SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d) of
The Securities and Exchange Act of 1934
Quarter Ended October 21, 1995 Commission File No. 2-72154
BIG B, INC.
STATE OF INCORPORATION Alabama I.R.S. EMPLOYER I.D. NO. 63-0632551
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE
2600 Morgan Road S.E., Bessemer, Alabama 35023
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE
Area Code 205 424-3421
OUTSTANDING COMMON STOCK AS OF OCTOBER 21, 1995 IS 18,572,140
Indicate by check 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, and (2) has been subject to such filing
requirements for the past 90 days.
YES (X) NO ( )<PAGE>
COMMISSION FILE NO. 2-72154
BIG B, INC.
Index
FINANCIAL STATEMENTS: PAGE NO.
Condensed Consolidated Balance Sheets as of
October 21, 1995 and January 28, 1995
Condensed Consolidated Statements of Income and
Retained Earnings for the Thirty-eight and Twelve
Week Periods Ended October 21, 1995
and October 22, 1994
Condensed Consolidated Statements of Cash Flows for the
Thirty-eight and Twelve Week Periods Ended
October 21, 1995 and October 22, 1994
Notes to Condensed Financial Statements
Management's Discussion and Analysis of
the Results of Operations and Financial
Condition
Other Information and Signatures
<PAGE>
BIG B, INC.
CONDENSED BALANCE SHEETS
AS OF OCTOBER 21, 1995, AND JANUARY 28, 1995
(Unaudited)
Oct. 21, Jan. 28
---------- ---------
1995 1995
(In Thousands)
ASSETS
Current Assets -
Cash and Temporary Cash Investments $ 515 $ 4,076
Receivables 21,785 20,317
Inventories at LIFO 206,523 169,473
Prepaid Expenses 8,501 3,750
Refundable Income Taxes 2,146 2,146
--------- ---------
Total Current Assets $239,470 $199,762
--------- ---------
Property, Equipment, and Investments
in Property Under Capital Leases,
Net $ 77,048 $ 67,044
--------- ---------
Other Assets 8,569 6,686
--------- ---------
$325,087 $273,492
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities -
Current Portion of Long-Term Debt and
Capitalized Lease Obligations $ 1,028 $ 1,028
Accounts Payable 60,022 56,071
Short Term Bank Loan 13,800 7,000
Accrued Income Taxes Payable 0 1,446
Accrued Expenses 14,691 13,547
--------- ---------
Total Current Liabilities $ 89,541 $ 79,092
--------- ---------
Non-Current Liabilites -
Long-Term Debt and
Capitalized Lease Obilgations $ 71,781 $ 74,268
Deferred Income Taxes 6,758 6,653
Deferred Compensation 1,366 1,205
Other 3,780 5,541
--------- ---------
$ 83,685 $ 87,667
--------- ---------
Shareholders' Investment -
Common Stock ($.001 par value
100,000,000 Shares Authorized;
18,572,140 issued and outstanding) $ 19 $ 16
Paid-in capital 74,624 35,327
Retained earnings 77,218 71,390
--------- ---------
$151,861 $106,733
--------- ---------
$325,087 $273,492
========= =========
See notes to condensed financial statements.<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THIRTY-EIGHT AND TWELVE WEEK PERIODS ENDED
OCTOBER 21, 1995 AND OCTOBER 22, 1994
(Unaudited) (Note 2)
Thirty-Eight Weeks Ended Twelve Weeks Ended
10-21-95 10-22-94 10-21-95 10-22-94
--------- --------- --------- ---------
Net Sales $516,054 $475,421 $161,312 $150,143
--------- --------- --------- ---------
Cost and Expenses:
Cost of Products Sold $360,312 $329,081 $113,197 $103,748
Store Operating, Selling and
Administrative Expenses 129,386 121,736 42,876 39,811
Depreciation and Amortization 9,624 8,298 3,706 2,884
Interest Expense 3,473 3,503 1,115 1,284
Interest Income (41) (17) (5) (2)
--------- --------- --------- ---------
$502,754 $462,601 $160,889 $147,725
--------- --------- --------- ---------
Income (Loss) Before Taxes $ 13,300 $ 12,820 $ 423$ 2,418
Provision for Income Taxes 4,990 4,745 160 855
--------- --------- --------- ---------
Net Income (Loss) $ 8,310$ 8,075 $ 263 $ 1,563
Retained Earnings,
Beginning of Period 71,390 58,627 77,884 64,022
Dividend Paid (2,482) (1,712) (929) (595)
--------- --------- --------- ---------
Retained Earnings,
End of Period $ 77,218 $ 64,990 $ 77,218 $ 64,990
========= ========= ========= =========
Net Income Per Common Share (Note 1)
Fully Diluted $0.46 $0.49 $0.02 $0.10
========= ========= ========= =========
Primary $0.48 $0.52 $0.01 $0.10
========= ========= ========= =========
See accompanying notes to condensed financial statements.<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF CASH FLOWS FOR THE
THIRTY-EIGHT WEEK PERIOD ENDED OCTOBER 21, 1995, AND OCTOBER 22, 1994
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS
Oct. 21, 1995 Oct. 22, 1994
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 8,310 $ 8,075
Adjustments to reconcile net income to net cash --------- ---------
provided by (used in) operating activities -
Depreciation and amortization 9,624 8,298
Provision for deferred income taxes 105 75
Provision for losses on receivables 7,984 5,902
Provision to value inventories at LIFO cost 1,150 1,400
Loss on sale of property 38 348
Provision for deferred compensation 161 79
Provision (Recognition) of other
non-current liability (1,761) ----
Change in assets and liabilities:
Increase in accounts receivable (9,440) (8,137)
Increase in other assets (2,132) (317)
Increase in inventories (38,015) (32,127)
Increase in prepaid expenses (4,751) (143)
Increase in accounts payable 3,951 5,084
Decrease in accrued income taxes (1,446) (615)
Increase in accrued expenses 1,762 5,891
---------- ---------
Total adjustments $ (32,770) $ (14,980)
Net cash provided by (used in) ---------- ---------
operating activities $ (24,460) $ (6,905)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 25 27
Capital expenditures (19,284) (13,581)
---------- ---------
