UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Twenty-Six Weeks Ended July 29, 1995
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 No. 1-4844
ECKERD CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 13-3302437
(State of incorporation) (I.R.S. Employer Identification No.)
8333 Bryan Dairy Road
Largo, Florida 34647
(Address and zip code of principal executive offices)
(813) 399-6000
(Registrant's telephone number, including area code)
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
----- -----
As of August 26, 1995 34,858,382 shares of Common Stock, $.01 par
value, were outstanding.
<PAGE>
<TABLE>
<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
Unaudited Audited
ASSETS 7/29/95 1/28/95
----------- -----------
<S> <C> <C>
Current assets:
Cash and short-term interest bearing deposits $ 9,763 8,898
Receivables, less allowance for doubtful
receivables of $3,000 83,099 52,487
Merchandise inventories 738,088 771,122
Prepaid expenses and other current assets 1,140 2,366
----------- -----------
Total current assets 832,090 834,873
----------- -----------
Property, plant and equipment, at cost 588,556 542,191
Less accumulated depreciation 269,313 249,214
----------- -----------
Net property, plant and equipment 319,243 292,977
----------- -----------
Excess of cost over net assets acquired, less
accumulated amortization 29,297 27,667
Favorable lease interests, less accumulated amortization 135,475 153,664
Unamortized debt expense 9,190 10,138
Other assets 18,921 23,028
----------- -----------
$ 1,344,216 1,342,347
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Bank debit balances $ 17,841 44,373
Current installments of long-term debt 1,455 1,452
Accounts payable 252,470 287,551
Accrued expenses 224,800 221,208
----------- -----------
Total current liabilities 496,566 554,584
----------- -----------
Other noncurrent liabilities 139,080 124,944
Long-term debt, excluding current installments 789,103 785,561
Stockholders' deficit:
Preferred stock of $.01 par value
Authorized 20,000,000 shares; none issued -- --
Voting common stock of $.01 par value
Authorized 96,481,272 shares; issued 32,181,247
and 32,105,774 322 321
Nonvoting common stock of $.01 par value
Authorized 3,518,728 shares; none issued -- --
Capital in excess of par value 234,636 234,027
Retained deficit (315,491) (357,090)
----------- -----------
Total stockholders' deficit (80,533) (122,742)
----------- -----------
$ 1,344,216 1,342,347
=========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------------- -------------------------
7/29/95 7/30/94 7/29/95 7/30/94
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales and other operating revenue $ 1,138,724 1,066,890 2,358,318 2,203,085
----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales, including store
occupancy, warehousing and
delivery expense 885,108 820,281 1,824,596 1,686,364
Operating and administrative expenses 221,832 215,767 442,423 433,613
----------- ----------- ----------- -----------
Earnings before interest expense 31,784 30,842 91,299 83,108
Interest expense:
Interest expense, net 19,064 22,789 38,881 45,001
Amortization of original issue discount
and deferred debt expenses 529 1,702 1,068 3,391
----------- ----------- ----------- -----------
Total interest expense 19,593 24,491 39,949 48,392
----------- ----------- ----------- -----------
Earnings before income taxes
and extraordinary items 12,191 6,351 51,350 34,716
Income tax provision 115 330 8,730 1,750
----------- ----------- ----------- -----------
Earnings before extraordinary
items 12,076 6,021 42,620 32,966
Extraordinary item-early retirement of debt
net of tax benefit of $288 (1,021) -- (1,021) --
----------- ----------- ----------- -----------
Net earnings for the period $ 11,055 6,021 41,599 32,966
=========== =========== =========== ===========
Earnings per common share:
Earnings before extraordinary item $ .37 .19 1.30 1.02
Extraordinary item (.03) -- (.03) --
----------- ----------- ----------- -----------
Net earnings per common share $ .34 .19 1.27 1.02
=========== =========== =========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
Twenty-Six Weeks Ended
-----------------------
