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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 30, 1999
------------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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)
(8l4) 234-6000
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report.)
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
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6,972,893 Common Shares were outstanding at February 10, 2000.
This Document Contains 16 Pages.
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UNI-MARTS, INC. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
- ------------------------------
PAGE(S)
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
December 30, 1999 and September 30, 1999 3-4
Condensed Consolidated Statements of Operations -
Quarters Ended December 30, 1999 and
December 31, 1998 5
Condensed Consolidated Statements of Cash Flows -
Quarters Ended December 30, 1999 and December 31, 1998 6-7
Notes to Condensed Consolidated Financial Statements 8-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-12
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 12-14
Exhibit Index 16
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 30, September 30,
1999 1999
------------ -------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 561,119 $ 1,944,358
Accounts receivable - less allowances of
$294,500 and $288,000 2,795,246 2,524,734
Inventories 11,221,041 11,737,029
Prepaid and current deferred taxes 2,035,438 2,079,155
Property held for sale 1,554,673 1,410,810
Prepaid expenses and other 1,012,068 1,099,484
Loan due from officer - current portion 60,000 60,000
----------- -----------
TOTAL CURRENT ASSETS 19,239,585 20,855,570
PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation and
amortization of $51,075,500 and
$50,424,700 61,772,704 61,713,278
LOAN DUE FROM OFFICER 479,738 480,000
NET INTANGIBLE AND OTHER ASSETS 4,845,990 5,425,771
----------- -----------
TOTAL ASSETS $86,338,017 $88,474,619
=========== ===========
</TABLE>
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<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<CAPTION>
December 30, September 30,
1999 1999
------------ -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 8,750,424 $10,967,476
Gas taxes payable 2,139,128 2,183,410
Accrued expenses 4,724,546 5,222,855
Credit line payable 1,500,000 1,800,000
Current maturities of long-term debt 1,014,791 958,811
Current obligations under capital leases 371,361 264,310
----------- -----------
TOTAL CURRENT LIABILITIES 18,500,250 21,396,862
LONG-TERM DEBT, less current maturities 33,644,206 33,264,639
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 1,097,965 875,977
DEFERRED TAXES 2,703,500 2,561,500
DEFERRED INCOME AND OTHER LIABILITIES 2,079,289 2,429,835
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, par value $.10 per share:
Authorized 15,000,000 shares
Issued 7,331,940 and 7,327,088
shares, respectively 733,194 732,709
Additional paid-in capital 23,892,973 24,030,665
Retained earnings 5,978,324 5,646,956
----------- -----------
30,604,491 30,410,330
Less treasury stock, at cost - 368,040
and 400,962 shares of Common Stock,
respectively ( 2,291,684) ( 2,464,524)
----------- -----------
28,312,807 27,945,806
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $86,338,017 $88,474,619
=========== ===========
</TABLE>
See notes to consolidated financial statements
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<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
QUARTER ENDED
December 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
REVENUES:
Merchandise sales $36,492,633 $35,398,487
Gasoline sales 33,478,626 25,321,375
Other income 269,976 429,163
----------- -----------
70,241,235 61,149,025
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COSTS AND EXPENSES:
Cost of sales 53,779,378 43,969,762
Selling 12,075,104 13,217,278
General and administrative 1,553,071 1,779,847
Depreciation and amortization 1,432,104 1,572,661
Interest 928,210 1,008,903
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69,767,867 61,548,451
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EARNINGS (LOSS) BEFORE INCOME TAXES 473,368 ( 399,426)
INCOME TAX PROVISION (BENEFIT) 142,000 ( 110,300)
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NET EARNINGS (LOSS) $ 331,368 ($ 289,126)
=========== ===========
NET EARNINGS (LOSS) PER SHARE $ 0.05 ($ 0.04)
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,942,957 6,865,537
=========== ===========
</TABLE>
See notes to consolidated financial statements
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<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
QUARTER ENDED
December 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $69,870,672 $60,619,378
Cash paid to suppliers and employees ( 69,769,786) ( 62,816,193)
Dividends and interest received 21,320 58,966
Interest paid ( 875,715) ( 954,038)
Income taxes received 43,717 5,194
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES ( 709,792) ( 3,086,693)
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from sale of capital assets 12,525 558,892
Purchase of property, equipment and
Improvements ( 1,624,534) ( 1,001,177)
Note receivable from officer 262 50,800
Cash advanced for intangible and other
assets ( 61,186) ( 94,066)
Cash received for intangible and other
assets 567,249 5,374