Net cash used in investing activities $(19,259) $ (13,554)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 14,000 10,375
Net borrowings (repayments) under
line of credit agreement 6,800 12,500
Principal payments under
long-term debt and capital lease obligations (16,487) (710)
Proceeds from issuance of common stock 38,327 43
Dividends paid $ (2,482) $ (1,712)
Net cash provided by ---------- ----------
financing activities $ 40,158 $ 20,496
---------- ----------
NET INCREASE (DECREASE) IN CASH
AND TEMPORARY CASH INVESTMENTS (3,561) 37
CASH AND TEMPORARY INVESTMENTS
AT BEGINNING OF PERIOD 4,076 419
--------- ----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $515 $ 456
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 4,254 $ 4,155
Income taxes 8,000 5,285
See accompanying notes to condensed financial statements.<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
OCTOBER 21, 1995 AND OCTOBER 22, 1994
1. Net income per common share for all periods was computed by
dividing net income by the average weighted number of shares
outstanding during the periods. Outstanding stock options
are common stock equivalents but were excluded from the
primary net income per common share computations as their
effect was not material. Fully diluted net income per
common share was determined on the assumption that all
convertible subordinated debentures were converted and all
stock options outstanding were exercised. Conversion was
assumed during the portion of each period that the
debentures and the options were outstanding. For the
debentures, net income was adjusted for interest, net of
income tax effects; for the stock options, outstanding
shares were decreased by the number of shares that could
have been purchased with the proceeds from the exercise,
using the end of the period market price.
2. In the opinion of management, all adjustments have been made
which are necessary to reflect a fair statement of the
results of operations of the interim period.
<PAGE>
BIG B, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OPERATING RESULTS
Net Sales
Sales for the thirty-eight week period increased 8.5% to
$516.1 million from $475.4 million in the prior year. Sales for
the twelve week period increased 7.4% to $161.3 million from
$150.1 million in the prior year. The increase in sales was
primarily the result of increased sales in existing stores and
stores opened during the period.
Store Cost and Expense
As a percentage net sales, cost of products sold including
distribution center expense increased to 69.8% from 69.2% for the
thirty-eight week period and increased to 70.2% from 69.1% for
the most recent twelve week period. This increase in cost of
good sold was primarily the result of lower pharmacy gross
margins in stores operated.
Store operating, selling and administrative expenses as a
percentage of net sales during the thirty-eight week period
decreased to 25.1% from 25.6% and remained steady at 26.5% for
the most recent twelve week period. The decline in the thirty-
eight week period was the result of growth in the Company's net
sales and continual expense control.
Depreciation and amortization as a percentage of net sales
increased slightly in both the thirty-eight and twelve week
periods. This increase as a percentage of net sales was the
result of the increase in total store count open during the
period coupled with the installation of an enhanced point of
sales system and new pharmacy computer system.
Interest expense as a percentage of net sales decreased
slightly in both the thirty-eight and twelve week periods. This
decline was due primarily to lower short term borrowings and
generally lower interest rates during the periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements relate primarily to
opening and stocking new stores, acquiring stores, refurbishing
existing stores and supporting inventory for the Company's
existing stores. Historically, the Company has been able to
lease its store locations and has financed its expansion and
operations from internally generated cash flows, the net proceeds
of securities offering and borrowed funds. Currently, the
Company owns the land and buildings of only two of its drug
stores.
The Company plans to open 20 to 25 new stores in fiscal year
1996 and 25 to 30 new store in fiscal year 1997 at an anticipated
aggregate capital outlay of $8.0 to $10.0 and $10.0 to $12.0
million, respectively. Most of the new stores will be Big B
Drugs store. The cost of fixtures, equipment and inventory to
open a new drug store is approximately $400,000 for a Big B Drugs
store and approximately $1.1 million for a Drugs for Less store.
Additionally, in fiscal 1996, the Company plans to complete
installation of an enhanced pharmacy computer system at a cost of
approximately $10.0 million. The Company believes that internally
generated funds, the proceeds of a security offering, and
borrowings on its line of credit and revolving credit facility
will be adequate to fund the capital requirements noted above.
<PAGE>
BIG B, INC.
OTHER INFORMATION
The Company was not required to file and did not file any
report on Form 8-K during the twelve weeks ended October 21,
1995.
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.
BIG B, INC.
REGISTRANT
DATE: December 5, 1995
/s/ Michael J. Tortorice
Michael J. Tortorice
Vice President of Finance*
*Both duly authorized officer and principal financial officer.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BIG B, INC. FOR THE PERIOD ENDED OCTOBER 21, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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<PERIOD-START> JAN-29-1995
<PERIOD-END> OCT-21-1995
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