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 September 23, 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.
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(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
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(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 _______
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The number of shares outstanding of the Registrant's common stock, $1.00 par
value, as of October 27, 2000 was approximately 206,488,705.
Page 1 of 12 pages
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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
September 23, 2000 December 25, 1999
------------------ -----------------
(Unaudited)
<S> <C> <C>
Current Assets
--------------
Cash and cash equivalents $ 430,395 $ 626,636
Short-term investments 13,504 28,233
Trade receivables 66,695 107,185
Merchandise inventories 739,708 769,454
Deferred tax assets 62,135 57,065
Prepaid expenses 6,656 2,442
---------- ----------
Total Current Assets 1,319,093 1,591,015
---------- ----------
Long-term investments 419,701 398,865
Other noncurrent assets 22,612 22,682
Property, plant and equipment 3,559,987 3,307,387
Accumulated depreciation (1,299,632) (1,252,217)
---------- ----------
Total Assets $4,021,761 $4,067,732
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
-------------------
Accounts payable $ 593,582 $ 634,995
Accrued contribution to retirement plans 194,778 182,981
Accrued salaries and wages 89,730 52,591
Accrued self-insurance reserves 75,946 69,356
Federal and state income taxes 22,532 32,496
Other 126,253 103,339
---------- ----------
Total Current Liabilities 1,102,821 1,075,758
---------- ----------
Deferred tax liabilities, net 141,380 135,413
Self-insurance reserves 110,373 100,154
Accrued postretirement benefit cost 61,151 55,735
Other noncurrent liabilities 19,701 24,528
Stockholders' Equity
--------------------
Common stock of $1 par value. Authorized
300,000,000 shares; issued 215,914,742
shares at September 23, 2000 and 215,567,950
shares at December 25, 1999 215,915 215,568
Additional paid-in capital 211,972 196,352
Reinvested earnings 2,597,996 2,271,323
---------- ----------
3,025,883 2,683,243
Less 9,518,028 treasury shares
at September 23, 2000, at cost (434,254) ---
Accumulated other comprehensive earnings (5,294) (7,099)
---------- ----------
Total Stockholders' Equity 2,586,335 2,676,144
---------- ----------
Total Liabilities and Stockholders'
Equity $4,021,761 $4,067,732
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<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
September 23, 2000 September 25, 1999
------------------ ------------------
(Unaudited)
<S> <C> <C>
Revenues
--------
Sales $ 3,465,265 $ 3,155,851
Other income, net 37,377 35,243
------------ ------------
Total revenues 3,502,642 3,191,094
------------ ------------
Costs and expenses
------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 2,565,679 2,356,079
Operating and administrative expenses 760,119 675,109
------------ ------------
Total costs and expenses 3,325,798 3,031,188
------------ ------------
Earnings before income tax expense 176,844 159,906
Income tax expense 62,984 56,538
------------ ------------
Net earnings $ 113,860 $ 103,368
============ ============
Weighted average number of common
shares outstanding 208,844,691 216,335,129
============ ============
Basic earnings per common share $ .55 $ .48
============ ============
Cash dividends per common share none none
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
September 23, 2000 September 25, 1999
------------------ ------------------
(Unaudited)
<S> <C> <C>
Net earnings $ 113,860 $ 103,368
Other comprehensive earnings - unrealized gain
(loss) on investment securities
available-for-sale, net of tax effect
of $2,484 and ($3,164) in 2000 and 1999,
respectively 3,955 (5,037)
Reclassification adjustment for net
realized (gain) loss on investment
securities available-for-sale, net
of tax effect of ($119) and $74 in
2000 and 1999, respectively (190) 116
------------ ------------
Comprehensive earnings $ 117,625 $ 98,447
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share and share amounts)
Nine Months Ended
September 23, 2000 September 25, 1999
------------------ ------------------
(Unaudited)
<S> <C> <C>
Revenues
--------
Sales $ 10,556,189 $ 9,656,686
Other income, net 109,734 101,293
------------ ------------
Total revenues 10,665,923 9,757,979
------------ ------------
Costs and expenses
------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 7,827,006 7,216,881
Operating and administrative expenses 2,239,580 2,013,839
------------ ------------
Total costs and expenses 10,066,586 9,230,720
------------ ------------
Earnings before income tax expense 599,337 527,259
Income tax expense 214,848 189,224
------------ ------------
Net earnings $ 384,489 $ 338,035
