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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-11556
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UNI-MARTS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 25-1311379
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 East Beaver Avenue, State College, PA 16801-5690
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 234-6000
-----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Common Stock, $.10 Par Value American Stock Exchange
- ------------------------------------- --------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of 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 this Form 10-K or any amendment to this
Form 10-K. [X]
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
----- -----
Aggregate market value of the voting stock which consists solely of shares of
common stock held by non-affiliates of the registrant as of December 1, 1995,
computed by reference to the closing sale price of the registrant's common stock
on such date: $39,872,988
6,377,474 shares of Common Stock were outstanding at December 1, 1995.
This Document Contains 82 Pages.
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Company's Proxy Statement, in connection with the Annual
Meeting of Stockholders expected to be held in February 1996, are
incorporated into Part III.
(2) A portion of the Company's Definitive Proxy Statement for the February
25, 1988 Annual Meeting of Stockholders, filed on January 28, 1988, is
incorporated into Part IV.
(3) Portions of the Company's Current Report on Form 8-K, dated December 20,
1991, are incorporated into Part IV.
(4) A portion of the Company's Annual Report on Form 10-K for the year ended
September 30, 1989, filed on December 27, 1989, is incorporated into Part
IV.
(5) A portion of the Company's Annual Report on Form 10-K for the year ended
September 30, 1990, filed on December 20, 1990, is incorporated into Part
IV.
(6) A portion of the Company's Annual Report on Form 10-K for the year ended
September 30, 1993, filed on December 29, 1993, is incorporated into Part
IV.
(7) Portions of the Company's Annual Report on Form 10-K for the year ended
September 30, 1994, filed on December 23, 1994, is incorporated into Part
IV.
(8) Portions of the Company's Quarterly Report on Form 10-Q for the period
ended April 1, 1993, filed on May 15, 1993, are incorporated into Part
IV.
(9) Portions of the Company's Quarterly Report on Form 10-Q for the period
ended March 30, 1995, filed on May 19, 1995, are incorporated into Part
IV.
(10) A portion of the Company's Registration Statement on Form S-8, File No.
33-9807, filed on July 10, 1991, is incorporated into Part IV.
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PART I
ITEM 1. BUSINESS.
COMPANY OVERVIEW
Since its initial public offering in 1986, when it operated 208 convenience
stores, the Company has expanded, primarily through three major acquisitions of
groups of stores, including the acquisition of 141 stores from Getty Petroleum
Corp. ("Getty") in December 1991. The Company currently operates 414
convenience stores in Pennsylvania, Virginia, New York, New Jersey, Delaware and
Maryland, of which 300 sell gasoline. Following the acquisition of stores from
Getty, the Company closed certain redundant and underperforming stores. Most of
the stores are located in small towns and rural locations where costs of
operations are generally lower than in urban areas. Most Company stores located
in urban and suburban areas have been acquired and are generally leased on a
long-term basis.
The size of the Company's stores ranges from approximately 1,200 to 3,300 square
feet, with newly constructed stores having over 3,000 square feet. Typically,
the stores offer a complete line of over 3,000 popular consumer items. In
addition, the Company offers products designed to increase store traffic, such
as branded fast foods as well as services, including lottery tickets, free check
cashing and automated teller machines ("ATMs"). The Company allows store
management to tailor the merchandise mix to fit the needs of that store's
community. The Company believes that this results in customer loyalty and a
more stable profit margin.
The following table shows the geographic distribution of the Company's stores as
of September 30, 1995:
Company-
operated Franchise Total
-------- --------- -----
Pennsylvania 290 30 320
Virginia 53 1 54
Western New York 24 24
Southern New Jersey 8 8
Delaware 5 5
Maryland 3 3
--- --- ---
375 39 414
=== === ===
The Company commenced its convenience store operations in 1972 and was
incorporated in Delaware in 1977. In 1986, the Company's shares were
distributed in a tax-free spin-off to the holders of the stock of Unico
Corporation, formerly the Company's parent. The Company's executive offices are
located at 477 East Beaver Avenue, State College, Pennsylvania 16801-5690 and
its phone number is (814) 234-6000.
THE CONVENIENCE STORE INDUSTRY
The convenience store industry is a retail service-oriented industry. It is
distinguished from other retail businesses by its emphasis on location and
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convenience and a commitment to customers who need to purchase items quickly at
extended hours. Convenience stores feature a wide variety of items, including
groceries, dairy products, tobacco products, beverages, prepared and self-
service fast foods and health and beauty aids, and many sell gasoline on a self-
service basis. Stores are generally designed with ample customer parking and
quick checkout procedures to maximize convenience, as well as to encourage
impulse buying of high margin items.
The convenience store industry is extremely fragmented. Industry sources report
that there were 93,200 stores in the United States at the end of 1994, of which
the six largest convenience store chains combined for about 9% of the total
stores in operation. Currently, there are many external forces exerting
considerable pressure on owners of independent and small convenience store
chains. Two of the major forces include the need to comply with environmental
regulations for underground storage tanks and the general weakness in the dairy
industry. The large capital expenditures required to comply with environmental
regulations are also affecting many operators of gasoline service stations. As
a result of these forces, there has been and continues to be significant
opportunities for consolidation in the industry.
Recent competitive trends across many retail sectors are having a positive
influence on the convenience store industry as it changes the typical
convenience store's merchandise mix in reaction to market conditions and
customer preferences. In addition, convenience stores compete not only with
other convenience stores but now also with gasoline distributors which have
converted to convenience stores. To compete for a broader customer base,
convenience stores are adding prepared foods, new services and improving store
layouts to attract new customers. Overall, industry sources report that
convenience store industry sales rose 8.5% and 8.7% in 1993 and 1994,
respectively, compared to a 6.3% and 7.8% increase in total U.S. retail sales
for the same periods. As consumer preferences and government regulations put
pressure on tobacco sales, convenience store operators are improving gasoline
pumping facilities and installing branded fast-food outlets and ATMs. In
addition, the convenience store industry has aggressively closed or remodeled
under-performing stores. Over the last two years, the industry has either
constructed, remodeled or closed about a third of the U.S. convenience store
population.
STRATEGY
Management believes that the Company is uniquely positioned to take advantage of
current trends in the convenience store industry. Its strategy is designed to
(i) expand the number of store locations by acquiring chains of convenience
stores and, on a limited basis, through internal growth and (ii) increase
customer traffic, sales volume and profit margins. Key elements of the
Company's strategy include the following:
FOCUS ON RURAL AND SMALL-TOWN LOCATIONS. Most of the Company's stores
are located in small towns and rural locations where costs of operations and
levels of competition are generally lower than in urban and suburban markets.
The Company's stores in these rural markets often serve as the community's
"general store", providing the convenience of one-stop shopping for customers.
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As a result, the Company is able to provide a wide range of services and
products at favorable margins. In addition, there tends to be significantly
less employee turnover at the Company's rural and small-town stores.
MAINTAIN DISCIPLINED EXPANSION PROGRAM. The Company believes that there
are many acquisition opportunities in its current and adjacent geographic market
areas. The Company has had and continues to maintain an expansion program which
has increased the number of convenience stores it operates through acquisitions
of existing chains and construction of new stores. Potential acquisition
candidates are carefully evaluated by the Company. In particular, before
pursuing an acquisition, the Company takes into account whether an acquisition
candidate is in compliance with applicable environmental laws and the level of
capital expenditures required for environmental compliance and to bring the
stores up to the Company's standards.
INSTALL BRANDED FAST-FOOD UNITS. The Company has been actively adding
fast-food units such as Burger King, Arby's and Blimpie to certain stores. The
Company believes that the recognition associated with these names increases foot
traffic and attracts new customers. In those stores that have added branded
fast-food units, merchandise sales have increased approximately 20 to 25
percent, including fast-food sales, and margins have increased approximately
four to five percent. To date, the Company is operating three Burger King
units, five Arby's and 21 Blimpies. Of its current stores, approximately 200
have the potential to profitably support fast-food units. The Company plans to
add 25 to 30 fast-food units per year in its existing and newly constructed
stores.
BUILD HIGH-VOLUME GASOLINE PUMPING STATIONS. The Company has been
replacing its traditional gasoline pumping stations with state-of-the-art,
multi-pump high-volume pumping stations, which include on-pump credit card
readers. The new pumps are spaced farther apart and can dispense all grades of
gasoline at a single pump, thereby enabling several customers to fuel their
automobiles at the same time. Based on the Company's experience to date, the
introduction of these pumping stations has resulted in more than 50 percent
additional gallons of gasoline being sold per store. In addition, the increased
number of gasoline customers served by these new high-volume pumping stations is
expected to generate additional customer traffic and merchandise sales. The
Company has installed twenty high-volume gasoline pumping stations to date and
140 of the Company's current stores have the necessary space for these new high-
volume stations.
ADDITIONAL SERVICES. The Company offers various services at its stores,
including the sale of lottery tickets, free check cashing and payment of utility
bills. In addition, the Company has entered into an agreement to add ATMs to
the Company's stores. The Company anticipates installing at least 155 ATMs to
its stores by early 1997. The Company believes that the addition of these ATMs,
like the addition of branded fast-food installations and high-volume gasoline
pumping stations, will serve to increase merchandise and gasoline sales.
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MERCHANDISING AND MARKETING
The Company's merchandising and marketing programs are designed to promote
convenience through store location, hours of operation, parking, customer
service, product selection and checkout procedures. Store hours are intended to
meet customer needs and the characteristics of the community in which each store
is located. Approximately one-half of the Company's stores are open 24 hours
per day, while the majority of the remaining stores are open from 6:00 a.m. to
12:00 midnight. To alleviate checkout congestion, many of the Company's
products and services, such as certain prepared fast food, fountain beverages
and gasoline, are sold on a self-service basis. Most Company stores provide
parking for customers.
Uni-Marts has a separate merchandising and marketing department which develops
and implements promotional and advertising programs, sometimes in conjunction
with suppliers. Television, radio and newspaper advertisements are used to
promote the Company's name and image. The Company maintains an employee
training program for all employees which emphasizes the importance of service to
customers and the development of merchandising and marketing skills for its
store managers and store personnel.
CONVENIENCE STORE MERCHANIDSE SALES. The Company's stores include dry
grocery items, health and beauty aids, newspapers and magazines, lottery
tickets, dairy products, candy, frozen foods, beverages, tobacco products,
delicatessen foods, fountain drinks and hot coffee. In recent years,
the Company has emphasized new merchandise sales such as prepared foods and
branded fast foods to increase sales volume and customer traffic. In addition,
the Company continues to add customer services, such as ATMs, check cashing,
payment of utility bills and lottery ticket sales, all of which are designed to
increase customer traffic. In addition, some stores offer a video rental
program, as well as a variety of prepared and self-service fast foods, including
freshly made sandwiches, hot dogs, pizza, chicken, freshly baked goods, frozen
sandwiches, nachos and soups.
As part of the Company's strategy to increase branded fast foods, in
fiscal year 1994, the Company entered into an agreement with Blimpie
International ("Blimpie") to become an area developer (franchisor) for Blimpie
Subs and Salads restaurants in Pennsylvania and western New York. During fiscal
year 1995, the Company added Blimpie branded subs and salads installations at 13
of its stores. In addition, in fiscal year 1995, the Company added two Burger
King and three Arby's installations. The Company intends to add more Blimpie,
Burger King, and Arby's fast-food installations.
CONVENIENCE STORE GASOLINE SALES. Convenience store operations and
merchandise sales are enhanced by self-service gasoline facilities, which the
Company plans to include in as many new locations as possible and to add to
existing stores when feasible. Sales of gasoline products at the Company's
stores are affected by wholesale and retail price volatility, competition and
marketing decisions. At September 30, 1995, the Company had 300 locations
offering unleaded gasoline, with 150 of these locations also offering kerosene.
All are branded self-service units with 287 offering Getty gasoline pursuant to
a petroleum supply agreement, and the balance offer other major brands.
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COMPANY OPERATIONS
STORE MANAGEMENT. Each Company-operated store is managed by a store
manager. Store managers are compensated by salary, as well as incentive
compensation programs based on in-store sales volume and profitability. All
Company stores are divided into groups of six to eleven stores by geographic
area. Each group is managed by a store supervisor. A regional manager is
responsible for a number of groups and their store supervisors. The regional
managers report directly to the Director of Operations, who oversees the day-to-
day operations of the stores. Managers, supervisors and regional managers are
compensated through incentive programs which provide for quarterly bonuses based
on increased profitability of the stores. The number of full-time and part-time
employees per store depends on the sales volume of the store and its hours of
operation.
FRANCHISES. The Company has 39 franchised stores which operate under
various franchise agreements. Under all franchise agreements, the franchisee
pays a royalty, which varies depending upon the agreement and whether the
Company or the franchisee owns the convenience food store equipment. The
royalty is based on the store's merchandise sales volume.
As part of its services to 28 franchise locations, the Company provides
accounting services, merchandising and advertising assistance, store layout and
design guidance, supplier and product selection and ongoing operational
assistance. These franchisees are required to use the same internal control
systems that the Company uses for the stores it operates. The Company's
financial statements include the sales and costs of sales of these 28 franchised
stores. The Company does not provide these services for the 11 franchise
locations formerly franchised by Getty. The Company has periodically closed
franchised stores and does not intend to grant new franchises except in
connection with new acquisitions or in other special circumstances.
DISTRIBUTION AND SUPPLY
All 414 stores are serviced at least weekly by vendors. The Company does not
distribute products to its stores itself. In order to minimize costs and
facilitate deliveries, the Company utilizes a single wholesale distributor for
most products, pursuant to a five-year supply agreement. The Company believes
that it could easily replace this distributor with one or more distributors.
Certain products, such as bakery items, dairy products, snacks, soft drinks,
magazines and perishable products, are distributed by wholesale route
salespeople. As part of the sale of its dairy operation, the Company entered
into a 10-year supply agreement with the purchaser which provides for the
Company's purchase of all dairy products sold at its Pennsylvania stores.
In connection with the 1991 acquisition of the Getty stores, the Company and
Getty entered into a five-year gasoline supply agreement pursuant to which Getty
supplies gasoline products to substantially all of the Company's convenience
stores offering self-service gasoline. The Company is currently negotiating an
extension of the petroleum supply agreement with Getty.
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MANAGEMENT CONTROLS AND INFORMATION SYSTEMS
The Company is developing an internal automation system which includes point-of-
sale ("POS") scanning. The system is designed to improve the timeliness and
accuracy of management information, reduce paperwork at the store level and
enhance cash, pricing and inventory controls. As of September 30, 1995,
installation of this new POS scanning system was complete in 14 stores, with
plans to add approximately 35 more during fiscal year 1996.
The Company utilizes its current computer systems for inventory and accounting
control, financial record-keeping and management reporting allowing management
to monitor closely and evaluate store operations. The Company's computer
systems are also programmed to identify variances from budgeted amounts by store
on a monthly and year-to-date basis. In addition, profit and loss statements by
store compare the current year's results for the month and year-to-date to the
previous year's comparable periods.
Store managers are responsible for placing orders for grocery, tobacco, frozen
food and non-food items directly into the central computer system of the
Company's wholesale supplier. The computer systems are programmed to compare
current orders with historic order levels and to reject orders which appear to
be incorrect. Orders and receiving reports are reviewed by store supervisors.
Invoices are reviewed and compared to receiving reports by the Company's
accounting personnel and are paid centrally.
The Company's inventory control system is designed to ensure that stores are
adequately stocked, inventories are maintained at levels which minimize carrying
costs and slow-moving items are identified. As part of the inventory control
system, store management personnel conduct approximately 12 physical inventories
at each store per year. The physical inventory, coupled with the computer
systems, enables the Company to monitor each store's operating performance on a
continuing basis. In addition, the Company's internal audit department conducts
periodic inventories at a sampling of stores and reports the results to the
Audit Committee of the Company's Board.
The Company believes that its automated accounting and inventory control systems
provide the information required for management decisions and expense control.
The Company believes that its existing and planned systems and controls can
accommodate significant expansion in the number of Company stores.
