UNITED GROCERS, INC., AND SUBSIDIARIES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
--------------------------------------------
Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
--------------------------------------------
For the Quarterly period ended July 2, 1999
Commission File Number 2-60487
United Grocers, Inc.
(Exact name of registrant as specified in its charter)
Oregon 93-0301970
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
6433 S.E. Lake Road
Post Office Box 22187, Milwaukie, Oregon 97269
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 833-1000
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 [ ] No [X]
Indicate the number of shares outstanding for each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at July 30, 1999
Common shares, $5 par value 505,122 shares
1
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
INDEX
PART I: Financial Information Pages
-----
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the quarters and year-to-date periods
ended July 2, 1999 and July 3, 1998...................3-4
Condensed Consolidated Balance Sheets as of
July 2, 1999 and October 2, 1998......................5-6
Condensed Consolidated Statements of Cash Flows
for the year-to-date periods ended July 2, 1999
and July 3, 1998..................................... 7
Notes to the Condensed Consolidated Financial
Statements...........................................8-9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................................10-15
Item 3. Quantitative and Qualitative Disclosures
about Market Risk....................................15
PART II: Other Information
Item 2. Changes in Securities and Use of Proceeds............16
Item 6. Exhibits and Reports on Form 8-K.....................16
SIGNATURE...............................................................16
2
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter ended Quarter ended
July 2, 1999 July 3, 1998
------------- -------------
<S> <C> <C>
Net sales and operations $ 259,762,038 $ 292,939,434
------------ ------------
Costs and expenses:
Cost of sales 224,385,874 250,136,523
Members' allowances 4,319,079 4,460,984
Operating expenses 25,020,951 26,138,718
Selling and administrative
expenses 5,152,799 4,876,842
Depreciation and amortization 2,566,285 2,585,031
------------ ------------
Total costs and expenses 261,444,988 288,198,098
------------- ------------
Other (income)/expense:
Interest expense 2,127,893 3,597,476
Interest income ( 555,472) ( 632,230)
Gain on sale of retail operations - (26,213,972)
------------- -------------
Total other (income)/expense 1,572,421 (23,248,726)
------------- -------------
Income (loss) from continuing operations
before income taxes (3,255,371) 27,990,062
(Provision) benefit for income taxes 1,302,147 (11,195,881)
------------ -------------
Income (loss) from continuing
operations (1,953,224) 16,794,181
Discontinued operations (Note 3), less
applicable income taxes of $279,140
in 1998 - 418,710
------------ -------------
Net income (loss) $ (1,953,224) $17,212,891
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Year-to-date Year-to-date
period ended period ended
July 2, 1999 July 3, 1998
------------ ------------
<S> <C> <C>
Net sales and operations $ 775,430,982 $ 893,813,267
------------- ------------
Costs and expenses:
Cost of sales 667,883,168 771,652,586
Members' allowances 13,602,320 9,060,625
Operating expenses 68,659,066 83,214,358
Selling and administrative
expenses 16,405,754 16,795,355
Depreciation and amortization 7,413,008 7,715,001
------------- ------------
Total costs and expenses 773,963,316 888,437,925
------------- ------------
Other (income)/expense:
Interest expense 7,068,804 11,229,345
Interest income ( 1,912,722) (1,329,902)
Gain on sale of retail operations - (26,213,972)
------------- ------------
Total other (income)/expense 5,156,082 (16,314,529)
------------- ------------
Income (loss) from continuing operations
before income taxes (3,688,416) 21,689,871
(Provision) benefit for income taxes 1,475,367 (8,675,805)
------------- ------------
Income (loss) from continuing
operations (2,213,049) 13,014,066
Discontinued operations (Note 3), less
applicable income taxes of $903,476
in 1998 - 1,355,185
------------- ------------
Net income (loss) $ (2,213,049) $14,369,251
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS July 2, 1999 October 2, 1998
--------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,907,426 $ 1,294,137
Accounts and notes receivable, net 64,581,572 67,269,129
Inventories 69,715,997 68,898,336
Other current assets 5,918,020 5,115,026
Deferred income taxes 1,525,237 1,525,237
------------ ------------
Total current assets 145,648,252 144,101,865
------------ ------------
Non-current assets:
Notes receivable 20,143,317 29,201,865
Investment in affiliated companies 3,353,925 3,359,579
Other receivables 3,169,321 3,032,683
Property, plant and equipment, net 30,385,599 37,913,621
Other assets, net 13,128,370 16,032,195
------------ ------------
