<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 13, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission File No. 1-6068
RINI-REGO SUPERMARKETS, INC.
(Exact name of Registrant as specified in its charter)
Ohio 34-0222970
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5300 Richmond Road, Bedford Heights, Ohio 44146
(Address of principal executive offices)
Registrant's telephone number, including area code: (216) 292-7000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 12, 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
February 23, 1996
Class A Common Stock, No Par Value 3,536,577
<PAGE> 2
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements
RINI-REGO SUPERMARKETS, INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands of dollars)
<TABLE>
<CAPTION>
1/13/96 7/1/95
ASSETS ------- ------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,688 $ 4,075
Trade accounts receivable, net 38,826 38,272
Inventories 68,228 74,042
Deferred income taxes 10,022 10,022
Prepaid expenses 6,319 4,895
-------- --------
Total current assets 127,083 131,306
PROPERTY, EQUIPMENT AND CAPITAL LEASES 197,952 185,826
Less-Allowances for depreciation, amorti-
zation and loss on disposal of fixed assets 73,002 67,729
-------- --------
124,950 118,097
OTHER ASSETS:
Notes receivable 3,173 10,868
Deferred income taxes 6,119 6,119
Other 2,076 2,071
-------- --------
Total other assets 11,368 19,058
-------- --------
TOTAL ASSETS $263,401 $268,461
======== ========
</TABLE>
<PAGE> 3
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<TABLE>
<CAPTION>
1/13/96 7/1/95
-------- --------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 55,728 $ 52,209
Accrued expenses 46,324 45,210
Current portion of long-term liabilities 10,486 10,003
-------- --------
Total current liabilities 112,538 107,422
LONG-TERM LIABILITIES:
Debt 40,008 55,749
Capital lease obligations 6,172 6,840
Self insurance reserves 12,330 11,845
-------- --------
Total long-term liabilities 58,510 74,434
OTHER LIABILITIES 11,014 12,231
STOCKHOLDERS' EQUITY:
Class A Common Stock--7,139,487 shares 71 71
and 7,125,287 shares outstanding at
1/13/96 and 7/1/95, respectively
Class B Common Stock--955,613 shares 10 10
Paid-in capital 35,657 35,546
Retained earnings 45,601 38,747
-------- --------
Total stockholders' equity 81,339 74,374
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $263,401 $268,461
======== ========
</TABLE>
The accompanying Notes to Consolidated Condensed Financial Statements are
an integral part of these balance sheets
<PAGE> 4
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RINI-REGO SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands of dollars, except share and per share data)
(unaudited)
<TABLE>
<CAPTION>
28 Weeks Ended: 12 Weeks Ended:
1/13/96 1/14/95 1/13/96 1/14/95
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 679,099 $ 628,819 $ 301,712 $ 282,118
COST OF GOODS SOLD 545,517 505,509 242,890 226,148
----------- ----------- ----------- -----------
Gross profit 133,582 123,310 58,822 55,970
SELLING, GENERAL &
ADMINISTRATIVE EXPENSE 117,471 111,651 49,729 49,836
----------- ----------- ----------- -----------
Operating income 16,111 11,659 9,093 6,134
INTEREST EXPENSE (3,761) (4,090) (1,633) (1,797)
INTEREST INCOME 684 642 282 254
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 13,034 8,211 7,742 4,591
PROVISION FOR INCOME TAXES 5,360 3,240 3,190 1,810
----------- ----------- ----------- -----------
NET INCOME 7,674 4,971 4,552 2,781
LESS PREFERRED STOCK
DIVIDENDS 11 72 -- 36
----------- ----------- ----------- -----------
NET INCOME FOR COMMON
STOCKHOLDERS $ 7,663 $ 4,899 $ 4,552 $ 2,745
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE $ .95 $ .61 $ .56 $ .34
=========== =========== =========== ===========
DIVIDEND PER COMMON SHARE $ .10 $ -- $ .05 $ --
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,084,451 8,080,900 8,085,440 8,080,900
=========== =========== =========== ===========
</TABLE>
The accompanying Notes to Consolidated Condensed Financial Statements are
an integral part of these statements.
