<NOTE>
FEE PAID VIA FEDWIRE
</NOTE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended July 28, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 33-19645
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Exact Name of Registrant as Specified in its Charter)
ALABAMA 63-0393676
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 J. Terrell Wooten Drive, Bessemer, Alabama 35020
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (205) 481-2300
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 for Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of the Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant as of July 28, 1995.
Common Stock, Par Value $0.01 -- $12,685,730
Indicate the number of shares outstanding of each of the
Registrant's Classes of Common Stock, as of July 28, 1995.
Class Outstanding at July 28, 1995
Common Stock, Par Value $0.01 73,236
TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT - 1995
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
PART I
Item 1. Business............................................. 3
Item 2. Properties........................................... 5
Item 3. Legal Proceedings.................................... 5
Item 4. Submission of Matters to a Vote of
Security Holders..................................... 6
PART II
Item 5. Market for Registrant's Common Stock
and Related Stockholder Matters...................... 6
Item 6. Selected Financial Data.............................. 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 8
Item 8. Financial Statements and Supplementary Data.......... 10
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................. 30
PART III
Item 10. Directors and Executive Officers of the
Registrant........................................... 30
Item 11. Executive Compensation............................... 33
Item 12. Security Ownership of Certain Beneficial
Owners and Management................................ 34
Item 13. Certain Relationships and Related Transactions....... 35
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.................................. 36
PART I
ITEM 1 - BUSINESS
The Company was incorporated under the laws of the State of
Delaware on September 18, 1958, under the name of Piggly Wiggly
Alabama Distributing Company, Inc. On September 26, 1979, it was
reorganized as an Alabama corporation under the name of Piggly
Wiggly Alabama Distributing Co., Inc. (the "Company"). The Company
has its principal place of business at 2400 J. Terrell Wooten
Drive, Bessemer, Alabama. During the past five years, the Company
has steadily grown, increasing sales from $333,106,000 in 1992 to
$402,682,000 in 1995. The number of grocery stores serviced by the
Company has expanded from 168 in 1990 to 214 in 1995.
Business Objective
The Company was organized and is being operated for the
purpose of providing grocery warehousing and distribution
facilities for its stockholders who are retail grocery operators in
parts of Alabama, Tennessee, Georgia, Mississippi, Florida and
North Carolina. While it is the hope and continued intention of
the management of the Company that the Company operate with a
reasonable profit, the primary objective of the Company is to
provide groceries, food products and related items and services at
low cost to its stockholders so that they may effectively meet
competition in their retail grocery market. Under the
circumstances, the intention that the Company operate with a
reasonable profit is subordinate to its primary objective, which
might result in a less profitable operation than would be the case
in the event there was no connection between the Company as a
supplier and its stockholders as customers.
Distribution
The Company operates wholesale grocery warehouse and
distribution facilities in Bessemer, Alabama. From its warehouse
and distribution facilities, the Company distributes grocery
products, including dry groceries, meats, produce, frozen foods,
dairy products, health and beauty aids, tobacco products and other
related items and provides services to retail grocery stores
operated under franchise issued by the Piggly Wiggly Corporation
and to non-franchised retail grocery stores generally located
within a 250-mile radius from the Company's warehouse facilities in
Bessemer, Alabama. The Company purchases its grocery products from
approximately 1,200 food and related product vendors. The
percentage of total sales produced by the various departments of
the Company during the last three years is reflected in the
following table:
1995 1994 1993
Dry Groceries....................... 51% 50% 49%
Meats............................... 20% 21% 22%
Produce............................. 5% 5% 5%
Dairy Products...................... 9% 9% 9%
Tobacco Products.................... 6% 6% 7%
Frozen Foods........................ 4% 4% 4%
Health & Beauty Aids................ 3% 3% 3%
Deli................................ 2% 2% 1%
100% 100% 100%
The Company's sales territory consists of parts of Alabama,
Tennessee, Georgia, Mississippi, Florida, and North Carolina. As
of September 30, 1995, the Company distributed to and serviced 214
retail grocery stores. For comparison with sales and operating
profit from previous years, see "Financial Statements."
The Company's inventory turns over approximately once in a 3
week period. Although retail grocery store operators have a right
to return merchandise, the actual percentage of returned
merchandise in the past five years has been negligible. Deliveries
of merchandise are made to the operators by the Company within two
days from the date an order is placed by a fleet of 52 tractors
leased by the company and 109 trailers owned by the Company. The
Company's handling of inventory is consistent with the practice of
the wholesale grocery warehouse industry. All store operators who
purchase from the Company are invoiced for the merchandise at the
time of delivery. Unpaid invoices are reflected in weekly
statements sent to operators which are to be paid within one (1)
week.
The Company is not dependent upon any single customer, the
loss of which would have a material adverse effect on its business.
The Company's largest customer accounts for less than six percent
of the Company's sales.
Patronage Dividends
The Company has a policy approved by the stockholders by which
a patronage dividend is to be accrued to each member-stockholder
from profits exceeding $400,000 from sales to member-stockholders
of the Company. The amount of the patronage dividend
which is accrued to each member-stockholder is the proportion that
the sales from the Company to each member-stockholder bear to the
total sales of the Company to all member-stockholders. The
patronage dividends accrued for the past five years are as follows:
Year Patronage Dividend
1991..................... $2,022,716
1992..................... $2,839,541
1993..................... $2,046,458
1994..................... $3,818,545
1995..................... $4,037,012
The Company's By-laws provide that patronage dividends shall
be paid eight and one-half months after year ends and
50% in promissory notes issued by the Company. These notes bear
interest at an annual rate of 7.5%. Interest only is paid
quarterly and the notes mature 10 years after issuance and are
callable by the Company at any time. Pursuant to the loan
agreement with Compass Bank described in "Properties" below, this
method of payment may not be changed during the term of the loan,
without prior consent of Compass Bank.
With permission from Compass Bank, the 1986, 1987, and 1988
patronage dividend notes have been redeemed ahead of schedule.
Competition
The wholesale food distribution business in which the Company
operates is a highly competitive market. The Company competes
favorably with regional and national wholesales grocery
distributors as well as representatives of individual manufacturing
concerns who sell directly to store operators. There are generally
at least two regional or national distributors in any given
geographical area with whom the Company competes. Because the
sales volume of its competitors for these markets is not known, the
Company is unable to determine accurately its exact rank in the
market. The Company believes that price, credit terms, patronage
dividends, rebates, breadth of selection and services offered in
conjunction with the grocery goods and products are factors in
influencing the retail grocery store operator's selection of a
wholesale distributor. The Company has been successful in
utilizing a combination of these factors to achieve its steady rate
of growth.
Employees
As of July 28, 1995, the Company had approximately 458
employees, of whom 294 are affiliated with the Teamsters
International Local Union No. 612. The Company enjoys excellent
working relations with its employees.
Connection With Piggly Wiggly Corporation
On June 20, 1984, the Company and Piggly Wiggly Corporation
entered into a Stock Purchase and Distributor's Agreement whereby
the Company granted Piggly Wiggly Corporation a first right of
refusal for the purchase of the Company and Piggly Wiggly
Corporation authorized the Company to act as a distributor of
Piggly Wiggly products and to use Piggly Wiggly trademarks, service
marks, copyright, trade names and logos. The Company shall have
such rights unless and until it defaults under the terms and
conditions of the Stock Purchase and Distributor's Agreement. As
of the date hereof, no such default has occurred.
Piggly Wiggly Corporation holds no ownership interest in the
Company and the Company is totally owned by its member-stockholders.
Recent Developments
The Board of Directors approved a plan of expansion in April
1994. Site work on the expansion began in September 1994 with
approximately 130,000 square feet of additional dry grocery space
completed during the fiscal year ended July 28, 1995 at a cost of
approximately $6,335,000. An additional 80,000 square feet of new
freezer space was under construction at fiscal year end with and
accumulated cost of approximately $5,926,400. The new freezer
space was placed in service in September 1995.
ITEM 2 - PROPERTIES
In May, 1988, the Company completed construction and occupied
its office, warehouse and distribution facility on approximately 36
acres in Bessemer, Alabama. The original warehouse consists of
approximately 289,000 square feet of dry goods storage area,
115,290 square feet of perishable and frozen foods storage and
27,000 square feet of general office space. The cost of the
facility was approximately $20 million. In May of 1995, the
Company completed construction and occupied an additional 130,000
square feet of dry grocery space. The addition cost approximately
$6,335,000. An additional 80,000 square feet of freezer space was
completed and placed in service in September of 1995 at a cost of
approximately $5,926,400. The Company also owns an additional
210 acres at the Bessemer site which is being held by the Company
for future development and/or sale.
The office, warehouse and distribution facility, built in 1988,
was financed with Industrial Development Bonds issued by the Industrial
Development Board of the City of Bessemer, Alabama. The Bonds were
sold on May 27, 1987. The transaction has the form of a lease;
however, the economic substance of the lease is that the Company
financed the construction through the lease, and accordingly, the
property and the accompanying debt is recorded in the Company's
assets and liabilities. The lease contains a bargain purchase
option and expires or is cancelable at the debt repayment date.
The lease provides for minimum lease payments sufficient to cover
the debt service and related expenses. The bonds were purchased by
Compass Bank. The original bond indenture had an interest rate of
9.625% until May 1, 1997, at which time the rate was scheduled to
become variable at 3% above the six month treasury bill index. In
September 1994, the indenture was amended to bear interest at a
fixed rate of 8.625%. The amendment allows the Company to prepay
up to $750,000 of principal each year without penalty. There is a
formula redemption fee for prepayments in excess of $750,000
annually prior to April 1, 2002. The loan agreement gives the bond
purchaser a security interest in all the assets of the Company,
except inventory, and places certain restrictions and performance
requirements on the Company for the period of the loan. These
restrictions include a limit of 50% of the patronage dividend being
paid in cash and limits the amount of capital expenditures and
additional debt which may be incurred by the Company.