Total non-current assets 70,180,532 89,539,943
------------ ------------
TOTAL $215,828,784 $233,641,808
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
LIABILITIES AND MEMBERS' EQUITY July 2, 1999 October 2, 1998
-------------- -----------------
<S>
<C> <C>
Current liabilities:
Notes payable, current portion $55,688,457 $ 41,159,191
Accounts payable 57,839,813 59,675,586
Compensation and taxes payable 4,578,124 6,335,369
Other current liabilities 2,707,756 5,778,587
------------ ------------
Total current liabilities 120,814,150 112,948,733
Notes payable, net of current portion 56,596,304 74,433,616
Other liabilities 9,047,833 11,011,261
------------ ------------
Total liabilities 186,458,287 198,393,610
------------ ------------
Redeemable members' equity (includes 33,965 1,885,737 3,905,070
and 93,085 shares outstanding, respectively)
Members' equity:
Common stock -- authorized, 10,000,000
shares at $5.00 par value;
net issued and outstanding,
508,479 and 523,955 shares, respectively 2,542,395 2,619,775
Additional paid-in capital 18,826,331 20,394,270
Retained earnings 6,116,034 8,329,083
------------ ------------
Total members' equity 27,484,760 31,343,128
------------ ------------
TOTAL $215,828,784 $233,641,808
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION> Year-to-date Year-to-date
period ended period ended
July 2, 1999 July 3, 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ (2,213,049) $ 14,369,251
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities (2,932,290) (13,095,299)
------------- -------------
Net cash provided by (used in)
operating activities (5,145,339) 1,273,952
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to members ( 357,605) (1,647,219)
Collections on loans 8,966,153 2,603,304
Proceeds from sale of member loans - 1,550,163
Redemption of investments - 8,685,147
Purchase of investments - (3,166,617)
Sale of property, plant and equipment 7,912,268 12,898,495
Purchase of property, plant and equipment (1,789,490) (1,870,052)
Proceeds from sale of retail operations,
net - 40,279,545
------------- -------------
Net cash provided by investing activities 14,731,326 59,332,766
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 762,690 -
Repurchase of common stock (4,427,342) -
Proceeds from (repayment of)
long-term liabilities:
Revolving bank lines of credit, net 5,115,653 (46,669,230)
Mortgages and notes (1,693,215) ( 5,969,186)
Redeemable notes and certificates (6,730,484) ( 2,520,500)
------------- -------------
Net cash used in financing activities (6,972,698) (55,158,916)
------------- -------------
Net increase in cash and
cash equivalents 2,613,289 5,447,802
Cash and cash equivalents,
beginning of period 1,294,137 10,223,434
------------- -------------
Cash and cash equivalents, end of period $ 3,907,426 $ 15,671,236
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. MANAGEMENT'S STATEMENT
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the consolidated financial position of United
Grocers, Inc. and subsidiaries (the Company) at July 2, 1999 and the
consolidated results of operations for the quarterly and the year-to-date
periods ended July 2, 1999 and July 3, 1998 and consolidated cash flows for the
year-to-date periods ended July 2, 1999 and July 3, 1998. The Notes to the
Condensed Consolidated Financial Statements which are contained in the Company's
1998 Annual Report on Form 10-K to Shareholders should be read in conjunction
with these Condensed Consolidated Financial Statements.
Operating results for the period ended July 2, 1999 are not necessarily
indicative of the results that may be expected for the entire fiscal year ending
October 1, 1999, or any other period.
Note 2. ACCOUNTING PRONOUNCEMENTS
In February 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits" ("SFAS 132"). This
statement revises employers' disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans.
The statement suggests combined formats for presentation of pension and other
postretirement benefit disclosures. The statement is effective for fiscal years
beginning after December 15, 1997, but is not required to be presented in
interim financial information in the year of adoption. The adoption of SFAS 132
will require revised disclosures when the statement becomes effective.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS 133 also requires that changes in the derivative instrument's
fair value be recognized currently in results of operations unless specific
hedge accounting criteria are met. SFAS 133, as amended by SFAS 137, is
effective for fiscal years beginning after June 15, 2000. The Company's
management has studied the implications of SFAS 133 and based on the initial
evaluation, expects the adoption to have no impact on the Company's financial
condition or results of operations.
8
<PAGE>
Note 3. DISCONTINUED OPERATIONS
In September 1997, the Company's management and Board of Directors approved a
plan whereby the insurance operations would be sold to an unrelated party.
