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 May 6, 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 MAY 6, 1995 IS 18,542,979
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 Balance Sheets as of
May 6, 1995 and January 28, 1995 2
Condensed Statements of Income and Retained
Earnings for the Fourteen Week Periods
Ended May 06, 1995 and May 07, 1994 3
Condensed Statements of Cash Flows for the
Fourteen Week Periods Ended May 06, 1995
and May 07, 1994 4
Notes to Condensed Financial Statements 6
Management's Discussion and Analysis of
the Results of Operations and Financial
Condition 7
Other Information and Signatures 9
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<PAGE>
BIG B, INC.
CONDENSED BALANCE SHEETS
AS OF MAY 06, 1995, AND JANUARY 28, 1995
MAY 06, JAN. 28
1995 1995
(In Thousands)
ASSETS
Current Assets -
Cash and Temporary Cash Investments $ 15,622 $ 4,076
Receivables 22,518 20,317
Inventories at LIFO 175,076 169,473
Prepaid Expenses 3,933 3,750
Refundable Income Taxes 2,146 2,146
------- --------
Total Current Assets $219,295 $199,762
------- --------
Property, Equipment, and Investments
in Property Under Capital Leases,
Net $ 68,898 $ 67,044
-------- --------
Other Assets 6,738 6,686
-------- --------
$294,931 $273,492
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities -
Current Portion of Long-Term Debt and
Capitalized Lease Obligations $ 1,028 $ 1,028
Accounts Payable 43,443 56,071
Short Term Bank Loan 0 7,000
Accrued Income Taxes Payable 2,145 1,446
Accrued Expenses 13,068 13,547
-------- --------
Total Current Liabilities $ 59,684 $ 79,092
-------- --------
Non-Current Liabilities -
Long-Term Debt and Capitalized
Lease Obligations $ 73,999 $ 74,268
Deferred Income Taxes 6,688 6,653
Deferred Compensation 1,243 1,205
$ 3,430 $ 5,541
-------- --------
Other $ 85,360 $ 87,667
-------- --------
Shareholders' Investment -
Common Stock ($.001 par value
40,000,000 Shares Authorized;
18,542,979 issued and outstanding) $ 19 $ 16
Paid-in capital 74,296 35,327
Retained earnings 75,572 71,390
-------- --------
$149,887 $106,733
-------- --------
$294,931 $273,492
======== ========
<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE FOURTEEN WEEK PERIODS ENDED MAY 06, 1995
AND MAY 07, 1994
(Unaudited)
FOURTEEN WEEKS ENDED
(In Thousands Except Per Share Amounts)
5-06-95 5-07-94
Net Sales $195,183 $179,315
-------- --------
Cost and Expenses:
Cost of Products Sold $136,101 $124,581
Store Operating, Selling and
Administrative Expenses 46,897 44,234
Depreciation and Amortization 3,141 2,891
Interest Expense 1,355 1,068
Interest Income (8) (8)
-------- --------
$187,486 $172,766
-------- --------
Income Before Taxes $ 7,697 $ 6,549
Provision for Income Taxes 2,890 2,455
-------- --------
Net Income $ 4,807 $ 4,094
Retained Earnings, Beginning of
Period 71,390 58,627
Dividend Paid (625) (465)
--------- --------
Retained Earnings, End of Period $ 75,572 $ 62,256
========= ========
Net Income Per Common Share (Note 1)
Primary $0.31 $0.26
Fully Diluted $0.28 $0.24
========= ========
See accompanying notes to condensed financial statements.
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<PAGE>
BIG B, INC.
CONDENSED STATEMENTS OF CASH FLOWS FOR THE
FOURTEEN WEEK PERIODS ENDED MAY 06, 1995 AND MAY 07, 1994
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS
(Unaudited)
May 06, 1995 May 07, 1994
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 4,807 $ 4,094
----------- -----------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation and amortization 3,141 2,891
Provision for deferred income taxes 35 ---
Provision for losses on receivables 2,963 1,871
Provision to value inventories at LIFO cost 400 500
(Gain) Loss on sale of property 39 (9)
Provision for deferred compensation 38 37
Provision (recognition) of
other non-current liability (2,111) 386
Change in assets and liabilities:
(Increase) Decrease in accounts receivable(5,152) 1,804
(Increase) in other assets (73) (59)
(Increase) in inventories (5,818) (17,292)
(Increase) in prepaid expenses (183) (1,199)
(Decrease) in accounts payable (12,628) (11,310)
Increase in accrued income taxes 699 262
Increase (Decrease) in accrued expenses (96) 4,300
--------- ---------
Total adjustments $ (18,746) $ (17,818)
--------- ---------
Net cash provided by (used in)
operating activities $ (13,939) $ (13,724)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 8 20
Capital expenditures (4,906) (5,602)
--------- ---------
Net cash used in investing activities$ (4,898) $ (5,582)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt --- 10,375
Net borrowings (repayments)
under line of credit agreement (7,000) 9,600
Principal payments under long-term
debt and capital lease obligations (269) (233)
Proceeds from issuance of common stock 38,277 43
Dividends paid $ (625) $ (465)
--------- ---------
Net cash provided by
financing activities $ 30,383 $ 19,320
--------- ---------
NET INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS 11,546 14
See accompanying notes to condensed financial statements.
<PAGE>
CASH AND TEMPORARY INVESTMENTS
AT BEGINNING OF PERIOD 4,076 419
--------- ----------
CASH AND TEMPORARY CASH
INVESTMENTS AT END OF PERIOD $ 15,622 $ 433
========= ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest 2,252 $ 2,193
Income taxes 2,156 1,729
See accompanying notes to condensed financial statements.
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<PAGE>
BIG B, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MAY 06, 1995 AND MAY 07, 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 fourteen week period increased 8.8% to $195.2
million from $179.3 million in the prior year. The increase in
net sales for the period resulted primarily from sales increases
in existing stores.
Store Cost and Expense
Cost of products sold, including warehouse expense, as a
percentage of net sales increased slightly to 69.7% from 69.5% in
the prior year. The increase in cost of goods sold was primarily
the result of lower gross margins in stores
Store operating, selling and administrative expenses as a
percentage of net sales declined to 24.0% from 24.7% in the prior
year period. The decline was due to growth in the company's net
sales and continued expense controls.
Depreciation and amortization as a percentage of net sales
remained steady at 1.6% in both periods.
Interest expense as a percentage of net sales increased to
0.7% from 0.6% in the prior year. This increase was due
primarily to higher short term borrowings and generally higher
interest rates 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. Capital is also required to support 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 offerings 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 million 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 plans
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 May 06, 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
June 20, 1995
/s/ Michael J. Tortorice
Michael J. Tortorice
Vice President of Finance*
*Both duly authorized officer and principal financial officer.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BIG B, INC. FOR THE PERIOD ENDED MAY 06, 1995, 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> FEB-03-1996
<PERIOD-END> MAY-06-1995
<CASH> 15,622
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<PP&E> 120,993
<DEPRECIATION> 52,035
<TOTAL-ASSETS> 294,931
<CURRENT-LIABILITIES> 59,684
<BONDS> 51,575
<COMMON> 19
0
0
<OTHER-SE> 149,868
<TOTAL-LIABILITY-AND-EQUITY> 294,931
<SALES> 195,183
<TOTAL-REVENUES> 195,183
<CGS> 136,101
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<OTHER-EXPENSES> 4,496
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</TABLE>