<PAGE> 5
Sequential Page 5 of 14
RINI-REGO SUPERMARKETS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(unaudited)
<TABLE>
<CAPTION>
28 Weeks Ended: 12 Weeks Ended:
1/13/96 1/14/95 1/13/96 1/14/95
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 7,674 $ 4,971 $ 4,552 $ 2,781
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation & amort. 9,198 9,044 3,709 3,859
Changes in assets
and liabilities 16,104 13,319 24,253 7,340
--------- --------- --------- ---------
Net cash provided by
operating activities 32,976 27,334 32,514 13,980
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of fixed assets (16,729) (15,949) (6,707) (9,866)
Proceeds from sales of
fixed assets 102 163 71 111
--------- --------- --------- ---------
Net cash used for
investing activities (16,627) (15,786) (6,636) (9,755)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under revolving
lines of credit 425,866 348,217 168,083 152,729
Repayments of revolving
lines of credit (442,095) (357,649) (193,750) (153,484)
Additional borrowings 5,093 1,425 3,520 --
Debt repayments (4,148) (3,527) (2,957) (2,825)
Repayments of capital
lease obligations (743) (751) (300) (287)
Exercise of stock options 111 -- 98 --
Common stock dividends (809) -- (405) --
Preferred stock dividends (11) (72) -- (36)
--------- --------- --------- ---------
Net cash used for
financing activities (16,736) (12,357) (25,711) (3,903)
--------- --------- --------- ---------
</TABLE>
<PAGE> 6
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<TABLE>
<CAPTION>
28 Weeks Ended: 12 Weeks Ended:
1/13/96 1/14/95 1/13/96 1/14/95
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (387) (809) 167 322
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,075 4,376 3,521 3,245
------- ------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 3,688 $ 3,567 $ 3,688 $ 3,567
======= ======= ======= =======
SUPPLEMENTAL DATA:
Interest Paid $ 3,900 $ 4,215 $ 2,374 $ 2,204
======= ======= ======= =======
Income Taxes Paid $ 5,718 $ 2,482 $ 1,439 $ 1,142
======= ======= ======= =======
</TABLE>
The accompanying Notes to Consolidated Condensed Financial Statements are
an integral part of these statements
<PAGE> 7
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RINI-REGO SUPERMARKETS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JANUARY 13, 1996
(1) Basis of Presentation:
The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. The results of
operations for the twelve and twenty-eight weeks ended January 13, 1996 are not
necessarily indicative of the results to be expected for the entire fiscal year
ending June 29, 1996. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all adjustments necessary
for a fair presentation of the financial position at the dates indicated and of
the results of operations for the interim periods presented.
Rini-Rego Supermarkets, Inc. (RRS or the Company), formerly known as
Fisher Foods, Inc. (Fisher), is a subsidiary of Riser Foods, Inc. (Riser). The
accompanying financial statements of the Company are presented on the "push
down accounting" basis, for financial reporting purposes only, with the equity
section of the accompanying balance sheet reflecting the equity of Riser. The
separate financial statements of the Company would reflect the following
stockholder equity amounts (in thousands):
<TABLE>
<CAPTION>
1/13/96 7/2/95
------- -------
<S> <C> <C>
Preferred Stock $ 1,811 $ 1,811
Common Stock 1,403 1,403
Paid-in capital 22,714 22,714
Retained Earnings 56,450 48,776
------- -------
$82,378 $74,704
======= =======
</TABLE>
(2) Debt:
The Company's bank credit facilities (the Facilities), provide for
revolving lines of credit and letters of credit up to an aggregate of $67
million and a term loan which currently has $7.3 million outstanding. The
Facilities are secured by substantially all of the Company's assets. Facility
fees and interest are paid monthly. Available unused borrowing capacity under
the Facilities at January 13, 1996 was approximately $44.7 million.
(3) Changes in Equity:
Riser's Board of Directors unanimously approved the redemption of its
Series A Preferred Stock on June 9, 1995. The outstanding shares of preferred
stock were redeemed on July 28, 1995 at a redemption price of $105 per share
plus accumulated dividends. Riser redeemed 18,044 shares at a total redemption
price of $1,894,620 plus accumulated dividends of $11,007.