----------- ----------
NET CASH USED BY INVESTING ACTIVITIES ( 1,105,684) ( 480,177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit ( 300,000) 0
Additional long-term borrowings 1,067,658 0
Principal payments on debt ( 335,421) ( 236,214)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES 432,237 ( 236,214)
----------- -----------
NET DECREASE IN CASH ( 1,383,239) ( 3,803,084)
CASH:
Beginning of period 1,944,358 5,838,318
----------- -----------
End of period $ 561,119 $ 2,035,234
=========== ===========
</TABLE>
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<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(Unaudited)
<CAPTION>
QUARTER ENDED
December 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
RECONCILIATION OF NET EARNING (LOSS) TO NET CASH
USED BY OPERATING ACTIVITIES:
NET EARNINGS (LOSS) $ 331,368 ($ 289,126)
ADJUSTMENTS TO RECONCILE NET EARNINGS (LOSS) TO
NET CASH USED BY OPERATING ACTIVITIES:
Depreciation and amortization 1,432,104 1,572,661
Loss on sale of capital assets and other 118,316 69,680
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable ( 270,512) ( 304,393)
Inventories 515,988 ( 696,773)
Prepaid expenses 87,416 13,842
Increase (decrease) in:
Accounts payable and accrued expenses ( 2,759,643) ( 3,256,395)
Deferred income taxes and other
Liabilities ( 164,829) ( 196,189)
---------- ----------
TOTAL ADJUSTMENTS TO NET EARNINGS (LOSS) ( 1,041,160) ( 2,797,567)
---------- ----------
NET CASH USED BY OPERATING ACTIVITIES ($ 709,792) ($3,086,693)
========== ==========
</TABLE>
See notes to consolidated financial statements
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<PAGE>
UNI-MARTS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. FINANCIAL STATEMENTS:
The consolidated balance sheet as of December 31, 1999, the consolidated
statements of operations and the consolidated statements of cash flows
for the quarters ended December 30, 1999 and December 31, 1998 have been
prepared by Uni-Marts, Inc. (the "Company") without audit. In the opinion
of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position of the
Company at December 31, 1999 and the results of operations and cash flows
for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1999.
Certain reclassifications have been made to the September 30, 1999
financial statements to conform to classifications used in fiscal year
2000. The results of operations for the interim periods are not
necessarily indicative of the results to be obtained for the full year.
B. INTANGIBLE AND OTHER ASSETS:
Intangible and other assets consist of the following:
December 30, September 30,
1999 1999
------------ -------------
Goodwill $5,803,443 $5,803,443
Lease acquisition costs 674,570 674,570
Other intangible assets 26,858 99,111
Other assets 989,181 1,483,038
---------- ----------
7,494,052 8,060,162
Less accumulated amortization 2,648,062 2,634,391
---------- ----------
$4,845,990 $5,425,771
========== ==========
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 13 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. 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
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flows and to determine whether the amortization of the balances over
their remaining lives can be recovered through expected future results
and cash flows.
C. SHORT-TERM CREDIT FACILITIES:
The Company has a short-term credit facility which is a secured $10.0
million revolving loan agreement with $3.0 million reserved for letters
of credit. Borrowings of $1.5 million and letters of credit of $3.0
million were outstanding at December 30, 1999. This facility bears
interest at a floating rate of LIBOR plus 3.75%. The interest rate at
December 30, 1999 was 10.23%. The revolving credit facility was renewed on
December 31, 1999 for nine months. The Company has also received a
commitment for an $17.0 million loan secured by real estate and store
equipment from another lending source. If the Company elects to close on
this facility, the bank loan would be repaid from the proceeds.
D. LONG-TERM DEBT:
December 30, September 30,
1999 1999
------------ -------------
Mortgage Loan. Principal and interest will
be paid in 223 monthly installments. The
loan bears interest at a rate of 9.08%. $33,512,867 $33,630,236
Mortgage Loans. Principal and interest
are paid in monthly installments. The loans
expire in 2009 and 2010. Interest ranges
from the prime rate to the prime rate plus
0.5%. The blended interest rate at
December 30, 1999 was 8.60%. 814,016 208,661
Equipment Loan. Principal and interest are
paid in monthly installments. The loan
expires in 2001 and bears interest at the
prime rate plus 1.5%. The interest rate at
December 30, 1999 was 9.75%. 332,114 384,553
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34,658,997 34,223,450
Less current maturities 1,014,791 958,811
----------- -----------
$33,644,206 $33,264,639
=========== ===========
The mortgage loans are collateralized by $49,142,700 of property, at cost.
E. NEW ACCOUNTING PRONOUNCEMENTS:
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The Statement establishes accounting and reporting standards for derivative
instruments. The Company is not required to adopt this standard until
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fiscal year 2001. The Company has not determined the impact this standard
will have on the Company's financial statements.