============ ============
Weighted average number of common
shares outstanding 208,530,507 216,336,294
============ ============
Basic earnings per common share $ 1.84 $ 1.56
============ ============
Cash dividends per common share $ .27 $ .22
============ ============
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Nine Months Ended
September 23, 2000 September 25, 1999
------------------ ------------------
(Unaudited)
<S> <C> <C>
Net earnings $ 384,489 $ 338,035
Other comprehensive earnings - unrealized gain
(loss) on investment securities
available-for-sale, net of tax effect
of $263 and ($4,999) in 2000 and 1999,
respectively 419 (7,968)
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $871 and $1,882 in
2000 and 1999, respectively 1,386 3,005
------------ ------------
Comprehensive earnings $ 386,294 $ 333,072
============ ============
</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)
Nine Months Ended
September 23, 2000 September 25, 1999
------------------ ------------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
------------------------------------
Cash received from customers $ 10,665,432 $ 9,726,691
Cash paid to employees and suppliers (9,547,528) (8,835,343)
Income taxes paid (225,048) (172,444)
Payment for self-insured claims (108,778) (102,548)
Other, net 37,916 36,270
------------ ------------
Net Cash Provided by Operating Activities 821,994 652,626
------------ ------------
Cash Flows From Investing Activities
------------------------------------
Payment for property, plant and equipment (386,842) (361,720)
Payment for investment securities -
available-for-sale (61,613) (153,629)
Proceeds from sale of investment securities -
available-for-sale 53,068 112,275
Other, net 3,142 (7,372)
------------ ------------
Net Cash Used in Investing Activities (392,245) (410,446)
------------ ------------
Cash Flows From Financing Activities
------------------------------------
Proceeds from sale of common stock 73,619 209,708
Payment for acquisition of common stock (641,662) (301,844)
Dividends paid (57,816) (47,846)
Other, net (131) (131)
------------ ------------
Net Cash Used in Financing Activities (625,990) (140,113)
------------ ------------
Net (decrease) increase in cash and cash
equivalents (196,241) 102,067
Cash and cash equivalents at beginning of
period 626,636 669,326
------------ ------------
Cash and cash equivalents at end of period $ 430,395 $ 771,393
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<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 and nine months ended September 23, 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 believes that the adoption of SFAS 133 will not have an
adverse effect on the Company's financial condition, results of operations or
cash flows.
5. In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements,"
(SAB 101). SAB 101 summarizes certain of the staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. This SAB, as amended by SAB No. 101A and No. 101B, is effective
for the Company's fourth quarter of fiscal year 2000. The Company has
historically recognized revenue in accordance with the requirements of SAB
101, therefore, there will be no effect on the Company's financial condition,
results of operations or cash flows from the adoption of SAB 101.
-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 $822.0
million in the nine months ended September 23, 2000, as compared with $652.6
million in the nine months ended September 25, 1999. Cash and cash equivalents
totaled $430.4 million as of September 23, 2000, as compared with $771.4 million
as of September 25, 1999.
Capital expenditures totaled approximately $386.8 million in the nine
months ended September 23, 2000. These expenditures were primarily incurred in
connection with the opening of 36 new stores and remodeling or expanding 52
stores. Significant expenditures were also incurred in the expansion of a
warehouse in Lakeland, Florida. In addition, the Company closed eight stores.
The net impact of new and closed stores (net new stores) added an additional 1.3
million square feet in the nine months ended September 23, 2000, a 4.6%
increase. Capital expenditures totaled approximately $361.7 million in the nine
months ended September 25, 1999. These expenditures were primarily incurred in
connection with the opening of 24 new stores and remodeling or expanding 61
stores. Significant expenditures were also incurred in the purchase of nine
additional store sites from A & P in the greater Atlanta area. In addition, the
Company closed 12 stores. Net new stores added an additional .65 million square
feet in the nine months ended September 25, 1999, a 2.5% increase.
Capital expenditures for the remainder of 2000, primarily made up of new
store and warehouse construction and the remodeling or expanding of many
existing stores, are expected to be approximately $168.2 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.