<PAGE> 8
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On September 8, 1995 and December 8, 1995, Riser's Board of Directors
declared regular quarterly dividends of $.05 per share on each outstanding
share of its Class A Common Stock and Class B Common Stock. The declaration and
payment of dividends is subject to the discretion of Riser's Board of Directors
and there are no assurances that dividends will be paid in the future. Riser
paid dividends on both classes of its Common Stock on October 10, 1995 and
January 9, 1996 which totaled $964,042 of which $155,323 was paid to the
Company.
Riser has a Stock Incentive Plan which provides for both qualified and
non-qualified stock options, as well as stock appreciation rights and
restricted stock grants for employees, officers and directors of Riser. Stock
options must be issued at not less than the fair value of the Class A Common
Stock at the date of grant and are exercisable for up to ten years from the
date of grant. The outstanding options are exercisable at option prices
ranging from $7.25 to $10.31 per share. Options for 14,200 shares of Class A
Common Stock were exercised at prices ranging from $7.31 to $10.31 per share
during the first twenty-eight weeks of fiscal 1996.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The following table sets forth items from the Company's Consolidated
Statements of Income as a percentage of net sales:
<TABLE>
<CAPTION>
28 Weeks Ended: 12 Weeks Ended:
1/13/96 1/14/95 1/13/96 1/14/95
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales 100.00 100.00 100.00 100.00
Cost of goods sold 80.33 80.39 80.50 80.16
------ ------ ------ ------
Gross profit 19.67 19.61 19.50 19.84
Selling, general &
administrative expense 17.30 17.76 16.48 17.66
------ ------ ------ ------
Operating income 2.37 1.85 3.02 2.18
Interest expense (.55) (.65) (.54) (.64)
Interest income .10 .10 .09 .09
------ ------ ------ ------
Income before income taxes 1.92 1.30 2.57 1.63
Income taxes .79 .52 1.06 .64
------ ------ ------ ------
Net income 1.13 .78 1.51 .99
====== ====== ====== ======
</TABLE>
The Company's results of operations for the twelve and twenty-eight weeks
ended January 13, 1996 continue to reflect successful implementation of
strategic initiatives designed to improve operating performance and counter
competitive and economic pressures. In general, the food distribution industry
has encountered little or no top line price inflation between years while
operating costs, particularly labor and occupancy, have contractually risen.
Overall industry sales and operating margins have also been challenged by
growing competition from non-traditional sources, such as convenience stores
and national mass merchandising chains.
<PAGE> 9
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Net Sales
In the second quarter of fiscal 1996, net sales increased 6.95% to $301.7
million from $282.1 million in fiscal 1995. Fiscal 1996 year-to-date sales
increased 8.0% to $679.1 from $628.8 in fiscal 1995. This continues a trend of
increased sales over the prior year which began in the second quarter of fiscal
1994. This trend is attributed to the favorable impact of strategic initiatives
to remodel and reposition Company-operated retail stores, aggressive
merchandising in Company-operated retail stores which included the introduction
of the Preferred Shoppers Club, expansion of the Company's wholesale
distribution territory and the continuance of a strong economic climate in the
Company's primary market area.
The Company's strategic initiatives to remodel and reposition
Company-operated retail stores have resulted in the consolidation of certain
Company-operated retail stores. The following table details the number, format
and square footage of Company-operated retail stores between years:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
No. of Company-operated
retail stores:
Beginning of year ..................... 38 42
Opened ................................ -- --
Closed ................................ -- (3)
---------- ----------
End of second quarter ................... 38 39
========== ==========
Store Formats:
Rini-Rego Stop-N-Shop ................. 33 35
Rini-Rego Marketplace ................. 5 4
Square footage:
Total - end of quarter ................ 1,838,300 1,842,900
Average store size
(38 stores) ........................... 48,376 47,568
</TABLE>
Sales in Company-operated retail stores increased over the prior year 5.5%
during the second quarter and 7.5% year-to-date. Same store sales increases in
the Company's 38 Rini-Rego stores of 6.9% in the second quarter and 10.2%
year-to-date, more than offset sales losses attributed to closed or about to be
closed stores. This continues a trend of same store sales increases which began
in the fourth quarter of fiscal 1994. This increase in same store sales is the
result of the Company's retail remodeling and repositioning programs,
aggressive merchandising which included the introduction of its Preferred
Shoppers Club and a favorable economic climate. Additionally, the second
quarter was favorably impacted by a strong holiday selling season.