COMPETITION
The convenience store industry is highly competitive, fragmented and
regionalized. It is characterized by a few large companies, some medium-sized
companies, such as the Company, and many small independent companies. Several
competitors are substantially larger and have greater resources than the
Company. The Company's primary competitors include national chains such as A-
Plus Mini-Markets and Seven-Eleven and regional chains such as Sheetz, WaWa,
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Stop-N-Go, Convenient Food Mart, Turkey Hill, Coastal and Co/Go. The Company
also competes with other convenience stores, small supermarkets, grocery stores
and major and independent gasoline distributors who have converted units to
convenience stores.
Competition for gasoline sales is based on price and location. The Company
competes primarily with self-service gasoline stations operated by independent
dealers and major oil companies in addition to other convenience stores.
ENVIRONMENTAL COMPLIANCE AND REGULATION
The Company's gasoline operations are subject to federal, state and local
environmental laws and regulations primarily relating to underground storage
tanks. The United States Environmental Protection Agency (the "EPA") has
established standards for owners and operators of underground storage tanks
("USTs") relating to, among other things: (i) maintaining leak detection
systems; (ii) upgrading UST systems; (iii) implementing corrective action in
response to releases; (iv) closing out-of-use USTs to prevent future releases;
(v) maintaining appropriate records; and (vi) maintaining evidence of financial
responsibility for corrective action and compensating third parties for bodily
injury and property damage resulting from UST releases. All states in which the
Company operates also have adopted these regulatory programs.
Under current federal and certain state regulatory programs, the Company is
obligated to upgrade or replace all non-complying underground storage tanks it
owns or operates to meet corrosion protection and overfill/spill containment
standards by 1998. The Company has evaluated each of its stores which sell
gasoline to determine the type of expenditures required to comply with these and
other requirements under the federal and state UST regulatory programs.
Management believes that the Company is currently in material compliance with
all applicable federal and state laws and regulations. The Company has spent
substantial amounts of money to upgrade all of its underground storage tanks to
meet the applicable standards and requirements and intends to expend $2.8
million over the next three years to maintain compliance. The Company has
adopted a program to ensure that new gasoline installations comply with federal
and state regulations and that existing locations are upgraded if required under
these regulations. For a discussion of the capital expenditures planned for
environmental compliance, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
GOVERNMENTAL REGULATION
In addition to the laws and regulations referred to under "Environmental
Compliance and Regulation," certain aspects of the Company's business are
governed by federal, state and local statutes. As a franchisor, the Company is
also subject to federal and state laws governing franchising, which include,
among other matters, the commencement and termination of franchises.
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Management believes that the Company is currently in material compliance with
all applicable federal and state laws and regulations.
TRADEMARKS
The name "UNI-MART" and the Company's UNI-MART logo were registered with the
U.S. Patent and Trademark Office as of May 31, 1983, and are owned by and
licensed from Uni-Marts of America, Inc., a wholly owned subsidiary of
the Company.
EMPLOYEES
As of September 30, 1995, the Company had approximately 2,800 employees,
approximately 1,250 of which were full-time. The Company believes that its
employee relations are good. None of the Company's employees are covered by a
collective bargaining agreement.
ITEM 2. PROPERTIES.
The following table sets forth certain information with respect to
administrative and storage facilities owned or leased by the Company as of
September 30, 1995:
Type of Square
Location Ownership Footage Use
- -------- --------- ------- ---
State College, PA Leased 25,200 Administrative offices
State College, PA Owned 5,400 Administrative offices
State College, PA Leased 2,800 State Gas & Oil offices
and garages
Oak Hall, PA Leased 14,400 Storage facility
Pittsburgh, PA Leased 3,400 Regional office and
storage facility
Williamsport, PA Leased 1,100 Regional office
Camp Hill, PA Leased 3,700 Regional office and
storage facility
Lancaster, PA Leased 3,000 Regional office and
storage facility
Roanoke, VA Leased 500 Storage facility
The Company's above-referenced leased administrative offices and storage
facility in State College and Oak Hall, PA are leased from HFL Corporation. HFL
Corporation is controlled by Henry D. Sahakian, the Company's Chairman of the
Board and Chief Executive Officer, and his brother, Daniel D. Sahakian, a
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Director of the Company. The State Gas & Oil division offices and garages are
leased from Unico Corporation, which is also controlled by Henry D. Sahakian and
Daniel D. Sahakian.
Of the Company's 414 convenience store locations, 122 are owned by the Company,
12 are leased from affiliated parties and 280 are leased from unaffiliated
parties. Most leases are for initial terms of five to ten years with renewal
terms of five years available at the Company's option. Under most leases, the
Company is responsible for the payment of insurance, taxes and maintenance. Of
the leased locations, 11 are subleased to franchisees. Of the 280 stores leased
from unaffiliated parties, 118 were leased from Getty in December 1991. These
leases expire in December 1996. The Company is currently negotiating with Getty
an extension of these leases. The Company also owns five gasoline service
stations which are leased to unaffiliated operators. As of September 30, 1995,
the Company had no stores under construction.
The Company's store leases expire as follows:
Lease expiration date (1) Number of facilities
------------------------- --------------------
1996 8
1997 124
1998 8
1999 3
2000 and later 149
- --------------------
(1) Most of the Company's leases have one or more renewal options at an
agreed upon rental or fair market rental at the end of their initial
terms. The table assumes the exercise of these renewal options.
The Company has generally renewed its leases prior to their expiration. Where
renewals have not been available or the Company otherwise determines to change
location, the Company generally has been able to locate acceptable alternative
facilities.
The lease for the Company's executive offices in State College, Pennsylvania
expires in December 2000.
Management considers all properties currently in use, owned or leased, to be in
good condition, well maintained and suitable for current operations.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending material legal proceeding. The
Company is self-insured.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
The Company's Common Stock is listed on the American Stock Exchange under the
symbol "UNI." The transfer agent and registrar for shares of the Company's
Common Stock is Chemical Mellon Shareholder Services, L.L.C., Ridgefield Park,
New Jersey. As of December 1, 1995, the Company had 6,377,474 shares of its
Common Stock outstanding.
Set forth below is a table which shows the high and low sale prices as reflected
on the American Stock Exchange and dividends paid on Common Stock for each
quarter in the two most recent fiscal years.
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
1995
- ----
Cash Dividends per share $.0275 $.0275 $.0275 $.0275
Price Range:
High 6 5 7/8 5 9/16 8
Low 4 3/4 5 1/8 5 1/4 5 3/4
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
1994
- ----
Cash Dividends per share $.0250 $.0250 $.0250 $.0250
Price Range:
High 5 1/2 6 1/2 6 1/4 6
Low 4 1/2 5 3/8 5 3/8 4 7/8
Effective January 1995, the Company elected to increase the quarterly dividends
on its Common Stock to the rate of $.0275 per share. However, there is no
assurance of future dividends because they are at the discretion of the
Company's Board of Directors and are dependent on future earnings, capital
requirements and financial condition. In addition, certain debt agreements may
restrict the Company's ability to declare and pay dividends on Common Stock.
The amount of retained earnings available for such dividends at September 30,
1995 was $5,108,200.
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At December 1, 1995, the Company had approximately 460 stockholders of record of
Common Stock. The Company believes that approximately 43 percent of its Common
Stock is held in street or nominee names.
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ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share, per gallon and number of stores data)
The following table of selected consolidated financial data of the Company,
except for Operating Data, has been derived from the financial statements and
related notes of the Company which have been audited by Deloitte & Touche LLP,
Independent Auditors, as indicated in their report relating to the fiscal years
ended 1995, 1994 and 1993, included elsewhere in this report. The data should
be read in conjunction with the financial statements, related notes and other
financial information included elsewhere in this report.
<CAPTION>
Year Ended September 30,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENTS OF EARNINGS DATA:
Sales and other income by the
Company and its franchisees:
Merchandise sales $180,343 $181,331 $185,560 $180,223 $141,082
Gasoline sales 143,690 132,215 130,891 118,833 94,592
Dairy sales 0 10,495 20,328 21,749 20,840
Other income 2,978 2,575 2,597 3,520 1,062
-------- -------- -------- -------- --------
Total 327,011 326,616 339,376 324,325 257,576
Cost of sales 240,164 239,751 249,896 239,007 189,597
-------- -------- -------- -------- --------
Gross profit 86,847 86,865 89,480 85,318 67,979
Selling 64,416 65,904 67,324 65,127 46,971
General and administrative 6,915 6,462 6,889 6,394 6,085
Depreciation and amortization 5,533 5,660 6,667 6,709 6,356
Interest 3,323 3,297 4,061 4,791 4,956
-------- -------- -------- -------- --------
Earnings before income taxes 6,660 5,542 4,539 2,297 3,611
Income taxes 2,506 1,877 1,417 784 1,239
-------- -------- -------- -------- --------
Net earnings $ 4,154 $ 3,665 $ 3,122 $ 1,513 $ 2,372
======== ======== ======== ======== ========
Earnings per share $ .66 $ .54 $ .46 $ .22 $ .34
======== ======== ======== ======== ========
Dividends per share $ .11 $ .10 $ .10 $ .10 $ .45
======== ======== ======== ======== ========
Weighted average shares 6,297 6,813 6,858 6,909 6,954
outstanding ======== ======== ======== ======== ========
</TABLE>
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<TABLE>
<CAPTION>
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OPERATING DATA (CONVENIENCE STORES
ONLY):
Average, per store, for stores
open two full years:
Merchandise sales $ 448 $ 441 $ 426 $ 420 $ 418
Gasoline sales $ 478 $ 433 $ 399 $ 390 $ 429
Gallons of gasoline sold 468 468 436 406 399
Gross profit per gallon
of gasoline $ .132 $ .117 $ .106 $ .108 $ .131
Total gallons of gasoline sold 139,842 139,512 136,820 119,032 83,280
Number of stores open at year end 414 417 444 445 339
Stores added 3 3 2 2 8
Stores added by acquisition 141
Stores closed 6 30 3 37 8
BALANCE SHEET DATA:
Working capital $ 2,330 $ 981 $ 2,923 $ 2,552 $ 3,115
Total assets 95,670 93,036 105,353 104,089 97,035
Long-term obligations 33,343 32,954 40,028 45,781 45,985
Stockholders' equity 32,579 28,803 29,222 26,627 26,005
</TABLE>
15
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company's revenues are derived primarily from sales of merchandise and
gasoline at its 414 convenience stores. In recent years the sale of gasoline
has become an increasingly significant part of the Company's revenues. Gasoline
sales as a percentage of total revenues have increased from 38.5% in fiscal year
1993 to 40.5% in fiscal year 1994 to 43.9% in fiscal year 1995. Average
gasoline sales per store, for stores open two full years, have increased from
approximately $399,000 in fiscal year 1993 to approximately $433,000 in fiscal
year 1994 to approximately $478,000 in fiscal year 1995, largely as a result of
the increase in the selling price per gallon. While the Company expects to sell
more gallons as it implements its strategy of adding high-volume gasoline
pumpers, the price of gasoline can be volatile, and there can be no assurance
that sales of an increased number of gallons will result in higher revenues.
Average merchandise sales per store, for stores open two full years, have
increased from approximately $426,000 in year 1993 to approximately $441,000 in
fiscal year 1994 and approximately $448,000 in fiscal year 1995. This
merchandise sales growth trend is primarily the result of increased sales of
branded fast-food items and the enhancement of in-store traffic building
services, such as lottery tickets, money orders, utility bill collections and
free check cashing. The Company intends to continue to add fast-food units to
its stores as well as other services designed to enhance in-store traffic,
including ATMs. Tobacco sales represented 25.7% and 26.5% of total merchandise
sales in fiscal years 1994 and 1995, respectively. Over the last two fiscal
years, the Company has experienced decreases in cigarettes sold. In addition,
there has been volatility in selling prices as a result of competition among
cigarette manufacturers. Since the Company expects this volatility to
continue, it has sought increased sales of other merchandise to offset the
uncertainty in cigarette sales.
The Company has grown primarily through acquisitions of groups of convenience
stores. In fiscal year 1989, the Company acquired 65 stores from Handy Markets,
Inc. and 23 stores from Foodcraft, Inc. In fiscal year 1992, the Company
consummated an acquisition of 141 convenience stores from Getty. Following
acquisitions, the Company consolidates by closing redundant or underperforming
stores. As part of the Getty acquisition, the Company added 16 franchised
stores, bringing to 50 the total number of franchised stores operated by the
Company. Periodically, the Company has converted franchised stores to Company-
operated locations. In general, the Company does not intend to expand the
number of franchised stores it operates, except in connection with acquisitions
or other special circumstances.
In connection with the Company's strategy to focus on expanding its convenience
stores, the Company made a strategic decision to dispose of its dairy
operation. In April 1994, it consummated the sale of the dairy operation for
approximately $6.4 million. The cash proceeds of the sale were primarily used
for capital expenditures, including remodeling, modernizing stores and adding
branded fast-food units.
16
<PAGE>
Convenience stores selling gasoline have been heavily affected by environmental
regulations principally concerning underground storage tanks, which require
large capital expenditures in order to achieve compliance. In the late 1980s,
the Company made significant expenditures to meet, and exceed, applicable
standards. Management believes that the Company is currently in compliance with
all applicable federal and state environmental laws and regulations and expects
to make minimal expenditures in the future to maintain compliance. In addition,
the Company has adopted a program to ensure that new gasoline installations
comply with federal and state regulations.
17
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of certain expense
items to total revenues. Since the Company's franchise agreements for 28 of the
Company's 39 franchise locations permit the Company to exercise complete control
over the operations of these 28 franchised stores and the Company bears the
attendant risks of ownership, the results of operations include sales and
related cost of sales of stores operated by these franchisees. It should be
noted that the primary factors influencing the percentage relationship of cost
of sales to revenues are the volatility of gasoline prices and the proportional
increase in the number of stores selling gasoline. On a percentage basis, the
gross profit on gasoline sales is significantly less than the gross profit on
merchandise sold in the convenience stores.
Year Ended September 30,
1995 1994 1993
------ ------ ------
Revenues:
Merchandise sales 55.2% 55.5% 54.7%
Gasoline sales 43.9 40.5 38.5
Dairy sales 0.0 3.2 6.0
Other income 0.9 0.8 0.8
----- ----- -----
Total revenues 100.0 100.0 100.0
Cost of sales 73.4 73.4 73.6
----- ----- -----
Gross profit:
Merchandise (as a percentage of
merchandise sales) 36.0 35.4 35.3
Gasoline (as a percentage of
gasoline sales) 13.2 12.9 11.5
Dairy products (as a percentage of
dairy sales) 0.0 29.8 31.4
Total gross profit 26.6 26.6 26.4
Costs and expenses:
Selling 19.7 20.2 19.9
General and administrative 2.1 2.0 2.0
Depreciation and amortization 1.7 1.7 2.0
Interest 1.0 1.0 1.2
----- ----- -----
Total expenses 24.5 24.9 25.1
----- ----- -----
Earnings before income taxes 2.1 1.7 1.3
Income taxes 0.8 0.6 0.4
----- ----- -----
Net earnings 1.3% 1.1% 0.9%
===== ===== =====
18
<PAGE>
FISCAL YEAR 1995 COMPARED TO FISCAL YEAR 1994
The Company opened one new store during fiscal year 1995 and rebuilt two
locations. The Company also closed six locations in fiscal year 1995, including
three franchised locations. Total revenues were $327.0 million in fiscal year
1995 compared to $326.6 million in fiscal year 1994. Fiscal year 1994 revenues
included $10.5 million of dairy sales which were not included in fiscal year
1995 since the Company's dairy operation was sold on April 1, 1994. Exclusive
of dairy sales, total revenues increased 3.4% from fiscal year 1994 to fiscal
year 1995.
Because the Company had fewer stores in operation, merchandise sales decreased
by $987,000, or 0.5%, from $181.3 million in fiscal year 1994 to $180.3 million
in fiscal year 1995. Merchandise sales at comparable stores increased 0.9%.
Gasoline sales increased $11.5 million, or 8.7%, from $132.2 million in fiscal
year 1994 to $143.7 million in fiscal year 1995. The gasoline sales increase is
due primarily to higher retail selling prices per gallon sold.