The Company was in substantial compliance with all
requirements of the loan at July 28, 1995 and as of the date of
this report.
Financing arrangements for the expansion have been negotiated
with Compass Bank whereby $10,000,000 is available
under a three year revolving line of credit at the bank's
prime rate or 175 basis points over LIBOR, whichever is lower. The
line will decline $1,000,000 per year for three years and is
expected to be renegotiated prior to maturity.
ITEM 3 - LEGAL PROCEEDINGS
There are no material legal proceedings against the Company or
its subsidiaries other than ordinary routine litigation incidental
to the business of the Company and its subsidiaries.
ITEM 4 - SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS
Not Applicable
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Because stock ownership is limited to approved retail grocery
store operators, there is no established public trading market for
the Common Stock of the Company.
As of September 30, 1995, there were approximately 180 record
holders of Common Stock.
The Company is authorized to declare and pay regular dividends
on Common Stock, but none have been declared or paid, nor is it
anticipated that any will be paid as long as net profits of the
Company in excess of the approved retainage (which is currently
$400,000 per year) are distributed to member-stockholders through
patronage dividends.
ITEM 6 - SELECTED FINANCIAL DATA
The following sets forth selected financial information of
Piggly Wiggly Alabama Distributing Co., Inc. and Subsidiaries for
the five fiscal periods ended July 28, 1995. The material should
be read in conjunction with the consolidated financial statements
and related notes with respect to the three fiscal periods ended
July 28, 1995.
<TABLE>
<CAPTION>
(Dollar Amounts in thousands, except for per share data)
July 28, July 29, July 30, July 31, July 26,
1995 1994 1993 1992 1991
OPERATIONS
<S> <C> <C> <C> <C> <C>
Net Sales...................... $402,682 $372,223 $353,027 $351,212 $342,402
Cost of Sales.................. 383,008 353,576 333,476 328,716 323,138
Gross Profit on sales........ 19,674 18,647 19,551 22,496 19,264
Purchase discounts............. 5,987 5,502 5,143 5,060 4,861
Other operating income......... 1,900 2,081 1,144 1,321 1,593
Gross Profit................. 27,561 26,230 25,838 28,877 25,718
Selling, general and
administrative expenses...... 19,431 18,059 19,297 21,196 19,111
Depreciation and amortization.. 2,199 2,004 1,992 2,124 1,876
Operating income............. 5,931 6,167 4,549 5,557 4,731
Interest expense............... 1,494 1,949 2,103 2,318 2,308
Income before patronage
dividends.................. 4,437 4,218 2,446 3,239 2,423
Patronage Dividends............ 4,037 3,818 2,046 2,839 2,023
Income before income
taxes...................... 400 400 400 400 400
Income taxes................... 146 145 126 124 136
Net income..................... $ 254 $ 255 $ 274 $ 276 $ 264
</TABLE>
<TABLE>
SUMMARY INCOME STATEMENT DATA:
<CAPTION>
(Dollar Amounts in thousands, except for per share data)
Fiscal Periods Ending
July 28, July 29, July 30, July 31, July 26,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Total Sales $402,682 $372,223 $353,027 $351,212 $342,402
Patronage dividends $ 4,037 $ 3,818 $ 2,046 $ 2,839 $ 2,023
Net Income $ 254 $ 255 $ 274 $ 276 $ 264
Earnings per common
share and common
share equivalent
Primary $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
Fully diluted $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
</TABLE>
<TABLE>
SUMMARY BALANCE SHEET DATA:
<CAPTION>
July 28, July 29, July 30,
1995 1994 1993
<S> <C> <C> <C>
Total Assets $63,874 $54,255 $50,163
Total Liabilities $47,804 $39,327 $36,486
Total Equity $16,073 $14,928 $13,677
</TABLE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Results of Operations
The Company's sales increased 8.2% in 1995, 5.4% in 1994 and
2.4% in 1993. The increases were the result of additional stores
added to the customer base.
Gross profit as a percent of sales was 6.8% in 1995, 7.0% in
1994 and 7.3% in 1993, while operating expenses as a percent of
sales were 5.4% in 1995 and 1994, and 6.0% in 1993.
Operating expenses increased 7.8% in 1995 and decreased
5.8% in 1994 and 7.0% in 1993. The 1995 increase was due largely
to the increase in labor costs. The 1994 and 1993 net
decreases in operating expenses were due to the reduction of
operating expenses at the subsidiary level (they were zero in
1994). Operating expenses at the wholesale level increased 6.2% in
1994 and 6.3% during 1993. These increases were due largely to
increases in employment related expenses. For the fiscal years
1995, 1994 and 1993 employment related expenses averaged 62% of
total operating expenses and 3.3% of sales. These expenses
increased 12.4% in 1995, 7.1% in 1994 and 9.0% in 1993. These
increases were due to increases in retail services to member
customers, the cost of health insurance and other employee
benefits, and increases in sales volume.
Operating income decreased 3.8% in 1995, increased 35.5% in
1994 and decreased 16.6% in 1993. The 1995 decrease was due to the
decline in gross profit and miscellaneous income. The 1994
increase was due to increased sales volume, stabilization of
expenses as a percent of sales and the end of the operation of the
retail subsidiary in 1993. The 1993 changes were due to the
increase in operating expenses discussed above.
The financial expenses of the Company have declined by 23% in
1995. This decline was due to the reduction in long-term debt.
The warehouse facility debt is being reduced on schedule, and an
additional payment of $750,000 was made on the debt in May 1994 and
August 1994. The perishable warehouse mortgage of $399,000 was
paid in January 1993, the patronage dividend notes of $1,072,000
due in 1997 were paid in January 1993, and the patronage dividend
notes of $985,205 due in 1998 and 1999 were paid in December 1993.
The financial expenses will increase as the debt required for the
warehouse expansion begins in 1996.
Because all income in excess of $400,000 is returned to the
member-stockholders as a patronage dividend, once net income has
reached the $400,000 level, it does not change with overall
profitability.
The patronage dividend was 1.00% of sales in 1995, 1.03% of
sales in 1994 and 0.58% of sales in 1993.
Liquidity and Capital Resources
The Company's liquidity need relate primarily to (1) working
capital to support increased levels of inventories and receivables,
and (2) funding of capital expenditures. In recent years, the
Company has met these needs in a number of ways. The construction
of the new warehouse and operating facility was funded with
long-term debt. The portion of capital expenditures for
replacement and additional delivery vehicles are funded through
capital leases. Other capital expenditures have been funded from
cash generated by operations and from member-stockholders'
equalization purchases of Common Stock (each member store is
required to own stock equal in value to 125% of its average weekly
retail sales), except for occasional short-term borrowing to match
cash flow needs. During the last three years such short-term
borrowings have not been necessary. The Company does not
experience significant seasonal fluctuations in demand for working
capital.
It is management's belief that the items in the balance sheet
which most clearly reflect the Company's liquidity condition are
the merchandise inventories, trade accounts receivable and accounts
payable. Merchandise inventories turn approximately 17 times per
year. The majority of trade accounts receivable are paid within 7
days of weekly billing, On the average, all trade accounts
receivable are paid within approximately 10 days. The Company pays
merchandise vendor payables within the period of discount terms.
The average number of days within which accounts payable are paid
is approximately 10. The ratio of merchandise inventory plus trade
accounts receivable to accounts payable is approximately 2 to 1.
The ratio of current assets to current liabilities was 1.1 in 1995,
1.7 in 1994 and 1.8 in 1993.
The Company's Certificate of Incorporation and By-Laws require
that all member-stockholders own Common Stock in the Company equal
in value to 125% of their average weekly retail sales. This
requirement tends to insure that as sales of the member-stockholder
increase at the retail level, the cash equity of the Company will
also increase. This increase in cash equity will provide
additional liquidity to the Company to help expand its assets,
including inventories, to meet the larger retail sales volume of
member stores.
Net additions to property, plant and equipment, other than the
construction and equipping of the new warehouse and delivery
vehicles financed through capital leases, were funded from cash
flow from the Company's operations and from stockholders'
equalization. Additions to property, plant and equipment and
capital lease property were $9,460,286, $1,449,481, and $710,668 in
fiscal years 1995, 1994 and 1993, respectively.
The Company's debt to equity ratio was 1.3 in 1995, 1.4 in
1994 and 1.6 in 1993.
Inflation
Inflation has increased many of the Company's costs and
expenses in recent years, particularly repairs and maintenance and
employment related costs. However, the Company has increased its
gross sales volume during the recent years while improving
efficiency in distribution and administration. Management
estimates that inflation increased expenses during the last three
years by 3% annually.
ITEM 8 - FINANCIAL STATEMENT AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Page
INDEPENDENT AUDITORS' REPORT 1
CONSOLIDATED BALANCE SHEETS - July 28, 1995
and July 29, 1994 2 - 3
CONSOLIDATED STATEMENTS OF INCOME - Years ended
July 28, 1995, July 29, 1994 and July 30, 1993 4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -
Years ended July 28, 1995, July 29, 1994 and
July 30, 1993 5
CONSOLIDATED STATEMENTS OF CASH FLOWS - Years ended
July 28, 1995, July 29, 1994 and July 30, 1993 6 - 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 28, 1995, July 29, 1994 and July 30, 1993 8 - 23
DENT, BAKER & COMPANY
Certified Public Accountants
The Board of Directors
Piggly Wiggly Alabama Distributing Co., Inc.
and Subsidiary
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheets
of Piggly Wiggly Alabama Distributing Co., Inc. and Subsidiary as
of July 28, 1995 and July 29, 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for each
of the three fiscal years in the period ended July 28, 1995. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Piggly Wiggly Alabama Distributing Co., Inc. and
Subsidiary as of July 28, 1995 and July 29, 1994, and the
consolidated results of operations and cash flows for each of the
three fiscal years in the period ended July 28, 1995, in conformity
with generally accepted accounting principles.