Company programs to remodel and reposition its core stores have proven
successful. The closing of certain non-core stores and expansion and/or
consolidation of certain other core stores have yielded positive sales growth
and improved operating leverage. The Company completed one significant store
remodeling project during the second quarter of fiscal 1996. The Company grand
re-opened its fifth Marketplace store and completed one other significant store
remodeling project during the second quarter of fiscal 1995. The Company
completed four major remodeling projects during fiscal 1995 which added
approximately 27,500 square feet and closed four stores representing
<PAGE> 10
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approximately 116,100 square feet. The Company anticipates completing a total
of four significant remodeling projects during fiscal 1996 which will add
approximately 21,300 square feet to its core stores.
One of the important factors in the Company's program to reposition its
core stores was the development of the Marketplace store format. The
Marketplace stores are larger (approximately 65,000 square feet) and meet the
consumer's basic grocery needs while offering expanded product lines featuring
high quality perishable departments and a variety of full-service,
consumer-oriented departments. The Company currently has five Marketplace
stores, all of which have been open for one year or more. Due to favorable
consumer response and the continued strong operating results of this format,
the Company is currently constructing two new Marketplace stores which will
open in early fiscal 1997 and replace existing stores. Additionally, the
Company plans to convert two other Rini-Rego stores to this format later in
fiscal 1997.
The Company continued to enhance its market position by aggressive
merchandising campaigns promoted primarily through its Preferred Shoppers Club.
During the first quarter of fiscal 1995, the Association of Stop-N-Shop
Supermarkets, a northeast Ohio advertising cooperative which includes all the
Company-operated retail stores, introduced a new target marketing campaign, the
Preferred Shoppers Club. This program, the first of its kind in northeast Ohio,
allows the Company to offer its customers greater value and will enhance the
Company's ability to track customer purchasing habits and preferences.
Participating shoppers receive a card which entitles them to extra markdowns
below weekly sales prices. The success of this program has continued to
increase sales in Company-operated retail stores and proven to be a valuable
tool to counter competitive pressures.
The Company expects its trend of same store sales increases to continue
albeit at a lower rate. The Company anticipates same store sales increases
lower than those previously realized during the last half of fiscal 1995 and
the first half of fiscal 1996 due to the cycling of remodels from the prior
year, a full year of the Preferred Shoppers Club, competitive responses to the
Company's promotional campaigns and the timing of store remodeling projects.
The Company will continue its plans to remodel core stores focusing on its
Marketplace and traditional neighborhood store formats, with area demographics
dictating store format. The Company will continue to aggressively merchandise
through its Preferred Shoppers Club to augment existing store sales.
Net sales to independently-operated retail stores through the Company's
distribution facilities increased 8.6% during both the second quarter of fiscal
1996 and year to date. Sales to independently-operated retail stores have
benefited from strategic initiatives targeting the expansion of the Company's
primary wholesale distribution territory and expansion of the Company's product
lines. During the last twelve months, the Company began distributing grocery
and perishable products to independently-operated stores in southeast Michigan
(December 1994), increased the number of Hills Department stores it serviced by
approximately 10% and began servicing a 100 store deep discount drug store
chain (May 1995). Second quarter sales to independently-operated retail stores
were also benefited by the same strong holiday selling season experienced by
the Company-operated stores.
As a percentage of net sales, gross profit declined from 19.8% in fiscal
1995 to 19.5% during the second quarter of fiscal 1996. Year-to-date, the gross
profit percentage was 19.7% in fiscal 1996 compared to 19.6% in fiscal 1995.
The decrease during the second quarter of fiscal 1996 reflects a shift
<PAGE> 11
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in the Company's mix of sales from sales in Company-operated retail stores to
sales to independently-operated retail stores, which traditionally carry a
lower gross profit percentage. Sales in Company-operated retail stores
accounted for 51.5% of total Company sales during the second quarter of fiscal
1996 compared to 52.2% in the second quarter of fiscal 1995. The fiscal 1996
second quarter gross profit percentage was also unfavorably impacted by
aggressive holiday merchandising programs in Company-operated retail stores,
which yielded increased sales but also increased promotional expenses.