Gross profits on merchandise sales in fiscal year 1995 were $725,000 higher
compared to fiscal year 1994 due to higher gross profit rates. As a percentage
of merchandise revenues, gross profits increased from 35.4% in fiscal year 1994
to 36.0% in fiscal year 1995, primarily as a result of a differing mix of
merchandise sold, which included higher-margin items such as branded fast food.
Gross profits on gasoline sales increased by $2.0 million, or 11.6%, in fiscal
year 1995 compared to fiscal year 1994 as a result of an increase in gross
profits per gallon sold at the Company's convenience stores, from $0.117 in
fiscal year 1994 to $0.132 in fiscal year 1995, which resulted from favorable
trends in wholesale gasoline price fluctuations. As a percentage of gasoline
revenues, gross profits increased from 12.9% in fiscal year 1994 to 13.2% in
fiscal year 1995.
Other income, consisting primarily of rental income, promotional allowances and
franchise royalties, increased from $2.6 million in fiscal year 1994 to $3.0
million in fiscal year 1995. The increase was primarily due to a higher level
of promotional allowances, which offset decreases in other components of other
income.
Total operational expenses attributable to the Company's dairy operation
decreased from $2.6 million in fiscal year 1994 to no expense in fiscal year
1995. Excluding such expenses, selling expenses in fiscal 1995 of $64.4 million
were $702,000, or 1.1%, higher than fiscal year 1994 selling expenses of $63.7
million. This increase is the result of increased convenience store expenses.
General and administrative expense increased $453,000, or 7.0%, primarily due to
increased employee compensation and incentive programs. Depreciation and
amortization decreased by $127,000, or 2.2%, reflecting the expense reduction
due to the April 1994 dairy sale offset by additional depreciation of
convenience store capital improvements. Interest expense remained relatively
level as lower borrowing levels were offset by higher interest rates.
19
<PAGE>
As a result of the factors mentioned above, earnings before income taxes in
fiscal year 1995 increased by $1.1 million, or 20.2%, from $5.5 million in
fiscal year 1994 to $6.7 million in fiscal year 1995. Income taxes increased by
$629,000 due to higher pre-tax income and a reduced level of tax credits. Net
earnings grew by $489,000 from $3.7 million, or $0.54 per share, in fiscal year
1994 to $4.2 million, or $0.66 per share, in fiscal year 1995.
FISCAL YEAR 1994 COMPARED TO FISCAL YEAR 1993
The Company opened three new stores during fiscal year 1994 and closed 30
underperforming stores, including two franchised locations. In addition, two
franchised locations were converted to Company-operated stores, and one Company-
operated store was converted to a franchised location. In addition, the Company
sold its dairy operation if fiscal year 1994. Total non-dairy revenues in
fiscal year 1994 were $316.1 million compared to $319.0 in fiscal year 1993,
representing a decrease of $2.9 million, or 0.9%.
Due to the Company's closing of underperforming stores in the consolidation
following the Getty acquisition, merchandise sales declined by $4.2 million, or
2.3%, from $185.5 million in fiscal year 1993 to $181.3 million in fiscal year
1994. Merchandise sales at comparable stores remained essentially the same.
Total gasoline sales increased from $130.9 million in fiscal year 1993 to $132.2
million in fiscal year 1994, representing an increase of $1.3 million, or 1.0%,
due to the sale of an additional 2.7 million gallons of gasoline at the
Company's convenience stores.
Gross profits on merchandise sales declined by $1.3 million in fiscal year 1994
compared to 1993 due to lower sales volume resulting from the closing of
underperforming stores in connection with consolidation of the Getty
acquisition. As a percentage of revenues, gross profits on merchandise sales
remained constant from fiscal year 1993 to fiscal year 1994.
Gasoline gross profits increased by $2.0 million, or 13.2%, in fiscal year 1994
due to the sale of additional gallons and an increase in gross profit per gallon
sold at the Company's convenience stores, from $0.106 in fiscal year 1993
to $0.117 in fiscal year 1994, which resulted from favorable trends in wholesale
gasoline price fluctuations. As a percentage of gasoline revenues, gross
profits on gasoline sales increased from 11.5% in fiscal year 1993 to 12.9% in
fiscal year 1994.
Total operational expenses attributable to the Company's dairy operation
decreased from $5.0 million in fiscal year 1993 to $2.6 million in fiscal year
1994 due to the sale of such operation. Excluding such expenses, selling
expenses increased $461,000, or 0.7%, from $63.2 million in fiscal year 1993
compared to $63.7 million in fiscal year 1994, reflecting increased selling
expenses in the convenience store operation. General and administrative
expenses declined by $427,000, or 6.2%, also due primarily to the sale of the
dairy operation. Depreciation and amortization decreased by $1,006,000, or
15.1%, due to various factors including the sale of the dairy operation.
Interest expense declined by $765,000, or 18.8%, as a result of lower borrowing
levels.
20
<PAGE>
Earnings before income taxes in fiscal year 1994 of $5.5 million were higher
than in fiscal year 1993 by $1.0 million, or 22.1%. Income taxes were $460,000
higher in fiscal year 1994 due to higher pre-tax income and an increased
effective tax rate from increased state income taxes and reduced tax credits.
Net earnings increased from $3.1 million, or $0.46 per share, in fiscal year
1993 to $3.7 million, or $0.54 per share, in fiscal year 1994.
SEASONALITY AND QUARTERLY RESULTS
The Company's business has been subject to moderate seasonal influences with
higher sales in the third and fourth fiscal quarters of each year, since
customers tend to purchase more convenience items, such as ice, beverages and
fast food, and more gasoline during the warmer months. Due to adverse weather
conditions, merchandise sales for the second fiscal quarter have generally been
lower than other quarters. However, because of price volatility, gasoline
profit margins fluctuate significantly throughout the year.
The following table represents certain earnings data for the Company for the
last eight fiscal quarters:
<TABLE>
<CAPTION>
(In thousands, except per share data)
Quarter Ended
---------------------------------------------------------------------------------------
Dec. 30, Mar. 31, June 30, Sep. 30, Dec. 29, Mar. 30, June 29, Sep. 30,
1993 1994 1994 1994 1994 1995 1995 1995
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Merchandise sales $44,226 $41,499 $47,632 $47,974 $43,608 $40,163 $46,479 $50,093
Gasoline sales 34,033 29,529 32,200 36,453 35,749 32,299 37,049 38,593
Dairy sales 5,193 5,302 0 0 0 0 0 0
Other income 694 400 631 850 547 689 1,398 344
------- ------- ------- ------- ------- ------- ------- -------
Total revenues 84,146 76,730 80,463 85,277 79,904 73,151 84,926 89,030
Cost of sales 61,279 55,552 59,927 62,993 58,421 52,645 63,176 65,922
------- ------- ------- ------- ------- ------- ------- -------
Gross profit 22,867 21,178 20,536 22,284 21,483 20,506 21,750 23,108
Costs and expenses:
Selling 16,910 16,708 15,920 16,366 15,628 15,783 16,444 16,561
General &
administrative 1,694 1,716 1,515 1,537 1,631 1,638 1,831 1,815
Depreciation &
amortization 1,530 1,476 1,328 1,326 1,337 1,346 1,386 1,464
Interest 859 816 792 830 787 833 796 907
------- ------- ------- ------- ------- ------- ------- -------
Earnings before income
taxes 1,874 462 981 2,225 2,100 906 1,293 2,361
Income taxes 657 (7) 287 940 756 345 500 905
------- ------- ------- ------- ------- ------- ------- -------
Net earnings $ 1,217 $ 469 $ 694 $ 1,285 $ 1,344 $ 561 $ 793 $ 1,456
======= ======= ======= ======= ======= ======= ======= =======
Earnings per share $ 0.18 $ 0.07 $ 0.10 $ 0.19 $ 0.21 $ 0.09 $ 0.13 $ 0.23
======= ======= ======= ======= ======= ======= ======= =======
Weighted average
shares outstanding 6,891 6,908 6,814 6,643 6,279 6,291 6,303 6,316
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
21
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $10.8 million for the year ended
September 30, 1995, as compared to $9.1 million for fiscal year 1994. The
increase was principally due to higher net income in 1995.
Net cash used in investing activities was $8.3 million for fiscal year 1995 as
compared to $1.0 million for fiscal year 1994. The Company used the proceeds of
the sale of the dairy operation for remodeling, modernizing stores and adding
branded fast-food units. Purchases of property, equipment and improvements,
consisting primarily of remodeling existing stores and purchasing new land, were
$8.6 million in fiscal year 1995 and $5.1 million in fiscal year 1994. Cash
flows from investing activities in fiscal year 1994 included the sale of the
dairy operation.
Net cash used by financing activities was $3.7 million in fiscal year 1995 as
compared to $9.4 million in fiscal year 1994, principally representing principal
payments on debt and the purchase of treasury stock in fiscal year 1994.
Most of the Company's sales are for cash and its inventory turns over rapidly.
As a result, the Company's daily operations do not require large amounts of
working capital. The Company has budgeted approximately $17 million in fiscal
year 1996 for capital expenditures, including construction of new stores, and
environmental compliance and anticipates debt and capital lease payments of
approximately $3.4 million in fiscal year 1996. The Company believes that the
cost of constructing a prototypical store is approximately $500,000, although
additional costs to acquire land may vary considerably.
On December 26, 1995, the Company signed an agreement with its bank group to
borrow $10 million on an interest-only basis for a period of three years.
Proceeds from the loan will be used to complete major remodels, including adding
branded fast-food units to existing stores, upgrading gasoline dispensing
facilities to high-volume pumping units, and new store construction. In
addition, the Company has available $14.8 million under existing credit
agreements at September 30, 1995, including the $10.0 million loan. The Company
anticipates that cash presently available and cash generated from operations
will be sufficient to fulfill its cash requirements in fiscal year 1996 and for
the foreseeable future.
IMPACT OF INFLATION
The Company believes that inflation has not had a material effect on its results
of operations in recent years. Generally, increases in the Company's cost of
merchandise can be quickly reflected in higher prices of goods sold. However,
upward movement of gasoline costs may have short-term negative effects on profit
margins, since the Company's ability to raise gasoline prices can be limited by
competition from other self-service gasoline outlets. In addition, fluctuation
of gasoline prices can limit the ability of the Company to maintain stable gross
margins.
22
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Stockholders
Uni-Marts, Inc.
State College, Pennsylvania
We have audited the accompanying consolidated balance sheets of Uni-Marts, Inc.
and subsidiaries, (the "Company"), as of September 30, 1995 and 1994, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for each of the three years in the period ended September 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Uni-Marts, Inc. and subsidiaries as
of September 30, 1995 and 1994, and the results of their operations and their
cash flows for each of three years in the period ended September 30, 1995, in
conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
October 23, 1995
(December 26, 1995, as to Note M)
23
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<CAPTION>
September 30,
1995 1994
------------ ------------
A S S E T S
-----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 7,325,513 $ 8,533,265
Marketable equity securities (at market in
1995, cost $483,800; at cost in 1994,
market $582,900) 434,508 572,166
Accounts receivable - less allowances of
$123,800 and $582,100 2,411,984 2,168,649
Inventories 15,564,752 15,108,457
Prepaid expenses and other 2,449,354 2,019,255
----------- -----------
TOTAL CURRENT ASSETS 28,186,111 28,401,792
PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation
and amortization of $37,414,200 and
$32,956,200 60,258,913 56,883,848
NET INTANGIBLE AND OTHER ASSETS 7,224,839 7,750,798
----------- -----------
TOTAL ASSETS $95,669,863 $93,036,438
=========== ===========
</TABLE>
24
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Continued)
<CAPTION>
September 30,
1995 1994
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $15,915,088 $14,440,175
Accrued expenses 6,560,360 6,030,584
Current maturities of long-term debt 3,272,958 6,851,260
Current obligations under capital leases 108,053 98,864
----------- -----------
TOTAL CURRENT LIABILITIES 25,856,459 27,420,883
LONG-TERM DEBT, less current maturities 32,616,236 32,121,021
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 726,545 833,400
DEFERRED TAXES 2,876,400 2,806,800
DEFERRED INCOME AND OTHER LIABILITIES 1,015,521 1,051,311
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, par value $.10 a share:
Authorized 15,000,000 shares
Issued 7,042,886 and 6,996,498
shares, respectively 704,289 699,650
Additional paid-in capital 23,134,580 22,897,804
Retained earnings 12,494,863 9,035,050
----------- -----------
36,333,732 32,632,504
Less treasury stock, at cost - 697,421
and 722,238 shares of Common Stock,
respectively ( 3,755,030) ( 3,829,481)
----------- -----------
32,578,702 28,803,023
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $95,669,863 $93,036,438
=========== ===========
</TABLE>
See notes to consolidated financial statements
25
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
-----------------------------------
<CAPTION>
Year Ended September 30,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Merchandise sales $180,343,639 $181,330,700 $185,559,721
Gasoline sales 143,689,680 132,215,444 130,891,466
Dairy sales 0 10,494,832 20,327,614
Other income 2,978,052 2,574,932 2,596,949
------------ ------------ ------------
327,011,371 326,615,908 339,375,750
------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 240,164,720 239,750,829 249,895,796
Selling 64,416,108 65,904,333 67,324,304
General and administrative 6,915,288 6,462,162 6,888,880
Depreciation and amortization 5,532,744 5,659,881 6,666,233
Interest 3,322,550 3,296,480 4,061,374
------------ ------------ ------------
320,351,410 321,073,685 334,836,587
------------ ------------ ------------
EARNINGS BEFORE INCOME TAXES 6,659,961 5,542,223 4,539,163
INCOME TAXES 2,506,200 1,877,100 1,417,000
------------ ------------ ------------
NET EARNINGS $ 4,153,761 $ 3,665,123 $ 3,122,163
============ ============ ============
EARNINGS PER SHARE $.66 $.54 $.46
==== ==== ====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,297,362 6,813,408 6,857,757
========= ========= =========
</TABLE>
See notes to consolidated financial statements
26
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------
<CAPTION>
Common Stock
Par Value $.10
a share
Authorized 15,000,000 Additional
Shares Paid-in Retained Treasury Stock
Shares Amount Capital Earnings Shares Amount
--------- -------- ----------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance - October 1, 1992 6,963,498 $696,350 $22,737,345 $ 3,607,071 126,649 ($ 413,676)
Issuance of common stock 10,000 1,000 20,543 ( 34,600) 137,528
Net earnings 3,122,163
Dividends ($.10 per share) ( 686,345)
--------- -------- ----------- ----------- ------- ----------
Balance - September 30, 1993 6,973,498 697,350 22,757,888 6,042,889 92,049 ( 276,148)
Purchase of treasury stock 661,670 ( 3,647,779)
Issuance of common stock 23,000 2,300 139,916 ( 31,481) 94,446
Net earnings 3,665,123
Dividends ($.10 per share) ( 672,962)
--------- -------- ----------- ----------- ------- ----------
Balance - September 30, 1994 6,996,498 699,650 22,897,804 9,035,050 722,238 ( 3,829,481)
Issuance of common stock 46,388 4,639 236,776 ( 24,817) 74,451
Net earnings 4,153,761
Dividends ($.11 per share) ( 693,948)
--------- -------- ----------- ----------- ------- ----------
Balance - September 30, 1995 7,042,886 $704,289 $23,134,580 $12,494,863 697,421 ($3,755,030)
========= ======== =========== =========== ======= ==========
</TABLE>
See notes to consolidated financial statements
27
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<CAPTION>
Year Ended September 30,
1995 1994 1993
------------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $326,516,241 $328,770,047 $338,285,238
Cash paid to suppliers and employees ( 309,676,039) ( 314,018,227) ( 318,989,824)
Net receipts for sales and purchases
of trading equity securities 45,267
Dividends and interest received 112,393 235,198 222,913
Interest paid ( 3,258,761) ( 3,342,457) ( 4,284,126)
Income taxes paid ( 2,862,500) ( 2,488,500) ( 2,532,000)
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 10,876,601 9,156,061 12,702,201
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from sale of capital assets 297,939 4,195,118 217,931
Purchase of property, equipment and
improvements ( 8,637,466) ( 5,112,481) ( 2,188,287)
Net receipts (payments) for sales and
purchases of marketable securities 231,849 ( 115,544)
Additional borrowing - note receivable
from officer ( 72,495)
Cash advanced for intangible and
other assets ( 260,965) ( 368,112) ( 349,987)
Cash received for intangible and
other assets 250,112 47,960 16,976
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES ( 8,350,380) ( 1,005,666) ( 2,491,406)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit
agreement 2,000,000
Additional long-term borrowings 250,000 21,388,981
Principal payments on debt ( 3,430,753) ( 7,100,539) ( 26,106,880)
Purchases of treasury stock ( 1,684,734)
Proceeds from issuance of common stock 140,728 62,000 26,562
Dividends paid to stockholders ( 693,948) ( 672,962) ( 686,345)
------------ ------------ ------------
NET CASH USED BY FINANCING ACTIVITIES ( 3,733,973) ( 9,396,235) ( 3,377,682)
------------ ------------ ------------
NET (DECREASE) INCREASE IN CASH ( 1,207,752) ( 1,245,840) 6,833,113
CASH AT BEGINNING OF PERIOD 8,533,265 9,779,105 2,945,992
------------ ------------ ------------
CASH AT END OF PERIOD $ 7,325,513 $ 8,533,265 $ 9,779,105
============ ============ ============
</TABLE>
28
<PAGE>
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Continued)
<CAPTION>
Year Ended September 30,
1995 1994 1993
----------- ---------- -----------
<S> <C> <C> <C>
RECONCILIATION OF NET EARNINGS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
NET EARNINGS $ 4,153,761 $3,665,123 $ 3,122,163
ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 5,532,744 5,659,881 6,666,233
Net unrealized holding loss on trading
securities 49,251
Gain on sale of marketable securities ( 120,515) ( 33,425)
Loss on sale of capital assets and other 143,668 280,651 213,159
Change in assets and liabilities:
(Increase) decrease in:
Marketable equity securities 88,407
Accounts receivable ( 243,335) 2,594,958 ( 653,018)
Inventories ( 456,295) 1,413,586 1,934,046
Prepaid expenses ( 4,199) 499,954 613,522
Increase (decrease) in:
Accounts payable and accrued expenses 2,004,689 ( 4,114,311) 1,991,584
Deferred income taxes and other
liabilities ( 392,090) ( 723,266) ( 1,152,063)
----------- ---------- -----------
TOTAL ADJUSTMENTS TO NET EARNINGS 6,722,840 5,490,938 9,580,038
----------- ---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $10,876,601 $9,156,061 $12,702,201
=========== ========== ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
During fiscal 1994, the Company accepted $1,308,000 worth of the Company's
Common Stock as repayment of a note receivable from an officer. (See Note G)
See notes to consolidated financial statements
29
<PAGE>
UNI-MARTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
The Company is an independent operator of convenience stores located in
Pennsylvania, Virginia, New York, New Jersey, Delaware and Maryland.