7/29/95 7/30/94
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 41,599 32,966
Adjustments to reconcile net earnings for the period
to net cash provided by operating activities:
Extraordinary charge related to early
retirement of debt 1,310 --
Depreciation and amortization 39,561 37,293
Amortization of original issue discount
and deferred debt expenses 1,068 3,391
Decrease in receivables, merchandise
inventories and prepaid expenses 3,648 2,030
Decrease in accounts payable and accrued
expenses (25,167) (70,760)
-------- --------
Net cash provided by
operating activities 62,019 4,920
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment* (40,169) (21,739)
Sale of property, plant and equipment 3,962 923
Acquisition of certain drug store assets (3,400) (689)
Net cash proceeds from sale of Vision Group 5,231 22,753
Other (2,976) 2,503
-------- --------
Net cash provided by (used in)
investing activities (37,352) 3,751
-------- --------
Cash flows from financing activities:
Decrease in bank debit balances (26,532) (28,258)
Additions to long-term debt 648 36
Reductions of long-term debt (795) (954)
Net additions under current credit agreement 18,907 19,265
Redemption of 11.125% subordinated debentures (16,640) --
Other 610 (1,264)
-------- --------
Net cash used in financing activities (23,802) (11,175)
-------- --------
Net increase (decrease) in cash and cash equivalents 865 (2,504)
Cash and short-term interest bearing deposits
at beginning of period 8,898 12,110
-------- --------
Cash and short-term interest bearing deposits
at end of period $ 9,763 9,606
======== ========
</TABLE>
* Total capital expenditures for twenty-six weeks ended July 29, 1995 and July
30, 1994 were $54,194 and $42,005, of which $14,025 and $20,266 were acquired
under a deferred payment arrangement.
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
ECKERD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Note 1.
-------
The condensed consolidated financial statements include the accounts of
the Company and its subsidiaries, and were prepared from the books and
records of the Company without audit or verification and in the opinion
of management include all adjustments (none of which were other than
recurring accruals) necessary to present a fair statement of results
for such periods. It is suggested that these condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes filed as part of the Form 10-K405 report for the
fiscal year ended January 28, 1995. The results of operations of the
periods indicated should not be considered as necessarily indicative of
operations for the full year.
Note 2.
-------
Substantially all inventories are determined on a last-in, first-out
(LIFO) cost basis. At July 29, 1995 and January 28, 1995 inventories
would have been greater by approximately $82,900 and $76,900,
respectively, if inventories were valued on a first-in, first-out
(FIFO) cost basis. The cost of merchandise sold is calculated primarily
on estimated inventory values and inflation rates based on physical
inventories taken at all locations at least once during the fiscal
year.
Note 3.
-------
The weighted average number of shares outstanding for thirteen weeks
and twenty-six weeks ended July 29, 1995 and July 30, 1994 were 32,897
and 32,855 in 1995 and 32,246 and 32,235 in 1994.
Note 4.
-------
Certain amounts have been reclassified in the fiscal 1994 condensed
consolidated statements of operations and statements of cash flows to
conform to the fiscal 1995 condensed consolidated financial statement
presentation.
Note 5.
-------
On August 2, 1995 the Company completed the public offering of
6,175,500 shares of Company common stock par value $.01 per share for
$32.25 per share. Of the shares offered, 2,675,000 shares were sold by
the Company and 3,500,500 shares were sold by certain stockholders of
the Company. The net proceeds to the Company after the underwriting
discount of $1.27 per share and other expenses related to the public
offering was approximately $82 million. At July 29, 1995 after adding
the $82 million to the Company's stockholders' deficit of $80.5
million, the Company would have stockholders' equity of approximately
$1.5 million.
