solely from the proceeds of the
sale of the Company's Baldwin Place Shopping Center located in Somers, New
York). Management continues to believe that operating cash flow, together with
borrowings under the bank revolving credit facility and equipment financings,
will be sufficient to meet the Company's operating needs, and scheduled capital
expenditures and will enable the Company to service its debt in accordance with
its terms.
The Bank Credit Agreement provides for a $26.0 million revolving credit
facility, under which there was $8.5 million outstanding as of March 22, 1997.
Additionally, $6.4 million was used from this facility for letters of credit and
bonding purposes. The Bank Credit Agreement requires that the Company maintain
minimum levels of consolidated net worth, EBITDA and fixed charge coverages, and
maximum levels of capital expenditures (each as defined in the Bank Credit
Agreement). The Company was in full compliance with all of its financial
covenants as of March 22, 1997 and management believes that the Company will
remain in compliance for the next 12 months.
-10-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Not applicable.
(b) Reports on Form 8-K
Not applicable.
-11-
<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.
BIG V SUPERMARKETS, INC.
Date: May 6, 1997 ______________________________________
James A. Toopes, Jr., Executive
Vice President-Finance, Administration
and Corporate Development
Date: May 6, 1997 ______________________________________
John Onufer, Jr., Vice President-
Controller
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> MAR-22-1997
<CASH> 11,424,680
<SECURITIES> 0
<RECEIVABLES> 11,879,564
<ALLOWANCES> 940,808
<INVENTORY> 32,581,172
<CURRENT-ASSETS> 58,186,563
<PP&E> 142,670,016
<DEPRECIATION> 73,090,826
<TOTAL-ASSETS> 257,177,300
<CURRENT-LIABILITIES> 62,917,156
<BONDS> 169,514,729
0
0
<COMMON> 1,000
<OTHER-SE> (26,173,875)
<TOTAL-LIABILITY-AND-EQUITY> 257,177,300
<SALES> 170,978,320
<TOTAL-REVENUES> 170,978,320
<CGS> 128,320,240
<TOTAL-COSTS> 128,320,240
<OTHER-EXPENSES> 3,858,833
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,948,795
<INCOME-PRETAX> (1,859,168)
<INCOME-TAX> (145,836)
<INCOME-CONTINUING> (1,713,332)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,713,332)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
