Securities and Exchange Commission
Washington, D.C. 20549
FORM 10 -Q/A
AMENDMENT TO THE QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the 13-week Period Ended October 2, 1993
Commission File Number 0-12923
DELCHAMPS, INC.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Alabama 63-0245434
_________________________________ _______________________________
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
305 Delchamps Drive, Mobile, AL 36602
________________________________ ________________________________
(Address of principal executive (Zip Code)
offices)
(205) 433-0431
________________________________
(Registrant's telephone number,
including area code)
Indicate by check mark 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 (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.
7,113,581 shares at October 25, 1993.
<PAGE>
INDEX
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheets -
October 2, 1993 and July 3 , 1993
Condensed Statements of Earnings -
Thirteen Weeks Ended October 2, 1993
and September 26, 1992
Condensed Statements of Cash Flows -
Thirteen Weeks Ended October 2, 1993
and September 26, 1992
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
<PAGE>
Part I. Financial Information
DELCHAMPS, INC. AND SUBSIDIARY
Condensed Balance Sheets - (In thousands)
(unaudited)
<TABLE>
<CAPTION>
October 2, 1993 July 3, 1993*
__________________________ ______________________
Amount % Assets Amount % Assets
ASSETS ____________ _____________ ___________ ___________
___________
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 13,510 5.24 $ 12,070 4.79
Trade accounts receivable 9,223 3.58 7,941 3.15
Merchandise inventories 100,664 39.08 97,083 38.52
Prepaid expenses 2,263 0.88 1,242 0.49
Deferred income taxes 1,976 0.77 2,129 0.84
____________ __________ ___________ __________
Total current assets 127,636 49.55 120,465 47.79
Property and equipment:
Land 6,363 2.47 6,495 2.58
Buildings and improvements 50,058 19.43 49,492 19.64
Fixtures and equipment 188,812 73.29 185,211 73.48
Construction in progress 1,887 0.74 3,339 1.32
____________ __________ ___________ __________
247,120 95.93 244,537 97.02
Less accumulated depreciation
and amortization (124,881) (48.48) (120,271) (47.72)
____________ __________ ___________ __________
Net property and equipment 122,239 47.45 124,266 49.3
Other assets 2,405 0.93 1,954 0.78
Goodwill 5,327 2.07 5,367 2.13
____________ ___________ ___________ __________
Total assets 257,607 100.00 252,052 100.00
============ =========== =========== ==========
LIABILITIES AND STOCKHOLDER' EQUITY
____________________________________
Current liabilities:
Notes payable $ 4,730 1.84 $ 3,847 1.53
Current portion of obligations
under capital leases 1,705 0.66 1,705 0.68
Current portion of long-term debt 3,760 1.45 3,759 1.49
Current portion of guaranteed ESOP 2,000 0.78 2,000 0.79
Accounts payable 44,333 17.21 39,785 15.78
Accrued expenses 16,560 6.43 18,427 7.31
Income taxes 2,266 0.88 1,431 0.57
____________ ___________ ____________ __________
Total current liabilities 75,354 29.25 70,954 28.15
Obligations under capital leases,
excluding current portion 12,980 5.04 13,387 5.31
Long-term debt, excluding current portion 21,177 8.22 22,116 8.77
Guaranteed ESOP debt, excluding current portion 4,000 1.55 4,000 1.59
Deferred income taxes 13,110 5.09 14,785 5.87
Other liabilities 3,122 1.21 548 0.22
____________ ___________ ____________ __________
Total liabilities 129,743 50.36 125,790 49.91
Stockholders' equity:
Junior participating preferred stock
of no par value - authorized 5,000,000
shares; no shares issued - - - -
Common stock of $.01 par value - authorized
25,000,000 shares; issued 7,113,581 shares 71 0.03 71 0.03
Additional paid-in capital 19,731 7.66 19,731 7.83
Retained earnings 115,159 44.70 113,611 45.07
____________ ___________ ____________ __________
134,961 52.39 133,413 52.93
Less: Guaranteed ESOP debt (6,000) (2.33) (6,000) (2.38)
Unamortized restricted stock awards (1,097) (0.42) (1,151) (0.46)
____________ ___________ ____________ __________
Total stockholders' equity 127,864 49.64 126,262 50.09
Total liabilities and stockholders' equity $ 257,607 100.00 252,052 100.00
============ =========== ============ ==========
</TABLE>
See accompanying notes to condensed financial statements.