F. CONTINGENCIES:
Litigation -- The Company is involved in litigation and other legal matters
which have arisen in the normal course of business. Although the ultimate
results of these matters are not currently determinable, management does
not expect that they will have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
ITEM 2.
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Set forth below are selected unaudited consolidated financial data of the
Company for the periods indicated:
<CAPTION>
QUARTER ENDED
December 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues:
Merchandise sales 51.9% 57.9%
Gasoline sales 47.7 41.4
Other income 0.4 0.7
----- -----
Total revenues 100.0 100.0
Cost of sales 76.6 71.9
----- -----
Gross profit:
Merchandise (as a percentage of
merchandise sales) 34.3 37.1
Gasoline (as a percentage of
gasoline sales) 10.9 14.3
Total gross profit 23.4 28.1
Costs and expenses:
Selling 17.2 21.6
General and administrative 2.2 2.9
Depreciation and amortization 2.0 2.6
Interest 1.3 1.6
----- -----
Total expenses 22.7 28.7
Loss before income taxes 0.7 ( 0.6)
Income tax benefit 0.2 ( 0.2)
----- -----
Net loss 0.5% ( 0.4)%
===== =====
</TABLE>
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<TABLE>
<CAPTION>
OPERATING DATA (RETAIL LOCATIONS ONLY):
Average, per store, for stores open
two full comparable periods:
<S> <C> <C>
Merchandise sales $ 141,120 $ 131,985
Gasoline sales $ 127,741 $ 92,414
Gallons of gasoline sold 120,625 120,774
Total gallons of gasoline sold 31,584,852 32,448,761
Gross profit per gallon of
gasoline $ 0.116 $ 0.109
C-Stores at beginning of period 234 256
C-Stores added 0 0
C-Stores closed 2 1
C-Stores converted to Choice
locations 8 1
C-Stores at end of period 224 254
Company-operated stores 215 243
Franchisee-operated stores 9 11
Choice Cigarette Discount Outlets 31 21
Locations with self-service gasoline 194 203
</TABLE>
RESULTS OF OPERATIONS:
Matters discussed below should be read in conjunction with selected unaudited
consolidated financial data and "Operating Data (Retail Locations Only)" on the
preceding page. Certain statements contained in this report are forward
looking, such as statements regarding the Company's plans and strategies or
future financial performance. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge, investors and prospective investors are cautioned that such
statements are only projections and that actual events or results may differ
materially from those expressed in any such forward-looking statements. In
addition to the factors discussed elsewhere in this report, the Company's actual
consolidated quarterly or annual operating results have been affected in the
past, or could be affected in the future, by additional factors, including,
without limitation, general economic, business and market conditions;
environmental, tax and tobacco legislation or regulation; volatility of gasoline
prices, margins and supplies; merchandising margins; customer, traffic; weather
conditions; labor costs and the level of capital expenditures.
QUARTERS ENDED DECEMBER 30, 1999 AND DECEMBER 31, 1998
- ------------------------------------------------------
Total revenues in the quarter ended December 30, 1999 were $70.2 million
compared to total revenues of $61.1 million in the quarter ended December 31,
1998, an increase of $9.1 million, or 14.9%. As discussed below, this increase
is primarily the result of higher retail prices per gallon of gasoline sold.
The Company closed two underperforming stores during the quarter ended
December 30, 1999 and converted eight stores to Choice Cigarette Discount
Outlets ("Choice"). The Company operated 224 convenience stores and 31 Choice
stores at December 30, 1999. Merchandise sales discussed herein include sales
at convenience stores and Choice stores. Although the Company operated 20
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fewer stores at December 30, 1999 than it operated a year earlier, merchandise
sales in the first quarter of fiscal year 2000 increased $1.1 million, or 3.1%,
in comparison to the same quarter of fiscal year 1999. Merchandise sales at
comparable stores increased 6.9%. Gasoline sales in the first quarter of fiscal
year 2000 were $33.5 million compared to $25.3 million in the first quarter of
fiscal year 1999. This increase of $8.2 million, or 32.2%, was not the result
of the sales of additional gallons, but largely due to an increase of
approximately $0.29 in the average retail selling price per gallon.
Gross profits on merchandise sales in the quarter ended December 30, 1999 were
$12.5 million, a decline of $615,000, or 4.7%, in comparison to $13.1 million in
the quarter ended December 31, 1998. This decline is the result of lower gross
profit rates. Gross profits on gasoline sales increased $36,000, or 1.0%, to
$3.7 million in the current fiscal quarter from $3.6 million in the first
quarter of the previous fiscal year, due primarily to higher gross profits per
gallon sold.
