<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 27, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period
from ____________ to ______________
Commission File Number 0-981
PUBLIX SUPER MARKETS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-0324412
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1936 George Jenkins Blvd.
Lakeland, Florida 33815
- --------------------------------------- ------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (941) 688-1188
--------------
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
--------- ---------
The number of shares outstanding of the registrant's common
stock, $1.00 par value, as of July 31, 1998 was 217,462,520.
Page 1 of 8 pages
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts are in thousands, except share amounts)
ASSETS
June 27, 1998 December 27, 1997
------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets
- --------------
Cash and cash equivalents $ 696,075 $ 530,018
Short-term investments 24,381 46,847
Trade receivables 49,130 71,318
Merchandise inventories 580,823 638,044
Deferred tax assets 54,887 66,402
Prepaid expenses 7,203 2,153
---------- ----------
Total Current Assets 1,412,499 1,354,782
---------- ----------
Long-term investments 400,567 331,659
Other noncurrent assets 8,816 9,036
Property, plant and equipment 2,814,164 2,757,707
Accumulated depreciation (1,148,932) (1,158,204)
---------- ----------
Total Assets $3,487,114 $3,294,980
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Accounts payable $ 537,896 $ 562,536
Accrued contribution to retirement plans 184,808 138,858
Accrued salaries and wages 66,106 47,367
Accrued self-insurance reserves 75,736 57,415
Accrued nonrecurring charge 63,799 69,249
Federal and state income taxes 4,764 15,583
Other 100,045 97,094
---------- ----------
Total Current Liabilities 1,033,154 988,102
---------- ----------
Deferred tax liabilities, net 118,402 114,807
Self-insurance reserves 87,569 90,068
Accrued postretirement benefit cost 45,589 42,612
Other noncurrent liabilities 34,258 40,092
Stockholders' Equity
- --------------------
Common stock of $1 par value. Authorized
300,000,000 shares; issued 220,458,183
shares at June 27, 1998 and 217,419,178
shares at December 27, 1997 220,458 217,419
Additional paid-in capital 236,374 100,757
Reinvested earnings 1,816,700 1,696,659
---------- ----------
2,273,532 2,014,835
Less treasury shares of 3,448,052
at June 27, 1998, at cost (109,609) ---
Accumulated other comprehensive earnings 4,219 4,464
---------- ----------
Total Stockholders' Equity 2,168,142 2,019,299
---------- ----------
Total Liabilities and Stockholders'
Equity $3,487,114 $3,294,980
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share and share amounts)
Three Months Ended
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Revenues
Sales $ 2,902,740 $ 2,674,469
Other income, net 33,499 28,337
------------ ------------
Total revenues 2,936,239 2,702,806
------------ ------------
Costs and expenses
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 2,195,044 2,049,577
Operating and administrative expenses 604,422 540,584
------------ ------------
Total costs and expenses 2,799,466 2,590,161
------------ ------------
Earnings before income tax expense 136,773 112,645
Income tax expense 48,355 40,313
------------ ------------
Net earnings $ 88,418 $ 72,332
============ ============
Weighted average number of common
shares outstanding 218,032,077 219,396,670
============ ============
Net earnings per common share $ .41 $ .33
============ ============
Cash dividends per common share $ .20 $ .15
============ ============
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Net earnings $ 88,418 $ 72,332
Other comprehensive earnings - net
unrealized gain (loss) on investment
securities available-for-sale, net
of tax benefit of $301 in 1998 and
tax expense of $439 in 1997 (478) 700
------------ ------------
Comprehensive earnings $ 87,940 $ 73,032
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share and share amounts)
Six Months Ended
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Revenues
- --------
Sales $ 5,994,157 $ 5,588,531
Other income, net 65,875 58,219
------------ ------------
Total revenues 6,060,032 5,646,750
------------ ------------
Costs and expenses
- ------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 4,518,543 4,281,309
Operating and administrative expenses 1,216,331 1,089,188
------------ ------------
Total costs and expenses 5,734,874 5,370,497
------------ ------------
Earnings before income tax expense 325,158 276,253
Income tax expense 117,742 100,718
------------ ------------
Net earnings $ 207,416 $ 175,535
============ ============
Weighted average number of common
shares outstanding 217,815,181 219,651,708
============ ============
Net earnings per common share $ .95 $ .80
============ ============
Cash dividends per common share $ .20 $ .15
============ ============
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Six Months Ended
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Net earnings $ 207,416 $ 175,535
Other comprehensive earnings - net
unrealized gain (loss) on investment
securities available-for-sale, net of
tax benefit of $154 in 1998 and tax
expense of $735 in 1997 (245) 1,172
------------ ------------
Comprehensive earnings $ 207,171 $ 176,707
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)
Six Months Ended
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Cash received from customers $6,055,699 $5,632,878