Accordingly, the results of operations of the insurance segment for the 1998
period have been presented as "discontinued operations" in the accompanying
condensed consolidated statements of operations.
Note 4. PROPOSED MERGER
In March 1999, the Company executed a letter of intent with respect to a
proposed merger with Certified Grocers of California, Ltd., a grocery
cooperative headquartered in Commerce, California. The consummation of the
merger is conditional upon the approval of a definitive merger agreement by the
shareholders of both entities, required filings with regulatory entities and
other customary conditions.
Note 5. SALE OF RETAIL OPERATIONS
The gain on sale of retail operations recorded in the condensed consolidated
statements of operations for 1998 periods reflects the following transactions:
On May 1, 1998, the Company completed the sale of its Rich and Rhine, Inc.
subsidiary to Kero Corporation. The purchase price consisted of $3.5 million in
cash, plus a promissory note of approximately $1.4 million. The promissory note
is collateralized by a pledge of the common stock of the buyer.
On May 15, 1998, the Company completed the sale of its Cash & Carry division to
Smart & Final, Inc. The purchase price consisted of $42.5 million in cash, plus
a $17.5 million 5-year unsecured note. In connection with the sale, the Company
entered into a five-year supply agreement with Smart & Final, Inc. In late May
of 1999, the Company and Smart & Final, Inc. reached an agreement in principle
whereby the Company has agreed to accept a reduction of $250,000 in each of the
next four installments due under the 5-year unsecured note. This $1 million
reduction in the note was charged to earnings in the third quarter of 1999.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's 1998
Annual Report on Form 10-K and the consolidated financial statements and notes
thereto of the Company.
Year-to-date period ended July 2, 1999 ("1999") compared to year-to-date period
ended July 3, 1998 ("1998").
RESULTS OF OPERATIONS
OVERVIEW
In March 1999, the Company executed a letter of intent with respect to a
proposed merger with Certified Grocers of California, Ltd., a grocery
cooperative headquartered in Commerce, California. The consummation of the
merger is conditional upon the approval of a definitive merger agreement by the
shareholders of both entities, required filings with regulatory entities and
other customary conditions.
During 1999, the Company incurred significant expenses related to the proposed
merger and Year 2000 (Y2K) compliance. During 1998, the Company's financial
condition and results of operations were affected by implementation of the
closure of the Medford, Oregon grocery distribution operations, the
consolidation of selected California operations with Oregon operations, the
implementation of a new marketing plan and the sales of the Cash & Carry and
Rich and Rhine, Inc. retail operations.
NET SALES AND OPERATIONS
Net sales and operations declined 13.2% ($118 million) from 1998 to $775.4
million for 1999. The decrease in sales is due to the sale of the Rich and
Rhine, Inc. subsidiary (approximately $21 million) and lower volume due to the
elimination of certain unprofitable accounts (approximately $97 million).
10
<PAGE>
COSTS AND EXPENSES
Total costs and expenses decreased $114.5 million (12.9%) from 1998 to $774.0
million for 1999 (99.8% of sales). This compares to $888.4 million (99.4% of
sales) in 1998. The components of costs and expenses are outlined below:
Costs and Expenses as a Percent of Net Sales and Operations:
<TABLE>
<CAPTION>
Year-to-date Year-to-date
period ended period ended
July 2, 1999 July 3, 1998
-------------- ------------
<S> <C> <C>
Cost of sales 86.1% 86.3%
Members' allowances 1.8 1.0
Operating expenses 8.8 9.3
Selling and administrative
expenses 2.1 1.9
Depreciation and amortization 1.0 0.9
---- ----
Total 99.8% 99.4%
==== ====
</TABLE>
Cost of sales as a percent of net sales and operations decreased from 86.3% to
86.1% from 1998 to 1999. The decrease in cost of sales and increase in members'
allowances are attributable to changes in the Company's marketing plan.
Operating expenses as a percent of net sales and operations decreased from 9.3%
to 8.7% from 1998 to 1999. The net decrease in operating expenses is due to
internal cost efficiencies, including the consolidation of the procurement and
accounting staffs of the Company's California division with those of the Oregon
operations. In addition, 1998 included costs incurred in connection with the
closure of the Company's Medford grocery distribution facility.
OTHER INCOME/EXPENSE
Interest expense decreased $4.2 million from 1998 to 1999, due to debt
reductions resulting from the sale of the Company's Cash & Carry division and
certain non-core assets. Interest income increased $.6 million from 1998 to
1999 as a result of an increase in the Company's notes receivable. Gain on sale
of retail operations of $26.2 million in 1998 is due to the sale of the Cash &
Carry and Rich and Rhine, Inc. retail operations, as described above.