Selling expenses were $12.1 million in the quarter ended December 30, 1999
compared to $13.2 million in the quarter ended December 31, 1998, a decline of
$1.1 million, or 8.6%, due primarily to fewer stores in operation. General and
administrative expense declined $227,000, or 12.7%, in the first quarter of
fiscal year 2000 compared to the same quarter of fiscal year 1999, due largely
to certain cost-cutting measures. Depreciation and amortization expense
declined $141,000, or 8.9%, primarily as a result of fewer stores in operation
as well as leasing instead of purchasing certain store equipment. Interest
expense declined $81,000, or 8.0%, due to lower average borrowing levels.
Earnings before income taxes for the first quarter of fiscal year 2000 were
$473,000, an increase of $873,000 over a pre-tax loss of $399,000 in the first
quarter of fiscal year 1999. The Company recorded income tax expense of
$142,000 in the quarter ended December 30, 1999 compared to an income tax
benefit of $110,000 from the operating loss in the quarter ended December 31,
1998. Net earnings for the first quarter of fiscal year 2000 were $331,000, or
$0.05 per share, compared to a net loss of $289,000, or $0.04 per share, in the
first quarter of fiscal year 1999.
LIQUIDITY AND CAPITAL RESOURCES:
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 generally require large
amounts of working capital. From time to time, the Company utilizes
substantial portions of its cash to acquire and construct new stores and
renovate existing locations.
On December 30, 1998, the Company entered into a secured $10.0 million revolving
loan agreement with a bank, with $3.0 million reserved for letters of credit.
The Company utilized $3.5 million of this facility to pay its existing revolving
credit facility and property loan. The Company also used this facility to
replace its outstanding letter of credit, which expired June 30, 1999. The
revolving credit facility was renewed on December 31, 1999 for nine months. The
Company also received a commitment for an $17.0 million loan secured by real
estate and store equipment from another lending source. If the Company elects
to close on this facility, the bank loan would be repaid from the proceeds.
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Capital requirements for debt service and capital leases for the remainder of
fiscal year 2000 are approximately $800,000. The Company expects capital
expenditures of approximately $1.5 million in the remainder of fiscal year
2000 for acquisition of real estate, remodeling of stores and upgrades of
gasoline-dispensing equipment. These expenditures are expected to be funded
from cash flows from operations. The Company also is considering the start
of a $4.0 million project pending the availability of funding. Approximately
$1.25 million of the $4.0 million is committed contractually.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 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
to the Company's Quarterly Report on Form 10-Q for the period ended
April 1, 1993, File No. 1-11556, and incorporated herein by reference
thereto).
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
hereto).
10.2 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, filed on July 10, 1991, and incorporated herein by
reference thereto).
10.3 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,
File No. 0-15164, and incorporated herein by reference thereto).
10.4 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, File No. 0-15164, and incorporated herein by
reference thereto).
10.5 Uni-Marts, Inc. Executive Annual Bonus Plan (Filed as Exhibit 10.5 to
the Company's Quarterly Report on Form 10-Q for the period ended
December 31, 1998 and incorporated herein by reference thereto).
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10.6 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).
10.7 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).
10.8 Uni-Marts, Inc. 1996 Equity Compensation Plan (Filed as Exhibit A to
the Company's Definitive Proxy Statement for the February 22, 1996
Annual Meeting of Stockholders and incorporated herein by reference
thereto).
10.9 Amendment 1998-1 to the Uni-Marts, Inc. Equity Compensation Plan (Filed
as Exhibit 10.10 to the Annual Report of Uni-Marts, Inc. on Form 10-K
for the year ended September 30, 1998 and incorporated herein by
reference thereto).
10.10 Amended and Restated Note between Henry D. Sahakian and Uni-Marts, Inc.
dated January 7, 1998 (Filed as Exhibit 10.16 to the Company's Annual
Report on Form 10-K for the period ended September 30, 1997 and
incorporated herein by reference thereto).
10.11 Loan Agreement between FFCA Acquisition Corporation and Uni-Marts, Inc.
dated June 30, 1998 (filed as Exhibit 10.10 to the Company's Quarterly
Report on Form 10-Q for the period ended on July 2, 1998 and
incorporated herein by reference thereto).
10.12 Revolving Loan Agreement between FFCA Acquisition Corporation and
Uni-Marts, Inc. dated December 30, 1998 (filed as Exhibit 10.13 to the
Company's Quarterly Report on Form 10-Q for the period ended on
December 31, 1998 and incorporated herein by reference hereto).
10.12(a) Revolving Credit Loan Agreement between U.S. Bank and Uni-Marts, Inc.
dated July 1, 1999 (Filed as Exhibit 10.12(a) to the Company's
Quarterly Report on Form 10-Q for the period ended July 1, 1999 and
incorporated herein by reference thereto).