* Condensed from Balance Sheet included in the 1993 Annual Report.
<PAGE>
DELCHAMPS, INC. AND SUBSIDIARY
Condensed Statements of Earnings -
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
___________________________________________________________
October 2, 1993 September 26, 1992
_________________________ ________________________
Amount % Sales Amount % Sales
___________ ___________ ____________ ___________
<S> <C> <C> <C> <C>
Sales $ 266,570 100.00 255,374 100.00
Cost of sales 197,810 74.21 191,674 75.06
___________ ___________ _____________ __________
Gross profit 68,760 25.79 63,700 24.94
Selling, general and
administrative expenses 62,619 23.49 57,674 22.58
____________ __________ ____________ __________
Operating income 6,141 2.30 6,026 2.36
Other expenses 1,048 0.39 1,320 0.52
____________ __________ ____________ __________
Earnings before income taxes and
cumulative effect of changes in
accounting principles 5,093 1.91 4,706 1.84
Income taxes 1,872 0.70 1,708 0.67
____________ ___________ ____________ ___________
Earnings before cumulative effect
of changes in accounting principles 3,221 1.21 2,998 1.17
Cumulative effect of change in accounting
for income taxes 900 0.34 - -
Cumulative effect of change in accounting
for postemployment benefits (net of
income tax benefits of $1,000) (1,600) (0.60) - -
____________ ___________ _____________ ___________
Net earnings $ 2,521 0.95 2,998 1.17
============ =========== ============= ===========
Earnings per common share:
Earnings before cumulative effect of
changes in accounting principles $ 0.45 0.42
Cumulative effect of change in accounting
for income taxes 0.12 -
Cumulative effect of change in accounting
for postemployment benefits (0.22) -
____________ ____________
Net earnings per common share 0.35 0.42
============ ============
Weighted average number of common
shares 7,114 7,114
============ ============
Dividends declared
per common share $ 0.11 0.11
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
DELCHAMPS, INC. AND SUBSIDIARY
Condensed Statements of Cash Flows - (In Thousands)
Increase/(Decrease) In Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
_____________________________________
10/10/93 09/26/92
_________________ __________________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,521 2,998
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 4,775 4,426
Loss reserve on closed stores (26) (23)
Restricted stock award compensation expense 54 53
Cumulative effect of change in accounting for
income taxes (900) -
Cumulative effect of change in accounting for
postemployment benefits 1,600 -
Decrease in merchandise inventories (3,581) 1,069
Decrease in accounts payable and accrued expenses 2,492 (6,236)
Increase (decrease) in income taxes, net 835 2,471
Other, net (2,377) (3,259)
________________ _________________
Net cash flows provided by operating activities 5,393 1,499
Cash flows from investing activities:
Additions to property and equipment (2,740) (7,830)
Proceeds from sale of property and equipment 32 -
________________ _________________
Net cash used in investing activities (2,708) (7,830)
Cash flows from financing activities:
Proceeds from notes payable 883 5,217
Principal payments on obligations under capital leases (407) (450)
Principal payments on long - term debt (939) (1,131)
Dividends paid (782) (782)
_________________ _________________
Net cash provided by financing activities (1,245) 2,854
Net (decrease) increase in cash and cash equivalents 1,440 (3,477)
Beginning of period cash and cash equivalents 12,070 11,323
_________________ ________________
End of period cash and cash equivalents $ 13,510 7,846
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest expense $ 1,117 1,396
================= ================
Income taxes $ 437 1,278
================= ================
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
DELCHAMPS, INC. AND SUBSIDIARY
Notes to Condensed Financial Statements
(Unaudited)
(A) The condensed financial statements for the thirteen week
periods ended October 2, 1993 and September 26, 1992 are
unaudited. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for
the fair presentation of the financial position
and results of operations for the periods presented have
been included. Results of operations for interim periods
are not necessarily indicative of results for the entire
year.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the
condensed financial statements and notes thereto included elsewhere
herein.
RESULTS OF OPERATIONS:
Sales:
______________
Sales increased 4.38% for the thirteen-week period compared with the
corresponding period last year. The increase in sales was primarily because
of sales from new supermarkets. During the last year, the Company has
opened five supermarkets, of which one was a replacement for a smaller unit.
At the end of the current period, the Company operated 119 supermarkets
and ten liquor stores compared with 115 supermarkets and ten liquor stores
a year earlier.