September 29, 1995
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
July 28, 1995 and July 29, 1994
<CAPTION>
ASSETS 1995 1994
CURRENT ASSETS
<S> <C> <C>
Cash $ - $ 2,815,253
Short-term investments 110,675 1,142,228
Receivables
Trade accounts 10,426,382 9,152,077
Other 160,494 315,851
Total receivables 10,586,876 9,467,928
Inventories 18,219,615 18,495,239
Prepaid expenses 54,063 196,561
Deferred tax asset 7,700 107,200
Total current assets 28,978,929 32,224,409
NOTES RECEIVABLE 1,273,709 1,471,353
PROPERTY AND EQUIPMENT
At cost net of accumulated
depreciation of $10,453,925
(1994, $9,016,911) 23,043,157 17,710,689
LEASED PROPERTY UNDER CAPITAL LEASES
Net of accumulated amortization
of $504,185 (1994, $1,793,634) 2,806,111 1,110,882
OTHER ASSETS
Construction-in-process 5,926,364 -
Unamortized loan costs 448,332 325,815
Property held for sale or lease 1,397,503 1,412,472
Total other assets 7,772,199 1,738,287
TOTAL ASSETS $63,874,105 $54,255,620
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
CURRENT LIABILITIES
<S> <C> <C>
Checks outstanding - net $ 822,440 $ -
Notes payable 3,115,427 100,000
Current installments on
long-term debt 1,510,259 1,378,220
Current capital lease obligations 529,585 592,316
Accounts payable - trade 16,403,289 14,265,082
Accrued expenses 1,933,105 887,096
Accrued income tax - 15,850
Accrued patronage dividends 2,018,506 1,909,272
Total current liabilities 26,332,611 19,147,836
LONG-TERM DEBT
Notes payable - long-term portion 18,676,376 18,988,133
Capital lease - long-term obligations 2,420,178 900,242
Deferred tax liability -
long-term portion 372,300 291,200
Total long-term debt 21,468,854 20,179,575
Total liabilities 47,801,465 39,327,411
STOCKHOLDERS' EQUITY
Common stock of $.01 par value
per share, authorized 200,000
shares issued 73,236 shares
(1994, 68,999 shares) 732 690
Additional paid-in capital 13,252,912 12,213,162
Common stock purchase deposits 1,006,262 1,031,944
Retained earnings 1,812,734 1,682,413
Total stockholders' equity 16,072,640 14,928,209
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $63,874,105 $54,255,620
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years ended July 28, 1995, July 29, 1994 and July 30, 1993
<CAPTION>
July 28, July 29, July 30,
1995 1994 1993
<S> <C> <C> <C>
Net sales $402,681,846 $372,223,423 $353,027,019
Cost of sales 383,008,376 353,576,278 333,475,534
GROSS PROFIT ON SALES 19,673,470 18,647,145 19,551,485
Purchase discounts 5,986,628 5,501,576 5,142,815
Other operating income 1,900,618 2,081,323 1,143,577
GROSS PROFIT 27,560,716 26,230,044 25,837,877
Selling, general and
administrative expenses 19,431,359 18,058,955 19,296,509
Depreciation and amortization 2,198,542 2,003,648 1,991,625
OPERATING INCOME 5,930,815 6,167,441 4,549,743
Interest expense 1,493,803 1,948,896 2,103,285
INCOME BEFORE PATRONAGE
DIVIDENDS AND INCOME
TAXES 4,437,012 4,218,545 2,446,458
Patronage dividends 4,037,012 3,818,545 2,046,458
INCOME BEFORE INCOME
TAXES 400,000 400,000 400,000
Provision for income taxes 146,307 144,935 125,712
NET INCOME $ 253,693 $ 255,065 $ 274,288
Earnings per common share
and common share equivalent
Primary $ 3.35 $ 3.58 $ 4.10
Fully diluted $ 3.35 $ 3.58 $ 4.10
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended July 28, 1995, July 29, 1994 and July 30, 1993
<CAPTION>
July 28, July 29, July 30,
1995 1994 1993
COMMON STOCK
<S> <C> <C> <C>
Balance, beginning of year $ 690 $ 655 $ 640
Add new issues during the
year 74 63 33
Less redemptions during the
year 32 28 18
Balance, end of year $ 732 $ 690 $ 655
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year $12,213,162 $11,353,721 $10,979,009
Add premiums received on
common stock 1,602,378 1,346,787 704,750
Less refund of premium
received on common
stock redeemed 562,628 487,346 330,038
Balance, end of year $13,252,912 $12,213,162 $11,353,721
COMMON STOCK PURCHASE
DEPOSITS
Balance, beginning of year $ 1,031,944 $ 722,093 $ 360,771
Add cash collections 1,576,770 1,656,701 1,116,105
Less fully paid stock
issued 1,602,452 1,346,850 704,783
Balance, end of year $ 1,006,262 $ 1,031,944 $ 772,093
RETAINED EARNINGS
Balance, beginning of year $ 1,682,413 $ 1,550,784 $ 1,327,231
Add net income 253,693 255,065 274,288
Less excess of purchase price
over issue price of stock
redeemed and cancelled 123,372 123,436 50,735
Balance, end of year $ 1,812,734 $ 1,682,413 $ 1,550,784
TOTAL STOCKHOLDERS' EQUITY $16,072,640 $14,928,209 $13,677,253
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended July 28, 1995, July 29, 1994 and July 30, 1993
<CAPTION>
July 28, July 29, July 30,
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Cash received from customers $ 401,426,825 $ 372,651,848 $ 351,763,657
Cash paid for cost of sales
and inventories (373,618,915) (347,967,323) (327,304,083)
Cash paid to other suppliers
and employees (19,148,064) (17,853,589) (19,284,724)
Cash paid for patronage dividends (1,909,271) (1,023,230) (1,606,313)
Interest received 299,488 240,127 198,632
Interest paid (1,601,379) (1,806,249) (2,103,680)
Income taxes paid (15,850) (163,241) (253,890)
Miscellaneous income received 1,311,533 1,613,363 956,629
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 6,744,367 5,691,706 2,366,228
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
and capital lease equipment (9,054,115) (1,449,481) (710,668)
Construction-in-process (5,926,364) - -
Proceeds from sale of property
and equipment 24,935 806,023 968,814
(Increase) decrease in notes
receivable 353,000 (34,340) (1,422,821)
(Increase) decrease to
short-term investments 1,031,553 (1,142,228) -
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (13,570,991) (1,820,026) (1,164,675)
CASH FLOWS FROM FINANCING ACTIVITIES
Checks outstanding - net 822,440 - -
Proceeds from short-term debt 3,015,427 - -
Proceeds from long-term debt 2,607,880 702,416 -
Debt reduction
Long-term (3,325,114) (2,650,012) (1,990,249)
Collections on common stock
subscriptions 1,576,770 1,606,701 1,116,105
Redemption cost - common stock (686,032) (610,810) (380,791)
Cash paid for early redemption of
patronage dividend notes - (1,144,275) (1,072,282)
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 4,011,371 (2,095,980) (2,327,217)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,815,253) 1,775,700 (1,125,664)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 2,815,253 1,039,553 2,165,217
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ - $ 2,815,253 $ 1,039,553
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Years ended July 28, 1995, July 29, 1994 and July 30, 1993
<CAPTION>
July 28, July 29, July 30,
1995 1994 1993
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income $ 253,693 $ 255,065 $ 274,288
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization of
capital lease property 2,128,535 2,003,648 1,906,194
Amortization 70,006 42,359 55,415
(Gain) loss on sale of property
and equipment (304,606) (183,477) 4,251
Changes in assets and liabilities:
(Increase) decrease in trade
receivables (1,274,305) 384,069 (1,255,929)
(Increase) decrease in inventories 275,624 (2,737,198) 1,933,714
(Increase) decrease in prepaid
expenses 142,498 28,034 68,177
(Increase) decrease in deferred
tax asset 99,500 (34,121) (73,079)
(Increase) decrease in prepaid
income tax - - (121,514)
Increase (decrease) in accounts
payable and accrued expenses 3,184,216 3,136,938 (953,108)
Increase (decrease) in accrued
patronage dividends 109,234 886,043 (396,542)
Increase (decrease) in accrued
income taxes payable (15,850) 4,595 (42,065)
Increase (decrease) in deferred
patronage dividends payable 2,018,507 1,909,272 836,687
Increase (decrease) in deferred
income taxes payable 81,100 11,220 108,480
Increase (decrease) in
deferred compensation payable (23,785) (14,741) 21,259
NET CASH PROVIDED BY OPERATING
ACTIVITIES $6,744,367 $5,691,706 $2,366,228
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</FN>
</TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 28, 1995, July 29, 1994 and July 30, 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is an Alabama corporation that operates as a
wholesale grocery cooperative, which provides wholesale groceries
and grants credit to its stockholders/customers who are retail
grocery operators in Alabama, Tennessee, Georgia, Mississippi,
Florida and North Carolina.
Annually, the Company returns to its stockholders/customers as
a patronage dividend all of its income in excess of an amount
approved by the stockholders to be retained. The patronage
dividend is required to be distributed within an 8 1/2 month period
after the Company's year end. The retainage amount approved by the
stockholders for the years ended July 28, 1995, July 29, 1994 and
July 30, 1993, was $400,000.
As more fully described in Note 11 of the Notes to
Consolidated Financial Statements, the Company acquired the
operating assets and began operation of four retail grocery stores
during the fiscal year ended July 27, 1990. These operating assets
were sold in February 1993 and the Subsidiary was inactive at July
28, 1995 and July 29, 1994.
The fiscal years ended July 28, 1995, July 29, 1994 and July
30, 1993 are composed of 52 weeks.
Basis of Consolidation
The financial statements include the accounts of Piggly Wiggly
Alabama Distributing Co., Inc. and its wholly-owned subsidiary, BLM
Enterprises, Inc. BLM was inactive at July 28, 1995 and July 29,
1994.
