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 September 28, 1996
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 33-57505
----------------------------------------------
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
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(Address of principal executive offices) (Zip Code)
(414) 547-7999
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(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 September 28, 1996
- ------------------------------ ---------------------------------
Common Stock, $1.25 par value
Class A (Voting) 12,800 Shares
Class B (Non-voting) 1,120,214 Shares
ROUNDY'S, INC.
INDEX
Page No.
PART I. Financial Information: --------
Consolidated Balance Sheets -
September 28, 1996 and December 30, 1995 3
Statements of Consolidated Earnings -
Thirteen Weeks and Thirty-nine Weeks
Ended September 28, 1996 and
September 30, 1995 4
Statements of Consolidated Cash Flows -
Thirty-nine Weeks Ended September 28, 1996
and September 30, 1995 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information 9
SIGNATURES 10
PART I. FINANCIAL INFORMATION
ROUNDY'S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 28, 1996 and December 30, 1995
September 28, 1996 December 30, 1995
(Unaudited) (Audited)
ASSETS ------------------ -----------------
CURRENT ASSETS:
Cash and cash equivalents.............$ 29,247,100 $ 26,382,000
Notes and accounts receivable, less
allowance for losses, $6,859,500
and $8,431,300, respectively........ 101,970,500 99,727,000
Merchandise inventories............... 171,615,900 163,204,100
Prepaid expenses...................... 3,276,700 5,060,700
Future income tax benefits............ 8,496,800 8,496,800
------------ ------------
Total Current Assets............... 314,607,000 302,870,600
------------ ------------
OTHER ASSETS:
Notes receivable, less allowance
for losses of $4,641,000........... 13,765,300 17,249,100
Other assets and goodwill............. 11,147,700 5,300,600
Other real estate..................... 4,346,300 4,659,400
Deferred income tax benefit........... 2,706,000 2,706,000
------------ ------------
Total Other Assets................. 31,965,300 29,915,100
------------ ------------
PROPERTY AND EQUIPMENT - Net........... 102,613,300 74,550,900
------------ ------------
$449,185,600 $407,336,600
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt..$ 3,811,900 $ 3,776,500
Accounts payable...................... 162,985,000 165,539,300
Accrued expenses...................... 50,918,000 42,231,400
Income taxes.......................... 1,756,600 5 83,600
------------ ------------
Total Current Liabilities 219,471,500 212,130,800
LONG-TERM DEBT, LESS CURRENT MATURITIES 109,560,100 78,850,200
OTHER LIABILITIES...................... 15,820,700 16,322,500
------------ ------------
Total Liabilities.................. 344,852,300 307,303,500
------------ ------------
REDEEMABLE CLASS B COMMON STOCK........ 5,876,700 8,132,000
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A).................... 16,000 16,700
Non-Voting (Class B)................ 1,330,600 1,282,400
------------ ------------
Total Common Stock................. 1,346,600 1,299,100
Amount related to recording minimum
pension liability..................... (283,600) (283,600)
Patronage dividends payable in common
stock................................. 3,405,000
Additional paid-in capital............. 25,010,000 21,222,100
Reinvested earnings.................... 73,514,800 66,258,500
------------ ------------
Total.............................. 99,587,800 91,901,100
Less Treasury Stock, at cost........... 1,131,200
------------ ------------
Total Stockholders' Equity......... 98,456,600 91,901,100
------------ ------------
$449,185,600 $407,336,600
============ ============
See Notes to Consolidated Financial Statements.
<TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996 AND
SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
September 28, 1996 September 30, 1995 September 28, 1996 September 30,1995
------------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees.......... $645,106,900 $609,201,700 $1,898,315,700 $1,818,957,600
Other - net......................... 1,488,700 1,541,300 3,371,000 3,793,100
------------ ------------ -------------- --------------
646,595,600 610,743,000 1,901,686,700 1,822,750,700
COSTS AND EXPENSES:
Cost of sales....................... 582,610,500 552,934,700 1,717,974,700 1,651,485,200
Operating and administrative........ 55,416,100 51,783,700 164,134,900 153,308,000
Interest............................ 2,354,800 2,012,300 6,297,200 5,933,100
------------ ------------ -------------- --------------
640,381,400 606,730,700 1,888,406,800 1,810,726,300
------------ ------------ -------------- --------------
EARNINGS BEFORE INCOME TAXES........ 6,214,200 4,012,300 13,279,900 12,024,400
PROVISION FOR INCOME TAXES.......... 2,532,300 1,635,000 5,411,600 4,899,900
------------ ------------ -------------- --------------
NET EARNINGS........................ $ 3,681,900 $ 2,377,300 $ 7,868,300 $ 7,124,500
============ ============ ============== ==============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996 AND SEPTEMBER 30, 1995
(UNAUDITED)
Thirty-nine Weeks Ended
September 28, 1996 September 30, 1995
Cash Flows From Operating Activities:
Net earnings.......................... $ 7,868,300 $ 7,124,500
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization......... 11,790,400 9,968,600
Allowance for losses.................. 2,818,000 4,389,800
Gain on sale of assets................ (741,500) (859,300)
(Increase) Decrease in Operating Assets
Net of Effects of Business Acquisition:
Accounts receivable................... (4,161,500) (3,835,200)
Merchandise inventories............... (5,411,800) (17,799,000)
Prepaid expenses...................... 2,284,000 2,690,200
Future income tax benefits............ (596,600)
Other real estate..................... 313,100 1,593,700
Deferred expenses and other assets.... (403,000) 365,100
Increase(Decrease)in Operating Liabilities
Net of Effects of Business Acquisition:
Accounts payable...................... (4,354,300) 442,900
Accrued expenses...................... 7,802,100 7,131,300
Income taxes.......................... 1,173,000 (4,483,200)
Other liabilities..................... (501,800) (53,700)
----------- -----------
Net cash flows provided by operating
activities............................. 18,475,000 6,079,100
----------- -----------
Cash Flows from Investing Activities:
Capital Expenditures.................. (35,717,600) (12,508,700)
Proceeds from sale of property and
equipment........................... 2,221,400 4,530,100
Payment for business acquisition net of
cash acquired....................... (13,905,800)
Decrease (increase) in notes receivable 3,483,800 (6,354,800)
----------- -----------
Net cash flows used in investing
activities............................ (43,918,200) (14,333,400)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings.... 32,000,000 3,000,000
Principal payments of long-term debt.. (1,290,100) (6,845,900)
Increase (decrease)in current
maturities of long-term debt........ 35,400 (2,273,300)
Proceeds from sale of common stock.... 689,000 636,800
Common stock purchased................ (3,126,000) (3,046,400)
----------- -----------
Net cash flows provided by (used in)
financing activities.................. 28,308,300 (8,528,800)
----------- -----------
Net Increase (Decrease) in Cash and
Cash Equivalents...................... 2,865,100 (16,783,100)
Cash and Cash Equivalents,
Beginning of Period................... 26,382,000 40,268,800
----------- -----------
Cash and Cash Equivalents, End of Period $29,247,100 $23,485,700
=========== ===========
Cash paid during the period:-Interest $ 5,120,300 $ 5,508,500
-Income Taxes $ 4,347,900 $10,022,000
See Notes to Consolidated Financial Statements.
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 September 28, 1996 and
December 30, 1995, and the results of operations
for the thirteen and thirty-nine weeks ended
September 28, 1996 and September 30, 1995 and
changes in cash flows for the thirty-nine weeks
ended September 28, 1996 and September 30, 1995.
2) The results of operations for the thirteen and
thirty-nine weeks ended September 28, 1996 and
September 30, 1995 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.
4) Class B common stock which is subject to
redemption is reflected outside of stockholders'
equity. As of September 28, 1996 and December 30,
1995, 69,016 and 95,502 shares, respectively, were
subject to redemption. The Class B common stock
subject to redemption is payable over a five year
period based upon the book value at the preceding
fiscal year end.
5) During the quarter ended June 29, 1996, the
Company concluded its consolidation of Cardinal
Foods into the Lima Division. The pretax cost of
this consolidation was $1.5 million.
6) Effective June 22, 1996, the Company purchased a
grocery retailer for approximately $13 million in
cash. The acquisition has been accounted for as a
purchase and the results of operations have been
included in the consolidated financial statements
since the date of acquisition.
