<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 1999
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)
(262) 953-7999
------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- ---------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 2, 1999
Common Stock, $1.25 par value
Class A (Voting) 11,800 Shares
Class B (Non-voting) 1,150,228 Shares
<PAGE>
ROUNDY'S, INC.
INDEX
------
Page
No.
----
PART I. Financial Information:
Condensed Consolidated Balance Sheets - 3
October 2, 1999 and January 2, 1999
Condensed Statements of Consolidated Earnings 4
-
Thirteen Weeks and Thirty-nine Weeks Ended
October 2, 1999 and October 3, 1998
Condensed Statements of Consolidated Cash 5
Flows -
Thirty-nine Weeks Ended October 2, 1999
and October 3, 1998
Notes to Condensed Consolidated Financial 6
Statements
Management's Discussion and Analysis of 8
Financial Condition and Results of
Operations
PART II. Other Information 13
SIGNATURES 14
<PAGE>
PART I. FINANCIAL INFORMATION
ROUNDY'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 2, 1999 and January 2, 1999
October 2, 1999 January 2, 1999
(Unaudited) (Audited)
--------------- ---------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 85,755,300 $ 72,094,500
Notes and accounts receivable, less
allowance for losses of $6,402,800
and $6,361,600, respectively 85,598,000 78,489,000
Merchandise inventories 174,624,100 159,743,100
Prepaid expenses 3,461,900 5,347,000
Future income tax benefits 6,373,800 6,373,800
------------- -------------
Total Current Assets 355,813,100 322,047,400
------------- -------------
OTHER ASSETS:
Notes receivable, less allowance for
losses of $6,015,000 13,217,000 11,013,000
Goodwill and other assets 9,686,500 10,140,600
Other real estate 3,844,900 4,081,300
Deferred income tax benefit 4,492,000 4,492,000
------------- -------------
Total Other Assets 31,240,400 29,726,900
------------- -------------
PROPERTY AND EQUIPMENT - Net 123,128,200 110,637,300
------------- -------------
$510,181,700 $462,411,600
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 24,731,200 $ 10,159,700
Accounts payable 186,993,400 165,801,200
Accrued expenses 66,505,400 56,924,600
Income taxes 5,193,500 4,418,600
------------- -------------
Total Current Liabilities 283,423,500 237,304,100
LONG-TERM DEBT, LESS CURRENT MATURITIES 57,503,600 73,298,100
OTHER LIABILITIES 23,686,200 16,998,100
------------- -------------
Total Liabilities 364,613,300 327,600,300
------------- -------------
REDEEMABLE CLASS B COMMON STOCK 8,879,700 9,007,700
------------- -------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A) 14,700 14,900
Non-Voting (Class B) 1,357,700 1,327,300
------------- -------------
Total Common Stock 1,372,400 1,342,200
Patronage dividends payable in common
stock 4,060,000
Additional paid-in capital 36,337,200 31,582,600
Reinvested earnings 100,110,300 89,950,000
------------- -------------
Total 137,819,900 126,934,800
Less Treasury Stock, at cost 1,131,200 1,131,200
------------- -------------
Total Stockholders' Equity 136,688,700 125,803,600
------------- -------------
$510,181,700 $462,411,600
============= =============
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
ROUNDY'S, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
October 2, 1999 AND October 3, 1998
(UNAUDITED)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 2, 1999 October 3, 1998 October 2, 1999 October 3, 1998
-------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees... $ 669,895,800 $ 635,075,500 $1,987,423,000 $1,903,789,200
Other - net.................. 882,600 1,375,000 3,231,800 3,907,400
-------------- -------------- --------------- ---------------
670,778,400 636,450,500 1,990,654,800 1,907,696,600
-------------- -------------- --------------- ---------------
COSTS AND EXPENSES:
Cost of sales................ 603,326,900 574,711,100 1,793,586,400 1,722,281,600
Operating and administrative. 58,241,700 53,967,300 171,638,600 162,513,900
Interest..................... 1,630,100 1,803,000 4,892,600 5,490,800
-------------- -------------- --------------- ---------------
663,198,700 630,481,400 1,970,117,600 1,890,286,300
-------------- -------------- --------------- ---------------
EARNINGS BEFORE INCOME TAXES. 7,579,700 5,969,100 20,537,200 17,410,300
PROVISION FOR INCOME TAXES... 3,088,700 2,432,400 8,368,900 7,094,700
-------------- -------------- --------------- ---------------
NET EARNINGS................. $ 4,491,000 $ 3,536,700 $ 12,168,300 $ 10,315,600
============== ============== =============== ===============