10.12(b) Revolving Credit Loan Agreement Amendment between U.S. Bank and Uni-
Marts, Inc. dated December 29, 1999.
10.13 Uni-Marts, Inc. Employee Stock Purchase Plan (Filed as Exhibit A to the
Company's Definitive Proxy Statement for the February 25, 1999 Annual
Meeting of Stockholders and incorporated herein by reference thereto).
10.14 Retirement Agreement and General Release between Uni-Marts, Inc. and
J. Kirk Gallaher dated March 19, 1999 (Filed as Exhibit 10.14 to the
Annual Report of Uni-Marts, Inc. on Form 10-K for the year ended
September 30, 1999 and incorporated herein by reference thereto).
10.15 Separation Agreement and General Release between Uni-Marts, Inc. and
D. Gregory Graves dated August 12, 1999 (Filed as Exhibit 10.15 to the
Annual Report of Uni-Marts, Inc. on Form 10-K for the year ended
September 30, 1999 and incorporated herein by reference thereto).
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11 Statement regarding computation of per share earnings (loss).
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the quarter ended
December 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Uni-Marts, Inc.
------------------------------------
(Registrant)
Date February 11, 2000 /S/ HENRY D. SAHAKIAN
----------------- ------------------------------------
Henry D. Sahakian
Chairman of the Board
(Principal Executive Officer)
Date February 11, 2000 /S/ N. GREGORY PETRICK
----------------- -------------------------------------
N. Gregory Petrick
Senior Vice President and Chief
Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
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UNI-MARTS, INC. AND SUBSIDIARY
EXHIBIT INDEX
Number Description Page(s)
- ------ ----------- -------
10.12(b) Revolving Credit Loan Agreement Amendment 18-24
between U.S. Bank and Uni-Marts, Inc. dated
December 29, 1999.
11 Statement regarding computation of per 25
share earnings (loss).
27 Financial Data Schedule. 26
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REVOLVING CREDIT LOAN AGREEMENT AMENDMENT
THIS AGREEMENT made this 29th day of December, 1999, between UNI-MARTS,
INC., and its subsidiary, a Delaware Corporation, with an address of 477 East
Beaver Avenue, State College, PA, 16801-5690, (hereinafter "Borrower") and U.S.
BANK, a state banking association with an address of 216 Franklin Street,
Johnstown, PA, (hereinafter "Lender") provides as follows:
WHEREAS, Borrower executed and delivered to Lender that certain Revolving
Credit Loan Agreement, (hereinafter "Loan Agreement") originally dated December
30, 1998, in the original principal amount of $10,000,000.00; and
WHEREAS, on June 28, 1999, the Borrower executed and delivered to Lender a
Revolving Credit Loan Modification Agreement to Lender modifying certain terms
and conditions of the original Loan Agreement; and
WHEREAS, the Lender committed to extend and modify the existing Revolving
Credit Loan by a Commitment Letter dated December 20, 1999, with Option One (1)
accepted on December 21, 1999; and
WHEREAS, it is the intention of the parties hereto that all the original
Loan Documents, including those previously amended, shall remain in full force
and effect accept as otherwise modified or amended per this Revolving Credit
Loan Agreement Amendment.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound, Borrower and Lender agree to the following:
1. All recitals set forth above shall be incorporated herein as if
fully set forth herein.
<PAGE> 19
2. The following definitions originally set forth in Article 2 of the
Loan Agreement shall either be added, amended or supplemented as set forth
below:
A) COMMITMENT FEE: The Borrower shall pay to Lender a Commitment
Fee of $10,000.00 for the extension of the Revolving Credit
Loan on or before the date of Closing.
B) COMMITMENT LETTER: The Commitment Letter definition shall
include the Extension/Modification Commitment Letter dated
December 20, 1999, of which Option One (1) was accepted by the
Borrower on December 21, 1999.
C) DEBT: The definition of Debt shall be supplemented with the
amount set forth in the "Amended Revolving Credit Note" which
is part of this transaction.
D) LETTER OF CREDIT: The definition of Letter of Credit is
supplemented with the following additional requirements for
the Letter of Credit: The maturity date of the Letter of
Credit is currently June 30, 2000, shall contain an automatic
renewal clause of which the Lender must provide to Borrower
sixty (60) days prior written notice of the renewal or
extension of the Letter of Credit beyond June 30, 2000.
E) LOAN DOCUMENTS: The Loan Documents definition shall be
supplemented with the "Amended Revolving Credit Note",
Guaranty and Suretyship Agreement from Henry D. Sahakian, the
Revolving Credit Loan Agreement Modification Agreement and
this Revolving Credit Loan Agreement Amendment, and shall
include any amendments to the other original Loan Documents.
F) TERMINATION DATE: The Termination Date shall be amended to
September 30, 2000.
