UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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
(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)
Registrant's telephone number, including area code: (414) 547-7999
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of December 30, 1995, 13,400 shares of Class A (voting) Common Stock
and 1,121,399 shares of Class B (non-voting) Common Stock were
outstanding. All of the outstanding shares of Class A Common Stock on
December 30, 1995 were held of record by the Roundy's, Inc. Voting Trust
which may be deemed an affiliate of the registrant. There is no
established public trading market for either class of such stock.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Form 10-K Reference
--------- -------------------
Annual Report to Stockholders Part II, Items 6, 7, 8
for the year ended December 30, 1995
<PAGE>
PART I
ITEM 1. Business.
GENERAL
Roundy's, Inc. and its subsidiaries (collectively the
"Company") are engaged principally in the wholesale
distribution of food and nonfood products to supermarkets
and warehouse food stores located in Wisconsin, Illinois,
Michigan, Indiana, Ohio, Kentucky, Missouri, Arkansas,
Pennsylvania, Tennessee and West Virginia. The Company also
owns and operates ten retail warehouse food stores under the
name "Pick 'n Save," five limited assortment food stores
under the name "Mor For Less" and seven conventional food
stores under the name "Cardinal Foods," "Village Market" or
"Buy Low Foods." The Company offers its retail customers a
complete line of nationally-known name brand merchandise, as
well as a number of its own private and controlled labels.
The Company services 896 retail grocery stores.
In addition to the distribution and sale of food and nonfood
products, the Company provides specialized support services
for retail grocers, including promotional merchandising and
advertising programs, accounting and inventory control,
store development and financing and assistance with other
aspects of store management. The Company maintains a staff
of trained retail counselors who advise and assist
individual owners and managers with store operations.
Roundy's, Inc. was incorporated in 1952 under the Wisconsin
Business Corporation Law. The Company's executive offices
are located at 23000 Roundy Drive, Pewaukee, Wisconsin
53072, and its telephone number is (414) 547-7999. Unless
the context indicates otherwise, as used herein, the term
"Company" refers to Roundy's, Inc. and its subsidiaries and
the term "Roundy's" refers to Roundy's, Inc. without its
subsidiaries.
OPERATION AS A COOPERATIVE
Roundy's has historically operated its food wholesale
business on a cooperative basis, and therefore determined
its Federal income tax liabilities under Subchapter T of the
Internal Revenue Code, which governs the taxation of
corporations operating on a cooperative basis.
Substantially all of Roundy's outstanding Class A Common is
owned by the owners ("stockholder-customers") of 134 retail
grocery stores serviced by Roundy's. These stockholder-
customers, who own approximately 68% of the combined total
of Class A Common and Class B Common, may receive patronage
dividends from Roundy's based on the sales of Roundy's to
such stockholder-customers. The patronage dividend is
payable at least 20% in cash and the remainder in Class B
Common. Patronage dividends for the years ended December
30, 1995 and January 1, 1994 were payable 30% in cash and
70% in Class B Common. There were no patronage dividends
paid for the year ended December 31, 1994 because the
Company did not meet the requirement imposed under its By-
Laws which provides that the book value per share of its
<PAGE>
common stock must increase by 10% before any patronage
dividends may be paid. Under Subchapter T of the Internal
Revenue Code, patronage dividends are deducted by Roundy's
in determining taxable income, and are generally taxable to
the stockholder-customers (including the value of the Class
B Common), for Federal income tax purposes.
Roundy's anticipates that in the future it will continue to
operate on a cooperative basis in substantially this manner,
although it is not required to do so and its operation on
this basis, as well as its practice of paying patronage
dividends, could be terminated at any time by action of the
Board of Directors.
The applicable laws, regulations, rulings and judicial
decisions affecting the determination of whether a
corporation is operating on a cooperative basis for Federal
income tax purposes under Subchapter T of the Internal
Revenue Code are subject to interpretation. Although
management believes that Roundy's qualifies as a cooperative
for such purposes, Roundy's has not obtained, and does not
intend to seek a ruling or other assurance from the IRS that
this is the case. If the Internal Revenue Service were to
challenge the cooperative status of Roundy's, and if
Roundy's were to be unsuccessful in defending such status,
Roundy's might incur a Federal income tax liability with
respect to patronage dividends previously paid to
stockholder-customers during the tax years in question and
reflected as tax deductions by Roundy's. Roundy's
thereafter might incur significantly increased consolidated
Federal income tax liabilities in future tax years.
The subsidiaries of Roundy's do not operate as cooperatives.
The customers serviced by these subsidiaries are independent
grocers, operating 762 retail stores. They do not receive
patronage dividends. In addition, approximately 32% of the
outstanding combined Class A Common and Class B Common is
held by employees or former customers of Roundy's and,
although they participate in the accumulation of equity in
the Company, they do not receive patronage dividends and do
not own any Class A Common.
WHOLESALE FOOD DISTRIBUTION
The Company distributes a broad range of food and nonfood
products to its customers and to corporate-owned retail
stores. The Company has seven product lines: dry grocery,
frozen food, fresh produce, meat, dairy products, bakery
goods and nonfood products. The Company has no long-term
purchase commitments and management believes that the
Company is not dependent upon any single source of supply.
No source of supply accounted for more than 5% of the
Company's purchases in fiscal 1995.
<PAGE>
The Company sells brand name merchandise of unrelated
manufacturers, including most nationally advertised brands.
In addition, the Company sells numerous products under
private and controlled labels, including but not limited to
"Roundy's," "Old Time," "Shurfine" and "Buyers' Choice."
Private label product sales for the Company accounted for
$166,045,000, $153,699,000 and $137,176,000 of the Company's
sales during the fiscal years ended December 30, 1995,
December 31, 1994 and January 1, 1994, respectively.
As described above, Roundy's, exclusive of its subsidiaries,
has historically operated on a cooperative basis with
respect to its wholesale food distribution business.
Roundy's cooperative operations accounted for approximately
37%, 37% and 36% of the Company's consolidated net sales and
service fees for fiscal 1995, 1994 and 1993, respectively.
At December 30, 1995, Roundy's had 76 stockholder-customers
actively engaged in the retail grocery business, operating a
total of 134 retail grocery stores. Roundy's cooperative
wholesale food business is focused primarily in Wisconsin,
where all but 6 of the 134 retail grocery stores are located
(6 are in Illinois). At December 30, 1995 the Company
(including its subsidiaries) had 762 independent retail food
store customers. Sales by the Company to the independent
retail food stores accounted for 54%, 54% and 55% of the
Company's consolidated net sales and service fees for fiscal
1995, 1994 and 1993, respectively.
The Company's primary marketing objective is to be the
principal source of supply to both its stockholder-customers
and other independent retailers. In an 11 state area the
Company serviced 134 retail grocery stores operated by its
stockholder-customers, 762 retail stores operated by non-
stockholders and 22 Company-owned and operated retail stores
during fiscal 1995. Of the Company's consolidated net sales
and service fees for this period, $539,854,000 or 21.7% were
attributable to five customers, with one customer accounting
for $219,310,000 or 8.8% of such sales. Approximately 80%
or 717 retail store customers purchased less than $3,000,000
each from the Company in fiscal 1995. 121 customers owned
more than one retail food store, with two customers owning
13 retail food stores.
<PAGE>
Services to Customers
Stockholder-customers are provided, and independent
retailers are offered, a variety of services to help them
maintain a competitive position within the retail grocery
industry. These services include pricing services, ordering
assistance, point-of-sale host-computer support, detailed
reports of purchases, store engineering, retail accounting,
group advertising, centralized bakery purchasing,
merchandising, insurance, real estate services and retail
training. The Company charges its stockholder-customers for
some of these services, however, the income generated by
such charges is not material. The foregoing services are
also available to the Company's independent retailers on a
fee basis.
Customer Loans, Guarantees and Leases
The Company has maintained a continuous effort to assist
qualified stockholder-customers and independent retailers to
remodel and expand existing retail locations and to develop
new retail outlets, and has made various loans to these
individuals and entities for such purposes.
Loans outstanding as of December 30, 1995 are as follows:
Outstanding
Number Balance Range of Range of
of Original as of Interest Maturity
Loans Amount Dec. 30,1995 Rates Dates
------ ----------- ------------ ---------- ----------
Inventory,
Equipment
Loans 146 $40,938,700 $31,030,500 Variable(1) 1996-2011
________________
(1) Variable rates based on the Company's cost of borrowing.
The Company has guaranteed customer and employee bank loans
and customer leases amounting to $1,908,000 and $1,288,400,
respectively at December 30, 1995.
The Company has a lease program under which it may in its
discretion lease store sites and equipment for sublease to
qualified customers. This enables customers to compete with
large grocery store chains for store sites at favorable
rates. The Company presently has such real estate and
equipment leases with lease terms from 1996 to 2018.
Aggregate lease rentals received under this program were
$22,045,500, $22,329,500 and $18,985,200 in fiscal 1995,
1994 and 1993, respectively.
<PAGE>
Marketing and Distribution of Products
The Company generally distributes its various product lines
by a fleet of 270 tractor cabs and 620 trailers and some
products are shipped direct from manufacturers to customer
locations. Most customers order for their stores on a
weekly basis and receive deliveries from one to five days a
week. Orders are generally transmitted directly to a
warehouse computer center for prompt assembly and dispatch
of shipments. The Company has retail counselors and
merchandising specialists who serve its customers in a
variety of ways, including the analysis of and
recommendation on store facilities and equipment;
development of programs and objectives for establishing
efficient methods and procedures for receipt, handling,
processing, checkout and other operations; informing
customers on latest industry trends; assisting and dealing
with training needs of customers; and, if the need arises,
acting as liaison or problem solver between the Company and
the customers. The retail counselors and specialists are
assigned a specific geographic area and periodically visit
each customer within their assigned area.
Terms of Sales and Bad Debt Experience
The Company renders statements to its customers on a weekly
basis to coincide with regular delivery schedules. Roundy's
accounts of single store owners are considered delinquent if
not paid on the statement date. Accounts of multiple store
owners are considered delinquent if not paid within three
days of the statement date. Accounts of Roundy's
subsidiaries are considered delinquent if not paid within
seven days of the statement date. The majority of accounts
are collected via the Automated Clearing House ("ACH")
system. Delinquent accounts are charged interest at the
rate of prime plus 5%, computed on a daily basis. During
each of the past three fiscal years, the Company's bad debt
expense has been less than .38% of sales. In 1995, 1994 and
1993, the Company's bad debt expense was $5,871,500,
$9,166,600 and $6,738,600, respectively.
Roundy's stockholder-customers are required to maintain
buying deposits with Roundy's equal to the greater of the
average amount of a stockholder-customer's purchases over a
two-week period or $20,000. The book value of Class A and
Class B Common Stock of Roundy's owned by a stockholder-
customer is credited against the buying deposit requirement,
and Roundy's has a lien against all such stock to secure any
indebtedness to Roundy's.
<PAGE>
RETAIL FOOD STORES
The Company operates three types of corporate stores (high
volume-limited service retail "warehouse" stores, high value-
limited assortment retail stores and conventional retail
stores). The high volume-limited service warehouse stores
are designated as "Pick 'n Save" which generally offer, at
discount prices, complete food and general merchandise lines
to the customer, emphasizing higher demand items, with
stores ranging from 34,000 to 73,000 square feet per store.
The high value-limited assortment retail stores are
designated as "Mor For Less" which emphasize low cost, high
value lines to the customer, with stores ranging from 9,400
to 24,000 square feet per store. Conventional retail stores
operated under the name "Cardinal Foods," "Village Market"
or "Buy Low Foods" generally emphasize full service to the
customer at competitive prices. These stores range from
36,000 to 42,000 square feet. The number of stores operated
by the Company at the end of its three most recent fiscal
years was as follows:
Type of Store 1995 1994 1993
------------- ---- ---- ----
High Value-Limited Assort-
ment and High Volume-Limited
Service Stores (Warehouse
food stores)..................... 15 11 14
Conventional Retail Stores....... 7 4 5
Sales of Company-operated stores during the three most
recent fiscal years were $226,513,000, $231,364,000 and
$238,724,000 for fiscal 1995, 1994 and 1993, respectively.
The additional volume of wholesale sales generated by the
retail stores owned and operated by the Company helps to
reduce the overhead of the business and increases the
Company's return to its stockholders.
EMPLOYEES
At December 30, 1995, the Company had employed full-time
1,153 executive, administrative and clerical employees,
1,419 warehouse and processing employees and drivers and 678
retail employees and had employed 1,589 part-time employees.
Substantially all of the Company's warehouse employees,
drivers and retail employees are represented by unions, with
contracts expiring in 1996 through 1999. The Company
considers its employee relations to be normal. However,
during the third quarter of 1991 the Company experienced a
12-week labor dispute at the Milwaukee Division. There have
been no other significant work stoppages during the last
five years. Substantially all full-time employees are
covered by group life, accident, and health and disability
insurance.
<PAGE>
COMPETITION
The grocery industry, including the wholesale food
distribution business, is characterized by intense
competition and low profit margins. The shifting of market
share among competitors is typical of the wholesale food
business as competitors attempt to increase sales in any
given market. In order to compete effectively, the Company
must have the ability to meet rapidly fluctuating
competitive market prices, provide a wide range of
perishable and nonperishable products, make prompt and
efficient delivery, and provide the related services which
are required by modern supermarket operations.
The Company competes with a number of local and regional
grocery wholesalers and with a number of major businesses
which market their products directly to retailers, including
companies having greater assets and larger sales volume than
the Company. The Company's customers and the Company's
corporate stores also compete at the retail level with
several chain store organizations which have integrated
wholesale and retail operations. The Company's competitors
range from small local businesses to large national and
international businesses. The Company's success is in large
part dependent upon the ability of its independent retail
customers to compete with larger grocery store chains.
In the Milwaukee area, the "Pick 'n Save" group, which
consists of both independently-owned and Company-owned
stores, continues to be the market share leader with 46% of
households in the Milwaukee metropolitan statistical area
purchasing "most of their groceries" from "Pick 'n Save" as
reported in the Milwaukee Journal Consumer Analysis Survey
taken in the Fall of 1994.
In competing for customers, emphasis is placed on high
quality and a wide assortment of product, low service fees
and reliability of scheduled deliveries. The Company
believes that the range and quality of other business
services provided to retail store customers by the
wholesaler are increasingly important factors, and that
success in the wholesale food industry is dependent upon the
success of the Company's customers who are also engaged in
an intensely competitive, low profit margin industry.
<PAGE>
ITEM 2. Properties.
The Company's principal executive offices are located in
Pewaukee, Wisconsin. These offices are on a 5-acre site. A
portion of these facilities are owned by Roundy's and the
remainder are leased from a third party.
Wholesale activities are conducted by the Company from the
following warehouses:
Approximate
Warehouse
Location Products Distributed Square Footage
- -------- -------------------- --------------
Wauwatosa, Wisconsin All product lines, 745,000 (O)
except nonfood products
Mazomanie, Wisconsin Dry groceries and 225,000 (L)
nonfood products
Westville, Indiana All product lines, 557,000 (L)
except nonfood products
Lima, Ohio All product lines, 460,000 (O)
except produce and
nonfood products
Eldorado, Illinois Dry groceries and 384,000 (O)
dairy products
Columbus, Ohio All product lines, 320,000 (L)
except produce
Van Wert, Ohio Nonfood products 115,000 (L)
Evansville, Indiana Frozen foods and 94,000 (O)
meat
South Bend, Indiana Frozen foods 84,000 (L)
Muskegon, Michigan All product lines, 215,000 (O)
except produce
O = Owned L = Leased
The Company believes its current properties are well
maintained and, in general, are adequately sized to house
existing operations. The Company is subject to regulation
by the United States Food and Drug Administration and to
certain state and local health regulations in connection
with the operations of its facilities and its wholesale food
business. The Company has not been subject to any actions
brought under such regulations in the past five years.
<PAGE>
Transportation
The Company's transportation fleet for distribution
operations as of December 30, 1995 consisted of 270 tractor
cabs, 620 trailers and 10 straight delivery trucks. In
addition, the Company owns 50 automobiles. Approximately
89% of the fleet is owned by the Company and the balance is
leased.
Computers
The Company owns most of its computer and related peripheral
equipment. The computers are used for inventory control,
billing and all other general accounting purposes. The
computer systems are adequate for the Company's operations.
ITEM 3. Legal Proceedings.
The Company is not involved in any material litigation as
either a plaintiff or defendant, nor is any other material
litigation contemplated by Roundy's or, to the best of its
knowledge, threatened against it.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders
during the fourth quarter of fiscal 1995.