(1) Principles of Consolidation -- The consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries. All material intercompany balances and transactions
have been eliminated.
(2) Marketable Equity Securities -- The Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," ("SFAS 115") effective
October 1, 1994. SFAS 115 requires the Company to account for debt
and equity securities based on the classification into one of three
categories: held-to-maturity, available-for-sale, or trading.
Securities that are bought and held principally for the purpose of
selling them in the near term are classified as trading securities.
All securities held by the Company are classified as trading.
These securities are carried at their market value which was
specifically identified using published quotes as of the last day
of business on September 30, 1995. Unrealized holding losses for
trading securities of $30,800, net of taxes of $18,500, are
included in earnings.
(3) Inventories -- The Company values its merchandise inventories at
the lower of cost (first-in, first-out method) or market, as
determined by the retail inventory method. Gasoline inventories
are valued at the lower of cost (first-in, first-out method) or
market.
(4) Property, Equipment and Improvements -- Depreciation and
amortization are calculated using the straight-line method over the
useful lives of the related assets. Amortization of improvements
to leased properties is based on the remaining terms of the leases
or the estimated useful lives of such improvements, whichever is
shorter.
30
<PAGE>
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
------------------------------------------------------
(5) Intangible and Other Assets -- Intangible and other assets consist
of the following:
September 30,
1995 1994
----------- -----------
Goodwill $ 6,498,671 $ 6,498,671
Lease acquisition costs 1,639,505 1,674,483
Non-competition agreements 1,213,040 1,213,040
Other 1,694,767 1,647,520
----------- -----------
11,045,983 11,033,714
Less accumulated amortization 3,821,144 3,282,916
----------- -----------
$ 7,224,839 $ 7,750,798
=========== ===========
Goodwill represents the excess of costs over the fair value of net
assets acquired in business combinations and is amortized on a
straight-line basis over periods of 5 to 40 years. Lease
acquisition costs are the bargain element of acquired leases and
are being amortized on a straight-line basis over the related lease
terms. Non-competition agreements are amortized over the terms of
the particular agreements. It is the Company's policy to
periodically review and evaluate the recoverability of the
intangible assets by assessing current and future profitability and
cash flows and to determine whether the amortization of the
balances over their remaining lives can be recovered through
expected future results and cash flows.
(6) Self-Insurance Reserves -- The Company assumes the risks for
general liability and workers' compensation insurance exposures
up to certain loss thresholds set forth in separate insurance
contracts. In fiscal 1994, the Company had assumed risks for
health insurance exposures; however, on May 1, 1995, the Company
entered into a commercial contract transferring the risks of its
health insurance exposure to a third party. The Company has
established self-insurance reserves for these risks using actuarial
valuations provided by independent companies which are recorded on
a present value basis. At September 30, 1995 and 1994, the Company
had self-insurance reserves totaling $2,705,600 and $2,068,200,
respectively.
(7) Income Taxes -- The Company accounts for income taxes under the
provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," ("SFAS 109"). SFAS 109 requires the
Company to compute deferred taxes on the difference between the
financial statement and tax basis of assets and liabilities using
enacted rates.
31
<PAGE>
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
------------------------------------------------------
(8) Operations -- The Company operates 414 convenience stores, 39 of
which are operated by franchisees (46 in 1994 and 49 in 1993).
During fiscal 1995, the results of operations include sales and
costs of sales of 28 of these franchisees for which the Company
exercises complete control and bears the attendant risks of
ownership (33 in 1994 and 35 in 1993). Net sales of stores
operated by these franchisees were $13,057,200 (1995), $14,163,600
(1994) and $15,286,800 (1993).
(9) Earnings Per Share -- Earnings per share are calculated based on
the weighted average number of shares of common stock outstanding.
Common stock equivalents were not considered in the computation of
earnings per share as the effect was not significant to the
Company.
(10) Reclassifications -- Certain reclassifications have been made to
the 1994 and 1993 financial statements to conform to the
classifications used in 1995.
B. PROPERTY, EQUIPMENT AND IMPROVEMENTS - AT COST:
----------------------------------------------
Estimated
September 30, Life in
1995 1994 Years
----------- ----------- ----------
Land $14,823,317 $13,162,045
Buildings 34,952,245 33,043,184 30-35
Machinery and equipment 34,823,917 31,347,942 3-20
Capitalized property and
equipment leases 1,643,775 1,643,775 5-25
Leasehold improvements 10,575,655 9,715,947 1-20
Construction in progress 854,219 927,109
----------- -----------
97,673,128 89,840,002
Less accumulated depreci-
ation and amortization 37,414,215 32,956,154
----------- -----------
$60,258,913 $56,883,848
=========== ===========
C. INTERIM CREDIT FACILITIES:
-------------------------
The Company has a $13.5 million revolving credit agreement with a bank
group at the bank's prime rate or a fixed rate option at the Company's
election, with a maximum of $3.5 million available for issuance of letters
of credit. The revolving credit facility is committed for a two-year
period expiring February 28, 1997 or a later date as approved by the bank
group. At September 30, 1995, borrowings of $6.0 million and letters of
credit of $2.7 million were outstanding under the agreement.
32
<PAGE>
D. LONG-TERM DEBT:
--------------
September 30,
1995 1994
----------- -----------
Term Loan. Interest is paid at least quarterly.
Principal on the note will be repaid in
16 quarterly installments beginning
October 31, 1997. The interest rate was
8.125% at September 30, 1995. $16,741,488 $16,805,316
Senior Notes of the Company. Interest is
paid in semiannual installments at a
blended rate of 10.500%. Principal on the
notes will be repaid in seven semiannual
installments. 10,636,735 13,703,402
Revolving Credit Agreement. Interest is paid
quarterly. At September 30, 1995, the
interest rate was 8.750%. (See Note C) 6,000,000 6,000,000
Mortgage Loans Payable. Paid in monthly
installments expiring in years 1997 through
2004 with interest ranging from the bank's prime
rate to the bank's prime rate plus one-half
percent. The blended interest rate was
9.064% at September 30, 1995. 2,262,297 2,460,328
Loans Payable. Paid in monthly installments
expiring in 2010. The interest rate was
9.000% at September 30, 1995. 248,674
Various Equipment Financing. Repaid in fiscal
1995. 3,235
----------- -----------
35,889,194 38,972,281
Less current maturities 3,272,958 6,851,260
----------- -----------
$32,616,236 $32,121,021
=========== ===========
The mortgage loans are collateralized by $6,755,600 of property at cost.
Aggregate maturities of long-term debt during the next five years,
including payments due in connection with the senior notes and the term
loan are as follows: (See Note M)
September 30,
1996 $ 3,273,000
1997 10,138,700
1998 7,443,400
1999 6,071,100
2000 4,605,100
-----------
$31,531,300
===========
33
<PAGE>
D. LONG-TERM DEBT (Continued):
--------------------------
Certain of the Company's debt agreements contain covenants which provide
for the maintenance of minimum working capital and net worth as well as
limitations on future indebtedness, sales and leasebacks and dispositions
of assets. These agreements may restrict the Company's ability to declare
and pay dividends on common stock. The amount of retained earnings
available for such dividends at September 30, 1995 was $5,108,200.
E. COMMITMENTS AND CONTINGENCIES:
-----------------------------
(1) Leases - The Company leases its corporate headquarters, a majority of
its store locations and certain equipment. Future minimum lease
payments under capital leases and noncancellable operating leases
with initial or remaining terms in excess of one year at September
30, 1995 are shown below. Some of the leases provide for additional
rentals when sales exceed a specified amount and contain variable
renewal options and escalation clauses. Rental income in connection
with the sublease of certain properties is also provided. Such
rental income was $1,075,700 in 1995, $1,086,900 in 1994, and
$1,071,600 in 1993.
Sublease
Capital Operating Rental
Leases Leases Income
---------- ----------- ----------
1996 $ 216,800 $10,070,800 $1,125,400
1997 196,400 5,073,700 550,200
1998 167,700 3,267,700 387,000
1999 132,100 2,110,200 173,400
2000 139,900 1,613,900 115,500
Thereafter 541,000 6,903,700 244,000
---------- ----------- ----------
Total future minimum
lease payments 1,393,900 $29,040,000 $2,595,500
Less amount representing =========== ==========
interest 559,300
----------
Present value of future
payments 834,600
Less current obligations 108,100
----------
$ 726,500
==========
Rental expense under operating leases was as follows:
Year Ended September 30,
1995 1994 1993
----------- ----------- -----------
Minimum rentals $10,537,700 $10,503,400 $10,349,200
Contingent rentals 98,800 87,500 90,000
----------- ----------- -----------
$10,636,500 $10,590,900 $10,439,200
=========== =========== ===========
34
<PAGE>
E. COMMITMENTS AND CONTINGENCIES (Continued):
-----------------------------------------
(2) Change of Control Agreements - The Company has change of control
agreements with its four executive officers pursuant to which each
executive officer will receive remuneration of 2.99 times his base
compensation if his employment is terminated due to a change of
control as defined in the agreements. Remuneration which might be
payable under these agreements has not been accrued in the
consolidated financial statements as a change of control has not
occurred.
F. INCOME TAXES:
------------
The provision for income taxes includes the following:
Year Ended September 30,
1995 1994 1993
---------- ---------- ----------
Current tax expense:
Federal $2,572,100 $2,129,600 $2,276,600
State 290,100 358,900 255,400
---------- ---------- ----------
2,862,200 2,488,500 2,532,000
---------- ---------- ----------
Deferred tax expense:
Federal ( 213,900) ( 343,300) ( 800,400)
State ( 142,100) ( 268,100) ( 314,600)
---------- ---------- ----------
( 356,000) ( 611,400) ( 1,115,000)
---------- ---------- ----------
$2,506,200 $1,877,100 $1,417,000
========== ========== ==========
Deferred tax liabilities (assets) are comprised of the following at
September 30:
1995 1994 1993
---------- ---------- ----------
Depreciation $3,512,500 $3,460,800 $3,981,800
---------- ---------- ----------
Gross deferred tax
liabilities 3,512,500 3,460,800 3,981,800
---------- ---------- ----------
Insurance reserves ( 1,120,100) ( 766,400) ( 590,000)
Capital leases ( 119,600) ( 130,700) ( 158,400)
Deferred compensation ( 211,900) ( 171,500) ( 135,700)
Deferred income ( 91,600) ( 173,800) ( 261,700)
Intangible assets ( 155,000) ( 132,300)
Deferred tax payments ( 96,200)
Other ( 100,900) ( 112,600) ( 251,100)
---------- ---------- ----------
Gross deferred tax
assets ( 1,895,300) ( 1,487,300) ( 1,396,900)
---------- ---------- ----------
$1,617,200 $1,973,500 $2,584,900
========== ========== ==========
35
<PAGE>
F. INCOME TAXES (Continued):
------------------------
The financial statements include noncurrent deferred tax liabilities of
$2,876,400 and $2,806,800 in 1995 and 1994, respectively, and current
deferred tax assets of $1,259,200 and $833,300, which are included in
prepaid expenses and other. No valuation allowance is required because,
based upon the weight of available evidence, it is more likely than not
that all of the deferred tax assets will be realized.
A reconciliation of the provision for income taxes to an amount determined
by application of the statutory federal income tax rate follows:
Year Ended September 30,
1995 1994 1993
---------- ---------- ----------
Statutory rate $2,264,400 $1,884,400 $1,543,300
Increase (decrease)
resulting from:
Tax credits ( 82,500) ( 184,800)
Nondeductible items 83,000 76,800 114,000
State taxes (net) 97,700 59,900 ( 39,100)
Other (net) 61,100 ( 61,500) ( 16,400)
---------- ---------- ----------
Tax provision $2,506,200 $1,877,100 $1,417,000
========== ========== ==========
G. RELATED PARTY TRANSACTIONS:
--------------------------
On September 2, 1994, the Company purchased 315,000 shares of its Common
Stock from Henry D. Sahakian, Chairman of the Company's Board, at $5.25
per share. The closing price of the Company's Common Stock on the
American Stock Exchange on that date was $5.375 per share. On this date,
amounts due to the Company from Mr. Sahakian of $1,308,000 were paid.
Certain directors and officers of the Company are also directors,
officers and shareholders of Unico Corporation ("Unico"), formerly the
Company's parent, and other affiliated companies. The following is a
summary of significant transactions with these entities:
(1) The Company leases seven stores and certain other locations from
Unico and leases its corporate headquarters and five additional
locations from affiliates of Unico. Aggregate rentals in
connection with these leases were $700,300 (1995), $887,000 (1994)
and $1,062,200 (1993).
(2) The Company charges an affiliate of Unico for general and
administrative services provided. Such charges amounted to $10,400
(1995), $9,900 (1994) and $8,500 (1993).
The Company received commissions from Coinfone Telecommunications, Inc.
("CTI") for coin-operated telephones installed at convenience store
locations. The majority of the stock of CTI is beneficially owned or
controlled by persons related to Henry D. Sahakian. Commissions received
from CTI were $310,300 (1995), $241,400 (1994), and $62,500 (1993).
36
<PAGE>
G. RELATED PARTY TRANSACTIONS (Continued):
--------------------------------------
The Company acquired property for $1,605,300 in 1995 by exercising a
property option that was controlled by Whitehall Associates, a partnership
in which the Company was a partner. Bruce K. Heim, a director of
the Company, is also a partner in a partnership which controls 75% of
Whitehall Associates. The Company also paid rents of $86,300 and $129,800
to Whitehall Associates in 1995 and 1994, respectively.