The Company currently repurchases common stock at the stockholders' request
in accordance with the terms of the Company's Employee Stock Purchase Plan. The
Company expects to continue to repurchase its common stock, as offered by its
stockholders from time to time, at its then currently appraised value. However,
such purchases are not required and the Company retains the right to discontinue
them at any time.
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 9.8% in the third quarter of 2000 to $3.5 billion, an
increase of $309.4 million compared to the same quarter in 1999. This reflects
an increase of $96.2 million or 3.0% in sales from stores that were open for all
of both quarters (comparable stores) and sales of $213.2 million or 6.8% from
net new stores since June 26, 1999.
Sales increased 9.3% in the nine months ended September 23, 2000, to $10.6
billion, an increase of $899.5 million over the nine months ended September 25,
1999. This reflects an increase of $315.9 million or 3.3% in sales from
comparable stores and sales of $583.6 million or 6.0% from net new stores since
the beginning of 1999.
-7-
<PAGE>
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses, as a percentage of sales, was approximately 74.0% and 74.7%
in the quarters ended September 23, 2000 and September 25, 1999, respectively.
These cost of sales percentages were 74.2% and 74.7% for the nine months ended
September 23, 2000 and September 25, 1999, respectively. The decreases in cost
of merchandise sold, as a percentage of sales, were primarily due to continuing
improvements in buying practices and promotional efficiencies. Additionally, the
shifting of the sales mix towards higher margin departments is contributing to
the increase in gross profit percentage.
Operating and administrative expenses, as a percentage of sales, were
approximately 21.9% and 21.4% for the quarters ended September 23, 2000 and
September 25, 1999, respectively. The operating and administrative expenses, as
a percentage of sales, were 21.2% and 20.9% for the nine months ended September
23, 2000 and September 25, 1999, respectively. The significant components of
operating and administrative expenses are payroll costs, employee benefits, rent
and depreciation.
Year 2000
---------
As of October 2000, the Company has not experienced any significant Year
2000 problems prior to or after January 1, 2000. The Company does not anticipate
that it will experience any material Year 2000 problems in its mission-critical
functions, processes and systems. 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.
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"). As previously reported, the
Middleton case is set for trial by jury beginning March 3, 2001.
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"). As
reported in the Company's Form 8-K of March 21, 2000, the Court on March 21,
2000 entered an order denying the Dyer case plaintiffs' request for class
certification. At the Company's request, the Court severed the claims of three
of the plaintiffs, including Ms. Dyer, who worked in the Company's manufacturing
operations. Those three claims are proceeding in the Court as three separate
individual actions and, as a result, the Company no longer considers the Dyer
case or the other two individual cases to be material.
The remaining eight plaintiffs from the former Dyer case, who assert claims
relating to the Company's warehousing and distribution and security operations,
are proceeding in the Court with Violet McGee as the lead plaintiff (the "McGee
case"). The plaintiffs in the McGee case are seeking an opportunity to add or
substitute additional plaintiffs and again to request class certification.
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. The case has been transferred to
the Federal District Court for the Northern District of Georgia, where the
parties have briefed the class certification issue and are awaiting a ruling.
A purported class action was filed against the Company on October 23, 2000
in the Federal District Court for the Southern District of Florida, Miami
Division, by Joaquin A. Garcia and five other present or former warehouse
employees of the Company, individually and on behalf of all other persons
similarly situated (the "Garcia case"). In their Complaint, the plaintiffs
allege that the Company has maintained a pattern and practice of national origin
discrimination against Hispanic warehouse employees in connection with
promotion, terms and conditions of employment, hiring and discharge, all in
violation of federal and state law. The plaintiffs seek, among other relief, a
certification of the suit as a class action, declaratory and injunctive relief,
back pay, compensatory damages, and other equitable relief.
-9-
<PAGE>
The Company denies the allegations of the plaintiffs in the Middleton,
McGee, Lisenby and Garcia 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, results of operations or
cash flows.
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, results of operations or cash flows.
-10-
<PAGE>
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 nine months ended
September 23, 2000.
Item 6(b)Reports on Form 8-K
----------------------------
No reports on Form 8-K were filed during the quarter ended September 23,
2000.
-11-
<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: November 3, 2000 /s/ John A. Attaway Jr.
------------------------------------------
John A. Attaway Jr., Secretary
Date: November 3, 2000 /s/ David P. Phillips
------------------------------------------
David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
-12-