PART II
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The transfer of shares of Roundy's Class A Common and
Roundy's Class B Common is substantially restricted and
there is no established public trading market for Roundy's
stock. As of December 30, 1995, all of the outstanding
shares of Roundy's Class A (voting) Common Stock were held
of record by the Roundy's, Inc. Voting Trust. Further
information on the Voting Trust is found in Item 12 of this
report. There is also no established public trading market
for Roundy's Voting Trust Certificates and there were 76
holders of such Certificates on December 30, 1995. On
December 30, 1995 an aggregate of 225 persons held shares of
Roundy's Class B Common Stock and/or Voting Trust
Certificates. Except for patronage dividends (see Item 1,
Business, and Note 3 to Roundy's financial statements), no
dividends have ever been paid on the Common Stock of
Roundy's. There is no intention of paying dividends, other
than patronage dividends, in the foreseeable future.
<PAGE>
ITEM 6. Selected Financial Data.
The information required by this Item is incorporated by
reference from the Registrant's Annual Report to
Stockholders for the fiscal year ended December 30, 1995
(the "Annual Report") under the caption "Selected Financial
Data."
ITEM 7. Management's Discussion and Analysis of Financial Condition
and Results of Operation.
The information required by this Item is incorporated by
reference from the Annual Report under the caption
"Financial and Operational Review."
ITEM 8. Financial Statements and Supplementary Data.
The required Financial Statements are incorporated by
reference from the Annual Report; see response to Item
14(a)(1), of this report. The required financial statement
schedules are filed with this report; see the response to
Item 14(a)(2) of this report. Supplementary data is not
furnished pursuant to Item 30(a)(5) of Regulation S-K.
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The Directors and Executive Officers of Roundy's are as follows:
Position(s) Held with Roundy's
Name Age and Business Experience
- ----------------- --- -------------------------------
Gerald F. Lestina 53 President and Chief Executive Officer
since 1995; President and Chief Operating
Officer 1993-1995; Vice President of
Wisconsin Region 1992-1993; President of
Milwaukee Division 1986-1993; Director
since 1991 (term expires 1996)
Roger W. Alswager 47 Vice President of Real Estate since 1989
Londell J. Behm 45 Vice President of Advertising since 1987
Ralph D. Beketic 49 Vice President-Wisconsin Region since
1996; President of Milwaukee Division
since 1993; Vice President of Sales-
Milwaukee Division 1991-1993
David C. Busch 47 Vice President of Administration since
1993; Vice President of Human Resources
1990-1993
Edward G. Kitz 42 Vice President, Secretary & Treasurer
since 1995; Vice President & Treasurer
since 1989
Charles H. 53 Vice President of Logistics and Planning
Kosmaler, Jr. since 1993; Vice President of Adminis-
trative Efficiencies 1992-1993; Vice
President and Financial Operating Officer
1990-1991
Thomas A. Loggia 41 Vice President-Wholesale since 1995;
President of Cardinal Foods, Inc. 1994-
1995 (a subsidiary of the Company);
Vice President-Logistics, Food 4 Less,
Inc. 1993-1994; Vice President-Operations,
Wetterau, Inc. 1988-1993
Robert D. Ranus 55 Vice President and Chief Financial Officer
since 1987; Director since 1987 (term
expires 1997)
Michael J. Schmitt 47 Vice President-Sales and Development since
1995; Vice President, Northern Region
1992-1995; Vice President and General
Manager of Milwaukee Division 1991-1992
Marion H. Sullivan 49 Vice President of Marketing since 1989
<PAGE>
Robert E. Bartels 58 Director since 1994 (term expires 1997);
President and Chief Executive Officer of
Martin's Super Markets, Inc., South Bend,
Indiana
Charles R. Bonson 49 Director since 1994 (term expires 1997);
President of Bonson's Foods, Inc., Eagle
River, Wisconsin
Lloyd E. Coppersmith 55 Director since 1995 (term expires 1998);
President of Ron & Lloyd's, Inc., New
London, Wisconsin
Gary N. Gundlach 52 Director since 1990 (term expires 1996);
President of G.E.M., Inc., McFarland,
Wisconsin
George C. Kaiser 63 Director since 1986 (term expires 1998);
Chairman and Chief Executive Officer,
Hanger Tight Company since 1988; Chief
Executive Officer, George C. Kaiser and
Co. since 1988; Director of The Baird
Funds, Inc. since 1992
Henry Karbiner, Jr. 55 Director since 1995 (term expires 1998);
President and Chief Operating Officer, Tri
City National Bank; Vice President and
Chief Financial Officer and Director, Tri
City Bankshares Corporation, Oak Creek,
Wisconsin
Patrick D. McAdams 46 Director since 1995 (term expires 1998);
General Manager and Treasurer of McAdams,
Inc., Oconomowoc, Wisconsin
Brenton H. Rupple 71 Director since 1993 (term expires 1996);
Retired Chairman of Robert W. Baird & Co.,
Milwaukee, Wisconsin
Directors of Roundy's are elected by class and generally serve three-
year terms; approximately one-third of the Board of Directors is elected
annually. Of the ten current members of the Board of Directors, two are
currently Executive Officers of Roundy's (Messrs. Lestina and Ranus) and
four are "Retailer Directors" (Messrs. Bonson, Coppersmith, Gundlach and
McAdams). The terms of the Roundy's, Inc. Voting Trust provide that
each year the Trustees will vote to elect one stockholder-customer,
chosen by a plurality vote of the Voting Trust Certificate Holders, to
serve a three-year term as Director; however, the Roundy's, Inc. Voting
Trust provides that in every third year, Voting Trust Certificate
Holders will choose two Retailer Directors. Therefore, at any time
there should be four Retailer Directors serving.
<PAGE>
ITEM 11. Executive Compensation.
The following table shows the compensation for the past
three years of Roundy's five most highly compensated
executive officers performing policy making functions for
Roundy's, including the Chief Executive Officer (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
Other Compensation
Annual Securities All Other
Name and Compen- Underlying Compen-
Principal sation (A)Options sation
Position Year Salary Bonus(1) (2)(3)(5) (B)SARs (4)
- ------------------------------------------------------------------------------
(A) (B)
----- -----
Gerald F. Lestina 1995 $304,231 - - 6,000 - $8,138
President and Chief 1994 235,000 $41,344 $10,148 - - 7,697
Executive Officer 1993 193,605 63,127 9,381 4,000 - 7,367
Robert D. Ranus 1995 207,000 - - - - 9,659
Vice President and 1994 200,000 23,600 14,668 - - 9,604
Chief Financial 1993 181,125 62,500 13,895 3,000 - 9,527
Officer
Ralph D. Beketic 1995 120,000 38,750 - 1,500 500 1,797
Vice President- 1994 110,000 24,750 - - - 1,879
Wisconsin Region 1993 93,077 25,686 - - 1,000 1,988
Marion H. Sullivan 1995 135,846 15,625 - - 500 7,105
Vice President of 1994 125,000 25,499 7,298 - - 7,181
Marketing 1993 116,000 22,936 - - 500 7,324
Thomas A. Loggia 1995 132,577 14,375 46,640 1,500 2,500 5,344
Vice President- 1994 91,558 - 27,462 - - 214
Wholesale 1993 - - - - - -
<PAGE>
(1) Represents amounts paid in the year indicated for
performance in the previous year.
(2) Shown in this column are amounts reimbursed during the
fiscal year for the payment of income taxes for Messrs.
Lestina, Ranus and Sullivan.
(3) Pursuant to applicable SEC regulations, perquisites and
other personal benefits are omitted (except for Mr.
Loggia) because they did not exceed the lesser of
either $50,000 or 10% of the total of salary and bonus.
(4) The amounts shown in this column for 1995, 1994 and
1993, respectively, were derived from the following
figures. Term life insurance premiums paid by Roundy's
and Roundy's contributions to the 401(k) plan,
respectively, for the named executive officers are
shown below. For 1995 - Mr. Lestina: $5,828 and
$2,310. Mr. Ranus: $7,589 and $2,070. Mr. Beketic:
$597 and $1,200. Mr. Sullivan: $5,747 and $1,358.
Mr. Loggia: $5,344 and $0. For 1994 - Mr. Lestina:
$5,518 and $2,179. Mr. Ranus: $7,425 and $2,179. Mr.
Beketic: $546 and $1,333. Mr. Sullivan: $5,667 and
$1,514. Mr. Loggia: $214 and $0. For 1993 - Mr.
Lestina: $5,118 and $2,249. Mr. Ranus: $7,278 and
$2,249. Mr. Beketic: $592 and $1,396. Mr. Sullivan:
$5,584 and $1,740.
(5) The amounts shown in this column were for payments made
to Mr. Loggia for the following perquisites: personal
use of a company-owned car, loan forgiveness and
relocation expenses, respectively, as shown below. For
1995 - $906, $14,583 and $31,150. For 1994 - $857, $0,
and $26,605.
The executive officers of Roundy's are each covered by
$250,000 of executive equity life insurance. In addition,
executives are covered by a group life carve-out plan in the
amount of three times salary, which is in lieu of the group
term life insurance provided to substantially all nonunion
employees under a Roundy's-sponsored Plan. The executive
officers of Roundy's are also covered by an executive
disability income insurance wrap-around plan which is in
addition to the disability income insurance provided to
substantially all nonunion employees under a Roundy's-
sponsored Plan.
The Board of Directors of the Company has authorized the
Company to guarantee the repayment of any loans incurred by
senior executives and key employees for the purpose of
exercising certain stock options granted by the Company. The
guarantee is limited to a total aggregate principal amount
of loans of $3,000,000.
<PAGE>
The Company has Deferred Compensation Agreements with
certain executive officers, including Messrs. Lestina, Ranus
and Sullivan. The Deferred Compensation Agreements provide
generally that upon the occurrence of a change in control of
the Company, the Company shall pay to the employee deferred
compensation equal to the sum of the employee's then current
annual salary plus any bonus which may have been paid to the
employee within the fiscal year of the Company preceding the
change in control plus any other deferred compensation which
may accrue to the employee for the fiscal year of the
Company preceding the change in control under any deferred
compensation plan or agreement plus the value of any health
or life insurance benefits. The deferred compensation
amount must be paid in a single payment six months following
the date of occurrence of the change in control or, if
employee should be terminated following the change in
control, within thirty days of the date of such termination,
whichever occurs earlier.
Roundy's has a severance and non-competition agreement with
Gerald F. Lestina. This agreement continues in effect until
October 10, 2007. Upon Roundy's termination of Mr.
Lestina's employment (other than for "good cause" as defined
in the agreement), or Mr. Lestina's termination of his
employment (for "good reason" as defined in the agreement),
Roundy's will pay Mr. Lestina pro rata over the non-compete
period, an "applicable benefit." The "applicable benefit"
shall mean (i) if termination occurs prior to June 1, 1996,
24 times the "monthly benefit amount," and (ii) if
termination occurs on or after June 1, 1996, the "monthly
benefit amount" times the greater of (A) the number of
months remaining between the termination date and June 1,
1998, and (B) twelve (12).
The "monthly benefit amount" means the sum of: (i)
1/12 of the amount of Mr. Lestina's current salary; (ii)
1/12 of the amount of Mr. Lestina's bonus paid or payable;
and the fair value of any health and/or life insurance
benefits, on a monthly basis, to which Mr. Lestina is
entitled. If Mr. Lestina ceases to be employed by Roundy's
(including by reason of his death) at any time after
attaining age 55 and while he is then an officer and a
director of Roundy's (unless employment is terminated for
"good cause"), Roundy's will provide coverage for Mr.
Lestina and his spouse under the employee health, medical
and life insurance plans maintained by Roundy's for its
executive personnel, until, in addition to other parameters,
Mr. Lestina attains age 65. For a period of one year following
the termination of employment of Mr. Lestina, which occurs
under circumstances giving rise to Roundy's obligation to pay
the severance benefit under this agreement, Mr. Lestina agrees
not to compete with Roundy's in the states of Wisconsin,
Michigan, Illinois, Indiana and Ohio, plus to the extent not
included in those states, the area encompassed within a radius
of 400 miles of any warehouse or distribution facility operated
by Roundy's, or any affiliate of Roundy's, as of the termination
date.
<PAGE>
Effective November 1, 1991, the Board of Directors adopted
the 1991 Stock Incentive Plan (the "Plan") under which up to
75,000 shares of Class B Common Stock may be issued pursuant
to the exercise of stock options. The Plan also authorizes
the grant of up to 25,000 stock appreciation rights
("SARs"). Options and SARs may be granted to senior
executives and key employees of the Company by the Executive
Compensation Committee of the Board of Directors. No
options or SARs may be granted under the Plan after November
30, 2001. Options granted become exercisable based on a
vesting schedule which ranges from 20% at the date of grant
to 100% eight years from the date of grant. SAR holders are
entitled, upon exercise of a SAR, to receive cash in an
amount equal to the excess of the book value per share of
the Company's common stock as of the last day of the
Company's fiscal year immediately preceding the date the SAR
is exercised over the base price of the SAR. SARs granted
become exercisable based on the vesting rate which ranges
from 20% on the last day of the fiscal year of the grant to
100% eight years from the last day of the fiscal year of the
grant. In the event of a change in control of the Company,
all options and SARs previously granted and not exercised,
become exercisable.
The following tables provide information on the Named
Executive Officers' option and SAR grants in 1995, option
and SAR exercises in 1995 and the value of unexercised
options at December 30, 1995.
OPTION AND SAR GRANTS IN 1995 Potential
Realizable
% of Value at
Number of Total Assumed Annual
Securities Options/ Exer- Rates of Stock
Underlying SARs cise or Price Appreci-
(A)Options Granted to Base ation for
(B)SARs Employees Price Expiration Option Terms
Name Granted(1) in 1995(2) ($/Share) Date 5%($) 10%($)
- ------------------------------------------------------------------------------
Gerald F. Lestina (A) 6,000 63.2 77.40 11/30/2005 292,080 740,160
(B) - - - - - -
Ralph D. Beketic (A) 1,500 15.8 77.40 11/30/2005 73,020 185,040
(B) 500 11.1 77.40 11/30/2005 24,340 61,680
Marion H. Sullivan (A) - - - - - -
(B) 500 11.1 77.40 11/30/2005 24,340 61,680
Thomas A. Loggia (A) 1,500 15.8 77.40 11/30/2005 73,020 185,040
(B) 2,500 55.6 77.40 11/30/2005 121,700 308,400
(1) These options become exercisable in accordance with the vesting
schedule under the plan.
(2) Roundy's granted options representing 9,500 shares and 4,500
freestanding SARs to employees in 1995.
<PAGE>
Aggregated Option/SAR Exercises in 1995
and 1995 Year-End Option Values
Value of ($)
Number of of Unexercised
Unexercised In-the-Money
Shares (A)Options (A)Options
Acquired (B)SARs Money(B)SARs
on Exercise at 12/30/95 at 12/30/95
(A)Options Value($) Exercisable/ Exercisable/
Name (B)SARs Realized Unexercisable Unexercisable
- ----------------------------------------------------------------------------
Gerald F. Lestina (A) - - 13,500 / 4,000 321,948 / 31,002
(B) - - - -
Robert D. Ranus (A) - - 10,500 / - 286,400 / -
(B) - - - -
Ralph D. Beketic (A) - - 750 / 1,250 10,475 / 14,350
(B) - - 816 / 1,184 15,907 / 21,219
Marion H. Sullivan (A) - - 850 / 650 25,830 / 19,420
(B) - - 1,216 / 1,284 31,127 / 28,024
Thomas A. Loggia (A) - - 500 / 1,000 3,875 / 7,750
(B) - - 833 / 1,667 6,458 / 12,917
Benefits under the Roundy's, Inc. Retirement Plan are, in
general, an amount equal to 50% of average compensation
minus 50% of the participant's primary Social Security
benefit; provided, however, that if the employee has fewer
than 25 years of credited service, the monthly amount so
determined is multiplied by a fraction, the numerator of
which is the years of credited service and the denominator
of which is 25. In addition, if credited service is greater
than 25 years, the benefit is increased by 1% of average
compensation for each year of credited service in excess of
25 years to a maximum of 10 additional years.
The following table sets forth the estimated annual pensions
(before deduction of the Social Security offset described
below) which persons in specified categories would receive
if they had retired on December 30, 1995, at the age of 65:
<PAGE>
Average Annual
Compensation
During Last Annual Pension After Specified
Five Completed Years of Credited
Service
Calendar Years 15 Years 20 Years 25 Years 30 Years 35 Years
- --------------------------------------------------------------------
$100,000 $20,000 $40,000 $50,000 $55,000 $60,000
125,000 37,500 50,000 62,500 68,800 75,000
150,000 43,700 58,200 72,800 80,100 87,300
175,000 47,300 63,100 79,000 87,100 95,100
200,000 53,200 71,300 89,400 99,100 108,700
225,000 59,100 79,500 99,900 111,200 120,000
250,000 63,000 84,900 106,800 119,200 120,000
300,000 63,000 84,900 106,800 119,200 120,000
400,000 63,000 84,900 106,800 120,000 120,000
450,000 63,000 84,900 115,100 120,000 120,000
500,000 63,000 92,400 120,000 120,000 120,000
All of the Named Executive Officers are covered by the
Roundy's, Inc. Retirement Plan. Their average annual
compensation would be the combined amount listed under
Salary and Bonus shown in the Summary Compensation Table.
