UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 October 1, 1994
---------------
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 2-66296
--------------------------------------------------
Roundy's, Inc.
- - ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0854535
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23000 Roundy Drive, Pewaukee, Wisconsin 53072
- - ------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(414) 547-7999
- - ------------------------------------------------------------------------
(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___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 1, 1994
- - ------------------------------ ------------------------------------
Common Stock, $1.25 par value
Class A (Voting) 14,200 Shares
Class B (Non-voting) 1,153,805 Shares
<PAGE>
ROUNDY'S, INC.
INDEX
-----
Page No.
PART I. Financial Information: --------
Consolidated Balance Sheets -
October 1, 1994 and January 1, 1994 3
Statements of Consolidated Earnings -
Thirteen Weeks and Thirty-Nine Weeks
Ended October 1, 1994 and October 2, 1993 4
Statements of Consolidated Cash Flows -
Thirty-Nine Weeks Ended October 1, 1994
and October 2, 1993 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information 9
SIGNATURES 10
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
CONSOLIDATED BALANCE SHEETS
October 1, 1994 and January 1, 1994
October 1, 1994 January 1, 1994
(Unaudited) (Audited)
ASSETS --------------- ---------------
CURRENT ASSETS:
Cash and short-term investments....... $ 29,776,700 $ 25,845,600
Notes and accounts receivable, less
allowance for losses, $7,734,800
and $8,766,500, respectively........ 98,970,600 99,826,500
Merchandise inventories............... 165,946,800 153,169,500
Prepaid expenses...................... 3,593,300 6,956,800
Future income tax benefits............ 5,381,500 4,281,800
------------ ------------
Total Current Assets............... 303,668,900 290,080,200
------------ ------------
OTHER ASSETS:
Notes receivable...................... 15,457,400 14,894,700
Deferred expenses and other........... 14,103,200 15,228,100
------------ ------------
Total Other Assets................. 29,560,600 30,122,800
------------ ------------
PROPERTY AND EQUIPMENT - Net.............. 64,829,600 59,889,100
------------ ------------
$398,059,100 $380,092,100
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable......................... $ 139,600
Current maturities of long-term debt.. $ 6,462,300 8,920,700
Accounts payable...................... 161,449,900 130,187,600
Accrued expenses...................... 43,259,500 36,778,500
Income taxes.......................... 410,900
------------ ------------
Total Current Liabilities 211,171,700 176,437,300
LONG-TERM DEBT, LESS CURRENT MATURITIES 92,004,000 113,044,700
DEFERRED INCOME TAXES..................... 600,000 600,000
OTHER LIABILITIES......................... 4,140,800 3,944,000
------------ ------------
Total Liabilities.................. 307,916,500 294,026,000
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A).................... 17,700 19,400
Non-Voting (Class B)................ 1,442,300 1,425,400
------------ ------------
Total Common Stock....................... 1,460,000 1,444,800
<PAGE>
Amount related to recording minimum
pension liability........................ (308,700) (308,700)
Patronage dividends payable in
common stock............................ 1,225,000 3,263,000
Additional paid-in capital................ 22,991,200 20,388,900
Reinvested earnings....................... 64,775,100 61,278,100
------------ ------------
Total Stockholders' Equity............... 90,142,600 86,066,100
------------ ------------
$398,059,100 $380,092,100
============ ============
See Notes to Financial Statements.
<PAGE>
<TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
OCTOBER 1, 1994 AND OCTOBER 2, 1993
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 1, 1994 October 2, 1993 October 1, 1994 October 2, 1993
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees............ $601,014,400 $616,396,500 $1,831,506,300 $1,843,036,100
Other - net........................... 748,000 658,000 1,968,900 1,937,100
------------ ------------ -------------- --------------
601,762,400 617,054,500 1,833,475,200 1,844,973,200
------------ ------------ -------------- --------------
COSTS AND EXPENSES:
Cost of sales......................... 543,984,600 559,297,300 1,660,488,700 1,669,510,200
Operating and administrative.......... 51,864,900 51,392,700 155,274,200 156,013,000
Interest.............................. 2,307,600 2,956,000 7,118,200 9,098,600
------------ ------------ -------------- --------------
598,157,100 613,646,000 1,822,881,100 1,834,621,800
------------ ------------ -------------- --------------
EARNINGS BEFORE PATRONAGE DIVIDENDS..... 3,605,300 3,408,500 10,594,100 10,351,400
PATRONAGE DIVIDENDS..................... 500,000 500,000 1,750,000 1,750,000
------------ ------------ -------------- --------------
EARNINGS BEFORE INCOME TAXES............ 3,105,300 2,908,500 8,844,100 8,601,400
PROVISION FOR INCOME TAXES.............. 1,266,000 1,199,000 3,604,000 3,505,000
------------ ------------ ------------- --------------
NET EARNINGS............................ $ 1,839,300 $ 1,709,500 $ 5,240,100 $ 5,096,400
============ ============ ============= ==============
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 1, 1994 AND OCTOBER 2, 1993
(UNAUDITED)
Thirty-Nine Weeks Ended
October 1, 1994 October 2, 1993
--------------- ---------------
Cash Flows From Operating Activities:
Net earnings.......................... $ 5,240,100 $ 5,096,400
Adjustments to reconcile net earnings
to net cash provided by operating
activities:...........................