5
<PAGE>
<TABLE>
<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 6. ECKERD CORPORATION AND SUBSIDIARIES
------- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------------------------- --------------------------------------
July 29, 1995 July 30, 1994 July 29, 1995 July 30, 1994
------------- -------------------------- ------------- ------------------------
Actual Actual(A) Adjusted(B) Actual Actual(A) Adjusted(B)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Sales and other operating revenue $ 1,138,724 1,066,890 1,038,735 2,358,318 2,203,085 2,147,374
Cost of sales 885,108 820,281 801,615 1,824,596 1,686,364 1,649,059
Operating and administrative
expenses 213,939 208,016 199,929 426,751 417,835 402,393
Amortization of intangibles 7,893 7,751 7,666 15,672 15,778 15,612
----------- ----------- ----------- ----------- ----------- -----------
Operating profit 31,784 30,842 29,525 91,299 83,108 80,310
Interest expense 19,593 24,491 22,355 39,949 48,392 44,125
----------- ----------- ----------- ----------- ----------- -----------
Earnings before income taxes
and extraordinary item 12,191 6,351 7,170 51,350 34,716 36,185
Income taxes 115 330 359 8,730 1,750 1,810
----------- ----------- ----------- ----------- ----------- -----------
Earnings before extraordinary item 12,076 6,021 6,811 42,620 32,966 34,375
Extraordinary item (1,021) -- -- (1,021) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net earnings $ 11,055 6,021 6,811 41,599 32,966 34,375
=========== =========== =========== =========== =========== ===========
Earnings per common share before $ .37 .19 .21 1.30 1.02 1.07
extraordinary item
Net earnings per common share $ .34 .19 .21 1.27 1.02 1.07
Weighted average number of shares
outstanding 32,897 32,246 32,246 32,855 32,235 32,235
Earnings before interest, income
taxes, extraordinary item,
depreciation and amortization $ 51,808 49,795 48,034 130,860 120,339 116,680
(EBITDA)
(A) Certain amounts have been reclassified to conform to the 1995 actual
financial statement presentation.
(B) The adjusted financial data is based on the historical financial
statements of the Company, adjusted to give effect to the Company's sale
of the Insta-Care Pharmacy Services operations which was sold effective
November 15, 1994, and the use of the net proceeds therefrom as if such
transaction had occurred as of the beginning of the twenty-six week period
ended July 30, 1994.
</TABLE>
6
<PAGE>
ECKERD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The Company sold its Insta-Care Pharmacy Services ("Insta-Care")
operations effective November 15, 1994. The following results of
operations discussion will compare the second quarter and twenty-six
weeks of fiscal 1995 to the adjusted second quarter and twenty-six
weeks of fiscal 1994 (thirteen and twenty-six weeks ended July 29, 1995
and July 30, 1994) which gives effect to the Company's sale of the
Insta-Care operations. See "footnote 6 of Notes to Condensed
Consolidated Financial Statements."
The Company's sales and other operating revenue for the second quarter
and twenty-six weeks of fiscal 1995 were $1,138.7 million and $2,358.3
million, a 9.6% and 9.8% increase over the second quarter and
twenty-six weeks of fiscal 1994. Sales benefited from significant
increases in prescription sales in the second quarter and twenty-six
weeks as well as by increases in front end sales from strong Valentine
and Easter selling seasons in the first quarter, and from a change in
the promotional calendar in the fiscal 1995 second quarter.
Prescription sales for the second quarter and twenty-six weeks of
fiscal 1995 were $609.2 million and $1,256.9 million, a 14.5% and 15.8%
increase over the second quarter and twenty-six weeks of fiscal 1994.
In addition, front end sales increased to $527.1 million and $1,096.8
million, a 4.6% and 3.8% increase over the second quarter and
twenty-six weeks of fiscal 1994. Front end sales in the second quarter
and twenty-six weeks of fiscal 1995 were positively affected primarily
by increased sales of non-prescription items in the health, greeting
card, convenience food and photofinishing categories. Comparable drug
store sales (stores open for one year or more, excluding relocated
stores open less than one year) increased 9.0% and 8.8% for the second
quarter and twenty-six weeks of fiscal 1995, compared to a 8.6% and
8.0% increase for the second quarter and twenty-six weeks of fiscal
1994.
Prescription sales as a percentage of drug store sales was
approximately 53.6% and 53.4% for the second quarter and twenty-six
weeks of fiscal 1995 as compared with approximately 51.3% and 50.6% for
the second quarter and twenty-six weeks of fiscal 1994. The growth in
prescription sales for the second quarter and twenty-six weeks were
primarily the result of increased third-party prescription sales and
the Company's competitive cash pricing strategy. These strong sales
were aided by a more severe cough, cold and flu season in the first
quarter of fiscal 1995 compared to the first quarter of fiscal 1994.