The estimated credited years of service for each of the
Named Executive Officers is as follows: Mr. Lestina: 26
years, Mr. Ranus: 10 years, Mr. Beketic: 5 years, Mr.
Sullivan: 8 years and Mr. Loggia: 2 years.
Directors who are employees of Roundy's receive no fees for
serving as Directors. Customer-directors each received $500
per meeting during 1995; outside Directors each received
$12,500, prorated on an annual basis, plus $500 per Board of
Directors meeting plus $250 per committee meeting not held
the same day as a Board of Directors meeting for their
services during 1995.
<PAGE>
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
Roundy's is authorized by its Articles of Incorporation to
issue 60,000 shares of Class A Common, $1.25 par value, and
2,400,000 shares of Class B Common, $1.25 par value. On
December 30, 1995, 13,400 shares of Class A Common and
1,121,399 shares of Class B Common were outstanding.
Roundy's has a Voting Trust (the "Trust") which was
established in August, 1971 (was amended and restated in
1983 and was further amended in 1986 and 1995), as the
successor to an initial voting trust created at the time of
the organization of Roundy's. The Trust has an indefinite
term, although it may be terminated upon the vote of the
Voting Trust Certificate Holders as provided therein. The
main purpose for the establishment of the Trust, and its
predecessor, was to insure the stability of management
necessary to obtain long-term warehouse and other financing.
On December 30, 1995, all of the outstanding shares of
Roundy's Class A Common held by current stockholder-
customers were on deposit in the Trust. The Voting Trust
Agreement authorizes the Trustees to vote all shares
deposited in the Trust, in their discretion, for the
election of all but four of the Directors (there are
currently ten Directors). On other matters submitted to a
vote of stockholders (including the election of one Director
each year), the Trustees are required to vote the shares
deposited in the Trust as a block as directed by a vote of a
majority of the holders of outstanding Voting Trust
Certificates (with each share of Class A Common in the Trust
entitling the depositor thereof to one vote).
The Trustees of the Trust currently are Robert S. Gold,
Edward G. Kitz, Gerald F. Lestina, Gary R. Sarner, Robert R.
Spitzer, Duane G. Tate and David A. Ulrich. Mr. Lestina is
President and Chief Executive Officer of Roundy's, Inc., and
is a member of Roundy's Board of Directors. Mr. Kitz is
Vice President, Secretary and Treasurer of Roundy's, Inc.
Mr. Gold is President and Stockholder of B. & H. Gold
Corporation, a stockholder-customer of Roundy's. Mr. Sarner
is President and Chief Executive Officer of Wiscold, Inc.
(see Item 13.). Mr. Tate is President and Stockholder of
Tate Foods, Inc., a stockholder-customer of Roundy's. Mr.
Ulrich is President and Stockholder of Mega Marts, Inc., a
stockholder-customer of Roundy's. In the event of the
death, resignation, incapacity or inability of any of the
Trustees, a successor Trustee may be named by a majority of
the remaining Trustees.
Vacancies need not be filled, except that there must be at
least three Trustees acting as such at all times, and one
Trustee must always be a stockholder-customer (or a
principal of an entity which is a stockholder-customer) of
Roundy's.
<PAGE>
Woodman's Food Market, Inc. (2919 North Lexington,
Janesville, Wisconsin 53545) is the record owner of 101,458
shares (or 9.05%) of the Roundy's Class B Common outstanding
on December 30, 1995. Voting and investment power over the
shares owned by Woodman's Food Market, Inc. is solely held
by its owner, Willard R. Woodman, Jr. McAdams, Inc. (36933
West Plank Road, Oconomowoc, Wisconsin 53066) is owner of
64,994 shares (or 5.80%) of the Roundy's Class B Common
outstanding on December 30, 1995. Voting and investment
power over the shares owned by McAdams, Inc. is solely held
by its owner, John A. McAdams. Mega Marts, Inc. (6312 South
27th Street, Oak Creek, Wisconsin 53154) is owner of 1,300
shares (or 9.70%) of the Roundy's Class A Common Stock and
79,411 shares (or 7.08%) of the Roundy's Class B Common
Stock outstanding on December 30, 1995. Voting and
investment power over the shares owned by Mega Marts, Inc.
is solely held by its owner, David A. Ulrich. Except as set
forth above or in the table below, no other person (or group
who, directly or indirectly, through any relationship, has
or shares the power to vote, or to direct the voting) owns
of record or is known by Roundy's to own beneficially more
than 5% of the outstanding Roundy's Class A Common Stock or
Roundy's Class B Common Stock. Except for Mega Marts, Inc.
mentioned above, no other person owns of record or is known
by Roundy's to own beneficially more than 5% of the Voting
Trust Certificates issued by the Trustees of the Roundy's
Voting Trust with respect to shares of Roundy's Class A
Common Stock deposited with the Trustees.
The following table sets forth the beneficial ownership of
equity securities of Roundy's by each Director at December
30, 1995, together with the beneficial ownership of equity
securities by all Directors and Officers as a group:
Beneficial Percent
Title of Class Beneficial Owner Ownership(1) of Class
- -------------- ------------------ ----------------- --------
Class B Common Gerald F. Lestina 16,606 shares (2) 1.46%
Class B Common Robert D. Ranus 14,825 shares (3) 1.31%
Class B Common George C. Kaiser 3,000 shares (4) 0.27%
Class B Common Robert E. Bartels 4,249 shares (5) 0.38%
Class A Common Lloyd E. Coppersmith 500 shares (6) 3.73%
Class B Common Lloyd E. Coppersmith 14,705 shares (6) 1.31%
Class A Common Gary N. Gundlach 500 shares (7) 3.73%
Class B Common Gary N. Gundlach 16,735 shares (7) 1.49%
Class A Common Charles R. Bonson 100 shares (8) 0.75%
Class B Common Charles R. Bonson 18,702 shares (8) 1.67%
Class B Common Brenton H. Rupple 300 shares 0.03%
Class A Common Patrick D. McAdams 600 shares (9) 4.48%
Class B Common Patrick D. McAdams 64,994 shares (9) 5.80%
Class A Common All Directors and
Officers as a Group
(4 persons, including
the above) 1,700 shares 12.69%
Class B Common All Directors and
Officers as a Group
(19 persons, including
the above) 166,332 shares (10) 14.43%
<PAGE>
(1) Direct ownership except as otherwise noted, and except
that all shares of Class A Common Stock shown in the
table are owned of record by the Trustees of the
Roundy's, Inc. Voting Trust.
(2) Includes options for 13,500 shares that are currently
exercisable but does not include options for an
additional 4,000 shares that have been granted.
(3) Includes options for 10,500 shares that are currently
exercisable.
(4) Relates to shares owned by First Wisconsin Trust
Company as Trustee of George Kaiser Profit Sharing
Plan.
(5) Includes 3,949 shares owned by Martin's Super Markets,
Inc., of which Mr. Bartels is President and
shareholder.
(6) Relates to shares owned by Ron & Lloyd's, Inc. of which
Mr. Coppersmith is the President and shareholder.
(7) Relates to shares owned by Gary N. Gundlach, as sole
proprietor and of G.E.M., Inc. of which Mr. Gundlach is
principal shareholder.
(8) Relates to shares owned by Bonson's Foods, Inc. of
which Mr. Bonson is principal shareholder.
(9) Relates to shares owned by McAdams, Inc. of which Mr.
McAdams is General Manager and Treasurer.
(10) Includes options for 31,316 shares that are currently
exercisable but does not include options for an
additional 11,684 shares that have been granted.
<PAGE>
ITEM 13. Certain Relationships and Related Transactions.
Messrs. McAdams, Bonson, Coppersmith, Bartels and Gundlach,
directors of Roundy's, and Messrs. Tate, Ulrich and Gold,
Trustees of the Voting Trust, each own and/or operate retail
food stores which purchase merchandise from the Company as a
supplier in the ordinary course of business. Retail food
stores owned by directors or Retailer Trustees purchase from
the Company on the same basis and conditions as all other
stockholder-customers of Roundy's. During the last three
years, the aggregate amount of purchases from the Company
for each of the foregoing were as follows:
1995 1994 1993
David A. Ulrich $219,310,000 $196,627,000 $169,194,000
Robert S. Gold 46,770,000 44,090,000 39,500,000
Gary N. Gundlach 39,253,000 31,960,000 28,110,000
Duane G. Tate 14,593,000 15,493,000 18,334,000
Patrick D. McAdams 63,598,000 64,185,000 62,838,000
Charles R. Bonson 7,094,000 6,644,000 5,580,000
Lloyd E. Coppersmith 21,499,000 20,808,000 20,203,000
Robert E. Bartels 81,542,000 77,898,000 65,988,000
Woodman's Food Market, Inc., owner of 9.05% of Roundy's
Class B Common Stock, had aggregate purchases from Roundy's
of $58,484,000, $53,981,000, and $52,085,000 for 1995, 1994
and 1993, respectively.
Ron & Lloyd's, Inc. agreed to sublease land and buildings
from the Company for a period of 18 years at one store site,
for an aggregate annual rental of approximately $455,000.
Gary N. Gundlach and G.E.M., Inc. have agreed to sublease
land and buildings from the Company for periods of one to 19
years at five store sites, for an aggregate annual rental of
approximately $951,000.
Tate Foods, Inc. agreed to sublease land and buildings from
the Company for periods of two to 15 years at two store
sites, for an aggregate annual rental of approximately
$275,000.
McAdams, Inc. agreed to sublease land and buildings from the
Company for periods of six to 15 years at three store sites,
for an aggregate annual rental of approximately $624,000.
Mega Marts, Inc. agreed to sublease land and buildings from
the Company for periods of four to 19 years at eleven store
sites, for an aggregate annual rental of approximately
$3,792,000.
In April, 1993, Tate Foods, Inc. issued promissory notes to
Roundy's, Inc. in the amount of $40,000. The amount
outstanding as of February 24, 1996 was $2,400.
The Company has guaranteed $347,400 of notes which mature in
December of 1997 for Tate Foods, Inc., of which Duane G.
Tate is President and stockholder.
<PAGE>
B. & H. Gold Corporation, Gold's Market, Inc., and Gold's,
Inc. have agreed to sublease land and buildings from the
Company for periods of ten to 23 years at three store sites,
for an aggregate annual rental of approximately $1,149,000.
The Company has made payments in fiscal 1995 aggregating
$1,299,800 for handling, order selecting and storage of
frozen food, meat and ice cream to Wiscold, Inc., of which
Mr. Sarner is President and Chief Executive Officer.
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a)(1) Financial Statements
The following consolidated financial statements of the
Company are incorporated by reference from its Annual Report
to Stockholders for the year ended December 30, 1995, filed
as an exhibit hereto:
Independent Auditors' Report
Statements of Consolidated Earnings for each of the three years
in the period ended December 30, 1995
Consolidated Balance Sheets at December 30, 1995 and
December 31, 1994
Statements of Consolidated Stockholders' Equity for each of
the three years in the period ended December 30, 1995
Statements of Consolidated Cash Flows for each of the three
years in the period ended December 30, 1995
Notes to Financial Statements
(a)(2) Financial Statement Schedules as of December 30, 1995
Page
----
Independent Auditors' Report....................... 24
Schedule VIII - Valuation and qualifying accounts.. 25
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or the notes thereto.
(a)(3) Exhibits
3.1 Articles of Incorporation of the Registrant, as
amended, incorporated herein by reference to Exhibit
4.1 of Registrant's Registration Statement on Form S-
2 (File No. 2-94485) dated December 5, 1984.
3.2 By-Laws of the Company as amended December 9, 1986,
incorporated herein by reference to Exhibit 3.2 of
Registrant's Annual Report on Form 10-K for fiscal
year ended January 3, 1987, filed with the Commission
on April 3, 1987, Commission File No. 2-66296.
3.3 1988-1 By-Law Amendments, incorporated herein by
reference to Exhibit 3.3 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1988, filed with the Commission on April 1, 1988,
Commission File No. 2-66296.
3.4 Amendment of By-Law Section 5.01, incorporated herein
by reference to Exhibit 3.4 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 30, 1989, filed with the Commission on March
30, 1990, Commission File No. 2-66296.
3.5 Amendment of By-Law Section 7.10, 7.11 and 7.12,
incorporated herein by reference to Exhibit 3.5 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990, filed with the
Commission on March 28, 1991, Commission File No. 2-66296.
<PAGE>
3.6 Amendment to By-Laws Relating to Number of Directors,
adopted April 12, 1995, incorporated herein by
reference to Exhibit 3.6 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May 1, 1995.
4.1 Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as
agent), incorporated herein by reference to Exhibit
4.3 of Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988, filed with
the Commission on March 31, 1989, Commission File No.
2-66296.
4.2 Amendment No. 1 dated April 13, 1990 to the Credit
Agreement dated March 6, 1989, between Roundy's, Inc.
and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.5 of
Registrant's Registration Statement on Form S-2 (File
No. 2-66296), dated April 27, 1990.
4.3 Policy Relating to Redemption of Stock by Inactive
Customer Shareholders and Former Employees,
incorporated herein by reference to Exhibit 4.5 of
Registrant's Registration Statement on Form S-2 (File
No. 33-57505) filed with the Commission on January
30, 1995 (included as Exhibit D to the prospectus
which forms a part of the Registration Statement).
4.4 Amendment No. 2 dated October 9, 1991 (effective
October 24, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.7 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.5 Amendment No. 3 dated December 9, 1991 (effective
December 30, 1991) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.8 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.6 Note Agreement dated December 15, 1991 (effective
December 30, 1991), between Roundy's, Inc. and
Massachusetts Mutual Life Insurance Company and
United of Omaha Life Insurance Company, incorporated
herein by reference to Exhibit 4.9 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.7 Amendment No. 4 dated December 14, 1992 (effective
December 15, 1992) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.10 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1993, filed with the Commission on March 30, 1993,
Commission File No. 2-66296.
<PAGE>
4.8 Note Agreement dated December 15, 1992 between
Roundy's, Inc. and Connecticut Mutual Life Insurance
Company, The Ohio National Life Insurance Company,
Provident Mutual Life Insurance Company of
Philadelphia, Provident mutual Life and Annuity
Company of America, Guarantee Mutual Life Company,
Woodmen Accident and Life Company and United of Omaha
Life Insurance Company, incorporated herein by
reference to Exhibit 4.11 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1993, filed with the Commission on March 30, 1993,
Commission File No. 2-66296.
4.9 Policies relating to Roundy's Issuance and Sales and
Redemptions/Repurchases of its Stock, incorporated
herein by reference to Exhibit 4.11 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit E to the prospectus which forms
a part of the Registration Statement).
4.10 Amendment No. 5 dated December 15, 1993 (effective
December 13, 1993) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.13 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
1, 1994, filed with the Commission on March 31, 1994,
Commission File No. 2-66296.
4.11 Note Agreement dated December 22, 1993 (effective
December 22, 1993), between Roundy's, Inc. and The
Variable Annuity Life Insurance Company, The Life
Insurance Company of Virginia, Phoenix Home Life
Mutual Insurance Company, Phoenix American Life
Insurance Company, Washington National Insurance
Company, and TMG Life Insurance Company, incorporated
herein by reference to Exhibit 4.14 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 1, 1994, filed with the Commission on March
31, 1994, Commission File No. 2-66296.
4.12 Form of Subscription Agreement, incorporated by
reference to Exhibit 4.14 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit A to the prospectus which forms
a part of the Registration Statement).
4.13 Form of Buying Deposit Agreement, incorporated by
reference to Exhibit 4.15 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit B to the prospectus which forms
a part of the Registration Statement).
4.14 Article V of Registrant's By-Laws "Fiscal Year
Accounting and Patronage Rebates," as amended on
December 12, 1989, incorporated by reference to
Exhibit 4.16 of Registrant's Registration Statement
on Form S-2 (File No. 33-57505) filed with the
Commission on January 30, 1995 (included as Exhibit C
to the prospectus which forms a part of the
Registration Statement).
<PAGE>
9 Amended and Restated Voting Trust Agreement dated
September 16, 1983, incorporated herein by reference
to Exhibit 9 of Registrant's Annual Report on Form 10-K
for the year ended December 31, 1983, filed with
the Commission on March 30, 1984, Commission File No.
