<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended November 3, 1996
Commission File No. 34-025260
KASH N' KARRY FOOD STORES, INC.
(Exact name of registrant as specified in charter)
Delaware 95-4161591
(State of Incorporation) (IRS Employer Identification Number)
6422 Harney Road, Tampa, Florida 33610
(Address of registrant's principal executive offices)
(813) 621-0200
(Registrant's telephone number, including area code)
The registrant 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 and has been subject to such filing
requirements for the past 90 days. The registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
As of December 13, 1996, there were 4,674,314 shares
outstanding of the registrant's common stock, $0.01 par value.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
BALANCE SHEETS
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
ASSETS
November 3, July 28,
1996 1996
--------- --------
(Unaudited)
Current assets:
Cash and cash equivalents $ 9,655 $ 6,778
Accounts receivable 9,428 12,239
Inventories 94,455 90,332
Prepaid expenses and other current assets 7,282 7,071
-------- --------
Total current assets 120,820 116,420
Property and equipment, at cost, less
accumulated depreciation 130,113 132,016
Favorable lease interests, less accumulated
amortization of $3,648 and $3,149 26,306 26,805
Deferred financing costs, less accumulated
amortization of $2,511 and $2,155 4,267 4,509
Excess reorganization value, less accumulated
amortization of $16,960 and $16,006 84,359 85,313
Deferred tax asset 2,555 1,200
Other assets 2,423 2,362
-------- ---------
Total assets $370,843 $368,625
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 4,771 $ 5,507
Accounts payable 44,137 43,440
Accrued payroll and benefits 4,732 6,441
Accrued interest 4,678 8,809
Other accrued expenses 19,322 21,159
--------- ---------
Total current liabilities 77,640 85,356
Long-term debt, less current obligations 228,762 215,464
Other long-term liabilities 15,771 15,949
Stockholders' equity:
Common Stock of $.01 par value.
Authorized 5,500,000 shares; 4,674,314
shares outstanding. 46 46
Capital in excess of par value 46,693 46,693
Retained earnings 1,931 5,117
---------- ----------
Total stockholders' equity 48,670 51,856
---------- ----------
Total liabilities & stockholders' equity $370,843 $368,625
========== ==========
See accompanying notes to condensed financial statements.
2<PAGE>
KASH N' KARRY FOOD STORES, INC.
STATEMENTS OF OPERATIONS
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended
November 3, October 29,
1996 1995
--------- ---------
Sales $242,418 $250,368
Cost of sales 194,044 199,950
--------- ---------
Gross profit 48,374 50,418
Selling, general and
administrative expenses 40,074 40,022
Depreciation and amortization 6,138 6,167
--------- ---------
Operating income 2,162 4,229
Interest expense 6,703 6,422
--------- ---------
Loss before income taxes (4,541) (2,193)
Income tax benefit 1,355 362
--------- ---------
Net loss $ (3,186) $ (1,831)
========= =========
Net loss per common
share (A) $ (0.68) $ (0.39)
========= ==========
(A) Based on a weighted average number of shares of common stock of
4,674,314 and 4,649,943 outstanding for the fourteen weeks ended
November 3, 1996 and the thirteen weeks ended October 29, 1995,
respectively.
See accompanying notes to condensed financial statements.
3<PAGE>
KASH N' KARRY FOOD STORES, INC.
