Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File No. 0-5815
AMERICAN CONSUMERS, INC.
(Exact name of registrant as specificied in its charter
GEORGIA 58-1033765
(State of other juridiction of (I.R.S. Employer Identification
incorporation or organization) Number)
P.O. Box 2328, 418A Battlefield Pkwy., Fort Oglethorpe, GA 30742
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (706)861-3347
N/A
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registant (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 ( )
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at October 6, 1995
COMMON STOCK - $.10 PAR VALUE 927,224.2
NON VOTING COMMON STOCK - $.00 PAR VALUE 0
NON VOTING PREFERRED STOCK - $.00 PAR VALUE 0
Exhibit Index on Page 10
(1)
PAGE 1 OF 13 PAGES
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<TABLE>
<CAPTION>
FINANCIAL INFORMATION
AMERICAN CONSUMERS, INC.
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
THIRTEEN WEEKS ENDED
September 2, August 27,
1995 1994
------------ -----------
<S> <C> <C>
NET SALES $7,284,621 $7,097,746
COST OF GOODS SOLD 5,757,988 5,637,474
--------- ----------
Gross Margin 1,526,633 1,460,272
OPERATING EXPENSES 1,473,387 1,385,076
--------- ----------
Operating Income 53,246 75,196
OTHER INCOME (EXPENSE)
Interest income 5,046 7,864
Other income 11,939 10,143
Interest expense (4,946) (4,118)
--------- ----------
Income Before Income Taxes 65,285 89,085
PROVISION (BENEFIT) FOR INCOME TAXES 22,243 31,172
NET INCOME 43,042 57,913
RETAINED EARNINGS:
Beginning 1,467,651 1,371,264
Cash dividends (18,549) (18,836)
Redemption of common stock (15) (125)
--------- ---------
Ending 1,492,129 1,410,216
========= =========
PER SHARE:
Net income $0.046 $0.062
====== ======
Cash dividends ($0.020) ($0.020)
======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 927,398 941,418
======= =======
</TABLE>
See Notes to Financial Statements
(2)
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<TABLE>
<CAPTION>
FINANCIAL INFORMATION
AMERICAN CONSUMERS, INC.
CONDENSED BALANCE SHEET
September 2, June 3,
1995 1995
------------- ---------
--ASSETS--
<S> <C> <C>
CURRENT ASSETS:
Cash $674,349 $416,456
Securities purchased under agreement
to resell 94,493 187,700
Certificate of deposit 337,021 337,021
Accounts receivable 254,003 238,523
Inventories 1,647,840 1,599,435
Prepaid expenses 62,232 80,624
--------- ---------
Total current assets 3,069,938 2,859,759
--------- ---------
PROPERTY - At cost:
Property 2,305,996 2,295,587
Less accumulated depreciation 1,495,834 1,458,153
--------- ---------
Property - Net 810,162 837,434
--------- ---------
OTHER ASSETS 38,529 39,442
---------- ----------
TOTAL ASSETS $3,918,629 $3,736,635
========== ==========
--LIABILITIES AND STOCKHOLDERS' EQUITY--
CURRENT LIABILITIES:
Accounts payable $835,971 $718,368
Short-term borrowings 201,000 198,000
Accrued sales tax 137,560 168,993
Accrued income taxes 22,868 -----
Other accrued liabilities 177,734 122,912
--------- ---------
Total Current Liabilities 1,375,133 1,208,273
--------- ---------
DEFERRED INCOME TAX LIABILITY 22,919 26,759
--------- ---------
DEFERRED INCOME 162,494 167,793
--------- ---------
COMMITMENTS AND CONTINGENCIES (Note 2)
STOCKHOLDERS' EQUITY:
Non voting preferred stock; authorized
5,000,000 shares of no par value; no shares
issued ---- ----
Non voting common stock; authorized
5,000,000 shares of $.10 par value; no
shares issued ---- ----
Common stock; authorized 5,0000,000
shares of $.10 par value; issued and
outstanding at 6/3/95, 927,444 and at
9/2/95, 927,224 shares. 92,722 92,744
Additional paid-in capital 773,232 773,415
Retained Earnings 1,492,129 1,467,651
--------- ---------
Total Stockholders Equity 2,358,083 2,333,810
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS EQUITY 3,918,629 3,736,635
========= =========
</TABLE>
See Notes to Financial Statements
(3)
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<TABLE>
<CAPTION>
FINANCIAL INFORMATION
AMERICAN CONSUMERS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
THIRTEEN WEEKS ENDED
September 2, August 27,
