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 March 25, 2000
--------------
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
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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 (863) 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 April 28, 2000 was 213,683,004.
Page 1 of 11 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
March 25, 2000 December 25, 1999
-------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets
- --------------
Cash and cash equivalents $ 662,315 $ 626,636
Short-term investments 25,546 28,233
Trade receivables 83,325 107,185
Merchandise inventories 707,707 769,454
Deferred tax assets 61,738 57,065
Prepaid expenses 7,535 2,442
---------- ----------
Total Current Assets 1,548,166 1,591,015
---------- ----------
Long-term investments 398,935 398,865
Other noncurrent assets 22,028 22,682
Property, plant and equipment 3,418,225 3,307,387
Accumulated depreciation (1,300,361) (1,252,217)
---------- ----------
Total Assets $4,086,993 $4,067,732
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Accounts payable $ 607,244 $ 634,995
Accrued contribution to retirement plans 100,500 182,981
Accrued salaries and wages 64,275 52,591
Accrued self-insurance reserves 71,925 69,356
Federal and state income taxes 97,423 32,496
Other 90,785 103,339
---------- ----------
Total Current Liabilities 1,032,152 1,075,758
---------- ----------
Deferred tax liabilities, net 136,972 135,413
Self-insurance reserves 104,026 100,154
Accrued postretirement benefit cost 57,593 55,735
Other noncurrent liabilities 22,832 24,528
Stockholders' Equity
- --------------------
Common stock of $1 par value. Authorized
300,000,000 shares; issued 215,914,742
shares at March 25, 2000 and 215,567,950
shares at December 25, 1999 215,915 215,568
Additional paid-in capital 211,969 196,352
Reinvested earnings 2,413,686 2,271,323
---------- ----------
2,841,570 2,683,243
Less 2,197,581 treasury shares
at March 25, 2000, at cost (97,472) ---
Accumulated other comprehensive earnings (10,680) (7,099)
---------- ----------
Total Stockholders' Equity 2,733,418 2,676,144
---------- ----------
Total Liabilities and Stockholders'
Equity $4,086,993 $4,067,732
========== ==========
</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
March 25, 2000 March 27, 1999
-------------- --------------
(Unaudited)
<S> <C> <C>
Revenues
- --------
Sales $ 3,614,322 $ 3,363,248
Other income, net 34,930 31,172
------------ ------------
Total revenues 3,649,252 3,394,420
------------ ------------
Costs and expenses
- ------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 2,691,830 2,537,978
Operating and administrative expenses 735,196 669,915
------------ ------------
Total costs and expenses 3,427,026 3,207,893
------------ ------------
Earnings before income tax expense 222,226 186,527
Income tax expense 79,863 67,959
------------ ------------
Net earnings $ 142,363 $ 118,568
============ ============
Weighted average number of common
shares outstanding 213,832,605 216,446,126
============ ============
Basic earnings per common share $ .67 $ .55
============ ============
Cash dividends per common share None None
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
March 25, 2000 March 27, 1999
-------------- --------------
(Unaudited)
<S> <C> <C>
Net earnings $ 142,363 $ 118,568
Other comprehensive earnings - unrealized
loss on investment securities
available-for-sale, net of tax effect
of ($3,119) and ($2,031) in 2000 and
1999, respectively (4,966) (3,245)
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $870 and $1,719 in
2000 and 1999, respectively 1,385 2,746
------------ ------------
Comprehensive earnings $ 138,782 $ 118,069
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)
Three Months Ended
March 25, 2000 March 27, 1999
-------------- --------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Cash received from customers $ 3,660,352 $ 3,398,907
Cash paid to employees and suppliers (3,230,612) (3,085,262)
Income taxes paid (15,801) (6,234)
Payment for self-insured claims (34,381) (27,565)
Other, net 13,906 12,345
----------- -----------
Net Cash Provided by Operating Activities 393,464 292,191
----------- -----------
Cash Flows From Investing Activities
- ------------------------------------
Payment for property, plant and equipment (121,588) (107,724)
Payment for investment securities -
available-for-sale (20,011) (73,235)
Proceeds from sale of investment securities -
available-for-sale 13,734 59,361
Other, net 1,475 (893)
----------- -----------
Net Cash Used in Investing Activities (126,390) (122,491)
----------- -----------
Cash Flows From Financing Activities
- ------------------------------------
Proceeds from sale of common stock 21,212 83,553
Payment for acquisition of common stock (252,476) (122,661)
Other, Net (131) (131)
----------- -----------
Net Cash Used in Financing Activities (231,395) (39,239)
----------- -----------
Net increase in cash and cash equivalents 35,679 130,461
Cash and cash equivalents at beginning of
period 626,636 669,326
----------- -----------
Cash and cash equivalents at end of period $ 662,315 $ 799,787
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE>
PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed consolidated financial statements included
herein are unaudited; however, in the opinion of management, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are necessary for the fair statement of results for the
interim period. These condensed consolidated financial statements should be
read in conjunction with the fiscal 1999 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 ended March 25, 2000 are not necessarily indicative of the
results for the entire 2000 fiscal year.
3. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
4. In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities," (SFAS 133) effective for fiscal years
beginning after June 15, 1999. SFAS 133 requires that derivatives be
carried at fair value and provides for hedge accounting when certain
conditions are met. In June 1999, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133" (SFAS 137) which deferred the effective
date of adoption of SFAS 133 for one year. The Company is currently
evaluating the effect of adopting SFAS 133.
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<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 $393.5
million in the quarter ended March 25, 2000, as compared with $292.2 million in
the quarter ended March 27, 1999. Cash and cash equivalents totaled $662.3
million as of March 25, 2000, as compared with $799.8 million as of March 27,
1999.
Capital expenditures totaled approximately $121.6 million in the quarter
ended March 25, 2000. These expenditures were primarily incurred in connection
with the opening of 14 new stores and remodeling or expanding 18 stores.
Significant expenditures were also incurred in the expansion of a warehouse in
Lakeland, Florida. In addition, the Company closed two stores. The net impact of
new and closed stores (net new stores) added an additional .55 million square
feet in the first quarter of 2000, a 1.98% increase. Capital expenditures
totaled approximately $107.7 million in the quarter ended March 27, 1999. These
expenditures were primarily incurred in connection with the opening of seven new
stores and remodeling or expanding 18 stores. In addition, the Company closed
four stores. Net new stores added an additional .19 million square feet in the
first quarter of 1999, a .74% increase.
Capital expenditures for the remainder of 2000, primarily made up of new
store, warehouse and office construction and the remodeling or expanding of many
existing stores, are expected to be approximately $513.4 million. The capital
program is subject to continuing change and review. The remaining 2000 capital
expenditures are expected to be financed by internally generated funds and
current liquid assets. In the normal course of operations, the Company replaces
stores and closes unprofitable stores. The impact of future store closings is
not expected to be material.
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 for the first quarter of 2000 were $3.6 billion as compared with
$3.4 billion in the same quarter in 1999, a 7.5% increase. This reflects an
increase of $84.1 million or 2.5% in sales from stores that were open for all of
both quarters (comparable stores) and sales of $167.0 million or 5.0% from net
new stores since the beginning of the first quarter of 1999.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses, as a percentage of sales, was approximately 74.5% for the
quarter ended March 25, 2000 and 75.5% for the quarter ended March 27, 1999. The
decrease in cost of merchandise sold, as a percentage of sales, was primarily
due to continuing improvements in buying practices and merchandising
efficiencies.
Operating and administrative expenses, as a percentage of sales, were
approximately 20.3% and 19.9% for the quarters ended March 25, 2000 and March
27, 1999, respectively. The significant components of operating and
administrative expenses are payroll costs, employee benefits, rent and
depreciation.
-6-
<PAGE>
Year 2000
- ---------
In order to avoid potential Year 2000 problems, the Company adopted a
Year 2000 plan (the "Plan") covering all of the Company's business units. The
aim of the Plan was to take steps to prevent the Company's processes and
systems, with emphasis on mission-critical functions, from being impaired due to
Year 2000 problems. Year 2000 problems result from the use in computer hardware
and software of two digits rather than four digits to define the applicable
year. To oversee the Plan, the Company established a Year 2000 Project Office.