Cash and Cash Equivalents
Cash and highly liquid debt instruments purchased with an
original maturity of three months or less are considered to be cash
equivalents.
Bad Debts
Bad debts are charged to expense when deemed uncollectible
under the specific write-off method, which approximates the amount
of bad debts had the reserve method been used.
Inventories
The wholesale inventory is valued at the lower of cost,
last-in, first-out (LIFO) or market. If the first-in, first-out
(FIFO) method of inventory pricing had been used by the Company,
inventory would have been approximately $3,766,000 and $3,762,000
higher than reported at July 28, 1995 and July 29, 1994,
respectively.
Property and Equipment
Property and equipment are recorded at cost. Depreciation on
buildings and improvements is determined under the straight-line
method over the estimated useful life of the buildings, and
substantially all other assets are depreciated under accelerated
and straight-line methods over the estimated useful lives of the
assets.
Estimated useful lives of the assets are as follows:
Buildings and improvements 25 - 35 years
Machinery and equipment 5 - 10 years
Automobiles 3 - 5 years
Amortization of Intangibles and Leased Property Under Capital Leases
Loan costs and origination fees are being amortized on the
straight-line method over the life of the loan. Amortization of
leased property under capital leases is computed under the
straight-line method over the term of the leases.
NOTE 2 - PROPERTY AND EQUIPMENT
A summary of property and equipment and accumulated
depreciation at July 28, 1995 and July 29, 1994 is as follows:
<TABLE>
<CAPTION>
1995
Accumulated
Description Cost Depreciation Net
<S> <C> <C> <C>
Land $ 242,069 $ - $ 242,069
Buildings and improvements 20,543,411 3,374,856 17,168,555
Equipment 12,711,602 7,079,069 5,632,533
Totals $33,497,082 $10,453,925 $23,043,157
</TABLE>
<TABLE>
<CAPTION>
1994
Accumulated
Description Cost Depreciation Net
<S> <C> <C> <C>
Land $ 242,069 $ - $ 242,069
Buildings and improvements 16,125,123 2,883,750 13,241,373
Equipment 10,360,408 6,133,161 4,227,247
Totals $26,727,600 $ 9,016,911 $17,710,689
</TABLE>
Depreciation charged to expense for each of the three fiscal
years included in the period ended July 28, 1995 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Total depreciation $1,512,631 $1,439,280 $1,466,241
</TABLE>
NOTE 3 - DESCRIPTION OF CAPITAL LEASE OBLIGATIONS
The Company leases vehicles used in the delivery of
merchandise. The vehicle leases are generally for 5 years and are
classified as capital leases. The leases are cancelable after one
year at either the lessee's or lessor's option, with 120 days
notification to the other party. The leases require the Company to
purchase the vehicles at a determinable value, but not less than
approximately 20% of original value if the Company cancels the
leases. If the lessor cancels the leases, the Company has the
option of purchasing the vehicles at a determinable value but not
less than approximately 20% of original value. The leasing
arrangement provides for contingent minimum lease payment increases
or decreases based on the annual rise or fall of the automotive
section of the Consumer Price Index, excluding fuel prices.
The following is a schedule by years of future minimum lease
payments under capital leases together with the present value of
the net minimum lease payments as of July 28, 1995.
Year Ending July
1996 $ 1,100,126
1997 1,100,126
1998 1,100,126
1999 1,063,272
2000 854,517
Total minimum lease payments 5,218,167
Less: Amount representing estimated
executory costs and profit
thereon, included in total
minimum lease payments 1,731,373
Less: Amount representing interest 537,031
Present value of net minimum lease
payments $ 2,949,763
The present value of the net minimum lease payments is
included in the financial statements in the following categories:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Current capital lease obligations $ 529,585 $ 592,316
Capital lease - long-term obligations 2,420,178 900,242
Totals $2,949,763 $1,492,558
</TABLE>
Assets carried on the balance sheets under the heading of
leased property under capital leases at July 28, 1995 and July 29,
1994 are summarized as follows:
<TABLE>
<CAPTION>
Class of Property 1995 1994
<S> <C> <C>
Delivery vehicles $3,310,296 $2,904,516
Less: Amortization 504,185 1,793,634
Net leased property under capital leases $2,806,111 $1,110,882
</TABLE>
Amortization charged to expense for each of the three fiscal
years included in the period ended July 28, 1995 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Total amortization $ 619,033 $ 564,368 $ 525,384
</TABLE>
NOTE 4 - COMMON STOCK PURCHASE DEPOSITS
Each stockholder/customer retail operator is required to
purchase and maintain by additional purchases, if necessary, an
amount of stock equal in value to 125% of the operator's average
weekly retail sales. The normal terms of the initial stock
purchase are a minimum 15% down payment with the balance to be paid
by a 1 1/4% addition to weekly purchases from the Company by the
retail operator. Common stock certificates equivalent to the 15%
down payment are issued within ninety (90) days of the down
payment. Additionally, equivalent shares are issued at least
annually for subscription payments received. Common stock purchase
deposits represent amounts paid under subscriptions for shares that
have not yet been issued. There are 15,409 shares under
subscription at July 28, 1995 at an average price of $ 219.09. At
July 29, 1994, 15,333 shares were under subscription at an average
price of $216.24.
Common stock purchase deposits are nonforfeitable by the
operator and are refundable if the operator dies or ceases to do
business with the Company. The Company has the right to offset
these deposits and common stock against amounts due the Company on
termination of membership.
The Certificate of Incorporation grants the Company an
irrevocable option to redeem shares of any stockholder who dies or
ceases to be served by the warehouse. The redemption price for
shares redeemed in this manner is determined annually by the Board
of Directors. The excess of the redemption price over the issue
price for shares redeemed in this manner amounted to $123,372,
$123,436 and $50,735 for the years ended July 28, 1995, July 29,
1994 and July 30, 1993, respectively. The redemption price at July
28, 1995 was $225.04. The redemption price at July 29, 1994 was
$221.94 and at July 30, 1993 the redemption price was $217.99.
NOTE 5 - NOTES PAYABLE AND LONG-TERM DEBT
Notes payable and long-term debt at July 28, 1995 and July 29,
1994 are summarized as follows:
<TABLE>
<CAPTION>
Notes Payable 1995 1994
<S> <C> <C>
Debentures payable $ 3,115,427 $ 100,000
</TABLE>
<TABLE>
<CAPTION>
1995
Current Long-term
Long-Term Debt Portion Debt Total
<S> <C> <C> <C>
Deferred compensation payable $ 31,453 $ 171,585 $ 203,038
Industrial Revenue Bonds 1,478,806 9,931,732 11,410,538
Deferred patronage dividends - 8,573,059 8,573,059
Totals $1,510,259 $18,676,376 $20,186,635
</TABLE>
<TABLE>
<CAPTION>
1994
Current Long-term
Long-Term Debt Portion Debt Total
<S> <C> <C> <C>
Deferred compensation payable $ 34,598 $ 184,513 $ 219,111
Industrial Revenue Bonds 1,343,622 12,054,862 13,398,484
Deferred patronage dividends - 6,748,758 6,748,758
Totals $1,378,220 $18,988,133 $20,366,353
</TABLE>
The Company also has available a $10,000,000 line of credit.
The line bears interest at the bank's prime rate, or an alternative
rate consisting of London Interbank Offering Rate (Libor) plus 1
3/4%. The Company may from time to time elect the Libor Rate for
any portion (multiple of $500,000) or all of the principal balance.
The line and other debts to the Company's lead bank are
cross-collateralized with the Industrial Revenue Bonds and are
secured by substantially all assets of the Company. The bank prime
rate and Libor Rate at July 28, 1995 were 8.75% and 5.88%,
respectively. There were no outstanding draws against this line of
credit at July 28, 1995.
The debentures payable represent short-term loans to the
Company by store operators. The debentures bear interest at
approximately 80% of the bank prime rate. The debentures are
payable on demand; however, there is a partial interest forfeiture
for debentures presented for payment within six months of issue.
The weighted average interest rate on the debentures at July 29,
1995 was approximately 7%.
The deferred compensation payable is the present value
discounted at 10% of an unfunded deferred compensation agreement
with a retired former officer of the Company. The agreement calls
for 10 annual installments of $36,000, commencing January 1, 1994.
The Industrial Revenue Bonds were issued on May 27, 1987, to
finance the construction of a new warehouse, office and
distribution facility. The transaction has the form of a lease,
however, the economic substance of the lease is that the Company is
financing the facility through the lease, and, accordingly, it is
recorded in the Company's assets and liabilities. The lease
contains a bargain purchase option and expires or is cancelable at
the debt repayment date.
The lease provides for minimum lease payments sufficient to
cover the debt service and related expenses. The bonds required
monthly payments of interest only until May 1, 1989, at which time
monthly principal and interest payments of approximately $225,000
began. The original bond indenture had an interest rate of 9.625%
until May 1, 1997, at which time the rate was scheduled to become
variable at 3% above the six month treasury bill index. In
September 1994, the indenture was amended to bear interest at a
fixed rate of 8.625%. The monthly principal and interest payment
is approximately $200,000. The amendment allows the Company to
prepay up to $750,000 of principal each year without penalty.
There is a formula redemption fee for prepayments in excess of
$750,000 annually prior to April 1, 2002.
The bonds are secured by substantially all unencumbered
assets. Additionally, the bonds contain covenants which restrict
the unrelated capital expenditures to $1,000,000 per year on a
cumulative basis over the life of the bonds. The indenture
restricts additional debt, new leases, payment of patronage
dividends, equity levels and the retirement of notes issued as
partial payment of patronage dividends. The indenture requires the
Company to maintain certain financial ratios over the life of the
bonds. At July 28, 1995, and the date of this report, the Company
was in substantial compliance with the bond covenants and
restrictions.