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended
November 3, October 29,
1996 1995
Net cash flow from operating activities: -------- --------
Net loss $ (3,186) $ (1,831)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Depreciation and amortization,
excluding deferred financing costs 6,138 6,167
Amortization of deferred financing costs 356 316
Income tax benefit (1,355) (362)
Issuance of additional senior
notes in lieu of cash interest -- 9,192
(Increase) decrease in assets:
Accounts receivable 2,811 (4,212)
Inventories (4,123) (15,008)
Prepaid expenses and other assets (185) 345
Increase (decrease) in liabilities:
Accounts payable 697 16,350
Accrued expenses and other liabilities (7,709) (5,666)
Net cash provided (used) by -------- --------
operating activities (6,556) 5,291
-------- --------
Cash provided (used) by investing activities:
Additions to property and equipment (6,657) (6,959)
Net proceeds from sale of assets 3,788 --
-------- --------
Net cash provided (used) by
investing activities (2,869) (6,959)
-------- --------
Cash provided (used) by financing activities:
Borrowings under revolving loan facility 14,714 13,336
Proceeds from sale/leaseback -- 9,458
Repayments on revolving loan facility (1,509) (9,996)
Repayments on term loan facility -- (10,820)
Repayments of other long-term liabilities (790) (1,629)
Other financing activities (113) (798)
-------- --------
Net cash provided (used) by
financing activities 12,302 (449)
-------- --------
Net increase (decrease) in cash
and cash equivalents 2,877 (2,117)
Cash and cash equivalents at beginning
of period 6,778 4,803
-------- --------
Cash and cash equivalents at end of period $ 9,655 $ 2,686
======== ========
See accompanying notes to condensed financial statements.
4<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
1. The condensed financial statements presented herein
have been prepared in accordance with the instructions to Form
10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles.
These statements should be read in conjunction with the fiscal
1996 Form 10-K filed by the Company. The accompanying condensed
financial statements have not been audited by independent
accountants in accordance with generally accepted auditing
standards, but in the opinion of management such condensed
financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to summarize fairly the
Company's financial position and results of operations.
2. The Company follows a fifty-two/fifty-three week fiscal
year ending on the Sunday nearest to July 31, and, therefore, has
reported fourteen weeks of operations for the quarter ended
November 3, 1996. The fiscal year ending August 3, 1997 will have
fifty-three weeks of operations.
3. Inventories consist of merchandise held for resale and
are stated at the lower of cost or market; cost is determined
using average cost, which approximates the first-in, first-out
(FIFO) method.
4. Long-term debt consists of the following:
November 3, July 28,
1996 1996
-------- --------
Credit facility $ 38,861 $ 25,656
Senior Floating Rate Notes 23,942 23,942
Senior Fixed Rate Notes 136,802 136,802
Mortgages payable 16,512 17,655
Capital lease obligations and other 17,416 16,916
-------- --------
Long-term debt including
current portion 233,533 220,971
Less current portion (4,771) (5,507)
-------- --------
Long-term debt $228,762 $215,464
======== =========
5. On October 31, 1996, the Company, Food Lion, Inc.
("Food Lion"), and KK Acquisition Corp., a Delaware corporation
and an indirect wholly-owned subsidiary of Food Lion, entered
into an Agreement and Plan of Merger (the "Merger Agreement"). In
5<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
accordance with the terms and subject to the conditions of the
Merger Agreement, on November 15, 1996 Food Lion commenced a
tender offer (the "Offer") for all outstanding shares of common
stock of the Company at a price of $26 per share, net to the
seller in cash. The Offer, originally scheduled to expire at
12:00 midnight, New York City time, on December 13, 1996, was
extended by Food Lion and expired at 12:00 midnight, New York
City time, on Tuesday, December 17, 1996, at which time more than
90% of the outstanding shares had been tendered. On December 18,
1996, all of the tendered shares were accepted for payment and
management contemplates that KK Acquisition Corp. will be merged
with and into the Company (the "Merger") effective as of such
date. As a result of the Offer and the Merger, the Company will
become a wholly-owned subsidiary of Food Lion.
6<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANAYLSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This analysis should be read in conjunction with the
condensed financial statements.
RESULTS OF OPERATIONS
The following table compares certain income and expense line
items as a percentage of sales:
Fourteen Thirteen
Weeks Ended Weeks Ended
November 3, October 29,
1996 1995
---------- ----------
Sales 100.00% 100.00%
Gross profit 19.95% 20.14%
Selling, general and
administrative expenses 16.53% 15.99%
Depreciation and amortization 2.53% 2.46%
Operating income 0.89% 1.69%
Interest expense 2.76% 2.56%
Pretax loss (1.87)% (0.87)%
Income tax benefit 0.56% 0.14%
Net loss (1.31)% (0.73)%
SALES. Sales for the fourteen weeks ended November 3, 1996
were $242.4 million, or 3.2% below the sales for the thirteen
weeks ended October 29, 1995. Same store sales, on a comparable
thirteen week period, decreased 10.8%. Sales have decreased due
to an increase in new store and remodel activity of traditional
as well as non-traditional competitors and generally lower retail
prices. In addition, the Company's remodeled stores experienced
sales decreases during the remodeling period.
