<PAGE>
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 2, 1996 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 May 24, 1996: 251,957,988
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ALBERTSON'S, INC.
CONSOLIDATED EARNINGS
(in thousands except per share data)
(unaudited)
<CAPTION>
13 WEEKS ENDED
__________________________
May 2, 1996 May 4, 1995
____________ ___________
<S> <C> <C>
Sales $3,343,941 $3,083,424
Cost of sales 2,479,833 2,308,209
___________ ___________
Gross profit 864,108 775,215
Selling, general and administrative expenses 667,545 599,157
___________ ___________
Operating profit 196,563 176,058
Other (expenses) income:
Interest, net (14,957) (14,393)
Other, net 529 283
___________ ___________
Earnings before income taxes 182,135 161,948
Income taxes 69,758 62,674
___________ __________
NET EARNINGS $ 112,377 $ 99,274
EARNINGS PER SHARE $ .45 $ .39
DIVIDENDS DECLARED PER SHARE $ .15 $ .13
Average number of common shares outstanding 251,929 254,006
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
ALBERTSON'S, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
May 2, 1996 February 1,
(unaudited) 1996
______________ ____________
ASSETS
______
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 54,048 $ 69,113
Accounts and notes receivable 91,199 98,340
Inventories 1,042,891 1,030,246
Prepaid expenses 29,762 22,855
Deferred income taxes 59,458 62,448
__________ __________
TOTAL CURRENT ASSETS 1,277,358 1,283,002
OTHER ASSETS 175,223 155,427
LAND, BUILDINGS AND EQUIPMENT 4,183,795 4,063,378
Less accumulated depreciation and amortization 1,419,721 1,365,896
__________ __________
2,764,074 2,697,482
__________ __________
$4,216,655 $4,135,911
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
CURRENT LIABILITIES:
Accounts payable $ 617,530 $ 648,963
Salaries and related liabilities 125,983 134,096
Taxes other than income taxes 51,669 44,413
Income taxes 99,692 35,546
Self-insurance 68,209 68,899
Unearned income 24,048 32,208
Other current liabilities 49,250 38,815
Current maturities of long-term debt 1,237 78,237
Current capitalized lease obligations 7,404 7,316
__________ _________
TOTAL CURRENT LIABILITIES 1,045,022 1,088,493
LONG-TERM DEBT 637,919 602,993
CAPITALIZED LEASE OBLIGATIONS 130,143 129,265
DEFERRED INCOME TAXES 1,652
OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS 375,818 360,985
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 - 251,956,388
shares and 251,918,576 shares, respectively 251,956 251,919
Capital in excess of par value 3,878 3,269
Retained earnings 1,771,919 1,697,335
__________ __________
2,027,753 1,952,523
__________ __________
$4,216,655 $4,135,911
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
ALBERTSON'S, INC.
CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited)
<CAPTION>
13 WEEKS ENDED
______________________________
May 2, 1996 May 4, 1995
_____________ _____________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 112,377 $ 99,274
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 69,604 60,528
Net deferred income taxes (5,467) 1,460
Changes in operating assets and liabilities 31,093 85,249
__________ __________
Net cash provided by operating activities 207,607 246,511
CASH FLOWS FROM INVESTING ACTIVITIES:
Net capital expenditures excluding
non-cash activities (133,540) (104,181)
Increase in other assets (12,991) (20,895)
__________ __________
Net cash used in investing activities (146,531) (125,076)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term borrowings (78,779) (151,552)
Net commercial paper activity 34,971 79,393
Proceeds from stock options exercised 416 452
Cash dividends paid (32,749) (27,938)
__________ __________
Net cash used in financing activities (76,141) (99,645)
__________ __________
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (15,065) 21,790
CASH AND CASH EQUIVALENTS AT BEGINNING
OF QUARTER 69,113 50,224
__________ __________
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 54,048 $ 72,014
NON-CASH ACTIVITIES:
Capitalized lease obligations incurred $ 2,700 $ 2,845
Capitalized lease obligations terminated 685
Tax benefits related to stock options 230 244
CASH PAYMENTS FOR:
Income taxes 10,552 28,614
Interest, net of amounts capitalized 10,783 9,952
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
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. Such adjustments consisted only of
normal recurring items. 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 1995 Annual Report.
The balance sheet at February 1, 1996 has been taken from the audited
financial statements at that date.
Reclassifications
_________________
Certain reclassifications have been made in the prior year's
financial statements to conform to classifications used in the current
year.
Indebtedness
____________
Subsequent to May 2, 1996, the Company filed a shelf registration
statement with the Securities and Exchange Commission to authorize the
issuance of up to $500 million in debt securities. The registration
statement became effective on May 14, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
_____________________
Sales for the 13 weeks ended May 2, 1996 increased by $261 million
(8.4%) over sales for the 13 weeks ended May 4, 1995. This increase
was due to improved identical store sales (which includes inflation) and
the continued expansion of net retail square footage. Identical store
sales, sales in stores that have been in operation for the full 13 week
periods of both years, increased 2.4% and comparable store sales (which
include replacement stores) increased 2.7%. Management estimates that
annual inflation in products the Company sells was approximately 0.4%.
During the quarter fourteen stores were opened, one store was closed and
six store remodels were completed. Net retail square footage increased
9.7% from May 4, 1995.
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 Incr.(Decr.)