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
ROUNDY'S, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999 AND OCTOBER 3, 1998
(UNAUDITED)
Thirty-nine Weeks Ended
October 2, 1999 October 3, 1998
--------------- ---------------
Cash Flows From Operating Activities:
Net earnings................................ $ 12,168,300 $ 10,315,600
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization............... 13,832,700 13,739,200
Allowance for losses........................ 1,190,500 1,533,200
Loss(gain) on sale of assets................ 513,600 (198,700)
(Increase)decrease in operating assets net of
the effect of acquisitions and dispostiton:
Notes and accounts receivable............... (8,284,100) 7,077,200
Merchandise inventories..................... (11,833,900) (18,220,900)
Prepaid expenses............................ 1,889,500 2,398,900
Other real estate........................... 236,400 2,493,100
Goodwill and other assets................... (196,100) (79,100)
Increase(decrease)in operating liabilities net
of the effect of acquisitions and disposition:
Accounts payable............................ 20,291,900 10,597,900
Accrued expenses............................ 9,160,300 10,064,900
Income taxes................................ 774,900 2,287,000
Other liabilities........................... 6,688,100 298,300
------------- -------------
Net cash flows provided by operating activities 46,432,100 42,306,600
------------- -------------
Cash Flows from Investing Activities:
Capital expenditures........................ (22,433,000) (10,054,600)
Proceeds from sale of property and
equipment and other productive assets..... 1,182,400 3,454,100
Payment for business acquisitions net of
cash acquired............................. (6,682,500)
Increase in notes receivable................ (2,204,000) (143,900)
------------- -------------
Net cash flows used in investing activities... (30,137,100) (6,744,400)
------------- -------------
Cash Flows from Financing Activities:
Reduction in debt........................... (1,223,000) (1,220,900)
Proceeds from sale of common stock.......... 1,637,100 1,315,000
Common stock purchased...................... (3,048,300) (4,781,200)
------------- -------------
Net cash flows used in financing activities... (2,634,200) (4,687,100)
------------- -------------
Net Increase in Cash and Cash Equivalents..... 13,660,800 30,875,100
Cash and Cash Equivalents, Beginning of Period 72,094,500 52,366,900
------------- -------------
Cash and Cash Equivalents, End of Period...... $ 85,755,300 $ 83,242,000
============= =============
Cash paid during the period: - Interest $ 3,865,100 $ 4,509,100
- Income Taxes 7,684,300 4,940,400
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) In the opinion of the Company, the accompanying consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of October 2, 1999 and January 2, 1999, and the results
of operations for the thirteen and thirty-nine weeks ended October
2, 1999 and October 3, 1998 and changes in cash flows for the thirty-
nine weeks ended October 2, 1999 and October 3, 1998.
2) The results of operations for the thirteen and thirty-nine weeks
ended October 2, 1999 and October 3, 1998 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 October 2, 1999 and January
2, 1999, 77,349 and 78,464 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 fiscal 1998, fire destroyed the Evansville, Indiana
warehouse, inventory and equipment. The Division supplied frozen food
and meat products to Roundy's customers in the Southern Midwest area.
Discussions are in process with the insurance carrier relating to the
inventory, building and equipment and estimated business interruption
losses incurred.
Through October 2, 1999, cash advances aggregating $9.4 million were
received from the insurance carrier relative to (1) the cost of the
inventory destroyed in the fire ($4.1 million), (2) a partial
advance on the replacement cost of the destroyed building and
equipment ($5.0 million) and (3) to cover certain costs of
demolishing the building and removing debris from the site ($0.3
million). The Company has also recorded an insurance claim
receivable for expenses directly related to costs incurred in
connection with this fire.
The Company elected to rebuild the facility on the existing site and
completed the project in January 1999 at a cost of approximately
$10.8 million. The new facility was fully operational by January
30, 1999, again supplying frozen food and meat products to Roundy's
customers.
