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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For 13 Weeks Ended: May 5, 1994 Commission File Number: 1-6187
ALBERTSON'S, INC.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 82-0184434
_______________________________ ___________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
250 Parkcenter Blvd., P.O. Box 20, Boise, Idaho 83726
_______________________________________________ __________
(Address) (Zip Code)
Registrant's telephone number, including area code: (208) 385-6200
______________
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
_____ _____
Number of Registrant's $1.00 par value
common shares outstanding at June 1, 1994: 253,571,383
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PART I. FINANCIAL INFORMATION
ALBERTSON'S, INC.
CONSOLIDATED EARNINGS
(in thousands except per share data)
(unaudited)
13 WEEKS ENDED
__________________________
May 5, April 29,
1994 1993
____________ ___________
Sales $2,909,808 $2,719,633
Cost of sales 2,187,053 2,058,146
___________ ___________
Gross profit 722,755 661,487
Operating and administrative expenses 566,678 526,885
___________ ___________
Operating profit 156,077 134,602
Other (expenses) income:
Interest, net (16,146) (14,249)
Other, net (1,464) (1,353)
___________ ___________
Earnings before income taxes and cumulative
effect of accounting change 138,467 119,000
Income taxes 53,310 44,863
___________ ___________
Earnings before cumulative effect of
accounting change 85,157 74,137
Cumulative effect of accounting change:
Postemployment benefits (6,382)
___________ ___________
NET EARNINGS $ 78,775 $ 74,137
Earnings per share before cumulative
effect of accounting change $ .34 $ .29
Cumulative effect of accounting change:
Postemployment benefits (.03)
___________ ___________
EARNINGS PER SHARE $ .31 $ .29
DIVIDENDS DECLARED PER SHARE $ .11 $ .09
Average number of shares outstanding 253,499 257,283
See Notes to Consolidated Financial Statements.
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ALBERTSON'S, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
May 5, 1994 February 3,
(unaudited) 1994
______________ ___________
ASSETS
______
CURRENT ASSETS:
Cash and cash equivalents $ 99,739 $ 62,463
Accounts and notes receivable 116,503 114,493
Inventories 838,860 871,719
Prepaid expenses 17,796 13,589
Deferred income taxes 61,407 59,967
__________ __________
TOTAL CURRENT ASSETS 1,134,305 1,122,231
OTHER ASSETS 95,499 90,810
LAND, BUILDINGS AND EQUIPMENT 3,179,645 3,109,172
Less accumulated depreciation and amortization 1,070,650 1,027,318
__________ __________
2,108,995 2,081,854
__________ __________
$3,338,799 $3,294,895
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
CURRENT LIABILITIES:
Accounts payable $ 549,427 $ 600,376
Notes payable 10,000
Salaries and related liabilities 119,216 101,443
Taxes other than income taxes 44,489 38,095
Income taxes 61,340 48,622
Self-insurance 62,088 58,436
Unearned income 17,944 19,927
Other current liabilities 38,576 30,277
Current maturities of long-term debt 226,538 76,692
Current capitalized lease obligations 6,161 6,194
__________ _________
TOTAL CURRENT LIABILITIES 1,125,779 990,062
LONG-TERM DEBT 398,735 554,092
CAPITALIZED LEASE OBLIGATIONS 110,529 110,919
OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS 260,482 250,443
STOCKHOLDERS' EQUITY:
Preferred stock - $1 par value; authorized -
10,000,000 shares; issued - none
Common stock - $1 par value; authorized -
600,000,000 shares; issued - 253,571,383
shares and 253,406,983 shares, respectively 253,571 253,407
Capital in excess of par value 4,966 2,117
Retained earnings 1,184,737 1133,855
__________ __________
1,443,274 1,389,379
__________ __________
$3,338,799 $3,294,895
See Notes to Consolidated Financial Statements.
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ALBERTSON'S, INC.
CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited)
13 WEEKS ENDED
__________________________
May 5, April 29,
1994 1993
_____________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 78,775 $ 74,137
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 53,291 46,599
Net deferred income taxes (4,114) (2,521)
Cumulative effect of accounting change 6,382
Changes in operating assets and liabilities 23,848 46,224
__________ __________
Net cash provided by operating activities 158,182 164,439
CASH FLOWS FROM INVESTING ACTIVITIES:
Net capital expenditures excluding
non-cash activities (79,576) (87,948)
Increase in other assets (4,689) (6,016)
__________ __________
Net cash used in investing activities (84,265) (93,964)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net line of credit activity (10,000) 5,000
Proceeds from long-term borrowings 252,075
Payments on long-term borrowings (1,534) (1,761)
Net commercial paper activity (5,313) (41,095)
Proceeds from stock options exercised 3,013 506
Purchase of treasury shares (517,526)
Net proceeds from issuance of treasury shares 264,527
Cash dividends paid (22,807) (21,174)
__________ __________
Net cash used in financing activities (36,641) (59,448)
__________ _________
NET INCREASE IN CASH AND CASH EQUIVALENTS 37,276 11,027
CASH AND CASH EQUIVALENTS AT BEGINNING
OF QUARTER 62,463 39,541
__________ _________
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 99,739 $ 50,568
NON-CASH ACTIVITIES:
Capitalized lease obligations incurred $ 1,783
Capitalized lease obligations terminated 870 $ 223
CASH PAYMENTS FOR:
Income taxes 40,625 29,535
Interest, net of amounts capitalized 8,490 4,206
See Notes to Consolidated Financial Statements.