H. RETIREMENT SAVINGS AND INCENTIVE PLAN:
-------------------------------------
The Company has a contributory retirement savings plan covering all
employees meeting minimum age and service requirements. The Company will
match one-half of employee contributions up to 3% of the employee's
compensation. Effective July 1, 1991, the Company's contributions are
invested in the Company's Common Stock. The Board of Directors may
elect to make additional contributions to be allocated among all eligible
employees in accordance with provisions of the plan. The retirement
savings plan expense, which is funded currently, was $111,100 (1995),
$116,000 (1994) and $111,000 (1993).
I. DEFERRED COMPENSATION PLAN AND PERFORMANCE UNIT PLAN:
----------------------------------------------------
The Company has a non-qualified unfunded deferred compensation plan which
permits key executives to annually elect (via individual contracts) to
defer a portion of their compensation until their retirement, death or
disability. The Company makes a 50% matching contribution not exceeding
$5,000. The deferred compensation expense was $27,000, $24,700 and $23,900
for the years ended September 30, 1995, 1994 and 1993, respectively.
The Company has recorded the assets and liabilities for the deferred
compensation plan in the consolidated balance sheets because such assets
and liabilities belong to the Company rather than to any plan or trust.
Asset and matching liability of $568,000 and $406,400 at September 30, 1995
and 1994, respectively, include employee deferrals, accrued earnings and
matching contributions by the Company.
The Company also has a Performance Unit Plan to provide long-term
incentives to senior executives. Under the Performance Unit Plan, the
amount of compensation is determined over the succeeding three-year period
based upon performance of the Company as well as individual goals for the
senior executives. Compensation expense recognized under this plan was
$100,000 for the year ended September 30, 1995.
J. EQUITY COMPENSATION PLAN:
------------------------
The Company has reserved 775,491 shares of common stock which can be
issued in accordance with the terms of the Company's Equity Compensation
Plan, as amended (the "Plan").
37
<PAGE>
J. EQUITY COMPENSATION PLAN (CONTINUED):
------------------------------------
A committee of the Board of Directors has authority to administer the
Plan, and the committee may grant qualified incentive stock options to
employees of the Company, including officers, whether or not they are
directors. The Plan also provides that all non-employee directors will
receive annual non qualified stock option grants for 2,000 shares and
grants of shares of common stock on the date of each annual meeting. The
grants of stock will be equal in value to and in lieu of two-thirds of the
non-employee directors' annual retainers. During fiscal 1995, 6,223
shares of common stock were granted to non-employee directors under the
Plan.
The exercise price of all options granted under the Plan may not be less
than the fair market value of the common stock on the date of grant and
the maximum allowable term of each option is ten years. For qualified
stock options granted to any person who holds more than 10% of the voting
power of the outstanding stock, the exercise price may not be less than
110% of the fair market value and the maximum allowable term is five
years.
Information regarding outstanding options is presented below. All options
outstanding are exercisable except for options granted during the year
ended September 30, 1995.
Outstanding Options for Shares of Common Stock:
Outstanding Options Price Per Share
------------------- ---------------
Balance, October 1, 1992 427,829 $2.50 to $7.00
Granted 0
Exercised ( 10,000) $2.50 to $4.63
Canceled ( 7,600) $2.50 to $6.88
-------
Balance, September 30, 1993 410,229 $2.50 to $7.00
Granted 58,770 $5.38 to $5.91
Exercised ( 23,000) $2.50 to $3.50
Canceled ( 14,925) $3.50 to $7.00
-------
Balance, September 30, 1994 431,074 $2.50 to $6.36
Granted 73,000 $5.38 to $5.63
Exercised ( 40,165) $2.50 to $6.36
Canceled 0
-------
Balance, September 30, 1995 463,909 $2.50 to $6.36
=======
Exercisable at September 30, 1995 390,909 $2.50 to $6.36
=======
Balance of Shares Reserved for
Grant at September 30, 1995 311,582
=======
38
<PAGE>
K. NON-QUALIFIED STOCK OPTIONS:
---------------------------
The Company made a one-time, special grant of non-qualified stock options
to Henry D. Sahakian and Daniel D. Sahakian each to purchase 150,000
shares of common stock of the Company at a price of $4.50 per share in
exchange for their relinquishment of effective voting control of the
Company as a result of the elimination of the super-majority voting
provisions of the Class B Common Stock. These non-qualified stock options
are not related to the Company's Equity Compensation Plan. These stock
options expire on February 25, 1998.
L. SALE OF DAIRY OPERATION:
-----------------------
In April 1994, the Company sold the net assets of its dairy operation for
approximately $6,438,000 and received a cash payment of $5,788,000 and
105,906 shares of its common stock valued at $650,000. The sale resulted
in a pre-tax loss of $245,000 which is included as a reduction of other
income. The total effect of the sale on net earnings was a loss of
$51,000.
M. SUBSEQUENT EVENT:
----------------
On December 26, 1995, the Company signed an agreement with its bank group
to borrow $10 million on an interest-only basis for a period of three
years. Full amortization of the facility is required in fiscal 1999.
Proceeds from the loan will be used to complete major remodels, including
adding prepared fast-food installations to existing stores, upgrading
gasoline dispensing facilities to high-volume units and new store
construction.
This agreement has changed the composition of the Company's capital
requirements. Aggregate maturities of long-term debt during the next five
years, including payments due in connection with the senior notes and the
term loans are as follows: (See Note D)
September 30,
1996 $ 3,273,000
1997 10,138,700
1998 7,443,400
1999 16,071,100
2000 4,605,100
-----------
$41,531,300
===========
39
<PAGE>
<TABLE>
SUPPLEMENTARY FINANCIAL INFORMATION
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
Year Ended September 30, 1995
- -----------------------------
Revenues $79,903,832 $73,151,798 $84,925,491 $89,030,250
Gross Profit 21,483,072 20,506,236 21,749,543 23,107,800
Net Earnings 1,343,526 561,237 793,208 1,455,790
Earnings Per Share $ .21 $ .09 $ .13 $ .23
Year Ended September 30, 1994
- -----------------------------
Revenues $84,146,278 $76,729,522 $80,463,486 $85,276,622
Gross Profit 22,867,728 21,177,864 20,536,484 22,283,003
Net Earnings 1,216,761 468,948 693,930 1,285,484
Earnings Per Share $ .18 $ .07 $ .10 $ .19
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable
PART III
In accordance with Instruction G(3), the information called for by Items 10, 11,
12 and 13 is incorporated by reference from the Registrant's Definitive Proxy
Statement pursuant to Regulation 14A, to be filed with the Commission not later
than 120 days after September 30, 1995, the end of the fiscal year covered by
this report.
40
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.
(A) Financial Statements
The Financial Statements listed below are filed as part of this Annual Report on
Form 10-K.
PAGE(S)
Report of Deloitte & Touche LLP, Independent Auditors 23
Consolidated Balance Sheets - September 30, 1995 and 1994 24-25
Consolidated Statements of Earnings for the years ended
September 30, 1995, 1994 and 1993 26
Consolidated Statements of Stockholders' Equity for the years
ended September 30, 1995, 1994 and 1993 27
Consolidated Statements of Cash Flows for the years ended
September 30, 1995, 1994 and 1993 28-29
Notes to Consolidated Financial Statements 30-39
Supplementary Financial Information - Selected Quarterly
Financial Data (Unaudited) 40
(B) Reports on Form 8-K
Uni-Marts, Inc. filed no reports on Form 8-K with the Securities and Exchange
Commission during the last quarter of the fiscal year ended September 30, 1995.
(C) Exhibits
3.1 Amended and Restated Certificate of Incorporation of the Company
(Filed as Exhibit 3.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference thereto).
3.2 By-Laws of the Company (Filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the period ended March 30, 1995
and incorporated herein by reference thereto).
4.1 Form of the Company's Common Stock Certificate (Filed as Exhibit
4.3 to the Company's Quarterly Report on Form 10-Q for the period
ended April 1, 1993 and incorporated herein by reference
thereto).
41
<PAGE>
10.1 Uni-Marts, Inc. Amended and Restated Equity Compensation Plan
(Filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference thereto).
10.2 Uni-Marts, Inc. Stock Option Plan for Non-qualified Stock Options
dated as of February 26, 1993 (Filed as exhibit 10-2 to the
Annual Report of Uni-Marts, Inc. for the year ended September 30,
1993 and incorporated herein by reference thereto).
10.3 Uni-Marts, Inc. Retirement Savings & Incentive Plan (Filed as
Exhibit 4.2 to the Company's Registration Statement on Form S-8,
File No. 33-9807 and incorporated herein by reference thereto).
10.4 Composite Conformed Copy of Note Agreements dated August 28, 1989
between four insurance companies and Uni-Marts, Inc. (Filed as
Exhibit 10.14 to the Annual Report of Uni-Marts, Inc. on Form
10-K for the year ended September 30, 1989 and incorporated
herein by reference thereto).
10.5 Credit Agreement between the Bank Group and Uni-Marts, Inc. dated
as of March 1, 1993 (Filed as Exhibit 19 to the Company's
Quarterly Report on Form 10-Q for the period ended April 1, 1993
and incorporated herein by reference thereto).
10.5(a) Amendment No. 1 to Credit Agreement between the Bank Group and
Uni-Marts, Inc. dated as of March 21, 1994 (Filed as Exhibit
10.5(a) to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1994 and incorporated herein by
reference thereto).
10.5(b) Amendment No. 2 to Credit Agreement between the Bank Group and
Uni-Marts, Inc. dated as of July 1, 1994 (Filed as Exhibit
10.5(b) to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1994 and incorporated herein by
reference thereto).
10.5(c) Third Amendment to Credit Agreement between the Bank Group and
Uni-Marts, Inc. dated as of October 26, 1994 (Filed as Exhibit
10.5(c) to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1994 and incorporated herein by
reference thereto).
10.5(d) Amendment No. 4 to Credit Agreement between the Bank Group and
Uni-Marts, Inc. dated as of March 27, 1995 (Filed as Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q for the period
ended March 30, 1995 and incorporated herein by reference
thereto).
10.5(e) Amendment No. 5 to Credit Agreement between the Bank Group and
Uni-Marts, Inc. dated as of December 26, 1995.
42
<PAGE>
10.6 Form of Indemnification Agreement between Uni-Marts, Inc. and
each of its Directors (Filed as Exhibit A to the Company's
Definitive Proxy Statement for the February 25, 1988 Annual
Meeting of Stockholders filed on January 28, 1988 and
incorporated herein by reference thereto).
10.7 Uni-Marts, Inc. Deferred Compensation Plan (Filed as Exhibit 10.8
to the Annual Report of Uni-Marts, Inc. on Form 10-K for the year
ended September 30, 1990 and incorporated herein by reference
thereto).
10.8 Uni-Marts, Inc. Annual Bonus Plan (Filed as Exhibit 10.8 to the
Annual Report of Uni-Marts, Inc. on Form 10-K for the year ended
September 30, 1994 and incorporated herein by reference thereto).
10.9 Uni-Marts, Inc. Performance Unit Plan (Filed as Exhibit 10.9 to
the Annual Report of Uni-Marts, Inc. on Form 10-K for the year
ended September 30, 1994 and incorporated herein by reference
thereto).
10.10 Composite copy of Change in Control Agreements between Uni-Marts,
Inc. and its executive officers (Filed as Exhibit 10.10 to the
Annual Report of Uni-Marts, Inc. on Form 10-K for the year ended
September 30, 1994 and incorporated herein by reference thereto).
10.11 Agreement to Lease Properties and Sell Assets between Getty and
the Company dated October 31, 1991 with amendment dated December
5, 1991 (Filed as Exhibit 2.1 to the Company's Current Report on
Form 8-K dated December 20, 1991 and incorporated herein by
reference thereto).
10.12 Getty Petroleum Corp./Uni-Marts, Inc. Supply Agreement dated
December 6, 1991 (Filed as Exhibit 28.1 to the Company's Current
Report on Form 8-K dated December 20, 1991 and incorporated
herein by reference thereto).
11 Statement regarding computation of per share earnings.
21 Subsidiary of the registrant.
23 Consent of Deloitte & Touche LLP.
27 Financial data schedule.
99 Report on Form 11-K.
43
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
UNI-MARTS, INC.
(Registrant)
By: /S/ HENRY D. SAHAKIAN
------------------------------
Henry D. Sahakian
Chairman of the Board
(Principal Executive Officer)
By: /S/ J. KIRK GALLAHER
------------------------------
J. Kirk Gallaher
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
DATED: December 29, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of this registrant and
in the capacities and on the date indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/S/ HENRY D. SAHAKIAN Chairman of the Board December 29, 1995
- -----------------------------
Henry D. Sahakian
/S/ CHARLES R. MARKHAM President and Director December 29, 1995
- -----------------------------
Charles R. Markham
/S/ J. KIRK GALLAHER Executive Vice President December 29, 1995
- ----------------------------- and Director
J. Kirk Gallaher
/S/ G. DAVID GEARHART Director December 29, 1995
- -----------------------------
G. David Gearhart
/S/ BRUCE K. HEIM Director December 29, 1995
- -----------------------------
Bruce K. Heim
/S/ JEREMIAH A. KEATING Director December 29, 1995
- -----------------------------
Jeremiah A. Keating
/S/ JOSEPH V. PATERNO Director December 29, 1995
- -----------------------------
Joseph V. Paterno
/S/ CHARLES C. PEARSON, JR. Director December 29, 1995
- -----------------------------
Charles C. Pearson, Jr.
/S/ DANIEL D. SAHAKIAN Director December 29, 1995
- -----------------------------
Daniel D. Sahakian
/S/ MICHAEL J. SERVENTI Director December 29, 1995
- -----------------------------
Michael J. Serventi
44
<PAGE>
UNI-MARTS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Number Description Page(s)
- ------ ----------- -------
10.5(e) Amendment No. 5 to Credit Agreement between the
Bank Group and Uni-Marts, Inc. dated as of
December 26, 1995. 46-61
11 Statement regarding computation of per share
earnings for the years ended September 30, 1995,
1994 and 1993. 62
21 Subsidiary of the registrant 63
23 Consent of Deloitte & Touche LLP 64
27 Financial Data Schedule 65
99 Report on Form 11-K 66-82
45
<PAGE> 46
AMENDMENT NO. 5 TO CREDIT AGREEMENT
-----------------------------------
This Amendment No. 5 to Credit Agreement is dated as of December 26, 1995
by and among Uni-Marts, Inc. (the "Borrower"), PNC Bank, National Association
--------
("PNC"), CoreStates Bank, N.A. ("CoreStates") and The Daiwa Bank, Ltd.
--- ----------
("Daiwa", and together with PNC and CoreStates, collectively, the "Banks") and
----- -----
PNC Bank, National Association, in its capacity as agent (the "Agent") for the
Banks. -----
WHEREAS, the Borrower, the Banks and the Agent are parties to that
certain Credit Agreement dated as of March 1, 1993, as amended by Amendment
No. 1 to Credit Agreement dated as of March 21, 1994, Amendment No. 2 to
Credit Agreement dated as of July 1, 1994, Third Amendment to Credit Agreement
dated as of October 26, 1994 and Amendment No. 4 to Credit Agreement dated as
of March 27, 1995 (as amended, the "Credit Agreement");
----------------
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the same meanings given to them in the Credit Agreement; and
WHEREAS, the Borrower, the Banks and the Agent wish to amend the Credit
Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto, intending to be legally bound, agree as
follows:
1. Schedule 1.01(a) to the Credit Agreement is hereby deleted in its
entirety and a new Schedule 1.01(a) is inserted in lieu thereof in the form
attached hereto.
2. Exhibit D to the Credit Agreement (Form of Loan Request) is hereby
deleted in its entirety and a new Exhibit D is inserted in lieu thereof in the
form attached hereto.