Depreciation and amortization......... 9,484,400 9,912,600
Allowance for losses.................. 1,787,300 2,313,600
Gain on sale of assets................ (127,200) (75,000)
Patronage dividends payable in
common stock......................... 1,225,000 1,225,000
(Increase) Decrease in Operating Assets:
Accounts receivable................... (931,400) (15,701,500)
Merchandise inventories............... (12,777,300) (6,794,100)
Prepaid expenses...................... 3,363,500 486,900
Future income tax benefits............ (1,099,700) (638,900)
Other real estate..................... 170,400 100,200
Deferred expenses and other assets.... 616,000 (8,000)
Increase (Decrease) in Operating
Liabilities:
Accounts payable...................... 31,262,300 26,664,900
Accrued expenses...................... 6,481,000 3,793,300
Income taxes.......................... (410,900 (1,135,300)
Other liabilities..................... 196,800 241,100
------------- ------------
Net cash flows provided by (used in)
operating activities................... 44,480,300 25,481,200
------------- ------------
Cash Flows from Investing Activities:
Capital Expenditures.................. (14,428,700) (10,232,200)
Proceeds from sale of property and
equipment........................... 469,500 6,510,500
Increase in notes receivable.......... (562,700) 1,384,900
------------- ------------
Net cash flows provided by (used in)
investing activities.................. (14,521,900) (2,336,800)
Cash Flows from Financing Activities:
Proceeds from long-term borrowings....
Principal payments of long-term debt.. (21,040,700) (15,272,100)
Increase (decrease) in notes payable
and current maturities of
long-term debt...................... (2,598,000) 6,669,000
Proceeds from sale of common stock.... 214,600 273,300
Common stock purchased................ (2,603,200) (2,958,900)
------------ ------------
Net cash flows provided by (used in)
financing activities.................. (26,027,300) (11,288,700)
------------ ------------
Net Increase (Decrease) in Cash and
Short-term Investments................ 3,931,100 11,855,700
<PAGE>
Cash and Short-term Investments,
Beginning of Period................... 25,845,600 19,912,000
------------ ------------
Cash and Short-term Investments,
End of Period......................... $ 29,776,700 $ 31,767,700
============ ============
Cash paid during the period: - Interest $ 7,199,200 $ 10,027,400
- Income Taxes 4,668,000 5,384,600
See Notes to Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1) In the opinion of the Company, the accompanying
consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to
present fairly the financial position as of October 1, 1994
and January 1, 1994, and the results of operations for the
thirteen and thirty-nine weeks ended October 1, 1994 and
October 2, 1993 and changes in cash flows for the thirty-
nine weeks ended October 1, 1994 and October 2, 1993.
2) The results of operations for the thirteen and thirty-nine
weeks ended October 1, 1994 and October 2, 1993 are not
necessarily indicative of the results to be expected for the
full fiscal year.
3) Earnings per share are not presented because they are not
deemed to be meaningful.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
Results of Operations
- - ---------------------
The following is management's discussion and analysis of certain
significant factors which have affected the Company's results of
operations during the periods included in the accompanying statements of
consolidated earnings.
A summary of the period to period changes in the principal items
included in the statements of consolidated earnings is shown below:
Comparison of
------------------------------------------------
13 Weeks Ended Oct. 1, 39 Weeks Ended Oct. 1,
1994 & Oct. 2, 1993 1994 & Oct. 2, 1993
---------------------- ------------------------
Net sales and service fees $(15,382,100) (2.5)% $(11,529,800) (0.6)%
Cost of sales (15,312,700) (2.7)% (9,021,500) (0.5)%
Operating and admin. expenses 472,200 0.9 % (738,800) (0.5)%
Interest expense (648,400) (21.9)% (1,980,400) (21.8)%
Earnings before income taxes 196,800 6.8 % 242,700 2.8 %
Net sales and service fees decreased approximately $15.4 million during
the third quarter of 1994 as compared to the third quarter of 1993. The
loss of wholesale customers resulted in a decrease in sales of
approximately $6.2 million. The sale of manufacturing facilities
resulted in a decrease of $6.1 million. The closing or sale of three
Company-owned stores resulted in a decrease of approximately $4.1
million. Sales to new and existing wholesale customers increased $1.0
million.