7
<PAGE>
Third-party prescription sales increased to approximately 69.9% and
69.4% of the Company's prescription sales for the second quarter and
twenty-six weeks of fiscal 1995 from approximately 63.7% and 63.2% in
fiscal 1994. The Company expects prescription sales to third-party
payors, in terms of both dollar volume and as a percentage of total
prescription sales, to continue to increase in fiscal 1995 and for the
foreseeable future. Third-party payors typically negotiate lower
prescription prices than those on non third-party prescriptions,
resulting in decreasing gross profit margins on the Company's
prescription sales. However, contracts with third-party payors
generally increase the volume of prescription sales and gross profit
dollars.
Cost of sales and related expenses for the second quarter and
twenty-six weeks of fiscal 1995 were $885.1 million and $1,824.6
million, a 10.4% and 10.6% increase over the second quarter and
twenty-six weeks of fiscal 1994. As a percentage of sales, cost of
sales and related expenses were 77.7% and 77.3% compared to 77.2% and
76.8% for the second quarter and twenty-six weeks of fiscal 1995 and
1994, respectively. The increase in cost of sales and related expenses
as a percentage of sales resulted primarily from the continued increase
in third-party prescription sales with typically lower gross profit
margins than non third-party prescription sales. The LIFO charge was
$3.1 million and $6.0 million compared to $2.3 million and $4.8 million
for the second quarter and twenty-six weeks of fiscal 1995 and 1994,
respectively.
Operating and administrative expense for the second quarter and
twenty-six weeks of fiscal 1995 were $221.8 million and $442.4 million,
a 6.9% and 5.8% increase over the second quarter and twenty-six weeks
of fiscal 1994. As a percentage of sales, operating and administrative
expenses decreased to 19.5% and 18.8% for the second quarter and
twenty-six weeks of fiscal 1995 from 20.0% and 19.5% for the second
quarter and twenty-six weeks of fiscal 1994. The decrease in operating
and administrative expenses as a percentage of sales resulted primarily
from operating efficiencies related to higher sales, and cost controls
which helped produce lower costs as a percentage of sales in such
expense categories as payroll and insurance. Non-cash tax deductible
amortization of intangibles included in operating and administrative
expenses for the second quarter and twenty-six weeks of fiscal 1995 and
1994 was $7.9 million and $15.7 million, compared to $7.7 million and
$15.6 million, respectively, an increase of 3.0% and 0.4%,
respectively.
Earnings before interest expense, income taxes and extraordinary item
were $31.8 million and $91.3 million for the second quarter and
twenty-six weeks of fiscal 1995, a 7.7% and 13.7% increase over the
8
<PAGE>
second quarter and twenty-six weeks of fiscal 1994. The increase in
earnings before interest expense, income taxes and extraordinary item
was due primarily to the increase in gross profit dollars as a result
of higher sales and other operating revenue, and the decrease in
operating and administrative expenses as a percentage of sales in the
second quarter and twenty-six weeks of fiscal 1995 compared to the
second quarter and twenty-six weeks of fiscal 1994.
Total interest expense was $19.6 million and $39.9 million for the
second quarter and twenty-six weeks of fiscal 1995, a decrease of 12.4%
and 9.5% from the second quarter and twenty-six weeks of fiscal 1994.
The decrease was due primarily to lower average borrowings in the
second quarter and twenty-six weeks of fiscal 1995 compared to the
second quarter and twenty-six weeks of fiscal 1994. The average
interest rate on borrowings in the second quarter and twenty-six weeks
of fiscal 1995 and 1994 were substantially the same.
Income taxes for the twenty-six weeks of fiscal 1995 and 1994 were $8.7
million and $1.8 million, respectively. The effective income tax rate
of 17% for twenty-six weeks of fiscal 1995 was higher than the
twenty-six weeks of fiscal 1994 (5%). During the second quarter of
fiscal 1995, income taxes for twenty-six weeks were adjusted to reflect
the estimated 17% annual income tax rate. Income taxes include
alternative minimum and state income taxes for the Company, and reflect
the utilization of net operating loss carryforwards.