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ALBERTSON'S, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Basis of Presentation
_____________________
The accompanying unaudited consolidated financial statements
include the results of operations, account balances and cash flows of
the Company and its wholly-owned subsidiaries. All material
intercompany balances have been eliminated.
In the opinion of management, the accompanying unaudited
consolidated financial statements include all adjustments necessary to
present fairly, in all material respects, the results of operations of
the Company for the periods presented. The statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is
suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and the
accompanying notes included in the Company's 1993 Annual Report.
The balance sheet at February 3, 1994 has been taken from the
audited financial statements at that date.
Capital Stock
_____________
Average shares outstanding and per share data have been
retroactively adjusted to reflect the two-for-one stock split
distributed on October 4, 1993.
Cumulative Effect of Accounting Change
______________________________________
At the beginning of the 1994 fiscal year, the Company adopted
the provisions of Statement of Financial Accounting Standard (SFAS) No.
112, "Employers' Accounting for Postemployment Benefits." This
statement requires employers to recognize the obligation for benefits
provided to former or inactive employees after employment but before
retirement. The Company is self-insured for its employees' short-term
and long-term disability plans which are the primary benefits paid to
inactive employees prior to retirement. In prior years, disability
benefits have been charged to expenses under the pay-as-you-go method.
The total cumulative effect of this accounting change (net of $4.0
million in tax benefits) was to decrease net earnings by $6.4 million or
$.03 per share. Approximately $8.8 million of the obligation for
postemployment benefits is included with other long-term liabilities and
deferred credits and the remainder is included with current salaries and
related liabilities.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
_____________________
Sales for the 13 weeks ended May 5, 1994 increased by
$190,175,000 (7.0%) over sales for the 13 weeks ended April 29, 1993.
This increase was due to improved identical store sales, inflation and
the continued expansion of net square footage. Identical store sales,
sales in stores that have been in operation for the full 13 week periods
of both years, increased 3.0% and comparable store sales (which include
replacement stores) increased 3.3%. Management estimates that inflation
accounted for approximately 0.3% of the identical store sales increase.
During the quarter six stores were opened, four stores were closed and
ten store remodels were completed. Net square footage has increased
5.4% from April 29, 1993.
The following table sets forth certain income statement
components expressed as a percent to sales and the year-to-year
percentage changes in the amounts of such components:
Percent to sales Percentage increase
___________________ _________________________
13 weeks ended First Quarter
___________________ _________________________
5-5-94 4-29-93 1994/1993 1993/1992
_______ ________ ___________ __________
Sales 100.00% 100.00% 7.0% 18.4%
Gross profit 24.84 24.32 9.3 23.8
Operating and
administrative
expenses 19.47 19.37 7.6 12.4
Operating profit 5.36 4.95 16.0 105.2
Interest expense,
net 0.55 0.52 13.3 70.1
Earnings before
income taxes and
cumulative effect
of accounting
change 4.76 4.38 16.4 110.4
Net earnings 2.71 2.73 6.3 184.6
Gross profit, as a percent to sales, increased due primarily
to the expansion and increased utilization of the Company's distribution
facilities. Utilization of the Company's distribution system has
enabled the Company to better control product costs and product
distribution. The pre-tax LIFO charge reduced gross profit by
$12,000,000 (0.41% to sales) for the 13 weeks ended May 5, 1994 and
$11,200,000 (0.41% to sales) for the 13 weeks ended April 29, 1993.
Net interest expense increased as a result of borrowings
associated with the Company's purchase of its common stock from the
estate of J. A. Albertson on March 10, 1993.
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Liquidity and Capital Resources
_______________________________
The Company's operating results continue to enhance its
financial position and ability to continue its planned expansion
program. Cash provided by operating activities during the first quarter
of 1994 was $158 million as compared to $164 million in the prior year.
During the quarter ended May 5, 1994 the Company spent $80 million for
net capital expenditures, $23 million for the payment of dividends and
$17 million to reduce commercial paper borrowings, long-term debt and
current notes. The Company's commercial paper program is utilized to
supplement cash requirements resulting from seasonal fluctuations
created by the Company's capital expenditure program and changes in
working capital. Accordingly, commercial paper borrowings will
fluctuate between the Company's quarterly reporting periods.
Since 1987 the Board of Directors has continuously adopted or
renewed plans under which the Company is authorized, but not required,
to purchase shares of its common stock on the open market. The current
plan was adopted by the Board on March 7, 1994 and authorizes the
Company to purchase up to 2.5 million shares through March 31, 1995.