3. The defined terms "Commitment," "Consolidated Cashflow From
Operations," "Loan Request," "Loans," "Notes," "Ratable Share," "Term Loan
Base Rate Portion," and "Term Loan Euro-Rate Portion" in Section 1.01 of the
Credit Agreement are hereby deleted in their entirety and the following are
inserted in lieu thereof:
COMMITMENT shall mean as to any Bank, the aggregate of its Revolving
Credit Commitment, Term Loan Commitment and Term Loan-B Commitment and
COMMITMENTS shall mean the aggregate of the Revolving Credit Commitments,
the Term Loan Commitments and Term Loan-B Commitments of all the Banks.
<PAGE> 47
CONSOLIDATED CASHFLOW FROM OPERATIONS for any period of determination
shall mean (i) the sum of Consolidated Net Income, depreciation,
amortization, other non-cash charges to Consolidated Net Income, interest
expense, income tax expense, Funded Capital Expenditures and Rentals
minus (ii) non-cash credits to Consolidated Net Income, in each case of
-----
the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.
LOAN REQUEST shall mean a request for Revolving Credit Loans or Term
Loans-B made in accordance with Section 2.05 or Section 3.02(B) hereof or
a request to select, convert to or renew a Euro-Rate Option in accordance
with Section 4.02 hereof.
LOANS shall mean all Revolving Credit Loans, Term Loans and Term Loans-B,
collectively, and LOAN shall mean any Revolving Credit Loan, Term Loan or
Term Loan-B, separately.
NOTES shall mean the Revolving Credit Notes, the Term Notes and the Term
Notes-B.
TERM LOAN BASE RATE PORTION shall mean the portion of the Term Loans and
Term Loans-B bearing interest at any time under the Term Loan Base Rate
Option.
TERM LOAN EURO-RATE PORTION shall mean the portion of the Term Loans and
Term Loans-B bearing interest at any time under the Term Loan Euro-Rate
Option.
4. The following defined terms are hereby inserted in alphabetical
order in Section 1.01 of the Credit Agreement:
AMENDMENT NO. 5 shall mean Amendment No. 5 to Credit Agreement dated as
of December 26, 1995 by and among the Borrower, the Agent and the Banks.
AMENDMENT NO. 5 CLOSING DATE shall mean the date on which all conditions
to the effectiveness of Amendment No. 5 as set forth in Section 14 of
Amendment No. 5 are satisfied.
FUNDED CAPITAL EXPENDITURES shall mean, for any period of determination,
all capital expenditures of the Borrower and its Subsidiaries, determined
and consolidated in accordance with GAAP, which are funded by Term
Loans-B.
OFFERING shall mean any secondary public offering of common stock of the
Borrower.
RATABLE SHARE shall mean the proportion that a Bank's Commitment bears to
the Commitments of all the Banks, as set forth on Schedule 1.01(a)
hereto. ----------------
2
<PAGE> 48
TERM LOAN-B COMMITMENT shall mean, as to any Bank at any time, the amount
initially set forth opposite its name on Schedule 1.01(a) hereto in the
----------------
column labeled "Amount of Commitment for Term Loans-B," and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement to
which such Bank is a party and TERM LOAN-B COMMITMENTS shall mean the
aggregate Term Loan-B Commitments of all the Banks.
TERM LOAN-B COMMITMENT FEE shall have the meaning given to such term in
Section 3.04(B).
TERM LOAN-B MATURITY DATE shall mean December 25, 1998.
TERM LOAN-B REQUEST DATE shall mean December 25, 1996.
TERM LOANS-B shall mean collectively all Term Loans-B made by the Banks
to the Borrower under Section 3.02(B) hereof, and TERM LOAN-B shall mean
separately any Term Loan-B made by any Bank to the Borrower pursuant to
Section 3.02(B) hereof.
TERM NOTES-B shall mean collectively all Term Notes-B and TERM NOTE-B
shall mean separately any Term Note-B of the Borrower, in each case in
the form of Exhibit A to Amendment No. 5 which evidence the Term Loans-B,
together with all amendments, restatements, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.
5. A new Article III(B) (Term Loans-B) is hereby inserted immediately
following Article III of the Credit Agreement as set forth on Schedule 1
hereto. ----------
6. Section 4.01 of the Credit Agreement is hereby amended by deleting
"or Term Loans" in the fifth line thereof, and inserting in lieu thereof
",Term Loans or Term Loans-B".
7. Section 4.01(b) of the Credit Agreement is hereby amended by
inserting immediately after "the Term Loans" in the third line thereof "and
the Term Loans-B".
8. Clause (y) of Section 5.04 of the Credit Agreement is hereby deleted
in its entirety and the following is inserted in lieu thereof:
(y) a statement indicating the application of the prepayment between the
Revolving Credit Loans, the Term Loans and the Term Loans-B; and
9. The third sentence of the last paragraph of Section 5.04 of the
Credit Agreement is hereby deleted in its entirety and the following is
inserted in lieu thereof:
All Term Loan and Term Loan-B prepayments permitted pursuant to this
Section 5.04 shall be applied to the unpaid installments of principal of
the Term Loans or Term Loans-B, as the case may be, in the inverse order
of scheduled maturities.
3
<PAGE> 49
10. A new Section 5.60 (Mandatory Prepayments) is hereby inserted
immediately following Section 5.05 of the Credit Agreement as follows:
5.06 MANDATORY PREPAYMENT. Upon the closing of any Offering, the
Borrower shall, on the date of such closing, use the lesser of (i) all of
the proceeds of such Offering, net only of customary and reasonable
expenses incurred by the Borrower in connection with the Offering, or
(ii) $10,000,000, to prepay the Term Loans then outstanding, together
with all accrued fees and interest thereon.
11. Section 8.02(k) of the Credit Agreement (Capital Expenditures,
Including Capitalized Leases) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
(k) CAPITAL EXPENDITURES, INCLUDING CAPITALIZED LEASES. The Borrower
shall not make any payments in the aggregate for any of the fiscal years
set forth below on account of the purchase or lease of any assets which
if purchased would constitute fixed assets or which if leased would
constitute a Capitalized Lease in excess of the following:
Fiscal Aggregate
Year Ending Permitted Amount
----------- ----------------
September 30, 1996 $17,500,000
September 20, 1997 and each $ 8,000,000
fiscal year thereafter
12. The first sentence of Section 10.11 of the Credit Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:
With respect to its Commitments and the Loans made by it, the Agent shall
have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term "Banks"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity.
13. The last clause of the third sentence of Section 11.11 of the Credit
Agreement is hereby deleted in its entirety and the following is inserted in
lieu thereof:
, the Borrower shall execute and deliver new Notes to the assignee in the
amounts equal to the respective Commitments or Loans (as applicable)
assumed by it and new Notes to the assigning Bank in the amounts equal to
the respective Commitments or Loans (as applicable) retained by it
hereunder.
14. The effectiveness of this Amendment No. 5 is expressly conditioned
upon: (i) the Agent's receipt of counterparts of this Amendment No. 5 duly
executed by the Borrower and each of the Banks; (ii) each of the Banks having
4
<PAGE> 50
received a duly executed Term Note-B in the form of Exhibit A hereto; (iii)
---------
the Agent's receipt of a certificate signed by the Secretary or Assistant
Secretary of the Borrower, dated the Amendment No. 5 Closing Date, certifying
as to all action taken by the Borrower to authorize the execution, delivery
and performance of this Amendment No. 5; (iv) a written opinion of Ballard
Spahr Andrews & Ingersoll, counsel for the Borrower, dated the Amendment No. 5
Closing Date and in form and substance satisfactory to the Agent and its
counsel as to such matters incident to the transactions contemplated hereby as
the Agent may reasonably request; and (v) the receipt by each of the Banks of
an amendment fee in the amount of $8,333.00.
15. The Borrower hereby represents to the Agent and the Banks that the
representations and warranties of the Borrower contained in Article VI of the
Credit Agreement remain true and accurate on and as of the date hereof; the
Borrower has performed and is in compliance with all covenants contained in
Article VIII of elsewhere in the Credit Agreement; and no Event of Default or
Potential Default has occurred and is continuing.
16. The Borrower hereby agrees to reimburse the Agent and the Banks on
demand for all reasonable costs, expenses and disbursements relating to this
Amendment No. 5 which are payable by the Borrower as provided in Sections
10.05 and 11.03 of the Credit Agreement.
17. The Borrower, the Agent and the Banks intend and agree that, except
as provided hereinabove, the Credit Agreement shall remain in full force and
effect, without modification.
18. This Amendment shall be governed by and construed in accordance with
the internal laws of the Commonwealth of Pennsylvania without reference to its
principles of conflicts of law.
19. The Borrower, the Banks (other than Daiwa) and the Agent acknowledge
that Daiwa is attempting to sell its banking operations and assets located in
the United States, including, without limitation, its Loans and Commitments as
a going concern to a successor financial institution. Daiwa hereby agrees
that, in the event any proposed purchaser of Daiwa's Loans and Commitments is
not acceptable to the Agent and/or the Borrower in their reasonable good faith
discretion, or in the event Daiwa has not entered into an agreement providing
for the sale of its Loans and Commitments to a Purchasing Bank acceptable to
both the Agent and the Borrower in their reasonable good faith discretion on
or before February 2, 1996 (or such later date as shall be acceptable to the
Agent in its sole and absolute discretion), Daiwa shall, at the option of and
upon request by the Agent, (a) sell its Loans and Revolving Commitments to
such of the other Banks that elect in their sole and absolute discretion to
purchase Daiwa's Loans and Commitments, which electing Banks shall thereupon
purchase Daiwa's Loans and Commitment on a pro rata basis based upon their
respective Commitments or on such other basis as such Banks may agree among
themselves, and/or (b) sell its Loans and Commitments to a Purchasing Bank
identified and approved by both the Agent and the Borrower in their reasonable
good faith discretion, provided that such Purchasing Bank is ready, willing
5
<PAGE> 51
and able to purchase Daiwa's Loans and Commitments or the relevant portion
thereof for the purchase price set forth below. In the event the Agent
request Daiwa to sell its Loans and Commitments pursuant to this Section 19,
the closing of the sale and purchase thereof shall occur not less than thirty
(30) days after the Agent has given Daiwa written notice of the purchase(s) of
Daiwa's Loans and Commitments, or such shorter period of time as Daiwa shall
consent to in writing in its sole and absolute discretion or which shall
otherwise be required under applicable federal or state law. Any sale of
Daiwa's Loans and Commitments pursuant to this Section 19 shall be for an
aggregate purchase price equal to the unpaid principal balance of and all
accrued interest on Daiwa's Loans plus any accrued and unpaid Commitment Fees
on Daiwa's Commitments and any other amounts agreed to between Daiwa and the
purchaser(s) thereof, but less any Letter of Credit Fees paid to Daiwa for the
unexpired period of time for which such Letter of Credit Fees were paid.
20. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and
the same instrument.
[SIGNATURE PAGE FOLLOWS]
6
<PAGE> 52
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 5
as of the date first above written.
UNI-MARTS, INC.
By: /S/ J. KIRK GALLAHER
------------------------------
Title: Executive Vice President
--------------------------
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /S/ LOUIS R. CESTELLO
------------------------------
Title: Assistant Vice President
--------------------------
CORESTATES BANK, N.A.
By: /S/ PAUL S. PHILLIPS
------------------------------
Title: Vice President
--------------------------
THE DAIWA BANK, LTD.
By: /S/ GEORGE J. CERMINARA
------------------------------
Title: Vice President
--------------------------
By: /S/ PAUL F. NOEL
-----------------------------
Title: Assistant Vice President
--------------------------
7
<PAGE> 53
SCHEDULE 1.01(a)
TO
CREDIT AGREEMENT
- ------------------------------------------------------------------------------
Banks
-----
Amount of Amount of
Commitment Amount of Commitment
for Revolving Outstanding for Term Ratable
Bank Credit Loan (US$) Term Loans Loans-B Shares %
---- ----------------- ----------- ---------- --------
PNC Bank, National $4,500,000.00 $5,673,333.33 $3,333,333.34 33 1/3%
Association
CoreStates Bank, $4,500,000.00 $5,673,333.33 $3,333,333.34 33 1/3%
N.A.
The Daiwa Bank, $4,500,000.00 $5,673,333.33 $3,333,333.34 33 1/3%
Ltd.
<PAGE> 54
SCHEDULE 1
ARTICLE III-B
TERM LOANS-B
-------------
3.01(B) TERM LOAN-B BORROWINGS. Subject to the terms and conditions
hereof, and relying upon the representations and warranties herein set forth,
each Bank severally agrees to make a term loan or loans (collectively, the
"Term Loans-B") to the Borrower on or after the Amendment No.5 Closing Date in
such principal amount as the Borrower shall request up to but not exceeding
such Bank's Term Loan-B Commitment. The obligation of each Bank to make a
Term Loan-B to the Borrower shall be in the proportion that such Bank's Term
Loan-B Commitment bears to the Term Loan-B Commitments of all Banks, but each
Bank's Term Loan-B shall never exceed its Term Loan-B Commitment. The
failure of any Bank to make a Term Loan-B to the Borrower shall not relieve
any other Bank of its obligations to make a Term Loan-B to the Borrower nor
shall it impose any additional liability on any other Bank hereunder. The
Banks shall have no obligation to make Term Loans-B hereunder after the Term
Loan-B Request Date. The Term Loan-B Commitments are not revolving credit
commitments and the Borrower shall not have the right to borrow, repay and
reborrow under this Section 3.01(B).
3.02(B) TERM LOAN-B REQUESTS. Except as otherwise provided herein, the
Borrower may from time to time prior to the Term Loan-B Request Date request
the Banks to make Term Loans-B by delivery to the Agent, not later than 10:00
a.m. Pittsburgh time, (i) two (2) Business Days prior to the proposed
Borrowing Date with respect to the making of a Term Loan-B to which the Euro-
Rate Option applies or the conversion to or the renewal of the Euro-Rate
Option for any Term Loan-B; and (ii) one (1) Business Day prior to either the
proposed Borrowing Date with respect to the making of a Term Loan-B to which
the Base Rate Option applies or the last day of the preceding Interest Period
with respect to the conversion to the Base Rate Option for any Term Loan-B, of
a duly completed Loan Request in the form of Exhibit D hereto. Each Loan
Request shall be irrevocable and shall specify (i) the proposed Borrowing
Date; (ii) the aggregate amount of the proposed Term Loan-B comprising each
Borrowing Tranche, which shall be in integral multiples of $500,000 and no
less than $1,000,000 for each Borrowing Tranche to which the Euro-Rate Option
applies and not less than $1,000,000 for Term Loans-B or the maximum amount
available for Term Loans-B to which the Term Loan Base Rate Option applies;
(iii) whether the Euro-Rate Option or Base Rate Option shall apply to the
proposed Term Loan-B comprising the Borrowing Tranche; and (iv) in the case of
a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the proposed Term Loan-B comprising such Borrowing
Tranche.
3.03(B) MAKING TERM LOANS-B. The Agent shall, promptly after receipt of
a Loan Request pursuant to Section 3.02(B), notify the Banks of its receipt of
such Loan Request specifying: (i) the proposed Borrowing Date and the time and
method for disbursement of such Term Loan-B; (ii) the amount and type of such
Term Loan-B and the applicable Euro-Rate Interest Period (if any); and (iii)
the apportionment among the Banks of the Term Loan-B as determined by the
<PAGE> 55
Agent in accordance with Section 3.01(B) hereof. Each Bank shall remit the
principal amount of each Term Loan-B to the Agent such that the Agent is able
to, and the Agent shall, to the extent the Banks have made funds available to
it for such purpose, fund such Term Loan-B to the Borrower in U.S. Dollars in
immediately available funds at the Principal Office prior to 2:00 p.m.
Pittsburgh time on the Borrowing Date, provided that if any Bank fails to
--------
remit such funds to the Agent in a timely manner, the Agent may elect in its
sole discretion to fund with its own funds the Term Loan-B of such Bank on the
Borrowing Date.