As a result of primarily the foregoing factors, the Company had net
earnings before extraordinary item for the second quarter and
twenty-six weeks of fiscal 1995 of $12.1 million and $42.6 million,
compared to $6.8 million and $34.4 million for the second quarter and
twenty-six weeks of fiscal 1994, an increase of $5.3 million and $8.2
million or 77.3% and 24.0%, respectively.
At July 29, 1995 the Company operated 1,666 Eckerd Drug stores and 503
Eckerd Express Photo labs.
Financial Condition and Liquidity
With respect to the balance sheet at July 29, 1995 compared to the
balance sheet at January 28, 1995, merchandise inventories decreased
$33.0 million (net of the LIFO charge of $6.0 million) to $738.1
million, accounts receivable increased $30.6 million to $83.1 million
and property, plant and equipment increased $46.4 million to $588.6
million. The inventory decrease is a result of strong first and second
quarter sales.
9
<PAGE>
The receivables increase is attributable primarily to the increase in
receivables from third-party prescription sales and the timing of cash
collections on such receivables. Additions to property, plant and
equipment of $54.2 million were primarily due to the installation of
point-of-sale product scanning equipment along with other improvements
to existing stores and facilities, relocation of stores and the
addition of new stores.
At July 29, 1995, the Company had $474.3 million in borrowings
outstanding under the credit agreement ($415.3 million under the term
loan facility, $51.0 million under the revolving loan facility and $8.0
million of banker's acceptances) and the Company had unused and
available borrowing commitments under the revolving loan facility of
$198.7 million which is net of $92.3 million of letters of credit. The
term loan facility of $415.3 million amortizes in unequal quarterly
payments and matures in full in July 2000. The revolving loan facility
of $350.0 million matures in full at the end of July 2000. At July 29,
1995 the Company had excess availability under the revolving loan
commitment and accordingly did not treat the required amortization
repayments as current.
On July 29, 1995 the Company had working capital of $335.5 million and
a current ratio of 1.7 to 1 compared to $280.3 million and 1.5 to 1 at
January 28, 1995. Cash flow provided by operating activities increased
$57.1 million to $62.0 million for twenty-six weeks of fiscal 1995
compared to $4.9 million for twenty-six weeks of fiscal 1994. This
increase was due to higher earnings for the twenty-six weeks of fiscal
1995 compared to fiscal 1994 but was primarily due to the higher than
normal cash payments to merchandise vendors in the first quarter of
fiscal 1994, resulting in the reduction of accounts payable from an
abnormally high balance at January 29, 1994 primarily from the timing
of vendor payment due dates. This increase was offset partially by an
increase in receivables from third-party prescription sales in fiscal
1995.
Investing activities for the twenty-six weeks of fiscal 1995 and 1994
used $37.4 million of cash and provided $3.8 million of cash,
respectively. Uses of cash were principally for capital expenditures of
$40.2 million and $21.7 million for fiscal 1995 and 1994, respectively,
for point-of-sale product scanning equipment along with other
imrprovements to existing stores and facilities, relocation of stores
and the addition of new stores. In addition, in fiscal 1994, additions
to property, plant and equipment included the installation of satellite
communication equipment. In the first half of fiscal 1994, a source of
cash to the Company from investing activities was provided by a partial
payment for the sale of the Vision Group operations. Capital
10
<PAGE>
improvements for fiscal 1995, including those to be acquired under a
deferred payment arrangement and through operating leases, which total
$54.2 million for twenty-six weeks, are expected to total approximately
$119 million on an annual basis. Funds for the cash capital
expenditures are expected to come from cash flow from operating
activities and available borrowings, if necessary.