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 Sept. 28, 39 Weeks Ended Sept. 28,
1996 & Sept. 30, 1995 1996 & Sept. 30, 1995
Net sales and service fees $35,905,200 5.9% $79,358,100 4.4%
Cost of sales 29,675,800 5.4% 66,489,500 4.0%
Operating and admin. expenses 3,632,400 7.0% 10,826,900 7.1%
Interest expense 342,500 17.0% 364,100 6.1%
Earnings before income taxes 2,201,900 54.9% 1,255,500 10.4%
Net sales and service fees increased approximately $35.9
million during the third quarter of 1996 as compared to the
third quarter of 1995. The loss of wholesale customers
resulted in a decrease of approximately $17.1 million. The
closing or sale of six Company-owned stores resulted in a
decrease of approximately $4.1 million. New Company-owned
stores resulted in an increase of approximately $23.5
million. Sales by existing Company-owned stores increased
$3.3 million. Sales to new and existing wholesale customers
increased $30.3 million.
Net sales and service fees increased approximately $79.3
million during the first three quarters of 1996 as compared
to the first three quarters of 1995. The loss of wholesale
customers resulted in a decrease of approximately $39.6
million. The closing or sale of six Company-owned stores
resulted in a decrease of approximately $9.1 million. New
Company-owned stores resulted in an increase of
approximately $37.1 million. Sales by existing Company-
owned stores increased $8.3 million. Sales to new and
existing wholesale customers increased $82.6 million.
Cost of sales approximated 90.3% and 90.8% of net sales and
service fees for the thirteen weeks ended September 28, 1996
and September 30, 1995, respectively. Year-to-date cost of
sales approximated 90.5% and 90.8% of net sales and service
fees for the thirty-nine weeks ended September 28, 1996 and
September 30, 1995, respectively.
Operating and administrative expenses approximated 8.6% and
8.5% of net sales and service fees for the thirteen weeks
ended September 28, 1996 and September 30, 1995,
respectively. Year-to-date operating and administrative
expenses approximated 8.6% and 8.4% of net sales and service
fees for the thirty-nine weeks ended September 28, 1996 and
September 30, 1995, respectively. The increase is primarily
due to the costs associated with the consolidation of
Cardinal Foods into the Lima Division (See Note 5), and an
increase in depreciation and amortization expense.
Interest expense increased primarily as a result of
increased borrowing levels, primarily due to increased
capital expenditures and the business acquisition (See Note
6), during the thirty-nine weeks ended September 28, 1996 as
compared to the thirty-nine weeks ended September 30, 1995.
No patronage dividends have been accrued as of September 28,
1996. 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 1996 and
1995.
Liquidity and Capital Resources
The Company's current ratio was 1.43:1 at year-end and at
September 28, 1996. The consolidated long-term debt to
equity ratio has increased from 0.79:1 at December 30, 1995
to 1.05:1 at September 28, 1996, primarily due to increased
capital expenditures and the business acquisition (See Note 6).
Stockholders' equity, including redeemable common stock,
increased approximately $4.3 million due to reinvested
earnings of $7.9 million, proceeds from the sale of common
stock of $0.6 million and offset by common stock purchases
of $3.1 million and a common stock purchase, to be held in
Treasury, of $1.1 million.
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
September 28, 1996.
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 7, 1996 ROBERT D. RANUS
------------------------
Robert D. Ranus
Vice President and
Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROUNDY'S,
INC. FORM 10-Q FOR THE QUARTER ENDING SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 29,247,100
<SECURITIES> 0
<RECEIVABLES> 101,970,500
<ALLOWANCES> 0
<INVENTORY> 171,615,900
<CURRENT-ASSETS> 314,607,000
<PP&E> 191,252,400
<DEPRECIATION> 88,639,100
<TOTAL-ASSETS> 449,185,600
<CURRENT-LIABILITIES> 219,471,500
<BONDS> 109,560,100
0
0
<COMMON> 1,346,600
<OTHER-SE> 97,110,000
<TOTAL-LIABILITY-AND-EQUITY> 449,185,600
<SALES> 1,898,315,700
<TOTAL-REVENUES> 1,901,686,700
<CGS> 1,717,974,700
<TOTAL-COSTS> 1,717,974,700
<OTHER-EXPENSES> 161,316,900
<LOSS-PROVISION> 2,818,000
<INTEREST-EXPENSE> 6,297,200
<INCOME-PRETAX> 13,279,900
<INCOME-TAX> 5,411,600
<INCOME-CONTINUING> 7,868,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,868,300
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