The Project Office was staffed with representatives from the Company's
Information Systems Department, non-Information Systems business areas and
outside consultants. Additional consultants were used on an as needed basis.
Under the Plan, three main areas were addressed: information technology
(IT) systems; non-IT systems (including embedded chip technology); and supply
chain and other third party business partner readiness. The Plan called for the
Company to inventory its mission-critical computer hardware and software systems
and embedded chips (computer chips with date-related functions, contained in a
wide variety of devices); assess the effects of Year 2000 problems on the
Company's business units; remedy systems, software and embedded chips in an
effort to avoid material disruptions or other material adverse effects on
mission-critical functions, processes and systems; verify and test the systems
to which remediation efforts have been applied; and develop contingency plans to
cope with the mission-critical consequences of Year 2000 problems that were not
identified or remediated.
As of April 2000, the Company has not experienced any significant Year
2000 problems prior to or after January 1, 2000. The Company further believes
that it will not experience any material Year 2000 problems in its
mission-critical functions, processes and systems. Additionally, the Company
discontinued the Project Office during the first quarter of 2000.
From a forward-looking perspective, Year 2000 problems may affect the
Company for some period of time after January 1, 2000. However, the extent and
magnitude of these Year 2000 problems is difficult to predict or quantify. If,
despite the Company's reasonable efforts under its Year 2000 Plan, there are
mission-critical Year 2000 related failures that create substantial disruptions
to the Company's business, the adverse impact on the Company's business could be
material.
-7-
<PAGE>
Cautionary Note Regarding Forward-Looking Statements
- ----------------------------------------------------
From time to time, information provided by the Company, including written
or oral statements made by its representatives, may contain forward-looking
information about the future performance of the Company which is based on
management's assumptions and beliefs in light of the information currently
available to them. When used in this document, the words "plan," "estimate,"
"project," "intend," "believe" and other similar expressions, as they relate to
the Company, are intended to identify such forward-looking statements. These
forward-looking statements are subject to uncertainties and other factors that
could cause actual results to differ materially from those statements including,
but not limited to: competitive practices and pricing in the food and drug
industries generally and particularly in the Company's principal markets;
changes in the general economy; changes in consumer spending; and other factors
affecting the Company's business in or beyond the Company's control. These
factors include changes in the rate of inflation, changes in state and Federal
legislation or regulation, adverse determinations with respect to litigation or
other claims, ability to recruit and train employees, ability to construct new
stores or complete remodels as rapidly as planned, stability of product costs,
and issues arising from addressing Year 2000 IT and non-IT problems. Other
factors and assumptions not identified above could also cause the actual results
to differ materially from those set forth in the forward-looking statements. The
Company assumes no obligation to update publicly these forward-looking
statements.
-8-
<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 25, 1999,
the Company discussed the class action pending in the Federal District Court for
the Middle District of Florida (the "Court") by Lemuel Middleton and other
present or former employees of the Company, individually and on behalf of all
other persons similarly situated (the "Middleton case"). On March 20, 2000, the
Court ruled that Lydia Moultry could not join the case as a class representative
on behalf of the plaintiffs' proposed subclass of unsuccessful black applicants
for employment. The Middleton case is set for trial by jury beginning March 3,
2001 as to the subclasses previously certified by the Court of black employees
and former black employees who have sought to be promoted or who have been
discharged from employment at the Company's retail stores in Florida since April
3, 1993, and at retail stores in Georgia since January 14, 1995.
Also in its Form 10-K for the year ended December 25, 1999, the Company
discussed the purported class action filed against the Company in the Court by
Shirley Dyer and other present and former employees of the Company, individually
and on behalf of all other persons similarly situated (the "Dyer case"). In the
Dyer case, the plaintiffs allege that the Company has violated and is currently
violating Federal and state civil rights statutes in the Company's manufacturing
plants and distribution centers by discriminating against female employees and
applicants with respect to hiring, promotion, training, compensation,
discipline, demotion, termination and/or retaliation for bringing allegations of
discrimination. As reported in the Company's Form 8-K of March 21, 2000, the
Court entered an order denying the Dyer case plaintiffs' request for class
certification. The plaintiffs can now proceed to trial on their claims as
individuals. As a result, the Company no longer considers the Dyer case to be
material.