Sales increased .69% for stores which were open during both the current
and prior year periods. The moderate increase in same store sales follows
a large increase of 5.4% in same store sales for last year's quarter. Same
store sales have now had positive growth in each of the last six quarters.
During the current quarter, the Company continued its aggressive promo-
tional activities. These activities include Double Coupons (under which
the Company doubles coupons that have a face value of up to sixty cents),
Triple Coupons (under which the Company triples coupons that have a face value
of up to thirty-four cents in selected markets), and Cash Back For Schools
(under which the Company makes a cash donation to schools equal to 1% of the
total cash register receipts collected by each school). The Company also
successfully introduced a line of soft drink products with Delchamps as the
brand name. These products offer customers quality merchandise at retail
prices which are less than brand name products. The Company plans to
introduce additional product lines with Delchamps as the brand name in the
near future.
Gross Profit:
_________________
Gross profit as a percentage of sales increased from 24.94% last year
to 25.79% for the current thirteen-week period. This increase was the result
of increased promotional and buying allowances and a shift in product mix to
higher margin products located in the specialty department of the Company's
newer supermarkets and expanded supermarkets.
Selling, General, and Administrative Expenses:
_______________________________________________
Selling, general and administrative ("SG and A") expenses as a percentage
of sales increased from 22.58% last year to 23.49% for the current thirteen-
week period. This increase in SG and A percentage resulted from higher wages
resulting from wage rate adjustments and increased promotional expenses from
the promotional activities noted in the sales section above.
Other Expenses:
_________________
Other expenses decreased $272,000 from last year's thirteen-week period.
This decreased resulted from lower interest expense which was caused by
the Company refinancing a significant portion of long-term debt, lower
levels of indebtedness, and a decline in interest rates.
Income Taxes:
_________________
The effective rate for income taxes increased from 36.29% to 36.76% for
the current thirteen-week period. The increase is a result of a higher
Federal statutory tax rate which became effective January 1, 1993. The
effective rates were below the statutory rate because of targeted jobs tax
credits.
Other:
____________
During the current thirteen-week period, the Company implemented State-
ment of Financial Accounting Standard No. 109, Accounting For Income Taxes"
("SFAS No. 109"). SFAS No. 109 supersedes SFAS No. 96 and requires that
deferred taxes be recorded using the liability method and restricts the
conditions under which a deferred tax asset may be recorded. The cumulative
effect on the financial statements of adopting SFAS 109 was to increase net
earnings $900,000.
Postemployment Benefits Other than Pensions:
_______________________________________________
Effective for the quarter ended October 2, 1993, the Company adopted
Statement of Financial Accounting Standards No. 112, ("SFAS No . 112"),
"Employers' Accounting for Postemploymnt Benefits". Under SFAS No 112, the
cost of employment benefits must be recognized on an accrual basis as
employees perform services to earn the benefits.
The Company provides postemployment benefits, longevity bonus, to
associates that leave employment after either attaining age 55 or completing
25 years of service. The amount of longevity bonus is based on length of
service.
The Company previously expanded the cost of these benefits as incurred.
The Company has elected to recognize this change in accounting principle
on the immediate recognition basis. The cumulative effect for the quarter
ended October 2, 1993 of adopting SFAS No. 112 was an increase in accrued
postemployment benefit costs of $2,600,000 ($1,600,000 after the income tax
benefit of $.22 per share).
LIQUIDITY AND CAPITAL RESOURCES
Although the Company's supermarket locations are leased, the Company
makes substantial expenditures to equip new and expanded supermarkets.
In addition, the Company makes substantial expenditures for distribution
facilities and equipment. The Company plans to finance its capital
expenditures with funds provided by operations. However, if an insuff-
cient amount of funds are generated, the Company may draw on short-term
credit lines. The Company has $95.0 million in credit lines from financial
institutions of which $90.3 million is available for future use. While
these credit lines expire throughout fiscal year 1994, the Company expects
the majority of these credit lines to be extended annually as they are
deemed necessary.
Working capital increased from increased from $49,511,000 at July 3, 1993
to $52,282,000 as of October 2, 1993. Additions to property and equipment
were $2,740,000 during the same time period and consisted primarily of
purchases of store equipment.
<PAGE>
SIGNATURE
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.
DELCHAMPS, INC.
_________________
/s/ Roy W. Henderson
________________________
Date: August 12,1994 Roy W. Henderson
Vice President of Finance
Treasurer
