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 July 29, 1995 Commission File No. 2-72154
BIG B, INC.
STATE OF INCORPORATION I.R.S. EMPLOYER I.D. NO.
Alabama 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 JULY 29, 1995 IS 18,566,720
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
July 29, 1995 and January 28, 1995 2
Condensed Consolidated Statements of Income and
Retained Earnings for the Twenty-six and Twelve
Week Periods Ended July 29, 1995
and July 30, 1994
3
Condensed Consolidated Statements of Cash Flows for the
Twenty-six and Twelve Week Periods Ended
July 29, 1995 and July 30, 1994 4
Notes to Condensed Financial Statements 5
Management's Discussion and Analysis of
the Results of Operations and Financial
Condition 6
Other Information and Signatures 8
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<PAGE>
BIG B, INC.
CONDENSED BALANCE SHEETS
AS OF JULY 29, 1995, AND JANUARY 28, 1995
(Unaudited)
July 29, Jan. 28
1995 1995
(In Thousands)
ASSETS
Current Assets -
Cash and Temporary Cash Investments $ 496 $ 4,076
Receivables 21,769 20,317
Inventories at LIFO 182,539 169,473
Prepaid Expenses 5,887 3,750
Refundable Income Taxes 2,146 2,146
-------- --------
Total Current Assets $212,837 $199,762
-------- --------
Property, Equipment, and Investments
in Property Under Capital Leases,
Net $ 72,688 $ 67,044
--------- ---------
Other Assets 7,230 6,686
--------- ---------
$292,755 $273,492
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities -
Current Portion of Long-Term Debt and
Capitalized Lease Obligations $ 1,028 $ 1,028
Accounts Payable 49,470 56,071
Short Term Bank Loan 6,900 7,000
Accrued Income Taxes Payable 0 1,446
Accrued Expenses 13,392 13,547
--------- --------
Total Current Liabilities $ 70,790 $ 79,092
--------- --------
Non-Current Liabilities -
Long-Term Debt and Capitalized Lease Obligations$ 58,040$ 74,268
Deferred Income Taxes 6,723 6,653
Deferred Compensation 1,304 1,205
Other 3,417 5,541
--------- --------
$ 69,484 $ 87,667
--------- --------
Shareholders' Investment -
Common Stock ($.001 par value
100,000,000 Shares Authorized;
18,566,720 issued and outstanding) $ 19 $ 16
Paid-in capital 74,578 35,327
Retained earnings 77,884 71,390
-------- --------
$152,481 $106,733
-------- --------
$292,755 $273,492
======== ========
See notes to condensed financial statements.
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<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE TWENTY-SIX AND TWELVE WEEK PERIODS ENDED
JULY 29, 1995 AND JULY 30, 1994
(Unaudited)
(Note 2)
Twenty-Six Weeks Ended Twelve Weeks Ended
7-29-95 7-30-94 7-29-95 7-30-94
--------- -------- -------- -------
Net Sales $354,742 $325,278 $159,559 $145,963
-------- -------- -------- --------
Cost and Expenses:
Cost of Products Sold $247,115 $225,363 $111,014 $100,782
Store Operating, Selling and
Administrative Expenses 86,510 81,925 39,613 37,691
Depreciation and Amortization 5,918 5,414 2,777 2,523
Interest Expense 2,358 2,219 1,003 1,151
Interest Income (36) (15) (28) (7)
-------- ------- -------- --------
$341,865 $314,906 $154,379 $142,140
-------- -------- -------- --------
Income (Loss) Before Taxes $ 12,877 $ 10,372 $ 5,180 $ 3,823
Provision for Income Taxes 4,830 3,890 1,945 1,435
-------- -------- -------- -------
Net Income (Loss) $ 8,047 $ 6,482 $ 3,235 $ 2,388
Retained Earnings, Beginning of
Period 71,390 58, 627 75,572 62,256
Dividend Paid (1,553) (1,087) (923) (622)
-------- -------- -------- --------
Retained Earnings,
End of Period $ 77,884 $ 64,022 $ 77,884 $ 64,022
======== ======== ======== ========
Net Income Per Common Share (Note 1)
Fully Diluted $0.44 $0.39 $0.16 $0.15
===== ===== ===== =====
Primary $0.47 $0.42 $0.16 $0.16
===== ===== ===== =====
See accompanying notes to condensed financial statements.