1995 1994
------------ ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $43,042 $57,913
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and Amortization 37,681 41,212
Deferred income taxes (3,840) (500)
Deferred income (5,299) (5,298)
Change in operating assets and
liabilities:
Accounts receivable (15,480) 6,767
Inventories (48,405) 14,978
Prepaid expenses 18,392 (12,256)
Accounts payable 117,603 46,636
Accrued sales tax (31,433) 3,909
Accrued income taxes 22,868 (84,098)
Other accrued liabilities 54,822 (24,852)
--------- --------
Net cash provided by (used in) operating 189,951 44,411
activities --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property (10,409) (12,162)
Other 913 (81,713)
--------- --------
Net cash used in investing activities (9,496) (93,875)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in short-term borrowings 3,000 30,840
Net increase in long-term borrowings 0 44,964
Cash dividends (18,549) (18,836)
Redemption of common stock (220) (1,892)
-------- --------
Net cash provided by financing activities (15,769) 55,076
-------- --------
Net increase in cash 164,686 5,612
Cash and cash equivalents at beginning of
period 604,156 974,716
------- -------
Cash and cash equivalents at end of period 768,842 980,328
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Income taxes 4,225 116,745
======= =======
Interest 4,946 4,118
======= =======
</TABLE>
See Notes to Financial Statement
(4)
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AMERICAN CONSUMERS, INC.
NOTES TO FINANCIAL STATEMENTS
(1) Basis of Presentation.
The financial statements have been prepared in conformity with
generally accepted accounting principles and general practices within
the industry.
The interim financial statements should be read in conjunction with
the notes to the financial statements presented in the Corporation's
1995 Annual Report to Shareholders. The quarterly financial
statements reflect all adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for
interim periods. The results for interim periods are not necessarily
indicative of results to be expected for the complete fiscal year.
(2) Commitments and Contingencies.
The Company has begun the process of installing direct store delivery
equipment and replacing cash registers with registers capable of
scanning at the checkout. The new front-end equipment will also allow
the acceptance of certain credit cards and acceptance of electronic
benefits at a later date. Other capital expenditures are not expected
to exceed $100,000 during the next fiscal year.
The Company adopted a retirement plan effective January 1, 1995. The
plan is a 401(k) plan administered by BISYS Qualified Plan Services.
Participation in the plan is available to all full-time employees
after one year of service and age 19. Any contribution by the Company
will be at the discretion of the Board of Directors.
None of the Company's employees are represented by a union.
(5)
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-------------------------
September 2, August 27,
1995 1994
------------ ----------
<S> <C> <C>
Sales $7,284,621 $7,097,746
% Sales Increase (Decrease) 2.63 (1.69)
Gross Margin % 20.96 20.57
Operating and Administrative Expense:
Amount $1,473,387 $1,385,076
% of Sales 20.23 19.51
Net Income $43,042 $57,913
</TABLE>
Overall sales increased 2.63% from sales for the same quarter last
year. This increase is attributable to increased sales at five of the
Company's six stores. Management believes this increase is due to the
success of its current advertising program and changes in consumer buying
patterns following a change in ownership of one of the Company's major
competitors. The Company seeks to improve its profitability by obtaining
the lowest cost available for its goods.
Operating and administrative expense increased between the two
quarters presented due largely to increased advertising expense incurred
through the ad group to which the Company now belongs. However, this
increase was substantially offset by the increase in sales and gross
margin.