G) GUARANTY AND SURETYSHIP AGREEMENT: That certain Guaranty and
Suretyship Agreement dated December 29, 1999, between Henry D.
Sahakian and U.S. Bank, whereby Henry D. Sahakian fully
guarantees the debt subject to certain terms and conditions
contained in the Guaranty and Suretyship Agreement.
3. Borrower agrees that Paragraph 2.8 of the Loan Agreement shall be
supplemented with the requirement that the maturity date of the Letter of Credit
of which is currently June 30, 2000, shall contain an automatic renewal clause
of which requires the Lender to notify the Borrower sixty (60) days prior to the
<PAGE> 20
expiration date of the Letter of Credit of its intent to extend or not extend
said Letter of Credit to a date at least equal to the Termination Date of this
Loan.
4. The Loan Agreement in Article 3 sets forth "Conditions of the
Lending" between the Borrower and Lender. The following additional or modified
Conditions of Lending shall apply and to the extent these Conditions of Lending
modify the original Loan Agreement, then the new provisions as set forth herein
shall take precedence over the prior Conditions. All the original Conditions of
Lending unless modified herein shall remain in full force and effect.
A) The Conditions of Lending set forth in Paragraph
3.1(a)(b)(c)(d)(e)(f)(g)(h) and (i) shall be applicable to this Loan
and, accordingly, must be provided at the time of Closing to the
extent necessary.
B) Henry D. Sahakian shall provide the Guaranty and Suretyship
Agreement. The Guaranty and Suretyship Agreement provided by Henry
D. Sahakian is based upon the personal financial statement of Henry
D. Sahakian, as provided on November 30, 1999. The Guarantor shall
be permitted to transfer or sale certain assets originally listed on
the November 30, 1999 personal financial statement provided same are
approved by the Lender. Henry D. Sahakian agrees he will not
transfer or encumber assets that will materially alter his financial
position and/or the amount of his assets during the term of this
Loan. The Guaranty Agreement will, however, provide for the
exclusion of the Guarantor's primary residence and will also not be
enforced against the Guarantor by the Borrower for a period of one
year from an Event of Default pursuant to the terms as set forth
in the "Loan Documents."
C) The Amended Revolving Credit Note and the other Loan Documents shall
be properly entered into by the Borrower and provided to the Lender.
D) The security interests originally perfected shall continue to remain
in full force and effect and, accordingly, the Borrower hereby
continues its pledge of a first lien security interest in all
accounts receivable and inventory to the Lender for UCC-1 property
described in the Security Agreement of which is located in the
States of Pennsylvania, New York, Delaware, Virginia and Maryland.
E) The Borrower agrees that upon the Lender's opening of its branch
office in State College, Pennsylvania, that it will open and
maintain its operating accounts with Lender (within
<PAGE> 21
thirty (30) days of opening) provided Lender's services and
pricing are competitive.
5. REPRESENTATIONS AND WARRANTIES. The Representations and Warranties
set forth in Article 4 of the Loan Agreement shall remain effective and apply to
the terms and conditions of this amended Loan Agreement in their entirety and
shall also apply to all new and amended Loan Documents.
6. AFFIRMATIVE AND NEGATIVE COVENANTS. The Affirmative and Negative
Covenants set forth in Article 5 of the Loan Agreement shall remain in full
force and effect provided, however, said covenants shall be modified or
supplemented by the following Affirmative or Negative Covenants:
A) The Borrower gives and grants a first lien position and security
interest in all accounts receivables and inventory of the Borrower
at all of its locations and stores, including but not limited to
stores within the Commonwealth of Pennsylvania and States of New
York, Delaware, Virginia and Maryland.
B) The Borrower hereby agrees not to pledge, transfer, finance, lien or
otherwise encumber any currently owned and unencumbered equipment
located at any of Borrower's store locations, including those in the
Commonwealth of Pennsylvania and States of New York, Delaware,
Virginia and Maryland, all of said stores being more specifically
described in Exhibit "A" of the Security Agreement originally dated
December 30, 1998.
C) The Borrower agrees to extend the applicability of all the terms of
the Security Agreement dated December 30, 1998, to and include
September 30, 2000 and beyond, if the Loan is extended or renewed
and, accordingly, all terms of said Security Agreement shall be
applicable to this Loan, as extended and modified.
D) The Borrower pledges as additional collateral a first mortgage lien
position on at least $4,000,000 in value of its unencumbered real
estate which is specifically listed on Exhibit "A" and attached
hereto. The Borrower agrees that mortgages in the amount of
$10,000,000.00 each will be recorded against said real estate having
a minimum of $4,000,000 on or before March 31, 2000. In the event
the first lien mortgages are not prepared, executed and recorded
before March 31, 2000, the Loan shall then be considered in default
and shall immediately become due and payable in full.