Also in its Form 10-K for the year ended December 25, 1999, the Company
discussed the purported class action filed against the Company in the Court by
Charlene Jones, individually and on behalf of all other persons similarly
situated (the "Jones case"). In the Jones case, the plaintiff alleges that the
Company has violated and is currently violating Federal and state civil rights
statutes by discriminating against female applicants for employment in the
Company's manufacturing plants and distribution centers. On March 22, 2000, the
Court entered orders (1) denying the request of the plaintiffs in the Jones and
Dyer cases to combine the two cases and (2) dismissing the class action
allegations made by the plaintiff in the Jones case. The plaintiff can now
proceed to trial on her individual claims. As a result, the Company no longer
considers the Jones case to be material.
Also in its Form 10-K for the year ended December 25, 1999, the Company
discussed the purported class action filed against the Company in the Court by
Lisa Lisenby, individually and on behalf of all other persons similarly situated
(the "Lisenby case"). In the Lisenby case, the plaintiff alleges that the
Company has violated and is currently violating Federal statutory law by
discriminating against female applicants and employees in the Company's
manufacturing plants and distribution centers. On March 22, 2000, the Court
entered an order at the request of the Company transferring the Lisenby case to
the Federal District Court for the Northern District of Georgia.
-9-
<PAGE>
The Company denies the allegations of the plaintiffs in the Middleton,
Dyer, Jones and Lisenby cases and is vigorously defending the actions. Although
these cases are subject to the uncertainties inherent in the litigation process,
based on the information presently available to the Company, management does not
expect the ultimate resolution of these actions to have a material adverse
effect on the Company's financial condition or results of operations.
The Company is also a party in various legal claims and actions
considered in the normal course of business. In the opinion of management, the
ultimate resolution of these legal proceedings will not have a material adverse
effect on the Company's financial condition or results of operations.
Item 2. Changes in Securities
- -------------------------------
Not Applicable.
Item 3. Defaults Upon Senior Securities
- -----------------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
Not Applicable.
Item 5. Other Information
- ---------------------------
Not Applicable.
Item 6(a) Exhibits
- ------------------
27. Financial Data Schedule for the three months ended March 25,
2000.
Item 6(b) Reports on Form 8-K
- -----------------------------
The Company filed a report on Form 8-K dated March 21, 2000,
reporting the legal proceeding disclosed in Part II, Item 1 above
pertaining to the Dyer case.
-10-
<PAGE>
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: May 5, 2000 /s/ S. Keith Billups
----------------------------
S. Keith Billups, Secretary
Date: May 5, 2000 /s/ David P. Phillips
-------------------------------------------
David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for the three months ended March 25, 2000, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-30-2000
<PERIOD-START> Dec-26-1999
<PERIOD-END> Mar-25-2000
<EXCHANGE-RATE> 1
<CASH> 662,315
<SECURITIES> 25,546
<RECEIVABLES> 83,325
<ALLOWANCES> 0
<INVENTORY> 707,707
<CURRENT-ASSETS> 1,548,166
<PP&E> 3,418,225
<DEPRECIATION> (1,300,361)
<TOTAL-ASSETS> 4,086,993
<CURRENT-LIABILITIES> 1,032,152
<BONDS> 0
0
0
<COMMON> 215,915
<OTHER-SE> 2,517,503
<TOTAL-LIABILITY-AND-EQUITY> 4,086,993
<SALES> 3,614,322
<TOTAL-REVENUES> 3,649,252
<CGS> 2,691,830
<TOTAL-COSTS> 3,427,026
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 222,226
<INCOME-TAX> 79,863
<INCOME-CONTINUING> 142,363
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 142,363
<EPS-BASIC> .67
<EPS-DILUTED> .67
</TABLE>