2-66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to
Amended and Restated Voting Trust Agreement,
incorporated herein by reference to Exhibit 9(a) of
Registrant's Registration Statement on Form S-2 (File
No. 2-66296), dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting
Trust Agreement, incorporated herein by reference to
Exhibit 9(b) of Registrant's Registration Statement
on Form S-2 (File No. 2-66296), dated April 29, 1987.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement, incorporated herein by reference to
Exhibit 9(c) of Registrant's Registration Statement
on Form S-2 (File No. 33-57505), dated May 1, 1995.
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus and Sullivan, incorporated
herein by reference to Exhibit 10.4 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1989 filed with the Commission on March
30, 1990, Commission File No. 2-66296.
10.2 Directors and Officers Liability and Corporation
Reimbursement Policy issued by American Casualty
Company of Reading, Pennsylvania (CNA Insurance
Companies) as of June 13, 1986, incorporated herein
by reference to Exhibit 10.3 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
3, 1987, filed with the Commission on April 3, 1987,
Commission File No. 2-66296.
10.2(a) Declarations page for renewal through November 1,
1996 of Directors and Officers Liability and
Corporation Reimbursement Policy.
10.3 1991 Stock Incentive Plan, revised February 9, 1993,
incorporated herein by reference to Exhibit 10.6 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993, filed with the
Commission on March 30, 1993, Commission File No. 2-
66296.
10.4 Severance and Non-Competition Agreement between the
Registrant and Gerald F. Lestina.
13. 1995 Annual Report to Stockholders of Roundy's, Inc.
21. Subsidiaries of Roundy's, Inc.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the
last quarter of 1995.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of Roundy's, Inc.:
We have audited the consolidated financial statements of
Roundy's, Inc. and its subsidiaries as of December 30, 1995
and December 31, 1994, and for each of the three years in
the period ended December 30, 1995, and have issued our
report thereon dated February 23, 1996; such financial
statements and reports are included in your 1995 Annual
Report to Stockholders and are incorporated herein by
reference. Our audits also included the financial statement
schedule of Roundy's, Inc., listed in Item 14. This
financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 23, 1996
<PAGE>
<TABLE>
SCHEDULE VIII
ROUNDY'S, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
_______________________________________________________________________________________________
COLUMN COLUMN COLUMN COLUMN COLUMN
A B C D E
_______________________________________________________________________________________________
ADDITIONS
---------
(1) (2)
Balance at Charged Charged Balance
Beginning to Costs to Other at End
Description of Period & Expenses Accounts Deductions(A) of Period
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED December 30, 1995:
Allowance for Losses:
Current receivables ........$11,000,400 $2,146,500 $4,715,600 $ 8,431,300
Notes receivable, long-term 916,000 3,725,000 - 4,641,000
YEAR ENDED December 31, 1994:
Allowance for Losses:
Current receivables ........$ 8,766,500 $9,166,600 $6,932,700 $11,000,400
Notes receivable, long-term 1,483,000 - 567,000 916,000
YEAR ENDED January 1, 1994:
Allowance for Losses:
Current receivables ........$ 7,578,200 $6,738,600 $5,550,300 $ 8,766,500
Notes receivable, long-term 1,483,000 - - 1,483,000
<FN>
(A) Amounts in Column D represent charges made for the purpose the allowance was provided.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, Roundy's, Inc. has duly
caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
ROUNDY'S, INC.
GERALD F. LESTINA ROBERT D. RANUS
________________________ --------------------
By: Gerald F. Lestina By: Robert D. Ranus
(Principal Executive Officer) (Principal Financial
Officer and Principal
Accounting Officer)
Date: March 28, 1996
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons (constituting a majority of the Board of Directors)
on behalf of the Registrant and in the capacities and on the
dates indicated:
GERALD F. LESTINA PATRICK D. MCADAMS
________________________ --------------------
Gerald F. Lestina Patrick D. McAdams
March 28, 1996 March 28, 1996
(Director) (Director)
GEORGE C. KAISER ROBERT D. RANUS
________________________ --------------------
George C. Kaiser Robert D. Ranus
March 28, 1996 March 28, 1996
(Director) (Director)
BRENTON H. RUPPLE GARY N. GUNDLACH
________________________ -------------------
Brenton H. Rupple Gary N. Gundlach
March 28, 1996 March 28, 1996
(Director) (Director)
CHARLES R. BONSON ROBERT E. BARTELS
________________________ -------------------
Charles R. Bonson Robert E. Bartels
March 28, 1996 March 28, 1996
(Director) (Director)
LLOYD E. COPPERSMITH HENRY KARBINER, JR.
________________________ -------------------
Lloyd E. Coppersmith Henry Karbiner, Jr.
March 28, 1996 March 28, 1996
(Director) (Director)
<PAGE>
SUPPLEMENTAL INFORMATION TO BE
FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d)
OF THE ACT BY REGISTRANTS
WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT
Registrant's annual report to securityholders for the year
ended December 30, 1995 is incorporated by reference in this report.
Registrant does not furnish proxy soliciting material to its
securityholders.
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
3.1 Articles of Incorporation of the Registrant, as
amended, incorporated herein by reference to Exhibit
4.1 of Registrant's Registration Statement on Form S-
2 (File No. 2-94485) dated December 5, 1984.
3.2 By-Laws of the Company as amended December 9, 1986,
incorporated herein by reference to Exhibit 3.2 of
Registrant's Annual Report on Form 10-K for fiscal
year ended January 3, 1987, filed with the Commission
on April 3, 1987, Commission File No. 2-66296.
3.3 1988-1 By-Law Amendments, incorporated herein by
reference to Exhibit 3.3 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1988, filed with the Commission on April 1, 1988,
Commission File No. 2-66296.
3.4 Amendment of By-Law Section 5.01, incorporated herein
by reference to Exhibit 3.4 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 30, 1989, filed with the Commission on March
30, 1990, Commission File No. 2-66296.
3.5 Amendment of By-Law Section 7.10, 7.11 and 7.12,
incorporated herein by reference to Exhibit 3.5 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990, filed with the
Commission on March 28, 1991, Commission File No. 2-
66296.
3.6 Amendment to By-Laws Relating to Number of Directors,
adopted April 12, 1995, incorporated herein by
reference to Exhibit 3.6 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May
1, 1995.
4.1 Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as
agent), incorporated herein by reference to Exhibit
4.3 of Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988, filed with
the Commission on March 31, 1989, Commission File No.
2-66296.
4.2 Amendment No. 1 dated April 13, 1990 to the Credit
Agreement dated March 6, 1989, between Roundy's, Inc.
and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.5 of
Registrant's Registration Statement on Form S-2 (File
No. 2-66296), dated April 27, 1990.
4.3 Policy Relating to Redemption of Stock by Inactive
Customer Shareholders and Former Employees,
incorporated herein by reference to Exhibit 4.5 of
Registrant's Registration Statement on Form S-2 (File
No. 33-57505) filed with the Commission on January
30, 1995 (included as Exhibit D to the prospectus
which forms a part of the Registration Statement).
<PAGE>
4.4 Amendment No. 2 dated October 9, 1991 (effective
October 24, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.7 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.5 Amendment No. 3 dated December 9, 1991 (effective
December 30, 1991) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.8 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.6 Note Agreement dated December 15, 1991 (effective
December 30, 1991), between Roundy's, Inc. and
Massachusetts Mutual Life Insurance Company and
United of Omaha Life Insurance Company, incorporated
herein by reference to Exhibit 4.9 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 28, 1991, filed with the Commission on March
26, 1992, Commission File No. 2-66296.
4.7 Amendment No. 4 dated December 14, 1992 (effective
December 15, 1992) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.10 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1993, filed with the Commission on March 30, 1993,
Commission File No. 2-66296.
4.8 Note Agreement dated December 15, 1992 between
Roundy's, Inc. and Connecticut Mutual Life Insurance
Company, The Ohio National Life Insurance Company,
Provident Mutual Life Insurance Company of
Philadelphia, Providentmutual Life and Annuity
Company of America, Guarantee Mutual Life Company,
Woodmen Accident and Life Company and United of Omaha
Life Insurance Company, incorporated herein by
reference to Exhibit 4.11 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
2, 1993, filed with the Commission on March 30, 1993,
Commission File No. 2-66296.
4.9 Policies relating to Roundy's Issuance and Sales and
Redemptions/Repurchases of its Stock, incorporated
herein by reference to Exhibit 4.11 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit E to the prospectus which forms
a part of the Registration Statement).
4.10 Amendment No. 5 dated December 15, 1993 (effective
December 13, 1993) to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase
Manhattan Bank, N.A. (as agent), incorporated herein
by reference to Exhibit 4.13 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
1, 1994, filed with the Commission on March 31, 1994,
Commission File No. 2-66296.
<PAGE>
4.11 Note Agreement dated December 22, 1993 (effective
December 22, 1993), between Roundy's, Inc. and The
Variable Annuity Life Insurance Company, The Life
Insurance Company of Virginia, Phoenix Home Life
Mutual Insurance Company, Phoenix American Life
Insurance Company, Washington National Insurance
Company, and TMG Life Insurance Company, incorporated
herein by reference to Exhibit 4.14 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 1, 1994, filed with the Commission on March
31, 1994, Commission File No. 2-66296.
4.12 Form of Subscription Agreement, incorporated by
reference to Exhibit 4.14 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit A to the prospectus which forms
a part of the Registration Statement).
4.13 Form of Buying Deposit Agreement, incorporated by
reference to Exhibit 4.15 of Registrant's
Registration Statement on Form S-2 (File No. 33-
57505) filed with the Commission on January 30, 1995
(included as Exhibit B to the prospectus which forms
a part of the Registration Statement).
4.14 Article V of Registrant's By-Laws "Fiscal Year
Accounting and Patronage Rebates," as amended on
December 12, 1989, incorporated by reference to
Exhibit 4.16 of Registrant's Registration Statement
on Form S-2 (File No. 33-57505) filed with the
Commission on January 30, 1995 (included as Exhibit C
to the prospectus which forms a part of the
Registration Statement).
9 Amended and Restated Voting Trust Agreement dated
September 16, 1983, incorporated herein by reference
to Exhibit 9 of Registrant's Annual Report on Form 10-K
for the year ended December 31, 1983, filed with
the Commission on March 30, 1984, Commission File No.
2-66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to
Amended and Restated Voting Trust Agreement,
incorporated herein by reference to Exhibit 9(a) of
Registrant's Registration Statement on Form S-2 (File
No. 2-66296), dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting
Trust Agreement, incorporated herein by reference to
Exhibit 9(b) of Registrant's Registration Statement
on Form S-2 (File No. 2-66296), dated April 29, 1987.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement, incorporated herein by reference to
Exhibit 9(c) of Registrant's Registration Statement
on Form S-2 (File No. 33-57505), dated May 1, 1995.
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus and Sullivan, incorporated
herein by reference to Exhibit 10.4 of Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1989 filed with the Commission on March
30, 1990, Commission File No. 2-66296.
<PAGE>
10.2 Directors and Officers Liability and Corporation
Reimbursement Policy issued by American Casualty
Company of Reading, Pennsylvania (CNA Insurance
Companies) as of June 13, 1986, incorporated herein
by reference to Exhibit 10.3 of Registrant's Annual
Report on Form 10-K for the fiscal year ended January
3, 1987, filed with the Commission on April 3, 1987,
Commission File No. 2-66296.
10.2(a) Declarations page for renewal through November 1,
1996 of Directors and Officers Liability and
Corporation Reimbursement Policy. FILED HEREWITH.
10.3 1991 Stock Incentive Plan, revised February 9, 1993,
incorporated herein by reference to Exhibit 10.6 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993, filed with the
Commission on March 30, 1993, Commission File No. 2-
66296.
10.4 Severance and Non-Competition Agreement between the
Registrant and Gerald F. Lestina. FILED HEREWITH.
13 1995 Annual Report to Stockholders of Roundy's, Inc.
FILED HEREWITH.
21 Subsidiaries of Roundy's, Inc. FILED HEREWITH.
27 Financial Data Schedule. FILED HEREWITH.
<PAGE>
Exhibit 10.2(a)
Executive Protection Policy
DECLARATIONS
EXECUTIVE PROTECTION POLICY
Policy Number 8132-05-32B
Federal Insurance Company, a stock
insurance company, incorporated
under the laws of Indiana, herein
called the Company.
Item 1. Parent Organization:
ROUNDY'S, INC.
23000 ROUNDY DRIVE
PEWAUKEE, WISCONSIN
53072
Item 2. Policy Period: From 12:01 A.M. on NOVEMBER 01, 1995
To 12:01 A.M. NOVEMBER 01, 1996
Local time at the address shown in
Item 1.
Item 3. Coverage Summary
Description
GENERAL TERMS AND CONDITIONS
EXECUTIVE LIABILITY AND INDEMNIFICATION
Item 4. Termination of
Prior Policies:
THE EXECUTIVE LIABILITY AND INDEMNIFICATION, FIDUCIARY
LIABILITY, OUTSIDE DIRECTORSHIP LIABILITY AND EMPLOYMENT
PRACTICES LIABILITY COVERAGE SECTIONS (WHICHEVER ARE
APPLICABLE) ARE ALL WRITTEN ON A CLAIMS MADE BASIS. EXCEPT
AS OTHERWISE PROVIDED, THESE COVERAGE SECTIONS COVER ONLY
CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY
PERIOD. PLEASE READ CAREFULLY.
In witness whereof, the Company issuing this policy has
caused this policy to be signed by its authorized officers,
but it shall not be valid unless also signed by a duly
authorized representative of the Company.
FEDERAL INSURANCE COMPANY
HENRY A. GULICK DEAN R. OFFURE
_______________________ ______________________
Secretary President
NOVEMBER 8, 1995 JOHN S. BAIN
_______________________ ----------------------
Date Authorized
Representative
Exhibit 10.4
SEVERANCE AND NON-COMPETITION AGREEMENT
AGREEMENT, entered into this 1st day of June, 1995
("Effective Date"), between ROUNDY'S, INC., a Wisconsin
corporation (the "Company"), and GERALD F. LESTINA ("Mr.
Lestina").
RECITALS:
1. Mr. Lestina is employed by the Company as its President
and Chief Executive Officer, and is also a member of
its Board of Directors. In the course of such
employment, Mr. Lestina has acquired and will continue
to acquire a great deal of valuable, proprietary and
confidential knowledge and information regarding the
Company's business, its products and services, and its
marketing and business development strategies, and
other proprietary information of potential value to the
Company's competitors.
2. As an incentive for Mr. Lestina to continue in the
Company's employ, and in consideration for his
agreement not to compete with the Company following the
termination of his employment under certain conditions,
the Company wishes to undertake to make certain
payments and provide certain benefits to Mr. Lestina
upon the termination of his employment under the
circumstances set out herein.
AGREEMENT:
In consideration of the premises, and the mutual
covenants and agreements contained herein, the Company and
Mr. Lestina agree as follows:
1. Termination of Mr. Lestina's Employment by the Company
without Good Cause or by Mr. Lestina for Good Reason.
Upon the Company's termination of Mr. Lestina's
employment (unless such employment is terminated for
"Good Cause" (as that term is defined below)), or Mr.
Lestina's termination of his employment for "Good
Reason" (as that term is defined below), the Company
will pay to Mr. Lestina, pro rata over the non-compete
period, the Applicable Benefit (as that term is defined
below) without interest. The date upon which Mr.
Lestina's employment with the Company ceases is
referred to herein as the "Termination Date."
2. Post-Retirement Insurance Benefits. If Mr. Lestina
ceases to be employed with the Company (including by
reason of his death) at any time after his attaining
age 55 and while he is then an officer and a director
of the Company (unless his employment is terminated by
the Company for Good Cause), the Company will continue
to provide, during the Post Retirement Period (as
defined below), at no cost to Mr. Lestina, coverage for
Mr. Lestina and his spouse under the employee health,
medical and life insurance plans maintained by the
<PAGE>
Company for its most senior executive personnel, in
accordance with the terms of such plans as the same may
exist and be in effect from time to time during the
Post Retirement Period. The "Post Retirement Period"
means the period from the date of the termination of
Mr. Lestina's employment until the earliest of (i) date
on which he attains (or would have attained) age 65,
(ii) the date on which he accepts other employment the
terms of which include a health or medical insurance
benefit reasonably comparable to that to be provided
under this Section 2, or (iii) the date on which he
accepts other employment in violation of, or otherwise
breaches or violates the provisions of, Section 4
hereof. In the event of Mr. Lestina's death prior to
the end of the Post Retirement Period, the benefits to
be provided under this Section 2 will be provided to
his spouse until the date on which Mr. Lestina would
have attained age 65, or, if earlier, the date of his
spouse's remarriage.
