UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number 33-57505
Roundy's, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0854535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23000 Roundy Drive, Pewaukee, Wisconsin 53072
(Address of principal executive offices) (Zip Code)
(414) 547-7999
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at September 27, 1997
Common Stock, $1.25 par value
Class A (Voting) 13,000 Shares
Class B (Non-voting) 1,136,593 Shares
ROUNDY'S, INC.
INDEX
Page No.
PART I. Financial Information:
Consolidated Balance Sheets -
September 27, 1997 and December 28, 1996 3
Statements of Consolidated Earnings -
Thirteen Weeks and Thirty-nine Weeks Ended
September 27, 1997 and September 28, 1996 4
Statements of Consolidated Cash Flows -
Thirty-nine Weeks Ended September 27, 1997
and September 28, 1996 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information 9
SIGNATURES 10
PART I. FINANCIAL INFORMATION
ROUNDY'S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 27, 1997 and December 28, 1996
September 27, 1997 December 28, 1996
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 62,272,000 $ 40,342,300
Notes and accounts receivable, less
allowance for losses, $4,823,800
and $6,859,500, respectively......... 89,616,800 98,593,300
Merchandise inventories................ 160,769,200 155,562,300
Prepaid expenses....................... 2,735,500 2,741,000
Refundable and future income tax
benefits............................. 7,817,400 7,817,400
------------- -------------
Total Current Assets............... 323,210,900 305,056,300
------------- -------------
OTHER ASSETS:
Notes receivable, less allowance
for losses of $5,576,000............. 11,513,700 12,386,600
Goodwill and other assets.............. 15,209,700 12,100,600
Other real estate...................... 6,013,300 4,439,700
Deferred income tax benefit............ 1,922,000 1,922,000
------------- -------------
Total Other Assets................... 34,658,700 30,848,900
------------- -------------
PROPERTY AND EQUIPMENT - Net............. 99,537,100 98,735,800
------------- -------------
$457,406,700 $434,641,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt... $ 10,154,100 $ 10,225,800
Accounts payable....................... 163,540,200 159,038,100
Accrued expenses....................... 50,914,000 44,358,400
Income taxes........................... 5,301,300 936,100
------------- -------------
Total Current Liabilities............ 229,909,600 214,558,400
LONG-TERM DEBT, LESS CURRENT MATURITIES.. 92,397,900 93,614,600
OTHER LIABILITIES........................ 16,613,400 16,522,700
------------- -------------
Total Liabilities.................... 338,920,900 324,695,700
------------- -------------
REDEEMABLE CLASS B COMMON STOCK.......... 6,236,100 6,217,100
------------- -------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A)..................... 16,200 16,300
Non-Voting (Class B)................. 1,354,700 1,325,200
------------- -------------
Total Common Stock................. 1,370,900 1,341,500
Amount related to recording minimum
pension liability...................... (232,800) (232,800)
Patronage dividends payable in common
stock.................................. 3,779,000
Additional paid-in capital.............. 28,867,100 24,920,600
Reinvested earnings..................... 83,375,700 75,051,100
------------- -------------
Total.............................. 113,380,900 104,859,400
Less Treasury Stock, at cost............ 1,131,200 1,131,200
------------- -------------
Total Stockholders' Equity......... 112,249,700 103,728,200
------------- -------------
$457,406,700 $434,641,000
============= =============
See Notes to Consolidated Financial Statements.
<TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 1997 AND September 28, 1996
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
September 27, 1997 September 28, 1996 September 27, 1997 September 28, 1996
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees.... $629,712,300 $645,106,900 $1,881,349,200 $1,898,315,700
Other - net................... 881,000 1,488,700 2,614,500 3,371,000
------------- ------------- --------------- ---------------
630,593,300 646,595,600 1,883,963,700 1,901,686,700
------------- ------------- --------------- ---------------
COSTS AND EXPENSES:
Cost of sales................. 569,349,400 582,610,500 1,700,059,800 1,717,974,700
Operating and administrative.. 53,327,100 55,416,100 160,852,500 164,134,900
Interest...................... 2,012,600 2,354,800 6,042,100 6,297,200
------------- ------------- --------------- ---------------
624,689,100 640,381,400 1,866,954,400 1,888,406,800
------------- ------------- --------------- ---------------
EARNINGS BEFORE INCOME TAXES.. 5,904,200 6,214,200 17,009,300 13,279,900
PROVISION FOR INCOME TAXES.... 2,406,000 2,532,300 6,931,300 5,411,600
------------- ------------- --------------- ---------------
NET EARNINGS.................. $ 3,498,200 $ 3,681,900 $ 10,078,000 $ 7,868,300
============= ============= =============== ===============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 AND SEPTEMBER 28, 1996
(UNAUDITED)
Thirty-Nine Weeks Ended
September 27, 1997 September 28, 1996
Cash Flows From Operating Activities:
Net earnings.......................... $ 10,078,000 $ 7,868,300
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization......... 12,733,800 11,790,400
Allowance for losses.................. 1,601,800 2,818,000
Loss (gain) on sale of assets......... 369,200 (741,500)
(Increase) Decrease in Operating Assets
Net of Effects of Business Acquisition:
Accounts receivable................... 7,449,400 (4,161,500)
Merchandise inventories............... (3,297,900) (5,411,800)
Prepaid expenses...................... 58,800 2,284,000
Other real estate..................... (1,573,600) 313,100
Goodwill and other assets............. (47,300) (403,000)
Increase(Decrease)in Operating Liabilities
Net of Effects of Business Acquisition:
Accounts payable...................... 4,502,100 (4,354,300)
Accrued expenses...................... 6,552,200 7,802,100
Income taxes.......................... 4,365,200 1,173,000
Other liabilities..................... 90,700 (501,800)
Net cash flows provided by operating ----------------- ----------------
activities............................. 42,882,400 18,475,000
----------------- --------------
Cash Flows from Investing Activities:
Capital Expenditures.................. (12,405,300) (35,717,600)
Proceeds from sale of property and
equipment........................... 1,291,300 2,221,400
Payment for business acquisition net of
cash acquired....................... (7,885,700) (13,905,800)
Decrease in notes receivable.......... 872,900 3,483,800
Net cash flows used in investing ----------------- --------------
activities............................ (18,126,800) (43,918,200)
----------------- --------------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings.... 32,000,000
Principal payments of long-term debt.. (1,216,700) (1,290,100)
(Decrease) increase in current
maturities of long-term debt........ (71,700) 35,400
Proceeds from sale of common stock.... 814,100 689,000
Common stock purchased................ (2,351,600) (3,126,000)
Net cash flows (used in) provided by ----------------- --------------
financing activities.................. (2,825,900) 28,308,300
Net Increase (Decrease) in Cash and
Cash Equivalents...................... 21,929,700 2,865,100
Cash and Cash Equivalents,
Beginning of Period................... 40,342,300 26,382,000
---------------- --------------
Cash and Cash Equivalents, End of Period $ 62,272,000 $ 29,247,100
================ ==============
Cash paid during the period: - Interest $ 4,769,700 $ 5,120,300
- Income Taxes 2,679,000 4,347,900
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) In the opinion of the Company, the accompanying consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of September 27, 1997 and December 28, 1996, and the
results of operations for the thirteen and thirty-nine weeks ended
September 27, 1997 and September 28, 1996 and changes in cash flows
for the thirty-nine weeks ended September 27, 1997 and September 28,
1996.
2) The results of operations for the thirteen and thirty- nine weeks ended
September 27,1997 and September 28, 1996 are not necessarily
indicative of the results to be expected for the full fiscal year.
3) Earnings per share are not presented because they are not deemed to
be meaningful.
4) Class B common stock which is subject to redemption is reflected
outside of stockholders' equity. As of September 27, 1997 and
December 28, 1996, 66,130 and 65,929 shares, respectively, were
subject to redemption. The Class B common stock subject to
redemption is payable over a five year period based upon the book
value at the preceding fiscal year end.
5) During the six months ended June 29, 1996, the Company concluded its
consolidation of Cardinal Foods into the Lima Division. The net cost
of this consolidation was $2.1 million.
6) Effective September 15, 1997, the Company purchased a grocery
retailer for approximately $7.9 million in cash. The acquisition has
been accounted for as a purchase and the results of operation have
been included in the consolidated financial statements since the date
of acquisition.
7) In June 1997, the Financial Accounting Standards Board issued
statements No. 130 "Reporting Comprehensive Income" and No. 131
"Disclosures about Segments of an Enterprise and Related Information.
" These statements will become effective in 1998. The Company is
currently evaluating the impact of adopting these new pronouncements.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The following is management's discussion and analysis of certain significant
factors which have affected the Company's results of operations during the
periods included in the accompanying statements of consolidated earnings.
