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 24, 2000
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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 July 28, 2000 was 210,152,501.
Page 1 of 11 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
June 24, 2000 December 25, 1999
------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets
--------------
Cash and cash equivalents $ 500,203 $ 626,636
Short-term investments 22,199 28,233
Trade receivables 80,409 107,185
Merchandise inventories 706,719 769,454
Deferred tax assets 62,288 57,065
Prepaid expenses 8,201 2,442
---------- ----------
Total Current Assets 1,380,019 1,591,015
---------- ----------
Long-term investments 403,074 398,865
Other noncurrent assets 22,753 22,682
Property, plant and equipment 3,435,183 3,307,387
Accumulated depreciation (1,250,751) (1,252,217)
---------- ----------
Total Assets $3,990,278 $4,067,732
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
-------------------
Accounts payable $ 588,520 $ 634,995
Accrued contribution to retirement plans 150,567 182,981
Accrued salaries and wages 79,692 52,591
Accrued self-insurance reserves 73,578 69,356
Federal and state income taxes 23,740 32,496
Other 110,635 103,339
---------- ----------
Total Current Liabilities 1,026,732 1,075,758
---------- ----------
Deferred tax liabilities, net 140,740 135,413
Self-insurance reserves 106,423 100,154
Accrued postretirement benefit cost 59,320 55,735
Other noncurrent liabilities 21,267 24,528
Stockholders' Equity
--------------------
Common stock of $1 par value. Authorized
300,000,000 shares; issued 215,914,742
shares at June 24, 2000 and 215,567,950
shares at December 25, 1999 215,915 215,568
Additional paid-in capital 211,972 196,352
Reinvested earnings 2,484,136 2,271,323
---------- ----------
2,912,023 2,683,243
Less 5,927,008 treasury shares
at June 24, 2000, at cost (267,168) ---
Accumulated other comprehensive earnings (9,059) (7,099)
---------- ----------
Total Stockholders' Equity 2,635,796 2,676,144
---------- ----------
Total Liabilities and Stockholders'
Equity $3,990,278 $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
June 24, 2000 June 26, 1999
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(Unaudited)
<S> <C> <C>
Revenues
--------
Sales $ 3,476,602 $ 3,137,587
Other income, net 37,428 34,878
------------ ------------
Total revenues 3,514,030 3,172,465
------------ ------------
Costs and expenses
------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 2,569,497 2,322,824
Operating and administrative expenses 744,266 668,815
------------ ------------
Total costs and expenses 3,313,763 2,991,639
------------ ------------
Earnings before income tax expense 200,267 180,826
Income tax expense 72,001 64,727
------------ ------------
Net earnings $ 128,266 $ 116,099
============ ============
Weighted average number of common
shares outstanding 212,300,255 216,255,811
============ ============
Basic earnings per common share $ .60 $ .54
============ ============
Cash dividends per common share $ .27 $ .22
============ ============
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Three Months Ended
June 24, 2000 June 26, 1999
------------- -------------
(Unaudited)
<S> <C> <C>
Net earnings $ 128,266 $ 116,099
Other comprehensive earnings - unrealized
gain on investment securities
available-for-sale, net of tax effect
of $898 and $197 in 2000 and 1999,
respectively 1,430 314
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $120 and $90 in
2000 and 1999, respectively 191 143
------------ ------------
Comprehensive earnings $ 129,887 $ 116,556
============ ============
</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 24, 2000 June 26, 1999
------------- -------------
(Unaudited)
<S> <C> <C>
Revenues
--------
Sales $ 7,090,924 $ 6,500,835
Other income, net 72,357 66,050
------------ ------------
Total revenues 7,163,281 6,566,885
------------ ------------
Costs and expenses
------------------
Cost of merchandise sold, including store
occupancy, warehousing and delivery
expenses 5,261,327 4,860,802
Operating and administrative expenses 1,479,461 1,338,730
------------ ------------
Total costs and expenses 6,740,788 6,199,532
------------ ------------
Earnings before income tax expense 422,493 367,353
Income tax expense 151,864 132,686
------------ ------------
Net earnings $ 270,629 $ 234,667
============ ============
Weighted average number of common
shares outstanding 213,066,482 216,350,691
============ ============
Basic earnings per common share $ 1.27 $ 1.08
============ ============
Cash dividends per common share $ .27 $ .22
============ ============
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)
Six Months Ended
June 24, 2000 June 26, 1999
------------- -------------
(Unaudited)
<S> <C> <C>
Net earnings $ 270,629 $ 234,667
Other comprehensive earnings - unrealized
loss on investment securities
available-for-sale, net of tax effect
of ($2,221) and ($1,835) in 2000 and 1999,
respectively (3,536) (2,931)
Reclassification adjustment for net
realized loss on investment
securities available-for-sale, net
of tax effect of $990 and $1,808 in
2000 and 1999, respectively 1,576 2,889
------------ ------------
Comprehensive earnings $ 268,669 $ 234,625
============ ============
</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 24, 2000 June 26, 1999
------------- -------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
------------------------------------
Cash received from customers $ 7,163,292 $ 6,560,042
Cash paid to employees and suppliers (6,375,222) (5,944,062)
Income taxes paid (159,285) (112,079)
Payment for self-insured claims (71,571) (66,959)
Other, net 26,754 23,955
----------- -----------
Net Cash Provided by Operating Activities 583,968 460,897
----------- -----------
Cash Flows From Investing Activities
------------------------------------
Payment for property, plant and equipment (246,819) (242,692)
Payment for investment securities -
available-for-sale (33,230) (112,983)
Proceeds from sale of investment securities -
available-for-sale 26,951 94,543
Other, net 1,601 (6,160)
----------- -----------
Net Cash Used in Investing Activities (251,497) (267,292)
----------- -----------
Cash Flows From Financing Activities
------------------------------------
Proceeds from sale of common stock 47,445 175,377
Payment for acquisition of common stock (448,402) (256,417)
Dividends paid (57,816) (47,846)
Other, net (131) (131)
----------- -----------
Net Cash Used in Financing Activities (458,904) (129,017)
----------- -----------
Net (decrease) increase in cash and cash
equivalents (126,433) 64,588
Cash and cash equivalents at beginning of
period 626,636 669,326
----------- -----------
Cash and cash equivalents at end of period $ 500,203 $ 733,914
=========== ===========
</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 six months ended June 24, 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.