GROSS PROFIT. Gross profit, as a percentage of sales, was
lower than the prior year as a result of generally lower retail
prices and higher promotional expenses.
SELLING, GENERAL and ADMINISTRATIVE EXPENSES. Selling,
general and administrative expenses were flat compared to the
prior year. Lower store labor, supplies and insurance expenses
were offset by expenses associated with the additional week of
operations. Selling, general and administrative expenses, as a
percentage of sales, increased due to the lower sales volume.
DEPRECIATION and AMORTIZATION. Depreciation and amortization
was flat compared to the prior year due to an additional week of
7<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANAYLSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
expense offset by the reduction of depreciation associated with
assets sold during the last twelve months.
INTEREST EXPENSE. Interest expense increased $0.3 million
compared to the prior year as a result of an additional week of
operations and an increase in the amount of Senior Fixed Rate
Notes outstanding, partially offset by lower interest expense on
mortgage debt due to sale-leaseback transactions completed during
the last twelve months.
FINANCIAL CONDITION
The Company's existing Credit Agreement provides for a term
loan facility of $9.9 million and a revolving credit facility of
$50.0 million for working capital requirements and letters of
credit. As of December 13, 1996, the Company had borrowed $9.9
million under the term loan and $33.8 million under the working
capital line and had $7.5 million of letters of credit issued
against the revolving credit facility.
In 1995, the Company began a comprehensive remodeling
program to upgrade and expand, where necessary, its store
facilities to support its emphasis on quality perishables. For
1997, the Company expects total capital expenditures of
approximately $30.0 million, of which approximately $22.0 million
will be spent on two new stores, one replacement store, four
expansion remodels and four additional major remodels.
On October 31, 1996, the Company, Food Lion, Inc. ("Food
Lion"), and KK Acquisition Corp., a Delaware corporation and an
indirect wholly-owned subsidiary of Food Lion, entered into an
Agreement and Plan of Merger (the "Merger Agreement"). In
accordance with the terms and subject to the conditions of the
Merger Agreement, on November 15, 1996 Food Lion commenced a
tender offer (the "Offer") for all outstanding shares of common
stock of the Company at a price of $26 per share, net to the
seller in cash. The Offer, originally scheduled to expire at
12:00 midnight, New York City time, on December 13, 1996, was
extended by Food Lion and expired at 12:00 midnight, New York
City time, on Tuesday, December 17, 1996, at which time more than
90% of the outstanding shares had been tendered. On December 18,
1996, all of the tendered shares were accepted for payment and
management contemplates that KK Acquisition Corp. will be merged
with and into the Company (the "Merger") effective as of such
date. As a result of the Offer and the Merger, the Company will
become a wholly-owned subsidiary of Food Lion. Management
believes that the Merger will immediately improve the Company's
liquidity by, among other things, recapitalizing the existing
debt, and will allow the Company to accelerate its new store and
remodeling plan.
8<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANAYLSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
EFFECTS OF INFLATION
The Company's primary costs, inventory and labor, are
affected by a number of factors that are beyond its control,
including availability and price of merchandise, the competitive
climate and general and regional economic conditions. As is
typical of the supermarket industry, the Company has generally
been able to maintain margins by adjusting its retail prices, but
competitive conditions may from time to time render it unable to
do so while maintaining its market share.
9<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is engaged in various legal actions and claims
arising in the ordinary course of business including products
liability actions and suits charging violations of certain civil
rights laws and Florida's RICO Act. Management believes, after
discussions with legal counsel, that the ultimate outcome of such
litigation and claims will not have a material adverse effect on
the Company's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security
holders during the quarter ended November 3, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit
No. Description
- ------- ---------------------------------------------------------
2.1 First Amended Plan of Reorganization filed by the
Company with the United States Bankruptcy Court of the
District of Delaware on November 9, 1994, as amended by
notices of technical modifications thereto filed on
November 9, 1994, and December 12, 1994 (previously
filed as Exhibit 2 to the Company's Quarterly Report on
Form 10-Q for the period ended October 30, 1994, which
exhibit is hereby incorporated by reference).