3. Definitions.
(a) For purposes of this Agreement, the term "Good Cause" means
only (i) the wilful commission by Mr. Lestina of a material
act of dishonesty or moral turpitude involving the
Company; (ii) Mr. Lestina's conviction of a felony, or his
pleading guilty or nolo contendere to the same; (iii) Mr.
Lestina's gross negligence in the performance of his duties
and responsibilities as an officer of the Company; (iv) the
wilful failure of Mr. Lestina to carry out the duties and
responsibilities of his office, or to follow a specific and
lawful directive of the Board of Directors of the Company
(provided such directive is consistent with his position as
the President and Chief Executive Officer of the Company),
but only if such failure continues for ten days after Mr.
Lestina has been provided with written notice of such
failure (which notice includes a description of the nature
of the failure and specifies the actions to be taken by Mr.
Lestina to rectify it); (v) Mr. Lestina's wilful disclosure
of material proprietary confidential information of the
Company to or for the benefit of a competitor of the
Company, to the extent such information was not available
publicly; or (vi) any intentional misrepresentation by Mr.
Lestina to the shareholders or directors of the Company.
For purposes of the preceding definition, no act, failure
to act, or omission on the part of Mr. Lestina will be
deemed to have been "wilful" or "intentional" if done or
omitted to be done in good faith and in the reasonable
belief that it was in or not opposed to the best interests
of the Company. Any such act or omission or failure to act
based upon the advice of counsel for the Company will be
conclusively deemed to have been done or omitted to be done
in good faith and in the best interests of the Company.
<PAGE>
(b) For purposes of this Agreement, the term "Good Reason" means
any material diminution or adverse change (effected by the
Company, without Mr. Lestina's voluntary concurrence) in the
nature or scope of Mr. Lestina's authority, powers,
functions, duties or responsibilities or any other material
aspect of his employment, including, without limitation, Mr.
Lestina's ceasing to hold the positions of President and
Chief Executive Officer of the Company, and including his
ceasing to be a member of the Board of Directors of the
Company (other than by reason of his voluntary resignation
from such offices or from the Board of Directors).
(c) For purposes of this Agreement, the term "Monthly Benefit
Amount" means the sum of the following: (i) an amount equal
to one-twelfth of Mr. Lestina's annual base salary as
established and in effect as of the Termination Date; (ii)
one-twelfth of the amount of any bonus and/or incentive
compensation paid or payable to Mr. Lestina for the fiscal
year preceding the fiscal year of the Company in which the
Termination Date occurs (the "Prior Year Bonus"), or, if
greater, the amount of such bonus and/or incentive
compensation for the fiscal year of the Company in which the
Termination Date occurs (the "Current Year Bonus"); and
(iii) subject to the final sentence of Section 3(d), the
fair value of any health and/or life insurance benefits, on
a monthly basis, to which Mr. Lestina is entitled or which
are provided or made available by the Company to him as of
the Termination Date. If the amount of the bonus or
incentive compensation described in the preceding clause
(ii) cannot be determined as of the date when the benefits
to be paid hereunder are to be paid, then the amount to be
paid at such time shall be determined on the basis of the
Prior Year Bonus, and such amount shall be adjusted, if
necessary, to reflect the Current Year Bonus, as soon as
practical after the amount of the Current Year Bonus can be
determined.
(d) For purposes of this Agreement, and subject to the last
sentence of this Section 3(d), the term "Applicable Benefit"
shall mean (i) if the Termination Date occurs prior to June
1, 1996, 24 times the Monthly Benefit Amount, and (ii) if
the Termination Date occurs on or after June 1, 1996, the
Monthly Benefit Amount times the greater of (A) the number
of months remaining between the Termination Date and June 1,
1998, and (B) twelve (12). For purposes of the preceding
clause (ii)(A), in determining the number of months between
the Termination Date and June 1, 1998 the month in which the
Termination Date falls will be included and the month of
June 1998 will not be included. If the benefit described in
Section 1 hereof becomes payable under circumstances under
which the benefits described in Section 2 hereof are also
payable, the Applicable Benefit shall be determined by
excluding from the Monthly Benefit Amount the amount
described in clause (iii) of Section 3(c) for any month
during which the benefit described in Section 2 is also
payable.
<PAGE>
4. Noncompetition.
(a) For a period of (1) year following the Termination Date (but
only if such termination occurs under circumstances giving
rise to the Company's obligation to pay the severance
benefit provided in Section 1 hereof), Mr. Lestina will not,
directly or indirectly, as a principal, agent, owner,
employee, trustee, beneficiary, partner, co-venturer,
officer, director, stockholder (other than as a stockholder
of less than 5% of the stock of a publicly traded
corporation) or in any other capacity, engage in, have an
interest in or become associated with any entity, firm,
business, activity or enterprise which is engaged in the
wholesale distribution of groceries and which (either
directly or through a subsidiary or affiliate) has a
warehouse or distribution facility in the "Proscribed
Territory," as that term is defined below. The "Proscribed
Territory" means (i) the area consisting of the States of
Wisconsin, Michigan, Illinois, Indiana and Ohio, plus (ii)
to the extent not included within (i), the area encompassed
within a radius of four hundred (400) miles of any warehouse
or distribution facility operated by the Company or any
affiliate of the Company as of the Termination Date.
(b) Mr. Lestina acknowledges and agrees that the restrictions
set forth in this Section 3 are founded on valuable
consideration and are reasonable in duration and geographic
area in view of the circumstances under which this Agreement
is entered into, and that such restrictions are necessary to
protect the legitimate interests of the Company. In the
event that any provision of this Section 3 is determined to
be invalid by any court of competent jurisdiction, the
provisions of this Section 3 shall be deemed to have been
amended and the parties will execute any documents and take
whatever action is necessary to evidence such amendment, so
as to eliminate or modify any such invalid provision and to
carry out the intent of this Section 3 so to render the
terms of this Section 3 enforceable in all respects as so
modified.
(c) Mr. Lestina acknowledges and agrees that irreparable injury
will result to the Company in the event Mr. Lestina breaches
any covenant contained in this Section 3, and that the
remedy at law for such breach will be inadequate.
Therefore, if Mr. Lestina engages in any act in violation of
the provisions of this Section 3, the Company shall be
entitled, in addition to such other remedies and damages as
may be available to it by law or under this Agreement, to
injunctive or other equitable relief to enforce the
provisions of this Section 3.
5. Term and Termination. This Agreement will become effective as of
the Effective Date and continue in effect thereafter until October
10, 2007, unless sooner terminated by the mutual agreement of the
Company and Mr. Lestina.
<PAGE>
6. Severability. The provisions of this Agreement are severable. If
any part of this Agreement is held to be void or unenforceable or
contrary to law, the Company shall have the option to either
terminate this Agreement in its entirety, in which case it shall
be entitled to the return of (or be relieved of the obligation to
pay) any amounts paid (or which would otherwise be payable) to Mr.
Lestina hereunder, or it may require that the balance of the
Agreement nonetheless shall remain in full force and effect.
Notwithstanding the preceding sentence, if any court of competent
jurisdiction shall determine that any geographic or time restraint
provided in this Agreement is too broad as to the area or time
covered, such restraint may be reduced to whatever extent the
court deems reasonable and such restraint may be enforced as
reduced.
7. Effect on Retiree Health Benefits Policy. Mr. Lestina
acknowledges that the benefits provided hereunder (in particular
the benefits described in Section 2 hereof) are intended to be in
lieu of any benefits to which he may now be or hereafter become
entitled under the Company's existing policy relating to the
provision of health insurance benefits to its retired officer/
directors, as embodied in certain resolutions adopted by the
Company's directors on December 10, 1980 (the "1980 Retiree
Medical Benefits Policy"). The Company has not and does not
hereby acknowledge any obligation to Mr. Lestina or any of its
other employees, officers or directors by reason of the existence
of the 1980 Retiree Medical Benefit Policy, and reserves the right
to modify, limit, cancel or terminate that Policy at any time.
8. Notices. All notices under this Agreement shall be in writing and
any notice shall be considered to be given and received in all
respects on the day it is personally delivered or deposited in the
United States mail, first class, postage prepaid, addressed as
follows or to such other address as may be designated by one party
to the other by notice duly given (provided, that written notice
given in any other manner shall nonetheless be effective when
actually received by the party entitled to receive it):
If to the Company: Roundy's, Inc.
23000 Roundy Drive
P.O. Box 473
Pewaukee, WI 53072
Attn: Secretary
If to Mr. Lestina: Gerald F. Lestina
c/o Roundy's, Inc.
23000 Roundy Drive
P.O. Box 473
Pewaukee, WI 53072
9. No Contract of Employment. Nothing contained herein is intended
to create or constitute a contract of employment between the
Company and Mr. Lestina, or to impose on the Company any
obligation to continue the employment of Mr. Lestina or to confer
on Mr. Lestina any rights to such continued employment.
<PAGE>
10. Assignment. This Agreement may not be assigned by the Company
without the written consent of Mr. Lestina, except that if the
Company shall transfer substantially all of its business or assets
to another corporation or other form of business or other entity,
this Agreement may be assigned to such a successor and it shall be
binding upon and inure to its benefit. Mr. Lestina may not
assign, pledge or encumber this Agreement or any interest herein.
11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, the Company's successors and
assigns and Mr. Lestina's heirs and legal representatives. If the
Company merges or consolidates with or into any other corporation
or entity (whether or not the Company is the surviving entity in
such transaction), or transfers all or substantially all of its
business or assets to another corporation or other form of
business or other entity, all references herein to the Company
shall be deemed references to the corporation or other entity
surviving such merger or consolidation or to which such assets or
business are transferred.
12. Costs of Enforcement. If any action or proceeding is brought by
either party to enforce any provision of this Agreement, or to
recover damages for the breach hereof, the prevailing party shall
be entitled to recover from the other party its reasonable costs
and expenses (including reasonable attorneys' fees) incurred in
such action or proceeding.
13. Amendment. This Agreement may be amended only by a written
instrument executed by the parties hereto or their respective
successors, assigns, heirs or legal representatives, as
applicable.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ROUNDY'S, INC.
By:_________________________________
Its:__________________________
____________________________________
Gerald F. Lestina
<PAGE>
ROUNDY'S
1995
nineteen ninety-five
ANNUAL REPORT
In Memoriam
We will remember John R. Dickson, Roundy's former Chairman,
President and Chief Executive Officer, as a man of great
integrity and leadership. Sadly, John Dickson, 65, passed
away on December 2, 1995 after battling cancer for about a
year.
The energy, dedication and perseverance that marked his
leadership of the Company will continue to guide us as we
move forward and build upon his accomplishments.
Mr. Dickson was born June 17, 1930 in Amsterdam, NY. He
earned his degree from Ashland University in Ashland, Ohio
in 1954. After graduation, Mr. Dickson joined the Loblaw
Company in Buffalo, NY as a manager trainee. He rose through
the ranks to buyer.
In the early 1960's, he worked for the Loblaw Company in the
Pittsburgh area, and later moved to Cincinnati to work for
Colonial Food, an Atlanta-based supermarket company. In the
early 1970's, he worked for Shoprite Foods, and was later
named executive vice-president. In 1976, Mr. Dickson joined
Fox Grocery Company and eventually became vice-president and
general manager of the Pittsburgh division, staying on for
two years after Wetterau acquired the company.
In 1983, he moved to Wetterau headquarters and eventually
headed the company's Food Distribution group's central
region. Mr. Dickson took over the helm at Roundy's in 1986.
John will be missed by his many friends and colleagues.
John R. Dickson
1930-1995
<PAGE>
Roundy's Vision Statement
VISION
Roundy's strives to become the premier retail support
company throughout our regionby providing value driven goods
and services and maintaining the ultimate in customer
satisfaction.
WE ARE COMMITTED TO:
- -Communicating openly and honestly with our customers, our
associates and our vendors.
- -The on-going success and growth of our customers.
- -Creating an environment of opportunity and development for
all associates.
- -Working as a team to carry out business activities.
Selected Financial Data
($000 omitted except for per share data and ratios)
1995 1994 1993 1992 1991
---------- --------- ---------- ---------- ----------
Net sales and
service fees $2,488,196 $2,461,510 $2,480,254 $2,491,293 $2,534,418
Net earnings 9,022 6,554 8,028 7,353 6,813
Patronage dividends 5,129 0 5,301 5,135 3,305
Total assets 407,337 404,652 380,092 390,148 390,797
Long-term debt 78,850 88,227 113,045 135,420 139,283
Stockholders' equity(1) 100,033 90,419 86,066 78,573 70,917
Book value per share 85.15 77.40 71.65 65.10 58.75
Working capital 90,740 91,814 113,643 119,153 116,940
Current ratio 1.43:1 1.43:1 1.64:1 1.70:1 1.66:1
Earnings before
patronage dividends
as a percent of net
sales and service fees .81% .45% .81% .66% .58%
(1) includes redeemable common stock
Message to Our Stockholders
Every day of our lives we see them. We touch them and pass
through them and work in them. Yet, we often fail to notice
them....their beauty.....their function. Neither do we try
to spend much time trying to understand or appreciate them.
Structures.
They make things possible - work, comfort, preservation,
efficiency.
<PAGE>
As a company grows and develops, its structure begins to
take on a look of its own. Various "organizational" charts
and maps are used to distinguish geographic territories,
product categories, division of work responsibilities, and
the contribution of various divisions, departments and
individuals to the company's overall performance.
The "look" of Roundy's is a study of a changed structure.
Perhaps, a continuing metamorphosis.
Many things have acted together to affect the look of our
company: historical events, the ambitions of our founders,
the hard work of our employees, and the good fortunes of our
customers. As well, adverse factors like declining margins,
downturned economic conditions and the strategic moves of
our competitors have negatively affected our look - at times
forcing corrective action.
Make no mistake: the structure of Roundy's has been
impressive - even awe-inspiring - through the years. To our
competitors, "imposing" might be a better word.
But "looking" at a company.....and "examining" it.....yield
different results.
We believe that an annual report should be considered a
"snapshot" and a historical document. It should also be
considered a look into our future.
In examining Roundy's, you'll begin to understand the "why"
of things as they exist now. You'll begin to see and
appreciate the many things we've done this past year, and
understand our plans for the future.
"Good people follow virtue, building on the small to obtain
the great."
- Confucius
The Year in Review
- - Sales increased $26.7 million, or 1.1 percent. A continued
influx of alternative formats throughout Ohio and Indiana
compelled us to tighten credit and, in some cases,
discontinue business in order to strengthen our core
business in those regions. This conscious effort adversely
impacted our sales by approximately $25 million.
- - Operating and administrative expenses, excluding
depreciation and amortization, decreased $11.1 million, or
5.5 percent. As a percentage of sales, this ratio is the
lowest it has been in 16 years.
- - Interest expense decreased $1.6 million, or 16.4 percent.
Again, as a percentage of sales, this ratio is also the
lowest it has been in 16 years.
- - Earnings before patronage dividends increased $9.2 million
to $20,250,500 -a company record.
<PAGE>
- - Net earnings increased $2.5 million to $9,022,100 - another
company record.
- - Long-term debt decreased $9.4 million, or 10.6 percent.
Our long-term debt of $78.9 million is the lowest in 12
years and our long-term debt to equity ratio of 0.79 to 1 is
the lowest in 16 years.
- - Stockholders' equity, including redeemable common stock,
increased $9.6 million, or 10.6 percent.
The capital reinvestment we have made in our buildings,
fleet and technology demonstrates our commitment to our long-
term future. The following table illustrates our five-year
trend on capital expenditures:
1995 $24,216,300
1994 $22,316,600
1993 $13,354,800
1992 $15,332,300
1991 $11,894,000
Nonetheless, each capital expenditure is carefully analyzed
for its return on investment prior to implementation.
Most of us in this business have heard the phrase "declining
margins" - and often. This past year was no exception. We
saw several major manufacturers reduce their promotional
allowances. Also, alternative formats continued to expand
within our markets.
It has become an increasing challenge to hold the line on
profitability while positioning the company for the future.
To meet this challenge, Roundy's has formed a long-term
strategic plan, which you'll read about later.
Improving efficiency and reducing costs was the main focus
of our attention throughout 1995. In addition to closing
our flight department, we also reduced full-time equivalent
staff over the past three years. Last year in particular,
administrative consolidations contributed to the decrease.
We went from 4,263 full-time equivalents in 1993 to 4,166 in
1994, and finally to 4,088 at the end of 1995. This trend
will continue in 1996.
During the course of the year, we began to merge much of the
Columbus staff into our Lima Division. This process will be
completed in 1996. We also began to merge our South Bend
administrative staff as well as a part of our Muskegon staff
into our Westville Division. This also will be completed at
the end of 1996.
"Good people distinguish things in terms of categories and
groups."