On March 17, 1987, the stockholders approved a plan which
provided for the payment of patronage dividends, 50% in cash and
50% in 10 year 7.5% promissory notes. The deferred patronage
dividends payable represent the portion of the patronage dividends
that were paid in the form of ten year 7.5% promissory notes.
Interest on the notes is paid quarterly. The notes are subordinate
to secured creditors. During the year ended July 29, 1994, the
Company redeemed the 1987 and 1988 deferred patronage dividends
payable amounting to $985,205. During the year ended July 30,
1993, the Company redeemed the 1986 deferred patronage dividends
payable amounting to $1,072,283. There was no gain or loss on the
early redemptions.
The aggregate maturities on the outstanding long-term debt at
July 28, 1995 are as follows:
Year Ending July
1996 $ 1,510,259
1997 1,343,240
1998 1,893,420
1999 2,000,475
2000 2,902,113
Later years 10,537,128
Total $ 20,186,635
NOTE 6 - EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENT
Primary earnings per common share and common share equivalent
were computed by dividing net income by the weighted average number
of shares and share equivalents outstanding during the period.
Fully paid stock subscriptions and stock subscriptions priced below
the current redemption price are considered common stock
equivalents for purposes of computing earnings per common share and
common share equivalent. Proceeds from the assumed purchase of
subscribed shares priced below the current redemption price were
assumed to be used to purchase treasury stock at the current
redemption price. The weighted average number of common shares and
common share equivalents outstanding at July 28, 1995 was 75,598
shares (71,197 shares in fiscal 1994 and 66,935 shares in fiscal
1993). Fully diluted earnings per common share and common share
equivalent are computed as above, except that the issue of common
shares under subscription is assumed to take place at the beginning
of the fiscal year when the result is dilutive.
NOTE 7 - PROFIT SHARING PLAN
The Company has a profit sharing plan which covers
substantially all employees. The amount of contributions, if any,
are determined annually by the Board of Directors. The amount of
contributions to the plan charged to expense for the year ended
July 28, 1995 was $238,000 ($225,000 for the year ended July 29,
1994 and $125,000 for the year ended July 30, 1993). It is the
policy of the Company to fund profit sharing cost accrued.
The Company also has a 401(k) plan available to all full-time
employees who have at least one year of service. The Plan allows
electing participants to contribute up to 15% of their compensation
to the Plan. The Company contributes 25% of the first 5% of
elected contributions. The 401(k) plan year is a calendar year.
Company contributions to the Plan for the years ended July 28, 1995
and July 29, 1994 amounted to approximately $50,000.
NOTE 8 - INCOME TAXES
During the year ended July 30, 1993, the Company and its
subsidiaries adopted Statement of Financial Accounting Standards
Statement No. 109 - Accounting for Income Taxes (SFAS 109). The
Company and its subsidiaries had previously used the liability
method for computing deferred taxes. Under the liability method,
the deferred tax liability is determined based on the difference
between the financial statement and tax basis of assets and
liabilities as measured by the enacted tax rates which are expected
to be in effect when these differences reverse. Adoption of SFAS
109 did not have a material effect on the financial statements and
did not require restatement of the prior periods. Deferred tax
expense is the result of changes in the deferred tax liability.
A reconciliation of the statutory provision for income taxes
to financial reporting is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Pre-tax income from domestic operations $ 400,000 $ 400,000 $ 400,000
Statutory provision $ 136,000 $ 136,000 $ 136,000
Nondeductible expenses 13,270 7,800 4,200
Adjustment of prior years' estimated
liabilities 5,850 - -
Benefit of fuel tax credit (34,293) (26,122) (21,949)
State income taxes net of Federal tax
benefit 11,500 13,200 9,579
Other - net 13,980 14,057 (2,118)
Provision for income taxes $ 146,307 $ 144,935 $ 125,712
</TABLE>
The provision for income taxes is composed of the following:
<TABLE>
<CAPTION>
1995 1994 1993
Current
<S> <C> <C> <C>
Federal $ (34,293) $ 150,265 $ 78,099
State - 17,570 10,495
Total current (34,293) 167,835 88,594
Deferred
Federal 162,800 (20,381) 33,100
State 17,800 (2,519) 4,018
Total deferred 180,600 (22,900) 37,118
Provision for income taxes $ 146,307 $ 144,935 $ 125,712
</TABLE>
Current and deferred tax assets and liabilities are comprised
of the following at July 28, 1995 and July 29, 1994:
<TABLE>
<CAPTION>
1995 1994
Current deferred tax assets
<S> <C> <C>
Unearned marketing promotions $ - $ 102,000
Unrealized decline in asset
values 13,700 38,300
Deferred compensation accruals 11,100 11,800
Total current deferred tax assets 24,800 152,100
Current deferred tax liabilities
Tax over book depreciation (17,100) (44,800)
Other - net - (100)
Total current deferred tax liabilities (17,100) (44,900)
Net current deferred tax assets $ 7,700 $ 107,200
Deferred tax assets
Unearned marketing promotions $ - $ 32,300
Deferred compensation accruals 53,900 62,700
Unrealized decline in asset values - 9,800
Additional cost of inventories for
tax purposes 82,700 87,800
Total deferred tax assets 136,600 192,600
Deferred tax liabilities
Tax over book depreciation (508,900) (483,800)
Net deferred tax liability (372,300) (291,200)
Net $ (364,600) $ (184,000)
</TABLE>
The net deferred tax liability in the accompanying balance
sheet includes the following amounts of deferred tax assets and
liabilities:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax asset - current $ 7,700 $ 107,200
Deferred tax liability (372,300) (291,200)
Net deferred tax liability $ (364,600) $ (184,000)
</TABLE>
NOTE 9 - OPERATING LEASES
The Company has leased several store locations and sub-leased
the store locations to the store operators. The leases expire at
various times through 2013 and most have renewal options for five
to ten years. Several of the leases and sub-leases have contingent
rentals based on store sales above certain levels.
The following is a schedule by years of future minimum rental
payments and minimum sub-lease rentals required under operating
leases described above as of July 28, 1995:
<TABLE>
<CAPTION>
Minimum Net
Minimum Sub-lease (Income)
Year Ending July Rentals Rentals Expense
<C> <C> <C> <C>
1996 $ 2,360,966 $ 2,392,830 $ (31,864)
1997 2,279,876 2,307,686 (27,810)
1998 2,189,277 2,212,557 (23,280)
1999 2,038,600 2,126,166 (87,566)
2000 1,845,351 1,937,619 (92,268)
Remaining years 11,356,822 11,924,663 (567,841)
Totals $ 22,070,892 $ 22,901,521 $ (830,629)
</TABLE>
The following schedule shows the composition of net rental
expense (income) for all operating leases except those with terms
of a month or less that were not renewed.
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Minimum rentals $ 2,258,777 $ 2,387,700 $ 2,044,319
Less: Sub-lease rentals 2,285,532 2,420,901 2,060,695
Net rental expense
(income) $ (26,755) $ (33,201) $ (16,376)
</TABLE>
NOTE 10 - FINANCIAL INSTRUMENTS
Concentrations of Credit Risk
Financial instruments which potentially subject the Company to
significant concentrations of credit risk consist principally of
cash investments and trade accounts receivable.
The Company maintains cash and cash equivalents in various
accounts with a financial institution located in Alabama. Accounts
at the financial institution are insured by the Federal Deposit
Insurance Corporation up to $100,000. At July 28, 1995, and July
29, 1994, the Company's uninsured cash balance totaled
approximately $2,781,900 and $1,908,200, respectively. The Company
performs periodic evaluations of the relative credit standing of
this financial institution as a part of its overall cash investment
strategy.
Concentrations of credit risk with respect to trade accounts
receivable are limited due to the large number of entities
comprising the Company's customer base and the stockholder/customer
relationship.
NOTE 11 - INFORMATION ABOUT SUBSIDIARY
The Company owns 100% of the outstanding common stock of BLM
Enterprises, Inc.
As more fully explained in the following paragraph, during the
fiscal year ended July 30, 1993, the Company sold the operating
assets of its retail subsidiary, BLM Enterprises, Inc. At July 30,
1993, BLM Enterprises, Inc. was inactive.
On October 28, 1992, the Company entered into an agreement to
sell the assets of its retail subsidiary, BLM Enterprises, Inc.
The sale took place over a four month period ending February 1993.
There was no significant gain or loss realized on the sale of the
retail subsidiary's operating assets.
The Subsidiary was inactive for the entire fiscal years ended
July 28, 1995 and July 29, 1994. Included in the consolidated
results of operations for the year ended July 30, 1993 are the
following summarized results of operations for the parent and its
operating subsidiary:
<TABLE>
<CAPTION>
Intercompany
1993 Company BLM Eliminations Consolidated
(Amounts stated in thousands)
<S> <C> <C> <C> <C>
Net sales $ 349,410 $ 9,629 $ (6,012) $ 353,027
Cost of sales 331,276 8,211 (6,012) 333,475
Gross profit
on sales 18,134 1,418 - 19,552
Other operating income 6,243 43 - 6,286
Gross profit 24,377 1,461 - 25,838
Selling, general and
administrative
expenses 18,883 2,405 - 21,288
Operating income
(loss) before
income taxes,
interest and
patronage
dividends 5,494 (944) - 4,550
Interest expense 2,103 - - 2,103
Patronage dividends 2,047 - - 2,047
Provision for income
taxes 126 - - 126
Net income
(loss) $ 1,218 $ (944) $ - $ 274
</TABLE>
NOTE 12 - CONSTRUCTION-IN-PROCESS
The Board of Directors approved a plan of expansion in April
1994. Site work on the expansion began in September 1994 with
approximately 130,000 square feet of additional dry grocery space
completed during the fiscal year ended July 28, 1995 at a cost of
approximately $6,335,000. An additional 80,000 square feet of new
freezer space was under construction at year end with an
accumulated cost of approximately $5,926,400. Approximately
$307,000 of interest was capitalized in connection with the
expansion.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information
concerning the Executive Officers and all Directors of the Company,
including the Directors' beneficial ownership of shares of the
Company's Common Stock and the total share ownership of all
Officers and Directors as a group. None of the Executive Officers
of the Company own any shares of stock in the Company except those
Officers who are also Directors and owners of retail grocery stores
supplied by the Company. Except for the stock subscriptions
required by the Company, no Executive Officers or Directors have
any contracts or agreements under which they may acquire stock in
the Company. All share ownership information is as of
September 28, 1995. All persons listed below have been engaged in
the same or similar occupations for more than the last five years.