2.2 Agreement and Plan of Merger, dated as of
October 31, 1996, by and among Food Lion, Inc., KK
Acquisition Corp. and Kash n' Karry Food Stores, Inc.
(previously filed as Exhibit (2) to the Company's
Current Report on Form 8-K dated October 31, 1996,
which exhibit is hereby incorporated by reference
herein).
3(i)(a) Restated Certificate of Incorporation filed with the
Delaware Secretary of State on December 29, 1994
(previously filed as Exhibit 3(i) to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
3(i)(b) Certificate of Designations of Series A Junior
Participating Preferred Stock filed with the Secretary
of State of the State of Delaware on April 26, 1995
10<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
(previously filed as Exhibit 3(i)(b) to the Company's
Registration Statement on Form S-1, Registration No.
33-58999, which exhibit is hereby incorporated by
reference).
3(ii)(a) Bylaws adopted October 12, 1988 (previously filed as
Exhibit 3(ii)(a) to the Company's Quarterly Report on
Form 10-Q for the period ended January 29, 1995, which
exhibit is hereby incorporated by reference).
3(ii)(b) First Amendment to Bylaws adopted July 30, 1991
(previously filed as Exhibit 3(ii)(b) to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
3(ii)(c) Second Amendment to Bylaws adopted December 29, 1994
(previously filed as Exhibit 3(ii)(c) to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
3(ii)(d) Third Amendment to Bylaws adopted April 13, 1995
(previously filed as Exhibit 3(ii)(d) to the Company's
Quarterly Report on Form 10-Q for the period ended
April 30, 1995, which exhibit is hereby incorporated by
reference).
3(ii)(e) Fourth Amendment to Bylaws adopted March 8, 1996
(previously filed as Exhibit 3(ii)(3) to the Company's
Quarterly Report on Form 10-Q for the period ended
April 28, 1996, which exhibit is hereby incorporated by
reference).
4.1 Indenture dated as of December 29, 1994, between
the Company and Shawmut Bank Connecticut, N.A., as
Trustee, relating to 11.5% Senior Fixed Rate Notes due
2003 (previously filed as Exhibit 4.1 to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
4.2 Indenture dated as of December 29, 1994, between
the Company and IBJ Schroder Bank & Trust Company, as
Trustee, relating to Senior Floating Rate Notes due
2003 (previously filed as Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the period ended
11<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
January 29, 1995, which exhibit is hereby incorporated
by reference).
4.3(a) Rights Agreement dated as of April 13, 1995 between the
Company and Shawmut Bank Connecticut, N.A., as Rights
Agent (previously filed as Exhibit 1 to the Company's
Current Report on Form 8-K dated April 13, 1995, which
exhibit is hereby incorporated by reference).
4.3(b) First Amendment to Rights Agreement dated as of June
13, 1995 (previously filed as Exhibit 4.3(b) to the
Company's Quarterly Report on Form 10-Q for the period
ended April 30, 1995, which exhibit is hereby
incorporated by reference).
4.3(c) Second Amendment to the Rights Agreement, dated as of
October 30, 1996, between Kash n' Karry Food Stores,
Inc. and Fleet National Bank (successor to Shawmut Bank
Connecticut, N.A.), as Rights Agent (previously filed
as Exhibit (4) to the Company's Current Report on Form
8-K dated October 31, 1996, which exhibit is hereby
incorporated by reference herein).
4.4 Specimen form of Common Stock certificate
(previously filed as Exhibit 4.4 to the Company's
Registration Statement on Form S-1, Registration No. 33-
58999, which exhibit is hereby incorporated by
reference).
10.1(a) Credit Agreement dated as of December 29, 1994, among
the Company, certain lenders, The CIT Group/Business
Credit, Inc., as administrative agent, and Bank of
America National Trust and Savings Association, as
co-agent (previously filed as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended January 29, 1995, which exhibit is hereby
incorporated by reference).