During the quarter ended May 5, 1994 no shares were purchased pursuant
to this program.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
__________________________
There have not been any material developments in the Super Food
Services, Inc. lawsuit or the routine litigation referred to in the Form
10-K for the fiscal year ended February 3, 1994.
Item 2. Changes in Securities
______________________________
In March 1992, the Company entered into a revolving credit
agreement with several banks, whereby the Company may borrow, from time
to time, principal amounts up to $200,000,000 at any time prior to
April 1, 1997. In accordance with this revolving credit agreement, the
Company's consolidated tangible net worth, as defined, shall not be less
than $750 million.
Item 3. Defaults upon Senior Securities
________________________________________
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
____________________________________________________________
The Company held its Annual Meeting of Stockholders on May 27,
1994 and transacted the following business:
(a) Election of directors:
Nominee Votes For % For Votes Withheld
_________________ ___________ _____ ______________
Kathryn Albertson 217,635,617 99.3% 1,625,762
A. Gary Ames 217,749,534 99.3% 1,511,845
John B. Carley 217,691,106 99.3% 1,570,273
Paul I. Corddry 217,727,013 99.3% 1,534,366
(b) Reappointment of Deloitte & Touche as the Company's independent
auditors:
Votes Broker
Votes For % For Against Abstentions Nonvotes
______________ _____ _______ ___________ ________
218,545,617 99.7% 319,510 394,211 2,041
(c) Stockholder proposal to declassify the Board of Directors for
the purpose of director elections:
Votes Broker
Votes For % For Against Abstentions Nonvotes
______________ _____ ___________ ___________ __________
53,801,702 24.5% 136,824,848 1,616,255 27,018,574
(d) Stockholder proposal to amend Albertson's, Inc. By-Laws to
require secret ballot voting:
Votes Broker
Votes For % For Against Abstentions Nonvotes
______________ _____ ___________ ___________ __________
44,348,514 20.2% 146,282,513 1,611,275 27,019,077
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As set forth in the Company's definitive proxy statement for
use in connection with the Annual Meeting of Stockholders, abstentions
and broker nonvotes were counted and had the same effect as a vote
against the matter being voted upon.
Item 5. Other Information
__________________________
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
_________________________________________
a. Exhibits
None.
b. The following reports on Form 8-K were filed during the
quarter:
None.
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SIGNATURE
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.
ALBERTSON'S, INC.
_________________________________
(Registrant)
Date: June 6, 1994 A. Craig Olson
_____________________ _________________________________
A. Craig Olson
Senior Vice President, Finance
and Chief Financial Officer
FORM 10-Q
10
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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VOLUNTARY SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALBERTSON'S QUARTERLY
REPORT TO STOCKHOLDERS FOR THE QUARTER ENDED MAY 5, 1994 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx
<CAPTION>
REGULATION STATEMENT CAPTION FIRST QUARTER FIRST QUARTER
05-05-94 04-29-93
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5-02(1) Cash and Cash Items $ 99,739,000 $ 50,568,000
5-02(3)(a)(1) Notes and Accounts Receivable - Trade 117,603,000 89,142,000
5-02(4) Allowances for Doubtful Accounts 1,100,000 1,100,000
5-02(6) Inventory 838,860,000 791,846,000
5-02(9) Total Current Assets 1,134,305,000 989,319,000
5-02(13) Property, Plant and Equipment 3,179,645,000 2,804,690,000
5-02(14) Accumulated Depreciation 1,070,650,000 918,672,000
5-02(18) Total Assets 3,338,799,000 2,968,444,000
5-02(21) Total Current Liabilities 1,125,779,000 826,563,000
5-02(22) Bonds, Mortgages and Similar Debt 509,264,000 717,227,000
5-02(30) Common Stock 253,571,000 126,561,000
5-02(31) Other Stockholders' Equity 1,189,703,000 1,060,729,000
5-02(32) Total Liabilities and Stockholders' Equity 3,338,799,000 2,968,444,000
5-03(b)(1)(a) Net Sales of Tangible Products 2,909,808,000 2,719,633,000
5-03(b)(1) Total Revenues 2,908,344,000 2,718,280,000
5-03(b)(2)(a) Cost of Tangible Goods Sold 2,187,053,000 2,058,146,000
5-03(b)(2) Total Costs and Expenses Applicable to
Sales and Revenues 2,187,053,000 2,058,146,000
5-03(b)(4) Selling, General and Administrative Expenses 566,678,000 526,885,000
5-03(b)(8) Interest and Amortization of Debt Discount 16,146,000 14,249,000
5-03(b)(10) Income Before Taxes and Other Items 138,467,000 119,000,000
5-03(b)(11) Income Tax Expense 53,310,000 44,863,000
5-03(b)(14) Income From Continuing Operations 85,157,000 74,137,000
5-03(b)(18) Cumulative Effect - Changes in Accounting
Principles (6,382,000)
5-03(b)(19) Net Income 78,775,000 74,137,000
5-03(b)(20) Earnings Per Share 0.31 0.29
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