- Confucius
Developments
<PAGE>
In December of 1995, we completed work on a wide area
communications network that links our retail customers to
our corporate local area network. Hughes Network System
helped us complete installation of this wide area satellite
network. This network represents a fundamental building
block for our company's future.
Our new target marketing program, Advantage Rewards, was
the first project to utilize the new network in Wisconsin
which started on Super Bowl Sunday. Plans are underway to
expand the program, first to non-Pick 'n Save stores in
Wisconsin. An out-of-state pilot location will begin later
in 1996.
We introduced 265 new Roundy's label grocery, frozen foods
and dairy items during this past year, contributing toward
eight years of consistent double-digit growth.
Five new state-of-the-art stores were completed and opened
by our customers during this past year. The Pay Less
organization opened two new stores in Anderson and West
LaFayette, Indiana. Both stores are over 82,000 square feet
in size and are complete with leading-edge food courts and
perishable departments.
The Buehler organization added a new 41,000 square foot
store in Evansville, Indiana. The new store, designed to
emphasize its perishables and customer service departments,
had a line of customers extending one city block long on its
opening day.
The Kennedy family, owners of Polly's, transformed a
department store into a beautiful new store featuring a
state-of-the-art perishable department and a strong discount
grocery department.
Mega Marts constructed a 112,000 square foot store in Oak
Creek, Wisconsin. The rendering of this new store provides
second-to-none variety and powerful merchandising concepts,
as well as a number of leased departments including an
optical department.
We welcome the CeeBee's organization to the Roundy's family.
In addition to remodeling and reopening an existing store in
Chicago Heights, Illinois, they bring six existing stores to
be serviced by our Westville Division.
Millions of dollars were invested in capital improvements
throughout our entire region this past year. These major
expansions and remodels gave our customers the ability to
maintain or increase their respective market shares.
"Good people order and arrange."
- Confucius
<PAGE>
Improvements
Our Efficient Consumer Response (ECR) initiative is
simplifying and improving the way we conduct business, and
we are committed to it.
ECR's basic building block is the Electronic Data
Interchange (EDI), which is the electronic transmission of
business documents. The goal of EDI is to save time, reduce
paperwork, reduce human error and streamline business
operations.
Roundy's began the EDI process with selected manufacturers
less than a year ago. Today, approximately 75 percent of our
purchase order volume is now being sent via EDI to our
vendors. By the end of 1996, we expect to increase this to
over 90 percent.
In addition to sending purchase orders, we are also
receiving invoices that match electronically with our
accounts payable system, called PROMPT. An electronic match
via EDI with PROMPT reduces errors as well as paperwork.
Our Continuous Replenishment Program (CRP), another element
of ECR, allows manufacturers to review our warehouse
withdrawal history and make recommendations on purchase
order quantities. This system frees up valuable time that
could be spent on other projects. We are currently testing
CRP with several manufacturers; plans to proceed will be
based on those test results.
Roundy's also has the ability to receive Advanced Ship
Notices (ASN). This system alerts our buyers and warehouses
as to what has been shipped from manufacturers. Currently we
have ten vendors sending us ASN information.
Another aspect of ECR is Category Management (CM). The
overall strategy of CM is to successfully implement a review
of selected categories at the Milwaukee and Mazomanie
divisions and produce a process which can be applied at all
of Roundy's divisions, retailers and categories.
"When they do things, good people plan first."
- Confucius
The Future
To simply establish goals and performance levels for the
company without a plan is to set ourselves up for failure.
To properly aim at the future requires an exhaustive, honest
assessment of our place in the world, our competitors'
ambitions, our strengths - and our weaknesses.
We have done that, and in many ways it has opened our eyes.
In examining everything, we were able to develop a strategic
plan whose objectives are ambitious, yet based in the real
world.
<PAGE>
The structure of Roundy's of recent years has been
impressive, dominant and profitable. But in proceeding with
this planning process it became clear that positioning the
company for future success would require major changes in
structure. No longer could we simply afford to react to
market conditions and competitive weaknesses. We would have
to move proactively and aggressively.
The strategic plan that followed this assessment will take
the company forward to the year 2000 in a series of steps.
Key areas addressed include sales, cost improvements,
systems, human resources and communications.
It is important to note that the plan is fluid - changeable
if uncontrollable events occur. It is dynamic - containing
many inter-related efforts and objectives. And, it is
comprehensive - inclusive of every associate and customer,
and every aspect of the company's operations.
Establishing this plan gives company personnel a common
reference, a framework, and a complete understanding of the
company's resources and direction. A structure. This tool
will allow us to direct and redirect those resources as
necessary to meet our changing work environment.
One of the areas addressed in our strategic plan -
communications - bears particular mention. It's easy to
forget in any job that we have co-workers, sister divisions,
related operations and even unrelated operations. When a
company is as large and far-flung as ours, efforts sometimes
are duplicative or counterproductive.
Our goal here is more than simply talking to each other.
The concept of Roundy's Today, our new company newspaper,
came about during a strategic planning discussion regarding
improved communication within the company.
Corporate cultures can convey a sense of anonymity or they
can provide the feeling that each and every employee is a
vital component to the company's success. We pride
ourselves on the latter, and our new quarterly newspaper
celebrates Roundy's sense of unity and teamwork. I'm
extremely proud of our new newspaper, and I applaud the
entire editorial staff for a job well done.
The extent to which a company understands itself, its place
in history and its ambitions can be seen in its vision
statement. The extent to which the company believes and is
committed to its vision is evidenced in its pervasiveness.
That's why, over the coming weeks and months you will see
our vision statement everywhere: displayed proudly at every
division, in this report and even in various company
communications.
At Roundy's we believe that every stockholder, customer,
associate and vendor will soon see, know and believe this
common theme.
"Good people strengthen themselves ceaselessly."
- Confucius
<PAGE>
Finally...
Seeing the big picture - or at least understanding that
there is one - is a key element to success in any business
and in life. We recognize that 1996 and beyond will require
change. Our goal is to make such changes for the benefit of
our company.
We at Roundy's cannot look upon ourselves simply as managers
of business. We must expand our view of our business world
to include more than the things, people and events around
us. We must consider the intangibles - the areas of our
business we can't readily see or touch.
Currently, there is a "window of opportunity" for our
company during which we must take bold steps to insure our
future growth. We are prepared to take those steps as
management's actions in 1995 have demonstrated.
We would like to thank our stockholders, customers and
associates for their contributions to our past year's
success as we look forward to 1996 and beyond. We recognize
the challenges and welcome them because we will succeed
working as a team.
Gerald F. Lestina
President and Chief Executive Officer
Financial & Operational Review
LIQUIDITY AND CAPITAL RESOURCES
Roundy's took a giant step toward growing the company and
reshaping it to meet the challenges of the year 2000 and
beyond. This giant step began with the development and
implementation of a strategic plan.
The strategic plan addresses all of the essential elements
of the company necessary to sustain its growth, to increase
its profitability levels and to identify its short-range
technological and operational capital needs.
A fundamental element of the plan is the underlying strength
of the company - its balance sheet. The financial results
of fiscal 1995 more than ever, reflect a strong balance
sheet with sufficient reserves, decreased debt and increased
stockholders' equity. The company continued to focus on
cash management with the objective of further reducing debt.
This effort enabled Roundy's to pay down high interest rate
debt in 1995 and improve its long-term debt to equity ratio.
In 1994 the long-term debt to equity ratio fell below a one
to one ratio for the first time in over ten years, achieving
a .98:1 ratio compared to 1.31:1 in 1993. The 1994 level
was certainly a milestone for the company. However, the
1995 ratio showed even greater improvement achieving a .79:1
long-term debt to equity ratio.
<PAGE>
The ability to achieve this low debt level was predicated
on several factors. A major effort was directed at
controlling notes and accounts receivable. Average accounts
receivable days outstanding improved 8.2% in 1995 compared
to 1994 and 3.2% compared to 1993. Additionally, the
company continues to receive the benefits of its centralized
accounts payable function which provides for standardization
of payment terms. Although inventory levels increased
slightly in 1995 compared to 1994 with average equity in
inventory increasing 7.3%, it was still 5.9% better than
1993 average levels. Finally, the company continued to
concentrate its borrowing on low, fixed rate debt. In 1995,
the company prepaid $6,000,000 of 10.31% outstanding Senior
Unsecured Notes, reducing its average cost of long-term debt
to 7.6% versus 7.8% for 1994 and 7.9% for 1993.
In addition to lowering its cost of long-term debt, the
company continues to decrease its borrowing levels. Average
daily borrowings declined $11.5 million in 1995 compared to
1994 and $47.1 million compared to 1993. Lower average
daily borrowing levels and the pay down of higher interest
rate debt were the main reasons Roundy's was able to reduce
interest expense $1.6 million in 1995 compared to 1994 and
$4.2 million compared to 1993.
Another significant element of Roundy's strategic plan is to
maintain a strong capital structure. The benefits of such a
structure are numerous including the ability to secure low,
fixed rate debt, improve earnings and increase flexibility
for reacting to opportunities.
The capital structure for fiscal 1995 and 1994 is summarized
in the table outlined above right.
Capital Structure (in millions) 1995 1994
- ----------------------------------------------------------------------
Long-term debt $ 78.9 44.1% $ 88.2 49.4%
Stockholders' equity 100.0 55.9 90.4 50.6
- ----------------------------------------------------------------------
Total capital $178.9 100.0% $178.6 100.0%
- ----------------------------------------------------------------------
At the request of the Securities and Exchange Commission, in
1995, the company has reflected common stock submitted for
redemption outside of stockholders' equity. In Roundy's
capital structure table, management has elected to include
this amount in stockholders' equity since it is still
outstanding common stock which is earning appreciation in
book value and will continue to do so until it is redeemed.
<PAGE>
Another key element of Roundy's strategic plan is prudent
reinvestment in facilities, fleet and retail stores.
Capital expenditures were $24.2 million in 1995 compared to
$22.3 million in 1994 and $13.4 million in 1993. Major
investments were made in technology, fleet and buildings.
Management decided to centralize its frozen foods operation
for the Ohio Region in one location. Owned facilities were
inadequate and rented facilities were becoming too
expensive. A major construction project began in the fall
of 1995 at the Lima Division to build a frozen foods
facility designed to meet the growing needs of this Region.
In the Milwaukee Division over half of its capital
expenditures were due to "Target Marketing" equipment which
was installed in retail stores serviced by the Division.
Management strongly believes that new technology such as a
"Target Marketing" system with the objective of better
servicing the customer and reducing the cost of
accomplishing that objective will benefit both its customer
base and the servicing division. Finally, the company
undertook two major store remodels in 1995. With a growing
customer base, it was deemed essential in the strategic
planning meetings that key stores need to be modernized to
help deter competitors from opening sites in the vicinity of
these locations. All of the aforementioned actions coupled
with ongoing expenditures on new computer and operational
systems are essential factors in management's effort to
continue to lower operating expenses over $10.3 million from
1994 and $2.3 million from 1993.
An important statistic which management continues to monitor
is the company's current ratio. It is important to maintain
a good ratio, however, it is equally important to minimize
the amount of working capital invested in the business. The
year end current ratio for 1995 and 1994 was 1.43:1 and for
1993 it was 1.64:1. Even with increased sales, a
significant effort has been devoted to reducing average days
sales in receivables and increasing inventory turns.
Management believes that the ability to keep the 1995 ratio
consistent with 1994 was significant and was favorably
impacted by the improvement in its average days sales in
receivable ratio which offset the slight decline in average
inventory turns. Inventory turns were 14.1 in 1995 compared
to 14.4 in 1994 and 14.1 in 1993. In accordance with the
company's strategic plan, an increased amount in 1996
capital expenditures will be directed at improved inventory
control systems which will enable the company to better
control inventory levels.
Roundy's has already been working with several manufacturers
to develop and implement 1) a continuous replenishment
program (CRP), 2) electronic purchasing (EDI) and 3)
category management. All of these programs will keep
Roundy's in the forefront with respect to new data
processing systems that will help better control inventory
levels, reduce inventory carrying costs and provide
increased value at a lower cost to its customer.
<PAGE>
Roundy's book value per share increased to $85.15 or 10.0%.
Patronage dividends of $5.1 million were declared based on
1995 results. Both represent significant increases from
1994. Stockholders' equity increased $9.6 million from 1994
and $14.0 million from 1993. The changes in stockholders'
equity includes redeemable common stock.
RESULTS OF OPERATIONS
Net sales and fees increased $26.7 million in 1995 compared
to 1994 and $7.9 million over 1993 levels. The 1.1%
improvement from 1994 and 0.3% improvement from 1993 are a
result of several factors, all of which were emphasized in
the company's strategic plan. "Advantage Rewards" and
"Advantage Plus Saver's Club" programs have been significant
factors in achieving the documented sales increases. A
second key element was the improved strength in the "non-
foods" divisions which handle health and beauty care
products, general merchandise products, specialty foods,
tobacco and candy items. Sales for these divisions in 1995
were 5.2% greater than 1994 and 10.8% greater than 1993.
The improvement in this segment of Roundy's business was the
result of expanded product lines and increased emphasis.
Overall, gross profits reflect a modest 0.2% decline
compared to 1994 and 1993. The Company continues to
experience significant pressures on gross profits attributed
to reductions in manufacturers' promotional allowances,
forward buy opportunities and diverting revenues. The
current trend in the industry is to provide customers with
performance based and value-added options, which include
changing pricing practices and programs. Roundy's has been
working with various manufacturers on category management
and continuous inventory replenishment programs designed to
reduce costs, improve efficiencies and help neutralize the
declining gross profit opportunities.
Operating and administrative expenses continued to decline
both in absolute dollars and as a percent to sales.
Operating and administrative expenses as a percent to sales
were 8.2% compared to 8.7% in 1994 and 8.3% in 1993. The
1995 ratio was the lowest in sixteen years. When adjusting
for the significant increase in the closed facility reserve,
1994's operating and administrative ratio to sales would be
8.4%. Management has accepted the fact that the industry is
undergoing significant changes with the largest impact being
on gross profits. To offset the pressures on gross profits,
due to reductions in allowances and a variety of other
revenue sources previously available to wholesalers and
retailers, management recognized the need to reduce costs
and improve efficiencies. In this regard, the company
closed its flight department in 1995, reduced full-time
equivalent staff by over 75, implemented stronger credit
restrictions (which helped reduce bad debt expense $3.3
million compared to 1994 and $0.9 million from 1993) and
implemented several system enhancements directed at lowering
costs and improving operating efficiencies. Roundy's has
consolidated several administrative functions in divisions
<PAGE>
including purchasing, advertising, human resources and
accounting. These consolidations were accomplished with the
implementation of an automated, standardized buying system
in all Divisions, the centralization of accounts payable and
the further standardization of Human Resource systems,
practices and policies. It is management's plan to
accelerate the system standardization process in 1996 with
the objective of attaining further efficiencies and enabling
management, divisional staff and all of Roundy's to better
serve its retailers and the ultimate consumer.
Interest expense declined in 1995 by $1.6 million compared
to 1994 and $4.2 million compared to 1993. Management
continues to believe that good cash management practices are
important and, as such, has emphasized strong cash
management techniques and systems in its strategic plan.
Paramount to this effort has been the centralization of
accounts payable which enabled Roundy's to standardize
vendor payment terms. Additionally, a major emphasis was
placed on credit and improving average days sales in
receivables.
The effective income tax rates for 1995, 1994 and 1993 were
40.3%, 40.7% and 40.5%, respectively. The effective tax
rate has been favorably impacted by lower state income taxes
due to the company's decision to consolidate various
subsidiaries. The benefits of these efforts were diluted by
the loss of the targeted jobs tax credits in 1995 due to
changes in the federal tax code.
Net earnings reached a record level of .36% of net sales and
service fees compared to .27% for 1994 and .32% for 1993.
Management emphasized cost reductions and system
improvements in its strategic plan. 1995 net earnings
reflect the positive results of this focus with operating
administrative expenses decreasing as a percent of net sales
and service fees compared to both 1994 and 1993. Interest
expense, as a percent of net sales and service fees was at
its lowest level in sixteen years. The improvement in sales
achieved in 1995, together with the focus of Roundy's
strategic plan on cost reductions and system improvements
will offset the continuing decline in margins, resulting in
increased profitability for Roundy's.
<PAGE>
Independent Auditors' Report
To the stockholders & directors of Roundy's, Inc.:
We have audited the accompanying consolidated balance sheets
of Roundy's, Inc. and its subsidiaries as of December 30,
1995 and December 31, 1994 and the related statements of
consolidated earnings, stockholders' equity and cash flows
for each of the three years in the period ended December
30, 1995. These financial statements are the responsibility
of the Company's management. Our responsibility is to
express an opinion on these financial statements based on
our audits.