Net sales and service fees increased approximately $11.5 million during
the first three quarters of 1994 as compared to the first three quarters
of 1993. The loss of wholesale customers resulted in a decrease in sales
of approximately $36.3 million. The sale of manufacturing facilities
resulted in a decrease of $24.4 million. The closing or sale of six
Company-owned stores resulted in a decrease of approximately $14.6
million. Sales to new and existing wholesale customers increased $63.8
million.
Cost of sales approximated 90.5% and 90.7% of net sales and service fees
for the thirteen weeks ended October 1, 1994 and October 2, 1993,
respectively. Year-to-date cost of sales approximated 90.7% and 90.6%
of net sales and service fees for the thirty-nine weeks ended October 1,
1994 and October 2, 1993, respectively.
Operating and administrative expenses approximated 8.6% and 8.3% of net
sales and service fees for the thirteen weeks ended October 1, 1994 and
October 2, 1993, respectively. Year-to-date operating and
administrative expenses approximated 8.5% of net sales and service fees
for the thirty-nine weeks ended October 1, 1994 and October 2, 1993,
respectively.
Interest expense decreased primarily as a result of lower borrowing
levels during the thirty-nine weeks ended October 1, 1994 as compared to
the thirty-nine weeks ended October 2, 1993.
<PAGE>
Patronage dividends in the amount of $1,750,000 have been accrued as of
October 1, 1994 and October 2, 1993. The Company's By-Laws require
that, to the extent permitted by the Internal Revenue Code, patronage
dividends be paid out of earnings from business done with stockholder-
customers in an amount which will reduce net earnings of the Company to
such amount as will result in a 10 percent increase in the book value of
its common stock.
The income tax rate used for calculating the provision for income taxes
for the interim periods was 40.8% in 1994 and 1993.
Liquidity and Capital Resources
- - -------------------------------
The Company's current ratio decreased from 1.64:1 at year-end to 1.44:1
at October 1, 1994. The consolidated long-term debt to equity ratio has
decreased from 1.31:1 at January 1, 1994 to 1.02:1 at October 1, 1994,
primarily due to lower borrowing levels.
Stockholders' equity increased approximately $4.1 million due to
reinvested earnings of $5.3 million, proceeds from the sale of common
stock of $0.2 million and the 1994 patronage dividend payable in common
stock of $1.2 million partially offset by common stock purchases of $2.6
million.
On September 30, 1994, the Company and Spartan Stores, Inc. of Grand
Rapids, Michigan announced that on September 29, 1994, the companies signed
a Memorandum of Intent to merge their respective companies, and negotiations
toward a definitive merger agreement are continuing. The merger is subject
to approval by the shareholders of both companies.
<PAGE>
II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K -- There were no reports on Form 8-K
filed for the thirteen weeks ended October 1, 1994. However, on
October 7, 1994 a Form 8-K was filed to report, under "Item 5.
Other Events," the execution of a Memorandum of Intent relating to
the proposed merger of the Company with Spartan Stores, Inc. of
Grand Rapids, Michigan.
<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.
ROUNDY'S, INC.
---------------------------
(Registrant)
Date: November 3, 1994 ROBERT D. RANUS
---------------- ---------------------------
Robert D. Ranus
Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROUNDY'S,
INC. FORM 10-Q FOR THE PERIOD ENDED 10-1-94 AND IS QUALIFED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000314423
<NAME> ROUNDY'S, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<CASH> 29,776,700
<SECURITIES> 0
<RECEIVABLES> 106,705,400
<ALLOWANCES> (7,734,800)
<INVENTORY> 165,946,800
<CURRENT-ASSETS> 303,668,900
<PP&E> 142,076,200
<DEPRECIATION> (77,246,600)
<TOTAL-ASSETS> 398,059,100
<CURRENT-LIABILITIES> 211,171,700
<BONDS> 0
<COMMON> 1,460,000
0
0
<OTHER-SE> 88,682,600
<TOTAL-LIABILITY-AND-EQUITY> 398,059,100
<SALES> 1,831,506,300
<TOTAL-REVENUES> 1,833,475,200
<CGS> 1,660,488,700
<TOTAL-COSTS> 1,660,488,700
<OTHER-EXPENSES> 155,236,900
<LOSS-PROVISION> 1,787,300
<INTEREST-EXPENSE> 7,118,200
<INCOME-PRETAX> 8,844,100
<INCOME-TAX> 3,604,000
<INCOME-CONTINUING> 5,240,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,240,100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
