SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 12B-25
Commission File Number: 2-60487
NOTIFICATION OF LATE FILING
Form 10-K Form 11-K Form 20-F X Form 10-Q
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Form N-SAR
For Period Ended: April 3, 1998
___ Transition Report on Form 10-K ___ Transition Report on Form 10-Q
___ Transition Report on Form 20-F ___ Transition Report of Form N-SAR
___ Transition Report on Form 11-K
For the Transition Period Ended:
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Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.
PART I
REGISTRANT INFORMATION
Full name of registrant: United Grocers, Inc.
Address of principal executive office (Street and number):
6433 S.E. Lake Road (Post Office Box 22187), Milwaukie, Oregon 97269
PART II
RULE 12B-25 (b) AND (c)
The subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b).
X (a) The reasons described in reasonable detail in Part III of
this form could not be eliminated without unreasonable effort
or expense;
(b) The subject annual report on Form 10-K will be filed on or
before the fifteenth calendar day following the prescribed due
date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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PART III
NARRATIVE
In the past, United Grocers, Inc. (the "Company"), has filed quarterly
and annual reports with the Securities and Exchange Commission ("SEC") pursuant
to Section 15(d) of the Securities Exchange Act of 1934. The Company, a
cooperative, was required to file periodic reports because the Company
registered and sold notes as well as common stock. The Company halted note sales
in June 1997, and is now in the process of seeking legal advice from Washington,
D.C., counsel regarding alternatives for obtaining a suspension from the duty to
file periodic reports with the SEC. The Company hopes to be able to discontinue
all periodic reporting. If suspension from filing duties is a possibility,
preparation of a quarterly report at this time would impose an unnecessary and
burdensome effort and expense on the Company.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
Mark Tweedie, Vice President (503) 833-1000
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d)
of the Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed?
Yes X No
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A Form 12b-25 Notification of Late Filing was filed on January 2, 1998,
with respect to the Company's Form 10-K for the fiscal year ended October 3,
1997, and on February 17, 1998, with respect to the Company's Form 10-Q for the
quarter ended January 2, 1998.
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof?
X Yes No
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If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.
In the course of preparing financial statements as of October 3, 1997,
and the year then ended, Company management determined that previously issued
financial statements, including those as of September 27, 1996, and the fiscal
year then ended (as well as
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subsequent interim periods) should be restated. A restatement of the financial
statements as of March 28, 1997, and the quarter then ended, has not been
completed. Therefore, a reasonable estimate of the results of operations for the
quarter ended April 3, 1998, as compared to the quarter ended March 28, 1997,
cannot be made. A press release containing additional information regarding the
Company's recent results of operations is attached.
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United Grocers, Inc., has caused this notification to be signed on its
behalf by the undersigned thereunto duly authorized.
Date 5/19/98 By /s/ Mark Tweedie
Mark Tweedie
Vice President
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Press Release 5/19/98
United Grocers, Inc. (the "Company") released its financial statements for the
first half of fiscal year 1998 today. For the six periods ended April 3, 1998,
the Company reported revenues of $608 million and net income from normal
operations of approximately $500,000. However, after taking into account certain
extraordinary charges, the Company recorded a net loss of $2.8 million.
The reported loss included extraordinary costs of $3.7 million net of any
benefits associated with the closure of the Company's Medford distribution
facility, transfer of the grocery volume originally handled by the Medford
facility into the Portland and Modesto/Tracy distribution facilities, and the
consolidation of the Company's California operations. The closure of the Medford
facility and consolidation of the California operations was completed in March.
The positive impact of consolidating $270 million of volume from the Medford
facility into the two remaining facilities is projected to save $1.8 million
annually. In addition, the Company incurred an estimated $1.5 million of
extraordinary expenses associated with the restructuring of the Company. These
initiatives, combined with a revised sell plan that was implemented at the
beginning of the third quarter, are projected to generate $13 to 15 million of
annualized operating income.
Subsequent to the end of the Company's second quarter, the Company reported
several positive events related to the sale of its non-core businesses.
On May 5, 1998, the Company closed the sale of its Rich & Rhine division to KERO
Investments Inc.
On May 15, 1998, the Company completed the sale of its Cash and Carry division
to Smart and Final. Under the terms of the agreement, the Company has retained a
five year supply agreement to service the Cash & Carry stores in its northern
division.
On May 15, 1998, the Company signed a definitive purchase agreement to sell its
Grocers Insurance Group to Orion Capital Corporation. Application has been made
to the appropriate regulatory agencies required to complete the transaction and
the Company anticipates that the transaction will close on or before July 30,
1998.
The Company reported that it is in compliance with all of the covenants under
its primary bank agreement for the fiscal quarter ended April 3, 1998.
The Company reported that it is current with all of its vendors and that the
Company's liquidity position continues to improve as a result of the Company's
major lenders agreeing to permit the Company to share a portion of the proceeds
from the sale of the Company's non-core assets for working capital.
The Company anticipates that it will sign a definitive joint venture agreement
with Associated Grocers of Seattle in the near future, with implementation
scheduled to begin in September of this year.
Attached is a copy of the unaudited consolidated financial statements for United
Grocers, Inc. for the six periods ended April 3, 1998.
Although the Company remains optimistic about the future, as with all
forward-looking statements, the forward-looking statements made by the Company
in this release are subject to uncertainties that could cause actual results to
differ materially from those projected, including without limitation,
uncertainties inherent in business plans and the changing of business methods,
uncertainties related to the response of customers and suppliers to changing
business strategies, uncertainties concerning the outcome of planned sales of
subsidiaries, and uncertainties with respect to the future availability of
financing.
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UNITED GROCERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
APRIL 3, 1998
(in thousands, except share data)
ASSETS
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Current assets:
Cash and cash equivalents $ 12,326
Investments restricted or maintained for insurance reserves 48,265
Accounts and notes receivable, net 72,018
Inventories 84,451
Other current assets 6,678
Deferred income taxes 10,123
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Total current assets 233,861
Notes receivable 15,513
Investments in affiliated companies 6,971
Other receivables and investments 4,059
Deferred income taxes 553
Other assets, net 15,814
Property, plant and equipment, net 53,987
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$ 330,758
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LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Notes payable, current portion $ 50,265
Accounts payable 77,193
Insurance reserves 26,611
Compensation and taxes payable 8,151
Other accrued expenses 7,327
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Total current liabilities 169,547
Notes payable, net of current portion 135,868
Deferred gains on sale-leasebacks 3,984
Other liabilities 8,432
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Total liabilities 317,831
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Redeemable members' equity 1,120
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Members' equity:
Common stock--authorized, 10,000,000 shares at $5.00 par value; issued
and outstanding, 586,834 shares 2,934
Additional paid-in capital 22,886
Accumulated deficit (14,275)
Unrealized gain on investments 262
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Total members' equity 11,807
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$ 330,758
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UNITED GROCERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX PERIODS ENDED APRIL 3, 1998
(in thousands)
Net sales and operations $ 608,312
Costs and expenses:
Cost of sales 523,806
Operating expenses 62,360
Selling and administrative expenses 11,919
Depreciation and amortization 5,245
Interest:
Interest expense 7,632
Interest income (2,510)
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Interest expense, net 5,122
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Total costs and expenses 608,452
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Loss before members' allowances and income tax benefit (140)
Members' allowances (4,600)
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Loss before income tax benefit (4,740)
Income tax benefit 1,896
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Net loss $ (2,844)
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