<PAGE>
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial
position of the companies at December 30, 1995 and December
31, 1994, and the results of their operations and their cash
flows for each of the three years in the period ended
December 30, 1995 in conformity with generally accepted
accounting principles.
Doloitte & Touche LLP
Milwaukee, Wisconsin
February 23, 1996
<PAGE>
Statements of Consolidated Earnings
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
1995 1994 1993
Revenues:
Net sales and
service fees $2,488,196,200 $2,461,509,600 $2,480,254,200
Other-net 3,966,100 3,892,300 6,526,600
-------------- -------------- --------------
2,492,162,300 2,465,401,900 2,486,780,800
-------------- -------------- --------------
Costs and Expenses:
Cost of sales 2,260,039,400 2,230,645,500 2,248,336,000
Operating and
administrative 203,943,400 214,221,900 206,253,600
Interest 7,929,000 9,479,300 12,138,100
-------------- -------------- --------------
2,471,911,800 2,454,346,700 2,466,727,700
-------------- -------------- --------------
Earnings Before
Patronage Dividends 20,250,500 11,055,200 20,053,100
Patronage Dividends 5,128,500 5,300,700
-------------- -------------- --------------
Earnings Before
Income Taxes 15,122,000 11,055,200 14,752,400
-------------- -------------- --------------
Provision (Credit) for
Income Taxes:
Current-Federal 7,361,200 7,863,700 5,797,000
-State 1,177,400 2,290,100 1,740,200
-Jobs and other
tax credits (105,700) (448,700) (485,500)
-Deferred (2,333,000) (5,204,000) (1,078,000)
-------------- -------------- --------------
6,099,900 4,501,100 5,973,700
-------------- -------------- --------------
Earnings Before
Extraordinary Item 9,022,100 6,554,100 8,778,700
Extraordinary Loss on
Early Extinguishment
of Long-Term Debt (Net
of Income Tax Benefit
of $511,000) (751,000)
-------------- -------------- --------------
Net Earnings $ 9,022,100 $ 6,554,100 $ 8,027,700
============== ============== ==============
See notes to consolidated financial statements.
<PAGE>
Consolidated Balance Sheets
As of December 30, 1995 and December 31, 1994
Assets 1995 1994
------------ ------------
Current Assets:
Cash and cash equivalents $ 26,382,000 $ 40,268,800
Notes and accounts receivable,
less allowance for losses,
$8,431,300 and $11,000,400,
respectively 99,727,000 95,105,500
Merchandise inventories 163,204,100 157,195,700
Prepaid expenses 5,060,700 5,774,200
Future income tax benefits 8,496,800 5,691,800
------------ ------------
Total current assets 302,870,600 304,036,000
------------ ------------
Other Assets:
Notes receivable 17,249,100 14,631,300
Other real estate 4,659,400 6,584,200
Deferred expenses and other 5,300,600 7,066,200
Deferred income tax benefit 2,706,000 3,060,000
------------ ------------
Total other assets 29,915,100 31,341,700
------------ ------------
Property and Equipment-At Cost:
Land 5,042,700 5,883,000
Buildings 43,021,900 43,934,300
Equipment 94,499,200 83,963,000
Leasehold improvements 12,412,000 13,429,100
------------ ------------
154,975,800 147,209,400
Less accumulated depreciation
and amortization 80,424,900 77,934,900
------------ ------------
Property and equipment-net 74,550,900 69,274,500
------------ ------------
$407,336,600 $404,652,200
============ ============
See notes to consolidated financial statements.
<PAGE>
Liabilities and
Stockholders' Equity 1995 1994
------------ ------------
Current Liabilities:
Current maturities of
long-term debt $ 3,776,500 $ 5,678,600
Accounts payable 165,539,300 166,024,700
Accrued expenses 42,231,400 36,036,000
Income taxes 583,600 4,483,200
------------ ------------
Total current liabilities 212,130,800 212,222,500
------------ ------------
Long-Term Debt,
Less Current Maturities 78,850,200 88,226,700
Other Liabilities 16,322,500 13,784,300
------------ ------------
Total liabilities 307,303,500 314,233,500
------------ ------------
Commitments and Contingencies (Note 10)
Redeemable Common Stock 8,132,000 5,539,600
------------ ------------
Stockholders' Equity:
Common stock:
Voting (Class A) 16,700 17,500
Non-voting (Class B) 1,282,400 1,353,500
------------ ------------
Total common stock 1,299,100 1,371,000
Amount related to recording
minimum pension liability (283,600) (112,700)
Patronage dividends payable
in common stock 3,405,000
Additional paid-in capital 21,222,100 21,741,200
Reinvested earnings 66,258,500 61,879,600
------------ ------------
Total stockholders' equity 91,901,100 84,879,100
------------ ------------
$407,336,600 $404,652,200
============ ============
<PAGE>
<TABLE>
Statements of Consolidated Stockholders' Equity
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
<CAPTION>
Common Stock
----------------------------------------- Patronage
Class A Class B Dividends Additional
----------------- --------------------- Payable in Paid-in Reinvested
Shares Amount Shares Amount Common Stock Capital Earnings
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 2, 1993 16,100 $20,100 1,028,222 $1,285,300 $ 3,210,000 $15,215,700 $51,463,600
Net earnings 8,027,700
Common stock issued 700 900 82,193 102,700 (3,210,000) 5,058,100
Common stock purchased (1,300) (1,600) (40,875) (51,100) (1,133,100) (1,946,600)
Redeemable common stock (21,473) (26,800) (378,800) (1,132,900)
Patronage dividends payable
in common stock 3,263,000
--------------------------------------------------------------------------------
Balance, January 1, 1994 15,500 19,400 1,048,067 1,310,100 3,263,000 18,761,900 56,411,800
Net earnings
Common stock issued 700 900 52,138 65,200 (3,263,000) 3,516,200
Common stock purchased (2,200) (2,800) (1,533) (1,900) (222,200) (191,800)
Redeemable common stock (15,880) (19,900) (314,700) (894,500)
--------------------------------------------------------------------------------
Balance, December 31, 1994 14,000 17,500 1,082,792 1,353,500 0 21,741,200 61,879,600
Net earnings
Common stock issued 200 200 12,755 16,000 931,400
Common stock purchased (800) (1,000) (17,446) (21,800) (384,500) (1,329,300)
Redeemable common stock (52,204) (65,300) (1,066,000) (3,313,900)
Patronage dividends payable
in common stock 3,405,000
---------------------------------------------------------------------------------
Balance, December 30, 1995 13,400 $16,700 1,025,897 $1,282,400 $ 3,405,000 $21,222,100 $66,258,500
=================================================================================
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Statements of Consolidated Cash Flows
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
1995 1994 1993
------------ ------------ ------------
Cash Flows From Operating Activities:
Net earnings $ 9,022,100 $ 6,554,100 $ 8,027,700
Adjustments to reconcile
net earnings to net cash flows
provided by operating activities:
Depreciation and amortization 13,594,400 12,756,500 12,913,200
Extraordinary loss on early
extinguishment of debt 751,000
Allowance for losses 5,871,500 9,166,600 6,738,600
Loss (gain) on sale of
property and equipment and other
productive assets 451,900 (1,087,700) (3,680,300)
Closed facility reserve 42,300 8,000,000 1,000,000
Patronage dividends payable
in common stock 3,405,000 3,263,000
(Increase) decrease in operating
assets, net of the effects
of disposition:
Accounts receivable (6,768,000) (5,012,600) (13,819,500)
Merchandise inventories (6,008,400) (4,026,200) 11,038,700
Prepaid expenses 713,500 1,182,600 (2,105,000)
Future income tax benefits (2,805,000) (1,410,000) 295,000
Other real estate 1,924,800 758,800 (802,300)
Deferred expenses and
other assets 1,208,700 323,300 (27,700)
Deferred income tax benefit 472,000 (3,060,000)
Increase (decrease) in operating
liabilities, net of the effects
of disposition:
Accounts payable (485,400) 35,837,100 7,715,000
Accrued expenses 6,018,200 (1,582,700) (227,100)
Income taxes (3,899,600) 4,072,300 (724,400)
Deferred income taxes (734,000) (1,373,000)
Other liabilities 2,538,200 3,015,300 796,200
----------- ----------- -----------
Net cash flows provided by
operating activities 25,296,200 64,753,400 29,779,100
----------- ----------- -----------
Cash Flows From Investing Activities:
Capital expenditures (24,216,300) (22,316,600) (13,354,800)
Proceeds from sale of property
and equipment and other
productive assets 5,296,500 1,753,200 11,017,900
(Increase) decrease in
notes receivable (6,342,800) 830,400 4,602,500
----------- ----------- -----------
Net cash flows (used in) provided
by investing activities (25,262,600) (19,733,000) 2,265,600
----------- ----------- -----------
<PAGE>
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 45,000,000
Principal payments and defeasance
of long-term debt (9,376,500) (24,818,000) (68,637,400)
Increase (decrease) in notes
payable and current maturities (1,902,100) (3,381,700) 1,015,100
of long-term debt
Proceeds from sale of common stock 947,600 319,300 1,951,700
Common stock purchased (3,589,400) (2,716,800) (5,440,500)
----------- ----------- -----------
Net cash flows (used in)
financing activities (13,920,400) (30,597,200) (26,111,100)
----------- ----------- -----------
Net (Decrease) Increase in
Cash and Cash Equivalents (13,886,800) 14,423,200 5,933,600
Cash And Cash Equivalents,
Beginning Of Year 40,268,800 25,845,600 19,912,000
----------- ----------- -----------
Cash And Cash Equivalents,
End Of Year $26,382,000 $40,268,800 $25,845,600
=========== =========== ===========
Cash Paid During The Year For:
Interest $ 8,116,000 $ 9,775,300 $13,100,200
Income Taxes 12,319,000 5,163,300 7,805,700
See notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Description of business-The company is primarily engaged in
the distribution of food products and related non-food items
through retail supermarkets, many of which are owned by
stockholder-customers or the company.
Fiscal year-The company's fiscal year is the 52 or 53 week
period ending the Saturday nearest to December 31. Each of
the three years in the period ended December 30, 1995
included 52 weeks.
Financial statements-The financial statements include the
accounts of the company and its subsidiaries. Significant
intercompany balances and transactions are eliminated.
Revenue from product sales are recognized upon shipment of
the product for food distribution and at the point of sale
for retail food. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and cash equivalents-The company considers all highly
liquid investments, with maturities of three months or less
when acquired, to be cash equivalents.
Inventories-Inventories are recorded at the lower of cost,
on the first-in, first-out method, or market.
Long-lived assets-The company periodically evaluates the
carrying value of long-lived assets in accordance with
Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." The company analyzes
the future recoverability of the long-lived assets using the
related undiscounted future cash flows of the business and
recognizes any adjustment to its carrying value on a current
basis.
Depreciation-Depreciation and amortization of property and
equipment are computed primarily on the straight-line method
over their estimated useful lives, which are generally
thirty-one years for buildings, three to ten years for
equipment and five to twenty years for leasehold
improvements. Equipment under capitalized leases is
amortized over the terms of the respective leases.
Closed facility costs-When a facility is closed the
remaining investment, net of expected salvage value, is
expensed. For properties under lease agreements, the present
value of any remaining future liability under the lease, net
of expected sublease recovery, is also expensed. The
increases in the balance of the closed facility reserve were
$42,300, $8,000,000 and $1,000,000 in 1995, 1994 and 1993, respectively.
<PAGE>
Income Taxes-The company provides income taxes in accordance
with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," which requires an asset and
liability approach to financial accounting and reporting for
income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial
statement and tax bases of assets and liabilities that will
result in taxable or deductible amounts in the future based
on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income.
2. DISPOSITION
On August 28, 1993, the company completed the sale of its
dairy and ice cream operations. The sale price of
$14,976,500 consisted of cash of $9,649,600 and liabilities
assumed by the purchaser of $5,326,900. The sale resulted in
a pretax gain of $3,254,100 which is included in other
revenues in the 1993 Statement of Consolidated Earnings.
3. PATRONAGE DIVIDENDS
The company's By-Laws require that for each of the last
three fiscal years, to the extent permitted by the Internal
Revenue Code, patronage dividends are to be paid out of
earnings from business done with stockholder-customers in an
amount which will reduce the net earnings of the company to
an amount which will result in a 10% increase in the book
value of its common stock. The dividends are payable at
least 20% in cash and the remainder in Class B common stock.
Dividends for the years ended December 30, 1995 and January
1, 1994 were payable 30% in cash. There were no patronage
dividends for the year ended December 31, 1994 because the
company did not meet the requirement to increase the book
value of its common stock by 10%.
4. NOTES RECEIVABLE
The company extends long-term credit to certain independent
retailers it serves to be used primarily for store expansion
or improvements. Loans to independent retailers are
primarily collateralized by the retailer's inventory and
equipment. Interest rates are generally in excess of the
prime rate and terms of the notes are up to 15 years.
Included in current notes and accounts receivable are
amounts due within one year totalling $9,305,500 and
$7,569,700 at December 30, 1995 and December 31, 1994,
respectively. Long-term notes receivable at December 30,
1995 and December 31, 1994 are net of an allowance for
losses of $4,641,000 and $916,000, respectively.
<PAGE>
5. LONG-TERM DEBT
Long-term debt, exclusive of current maturities, consists of
the following at the respective year-ends:
1995 1994
------------ ------------
Senior unsecured notes payable:
10.31%, prepaid in 1995 $ 6,000,000
9.26%, due 1997 to 2001 $ 12,500,000 15,000,000
7.57% to 8.26%, due 1997 to 2008 20,900,000 21,600,000
6.94%, due 1997 to 2003 45,000,000 45,000,000
Other long-term debt 450,200 626,700
------------ ------------
Total $ 78,850,200 $ 88,226,700
============ ============
At December 30, 1995, $69,600,000 was available to the
company under its revolving credit agreements. The loan
agreements include, among other provisions, minimum working
capital and net worth requirements and limit stock
repurchases and total debt outstanding.
In December 1993, the company completed a private placement
of $45,000,000 of 6.94% Senior Unsecured Notes. Proceeds
were used to prepay $25,000,000 of 11.26% outstanding
Senior Unsecured Notes and to reduce notes payable under
revolving credit agreements. Proceeds used to prepay the
11.26% Senior Unsecured Notes were placed in an
irrevocable trust and, as a result, this debt was
considered to be defeased. The extraordinary loss on the
early extinguishment of the 11.26% Senior Unsecured
Notes totalled $1,262,000, before applicable income tax
benefit of $511,000.
Repayment of principal on long-term debt outstanding
is as follows:
1996 $ 3,776,500
1997 10,235,600
1998 10,156,800
1999 10,159,700
2000 21,163,000
Thereafter 27,135,100
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The company's financial instruments, as defined in
Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial
Instruments," consist primarily of accounts and notes
receivable, accounts payable and long-term debt. The
carrying amounts for accounts and notes receivable and
accounts payable approximate their fair values. Based on the
borrowing rates currently available to the company for long-
term debt with similar terms and maturities, the fair value
of long-term debt, including current maturities, was
approximately $81,500,000 and $91,240,000 as of December 30,
1995 and December 31, 1994, respectively.
<PAGE>
Notes to Consolidated Financial Statements Continued
7. COMMON STOCK
The authorized capital stock of the company is 60,000 shares
of Class A common stock and 2,400,000 shares of Class B
common stock with a par value of $1.25 a share. Inactive
customers are required to exchange Class A voting stock held
for Class B non-voting stock.
The issuance and redemption of common stock is based on the
book value thereof as of the preceding year-end. The year-
end book value was $85.15, $77.40 and $71.65 for 1995, 1994
and 1993, respectively. The company is obligated, upon
request, to repurchase common stock held by inactive
customers or employees. The amount available for such
repurchases in any year is subject to limitations under
certain loan agreements.
Class B common stock which is subject to redemption is
reflected outside of stockholders' equity. The December 31,
1994 consolidated balance sheet and statements of
consolidated stockholders' equity have been reclassified in
order to be comparable. Redeemable common stock is held by
inactive customers and former employees. As of December 30,
1995 and December 31, 1994, 95,502 and 71,571 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. The company expects to repurchase shares of
36,663, 21,776, 15,764, 11,591 and 9,708 in 1996, 1997,
1998, 1999 and 2000, respectively.
Effective November 1991, the Board of Directors adopted the
1991 Stock Incentive Plan (the "Plan") under which up to
75,000 shares of Class B common stock may be issued pursuant
to the exercise of stock options. The Plan also authorizes
the grant of up to 25,000 stock appreciation rights
("SARs"). Options and SARs may be granted to senior
executives and key employees of the company by the Executive
Compensation Committee of the Board of Directors. No options
or SARs may be granted under the Plan after November 30,
2001.