All of the Directors are engaged in the operation or retail grocery
stores and purchase grocery products and items from the Company for
resale. All such sales are made at the same price level at which
the remaining stockholders purchase grocery products and items from
the Company. The Directors are not given any price differential or
discount for their service on the Board of Directors. Directors
are elected to a three-year term of office while Officers of the
Corporation are elected to a one-year term of office. The By-Laws
of the Company require Directors to be stockholders of the Company
or hold a minimum of a 25% ownership interest in a corporation,
firm or partnership which owns stock in the Company.
<TABLE>
<CAPTION>
Principal Amount of
Occupation, (1) Common Stock
Expiration Position and Nature of
of with Company Beneficial Percent
Term of and Director- Ownership of
Director Office as ship of Other Common
Name and Age Since Director Companies Direct Indirect Stock
<S> <C> <C> <C> <C> <C> <C>
Julian Gordon (64) 1980 1996 Chairman of the -0- 1,371 (2) 1.8%
Board, Grocery
Store Operator
(former President
of the Company)(2)
James Salmon (67) 1970 1996 Vice Chairman of -0- 2,559 (3) 3.3%
the Board, Director
Grocery Store
Operator(3)
Homer Vinson (62) 1983 1996 Secretary/Treasurer -0- 972 (8) 1.3%
of the Company
Director, Grocery
Store Operator(8)
Mary Hardin (80) 1972 1997 Director, Grocery -0- 5,366 (9) 6.9%
Store Operator(9)
Louis Day (66) 1985 1997 Director, Grocery -0- 1,365(10) 1.7%
Store Operator(10)
J.T. Milligan (60) 1985 1997 Director, Grocery -0- 2,590(11) 3.3%
Store Operator(11)
Billy Huff (60) 1987 1998 Director, Grocery -0- 1,304(12) 1.7%
Store Operator(12)
Stanley Virciglio (61) 1987 1998 Director, Grocery -0- 1,792(13) 2.3%
Store Operator(13)
Syrol McLain (62) 1995 1998 Director, Grocery -0- 1,589(14) 1.6%
Store Operator(14)
D.T. Stewart (50) Not a -- President -0- -0- 0 %
Director Chief Executive
Officer(4)
Louia Moseley (49) Not a -- Senior Vice -0- -0- 0 %
Director President
and MIS Director(5)
Jerry McCann (46) Not a -- Vice President -0- -0- 0 %
Director and Director Retail
Operations(6)
Bobby L. Martin (49) Not a -- Vice President -0- -0- 0 %
Director of Finance and
Controller(7)
Total ownership interest of executive
officers and directors as a group -0- 18,809 24.2%
<FN>
(1) Each Director has been actively involved at the retail level
of the grocery business for at least the last five years.
(2) Julian Gordon shares an investment and voting interest in
Piggly Wiggly of Canton, Mississippi, Inc. and Piggly Wiggly
of Carthage, Inc. which corporations own in the aggregate
1,371 shares of Common Stock of the Company.
(3) James Salmon holds the sole investment and voting interest in
W.E. Salmon, Inc. which owns 2,559 shares of Common Stock of
the Company.
(4) D.T. Stewart, the President and Cheif Executive Officer of the
Company, has been involved actively with the wholesale level
of the grocery business since his employment with the Company
in 1965. He was elected President and Chief Executive Officer
on January 1, 1994, prior to that time served as First Vice
President.
(5) Louia Moseley, the Senior Vice President and MIS Director, has
been involved with the wholesale level of the grocery business
since his employment with the Company in 1965.
(6) Jerry McCann, Vice President and Director Retail Operations,
has been involved with the wholesale level of the grocery
business since his employment with the Company in 1988.
(7) Bobby L. Martin, Vice President of Finance and Controller of
the Company, has been involved with the wholesale level of the
grocery business since his employment with the Company in
1982.
(8) Homer Vinson shares investment and voting interest in Piggly
Wiggly of Red Bay, Inc. which owns in the aggregate of 972
shares of Common Stock of the Company.
(9) The 5,366 shares are owned by Hardin & Company, Inc. Mary G.
Hardin shares investment and voting interest and owns 42% of
the Common Stock of Hardin & Company, Inc., and her daughters,
Mary Lee Hardin and Elizabeth Hardin, each own 29% of the
Common Stock of Hardin & Company, Inc. (See footnotes 1, 2 and
3 on pages 34 and 35).
(10) Louis Day shares investment and voting interest in L.A. Day
Company, Inc. and Piggly Wiggly of Middle Tennessee, Inc.,
which corporations own in the aggregate 1,365 shares of Common
Stock of the Company.
(11) J.T. Milligan holds the sole investment and voting interest in
J.T.M. Corporation and shares investment and voting interest
in South Star Food Corp., which corporations own in the
aggregate 2,590 shares of Common Stock of the Company. The
total of 2,590 shares beneficially owned does not include
shares of Common Stock owned or under subscription by B.G.
Milligan and J. Keith Milligan, Mr. Milligan's sons and Ubagit
Corp., a corporation owned by Mr. Milligan's family, who
collectively own 1,351 shares of Common Stock of the Company.
(12) Billy Huff shares investment and voting interest in The Huff
Corporation, Westco Foods, Inc., B&F Foods, Inc. and Shuqualak
Foods, Inc., which corporations own 1,304 shares of Common
Stock of the Company.
(13) Stanley Virciglio owns the sole investment and voting interest
in Piggly Wiggly Food Stores of Jefferson County, Inc., which
owns 1,792 shares of Common Stock of the Company.
(14) Syrol McLain owns the sole investment and voting interest in
McLain Grocery Co., Inc., Piggly Wiggly of Buchanan, Georgia,
Inc., McLain's Hogansville Grocery Co., Inc. and McLain's
Dillard Grocery, Inc., which owns 1,589 shares of Common
Stock of the Company and currently has 359 shares of Common
Stock of the Company under subscription.
</FN>
</TABLE>
Meetings of the Board of Directors
During the fiscal year ended July 28, 1995, there were nine
meetings of the Board of Directors. Each Director attended more
than 75% of the meetings of the Board.
ITEM 11 - EXECUTIVE COMPENSATION
The Directors of the Company serve without remuneration. The
following table shows the cash compensation paid the Chief Executive
Officer of the company during the fiscal year ended July 28, 1995.
No other executive officer's cash compensation exceeded $100,000 in
the fiscal year ended July 28, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
Other Annual All Other
Name and Salary Bonus Compensation Compensation
Principal Position Year ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
D.T. Stewart
President & Chief
Executive Officer(1) 1995 91,735 15,000
1994 80,875 5,000 - -
J. Terrell Wooten
President & Chief
Executive Officer(1) 1995 - - - -
1994 49,065 0 - -
1993 99,855 5,000 - 25,239(2)
<FN>
(1) J. Terrell Wooten served as President and Chief Executive
Officer for a portion of the fiscal year until his
retirement on December 31, 1993. D.T. Stewart was
elected President and Chief Executive Officer on January
1, 1994 and served as such for the remainder of the
fiscal year ended July 29, 1994.
(2) This amount includes the cash equivalent of a furnished
company car, a contribution to the Company Profit Sharing
Plan and the annual contribution to the Deferred
Compensation Plan referred to below.
</FN>
</TABLE>
Report on Executive Compensation
The Board of Directors determines the compensation of the
Chief Executive Officer (CEO) and other executive officers of the
Company. The Company's executive compensation program consists of
two primary components; base salary and annual bonus. Base salary
is the foundation of executive compensation. Base salaries are
reviewed annually and adjusted, if deemed appropriate. In
determining the compensation of the CEO and other executive
officers, the Board considers a number of factors, including
individual performance and achievement of each of the executive
officers. The Board's approval of such compensation has generally
been based on its subjective analysis of what it considers to be
reasonable and appropriate base salary and bonus for the CEO and
other executive officers taking into consideration their individual
job responsibilities and performance and the financial performance
of the Company during the prior fiscal year.
Deferred Compensation Plan
The Deferred Compensation Plan, as amended, for J. Terrell
Wooten, the former President and Chief Executive Officer of the
Company provides that he will be paid 10 annual payments of $36,000
each beginning in 1994.
Profit Sharing Plan
The Company has maintained a Profit Sharing Plan ("Plan") for
the benefit of all of its employees since December 31, 1976. Employees
become participants of the Plan during the first Plan Year
following their employment date in which they have accrued a
minimum of 1,000 hours of employment service. Annual contributions
are made to the Plan by the Company in amounts determined by the
Board of Directors. All contributions to the Plan are allocated to
the participants' accounts pursuant to a formula based on a
participant's credit units. Participants receive one credit unit
for each $1,000 of annual compensation and two credit units for
each year of service. The Company's annual contribution is
allocated among the participants' accounts in the same proportion
that each participant's credit units bear to the credits units of
all participants for that year. A participant's account vests
after five years. At death, disability or retirement, each
participant or beneficiary is paid the amount in the participant's
account. If the participant's employment is terminated, the
participant's vested account balance may be distributed to the
participant depending on the value of the account and consent of
the participant. Payment may be made in lump sum or in
installments.