3.04(B) TERM LOAN-B COMMITMENT FEE. Accruing from the date hereof until
the Term Loan-B Request Date, the Borrower agrees to pay to the Agent for the
account of each Bank, as consideration for the Term Loan-B Commitments
hereunder, a nonrefundable commitment fee (the "Term Loan-B Commitment Fee")
equal to one quarter percent (1/4%) per annum (computed on the basis of a year
of 365 or 366 days and actual days elapsed) on the average daily difference
between the amount of the Term Loan-B Commitments and the principal amount of
Term Loans-B outstanding. All Term Loan-B Commitment Fees shall be payable in
arrears on the last Business Day of each fiscal quarter of the Borrower after
the date hereof, on the Term Loan-B Request Date and upon any acceleration of
the Notes.
3.05(B) TERM LOAN-B NOTE. The obligation of the Borrower to repay the
unpaid principal amount of the Term Loans-B made to it by each Bank, together
with interest thereon, shall be evidenced by a promissory note of the Borrower
dated the Amendment No. 5 Closing Date in substantially the form attached to
Amendment No. 5 as Exhibit A payable to the order of each Bank in the face
---------
amount of the Term Loan-B Commitment of such Bank. The principal amount as
provided therein of each Term Note-B shall be payable in full on the Term
Loan-B Maturity Date.
3.06(B) USE OF PROCEEDS. The proceeds of the Term Loans-B will be used
by the Borrower for capital expenditures.
2
<PAGE> 56
EXHIBIT A
FORM OF TERM NOTE-B
-------------------
$3,333,333.34 Pittsburgh, Pennsylvania
December , 1995
FOR VALUE RECEIVED, the undersigned UNI-MARTS, INC., a Delaware
corporation (herein called the "Borrower"), hereby promises to pay to the
order of (the "Bank") the principal sum of Three
Million Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three and
34/100 U.S. Dollars (U.S. $3,333,333.34), which shall be payable to the Bank
in full on the earlier to occur of the Term Loan-B Maturity Date or the
acceleration of this Note.
The Borrower shall pay interest on the unpaid principal balance hereof
from time to time outstanding from the date hereof at the rate or rates per
annum specified by the Borrower pursuant to Section 4.01(b) of, or as
otherwise provided in, the Credit Agreement between the Borrower, the Banks
set forth therein and PNC Bank, National Association, as Agent for the Banks,
dated as of March 1, 1993, as amended by Amendment No. 1 to Credit Agreement
dated as of March 21, 1994, Amendment No. 2 to Credit Agreement dated as of
July 1, 1994, Third Amendment to Credit Agreement dated as of October 26,
1994, Amendment No. 4 to Credit Agreement dated as of March 27, 1995 and
Amendment No. 5 to Credit Agreement of even date herewith (as amended to date
and as it may be further amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement").
Upon the occurrence and during the continuation of an Event of Default,
the Borrower shall pay interest on the unpaid principal balance hereof at a
rate or rates per annum (based on a year of 360 days and actual days elapsed)
equal to two percent (2%) per annum above the rate or rates of interest
otherwise applicable with respect to such amount or the Base Rate if no other
rate of interest is otherwise applicable. Such interest rate will accrue
before and after any judgment has been entered.
Subject to the provisions of the Credit Agreement, interest on this Note
will be payable in arrears (i) on the portion of the Term Loans-B evidenced
hereby to which the Base Rate option applies on the last Business Day of each
December, March, June and September after the date hereof and on the Term
Loan-B Maturity Date and on any acceleration of this Note and (ii) on the
portion of the Term Loan-B evidenced hereby to which the Euro-Rate Option
applies, on the last day of each applicable Euro-Rate Interest Period, and if
such Euro-Rate Interest Period is longer than three (3) months, also on the
last day of every third month during such period and on the Term Loan-B
Maturity Date and upon any acceleration of this Note.
<PAGE> 57
If any payment or action to be made or taken hereunder shall be stated to
be or become due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day (unless in the case
of the Term Loan Euro-Rate Portion such Business Day falls in the next
calendar month, in which case the payment or action shall be made on the next
preceding Business Day) and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.
Subject to the provisions of the Credit Agreement, payments of principal
and interest shall be made without setoff, counterclaim or other deduction of
any nature at the office of the Agent located at Fifth Avenue and Wood Street,
Pittsburgh, Pennsylvania 15265, in lawful money of the United States of
America in immediately available funds.
This Note is one of the Term Notes-B referred to in, and is entitled to
the benefits of, the Credit Agreement and the other Loan Documents, including
the representations, warranties, covenants and conditions contained or granted
therein. The Credit Agreement among other things contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments, in certain circumstances, on account of
principal hereof prior to maturity upon the terms and conditions therein
specified.
All capitalized terms used herein shall, unless otherwise defined herein,
have the same meanings given to such terms in the Credit Agreement.
Except as otherwise provided in the Credit Agreement, the Borrower waives
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
of this Note and the Credit Agreement.
This Note shall bind the Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Bank and its successors and
assigns. All references herein to the "Borrower" and the "Bank" shall be
deemed to apply to the Borrower and the Bank, respectively, and their
respective successors and assigns.
This Note and any other documents delivered in connection herewith and
the rights and obligations of the parties hereto and thereto shall for all
purposes be governed by and construed and enforced in accordance with the
substantive laws of the Commonwealth of Pennsylvania without giving effect to
its principles of conflicts of law.
The Borrower consents to the exclusive jurisdiction and venue of the
federal and state courts located in Allegheny County, Pennsylvania, in any
action on, relating to or mentioning this Note, as more specifically set forth
in Section 11.16 of the Credit Agreement.
THE BORROWER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS, AFTER
CONSULTATION WITH ITS COUNSEL, THAT THE PROVISIONS OF THE FOLLOWING PARAGRAPH
COULD ENABLE THE LENDER TO OBTAIN A JUDGMENT AGAINST THE BORROWER AND COMMENCE
-2-
<PAGE> 58
EXECUTION PROCEEDINGS THAT RESULT IN THE SEIZURE OF ASSET OF THE BORROWER, IN
EITHER CASE, WITHOUT THE BORROWER HAVING THE BENEFIT OF A PRIOR HEARING; AND
(ii) THE BORROWER NEVERTHELESS KNOWINGLY AND VOLUNTARILY AGREES TO SUCH
POSSIBLE CONSEQUENCES AND THE PROVISIONS OF THE FOLLOWING PARAGRAPH.
CONFESSION OF JUDGMENT. THE BORROWER HEREBY AUTHORIZES AND EMPOWERS THE
----------------------
PROTHONOTARY OR CLERK OR ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE
COMMONWEALTH OF PENNSYLVANIA FROM AND AFTER AN EVENT OF DEFAULT (AS DEFINED IN
THE CREDIT AGREEMENT) AND UPON TEN (10) DAYS' PRIOR NOTICE TO THE BORROWER TO
APPEAR FOR THE BORROWER AND TO CONFESS JUDGMENT OR A SERIES OF JUDGMENTS
AGAINST THE BORROWER IN FAVOR OF THE BANK FOR SUCH SUMS AS SHALL HAVE BECOME
DUE UNDER THIS NOTE, WITH OR WITHOUT DECLARATION, WITH COST OF SUIT, RELEASE
OF ERROR, WITHOUT STAY OF EXECUTION AND WITH FIFTEEN PERCENT (15%) ADDED FOR
COLLECTION FEE, AND ALSO WAIVES THE RIGHT OF INQUISITION OF ANY REAL ESTATE
LEVIED ON, VOLUNTARILY CONDEMNS THE SAME, AUTHORIZES THE PROTHONOTARY OR CLERK
TO ENTER THE WRIT OF EXECUTION OF SAID VOLUNTARY CONDEMNATION, AGREES THAT
SAID REAL ESTATE MAY BE SOLD ON A WRIT OF EXECUTION, AND ALSO WAIVES AND
RELEASES ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAW OF
ANY STATE NOW IN FORCE OR ENACTED IN THE FUTURE. IF A COPY OF THIS NOTE,
VERIFIED BY AFFIDAVIT OF THE BANK HEREOF OR SOMEONE ON THE BANK'S BEHALF, HAS
BEEN FILED IN SUCH ACTION, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL NOTE
AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER
JUDGMENT AGAINST THE BORROWER WILL NOT BE EXHAUSTED BY THE INITIAL EXERCISE OF
THE AUTHORIZED POWER, AND THE POWER MAY BE EXERCISED FROM TIME TO TIME AS
OFTEN AS THE BANK DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT WILL BE A
SUFFICIENT WARRANT.
IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned
has executed this Note by its duly authorized officers as of the date and year
set forth above with the intention that it constitute a sealed instrument.
ATTEST: UNI-MARTS, INC.
By:
- ----------------------------------- --------------------------------
Title: Title:
[Seal]
-3-
<PAGE> 59
EXHIBIT D
FORM OF LOAN REQUEST
--------------------
TO: PNC Bank, National Association
Telephone No.: (412) 762-8239
Telecopier No.: (412) 762-4039
Attention: Louis R. Cestello
FROM: Uni-Marts, Inc.
RE: Credit Agreement (the "Agreement") dated as of March 1, 1993, by and
between Uni-Marts, Inc., as Borrower, the Banks set forth therein
and PNC Bank, National Association, as Agent for the Banks, as
amended
A. Pursuant to Section 2.05, Section 3.02(B) or Section 4.02 of
the Agreement, as applicable, the undersigned hereby makes the following Loan
Request:
1. Type of Loan U.S.$
(Revolving Credit or --------------------------
Term Loan-B)
2. Aggregate Principal Amount
of Loans Comprising the
Borrowing Tranche -------------------------------
3. Proposed Borrowing
Conversion or Renewal
Date -------------------------------
4. Applicable Interest Rate
Option (choose one):
------- a. Base Rate Option
------- b. Euro-Rate Option for a
Euro-Rate Interest
Period of (choose one):
------- i. 1 month
------- ii. 2 months
------- iii. 3 months
------- iv. 6 months
<PAGE> 60
B. Pursuant to Section 4.02 of the Agreement, the undersigned
hereby makes the following request to select, convert to or renew a Euro-Rate
Option:
1. Aggregate Principal Amount
of Loans comprising the
Borrowing Tranche (Loans
must be in the amount of
$1,000,000 or a greater
amount which is an integral
multiple of $500,000) U.S.$
--------------------------
2. Proposed Conversion or
Renewal Date -------------------------------
3. Type of Loan (Revolving
Credit Loan, Term Loan
or Term Loan-B) -------------------------------
4. a. Revolving Credit Euro-
Rate Option for a Euro-
Rate Interest Period of
(choose one):
------- i. 1 month
------- ii. 2 months
------- iii. 3 months
------- iv. 6 months
b. Term Loan Euro-Rate
Option for a Euro-Rate
Interest Period of
(choose one):
------- i. 1 month
------- ii. 2 months
------- iii. 3 months
------- iv. 6 months
C. As of the date hereof and the date of making of, converting to or
renewing the Loans: the representations and warranties contained in Article VI
of the Agreement are and will be true (except representations and warranties
that expressly relate solely to an earlier date or time, which representations
and warranties were true on and as of the specific date referred to therein);
-2-
<PAGE> 61
the Borrower has performed and complied with all covenants and conditions of
the Agreement; no Event of Default or Potential Default has occurred and is
continuing or shall exist; and the making of the Loans shall not contravene
any Law applicable to the Borrower.
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
The undersigned certifies to the accuracy of the foregoing.
UNI-MARTS, INC.
By:
-----------------------------
Its:
----------------------------
Date:
---------------------------
-3-
<PAGE> 62
EXHIBIT (13)
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS:
(A) Computation of the weighted average number of shares of common stock
outstanding for the years ended September 30, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
WEIGHTED
SHARES OF NUMBER OF DAYS NUMBER OF SHARES
COMMON STOCK OUTSTANDING SHARE DAYS OUTSTANDING
------------ -------------- -------------- -----------
<S> <C> <C> <C> <C>
1995
- ----
October 1 - September 30 6,274,260 365 2,290,105,018
Shares Issued 71,205 Various 8,432,227
--------- -------------
6,345,465 2,298,537,245 6,297,362
========= ============= =========
1994
- ----
October 1 - September 30 6,881,449 365 2,511,728,756
Treasury Stock Purchases ( 661,670) Various ( 36,167,603)
Shares Issued 54,481 Various 11,332,906
--------- -------------
6,274,260 2,486,894,059 6,813,408
========= ============= =========
1993
- ----
October 1 - September 30 6,836,849 365 2,495,449,751
Shares Issued 44,600 Various 7,631,475
--------- -------------
6,881,449 2,503,081,226 6,857,757
========= ============= =========
</TABLE>
(B) Computation of Earnings Per Share:
Computation of earnings per share is net earnings divided by the weighted
average number of shares of common stock outstanding for the years ended
September 30,
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Net Earnings $4,153,761 $3,665,123 $3,122,163
Weighted average number of
shares of common stock
outstanding 6,297,362 6,813,408 6,857,757
Earnings Per Share $.66 $.54 $.46
==== ==== ====
</TABLE>
62
<PAGE> 63
SUBSIDIARIES OF REGISTRANT
STATE OF
NAME INCORPORATION
---- -------------
Uni-Marts of America, Inc. Delaware
Uni-Marts of America, Inc. does business only under its legal corporate name.
63
<PAGE> 64
INDEPENDENT AUDITORS' CONSENT
Board of Directors and Stockholders of Uni-Marts, Inc.
State College, Pennsylvania
We consent to the incorporation by reference in this Registration Statement No.
33-9807 of Uni-Marts, Inc. on Form S-8 of our report dated October 23, 1995
(December 26, 1995 as to Note M) appearing in the Annual Report on Form 10-K of
Uni-Marts, Inc. for the year ended September 30, 1995.
/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
December 27, 1995
64
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED SEPTEMBER 30, 1995 AND THE STATEMENT OF EARNINGS FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000805020
<NAME> UNI-MARTS, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<CASH> 7,325,513
<SECURITIES> 434,508
<RECEIVABLES> 2,535,784
<ALLOWANCES> 123,800
<INVENTORY> 15,564,752
<CURRENT-ASSETS> 28,186,111
<PP&E> 97,673,113
<DEPRECIATION> 37,414,200
<TOTAL-ASSETS> 95,669,863
<CURRENT-LIABILITIES> 25,856,459
<BONDS> 33,342,781
<COMMON> 704,289
0
0
<OTHER-SE> 31,874,413
<TOTAL-LIABILITY-AND-EQUITY> 95,669,863
<SALES> 324,033,319
<TOTAL-REVENUES> 327,011,371
<CGS> 240,164,720
<TOTAL-COSTS> 320,351,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 78,400
<INTEREST-EXPENSE> 3,322,550
<INCOME-PRETAX> 6,659,961
<INCOME-TAX> 2,506,200
<INCOME-CONTINUING> 4,153,761
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,153,761
<EPS-PRIMARY> .66
<EPS-DILUTED> .66
</TABLE>
<PAGE> 66
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1995
----------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
--------------------- ---------------------
Commission file number 1-11556
-------------------------------------------------------
UNI-MARTS, INC. RETIREMENT SAVINGS & INCENTIVE PLAN
- -------------------------------------------------------------------------------
(Full title of the plan)
UNI-MARTS, INC.
- -------------------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
477 East Beaver Avenue, State College, PA 16801-5690
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
This Document Contains 17 Pages.
Exhibit Index on Page 16.
1
<PAGE> 67
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1995 AND 1994 AND FOR THE
THREE YEARS IN THE PERIOD ENDED SEPTEMBER 30, 1995:
Statements of Net Assets Available for Benefits 4-5
Statements of Changes in Net Assets Available for Benefits 6-8
Notes to Financial Statements 9-12
SUPPLEMENTAL SCHEDULES AS OF SEPTEMBER 30, 1995
AND FOR THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 13
Item 27d - Schedule of Reportable Transactions Involving
Securities of the Same Issue Where the Aggregate Amount
Exceeds 5% of Beginning Plan Value 14
Supplemental schedules not included herein are omitted because
of the absence of conditions under which they are required.
2
<PAGE> 68
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
Uni-Marts, Inc. Retirement Savings & Incentive Plan
State College, Pennsylvania
We have audited the accompanying statements of net assets available for benefits
of Uni-Marts, Inc. Retirement Savings & Incentive Plan as of September 30, 1995
and 1994, and the related statements of changes in net assets available for
benefits for each of the three years in the period ended September 30, 1995.