Financing activities for the twenty-six weeks of fiscal 1995 used $23.8
million. Uses of cash were primarily for the reduction of $26.5 million
of bank debit balances. Funds provided by $18.9 million of bank
borrowings were mostly used to redeem $16.6 million of the 11-1/8%
Subordinated Debentures due 2001 ("11-1/8% Debentures") on May 12,
1995. Financing activities for the twenty-six weeks of fiscal 1994 used
$11.2 million primarily for the reduction of $28.3 million of bank
debit balances. Funds were provided by $19.3 million of bank
borrowings.
On August 2, 1995 the Company completed the public offering of
6,175,500 shares of Company common stock for $32.25 per share. Of the
shares offered, 2,675,000 shares were sold by the Company and 3,500,500
shares were sold by certain stockholders of the Company. The net
proceeds to the Company after the underwriting discount of $1.27 per
share and other expenses related to the public offering was
approximately $82 million.
On September 5, 1995 the Company redeemed the remaining $78.9 million
of the 11-1/8% Debentures.
The Company anticipates that the combination of amortization of
intangibles and interest on debt will have a negative impact upon
future earnings and, to a lesser degree, cash flow from operating
activities. The Company does not believe, however, that the impact of
such planned amortization and interest expense upon earnings indicates
a present or future impairment of liquidity. Based upon the Company's
ability to generate cash flow from operating activities, the available
unused portion of the revolving loan facility under the bank credit
agreement and other existing sources, the Company believes that it will
have the funds necessary to meet the principal and interest payments on
its debt as they become due and to operate and expand its businesses.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Company's independent public accountants have made a limited review
of the financial information furnished herein in accordance with
standards established by the American Institute of Certified Public
Accountants. The Accountants' Report is presented on page 12 of this
report.
11
<PAGE>
Accountants' Report
-------------------
The Board of Directors
Eckerd Corporation:
We have reviewed the condensed consolidated balance sheet of Eckerd
Corporation and subsidiaries as of July 29, 1995 and the related
condensed consolidated statements of operations and cash flows for the
thirteen and twenty-six weeks ended July 29, 1995. These condensed
consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of January 28,
1995, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows, for the year then ended
(not presented herein); and in our report dated March 20, 1995, we
expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of January 28, 1995 is fairly
stated in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
KPMG PEAT MARWICK LLP
September 7, 1995
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
10.1 1995 Stock Option and Incentive Plan of Eckerd
Corporation (incorporated by reference to Exhibit
99.1 to the Registration Statement on Form S-8 of the
Company (No. 33-60175))
15.1 Letter re unaudited interim financial information
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
thirteen weeks ended July 29, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ECKERD CORPORATION
(Registrant)
September 11, 1995 /s/ Samuel G. Wright
----------------------
Samuel G. Wright
Executive Vice President -
Chief Financial Officer
(Principal Accounting Officer)
13
<PAGE>
Exhibit Index
-------------
Eckerd Corporation
Form 10-Q
Exhibit No. Description of Exhibit Page
----------- ---------------------- ----
10.1 1995 Stock Option and Incentive Plan of Eckerd *
Corporation
15.1 Letter re unaudited interim financial information
27 Financial Data Schedule
------------------------
*Previously filed by incorporation by reference.
14
<PAGE>
EXHIBIT 15.1
Eckerd Corporation and Subsidiaries
8333 Bryan Dairy Road
Largo, Florida 34647
Gentlemen:
RE: Registration Statement on Form S-3 (No. 33-50223)
Registration Statement on Form S-8 (No. 33-49977)
Registration Statement on Form S-3 (No. 33-10721)
Registration Statement on Form S-8 (No. 33-50755)
Registration Statement on Form S-3 (No. 33-56261)
Registration Statement on Form S-8 (No. 33-60175)
With respect to the above referenced registration statements, we
acknowledge our awareness of the incorporation by reference therein of
our report dated September 7, 1995 related to our review of interim
financial information, which report was included in the Form 10-Q of
Eckerd Corporation and Subsidiaries for the thirteen and twenty-six
weeks ended July 29, 1995.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report
is not considered a part of a registration statement prepared or
certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
KPMG PEAT MARWICK LLP
Tampa, Florida
September 7, 1995
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<NAME> ECKERD CORPORATION
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