10.1(b) Amended and Restated Credit Agreement dated as of
December 19, 1995, among the Company, certain lenders,
and The CIT Group/Business Credit, Inc., as
administrative agent (previously filed as Exhibit
10.1(b) to the Company's Quarterly Report on Form 10-Q
for the period ended January 28, 1996, which exhibit is
hereby incorporated by reference).
10.1(c) First Amendment to Amended and Restated Credit
Agreement dated as of March 28, 1996, among the
12<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
Company, certain lenders and The CIT Group/Business
Credit, Inc., as administrative agent (previously filed
as Exhibit 10.1(c) to the Company's Quarterly Report on
Form 10-Q for the period ended April 28, 1996, which
exhibit is hereby incorporated by reference).
10.2 Mortgage, Fixture Filing, Security Agreement and
Assignment of Rents between the Company, as mortgagor,
and Sun Life Insurance Co. of America, as mortgagee,
dated as of September 7, 1989 (previously filed as
Exhibit 28.1(a) to the Company's Quarterly Report on
Form 10-Q for the period ended October 29, 1989, which
exhibit is hereby incorporated by reference).
10.3 Mortgage between the Company, as mortgagor, and
Ausa Life Insurance Company, as mortgagee, dated as of
November 21, 1989 (mortgage satisfied in January 1996)
(previously filed as Exhibit 28.2(a) to the Company's
Quarterly Report on Form 10-Q for the period ended
October 29, 1989, which exhibit is hereby incorporated
by reference).
10.4 Trademark License Agreement dated as of October
12, 1988 between the Company and Lucky Stores, Inc.
(previously filed as Exhibit 10.11 to the Company's
Registration Statement on Form S-1, Registration No. 33-
25621, which exhibit is hereby incorporated by
reference).
10.5(a) Services Agreement dated as of March 1, 1995 between
the Company and GSI Outsourcing Corporation (previously
filed as Exhibit 10.5(a) to the Company's Registration
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
10.5(b) First Amendment to Services Agreement between the
Company and GSI Outsourcing Corporation (previously
filed as Exhibit 10.5(b) to the Company's Registration
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
10.5(c) Guaranty of Payment, Nondisturbance and Attornment
Agreement dated as of June 1995 among the Company, GSI
Outsourcing Corporation and IBM Credit Corporation
(previously filed as Exhibit 10.5(c) to the Company's
Annual Report on Form 10-K for the fiscal year ended
13<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
July 30, 1995, which exhibit is hereby incorporated by
reference).
10.5(d) Addendum to Services Agreement between the Company and
GSI Outsourcing Corporation dated as of July 1995
(previously filed as Exhibit 10.5(d) to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 30, 1995, which exhibit is hereby incorporated by
reference).
10.6 Form of Indemnity Agreement between the Company
and its directors and certain of its officers
(previously filed as Exhibit 10.3 to the Company's
Registration Statement on Form S-1, Registration No. 33-
25621, which exhibit is hereby incorporated by
reference).
10.7(a) 1995 Non-Employee Director Stock Option Plan adopted on
March 9, 1995 (previously filed as Exhibit 10.7(a) to
the Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
10.7(b) Form of Non-Qualified Stock Option Agreement entered
into between the Company and certain directors, as
optionees, pursuant to the 1995 Non-Employee Director
Stock Option Plan (previously filed as Exhibit 10.7(b)
to the Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
10.8 Non-Qualified Stock Option Agreement dated as of
January 17, 1995, between the Company and Green Equity
Investors, L.P. (previously filed as Exhibit 10.8 to
the Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
10.9 Management Services Agreement dated as of December
29, 1994, by and between the Company and Leonard Green
& Partners (previously filed as Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the period
ended January 29, 1995, which exhibit is hereby
incorporated by reference).
10.10(a) Employment Agreement dated as of January 24, 1995,
between the Company and Ronald Johnson (previously
filed as Exhibit 10.10 to the Company's Registration
14<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
10.10(b) Letter agreement dated as of May 22, 1996, amending
Employment Agreement with Ronald Johnson (previously
filed as Exhibit 10.10(b) to the Company's Quarterly
Report on Form 10-Q for the period ended April 28,
1996, which exhibit is hereby incorporated by
reference).