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that anticipated needs for working capital, capital
expenditures and repayment of long-term debt through fiscal 1999 will be met
from funds generated by operations and borrowings under the credit facility.
At July 2, 1999, approximately $36.4 million was available for borrowing under
the bank lines of credit.
CASH FLOWS FROM OPERATING ACTIVITIES
In 1999, the Company used $5.1 million in cash in its operating activities,
resulting from a decrease of approximately $5.0 million in accrued expenses. In
1998, the Company provided $1.3 million from its operating activities, resulting
from increases in accrued expenses.
CASH FLOWS FROM INVESTING ACTIVITIES
In 1999, the Company provided $14.7 million in cash from investing activities,
compared to the $59.3 million in cash provided by investing activities in 1998.
The decrease of $44.6 million is due to a decrease in the net sales of
investments of $5.5 million and a decrease of $45.3 million in net proceeds from
the sale of assets, offset by a net increase of $6.1 million in net collections
on loans.
CASH FLOWS FROM FINANCING ACTIVITIES
In 1999, the Company's financing activities used $7.0 million in cash compared
to $55.2 million used in 1998. In 1998, net proceeds from the sale of retail
operations and property, plant and equipment were used to reduce debt by $55.1
million. In 1999, proceeds from collections on loans and sales of property,
plant and equipment were used to reduce debt by $3.3 million and for net
repurchases of common stock of $3.7 million.
12
<PAGE>
ACCOUNTING PRONOUNCEMENTS
In February 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" ("SFAS 132"). This statement revises employers' disclosures about
pension and other postretirement benefit plans. It does not change the
measurement or recognition of those plans. The statement suggests combined
formats for presentation of pension and other postretirement benefit
disclosures. The statement is effective for fiscal years beginning after
December 15, 1997, but is not required to be presented in interim financial
information in the year of adoption. The adoption of SFAS 132 will require
revised disclosures when the statement becomes effective.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"("SFAS 133"). SFAS 133 establishes accounting
and reporting standards requiring that every derivative instrument be recorded
in the balance sheet as either an asset or liability measured at its fair value.
SFAS 133 also requires that changes in the derivative instrument's fair value be
recognized currently in results of operations unless specific hedge accounting
criteria are met. SFAS 133, as amended by SFAS 137, is effective for fiscal
years beginning after June 15, 2000. The Company's management has studied the
implications of SFAS 133 and based on the initial evaluation, expects the
adoption to have no impact on the Company's financial condition or results of
operations.
YEAR 2000 PREPARATIONS
This section captioned "Year 2000 Preparations" and other statements about Year
2000 issues are "Year 2000 Readiness Disclosures" pursuant to the Year 2000
Information and Readiness Disclosure Act.
The Company is addressing possible Year 2000 (Y2K) problems with a systematic
approach. To make a smooth transition into the next century, the Company has
entered into a "Year 2000 Project," comprised of four major areas of concern -
(1) Infrastructure (Hardware & Operating System Software), (2) Applications
Software, (3) Third Party Suppliers (Trading Partners, Banks, Utilities), and
(4) Process Control and Instrumentation (Embedded Systems).
Area -1- The Infrastructure area consists of hardware and operating system
software. Updating in this area was completed on April 15, 1999.
Area -2- The Applications Software area consists of conversion of software that
is not Y2K compliant, and where available, the replacement of such software from
the vendor. The Company has engaged Applied Decisions USA, Inc. to assist in
project management, and in conversion and testing of certain non-compliant
application software code.
13
<PAGE>
The conversion phase was completed March 31, 1999. The testing phase is
progressing in an organized fashion as the software is repaired or replaced.
Testing was 99 percent complete as of June 30, 1999.
The Company uses software from The Armature Company for warehousing functions
and E3 software for purchasing functions. Year 2000 compliant software
installation was completed on November 21, 1998.
Area -3- The Third Party Suppliers area includes the identification and
prioritizing of critical suppliers, financial institutions, and utilities, and
communicating with them about their plans and progress in addressing the Y2K
issue. The Company has identified and contacted 4,324 suppliers requesting
information on their plans and progress on the Y2K issue. As of June 30, 1999,
the Company had received a response from 85 percent of the identified suppliers.