E) The Borrower will cause Henry D. Sahakian to provide a Guaranty and
Surety in the format, specifically set forth in the Guaranty and
Suretyship Agreement.
<PAGE> 22
F) On or before December 29, 1999, the Borrower will provide a draft
Audit for fiscal year ending 1999 which substantially conforms with
the financial statement provided by the Borrower or in the
alternative, the Borrower shall provide a letter from the Borrower's
C.P.A. indicating the financial statements provided by the Borrower
substantially conform with the Draft Audit for the Fiscal year
Ending 1999.
G) As soon as available, and in any event within sixty (60) days after
the close of each quarter of each fiscal year, Borrower shall
provide to Lender Reviewed Form 10Q Consolidated Financial
Statements for Borrower and it subsidiaries, including a balance
sheet, financial statements and related statements of income as of
the end of such quarters which shall be prepared by Borrower's
Management and which shall be certified and signed by Borrower's
Chief Financial Officer.
H) As soon as available, and in any event with one-hundred twenty (120)
days after the close of each fiscal year, Borrower shall provided to
Lender an audited form 10K Consolidated Financial Statements of
Borrowers and its subsidiaries, including a Balance Sheet and
related statements of income and of cash flows as of the end of such
Fiscal year.
I) The Borrower shall submit to Lender an annual budget thirty (30)
days prior to its fiscal year ending. Said annual budget submission
must be prepared in a fashion that provides a breakdown of quarterly
financial expectations and budget items. The Borrower also agrees
to provide quarterly financial statements that will compare the
actual results to the budget within thirty (30) days of the end of
each fiscal quarter. The Borrower acknowledges it is already in pos
session of the quarterly budgets for the fiscal year ending
September 30, 2000.
J) The Borrower agrees as an Affirmative Covenant to maintain a Debt
Service Coverage Ratio, defined as "EBITDA", which is Earnings
Before Interest Taxes Depreciation and Amortization, divided by
current maturities of long term debt and capitalized leases plus
interest of 1.10 to 1.0.
K) The Borrower agrees its unfunded capital expenditures may not exceed
$3,000,000.00 during the nine (9) month term ending September 30,
2000.
L) The Borrower agrees it must maintain a maximum debt to tangible net
worth ratio of 3.0 to 1.
M) The Borrower agrees it will maintain a minimum tangible net worth of
$24,000,000.00 in the first and fourth quarters of the Borrower's
fiscal year. The Borrower must maintain a minimum tangible net
worth of $23,000,000.00 in the second and third quarters of the
Borrower's fiscal year. The Borrower and Lender agree that on March
30, 2000 and on June 29, 2000, that a financial evaluation of the
<PAGE> 23
Borrower's financial position will be reviewed by the Lender, and the
failure to comply with the above financial covenants will be considered
an Event of Default.
N) The Borrower agrees the Lender will continue to maintain the
existing sublimit $3,000,000.00 Letter of Credit. The Revolving
Credit Loan will maintain unused available funds equal to the Letter
of Credit that has been issued. The Letter of Credit will remain
available to the Borrower for the sole use and purpose of securing
Borrower's worker's compensation obligations. Any other use or
requested use of the Letter of Credit shall be subject to the
Lender's prior written approval of which shall be in the sole
discretion of the Lender. At no time prior to the maturity date of
the Loan, may the Letter of Credit and Revolving Credit Loan
Outstandings or Commitments exceed $10,000,000.00 and at no time
shall the Letter of Credit exceed $3,000,000.00. The maturity date
of the Letter of Credit presently is June 30, 2000, provided,
however, said Letter of Credit shall be amended to the extent
necessary to provide Borrower an automatic renewal subject to Lender
notifying Borrower at least sixty (60) days prior to expiration of
the Letter of Credit that it will or will not renew the Letter of
Credit for a term until at least until the maturity date of this
Loan.
7. EVENTS OF DEFAULT. The Events of Default set forth in the Loan
Agreement shall remain in full force and effect and in addition, will be
supplemented with the following additional Events of Default:
A) If the Borrower fails for any reason to maintain the Guaranty
Agreement from Henry D. Sahakian, as provided herein, this shall be
considered an Event of Default.
B) If the Borrower fails to meet the financial covenants and conditions
set forth herein and as set forth in the original Loan Agreement,
this shall be considered an Event of Default.
C) If Borrower fails to provide a first lien position on all account
receivables and inventory as provided herein, this shall be
considered an Event of Default.
D) If the Borrower encumbers equipment of which it has agreed not to
encumber, this shall be considered an Event of Default.