The Company is in negotiations with the insurance carrier regarding
an overall settlement of its claims-including additional expenses,
building, equipment and business interruption. Due to the
complexity of the claim, the Company anticipates that the final
settlement may require an extended
period of negotiation. However, Management believes that the
Company's insurance coverage was sufficient and that the final
settlement with its insurance carrier will not have a material
adverse impact on the Company's future financial statements.
<PAGE>
6) On December 8, 1998, the Company purchased a grocery retailer for
approximately $4.6 million in cash. On April 12, 1999, the Company
purchased a grocery retailer for approximately $5.7 Million in cash.
On August 24, 1999, the Company purchased a grocery retailer for
approximately $1.0 million in cash. The acquisitions have been
accounted for as purchases and the results of operations have been
included in the consolidated financial statements since the dates of
the acquisitions.
7) Segment Reporting. The Company and its subsidiaries sell and
distribute food and nonfood products that are typically found in
supermarkets. The Company's wholesale distribution segment sells to
both corporate and independently owned retail food stores, while the
retail segment sells directly to the consumer.
Gross Profit represents net sales, less cost of sales.
Identifiable assets are those used exclusively by that industry
segment. Corporate assets are principally cash and cash equivalents,
notes receivable, corporate office facilities and equipment.
<TABLE>
<CAPTION>
For the thirteen weeks ended For the thirty-nine weeks
October 2, 1999 October 3, 1998 October 2, 1999 October 3, 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net Sales
Wholesale $640,166,800 $621,883,500 $1,908,220,300 $1,850,839,700
Retail 83,830,200 69,904,200 235,490,200 211,798,000
Eliminations (54,101,200) (56,712,200) (156,287,500) (158,848,500)
------------- ------------- --------------- ---------------
Total $669,895,800 $635,075,500 $1,987,423,000 $1,903,789,200
============= ============= =============== ===============
Gross Profit
Wholesale $ 49,118,300 $ 46,150,300 $ 144,961,200 $ 138,586,000
Retail 18,193,500 14,909,900 51,161,200 45,113,100
Eliminations (742,900) (695,800) (2,285,800) (2,191,500)
------------- ------------- --------------- ---------------
Total $ 66,568,900 $ 60,364,400 $ 193,836,600 $ 181,507,600
============= ============= =============== ===============
Depreciation and
Amortization
Wholesale $ 1,876,600 $ 1,770,400 $ 5,493,200 $ 5,845,200
Retail 1,203,200 1,021,500 3,614,400 3,245,000
Corporate 1,665,500 1,499,000 4,725,100 4,649,000
------------- ------------- --------------- ---------------
Total $ 4,745,300 $ 4,290,900 $ 13,832,700 $ 13,739,200
============= ============= =============== ===============
Capital Expenditures
Wholesale $ 4,789,900 $ 1,907,300 $ 8,230,600 $ 4,112,200
Retail 352,900 286,100 717,500 455,600
Corporate 5,962,500 2,418,400 13,484,900 5,486,800
------------- ------------- --------------- ---------------
Total $ 11,105,300 $ 4,611,800 $ 22,433,000 $ 10,054,600
============= ============= =============== ===============
Identifiable Assets October 2, 1999 January 2, 1999
--------------- ---------------
Wholesale $314,275,300 $304,322,200
Retail 57,885,100 54,856,500
Corporate 138,021,300 103,232,900
------------- -------------
Total $510,181,700 $462,411,600
============= =============
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
- ---------------------
The following is management's discussion and analysis of certain
significant factors, which have affected the Company's results of
operations during the periods included in the accompanying statements
of consolidated earnings.
A summary of the period to period changes in the principal items
included in the statements of consolidated earnings is shown below:
<TABLE>
<CAPTION>
Comparison of
13 Weeks Ended October 2, 39 Weeks Ended October 2,
1999 and October 3, 1998 1999 and October 3, 1998
Increase/<Decrease> Increase/<Decrease>
------------------------- --------------------------
<S> <C> <C>
Net sales and service fees $34,820,300 5.48% $83,633,800 4.39%
Cost of sales 28,615,800 4.98% 71,304,800 4.14%
Operating and admin. expenses 4,274,400 7.92% 9,124,700 5.61%
Interest expense (172,900) (9.59)% (598,200) (10.89)%
Earnings before income taxes 1,610,600 26.98% 3,126,900 17.96%
</TABLE>
Net sales and service fees increased approximately $34.8 million during
the third quarter of 1999 as compared to the third quarter of 1998. The
loss of wholesale customers resulted in a decrease of approximately
$7.3 million. The closing or sale of three Company-owned stores
resulted in a decrease of approximately $6.0 million. New Company-
owned stores resulted in an increase of approximately $15.8 million.
