SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20049
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 26, 1996 Commission File Number 33-19645
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Exact name of registrant as specified in its charter)
ALABAMA 63-0393676
(State of Incorporation) (I.R.S. Employer identification No.)
2400 J. Terrell Wooten Drive, Bessemer, Alabama 35020
(Address of principal executive office and zip code)
Registrant's telephone number, including area code (205) 481-2300
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 of
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each for the issuer's class of
common stock, as of the latest practical date.
Class Outstanding at April 26, 1996
Common 77,205
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
INDEX
Part 1. Financial Information
Balance Sheets - April 26, 1996 and July 28, 1995 3-4
Statements of Income - Thirteen weeks and thirty-nine
weeks ended April 26, 1996 and April 28, 1995 5
Statements of Stockholders' Equity - Thirteen weeks
and twenty-six weeks ended April 26, 1996 and
April 28, 1995 6
Statements of Cash Flows - Thirty-nine weeks ended
April 26, 1996 and April 28, 1995 7-8
Notes to Financial Statements 9
Management's Discussion and Analysis of Financial
Conditions and Results of Operations 10
Part II. OTHER INFORMATION
Exhibit 27 11
<TABLE>
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
April 26, 1996
Piggly Wiggly Alabama Distributing Co., Inc. and July 28, 1995
<CAPTION>
Assets April July
Current assets
<S> <C> <C>
Short-term investments $ 10,675 $ 110,675
Receivables
Trade accounts 12,321,883 10,426,382
Other 161,120 160,494
Inventories 21,678,454 18,219,615
Prepaid expenses 175,638 54,063
Advanced taxes 7,700 7,700
Total current assets 34,355,470 28,978,929
Deferred accounts receivable 1,166,448 1,273,710
Property, plant and equipment, at cost
net of accumulated depreciation of
$11,859,722 (1995, $10,453,925) 27,859,139 23,043,157
Leased property under capital leases,
net of amortization of $990,561
(1995, $504,185) 2,384,695 2,806,111
Other assets
Unamortized loan costs 395,827 448,332
Property held for sale or lease 1,397,503 1,397,503
Construction in progress - 5,926,364
Total other assets 1,793,330 7,772,199
Total Assets $67,559,082 $63,874,106
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
April 26, 1996
Piggly Wiggly Alabama Distributing Co., Inc. and July 28, 1995
<CAPTION>
Liabilities and Stockholders' Equity April July
Current liabilities
<S> <C> <C>
Checks outstanding - net $ 2,898,191 $ 822,440
Current installments on long-term
debt 2,182,638 2,039,845
Accounts payable - trade 16,688,611 16,403,289
Accrued income taxes 105,000-
Accrued expenses 981,002 1,933,105
Accrued patronage dividend 1,177,139 2,018,506
Total current liabilities 24,032,581 23,217,185
Long-term debt, excluding current
installments
Notes payable 10,849,102 9,931,732
Notes payable - operators 3,555,431 3,115,427
Capitalized lease obligations 2,047,202 2,420,177
Patronage notes 9,526,181 8,573,059
Deferred compensation 144,354 171,585
Deferred income taxes 372,300 372,300
Total long-term debt 26,494,570 24,584,280
Total liabilities $50,527,151 $47,801,465
Stockholders' equity
Common stock of $.01 par value
per share, authorized 200,000
shares, issued 77,205
(1995, 73,236) shares $ 772 $ 732
Additional paid-in capital 14,208,532 13,252,912
Common stock purchase deposits 912,967 1,006,262
Retained earnings 1,909,660 1,812,734
Total stockholders' equity $17,031,931 $16,072,640
Total liabilities and stock-
holders' equity $67,559,082 $63,874,105
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
<TABLE>
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-nine Weeks Ended
April 26, April 28, April 26, April 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Sales 109,352,941 98,894,843 325,241,260 299,738,691
Cost of sales 103,892,681 93,952,893 309,176,416 284,803,135
Gross profit on sales 5,460,260 4,941,950 16,064,844 14,935,556
Purchase discounts 1,603,442 1,442,542 4,881,771 4,462,168
Other operating income 241,205 708,485 1,270,441 1,838,293
Gross profit 7,304,907 7,092,977 22,217,056 21,236,017
Depreciation & amortization 649,387 526,772 2,040,696 1,580,406
Other operating expenses 5,198,958 4,576,960 16,008,260 14,130,659
Total operating expenses 5,848,345 5,103,732 18,048,956 15,711,065
Operating income 1,456,562 1,989,245 4,168,100 5,524,952
Interest expense 466,438 529,471 1,513,823 1,392,637