___________________ _________________________
13 weeks ended First Quarter
___________________ _________________________
5-2-96 5-4-95 1996/1995 1995/1994
________ ________ ___________ ___________
Sales 100.00% 100.00% 8.4% 6.0%
Gross profit 25.84 25.14 11.5 7.3
Selling, general and
administrative
expenses 19.96 19.43 11.4 6.1
Operating profit 5.88 5.71 11.6 11.3
Net interest expense 0.45 0.47 3.9 (10.9)
Earnings before
income taxes 5.45 5.25 12.5 17.0
Net earnings 3.36 3.22 13.2 45.7
Gross profit, as a percent to sales, increased due to improved retail
gross profit and continued efficiencies at the Company's distribution
centers. The Company's distribution system provides approximately 77%
of all products purchased by retail stores. 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 $12.4 million (0.37% to sales) for the 13 weeks ended
May 2, 1996 and $11.1 million (0.36% to sales) for the 13 weeks ended
May 4, 1995.
Selling, general and administrative expenses, as a percent to sales,
increased due to: increased salary and related benefit costs resulting
from the Company's implementation of a new front-end manager position in
all of its stores and improved front-end service; increased usage and
related fees for debit and credit cards; increased depreciation expense
associated with the Company's expansion program; and, reduced operating
income associated with baled wastepaper recycling.
The 1995 decrease in net interest expense resulted from the repayment
of debt.
<PAGE>
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 1996 was
$208 million compared to $247 million in the prior year. The decrease
in cash provided by operating activities from the prior year was due
primarily to an increase in inventories and related changes in accounts
payable. Inventories increased during the first quarter of 1996 as a
result of new store openings and the new Houston, Texas Distribution
Center which became operational on March 18, 1996.
During the quarter ended May 2, 1996 the Company spent $134 million
for net capital expenditures, $33 million for the payment of dividends
and $79 million to reduce long-term debt. Net commercial paper
borrowings of $35 million were incurred during the first quarter of 1996
as compared to $79 million in the prior year.
The Company utilizes its commercial paper program to supplement cash
requirements from seasonal fluctuations in working capital resulting
from operations and the Company's capital expenditure program.
Accordingly, commercial paper borrowings will fluctuate between the
Company's quarterly reporting periods. The Company had $244 million of
commercial paper borrowings outstanding at May 2, 1996 compared to $209
million at February 1, 1996 and $189 million at May 4, 1995.
Subsequent to May 2, 1996, the Company filed a shelf registration
statement with the Securities and Exchange Commission to authorize the
issuance of up to $500 million in debt securities. The registration
statement became effective on May 14, 1996.
Since 1987 the Board of Directors has continuously adopted or renewed
programs under which the Company is authorized, but not required, to
purchase shares of its common stock on the open market. The current
program was adopted by the Board on March 4, 1996 and authorizes the
Company to purchase and immediately retire up to 7 million shares
through March 31, 1997. During the quarter ended May 2, 1996 no shares
were purchased pursuant to this program.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
__________________________
There have not been any material developments in the routine
litigation referred to in the Form 10-K for the fiscal year ended
February 1, 1996.
Item 2. Changes in Securities
______________________________
In accordance with the Company's $400 million 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 24, 1996
and transacted the following business:
(a) Election of Class I Directors:
Nominee Votes For Votes Withheld
_________________ ___________ ______________
Clark A. Johnson 218,850,174 3,342,138
Charles D. Lein 218,475,856 3,716,456
Gary G. Michael 218,791,153 3,401,159
Steven D. Symms 217,078,963 5,113,349
Continuing Class II Directors:
Kathryn Albertson A. Gary Ames John B. Carley
Paul I. Corddry Beatriz Rivera
Continuing Class III Directors:
Cecil D. Andrus John B. Fery Warren E. McCain
J.B. Scott Will M. Storey
(b) Stockholder proposal to declassify the Board of Directors for
the purpose of director elections:
Votes Broker
Votes For Against Abstentions Nonvotes
_____________ ___________ ___________ __________
64,223,733 134,401,479 1,724,128 21,842,972
(c) Stockholder proposal to institute confidential voting by
stockholders:
Votes Broker
Votes For Against Abstentions Nonvotes
_____________ ___________ ___________ __________
42,182,701 154,852,947 3,308,890 21,847,774
<PAGE>
Item 5. Other Information
__________________________
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
_________________________________________
a. Exhibits
27 Financial data schedule for the 13 weeks ended May 2,
1996
b. The following reports on Form 8-K were filed during the quarter:
None.
<PAGE>
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: May 31, 1996 A. CRAIG OLSON
_____________________ _________________________________
A. Craig Olson
Senior Vice President, Finance
and Chief Financial Officer
FORM 10-Q
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALBERTSON'S
QUARTERLY REPORT TO STOCKHOLDERS FOR THE QUARTER ENDED MAY 2, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1997
<PERIOD-START> FEB-02-1996
<PERIOD-END> MAY-02-1996
<CASH> 54,048
<SECURITIES> 0
<RECEIVABLES> 92,449
<ALLOWANCES> 1,250
<INVENTORY> 1,042,891
<CURRENT-ASSETS> 1,277,358
<PP&E> 4,183,795
<DEPRECIATION> 1,419,721
<TOTAL-ASSETS> 4,216,655
<CURRENT-LIABILITIES> 1,045,022
<BONDS> 768,062
<COMMON> 251,956
0
0
<OTHER-SE> 1,775,797
<TOTAL-LIABILITY-AND-EQUITY> 4,216,655
<SALES> 3,343,941
<TOTAL-REVENUES> 3,343,941
<CGS> 2,479,833
<TOTAL-COSTS> 2,479,833
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,957
<INCOME-PRETAX> 182,135
<INCOME-TAX> 69,758
<INCOME-CONTINUING> 112,377
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 112,377
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