A summary of the period to period changes in the principal items included in
the statements of consolidated earnings is shown below:
Comparison of
13 Weeks Ended September 27, 39 Weeks Ended September 27,
1997 and September 28, 1996 1997 and September 28, 1996
Increase/<Decrease> Increase/<Decrease>
Net sales and service fees $(15,394,600) (2.4)% $(16,966,500) (0.9)%
Cost of sales (13,261,100) (2.3)% (17,914,900) (1.0)%
Operating and admin. expenses (2,089,000) (3.8)% (3,282,400) (2.0)%
Interest expense (342,200) (14.5)% (255,100) (4.1)%
Earnings before income taxes (310,000) (5.0)% 3,729,400 28.1 %
Net sales and service fees decreased approximately $15.4 million during the
third quarter of 1997 as compared to the third quarterof 1996. The loss
of wholesale customers resulted in a decrease ofapproximately $10.1 million.
The closing or sale of ten Company-owned stores resulted in a decrease of
approximately $9.7 million. New Company-owned stores resulted in an increase
of approximately $4.7 million. Sales by existing Company-owned stores
decreased $2.2 million. Sales to new and existing wholesale customers
increased $1.9 million.
Net sales and service fees decreased approximately $17.0 million during the
first three quarters of 1997 as compared to the first three quarters of 1996.
The loss of wholesale customers resulted in a decrease of approximately $41.0
million. The closing or sale of twelve Company-owned stores resulted in a
decrease of approximately $25.7 million. New Company-owned stores resulted in
an increase of approximately $36.1 million. Sales by existing Company-owned
stores decreased $0.6 million. Sales to new and existing wholesale customers
increased $14.2 million.
Cost of sales approximated 90.4% and 90.3% of net sales and service fees for
the thirteen weeks ended September 27, 1997 and September 28, 1996,
respectively. Year-to-date cost of sales approximated 90.4% and 90.5% of
net sales and service fees for the thirty-nine weeks ended September 27,
1997 and September 28, 1996, respectively.
Operating and administrative expenses approximated 8.5% and 8.6% of net sales
and service fees for the thirteen weeks ended September 27, 1997 and
September 28, 1996, respectively. Year-to-date operating and administrative
expenses approximated 8.6% and 8.7% of net sales and service fees for the
thirty-nine weeks ended September 27, 1997 and September 28, 1996, respectively.
The decreases are primarily due to the costs associated with the consolidation
of Cardinal Foods into the Lima Division incurred during the first and second
quarters of 1996 (See Note 5).
Interest expense decreased primarily as a result of lower borrowing
levels during the quarter ended September 27, 1997 as compared to the
quarter ended September 28, 1996.
No patronage dividends have been accrued as of September 27, 1997. The Company's
By-Laws require that, to the extent permitted by the Internal Revenue Code,
patronage dividends be paid out of earnings from business done with
stockholder-customers in an amount which will reduce net earnings of the
Company to such amount as will result in a 10 percent increase in the book
value of its common stock.
The income tax rate used for calculating the provision for income taxes for the
interim periods was 40.8% in 1997 and 1996.
Liquidity and Capital Resources
The Company's current ratio decreased slightly from 1.42:1 at year-end to 1.41:1
at September 27, 1997. The consolidated long-term debt to equity ratio has
decreased from 0.85:1 at December 28, 1996 to 0.78:1 at September 27, 1997,
primarily due to increased equity levels.
Stockholders' equity, including redeemable common stock, increased approximately
$8.5 million due to reinvested earnings of $10.1 million and proceeds from the
sale of common stock of $0.8 million offset by common stock purchases of $2.4
million.
II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed
for the thirteen weeks ended September 27, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROUNDY'S, INC.
------------------------------
(Registrant)
Date: November 5, 1997 ROBERT D. RANUS
-----------------------------
Robert D. Ranus
Vice President and
Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROUNDY'S,
INC. FORM 10-Q FOR THE QUARTER ENDING SEPTEMBER 27, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> SEP-27-1997
<CASH> 62,272,000
<SECURITIES> 0
<RECEIVABLES> 89,616,800
<ALLOWANCES> 0
<INVENTORY> 160,769,200
<CURRENT-ASSETS> 323,210,900
<PP&E> 199,859,000
<DEPRECIATION> 100,321,700
<TOTAL-ASSETS> 457,406,700
<CURRENT-LIABILITIES> 229,909,600
<BONDS> 92,397,900
0
0
<COMMON> 1,370,900
<OTHER-SE> 110,878,800
<TOTAL-LIABILITY-AND-EQUITY> 457,406,700
<SALES> 1,881,349,200
<TOTAL-REVENUES> 1,883,963,700
<CGS> 1,700,059,800
<TOTAL-COSTS> 1,700,059,800
<OTHER-EXPENSES> 159,250,700
<LOSS-PROVISION> 1,601,800
<INTEREST-EXPENSE> 6,042,100
<INCOME-PRETAX> 17,009,300
<INCOME-TAX> 6,931,300
<INCOME-CONTINUING> 10,078,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,078,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