Year-to-date sales in Company-operated retail stores were 51.4% in fiscal 1996
and 51.7% in fiscal 1995. Despite these shifts in sales, the Company was able
to improve its gross profit percentage on a year-to-date basis principally due
to improved procurement opportunities as a result of the Company's increased
sales volume and improvement in the Company's private label programs. The
Company's provision for LIFO inventories was the same between years.
Selling, general and administrative (SG&A) expense decreased between years
during both the second quarter, from 17.7% to 16.5%, and year-to-date, from
17.8% to 17.3%. This decline reflects the shift in sales mix to more sales to
independently-operated retail stores, which demand less associated SG&A
expense. Company programs to remodel and reposition Company-operated retail
stores, while yielding increased sales and gross profit opportunities, also
demand increased SG&A expense, principally occupancy and depreciation. During
the second quarter of fiscal 1996, the Company was able to better leverage this
increased SG&A expense against larger sales volumes. Additionally, the Company
continued to achieve productivity gains as a result of its Total Quality
Management initiatives and will continue to use this as a tool to maintain its
SG&A costs as a percentage of net sales.
Interest expense declined $164,000 during the second quarter of fiscal
1996 and $329,000 year-to-date. Average debt levels, including capitalized
leases, decreased 10.4% year-to-date. This reduction in average debt levels is
primarily the result of increased net income, lower FIFO inventory levels and
the repayment of approximately $9 million of notes to independently-operated
retail stores during the second quarter of fiscal 1996. Lower average debt
levels were partially offset by increases in the interest rate charged under
the Company's bank credit facilities. The Company's average interest rate under
its bank credit facilities increased from approximately 8.30% last year to
approximately 8.57% this year, principally because of increases in the Bank's
Prime Lending Rate.
The Company provided for income taxes at an effective tax rate of 41.1% in
fiscal 1996 compared to 39.5% in fiscal 1995. Taxes were provided at the
various statutory rates to which the Company is subject. There were no
significant differences between financial reporting and taxable income. The
increase in the Company's effective tax rate reflects a higher effective
federal tax rate (35% in fiscal 1996 compared to 34% in fiscal 1995) and a
higher state income tax provision due to higher book income. The Company
provides for the franchise tax portion of its state income tax provision as an
operating expense.
CAPITAL RESOURCES AND LIQUIDITY
The Company's primary source of capital historically comes from internally
generated funds. During the second quarter of 1996, debt levels decreased due
to the increase in cash generated by operations, cash received from the
repayment of notes by independently-operated retail stores and continued
benefits from programs initiated during fiscal 1995 to reduce the Company's
investment in distribution inventories and increase inventory turns.
<PAGE> 12
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Operating activities generated $33.0 million of cash in the first
twenty-eight weeks of fiscal 1996 compared to $27.3 million in fiscal 1995. In
adjusting net income to net cash provided by operating activities for fiscal
1996, the major changes in assets and liabilities include decreases of accounts
and notes receivable of $7.1 million (increase of $1.0 million in fiscal 1995),
FIFO inventories of $4.7 million (decrease of $3.5 million in fiscal 1995) and
accrued expenses and other liabilities of $.1 million (increase of $3.6 million
in fiscal 1995) and an increase in accounts payable of $3.5 million (increase
of $6.5 million in fiscal 1995).
The large decrease in trade accounts and notes receivable during fiscal
1996 is due to the repayment of two significant notes by independently-operated
retail stores late in the second quarter of fiscal 1996. These notes totaled
approximately $9 million dollars. The decreases in FIFO inventories in both
years reflect seasonal declines and the continuation of Company programs to
lower distribution inventory levels. These programs, which have been successful
at increasing inventory turns, have also resulted in a larger percentage of
FIFO inventories being financed through trade accounts payable. Trade accounts
payable, as a percentage of FIFO inventories, increased from 48.5% at the end
of fiscal 1995 to 53.5% at the end of the second quarter of fiscal 1996. The
$3.6 million increase in accrued expenses and other liabilities in fiscal 1995
was a function of increased accurals under the Company's incentive bonus
program due to improved operating results and the timing of certain tax
payments.