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<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF CASH FLOWS FOR THE
TWENTY-SIX WEEK PERIODS ENDED JULY 29, 1995 AND JULY 30, 1994
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS
(Unaudited)
July 29, 1995 July 30, 1994
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 8,047 $ 6,482
---------- ----------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities -
Depreciation and amortization 5,918 5,414
Provision for deferred income taxes 70 50
Provision for losses on receivables 5,180 3,767
Provision to value inventories at LIFO cost 750 1,000
Loss on sale of property 38 80
Provision for deferred compensation 99 58
Provision (Recognition) of
other non-current liability (2,124) 274
Change in assets and liabilities:
(Increase) Decrease in accounts receivable (6,620) (2,032)
Increase in other assets (685) (110)
Increase in inventories (13,631) (18,655)
Increase in prepaid expenses (2,137) (1,757)
(Decrease) in accounts payable (6,601) (5,023)
Decrease in accrued income taxes (1,446) (1,300)
Increase in accrued expenses 460 5,425
--------- ---------
Total adjustments $(20,729) $ (12,809)
--------- ---------
Net cash provided by (used in)
operating activities $(12,682)$ (6,327)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 19 220
Capital expenditures (11,363) (11,231)
Net cash used in investing activities $(11,344) $ (11,209)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt --- 10,375
Net borrowings under line of credit agreement (100) 8,700
Principal payments under long-term debt and
capital lease obligations (16,228) (473)
Proceeds from issuance of common stock 38,327 43
Dividends paid (1,553) $ (1,087)
--------- ---------
Net cash provided by financing activities $ 20,446 $ 17,558
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND TEMPORARY CASH INVESTMENTS (3,580) 22
CASH AND TEMPORARY INVESTMENTS AT BEGINNING OF PERIOD 4,076 419
-------- ---------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $ 496 $ 441
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 2,408$ 2,222
Income taxes 7,990 3,091
See accompanying notes to condensed financial statements.
<PAGE>
BIG B, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JULY 29, 1995 AND JULY 30, 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.
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<PAGE>
BIG B, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OPERATING RESULTS
Net Sales
---------
Sales for the twenty-six week period increased 9.1% to $354.7 million
from $325.3 million in the prior year. Sales for the twelve week period
increased 9.3% to $159.6 million from $146.0 million in the prior year.
The increase in net sales for both the twenty-six and twelve week periods
were primarily the result of increased sales in existing stores.
Store Cost and Expense
----------------------
Cost of products sold, including warehouse expense, as a percentage of
net sales increased to 69.7% from 69.3% for the twenty-six week period and
increased to 69.6% from 69.1% in the most recent twelve week period. The
increase in cost of goods sold was primarily the result of lower pharmacy
gross margins in stores.
Store operating, selling and administrative expenses as a percentage
of net sales decreased to 24.4% from 26.2% in the twenty-six week period
and decreased to 24.8% from 25.8% in the most recent twelve week period.
The decline in both periods were the result of the growth in the company's
net sales and continued expense controls.
Depreciation and amortization as a percentage of net sales increased
slightly in both the twenty-six 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.
Interest expense as a percentage of net sales decreased slightly in
both the twenty-six and twelve week periods. This decrease was the result
of lower short term borrowings during the period.
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 one of its drug stores.
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<PAGE>
The Company plans to open 20 to 25 new stores in fiscal year 1996 and
25 to 30 new stores 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 stores. 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 plan to install 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.
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<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 July 29, 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
September 7, 1995
DATE
/s/ Michael J. Tortorice
Michael J. Tortorice
Vice President of Finance*
Both duly authorized officer and principal financial officer.
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BIG B, INC. FOR THE PERIOD ENDED JULY 29, 1995, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000352720
<NAME> BIG B, INC.
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