401(k) Plan
Effective January 1, 1991, the Company adopted the Piggly Wiggly
Alabama Distributing Co., Inc. 401(k) Plan (the "Plan") pursuant to
Section 401(k) of the Internal Revenue Code. This Plan permits
eligible employees to save a portion of their compensation annually
on a before-tax basis, which are referred to as "Elective
Deferrals". The Company may make a Matching Contribution from year
to year of up to 5% of a participating employee's eligible
compensation. The company is not obligated to make any Matching
Contributions. In addition, the Company may make annual
Discretionary Contributions in amounts as it may choose. The
Company is not obligated to make any Discretionary Contributions.
The Plan provides for distributions in the event of
retirement, death, disability or termination of employment.
Contributions to the Plan which are elected by the
employee ("Elective Deferrals") are 100% vested immediately.
Matching Contributions and Discretionary Contributions made by the
employer vest according to a vesting schedule.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth the names of all persons who
are known by the Company to be beneficial owners of more than five
percent of the Company's stock as of September 28, 1995.
<TABLE>
<CAPTION>
Amount and
Name and Nature of
Title of Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
<S> <C> <C> <C>
Common Mary G. Hardin 5,366(1) 6.9%
P.O. Box 69
Gadsden, AL 35999
Common Elizabeth Hardin 5,366(2) 6.9%
P.O. Box 69
Gadsden, AL 35999
Common Mary Lee Hardin 5,366(3) 6.9%
P.O. Box 69
Gadsden, AL 35999
Common R. Merrill Dobbs 4,134(4) 5.3%
P.O. Box 423
Calhoun, GA 30701
<FN>
(1) The 5,366 shares are owned by Hardin & Company, Inc. Mary G.
Hardin shares investment and voting interest in and owns 42%
of the Common Stock of Hardin & Company, Inc., and her
daughters, Mary Lee Hardin and Elizabeth Hardin, each own 29%
of the Common Stock of Hardin & Company, Inc. (See Footnotes
2 and 3).
(2) The 5,366 shares are owned by Hardin & Company, Inc.
Elizabeth Hardin shares investment and voting interest in and
owns 29% of the Common Stock of Hardin & Company, Inc., and
her sister, Mary Lee Hardin, owns 29% of the Common Stock of
Hardin & Company, Inc., and the remaining 42% is owned by her
mother, Mary G. Hardin (See Footnotes 2 and 3).
(3) The 5,366 shares are owned by Hardin & Company, Inc. Mary Lee
Hardin shares investment and voting interest in and owns 29%
of the Common Stock of Hardin & Company, Inc., and her sister,
Elizabeth Hardin, owns 29% of the Common Stock of Hardin &
Company, Inc., and the remaining 42% is owned by her mother,
Mary G. Hardin (See Footnotes 2 and 3).
(4) R. Merrill Dobbs holds the sole investment and voting interest
in Piggly Wiggly of Calhoun, Inc., T-B Foods, Inc., d/b/a
Piggly Wiggly of Bremen, Piggly Wiggly of Ellijay, Inc.,
Piggly Wiggly of Cleveland, Inc. and Piggly Wiggly of Jasper,
Inc. These companies own a total of 4,134 shares of Common
Stock of the Company.
</FN>
</TABLE>
Security Ownership of Management
The security ownership of Management of the Registrant is set
forth on pages 30 and 31 hereof under the heading "Directors and
Executive Officers of the Registrant."
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) 1. and 2. LIST OF FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES
The following financial statements of Piggly Wiggly
Alabama Distributing Co., Inc. To be included in Item 8
are listed below:
Consolidated Balance Sheets - July 28, 1995 and July 29,
1994
Consolidated Statements of Income - Years ended July 28,
1995, July 29, 1994 and July 30, 1993
Consolidated Statements of Stockholders' Equity - Years
ended July 28, 1995, July 29, 1994, and July 30, 1993
Consolidated Statements of Cash Flows - Years ended July
28, 1995, July 29, 1994 and July 30, 1993
Notes to Consolidated Financial Statements
The following financial statement schedules are included
in Item 14(d):
Schedule V - Property and Equipment
Schedule VI - Accumulated Depreciation
Schedule IX - Short-Term Borrowings
All other schedules are omitted because the information
required is not applicable, or the information is given
in the financial statements and notes thereto.
3. Exhibits:
11 Computation of Earnings Per Share
25 Power of Attorney executed by Julian
Gordon, Louis Day, Mary Hardin, Billy
Huff, James Salmon and Homer Vinson,
members of the Board of Directors,
authorizing D.T. Stewart, President
and Chief Executive Officer,
to execute this 10-K Report.
(b) Report on Form 8-K - The Registrant did not file a Form
8-K report during the last quarter of the period covered
by this report.
(c) Exhibits. See (a)3. above.
(d) Financial Statement Schedules. The response to this
portion of Item 14 is submitted under Item 14.(a) 1. and
2. above.
SIGNATURES
Pursuant to the requirements of the Section 13 or15(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.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
By: /s/ D. T. Stewart October 26, 1995
------------------------- ----------------
D. T. Stewart Date
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Julian Gordon Chairman of the Board October 26, 1995
Julian Gordon*
/s/ D. T. Stewart President and Chief October 26, 1995
D. T. Stewart Executive Officer
/s/ Bobby L. Martin Vice President of October 26, 1995
Bobby L. Martin Finance
/s/ Homer Vinson Secretary, Treasurer October 26, 1995
Homer Vinson* and Director
/s/ Mary Hardin Director October 26, 1995
Mary Hardin*
/s/ Louis Day Director October 26, 1995
Louis Day*
Director October 26, 1995
J. T. Milligan
/s/ Billy Huff Director October 26, 1995
Billy Huff*
Director October 26, 1995
Stanley Virciglio
/s/ James Salmon Vice Chairman of the October 26, 1995
James Salmon* Board and Director
Director October 26, 1995
Syrol McClain
<FN>
*Executed by D. T. Stewart
Pursuant to Power of Attorney
</TABLE>
DENT, BAKER & COMPANY
Certified Public Accountants
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual
Report (Form 10-K) of Piggly Wiggly Alabama Distributing Co., Inc.
of our report dated September 29, 1995, included in the 1995 Annual
Report to Shareholders of Piggly Wiggly Alabama Distributing Co.,
Inc.
Our audit also included the financial statement schedules of
Piggly Wiggly Alabama Distributing Co., Inc. listed in Item 14(a).
These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
We also consent to the incorporation by reference in the
Registration Statement pertaining to Piggly Wiggly Alabama
Distributing Co., Inc., with respect to the consolidated financial
statements incorporated herein by reference, and our report
included in the preceding paragraph with respect to the financial
statement schedules included in the Annual Report (Form 10-K) of
Piggly Wiggly Alabama Distributing Co., Inc.
DENT, BAKER & COMPANY
Birmingham, Alabama
October 26, 1995
<TABLE>
SCHEDULE IX
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. AND SUBSIDIARIES
Short-Term Borrowings
Years ended July 28, 1995, July 29, 1994, and July 30, 1993.
<CAPTION>
Weighted
Maximum Average Average
Weighted Amount Amount Interest
Balance at Average Outstanding Outstanding Rate
End of Interest During the During the During the
Category Period Rate Period Period Period
<S> <C> <C> <C> <C> <C>
At July 30, 1993
Debentures payable $ 100,000 5.40% (a) $ 100,000 (a) $ 100,000 (a) 5.40% (a)
Bank line of credit $ - - % (a) $ - (a) $ - (a) 6.00% (a)
At July 29, 1994
Debentures payable $ 100,000 6.50% (a) $ 100,000 (a) $ 100,000 (a) 5.75% (a)
Bank line of credit $ - - % (a) $ - (a) $ - (a) 7.75% (a)
At July 28, 1995
Debentures payable $ 3,115,427 7.0 % (a) $ 3,115,427 (a) $ 1,607,714 (a) 7.0 % (a)
Bank line of credit $ - - % (a) $ - (a) $ - (a) - % (a)
</TABLE>
The debentures payable represent short-term loans to the
Company by operators. The debentures bear interest at
approximately 80% of the bank's prime rate. The debentures are
payable on demand; however, there is a partial interest forfeiture
for debentures presented for payment within six months of issue.
The interest rate on the debentures at July 28, 1995 was
approximately 7.0%.
The Company also has available a $10,000,000 line of credit.
The line bears interest at the bank's prime rate, or an alternative
rate consisting of London Interbank Offering Rate (Libor) plus 1
3/4%. The Company may from time to time elect the Libor Rate for
any portion (multiple of $500,000) or all of the principal balance.
The line and other debts to the Company's lead bank are cross
collaterlized with the Industrial Revenue Bonds and are secured by
substantially all assets of the Company. The bank prime rate and
Libor Rate at July 28, 1995 were 8.75% and 5.88%, respectively.
There were no outstanding draws against this line of credit at July
28, 1995.
(a) Computed on a month end basis
<TABLE>
SCHEDULE V
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. AND SUBSIDIARIES
Property and Equipment
<CAPTION>
Balance Other
at Changes Balance
Beginning Additions Add at End
Classification of Period at Cost Retirements (Deduct) of Period
<S> <C> <C> <C> <C> <C>
At July 30, 1993
Land $ 365,882 $ - $ - $ - $ 365,882
Buildings and
improvements 17,772,680 - 34,222 - 17,738,458
Equipment 12,300,753 745,698 2,996,427 - 10,050,024
Totals $ 30,439,315 $ 745,698 $ 3,030,649 $ - $ 28,154,364
At July 29, 1994
Land $ 365,882 $ - $ 123,813 $ - $ 242,069
Buildings and
improvements 17,738,458 5,030 1,618,365 - 16,125,123
Equipment 10,050,024 732,058 421,675 - 10,360,407
Totals $ 28,154,364 $ 737,088 $ 2,163,853 $ - $ 26,727,599
At July 28, 1995
Land $ 242,069 $ - $ - $ - $ 242,069
Buildings and
improvements 16,125,123 4,418,288 - - 20,543,411
Equipment 10,360,407 2,444,002 92,808 - 12,711,602
Totals $ 26,727,599 $ 6,862,290 $ 92,808 $ - $ 33,497,082
</TABLE>
The additions for the year ended July 30, 1993 include
approximately $400,000 of normal replacements and approximately
$345,000 of nonrecurring equipment purchases. The retirements for
the year ended July 30, 1993 include a retirement of fully
depreciated equipment no longer used in the wholesale trade with an
original cost of approximately $1,475,000 and the sale of the
retail operating assets with an original cost of approximately
$1,412,000.