Since cash provided by operating activities was utilized to reduce
borrowings under the Company's revolving lines of credit and increased
inventory turns resulted in a higher trade accounts payable to FIFO inventory
ratio, working capital decreased to $14.5 million from $23.9 million at the end
of fiscal 1995. At the same time, the Company's current ratio decreased from
1.22:1 at the end of fiscal 1995 to 1.13:1 at the end of the second quarter of
fiscal 1996. Lower borrowing levels under the Company's bank credit facilities
reduced the Company's long-term liabilities to equity ratio from 1.00:1 at the
end of fiscal 1995 to .72:1 at the end of the second quarter of fiscal 1996.
The Company has continued to improve its ratio of liabilities to equity
lowering it to 2.24:1 at the end of the second quarter of fiscal 1996 from
2.61:1 at the end of fiscal 1995.
Through the second quarter of fiscal 1996, the Company utilized $16.7
million of cash flow for capital expenditures. This amount is slightly higher
than prior year levels and reflects the Company's acquisition of its Aurora
Road and Cash-N-Carry distribution facilities, which had previously been
leased, and lower retail capital expenditure levels. The Company used $8.7
million of its capital expenditures on retail remodeling projects ($12.7
million last year), $7.0 million for distribution facilities and equipment
($1.7 million last year) and $1.0 million on data processing systems upgrades
($1.5 million last year).
The Company anticipates that the level of capital expenditures for fiscal
1996 will be slightly higher than the previous three fiscal years principally
because of the acquisition of previously leased distribution facilities.
Capital expenditure levels will be maintained in the $25-30 million range over
the next four fiscal years until the Company has completed the remodeling or
expansion of its core stores. The Company believes that cash flow from
operations and the unused portion of its bank credit facilities ($44.7 million
at the end of the second quarter of fiscal 1996) will adequately fund planned
capital expenditures, normal ongoing business activities and scheduled debt
principal repayments.
<PAGE> 13
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IMPACT OF INFLATION
Inflation increases the Company's major costs: inventory and labor.
Because of the high velocity of inventory turnover in the food distribution
industry and the Company's use of the LIFO valuation method for a majority of
its inventory, the impact of inflation is normally reflected very quickly in
the results of operations. The food distribution industry has experienced
little or no food inflation over the last three years. Experience indicates
that highly competitive market condition may prevent the Company from fully
recovering inflation-driven costs through retail pricing alone.
<PAGE> 14
Sequential Page 14 of 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
RINI-REGO SUPERMARKETS, INC.
(Registrant)
/s/ Charles A. Rini, Sr.
February 26, 1996 By: Charles A. Rini, Sr.
President and Director
/s/ Ronald W. Ocasek
February 26, 1996 By: Ronald W. Ocasek
Senior Vice President,
Chief Financial Officer and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Rini-Rego Supermarkets, Inc. Consolidated Condensed Balance Sheet, Consolidated
Condensed Statement of Income and Notes to Consolidated Condensed Financial
Statements for the second quarter ended January 13, 1996 and is qualified in its
entirety by reference to such 10-Q for the second quarter ended January 13,
1996.
</LEGEND>
<CIK> 0000037180
<NAME> RINI-REGO SUPERMARKETS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> JUL-02-1995
<PERIOD-END> JAN-13-1996
<CASH> 3,688
<SECURITIES> 0
<RECEIVABLES> 38,826
<ALLOWANCES> 0
<INVENTORY> 68,228
<CURRENT-ASSETS> 127,083
<PP&E> 197,952
<DEPRECIATION> 73,002
<TOTAL-ASSETS> 264,440
<CURRENT-LIABILITIES> 112,538
<BONDS> 0
<COMMON> 1,403
0
1,811
<OTHER-SE> 79,164
<TOTAL-LIABILITY-AND-EQUITY> 264,440
<SALES> 679,099
<TOTAL-REVENUES> 679,099
<CGS> 545,517
<TOTAL-COSTS> 545,517
<OTHER-EXPENSES> 117,471
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,761
<INCOME-PRETAX> 13,034
<INCOME-TAX> 5,360
<INCOME-CONTINUING> 7,674
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,674
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
</TABLE>