10.11 Employment Agreement dated as of March 6, 1995,
between the Company and Gary M. Shell (previously filed
as Exhibit 10.11 to the Company's Registration
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
10.12(a) Employment Agreement dated as of March 16, 1995,
between the Company and Clifford C. Smith, Jr.
(previously filed as Exhibit 10.12 to the Company's
Registration Statement on Form S-1, Registration No. 33-
58999, which exhibit is hereby incorporated by
reference).
10.12(b) Letter agreement dated as of May 23, 1996, amending
Employment Agreement with Clifford C. Smith, Jr.
(previously filed as Exhibit 10.12(b) to the Company's
Quarterly Report on Form 10-Q for the period ended
April 28, 1996, which exhibit is hereby incorporated by
reference).
10.13(a) Employment Agreement dated as of July 8, 1995, between
the Company and BJ Mehaffey (previously filed as
Exhibit 10.13 to the Company's Annual Report on Form 10-
K for the fiscal year ended July 30, 1995, which
exhibit is hereby incorporated by reference).
10.13(b) Letter agreement dated as of May 23, 1996, amending
Employment Agreement with BJ Mehaffey (previously filed
as Exhibit 10.12(b) to the Company's Quarterly Report
on Form 10-Q for the period ended April 28, 1996, which
exhibit is hereby incorporated by reference).
10.14 Incentive Compensation Plan adopted on October 26,
1994 (previously filed as Exhibit 10.13 to the
Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
15<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
10.15 Amended and Restated Kash n' Karry Retirement
Estates and Trust (401(k) Plan) dated October 14, 1993,
effective as of January 1, 1992 (previously filed as
Exhibit 10.5 to the Company's Annual Report on Form 10-
K for the period ended August 1, 1993, which exhibit is
hereby incorporated by reference).
10.16(a) Form of Deferred Compensation Agreement dated as of
December 21, 1989 between the Company and key employees
and a select group of management (KESP) (previously
filed as Exhibit 28.3(a) to the Company's Quarterly
Report on Form 10-Q for the period ended January 28,
1990, which exhibit is hereby incorporated by
reference).
10.16(b) Master First Amendment to Deferred Compensation
Agreements, dated as of November 11, 1991 between the
Company and the key employees party thereto (previously
filed as Exhibit 28.3 to the Company's Quarterly Report
on Form 10-Q for the period ended November 3, 1991,
which exhibit is hereby incorporated by reference).
10.16(c) Master Second Amendment to Deferred Compensation
Agreements, dated as of December 30, 1993 between the
Company and the key employees party thereto (previously
filed as Exhibit 10.13(d) to the Company's Quarterly
Report on Form 10-Q for the period ended January 30,
1994, which exhibit is hereby incorporated by
reference).
10.16(d) Master Third Amendment to Deferred Compensation
Agreements, dated as of September 2, 1994, between the
Company and the key employees party thereto (previously
filed as Exhibit 10.2 to the Company's Quarterly Report
on Form 10-Q for the period ended January 29, 1995,
which exhibit is hereby incorporated by reference).
10.17(a) 1995 Key Employee Stock Option Plan (previously filed
as Exhibit 10.16(a) to the Company's Registration
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
10.17(b) Non-Qualified Stock Option Agreement dated March 9,
1995 between the Company and Ronald E. Johnson
(previously filed as Exhibit 10.16(b) to the Company's
Registration Statement on Form S-1, Registration No.
16<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
33-58999, which exhibit is hereby incorporated by
reference).
10.17(c) Form of Non-Qualified Stock Option Agreement entered
into between the Company and certain key employees, as
optionees, pursuant to the 1995 Key Employee Stock
Option Plan (previously filed as Exhibit 10.16(b) to
the Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
10.18 Employment and Consulting Agreement dated July 1,
1994 between the Company and Anthony R. Petrillo
(previously filed as Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 30, 1995, which exhibit is hereby incorporated by
reference).