Sales by existing Company-owned stores increased $4.1 million. Sales
to new and existing wholesale customers increased $28.2 million.
Net sales and service fees increased approximately $83.6 million during
the first three quarters of 1999 as compared to the first three
quarters of 1998. The loss of wholesale customers resulted in a
decrease of approximately $29.7 million. The closing or sale of five
Company-owned stores resulted in a decrease of approximately $21.7
million. New Company-owned stores resulted in an increase of
approximately $33.6 million. Sales by existing Company-owned stores
increased $11.7 million. Sales to new and existing wholesale customers
increased $89.7 million.
Cost of sales approximated 90.1% and 90.5% of net sales and service
fees for the thirteen weeks ended October 2, 1999 and October 3, 1998,
respectively. This lower cost of sales percentage is primarily due to
the higher concentration of retail store business. Year-to-date cost
of sales approximated 90.3% and 90.5% of net sales and service fees for
the thirty-nine weeks ended October 2, 1999 and October 3, 1998,
respectively.
Operating and administrative expenses approximated 8.7% and 8.5% of net
sales and service fees for the thirteen weeks ended October 2, 1999 and
October 3, 1998, respectively. Year-to-date operating and
administrative expenses approximated 8.6% and 8.5% of net sales and
service fees for the thirty-nine weeks ended October 2, 1999 and
October 3, 1998, respectively. During the quarter ended July 3, 1999,
the Company received approximately $3.5 million from a customer for
early termination of a supply agreement. The Company also
accrued approximately $1.5 million for the license to use bar-code
technology. Both of these items are reflected in Statement of
Consolidated Earnings for the thirty-nine week period ended October 2,
1999.
<PAGE>
Interest expense decreased, in both the thirteen week and thirty-nine
week periods ended October 2, 1999, primarily as a result of lower
borrowing levels.
No patronage dividends have been accrued as of October 2, 1999. 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 an 8 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 1998 and 1997.
Liquidity and Capital Resources
- -------------------------------
The Company's current ratio decreased slightly from 1.36:1 at year-end
to 1.26:1 at October 2, 1999. The consolidated long-term debt to
equity ratio has decreased from 0.54:1 at January 2, 1999 to 0.40:1 at
October 2, 1999, partially due to increased equity levels and partially
due to the reclass of approximately $14.6 million to current maturities
of long-term debt.
The Company's financial condition remains strong. Our cash, other
liquid assets, operating cash flows and access to capital markets,
taken together, provide adequate resources to fund ongoing operating
requirements and future capital expenditures related to the expansion
of our existing business and acquisitions.
Stockholders' equity, including redeemable common stock, increased
approximately $10.8 million due to reinvested earnings of $12.2 million
and proceeds from the sale of common stock of $1.6 million offset by
common stock purchases of $3.0 million.
YEAR 2000
- ----------
Many computer software applications, hardware and equipment and
embedded chip systems identify dates using only the last two digits of
the year or contain inherent date limitations in their programming
language. These products may be unable to properly recognize or handle
dates before, in or after the Year 2000, causing the applications,
equipment or systems to fail or produce incorrect information. These
potential problems are commonly referred to as "Year 2000 Issues."
<PAGE>
The Company relies primarily on computerized systems for
procurement, inventory control, sale and distribution of its products.
The Company also uses a number of computer software programs, operating
systems, and types of equipment with computer chips in its internal
operations, including its financial and business systems, its
distribution/warehouse, procurement and control systems and
administrative functions. To the extent that these items contain
source code or computer chips that are unable to correctly handle the
Year 2000 Issue, some level of modification or possible replacement
will be necessary.