-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 $584.0
million in the six months ended June 24, 2000, as compared with $460.9 million
in the six months ended June 26, 1999. Cash and cash equivalents totaled $500.2
million as of June 24, 2000, as compared with $733.9 million as of June 26,
1999.
Capital expenditures totaled approximately $246.8 million in the six
months ended June 24, 2000. These expenditures were primarily incurred in
connection with the opening of 27 new stores and remodeling or expanding 31
stores. Significant expenditures were also incurred in the expansion of a
warehouse in Lakeland, Florida. In addition, the Company closed four stores. The
net impact of new and closed stores (net new stores) added an additional 1.1
million square feet in the six months ended June 24, 2000, a 3.8% increase.
Capital expenditures totaled approximately $242.7 million in the six months
ended June 26, 1999. These expenditures were primarily incurred in connection
with the opening of 14 new stores and remodeling or expanding of 37 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 seven stores. Net new stores added an additional .39 million square feet
in the six months ended June 26, 1999, a 1.5% 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 $388.2 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.
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 10.8% in the second quarter of 2000 to $3.5 billion, an
increase of $339.0 million compared to the same quarter in 1999. This reflects
an increase of $134.9 million or 4.3% in sales from stores that were open for
all of both quarters (comparable stores) and sales of $204.1 million or 6.5%
from net new stores since March 27, 1999.
Sales increased 9.1% in the six months ended June 24, 2000, to $7.1
billion, an increase of $590.1 million over the six months ended June 26, 1999.
This reflects an increase of $219.7 million or 3.4% in sales from comparable
stores and sales of $370.4 million or 5.7% from net new stores since the
beginning of 1999.
Cost of merchandise sold including store occupancy, warehousing and
delivery expenses, as a percentage of sales, was approximately 73.9% and 74.0%
in the quarters ended June 24, 2000 and June 26, 1999, respectively. These cost
of sales percentages were 74.2% and 74.8% for the six months ended June 24, 2000
and June 26, 1999, respectively. The decreases in cost of merchandise sold, as a
percentage of sales, were primarily due to continuing improvements in buying
practices and merchandising efficiencies.
-7-
<PAGE>
Operating and administrative expenses, as a percentage of sales, were
approximately 21.4% and 21.3% for the quarters ended June 24, 2000 and June 26,
1999, respectively. The operating and administrative expenses, as a percentage
of sales, were 20.9% and 20.6% for the six months ended June 24, 2000 and June
26, 1999, respectively. The significant components of operating and
administrative expenses are payroll costs, employee benefits, rent and
depreciation.
Year 2000
---------
As of July 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.
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"). 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 plaintiff's request for class
certification. The Company has asked the Court to sever the Dyer case into
eleven different individual cases, but the plaintiffs have opposed that request
and are seeking an opportunity to add or substitute additional plaintiffs and
again to request class certification.
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. 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.
The Company denies the allegations of the plaintiffs in the Middleton,
Dyer, 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.
-9-
<PAGE>
Item 2. Changes in Securities
-------------------------------
Not Applicable.
Item 3. Defaults Upon Senior Securities
-----------------------------------------
Not Applicable.
Item 4. Results of Votes of Security Holders
----------------------------------------------
The Annual Meeting of Stockholders of the Company was held on May 17,
2000, 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 5. Other Information
---------------------------
Not Applicable.
Item 6(a) Exhibits
------------------
27. Financial Data Schedule for the six months ended June 24, 2000.
Item 6(b) Reports on Form 8-K
-----------------------------
No reports on Form 8-K were filed during the quarter ended June 24,
2000.
-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: August 4, 2000 /s/ John A. Attaway Jr.
------------------------------------------
John A. Attaway Jr., Secretary
Date: August 4, 2000 /s/ David P. Phillips
------------------------------------------
David P. Phillips, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
-11-