<PAGE>
Option and SAR transactions are as follows:
Options SARs Price
------- ------- -------------
Outstanding, January 2, 1993 45,000 15,000 $53.10-$58.75
Granted 15,000 5,000 65.10
Exercised (15,333) 53.10-65.10
Cancelled (1,500) (1,500) 53.10-58.75
------- ------- -------------
Outstanding, January 1, 1994 43,167 18,500 53.10-65.10
Exercised (3,667) 58.75-65.10
------- ------- -------------
Outstanding, December 31, 1994 39,500 18,500 53.10-65.10
Granted 9,500 4,500 77.40
Exercised (3,400) (1,550) 53.10-65.10
Cancelled (2,000) (2,350) 53.10-65.10
------- ------- -------------
Outstanding, December 30, 1995 43,600 19,100 $53.10-$77.40
======= ======= =============
Available for grant
after December 30, 1995 9,000 4,350
======= =======
Options granted become exercisable based on the vesting rate
which ranges from 20% at the date of grant to 100% eight
years from the date of grant. As of December 30, 1995,
options were exercisable for 31,916 shares at $53.10-$77.40
per share.
SAR holders are entitled, upon exercise of a SAR, to receive
cash in an amount equal to the excess of the book value per
share of the company's common stock as of the last day of
the company's fiscal year immediately preceding the date the
SAR is exercised over the base price of the SAR. SARs
granted become exercisable based on the vesting rate which
ranges from 20% on the last day of the fiscal year of the
grant to 100% eight years from the last day of the fiscal
year of the grant. Compensation expense was not material in
1995, 1994 and 1993. As of December 30, 1995, 9,247 SARs
were exercisable at $53.10-$77.40 per SAR.
In the event of a change in control of the company, all
options and SARs previously granted and not exercised,
become exercisable.
8. EMPLOYEE BENEFIT PLANS
Substantially all non-union employees of the company and
employees of its subsidiaries are covered by defined benefit
pension plans. Benefits are based on either years of service
and the employee's highest compensation during five of the
most recent ten years of employment or on stated amounts for
each year of service. The company intends to annually
contribute only the minimum contributions required by
applicable regulations.
<PAGE>
The following sets forth the funded status of the plans at
December 30, 1995 and December 31, 1994:
1995 1994
--------------------------- ----------------------------
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
------------ ------------- -------------- --------------
Acturial present value of:
Vested benefit
obligation $23,977,700 $ 3,473,300 $18,742,100 $ 2,816,400
=========== =========== =========== ============
Accumulated benefit
obligation $26,054,300 $ 3,592.200 $20,704,000 2,994,100
=========== =========== =========== ============
Projected benefit
obligation $30,750,300 $ 3,592,200 $24,009,500 2,994,100
Plan assets (primarily
listed stocks and bonds)
at market value 26,928,100 2,465,900 24,006,500 2,119,400
----------- ----------- ----------- ------------
Projected benefit
obligation in
excess of plan
assets (3,822,200) (1,126,300) (3,000) (874,700)
Unrecognized net
(gain) loss 1,419,500 478,600 (945,200) 189,700
Prior service cost
not yet recognized
in net periodic
pension cost 359,800 63,400 395,700 68,200
Unrecognized net
asset (1,069,500) (1,243,500)
Adjustment required to
recognize minimum
liability (542,000) (257,900)
----------- ----------- ----------- ------------
Accrued pension cost $(3,112,400) $(1,126,300) $(1,796,000) $ (874,700)
=========== =========== =========== ============
The assumptions used in the accounting were as follows:
1995 1994 1993
----- ----- -----
Discount rate 7.75% 8.25% 7.50%
Rate of increase in compensation levels 4.00% 4.00% 4.00%
Expected long-term rate of return of assets 9.00% 9.00% 9.00%
The changes in actuarial assumptions in 1995 resulted in a
$4,500,000 increase in the projected benefit obligation in
1995, and are expected to result in an increase in the 1996
pension expense of approximately $370,000. In accordance
with Statement of Financial Accounting Standards No. 87,
"Employers' Accounting for Pensions," the company has
recorded a minimum liability of which $283,600 and $112,700,
net of income taxes, is reflected as a reduction of
stockholders' equity in 1995 and 1994, respectively.
<PAGE>
Net pension cost for the foregoing defined benefit plans
includes the following components:
1995 1994 1993
----------- ----------- ------------
Service cost-benefits
earned during the year $ 1,652,800 $ 1,756,800 $ 1,314,800
Interest on projected
benefit obligation 2,191,100 2,020,600 1,881,000
Actual (return) loss
on plan assets (4,424,500) 1,013,200 (2,251,200)
Net amortization and deferral 1,989,200 (3,625,300) (247,500)
----------- ----------- ------------
Net pension cost $ 1,408,600 $ 1,165,300 $ 697,100
=========== =========== ============
The company and its subsidiaries also participate in various
multi-employer plans which provide defined benefits to
employees under collective bargaining agreements. Amounts
charged to pension expense for such plans were $3,611,600,
$3,705,300 and $3,437,500 in 1995, 1994 and 1993,
respectively. Also, the company has a defined contribution
plan covering substantially all salaried and hourly
employees not covered by a collective bargaining agreement.
Total expense for the plan amounted to $541,500, $507,500
and $513,700 in 1995, 1994 and 1993, respectively.
Effective January 3, 1993, the company adopted the
provisions of the Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," which covers health care and
other welfare benefits provided to retirees and Statement of
Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" issued by the
Financial Accounting Standards Board. The adoption of these
statements, using the immediate recognition basis, did not
have an effect on the accompanying consolidated financial
statements.
<PAGE>
Notes to Consolidated Financial Statements Continued
9. INCOME TAXES
Federal income tax at the statutory rates of 35% in 1995,
1994 and 1993 and and income tax expense as reported, are
reconciled as follows:
1995 1994 1993
---------- ---------- ----------
Federal income tax
at statutory rates $5,292,700 $3,869,300 $5,163,300
State income taxes,
net of federal tax benefits 765,300 720,000 1,131,100
Jobs and other tax credits (105,700) (448,700) (485,500)
Other-net 147,600 360,500 164,800
---------- ---------- ----------
Income tax expense $6,099,900 $4,501,100 $5,973,700
========== ========== ==========
The approximate tax effects of temporary differences at
December 30, 1995 and December 31, 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------- --------------------------------------
Assets Liabilities Total Assets Liabilities Total
--------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allowance for
doubtful accounts $ 1,603,000 $ 1,603,000 $ 2,613,000 $ 2,613,000
Inventories $ (975,200) (975,200) $ (817,200) (817,200)
Employee benefits 4,825,000 4,825,000 2,580,000 2,580,000
Accrued expenses
not currently
deductible 3,044,000 3,044,000 1,316,000 1,316,000
------------ ----------- ----------- ----------- ----------- -----------
Current 9,472,000 (975,200) 8,496,800 6,509,000 (817,200) 5,691,800
------------ ----------- ----------- ----------- ----------- -----------
Allowance for
doubtful accounts 1,876,000 1,876,000 359,000 359,000
Depreciation
and amortization (3,739,000) (3,739,000) (2,865,000) (2,865,000)
Employee benefits 3,485,000 3,485,000 2,883,000 2,883,000
Accrued expenses
not currently
deductible 1,068,000 1,068,000 2,676,000 2,676,000
Other 16,000 16,000 7,000 7,000
------------ ----------- ----------- ----------- ----------- -----------
Noncurrent 6,445,000 (3,739,000) 2,706,000 5,925,000 (2,865,000) 3,060,000
------------ ----------- ----------- ----------- ----------- -----------
Total $15,917,000 $(4,714,200) $11,202,800 $12,434,000 $(3,682,200) $ 8,751,800
============ =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
10. LEASE OBLIGATIONS AND CONTINGENT LIABILITIES
Rental payments and related subleasing rentals under
operating leases are as follows:
RENTAL PAYMENTS
------------------------- SUBLEASING
MINIMUM CONTINGENT RENTALS
----------- ---------- -----------
1993 $36,675,800 $398,800 $18,985,200
1994 36,268,800 448,300 22,329,500
1995 35,264,400 422,900 22,045,500
Contingent rentals may be paid under certain store leases on
the basis of the store's sales in excess of stipulated
amounts.
Future minimum rental payments under long-term leases are as
follows at December 30, 1995:
OPERATING
LEASES
------------
1996 $ 33,359,100
1997 29,139,700
1998 27,747,200
1999 26,658,300
2000 25,569,600
Thereafter 218,819,900
------------
Total $361,293,800
============
Total minimum rentals to be received in the future under non-
cancelable subleases as of December 30, 1995 are
$282,292,000.
The company has guaranteed customer bank loans and customer
leases amounting to $1,908,000 and $1,288,400, respectively,
at December 30, 1995.
11. EARNINGS PER SHARE
Earnings per share are not presented because they are not
deemed meaningful. See Notes 3 and 7 relating to patronage
dividends and common stock repurchase requirements.
<PAGE>
Board of Directors
- ------------------
Gerald F. Lestina
PRESIDENT & CEO
Robert D. Ranus
VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Charles R. Bonson
BONSON'S FOODS, INC.
EAGLE RIVER, WI
Lloyd E. Coppersmith
RON & LLOYD'S
NEW LONDON, WI
Gary N. Gundlach
PICK 'N SAVE - STOUGHTON
STOUGHTON, WI
Patrick D. McAdams
MCADAMS, INC.
OCONOMOWOC, WI
Robert E. Bartels
MARTIN'S SUPER MARKETS, INC.
SOUTH BEND, IN
George C. Kaiser
MILWAUKEE, WI
Henry Karbiner, Jr.
TRI CITY BANKSHARES CORPORATION
OAK CREEK, WI
Brenton H. Rupple
MILWAUKEE, WI
<PAGE>
Elected Corporate Officers
- --------------------------
Gerald F. Lestina
PRESIDENT & CEO
Ralph D. Beketic
VICE PRESIDENT -
WISCONSIN REGION
David C. Busch
VICE PRESIDENT
OF ADMINISTRATION
Edward G. Kitz
VICE PRESIDENT, SECRETARY
& TREASURER
Charles H. Kosmaler, Jr.
VICE PRESIDENT OF
LOGISTICS AND PLANNING
Thomas A. Loggia
VICE PRESIDENT -
WHOLESALE
Robert D. Ranus
VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Michael J. Schmitt
VICE PRESIDENT - SALES
AND DEVELOPMENT
Marion H. Sullivan
VICE PRESIDENT OF
MARKETING
<PAGE>
Advisory Committee
- ------------------
Tom McAdams
PICK 'N SAVE - MUKWONAGO
1010 ROCHESTER STREET
MUKWONAGO, WI 53149
George Prescott
PRESCOTT'S SUPERMARKETS, INC.
1719 SOUTH MAIN STREET
WEST BEND, WI 53095
Dave Ruehlman
THE GRAND FOOD CENTER
606 GREEN BAY RD.
WINNETKA, IL 60093
Frank Serio
PICK 'N SAVE - CUDAHY
5851 SOUTH PACKARD AVENUE
CUDAHY, WI 53110
Dave Spiegelhoff
PICK 'N SAVE - BURLINGTON
1120 MILWAUKEE AVE.
BURLINGTON, WI 53105
Mark Stinebrink
PICK 'N SAVE - LAKE GENEVA
100 EAST GENEVA SQUARE
LAKE GENEVA, WI 53147
John Stone
PICK 'N SAVE - BARABOO
615 HIGHWAY 136
WEST BARABOO, WI 53913
Scott Sylla
ULTRA MART, INC.
W173 N9170 ST. FRANCIS DRIVE
MENOMONEE FALLS, WI 53051
Rick Walker
PICK 'N SAVE - EAU CLAIRE
2717 BIRCH STREET
P.O. BOX 1508
EAU CLAIRE, WI 54703
<PAGE>
Trustees
- --------
Gerald F. Lestina
PRESIDENT & CEO
Edward G. Kitz
ViCE PRESIDENT, SECRETARY
& TREASURER
Robert S. Gold
B. & H. GOLD CORPORATION
BROWN DEER, WI
Duane G. Tate
PICK 'N SAVE - FRANKLIN
FRANKLIN, WI
David A. Ulrich
MEGA MARTS, INC.
OAK CREEK, WI
Gary R. Sarner
President & COO
CHRISTIANA COMPANIES, Inc.
MILWAUKEE, WI
Robert R. Spitzer
PRESIDENT EMERITUS
MILWAUKEE SCHOOL OF
ENGINEERING
MILWAUKEE, WI
<PAGE>
Divisional Map
1. Corporate Office - Roundy's, Inc.
23000 ROUNDY DRIVE, PEWAUKEE, WI 53072
2. Milwaukee Division
11300 W. BURLEIGH STREET, WAUWATOSA, WI 53222
3. Roundy's General Merchandise Division
400 WALTER ROAD, MAZOMANIE, WI 53560
4. Eldorado Division
ROUTE 45 SOUTH, ELDORADO, IL 62930
5. Evansville Perishable Division
4501 PETERS ROAD, EVANSVILLE, IN 47711
6. The Midland Grocery Company
6500 SOUTH U.S. 421, WESTVILLE, IN 46391
7. South Bend Perishable Division
2107 WESTERN AVENUE, SOUTH BEND, IN 46619
8. Midland Grocery of Michigan, Inc.
1764 CRESTON STREET, MUSKEGON, MI 49443
9. Spring Lake Merchandise, Inc.
1200 N. WASHINGTON, VAN WERT, OH 45891
10. Lima Division
1100 PROSPERITY ROAD, LIMA, OH 45802
11. Cardinal Foods, Inc.
4700 FISHER ROAD, COLUMBUS, OH 43228
<PAGE>
ROUNDY'S, INC.
23000 ROUNDY DRIVE
PEWAUKEE, WISCONSIN 53072
(414) 547-7999
<PAGE>
EXHIBIT 21
ROUNDY'S, INC.
Subsidiaries
Roundy's, Inc. has twelve wholly-owned first-tier subsidiaries, each a
Wisconsin corporation (except as otherwise noted) doing
business under their corporate names. These subsidiaries are:
Badger Assurance, Ltd.(1) Kee Wholesale, Inc.
CD of Wisconsin, Inc. Midland Grocery of Michigan, Inc.(6)
Holt Public Storage, Inc. Old Time, Inc.
I.T.A., Inc. Ropak, Inc.
Jondex Corp. Scot Lad Foods, Inc.
Kee Trans, Inc. WFC Foods, Inc.(2)
Five Wisconsin corporations doing business under their
corporate names are wholly-owned subsidiaries of Ropak, Inc.
These corporations are:
Insurance Planners, Inc. Shop-Rite, Inc.
Pick 'n Save Warehouse Foods, Inc. Villard Avenue Shop-Rite, Inc.
Sheboygan Land Corporation
Four corporations doing business under their corporate names
are wholly-owned subsidiaries of Scot Lad Foods, Inc. These
corporations are:
Bonnie Baking Co., Inc.(3) Cardinal Foods, Inc.(5)
Spring Lake Merchandise, Inc.(4) Scot Lad-Lima, Inc.(4)
One corporation doing business under its corporate name is a
wholly-owned subsidiary of Cardinal Foods, Inc. The corporation is:
Wilson's Cardinal Supermarket, Inc.(4)
One corporation doing business under its corporate name is a
subsidiary of Shop-Rite, Inc. and is partially owned by
Cardinal Foods, Inc. The corporation is:
The Midland Grocery Company(4)
_____________
(1) A Bermuda corporation. (4) An Ohio corporation.
(2) An Illinois corporation. (5) A Delaware corporation.
(3) An Indiana corporation. (6) A Michigan corporation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROUNDY'S,
INC. FORM 10-K 405 FOR THE PERIOD ENDED 12-30-95 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 26,382,000
<SECURITIES> 0
<RECEIVABLES> 99,727,000
<ALLOWANCES> 0
<INVENTORY> 163,204,100
<CURRENT-ASSETS> 302,870,600
<PP&E> 154,975,800
<DEPRECIATION> 80,424,900
<TOTAL-ASSETS> 407,336,600
<CURRENT-LIABILITIES> 212,130,800
<BONDS> 78,850,200
0
0
<COMMON> 1,299,100
<OTHER-SE> 90,602,000
<TOTAL-LIABILITY-AND-EQUITY> 407,336,600
<SALES> 2,488,196,200
<TOTAL-REVENUES> 2,492,162,300
<CGS> 2,260,039,400
<TOTAL-COSTS> 2,260,039,400
<OTHER-EXPENSES> 203,200,400
<LOSS-PROVISION> 5,871,500
<INTEREST-EXPENSE> 7,929,000
<INCOME-PRETAX> 15,122,000
<INCOME-TAX> 6,099,900
<INCOME-CONTINUING> 9,022,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,022,100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