State of Readiness
- -------------------
The Company has developed comprehensive plans to address the
possible impact of the Year 2000 Issue on operations throughout its
divisions. A Year 2000 Team has been organized to coordinate
activities necessary to assure that key automated systems and related
processes will remain functional through the year 2000. Progress is
being monitored and reported to management and to the Board of
Directors on a periodic basis.
The Company's efforts to address the year 2000 Issue can be
grouped into three major categories: information technology ("IT")
systems; Non-IT systems; and third party relationships. Within each
category there are generally four phases: (i) assessment of the extent
of potential Year 2000 Issues and risk exposures, as well as
contingency planning; (ii) remediation or replacement of non-compliant
software or equipment; (iii) testing of remediated or replaced software
or equipment; and (iv) implementation of fully tested compliant
systems.
IT Systems. The Company has identified three IT systems it
considers most critical to its operations: (a) procurement, including
electronic data interchange ("EDI") systems with product suppliers; (b)
warehouse management, order processing and distribution systems; and
(c) general control systems (which include financial reporting, billing
and collection, and other administrative systems). The Company
operates through several divisions, some of which are farther along
than others in addressing Year 2000 Issues. While in certain instances
the Company may rely extensively upon representations of software
vendors as to Year 2000 compliance, the Company has generally adopted
an approach of thoroughly testing critical IT systems (using internal
and external resources) in order to satisfy itself as to Year 2000
compliance.
Non-IT Systems. The Company is in the process of reviewing all of
its communication systems (phone and data transmission systems) fax
machines, photocopiers, postage machines, elevators, HVAC systems,
security systems and other Non-IT systems for purposes of determining
whether Year 2000 Issues exist. When available, written certifications
of Year 2000 compliance for these systems will be obtained. The
Company's operations are, in part, dependent upon embedded
microprocessors in equipment used to physically sort, store, and move
inventory.
<PAGE>
Status and Targeted Completion Date of IT and Non-IT System
Activities. In general, on an enterprise-wide basis, as of October 2,
1999, the Company has completed the approximate percentages of its
expected Year 2000 activities for its systems set forth in the
following table. These percentages are management's estimates derived
largely from the percentage of anticipated expenditures that has been
spent through October 2, 1999. The table also shows the targeted date
for the substantial completion of each Year 2000 activity:
<TABLE>
<CAPTION>
Assessment Remediation Testing Implementation
------------------- -------------------- ------------------- -------------------
Target Target Target Target
Percent Completion Percent Completion Percent Completion Percent Completion
System Complete Date Complete Date Complete Date Complete Date
-------- ---------- -------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IT Systems:
- -----------
Procurement 100% - 100% - 100% - 100% -
Warehouse/
Distribution 100% - 100% - 100% - 100% -
Control
Systems 100% - 100% - 100% - 100% -
Non-IT Systems:
- ---------------
Office Systems 100% - 100% - 100% - 100% -
Facilities 100% - 100% - 100% - 100% -
Other Non
- - IT Systems 100% - n/a - n/a - 100% -
</TABLE>
Third Party Relationships. The Year 2000 Issue can have an impact
on the Company's ability to receive accurate and timely deliveries from
its suppliers. Efforts are being made to contact all suppliers and
service providers and coordinate appropriate measures necessary to
assure the continuation of product deliveries and services. However,
because there is a range of alternative suppliers for essentially
comparable products, which the Company believes will reduce the impact
of any disruptions in its procurement systems, the Company is initially
concentrating on solving potential problems in its critical
distribution network to its customers. The Company is encouraging and
assisting its customers in their assessment of Year 2000 Issues in
order to help them avoid or minimize disruptions at the customer level
which would adversely impact the Company's ability to distribute its
products.
<PAGE>
Overall Risk Assessment and Contingency Planning. The Company's
business depends upon its ability to deliver inventory to its customers
in a timely fashion. The Company believes that the most reasonable
likely worst case scenario associated with the Year 2000 Issue is if,
as a result of disruptions or malfunctions, the Company is unable to
process and deliver customer orders consistent with the time-sensitive
nature of this process. The extent of such potential impact cannot be
determined with reliability at this time due, in large part, to the
lack of comprehensive information as to the Year 2000 readiness of the
Company's business partners (which the Company is attempting to
assemble). The Company is developing contingency plans designed to
minimize the risk of such disruptions. These contingency plans include
the development of backup procedures, identification of alternate
suppliers, and the establishment of processes designed to provide the
Company with adequate inventory and timely distribution to meet the
needs of its customers. The Company is working with key suppliers and
customers to develop action and contingency plans designed to achieve a
timely and accurate flow of inventory. These plans are expected to be
in place December 1999.