Cash paid to employees and suppliers (5,437,254) (5,133,644)
Income taxes paid (113,297) (126,326)
Payment for self-insured claims (57,859) (54,296)
Other, net 25,077 18,125
---------- ----------
Net Cash Provided by Operating Activities 472,366 336,737
---------- ----------
Cash Flows From Investing Activities
- ------------------------------------
Payment for property, plant and equipment (160,301) (121,626)
Payment for investment securities -
available-for-sale (136,244) (268,402)
Proceeds from sale of investment securities -
available-for-sale 88,389 192,610
Other, net 4,121 (3,244)
---------- ----------
Net Cash Used in Investing Activities (204,035) (200,662)
---------- ----------
Cash Flows From Financing Activities
Payment of long-term debt (131) (64)
Proceeds from sale of common stock 57,520 31,929
Payment for acquisition of common stock (115,911) (59,203)
Dividends paid (43,752) (33,003)
---------- ----------
Net Cash Used in Financing Activities (102,274) (60,341)
---------- ----------
Net increase in cash and cash equivalents 166,057 75,734
Cash and cash equivalents at beginning of
period 530,018 457,405
---------- ----------
Cash and cash equivalents at end of period $ 696,075 $ 533,139
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<PAGE>
PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying condensed
consolidated financial statements include all adjustments
deemed necessary to fairly reflect the financial position,
results of operations and changes in cash flows of the
Company for the interim periods presented. These condensed
consolidated financial statements should be read in
conjunction with the fiscal 1997 Form 10-K Annual Report of
the Company.
2. Due to the seasonal nature of the Company's business, the
results for the three months and six months ended June 27,
1998 are not necessarily indicative of the results for the
entire 1998 fiscal year.
3. Certain 1997 amounts have been reclassified to conform
with the 1998 presentation.
4. In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income," (SFAS 130) effective for
fiscal years beginning after December 15, 1997. SFAS 130 sets
forth standards for the reporting of comprehensive income
(earnings) in the financial statements. Comprehensive
earnings includes net earnings and other comprehensive
earnings. Other comprehensive earnings includes revenues,
expenses, gains and losses that have been excluded from net
earnings and recorded directly in the stockholders' equity
section of the balance sheet.
Accumulated other comprehensive earnings consists of net
unrealized gains on investment securities available-for-
sale. The following is a summary of the change in the
balance of accumulated other comprehensive earnings as of
June 27, 1998 (amounts are in thousands):
Balance as of beginning of year $4,464
Current period change (245)
------
Balance as of June 27, 1998 $4,219
======
5. In the Company's Form 10-K for the fiscal year ended
December 27, 1997, the Company disclosed two purported class
action suits, the Dyer and Middleton cases. No material
developments have occurred in the Dyer case since the Form
10-K filing.
With respect to the Middleton case, on June 15, 1998, a
federal magistrate judge recommended certification of claims
relating only to Publix's retail stores in Florida and
Georgia as a class action. Publix and the plaintiffs have
both objected to the recommendation, with Publix asking that
no class be certified and plaintiffs asking that the class
be expanded. In connection with the objections, on July 20,
1998, the plaintiffs filed documents with the court
announcing that they will drop all claims for compensatory
and punitive damages asserted in the lawsuit.
-6-
<PAGE>
PUBLIX SUPER MARKETS, INC.
Item 2. Management's Discussion and Analysis of Financial
- --------------------------------------------------------------
Condition and Results of Operations
- -----------------------------------
Liquidity and Capital Resources
- -------------------------------
Operating activities continue to be the Company's primary
source of liquidity. Net cash provided by operating
activities was approximately $472.4 million in the six months
ended June 27, 1998, as compared with $336.7 million in the
six months ended June 28, 1997. Cash and cash equivalents
totaled $696.1 million as of June 27, 1998.
Capital expenditures totaled approximately $160.3 million
in the six months ended June 27, 1998. These expenditures
were primarily incurred in connection with the opening of 19
new stores and the remodeling or enlarging of 14 stores which
added .85 million square feet. In addition, the Company
closed five stores. Capital expenditures totaled
approximately $121.6 million in the six months ended June 28,
1997. These expenditures were primarily incurred in
connection with the opening of 15 new stores and the
remodeling or enlarging of nine stores which added .60 million
square feet. In addition, the Company closed one store.
The Company has budgeted approximately $139.7 million for
the remainder of 1998 for new store construction and the
remodeling or enlarging of existing stores. The capital
budget is subject to continuing change and review. The
remaining capital expenditures are expected to be financed by
internally generated funds and current liquid assets.
As of June 27, 1998, the Company has a committed line of
credit for $50.0 million. This line is reviewed annually by
the bank. The interest rate for this line is at or below the
prime rate. No amounts were outstanding on the line of credit
as of June 27, 1998.