Patronage dividends 890,124 1,359,774 2,354,277 3,832,315
Income before income
taxes 100,000 100,000 300,000 300,000
Provision for income
taxes 33,000 32,000 105,000 102,000
Net income 67,000 68,000 195,000 198,000
Earnings per common share
and common share equivalent $ 0.86 $ 0.89 $ 2.49 $ 2.64
Earnings per common share
and common share equivalent -
assuming full dilution $ 0.86 $ 0.89 $ 2.49 $ 2.64
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
<TABLE>
Piggly Wiggly Alabama Distributing Co., Inc.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-nine Weeks Ended
April 26, April 28, April 26, April 28,
1996 1995 1996 1995
Common Stock
<S> <C> <C> <C> <C>
Beginning balance $ 772 $ 721 $ 732 $ 690
New issues 5 4 62 63
Redemptions (5) (3) (22) (31)
Ending balance $ 772 $ 722 $ 772 $ 722
Additional Paid-in
Capital
Beginning balance $14,208,987 $12,986,603 $13,252,912 $12,213,162
Premiums received 106,099 87,877 1,353,329 1,350,279
Refund of premiums
upon redemption (106,554) (63,468) (397,709) (552,429)
Ending balance $14,208,532 $13,011,012 $14,208,532 $13,011,012
Common Stock
Purchase Deposits
Beginning balance $ 654,303 $ 561,478 $ 1,006,262 $ 1,031,944
Cash collections 364,768 355,764 1,260,096 1,147,759
Stock issued (106,104) (87,881) (1,353,391) (1,350,342)
Ending balance $ 912,967 $ 829,361 $ 912,967 $ 829,361
Retained Earnings
Beginning balance $ 1,851,195 $ 1,693,040 $ 1,812,734 $ 1,682,413
Net income 67,000 68,000 195,000 198,000
Excess of stock
redemption price
over purchase price (8,535) (3,999) (98,074) (123,372)
Ending balance $ 1,909,660 $ 1,757,041 $ 1,909,660 $ 1,757,041
Total Stockholders'
equity $17,031,931 $15,598,136 $17,031,931 $15,598,136
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
<TABLE>
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Thirty-nine Weeks Ended
April 26, April 28,
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Received from customers $ 323,348,815 $ 298,770,017
Paid for cost of sales
& inventories (308,445,035) (281,976,945)
Paid to other
suppliers & employees (16,188,915) (14,078,818)
Paid for patronage dividends (2,018,506) (1,909,272)
Interest received 101,499 232,020
Interest paid (1,452,657) (1,416,003)
Income taxes paid - (15,850)
Miscellaneous income received 1,154,790 1,302,784
Net cash provided by
operating activities (3,500,009) 907,933
Cash flows from investing activities:
Purchase of equipment (477,639) (370,933)
Loan costs - (192,523)
New lease - (2,607,880)
Construction in progress - (7,810,129)
Notes receivable - net 106,636 291,314
Decrease in short-term
investments 100,000 1,037,981
Proceeds - sale of property 32,342 18,435
Net cash (used) by
investing activities (238,661) (9,633,735)
Cash flows from financing activities:
Checks outstanding - net 2,075,751 475,744
Proceeds - operator loans 440,004 2,745,000
Proceeds - bank loan 3,000,000 2,000,000
Lease payments (372,975) (440,967)
New capital lease - 2,607,880
Debt reduction - long-term (2,168,401) (1,949,035)
Proceeds from collections
on stock subscriptions 1,260,096 1,147,759
Redemption cost of common stock (495,805) (675,832)
Net cash provided (used) by
financing activities 3,738,670 5,910,549
Net increase (decrease) in
cash and cash equivalents $ -0- $ (2,815,253)
Cash and cash equivalents at
beginning of the period - 2,815,253
Cash and cash equivalents at
end of the period $ -0- $ -0-
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
<TABLE>
Piggly Wiggly Alabama Distributing Co., Inc.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Thirty-nine Weeks Ended
April 26, April 28,
1996 1995
Reconciliation of net income
to net cash provided by
operating activities:
<S> <C> <C>
Net income $ 195,000 $ 198,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation & amortization 2,040,696 1,580,406
Gain on sale of property,
plant & equipment (11,096) (298,492)
Changes in assets and liabilities:
Increase in trade receivables (1,895,503) (973,671)
Increase in inventories (3,458,839) (1,849,630)
(Increase) decrease in
prepaid expense (121,575) 64,543
Increase (decrease) in accounts
payable and accrued expenses (666,781) 201,530
Increase in accrued income
taxes payable 105,000 86,150
Increase in accrued patronage
dividends payable (841,367) 6,885
Increase in deferred patronage
dividends 1,177,139 1,916,158
Decrease in deferred compensa-
tion payable (22,683) (23,946)
Net cash (used) provided by
operating activities $(3,500,009) $ 907,933
<FN>
See accompanying notes to unaudited financial information.