10.19 Form of Bonus Deferred Compensation Agreement
dated as of July 28, 1995 between the Company and
certain key employees (previously filed as Exhibit
10.19 to the Company's Annual Report on Form 10-K for
the fiscal year ended July 30, 1995, which exhibit is
hereby incorporated by reference).
10.20 Supply Agreement dated as of November 29, 1995
between the Company and Gooding's Supermarkets, Inc.
(filed herewith) (previously filed as Exhibit 10.20 to
the Company's Quarterly Report on Form 10-Q for the
period ended October 29, 1995, which exhibit is hereby
incorporated by reference).
10.21 Separation, Waiver and Release Agreement dated as of
January 31, 1996 between the Company and Raymond P.
Springer (previously filed as Exhibit 10.21 to the
Company's Quarterly Report on Form 10-Q for the period
ended January 28, 1996, which exhibit is hereby
incorporated by reference).
10.22(a) Employment Agreement dated as of January 26, 1996
between the Company and Richard D. Coleman (previously
filed as Exhibit 10.22(a) to the Company's Quarterly
Report on Form 10-Q for the period ended April 28,
1996, which exhibit is hereby incorporated by
reference).
10.22(b) Letter Agreement dated as of May 23, 1996, amending
Employment Agreement with Richard D. Coleman
17<PAGE>
Exhibit
No. Description
- ------- ---------------------------------------------------------
(previously filed as Exhibit 10.22(b) to the Company's
Quarterly Report on Form 10-Q for the period ended
April 28, 1996, which exhibit is hereby incorporated by
reference).
10.23 Stockholders Agreement, dated as of October 31,
1996, among Food Lion, Inc., KK Acquisition Corp., Kash
n' Karry Food Stores, Inc. and the stockholders of Kash
n' Karry Food Stores, Inc. signatory thereto
Acquisition Corp. and Kash n' Karry Food Stores, Inc.
(previously filed as Exhibit (10) to the Company's
Current Report on Form 8-K dated October 31, 1996,
which exhibit is hereby incorporated by reference
herein).
11 Statement re computation of per share earnings
(filed herewith).
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K:
(1) Current Report on Form 8-K dated October 31, 1996.
(2) Current Report on Form 8-K dated November 8, 1996.
18<PAGE>
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.
KASH N' KARRY FOOD STORES, INC.
Date: December 18, 1996 By: /s/ Richard D. Coleman
---------------------------
Richard D. Coleman
Senior Vice President,
Administration
Date: December 18, 1996 By: /s/ Marvin H. Snow, Jr.
---------------------------
Marvin H. Snow, Jr.
Vice President, Controller
Exhibit 11
----------
Quarter 1 Earnings Per Share
Fourteen
Weeks Ended
November 3,
1996
---------
Net loss $(3,186,000)
Common shares outstanding 4,674,314
Net loss per share $ (0.68)
===========
(Note) Due to the net loss, conversion of common stock
equivalents are not considered.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION DERIVED FROM THE CONDENSED FINANCIAL
STATEMENTS OF KASH N' KARRY FOOD STORES, INC. AS OF AND FOR THE PERIOD ENDED
NOVEMBER 3, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONDENSED
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-03-1997
<PERIOD-START> JUL-29-1996
<PERIOD-END> NOV-03-1996
<CASH> 9,655
<SECURITIES> 0
<RECEIVABLES> 9,428
<ALLOWANCES> 0
<INVENTORY> 94,455
<CURRENT-ASSETS> 102,820
<PP&E> 172,063
<DEPRECIATION> 41,950
<TOTAL-ASSETS> 370,843
<CURRENT-LIABILITIES> 77,640
<BONDS> 228,762
0
0
<COMMON> 46
<OTHER-SE> 48,624
<TOTAL-LIABILITY-AND-EQUITY> 370,843
<SALES> 242,418
<TOTAL-REVENUES> 242,418
<CGS> 194,044
<TOTAL-COSTS> 240,256
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,703
<INCOME-PRETAX> (4,541)
<INCOME-TAX> 1,355
<INCOME-CONTINUING> (3,186)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,186)
<EPS-PRIMARY> $(0.68)
<EPS-DILUTED> $(0.68)
</TABLE>