Contingency plans for internal operating systems are expected to
be in place by October 1999.
Costs to Address the Year 2000 Issue. The Company estimates total
costs to be incurred to address the Year 2000 Issue will be
approximately $8.8 million, of which approximately $8.0 million had
been spent as of October 2, 1999. Of the total cost, approximately
$6.9 million (78%) will be spent on remediation and testing, and
approximately $1.3 million (15%) will be spent to upgrade packaged
software applications. Incremental costs, including the costs of third-
party contractors to modify existing systems and internal costs, are
expensed as incurred, with the funds coming from the Company's general
operations, and are included in Other Operating and Administrative
Expense.
The Company has deferred certain IT projects as a result of its
focus on
Year 2000 issues; however, the deferrals are not expected to have a
material impact on the Company's business or financial condition.
General. The Company believes it is taking reasonable steps
which, when fully implemented, will prevent major business
interruptions and will minimize the Company's risk of exposure to
liability to third parties due to the Year 2000 Issue. There can be no
assurance, however, that the Company will be successful in its efforts.
Further, the costs of the Company's efforts to address the Year 2000
Issue and the dates on which the Company believes it will complete the
projects described above are based upon management's best estimates.
There also can be no assurance that these estimates will prove to be
accurate, and the actual cost and progress on these projects could
differ materially from those currently anticipated. The reasonableness
of the Company's efforts, and the project time lines and budgets, were
derived based on information the Company believes to be reliable and by
making numerous assumptions regarding future events. Specific factors
that could cause actual results to differ include, but are not limited
to, (i) the Company's ability to assess, remediate, test and implement
all relevant computer hardware and software and embedded technology,
(ii) the Company's reliance on third-party assurances and the
variability of definitions of "Year 2000 compliance" which may be used
by such third parties, and (iii) the adequacy of the Company's
contingency plans, which are dependent in part upon the involvement and
cooperation of third-parties over whom the Company has no control, and
similar uncertainties.
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Pursuant to Item 305 of Regulation S-K, there were no material changes
for the quarter ended October 2, 1999.
II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed
for the thirty-nine weeks ended October 2, 1999. On November 8,
1999, the Company filed a Form 8-K stating that on November 3,
1999, the Board of Directors of Roundy's, Inc. ("Roundy's") of
Pewaukee, Wisconsin, has approved the acquisition of the
supermarket assets of Ultra Mart, Inc., an independent
owner/operator of seven Pick `n Save stores in Wisconsin. Also,
on November 5, 1999 the Board of Directors of Roundy's, Inc. has
authorized the purchase of the common stock of Mega Marts, Inc.
and the assets of the Tri City Pick `n Save store owned by
N.D.C., Inc., an affiliate of Mega Marts, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROUNDY'S, INC.
------------------
(Registrant)
Date: November 8, 1999 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 OCTOBER 2, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-END> OCT-02-1999
<CASH> 85,755,300
<SECURITIES> 0
<RECEIVABLES> 85,598,000
<ALLOWANCES> 0
<INVENTORY> 174,624,100
<CURRENT-ASSETS> 355,813,100
<PP&E> 232,258,800
<DEPRECIATION> 109,130,600
<TOTAL-ASSETS> 510,181,700
<CURRENT-LIABILITIES> 283,423,500
<BONDS> 57,503,600
0
0
<COMMON> 1,372,400
<OTHER-SE> 136,447,500
<TOTAL-LIABILITY-AND-EQUITY> 510,181,700
<SALES> 1,987,423,000
<TOTAL-REVENUES> 1,990,654,800
<CGS> 1,793,586,400
<TOTAL-COSTS> 1,793,586,400
<OTHER-EXPENSES> 170,448,100
<LOSS-PROVISION> 1,190,500
<INTEREST-EXPENSE> 4,892,600
<INCOME-PRETAX> 20,537,200
<INCOME-TAX> 8,368,900
<INCOME-CONTINUING> 12,168,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,168,300
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