Responses from the identified suppliers indicate progress in addressing the Y2K
issue, with a majority of the responses expecting full compliance by September
30, 1999. The Company has a follow-up plan in place scheduled through the
remainder of 1999. Contingency planning in this area began in February 1999,
with the completed plan estimated to be in place by August 31, 1999.
Area -4- The Process Control and Instrumentation area consists of identification
and prioritization of hardware and software associated with embedded chips used
in operation of all facilities of the Company. The Company estimates it has
identified and corrected approximately 99 percent of the identified items. The
remaining 1 percent is expected to be completed by
September 30, 1999. Contingency planning in this area began in January 1999, and
will be completed by September 30, 1999.
The major phases associated with the Y2K Project are: (A) Inventory of potential
Y2K items; (B) Assigning priorities to the items identified as material to the
Company; (C) Assessing the Y2K compliance of the inventoried items; (D)
Repairing or replacing material items that are determined not to be Y2K
compliant; (E) Testing material items; and (F) Developing contingency and
business continuation plans for each functional area and Company location.
On November 21, 1998, the Inventory, Prioritization, and Assessment phases
(phases A, B and C) of the Project were declared completed.
Phase D - Material items are those identified by the Company that affect the
ability of the Company to perform its core business functions, that support the
Company's customer base, or that affect revenues. All material items had been
repaired or replaced as of December 31, 1998.
Phase E - Full systems testing commenced in January 1999, and completion is
expected by August 31, 1999. Vendor software upgrades continue on schedule.
Phase F - Contingency planning for all areas is ongoing and is to be completed
by September 30, 1999.
14
<PAGE>
Cost - The estimated cost of the Y2K Project is approximately $4.9 million. The
total amount expended on the project through June 30, 1999 was $3.8 million
related to the cost of conversion or replacement of application software,
$200,000 related to the replacement of hardware, and $75,000 related to the cost
of identifying and communicating with third party suppliers. The estimated
future cost of completing the Y2K Project is estimated to be $800,000 for
replacement of software and related hardware, and $50,000 to identify and
communicate with third party suppliers and to repair or replace embedded
systems.
Risks - The failure to correct material Y2K issues could result in interruption
in, or failure of, key core business processes. The most likely worst case
scenario is business being partially or totally disrupted for a period of a few
hours to one week. There can be no assurance that actual results will not differ
materially from those projected.
Safety Net Preparation - The Y2K team has, as part of their project, been
identifying manual or modified processes that would need to be employed in the
unlikely event that some of the upgrades fail.
FORWARD-LOOKING STATEMENTS
Statements above and elsewhere in this Form 10-Q regarding future events or
performance are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. As with all forward-looking
statements, the forward-looking statements made by the Company herein 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 related to Y2K issues, and uncertainties concerning the outcome of
sales of subsidiaries or divisions.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No material changes to previously reported information.
15
<PAGE>
Part II
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During third quarter 1999, the Company issued 344 shares of its common stock to
a new member in exchange for a member deposit in the amount of $12,108. The
shares were issued without registration, as the issuance did not involve the
sale of a security or in reliance on the exemption from registration under
Section 4(2) of the Securities Act of 1933.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURE
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.
Date: August 6, 1999 UNITED GROCERS, INC.
(Registrant)
By /s/ Mark Tweedie
------------------------------------------
Vice President and Chief Financial Officer
(Principal Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements of United Grocers, Inc., for the
applicable periods ended July 2, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000225966
<NAME> United Grocers, Inc.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-01-1999
<PERIOD-START> OCT-03-1998
<PERIOD-END> JUL-02-1999
<EXCHANGE-RATE> 1
<CASH> 3,907,426
<SECURITIES> 0
<RECEIVABLES> 64,581,572
<ALLOWANCES> 1,942,467
<INVENTORY> 69,715,997
<CURRENT-ASSETS> 145,648,252
<PP&E> 30,385,599
<DEPRECIATION> 43,302,876
<TOTAL-ASSETS> 215,828,784
<CURRENT-LIABILITIES> 120,814,150
<BONDS> 56,596,304
0
0
<COMMON> 2,542,395
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 215,828,784
<SALES> 775,430,982
<TOTAL-REVENUES> 775,430,982
<CGS> 667,883,168
<TOTAL-COSTS> 750,144,554
<OTHER-EXPENSES> 16,405,754
<LOSS-PROVISION> 1,750,746
<INTEREST-EXPENSE> 7,068,804
<INCOME-PRETAX> (3,688,416)
<INCOME-TAX> 1,475,367
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<NET-INCOME> (2,213,049)
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</TABLE>