These financial statements are the responsibility of the Plan'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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of September 30,
1995 and 1994, and the changes in net assets available for benefits for each of
the three years in the period ended September 30, 1995 in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental information by fund in the statements of net assets
available for benefits and statements of changes in net assets available for
benefits is presented for the purpose of additional analysis rather than to
present information regarding the net assets available for benefits and changes
in net assets available for benefits of the individual funds and is not a
required part of the basic financial statements. The supplemental schedules and
supplemental information by fund are the responsibility of the Plan's
management. Such supplemental schedules and supplemental information by fund
have been subjected to the auditing procedures applied in our audits of the
basic financial statements and, in our opinion, except for the omission of
certain historical cost information in the supplemental schedules, are fairly
stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/S/ DELOITTE & TOUCHE LLP
November 10, 1995
3
<PAGE> 69
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Supplementary Information by Fund
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Uni-Marts,
Inc.
Money Government Capital High Common
Market Income Growth Income Stock Total
ASSETS Fund Fund Fund Fund Fund
Cash $ 18,625 $ 5,044 $ 5,101 $ 4,947 $ 33,717
-------- -------- ---------- -------- ----------
Investments, at fair value:
Uni-Marts, Inc. Common Stock,
121,345 shares: $849,414 849,414
Pooled funds 592,318 553,433 1,243,344 449,527 2,838,622
Participant loans 58,607 58,607
-------- -------- ---------- -------- -------- ----------
Total investments 650,925 553,433 1,243,344 449,527 849,414 3,746,643
-------- -------- ---------- -------- -------- ----------
Contributions receivable 2,909 2,211 3,823 1,841 10,784
Interfund receivable (payable) (5,435) 10,188 (1,554) (3,199)
-------- -------- ---------- -------- -------- ----------
(2,526) 12,399 2,269 (1,358) 10,784
-------- -------- ---------- -------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $667,024 $570,876 $1,250,714 $453,116 $849,414 $3,791,144
======== ======== ========== ======== ======== ==========
See notes to financial statements.
</TABLE>
4
<PAGE> 70
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Supplementary Information by Fund
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Uni-Marts,
Inc.
Money Government Capital High Common
Market Income Growth Income Stock Total
ASSETS Fund Fund Fund Fund Fund
Cash $410,870 $ 5,024 $ 5,037 $ 5,040 $ 425,971
-------- -------- -------- -------- ----------
Investments, at fair value:
Uni-Marts, Inc. Common Stock,
97,442 shares: $487,208 487,208
Pooled funds 74,518 504,923 947,544 387,243 1,914,228
Participant loans 44,610 44,610
-------- -------- -------- -------- -------- ----------
Total investments 119,128 504,923 947,544 387,243 487,208 2,446,046
-------- -------- -------- -------- -------- ----------
Contributions receivable 3,063 2,542 4,014 1,903 11,522
-------- -------- -------- -------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $533,061 $512,489 $956,595 $394,186 $487,208 $2,883,539
======== ======== ======== ======== ======== ==========
See notes to financial statements.
</TABLE>
5
<PAGE> 71
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Supplementary Information by Fund
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Uni-Marts,
Inc.
Money Government Capital High Common
Market Income Growth Income Stock Total
Fund Fund Fund Fund Fund
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $533,061 $512,489 $ 956,595 $394,186 $487,208 $2,883,539
-------- -------- ---------- -------- -------- ----------
ADDITIONS:
Participant contributions 81,419 63,675 109,106 52,439 53,421 360,060
Employer contributions 111,139 111,139
Interest and dividend income 27,003 35,691 35,691 38,747 12,420 149,552
Net appreciation in fair value
of plan assets 29,949 219,302 20,257 226,142 495,650
Interfund transfers 62,973 (24,801) (31,962) (8,423) 2,213
Rollover contribution 1,033 344 172 172 1,721
-------- -------- ---------- -------- -------- ----------
Total additions 172,428 104,858 332,137 103,192 405,507 1,118,122
-------- -------- ---------- -------- -------- ----------
DEDUCTIONS:
Payments to beneficiaries (38,362) (46,471) (38,018) (44,247) (43,301) (210,399)
Other (103) (15) (118)
-------- -------- ---------- -------- -------- ----------
Total deductions (38,465) (46,471) (38,018) (44,262) (43,301) (210,517)
-------- -------- ---------- -------- -------- ----------
INCREASE IN NET ASSETS 133,963 58,387 294,119 58,930 362,206 907,605
-------- -------- ---------- -------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $667,024 $570,876 $1,250,714 $453,116 $849,414 $3,791,144
======== ======== ========== ======== ======== ==========
See notes to financial statements.
</TABLE>
6
<PAGE> 72
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Supplementary Information by Fund
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Uni-Marts,
Inc.
Money Government Capital High Common
Market Income Growth Income Stock Total
Fund Fund Fund Fund Fund
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $542,221 $602,764 $ 989,257 $419,214 $415,914 $2,969,370
-------- -------- --------- -------- -------- ----------
ADDITIONS:
Participant contributions 82,850 73,631 117,590 55,477 46,974 376,522
Employer contributions 113,811 113,811
Interest and dividend income 18,067 37,342 74,336 35,512 9,271 174,528
Net (depreciation)in fair value
of plan assets (54,480) (58,703) (35,611) (15,762) (164,556)
Interfund transfers 61,378 (46,793) (30,860) 13,678 2,597
--------- -------- --------- -------- -------- ----------
Total additions 162,295 9,700 102,363 69,056 156,891 500,305
--------- -------- --------- -------- -------- ----------
DEDUCTIONS:
Payments to beneficiaries (170,657) (99,975) (135,017) (94,076) (85,597) (585,322)
Other (798) (8) (8) (814)
--------- -------- --------- -------- -------- ----------
Total deductions (171,455) (99,975) (135,025) (94,084) (85,597) (586,136)
--------- -------- --------- -------- -------- ----------
(DECREASE) INCREASE IN NET ASSETS (9,160) (90,275) (32,662) (25,028) 71,294 (85,831)
--------- -------- --------- -------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 533,061 $512,489 $ 956,595 $394,186 $487,208 $2,883,539
========= ======== ========= ======== ======== ==========
See notes to financial statements.
</TABLE>
7
<PAGE> 73
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 1993
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Supplementary Information by Fund
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Uni-Marts,
Inc.
Money Government Capital High Common
Market Income Growth Income Stock Total
Fund Fund Fund Fund Fund
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $512,313 $537,793 $752,703 $335,140 $119,440 $2,257,389
-------- -------- -------- -------- -------- ----------
ADDITIONS:
Participant contributions 84,455 74,737 106,960 51,286 33,317 350,755
Employer contributions 110,876 110,876
Interest and dividend income 10,605 43,987 4,329 31,659 6,918 97,498
Net appreciation (depreciation)in
fair value of plan assets (3,969) 91,312 22,150 163,232 272,725
Interfund transfers (62) (35,492) 45,432 (9,878)
Valley Farms transfers 4,175 27 315 15,234 15,240 5,073 67,037
-------- -------- -------- -------- -------- ----------
Total additions 99,173 106,578 263,267 110,457 319,416 898,891
-------- -------- -------- -------- -------- ----------
DEDUCTIONS:
Payments to beneficiaries (69,265) (41,607) (26,713) (26,376) (22,942) (186,903)
Other (7) (7)
-------- -------- -------- -------- -------- ----------
Total deductions (69,265) (41,607) (26,713) (26,383) (22,942) (186,910)
-------- -------- -------- -------- -------- ----------
INCREASE IN NET ASSETS 29,908 64,971 236,554 84,074 296,474 711,981
-------- -------- -------- -------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $542,221 $602,764 $989,257 $419,214 $415,914 $2,969,370
======== ======== ======== ======== ======== ==========
See notes to financial statements.
</TABLE>
8
<PAGE> 74
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995 AND 1994
- -------------------------------------------------------------------------------
1. THE PLAN
Uni-Marts, Inc. Retirement Savings & Incentive Plan (the "Plan"), a defined
contribution plan, was established October 1, 1983 to include all full-time
employees of the former parent of Uni-Marts, Inc. and certain of its
subsidiaries and related companies. Effective October 1, 1987, the Plan was
amended and restated to include only the employees of Uni-Marts, Inc. and
its affiliates (the "Company"). The assets of the Plan attributable to
employees of the former parent and related companies were spun off from the
Plan effective the date of the amendment. Uni-Marts, Inc. is the Trustee
of the Plan.
Employees are eligible to participate after attainment of age 21, and
completion of at least 1,000 hours of service in one eligibility computation
period. Employees whose wages and conditions of employment are subject to
agreement with a collective bargaining agent are not eligible to participate
unless provided by the collective bargaining agreement. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
All eligible employees may direct the Company to contribute from 1% to 3% of
their compensation to the Plan on their behalf as a basic contribution. An
additional amount up to 12% of compensation may be deposited as a
supplemental contribution. Total individual employee contributions are
indexed annually for inflation and may not exceed $9,240, $8,994, and $8,728
per Plan year ended 1995, 1994 and 1993, respectively, as provided in the
Plan. The Company will make matching contributions equal to $.50 for each
$1.00 of basic contribution and may make an optional contribution at the
discretion of the Board of Directors. No optional contributions were made
in the Plan years 1995, 1994 and 1993. Each participant has at all times a
100% nonforfeitable interest in their account balance.
Effective October 1, 1992, the Plan was amended and restated. The effect
of this amendment is to reflect the merger of the Valley Farms, Inc. (a
subsidiary of Uni-Marts, Inc.) Cash or Deferred Profit Sharing Plan with and
into the Plan and to incorporate the amendments necessary to comply with
regulations issued by the Internal Revenue Service (IRS).
Each employee directs that his/her contribution be invested and reinvested
in one or more of the investment funds selected by the Trustee and/or in the
Company's common stock. The Trustee determines how all amounts credited to
a member's optional contribution account, if any, will be invested. All
income, expenses, gains or losses attributable to assets held in each
investment fund are reflected therein exclusively.
Participants' accounts may be withdrawn upon separation from the Company,
death, disability or retirement (regular - age 65; early - age 55).
Withdrawals, except for hardship withdrawals, are distributed in lump sums,
including earnings. A participant may request a loan or apply for a
9
<PAGE> 75
hardship withdrawal in accordance with the provisions of the Plan. The
Company has the right to terminate the Plan subject to the provisions of
ERISA.
2. ADMINISTRATION OF THE PLAN
The Company is the administrator of the Plan. All fees related to the
Plan's administration and recordkeeping are paid by the Company and
therefore are not reported as an expense of the Plan.
3. INVESTMENTS
Investments representing units of funds maintained by diversified, open-end
management investment companies are stated at fair value as determined by
published market prices. Uni-Marts, Inc. common stock is valued at the
closing market price. Income and expenses relating to these investments are
recorded on the accrual basis of accounting.
10
<PAGE> 76
Investments at September 30, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1995 1994
Money Market Fund:
Massachusetts Financial Services
Cash Reserve Class B $ 27,171 $ 34,935
Rushmore Money Market Fund 565,147 39,583
---------- ----------
592,318 74,518
---------- ----------
Government Income Fund:
Massachusetts Financial Services
Government Mortgage Class A 82,269
Massachusetts Financial Services
Government Mortgage Class B 198,105 269,303
Franklin U.S. Government Securities 273,059 235,620
---------- ----------
553,433 504,923
---------- ----------
Capital Growth Fund:
Massachusetts Financial Services
Capital Growth Class A 249,338
Massachusetts Financial Services
Capital Growth Class B 422,739 557,441
Janus Fund 571,267 390,103
---------- ----------
1,243,344 947,544
---------- ----------
High Income Fund:
Massachusetts Financial Services
High Income Class A 59,309
Massachusetts Financial Services
High Income Class B 123,814 181,494
Franklin Income Fund 266,404 205,749
---------- ----------
449,527 387,243
---------- ----------
Uni-Marts, Inc. Common Stock 849,414 487,208
---------- ----------
Investments 3,688,036 2,401,436
---------- ----------
Participant Loans 58,607 44,610
---------- ----------
Total Investments $3,746,643 $2,446,046
========== ==========
</TABLE>
11
<PAGE> 77
During 1995, 1994 and 1993, the Plan purchased from Uni-Marts, Inc. 29,054,
28,937 and 36,704 shares of its common stock at a cost of $164,560, $160,785
and $144,193, respectively. The price paid for these shares was the average
of the bid and ask price per share on the date purchased for the 1993 Plan
year and the portion of the 1994 Plan year that the stock was traded on the
over-the-counter market. For the 1995 Plan year and the portion of the 1994
Plan year that the stock was traded on the American Stock Exchange, the
price paid for the shares was as traded on the American Stock Exchange.
4. TAX STATUS
The trust established under the Plan to hold the Plan's assets is qualified
pursuant to the appropriate section of the Internal Revenue Code (IRC), and,
accordingly, the trust's net investment income is exempt from income taxes.
The Plan obtained its latest determination letter on September 9, 1993, in
which the IRS stated that the Plan, as then designed, was in compliance with
the applicable requirements of the IRC. The Plan has been amended since
receiving the determination letter. However, the Plan administrator and
the Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC.
Therefore, they believe that the Plan was qualified and the related
trust was tax exempt as of the financial statement date.
*****
12
<PAGE> 78
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
<TABLE>
<CAPTION>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF INVESTMENT INCLUDING
MATURITY DATE, RATE OF INTEREST, CURRENT
IDENTITY OF ISSUE COLLATERAL, PAR OR MATURITY VALUE COST VALUE
Massachusetts Financial Services:
Cash Reserve Class B Money Market Account, 27,171 shares $ 27,171 $ 27,171
Government Mortgage Class A Government Bond Mutual Fund, 12,261 shares * 82,269
Government Mortgage Class B Government Bond Mutual Fund, 29,524 shares * 198,105
Capital Growth Class A Stock Mutual Fund, 14,921 shares * 249,338
Capital Growth Class B Stock Mutual Fund, 25,405 shares * 422,739
High Income Class A Corporate Bond Mutual Fund, 11,428 shares * 59,309
High Income Class B Corporate Bond Mutual Fund, 23,856 shares * 123,814
Rushmore Money Market Fund Money Market Account, 565,147 shares 565,141 565,147
Franklin U.S. Government Securities Government Bond Mutual Fund, 39,747 shares * 273,059
Janus Fund Stock Mutual Fund, 24,216 shares * 571,267
Franklin Income Fund Corporate Bond Mutual Fund, 115,828 shares * 266,404
Uni-Marts, Inc. Common Stock Company Common Stock, 121,345 shares 588,126 849,414
Employee Loans Receivable Maturing 1998 - 2010, interest from 7% to 8.5% 58,607 58,607
----------
Total $3,746,643
==========
</TABLE>
* Cost information is not available
13
<PAGE> 79
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
<TABLE>
<CAPTION>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS INVOLVING SECURITIES
OF THE SAME ISSUE WHERE THE AGGREGATE AMOUNT EXCEEDS 5% OF
BEGINNING PLAN VALUE
YEAR ENDED SEPTEMBER 30, 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT VALUE
EXPENSE OF ASSET ON
IDENTITY OF PURCHASE SELLING INCURRED WITH COST OF TRANSACTION NET GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE TRANSACTION ASSET DATE (LOSS)
Uni-Marts, Inc. Uni-Marts, Inc. Various N/A None $164,560 $164,560 N/A
common stock
</TABLE>
14
<PAGE> 80
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Annual Report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNI-MARTS, INC.
RETIREMENT SAVINGS & INCENTIVE PLAN
/S/ J. KIRK GALLAHER
-------------------------------------------
J. Kirk Gallaher
Executive Vice President
15
<PAGE> 81
EXHIBIT INDEX
Page(s)
23 Consent of Independent Certified Public Accountants. 17
16
<PAGE> 82
EXHIBIT
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Uni-Marts, Inc.:
We consent to the incorporation by reference in the Registration Statement No.
33-9807 of Uni-Marts, Inc. on Form S-8 of our report dated November 10, 1995
appearing in this Annual Report on Form 11-K of Uni-Marts, Inc. Retireement
Savings and Incentive Plan for the year ended September 30, 1995.
/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
December 27, 1995
17