Prepaid expenses decreased from $80,624 at June 3, 1995 to $62,232 at
September 2, 1995 due to the payment of rent overages accrued at year end.
Accounts payable increased $117,603,of which $48,405 is attributable
to an increase in the dollar value of inventory on the Company's balance
sheet. The remainder of the increase is due to normal operations.
Income Taxes:
The provision for income taxes for the quarter ended September 2, 1995
was $22,243 and $31,172 for the quarter ended August 27, 1994. The
provision for income taxes does not vary significantly from the statutory
rate of 34%. No accrued income taxes were booked as of June 3, 1995
because estimated payments for the fiscal year then ended exceeded the
liability.
Inflation:
Although not a current significant factor, the Company continues to
seek ways to cope with the threat of renewed inflation. To the extent
permitted by competition, increased costs of goods and services to the
Company are reflected in increased selling prices for the goods
sold by the Company.
(6)
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<PAGE>
FINANCIAL CONDITION
Liquidity and Capital Resources:
The Company finances its working capital requirements principally
through its cash flow from operations and short-term borrowing. Short-
term borrowing to finance inventory purchases is provided by the
Company's $800,000 line of credit with a regional bank. An additional
line of credit in the amount of $300,000 is also available from its
principal inventory supplier. Long-term borrowing generally finances
capital expansion.
Short-term borrowings as of September 2, 1995 and June 3, 1995
consist of unsecured notes payable to a principal stockholder. Notes
to the stockholder, in the amount of $201,000 and $198,000
respectively, are payable on demand and bear interest at .25% below the
base rate charged by the regional bank which provides the Company with
its line of credit to finance inventory purchases.
The ratio of current assets to current liabilities was 2.23 to 1
at the end of the latest quarter, September 2, 1995, as compared to
2.29 to 1 on August 27, 1994 and 2.37 to 1 at the end of the fiscal
year ended June 3, 1995. Cash and cash equivalents constituted 25.04%
of the total current assets at September 2, 1995 as compared to 32.34%
at August 27, 1994 and 21.13% at June 3, 1995. The decrease in cash is
attributable to the purchase of equipment during the last month of the
Company's year end.
During the quarter ended September 2, 1995 retained earnings
increased as a result of the Company's net income for the quarter.
(7)
PAGE 7 OF 13 PAGES
<PAGE>
AMERICAN CONSUMERS, INC.
PART II OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Shareholders on September
14, 1995, at which shareholders were asked to vote on the election of
directors for the fiscal year ending in 1995. Proxies were solicited
by management in favor of seven nominees, with no solicitation in
opposition to management's nominees. All of such nominees were
elected, with the number of votes cast for, against, or withheld as
well as the number of broker non votes and abstention as to each
nominee having been as follows:
VOTES VOTES BROKER
TOTAL CAST CAST VOTES NON
NOMINEE SHARES FOR AGAINST WITHHELD VOTES
[S] [C] [C] [C] [C] [C]
Michael A. Richardson 638,960 638,850 110 288,484 33,990
Paul R. Cook 638,960 638,520 440 288,484 33,990
Virgil E. Bishop 638,960 638,740 220 288,484 33,990
John P. Price 638,960 638,960 288,484 33,990
Thomas L. Richardson 638,960 638,850 110 288,484 33,990
Jerome P. Sims, Sr. 638,960 638,960 288,484 33,990
Herbert S. Willbanks 638,960 638,630 330 288,484 33,990
Item 6 EXHIBITS AND REPORTS ON FROM 8-K
(a) The following exhibits are filed as a part of
the, report.
(10) Renewal Lease Extension for the Company's
Stevenson, Alabama location.
(11) Statement re: computation of per share earnings.
(b) During the most recent quarter, the Company has not
filed a report on Form 8-K.
(8)
PAGE 8 OF 13 PAGES
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1034, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
AMERICAN CONSUMERS, INC.