E) If the Borrower fails to place first mortgage liens against a
minimum of $4,000,000 of value of the real property as listed on
Exhibit "A" hereto by March 31, 2000, this shall be considered an
Event of Default.
F) If the Borrower fails to provide the financial statements provided
herein within fifteen (15) days of their due date, this shall be
considered an Event of Default.
<PAGE> 24
8. REMEDIES - ARTICLE 7. The Remedies set forth in the original Loan
Agreement shall remain in full force and effect and shall be supplemented by the
following additional Remedy: Upon the occurrence of an Event of Default, and
after thirty (30) days prior written notice, the full amount of the principal
balance of the loan, principal interest and costs shall become immediately due
and payable in full.
9. GENERAL. All terms of Article 8 of the original Loan Agreement
shall remain in full force and effect, except that the notice to the Borrower
shall be amended to read as follows:
Uni-Marts, Inc.
Attn: N. Gregory Petrick, CFO
477 East Beaver Avenue
State College, PA 16801-5690
10. The provisions set forth in this Amended Loan Agreement shall modify
the terms of the original Loan Documents only to the extent specifically
modified herein. The terms of the original Loan Agreement shall remain in full
force and effect and are applicable to this Loan extension.
Executed and intending to be legally bound as of the day and year first
written above.
LENDER:
U.S. BANK
/s/ Brian S. Bowser
By:-----------------------------------
Brian S. Bowser
Assistant Vice President
BORROWER:
ATTEST: UNI-MARTS, INC.
/s/ Harry A. Martin /s/ N. Gregory Petrick
- --------------------------- By:-----------------------------------
N. Gregory Petrick
Senior Vice President and
Chief Financial Officer
EXHIBIT (11)
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (LOSS):
<TABLE>
(A) Computation of the weighted average number of shares of common stock
outstanding for the periods indicated:
<CAPTION>
WEIGHTED
SHARES OF NUMBER OF DAYS NUMBER OF NUMBER OF SHARES
COMMON STOCK OUTSTANDING SHARE DAYS OUTSTANDING
------------ -------------- ----------- ----------------
<S> <C> <C> <C> <C>
Quarter Ended December 30, 1999
- -------------------------------
October 1 - December 30 6,926,126 91 630,277,443
Shares Issued 37,774 Various 1,531,635
--------- -----------
6,963,900 631,809,078 6,942,957
========= =========== =========
Quarter Ended December 31, 1998
- -------------------------------
October 1 - December 31 6,861,252 92 631,235,184
Shares Issued 7,363 Various 394,247
--------- -----------
6,868,615 631,629,431 6,865,537
========= =========== =========
</TABLE>
(B) Computation of Earnings (Loss) Per Share:
Computation of earnings (loss) per share is net earnings (loss) divided by
the weighted average number of shares of common stock outstanding for the
periods indicated:
<TABLE>
<CAPTION>
QUARTER ENDED
December 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Basic:
Weighted average number of shares
of common stock outstanding 6,942,957 6,865,537
----------- ----------
Net earnings (loss) $ 331,368 ($ 289,126)
----------- ----------
Net earnings (loss) per share $ 0.05 ($ 0.04)
=========== ==========
Assuming dilution:
Weighted average number of shares
of common stock outstanding 6,942,957 6,865,537
Net effect of dilutive stock
options-not included if the
effect was antidilutive 0 0
---------- ----------
Total 6,942,957 6,865,537
---------- ----------
Net earnings (loss) $ 331,368 ($ 289,126)
---------- ----------
Net earnings (loss) per share $ 0.05 ($ 0.04)
========== ==========
</TABLE>
-25-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED DECEMBER 30, 1999 AND THE STATEMENT OF OPERATIONS FOR THE FISCAL
QUARTER ENDED DECEMBER 30, 1999 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> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-30-1999
<CASH> 561,119
<SECURITIES> 0
<RECEIVABLES> 3,089,746
<ALLOWANCES> 294,500
<INVENTORY> 11,221,041
<CURRENT-ASSETS> 19,239,585
<PP&E> 112,848,204
<DEPRECIATION> 51,075,500
<TOTAL-ASSETS> 86,338,017
<CURRENT-LIABILITIES> 18,500,250
<BONDS> 34,742,171
0
0
<COMMON> 733,194
<OTHER-SE> 27,579,613
<TOTAL-LIABILITY-AND-EQUITY> 86,338,017
<SALES> 69,971,259
<TOTAL-REVENUES> 70,241,235
<CGS> 53,779,378
<TOTAL-COSTS> 69,767,867
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,500
<INTEREST-EXPENSE> 928,210
<INCOME-PRETAX> 473,368
<INCOME-TAX> 142,000
<INCOME-CONTINUING> 331,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 331,368
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