</FN>
</TABLE>
Notes to Quarterly Financial Statements
(UNAUDITED)
April 26, 1996 and April 28, 1995
1. 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 diluted earnings per common share and common
share equivalents were 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.
2. In the opinion of management all adjustments have been made
which are necessary to reflect a fair statement of the results
of operations of the interim periods. These adjustments were
of a normal recurring nature and there were no unusual or
nonrecurring adjustments necessary.
The accounting policies followed by the Company are set forth
in note 1 of the Company's financial statements in the Form
10-K report for the year ended July 28, 1995 which is
incorporated by reference.
3. The results of operations for the thirty-nine weeks ended April
26, 1996 and April 28, 1995 are not necessarily indicative of
the results to be expected for the full year.
4. 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. These
statements include no bad debt expense. Bad debts have not
exceeded 0.01% of sales in any year in the last 5 years.
5. Property held for sale or lease is valued at the lower of cost
or net realizable value; currently that is cost.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - During the fiscal quarters in
1996, cash was used by operating activities due primarily to the
increases in inventory and accounts receivable. During the fiscal
1995 quarters, cash was provided primarily from increases in
deferred patronage dividends.
During the 1996 quarters, the payments for the purchase of
equipment resulted in the use of cash by investing activities.
During the 1995 quarters, the payments for construction of the
warehouse expansion ($7,810,129) resulted in the use of cash by
investing activities. Included in the third quarter of 1995 is the
replacement of 38 tractors in the capital lease. This transaction
totaled approximately $2,600,000.
During the quarters ended April 26, 1996 and April 28, 1995, cash
was used in financing activities to retire long-term debt. Cash
was provided during the fiscal 1996 quarters by the increase in
checks outstanding and the proceeds from the bank loan. In the
third quarter of 1995, a draw on the bank loan of $2,000,000 was
made in order to finance the construction in progress. In the
first quarter of fiscal 1995, an extra payment of $750,000 was made
on the long-term debt. This payment was made under the provisions
of the new loan agreement for this debt without prepayment penalty.
During the 1996 and 1995 quarters, $440,004 and $2,745,000,
respectively, was borrowed from the operators at 80% of the prime
rate. These loans are due on demand. Other sources and uses of
cash in financing activities were the routine sale of stock and
reduction in long-term debt.
Operating Results - During the thirty-nine weeks ended April 26,
1996 compared to the thirty-nine weeks ended April 28, 1995, sales
increased 8.5% ($25,503,000) and gross profits increased 4.6%
($891,000). Sales increased at a greater rate than gross profit
due to decreases in other operating income. Operating expenses
increased 14.9% ($2,338,000) due to largely to the increase of
29.1% ($406,000) in depreciation expense due to the 1995 capital
expenditure and other occupancy costs, predominately utilities.
Due to the above mentioned changes, operating income decreased
24.6% ($1,357,000) and, combined with a 8.7% ($121,000) increase in
interest expense due to the additional long-term debt, resulted in
a 38.6% ($1,478,000) decrease in patronage dividends for the
period.
These trends were also reflected in the thirteen weeks ended April
26, 1996.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports of Form 8-K - There were no reports on form
8-K for the thirty-nine weeks ended April 28, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereto duly authorized.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Registrant)
Dated:
D.T. Stewart, President and Chief
Executive Officer
Dated:
Bobby L. Martin, Vice-President of
Finance and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-26-1996
<PERIOD-END> APR-26-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 12,483
<ALLOWANCES> 0
<INVENTORY> 21,678
<CURRENT-ASSETS> 34,355
<PP&E> 43,094
<DEPRECIATION> 12,850
<TOTAL-ASSETS> 67,559
<CURRENT-LIABILITIES> 24,033
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 17,030
<TOTAL-LIABILITY-AND-EQUITY> 67,559
<SALES> 325,241
<TOTAL-REVENUES> 326,512
<CGS> 304,295
<TOTAL-COSTS> 322,344
<OTHER-EXPENSES> 2,354
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,514
<INCOME-PRETAX> 300
<INCOME-TAX> 105
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 195
<EPS-PRIMARY> 2.49
<EPS-DILUTED> 2.49
</TABLE>