(Registrant)
/s/ Michael A. Richardson
Date: 10/16/95 __________________________________
Michael A. Richardson
CHAIRMAN
(Principal Executive Officer)
/s/ Paul R. Cook
Date: 10/16/95 __________________________________
Paul R. Cook
EXECUTIVE VICE PRESIDENT - TREASURER
(Principal Financial Officer & Chief
Accounting Officer)
(9)
PAGE 9 OF 13 PAGES
STATE OF ALABAMA )
)
JACKSON COUNTY )
AMENDMENT TO RENEWAL LEASE
Heretofore, on May 4, 1994, Conley J. Smith, Sara W.
Lovelady and J.J. Williams, as Lessors, did enter into a renewal
lease with American Consumers, Inc., Post Office Box 2328, Fort
Oglephorpe, Georgia 30742, which renewal lease granted unto the
Lessee a lease on a building and premises housing 23,860 square
feet of floor space on property adjacent to the First National
Bank of Stevenson, Alabama, (the leased premises), and
Both Lessors and Lessee agree that the initial term of the
lease should be increased as herein provided.
The renewal lease dated May 4, 1994, provides:
"The term of this lease shall be five (5) years
beginning on June 1, 1994"
The Parties agree to amend the renewal lease by substituting
the following:
"The term of this lease shall be ten (10) years
beginning on June 1, 1994.
NOW, THEREFORE, by this amendment, the parties do agree that
the initial term of the renewal lease dated May 4, 1994, shall be
for a period of ten (10) years beginning on June 1, 1994.
All other provisions of said renewal lease consisting of
sixteen (16) pages shall remain in full force and effect.
Executed on this the 5th day of July, 1995, to be effective
on June 1, 1994, in triplicate, each copy to be taken as an
original.
LESSORS:
/s/ Conley J. Smith
___________________________
CONLEY J. SMITH
/s/ Sara W. Lovelady
___________________________
SARA W. LOVELADY
/s/ J. J. Williams
___________________________
J.J. WILLIAMS
LESSEE:
AMERICAN CONSUMERS, INC.
/s/ Mike Richardson
BY:________________________
MIKE RICHARDSON, Its President
ATTEST:
/s/ Reba S. Southern
_________________________
Secretary
(Corporate Seal)
<PAGE>
STATE OF ALABAMA )
)
JACKSON COUNTY )
I, the undersigned, a Notary Public in and for said County
and State, hereby certify that CONLEY J. SMITH, SARA W. LOVELADY
and J.J. WILLIAMS, whose names are signed to the foregoing
instrument, and who are known to me, acknowledged before me on
this day that, being informed of the contents of the instrument,
they, executed the same voluntarily on the day the same bears
date.
Given under my hand and official seal this the 5th day of
July, 1995.
/s/ May W. Ridom
(Seal) __________________________________
NOTARY PUBLIC
My Commission Expires January 23, 1997
STATE OF GEORGIA )
)
COUNTY OF CATOOSA )
I, the undersigned authority, a Notary Public in and for
said County and State, hereby certify that MIKE RICHARDSON, whose
name as President of AMERICAN CONSUMERS, INC., is signed to the
foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the
instrument, he, as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.
Given under my hand and official seal this the 20th day of
July, 1995.
/s/ Karen Ball
(Seal) __________________________________
NOTARY PUBLIC
My Commission Expires April 18, 1996
<TABLE>
<CAPTION>
AMERICAN CONSUMERS, INC.
NET INCOME PER COMMON SHARE
EXHIBIT 11
THIRTEEN WEEKS ENDED
--------------------------
September 2, August 27,
1995 1994
------------ -----------
<S> <C> <C>
Net income for computing earnings
per common share $43,042 $57,913
======== =======
Weighted average number of common
shares outstanding during each period 927,398 941,418
======= =======
Net income per common share $0.046 $0.062
======= =======
</TABLE>
(13)
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