Cash generated in excess of the amount needed for current
operations and capital expenditures is invested in short-term
and long-term investments. Management believes the Company's
liquidity will continue to be strong.
Operating Results
- -----------------
Sales increased 8.5% in the second quarter of 1998 to
$2,902.7 million, an increase of $228.3 million compared to
the same quarter in 1997. This represents an increase of
$115.5 million or 4.3% in sales from stores that were open for
all of both quarters (comparable stores) and sales of $112.8
million or 4.2% from the net impact of new and closed stores
since March 29, 1997. Easter occurred during the second
quarter of 1998 and the first quarter of 1997.
Sales increased 7.3% in the six months ended June 27, 1998,
to $5,994.2 million, an increase of $405.6 million over the
six months ended June 28, 1997. This reflects an increase of
$179.6 million or 3.2% in sales from comparable stores and
sales of $226.0 million or 4.1% from the net impact of new and
closed stores since the beginning of 1997.
Cost of merchandise sold including store occupancy,
warehousing and delivery expenses, as a percentage of sales,
was approximately 75.6% and 76.6% in the quarters ended June
27, 1998 and June 28, 1997, respectively. These cost of sales
percentages were 75.4% and 76.6% for the six months ended June
27, 1998 and June 28, 1997, respectively. The decreases in
cost of merchandise sold, as a percentage of sales, are due to
buying and merchandising efficiencies.
Operating and administrative expenses, as a percentage of
sales, were approximately 20.8% and 20.2% for the quarters
ended June 27, 1998 and June 28, 1997, respectively. The
operating and administrative expenses, as a percentage of
sales, were 20.3% and 19.5% for the six months ended June 27,
1998 and June 28, 1997, respectively. The significant
components of operating and administrative expenses are
payroll costs, employee benefits and depreciation.
-7-
<PAGE>
PUBLIX SUPER MARKETS, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
In the Company's Form 10-K for the fiscal year ended
December 27, 1997, the Company disclosed two purported class
action suits, the Dyer and Middleton cases. No material
developments have occurred in the Dyer case since the Form 10-
K filing.
With respect to the Middleton case, on June 15, 1998, a
federal magistrate judge recommended certification of claims
relating only to Publix's retail stores in Florida and Georgia
as a class action. Publix and the plaintiffs have both
objected to the recommendation, with Publix asking that no
class be certified and plaintiffs asking that the class be
expanded. In connection with the objections, on July 20,
1998, the plaintiffs filed documents with the court announcing
that they will drop all claims for compensatory and punitive
damages asserted in the lawsuit.
Item 4. Results of Votes of Security Holders
- ---------------------------------------------
The Annual Meeting of Stockholders of the Company was held
on May 12, 1998, for the purpose of electing a board of
directors. Proxies for the meeting were solicited pursuant to
Section 14(a) of the Securities Exchange Act of 1934 and there
were no solicitations in opposition to management's
solicitation. All of management's nominees for directors as
listed in the proxy statement were elected.
Item 6. Exhibit and Report on Form 8-K
- ---------------------------------------
(a) Exhibit
-----------
27. Financial Data Schedule for the six months
ended June 27, 1998.
(b) Report on Form 8-K
----------------------
No reports on Form 8-K were filed during the three
months ended June 27, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed in its behalf by the undersigned thereunto duly
authorized.
PUBLIX SUPER MARKETS, INC.
Date: August 7, 1998 /s/ S. Keith Billups
---------------------------
S. Keith Billups, Secretary
Date: August 7, 1998 /s/ David P. Phillips
---------------------------------
David P. Phillips, Vice President
Finance and Treasurer (Principal
Financial and Accounting Officer)
-8-
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for the six months ended June 27,1998, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-START> DEC-28-1997
<PERIOD-END> JUN-27-1998
<EXCHANGE-RATE> 1
<CASH> 696,075
<SECURITIES> 24,381
<RECEIVABLES> 49,130
<ALLOWANCES> 0
<INVENTORY> 580,823
<CURRENT-ASSETS> 1,412,499
<PP&E> 2,814,164
<DEPRECIATION> (1,148,932)
<TOTAL-ASSETS> 3,487,114
<CURRENT-LIABILITIES> 1,033,154
<BONDS> 0
0
0
<COMMON> 220,458
<OTHER-SE> 1,947,684
<TOTAL-LIABILITY-AND-EQUITY> 3,487,114
<SALES> 5,994,157
<TOTAL-REVENUES> 6,606,032
<CGS> 4,518,543
<TOTAL-COSTS> 5,734,874
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 325,158
<INCOME-TAX> 117,742
<INCOME-CONTINUING> 207,416
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207,416
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
</TABLE>