The additions for the year ended July 29, 1994 include
approximately $400,000 of normal replacements and approximately
$337,000 of nonrecurring equipment purchases. The retirements for
the year ended July 29, 1994 include the sale of a perishable foods
warehouse and real estate with an original cost of approximately
$1,618,000 and $123,800, respectively.
For the year ended July 28, 1995, the buildings and improvement
additions consist of $3,752,000 for the dry grocery area, $541,000 for
the pallet area and $126,000 for additional office space. The
equipment additions for the year ended include approximately $500,000
of normal replacements and additions and approximately $1,944,000 of
nonrecurring equipment purchases.
A summary of property and equipment and accumulated
depreciation at July 28, 1995 and July 29, 1994 is as follows:
<TABLE>
<CAPTION>
1995
Accumulated
Cost Depreciation Net
<S> <C> <C> <C>
Land $ 242,069 $ - $ 242,069
Buildings and improvements 20,543,411 3,374,856 17,168,555
Equipment 12,711,602 7,079,069 5,632,533
Totals $ 33,497,082 $ 10,453,925 $ 23,043,157
</TABLE>
<TABLE>
<CAPTION>
1994
Accumulated
Cost Depreciation Net
<S> <C> <C> <C>
Land $ 242,069 $ - $ 242,069
Buildings and improvements 16,125,123 2,883,751 13,241,372
Equipment 10,360,407 6,133,161 4,227,246
Totals $ 26,727,599 $ 9,016,912 $ 17,710,687
</TABLE>
Depreciation on buildings and improvements is determined under
the straight-line method over the estimated useful life of the
buildings and improvements. Substantially all other assets are
depreciated under accelerated and straight-line methods over the
estimated useful lives of the assets.
Estimated useful lives of the assets are as follows:
Buildings and improvements 25 - 35 years
Machinery and equipment 5 - 10 years
Automobiles 3 - 5 years
<TABLE>
Capital Lease Property
<CAPTION>
Balance Other
at Changes Balance
Beginning Additions Add at End
Description of Period at Cost Retirements (Deduct) of Period
<S> <C> <C> <C> <C> <C>
At July 30, 1993
Leased property
under capital
leases $ 2,626,932 $ - $ - $ - $ 2,626,932
At July 29, 1994
Leased property
under capital
leases $ 2,626,932 $ 702,416 $ 424,832 $ - $ 2,904,516
At July 28, 1995
Leased property
under capital
leases $ 2,904,516 $ 2,607,880 $ 2,202,100 $ - $ 3,310,296
</TABLE>
Leased property under capital leases, consists of tractors
used for the delivery of merchandise, which are leased generally
for a five year term. The acquisitions during the year ended July
28, 1995 were the result of entering into a new capital lease for
41 tractors during the year. The retirements result from the
expiration of the lease term of 38 tractors.
Assets carried on the balance sheets under the heading of
leased property under capital leases at July 28, 1995 and July 29,
1994 are summarized as follows:
<TABLE>
<CAPTION>
Class of Property 1995 1994
<S> <C> <C>
Delivery vehicles $ 3,310,296 $ 2,904,516
Less: Amortization 504,185 1,793,634
Net leased property under capital leases $ 2,806,111 $ 1,110,882
</TABLE>
Amortization charged to expense for each of the three fiscal
years included in the period ended July 28, 1995 is as follows:
1995 1994 1993
Total amortization $ 619,033 $ 564,368 $ 525,384
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
The following sets forth selected financial information of
Piggly Wiggly Alabama Distributing Co., Inc. and Subsidiaries for
the five fiscal periods ended July 28, 1995. The material should
be read in conjunction with the consolidated financial statements
and related notes with respect to the three fiscal periods ended
July 28, 1995.
<TABLE>
<CAPTION>
Fiscal Periods Ending
(Dollar amounts in thousands, except for per share data)
July 28, July 29, July 30, July 31, July 26,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
FINANCIAL DATA
Depreciation
and
amortization $ 2,129 $ 2,004 $ 1,906 $ 2,125 $ 1,876
Property and
equipment at
cost - net of
accumulated
depreciation $ 23,043 $ 17,711 $ 18,988 $ 20,631 $ 21,624
Leased property
under capital
leases - net
of amorti-
zation $ 2,806 $ 1,111 $ 1,025 $ 1,550 $ 2,076
Long-term debt
excluding
current
installments $ 21,469 $ 20,180 $ 21,567 $ 23,828 $ 24,678
Total assets $ 63,874 $ 54,256 $ 50,163 $ 52,641 $ 51,257
PER SHARE DATA
Net income per
common share
and common
share
equivalent $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
Net income per
common share
and common
assuming full
dilution $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
</TABLE>
<TABLE>
SCHEDULE VI
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. AND SUBSIDIARIES
Accumulated Depreciation
<CAPTION>
Additions
Balance at Charged to Other Balance
Beginning Costs and Charges at End
of Period Expenses Retirements Add (Deduct) of Period
<S> <C> <C> <C> <C> <C>
At July 30, 1993
Buildings and
improvements $ 3,093,793 $ 526,031 $ 36,236 $ - $ 3,583,588
Equipment 6,714,117 940,210 2,071,749 - 5,582,578
Totals $ 9,807,910 $ 1,466,241 $ 2,107,985 $ - $ 9,166,166
At July 29, 1994
Buildings and
improvements $ 3,583,588 $ 502,253 $ 1,202,090 $ - $ 2,883,751
Equipment 5,582,578 937,027 386,444 - 6,133,161
Totals $ 9,166,166 $ 1,439,280 $ 1,588,534 $ - $ 9,016,912
At July 28, 1995
Buildings and
improvements $ 2,883,751 $ 491,105 $ - $ - $ 3,374,856
Equipment 6,133,161 1,021,526 75,618 - 7,079,069
Totals $ 9,016,912 $ 1,512,631 $ 75,618 $ - $ 10,453,025
</TABLE>
<TABLE>
Accumulated Depreciation
Accumulated Amortization - Capital Lease Property
<CAPTION>
Additions
Balance at Charged to Other Balance
Beginning Costs and Charges at End
of Period Expenses Retirements Add (Deduct) of Period
Leased property
under capital
leases - tractors
At July 30, 1993
Accumulated
<S> <C> <C> <C> <C> <C>
amortization $ 1,076,493 $ 525,384 $ - $ - $ 1,601,877
At July 29, 1994
Accumulated
amortization $ 1,601,877 $ 564,368 $ 372,611 $ - $ 1,793,634
At July 28, 1995
Accumulated
amortization $ 1,793,634 $ 619,033 $ 1,908,482 $ - $ 504,185
</TABLE>
INDEX TO EXHIBITS
Exhibit Number Description Page
11 Computation of Earnings Per Share..................
25 Power of Attorney Executed by Homer Vinson, Julian
Gordon, Louis Day, Mary Hardin, Billy Huff, and
James Salmon, members of the Board of Directors
authorizing D. T. Stewart, President and Chief
Executive Officer, to execute this 10K
report..............................................
<TABLE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. AND SUBSIDIARIES
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Common shares outstanding
at end of period 73,236 68,999 65,510 63,954 62,568
Effect of using weighted
average number of
common shares
outstanding (963) (574) (206) 483 734
Effect of common share
equivalents - treasury
stock method 3,456 2,772 1,631 1,141 1,760
Shares used in computing
primary earnings per
share 75,729 71,197 66,935 65,578 65,062
Shares used in computing
fully diluted earnings
per share 75,729 71,197 66,935 65,578 65,062
Net income $ 253,693 $ 255,065 $ 274,288 $ 276,020 $ 264,172
Primary earnings per
common share and
common share
equivalent $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
Fully diluted earnings
per common share
and common share
equivalent $ 3.35 $ 3.58 $ 4.10 $ 4.21 $ 4.06
</TABLE>
EXHIBIT 25
POWER OF ATTORNEY
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JULIAN GORDON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ Julian Gordon
-------------------
JULIAN GORDON
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that JULIAN GORDON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
--------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, LOUIS DAY, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ Louis Day
---------------
LOUIS DAY
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that LOUIS DAY, whose name is signed to the
foregoing Power of Attorney, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the
Power of Attorney, he executed the same voluntarily on the day the
same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
---------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, MARY HARDIN, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ Mary Hardin
-----------------
MARY HARDIN
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that MARY HARDIN, whose name is signed to the
foregoing Power of Attorney, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the
Power of Attorney, he executed the same voluntarily on the day the
same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
---------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, BILLY HUFF, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ Billy Huff
-----------------
BILLY HUFF
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that BILLY HUFF, whose name is signed to the
foregoing Power of Attorney, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the
Power of Attorney, he executed the same voluntarily on the day the
same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
---------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JAMES SALMON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ James Salmon
------------------
JAMES SALMON
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that JAMES SALMON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
---------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HOMER VINSON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign a Form 10-K Annual Report for the fiscal
year ended July 28, 1995, to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and to sign any or all amendments to said 10-K Annual
Report and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, and I grant unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 16th day of October, 1995.
/s/ Homer Vinson
------------------
HOMER VINSON
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Bobby Martin, a Notary Public in and for said County and
State, hereby certify that HOMER VINSON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date.
Given under my hand and official seal, this the 16th day of
October, 1995.
/s/ Bobby Martin
---------------------------
Bobby Martin
NOTARY PUBLIC
My Commission Expires: 7/25/96
