<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
_________
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
----- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1998
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 001-10811
SMART & FINAL INC.
(Exact name of registrant as specified in its charter)
Delaware No. 95-4079584
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4700 South Boyle Ave.
Los Angeles, California 90058
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (213) 589-1054
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 registrant had 22,438,749 shares of common stock outstanding as of MAY 7,
1998.
Number of Sequentially Numbered Pages: 13
Exhibit Index at Page: 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SMART & FINAL INC.
INDEX
<TABLE>
<CAPTION>
PART I
FINANCIAL INFORMATION
Page
<S> <C> <C>
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets 2
Unaudited Consolidated Statements of Income 3
Unaudited Consolidated Statements of Cash Flows 4
Notes to Unaudited Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
PART II
OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE>
SMART & FINAL INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
March 29, January 4,
1998 1998
--------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash & cash equivalents $ 26,468 $ 22,891
Trade notes and accounts receivable, less
allowance for doubtful accounts of
$3,969 in 1998 and $5,518 in 1997 73,537 75,995
Inventories 125,645 129,761
Prepaid expenses 13,757 15,906
Deferred tax asset 9,600 9,600
-------- --------
Total current assets 249,007 254,153
Property, plant and equipment:
Land 35,553 35,631
Buildings and improvements 29,525 29,530
Leasehold improvements 66,830 67,821
Fixtures and equipment 146,401 139,316
-------- --------
278,309 272,298
Less - Accumulated depreciation and amortization 91,326 85,808
-------- --------
Net property, plant and equipment 186,983 186,490
Assets under capital leases, net 4,415 4,535
Goodwill 19,622 18,940
Deferred tax asset 3,148 3,148
Other assets 17,749 20,879
-------- --------
Total Assets $480,924 $488,145
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Current maturities of long-term debt $ 3,583 $ 3,576
Current maturities of notes payable to affiliates 7,600 7,600
Bank line of credit 35,000 37,000
Accounts payable 79,025 77,116
Payable to Parent and affiliates 20,814 18,589
Accrued salaries and wages 9,990 9,528
Other accrued liabilities 27,149 32,262
-------- --------
Total current liabilities 183,161 185,671
Long-term liabilities:
Notes payable, net of current maturities 3,167 4,061
Notes payable to affiliates 22,800 22,800
Bank debt 45,000 45,000
Obligations under capital leases 8,010 8,163
Other long-term liabilities 2,959 2,937
Workers' compensation reserve, postretirement
and postemployment benefits 18,146 18,068
-------- --------
Total long-term liabilities 100,082 101,029
Minority interest - 1,116
Stockholders' equity:
Preferred stock, $1 par value (authorized-
10,000,000 shares; no shares issued) - -
Common stock, $0.01 par value (authorized-
100,000,000 shares; 22,411,915 shares issued
and outstanding in 1998 and 22,386,181 in 1997) 224 224
Additional paid-in capital 143,328 142,865
Cumulative translation loss (835) (835)
Retained earnings 54,964 58,075
-------- --------
Total stockholders' equity 197,681 200,329
-------- --------
Total liabilities and stockholders' equity $480,924 $488,145
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
SMART & FINAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Twelve Weeks Ended
-------------------------------------
March 29, March 23,
1998 1997
---------------- ----------------
(Unaudited)
<S> <C> <C>
Sales................................................................. $ 334,278 $ 306,984
Cost of sales, buying and occupancy................................... 294,538 262,397
---------------- ----------------
Gross margin.......................................................... 39,740 44,587
Operating and administrative expenses................................. 39,418 34,827
---------------- ----------------
Income from operations............................................. 322 9,760
Interest expense, net................................................. 2,128 1,537
---------------- ----------------
Income (loss) before income taxes, minority share
of net income, and cumulative effect of accounting change........... (1,806) 8,223
Income taxes.......................................................... (780) 3,235
Minority share of net income.......................................... - 106
---------------- ----------------
Income (loss) from consolidated subsidiaries....................... (1,026) 4,882
Equity earnings in unconsolidated subsidiary............................. 130 100
---------------- ----------------
Income (loss) before cumulative effect of accounting change........ (896) 4,982
Cumulative effect of accounting change (start-up costs, net of
tax effect of $758)................................................. 1,090 -
---------------- ----------------
Net income (loss).................................................. $ (1,986) $ 4,982
================ ================
Earnings (loss) per common share:
Earnings (loss) per common share before cumulative effect of
accounting change................................................... $ (0.04) $ 0.23
Cumulative effect of accounting change per common share.............. (0.05) -
---------------- ----------------
Earnings (loss) per common share..................................... $ (0.09) $ 0.23
================ ================
Weighted average common shares........................................ 22,395,653 21,995,285
================ ================
Earnings (loss) per common share, assuming dilution:
Earnings (loss) per common share, assuming dilution, before
cumulative effect of accounting change.............................. $ (0.04) $ 0.22
Cumulative effect of accounting change per common share.............. (0.05) -
---------------- ----------------
Earnings (loss) per common share, assuming dilution.................. $ (0.09) $ 0.22
================ ================
Weighted average common shares
and common share equivalents......................................... 22,395,653 22,822,384
================ ================
Dividend per common share............................................. $ 0.05 $ 0.05
================ ================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
SMART & FINAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
Twelve Weeks Ended
-------------------------------
March 29, March 23,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net income ....................................................... $(1,986) $ 4,982
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization................................ 6,434 5,642
Cumulative effect of accounting change, net of taxes......... 1,090 -
Minority share of net income................................. - 106
Equity earnings in unconsolidated subsidiary................. (130) (100)
Decrease (increase) in:
Trade notes and accounts receivable..................... 2,458 1,539
Inventories............................................. 4,116 4,305
Prepaid expenses and other.............................. 2,746 (1,502)
Increase (decrease) in:
Accounts payable........................................ 3,089 (6,878)
Accrued liabilities..................................... 462 (2,183)
Other liabilities....................................... (5,013) 4,164
------- -------
Net cash provided by operating activities.................... 13,266 10,075
------- -------
Cash Flows From Investing Activities:
Acquisition of property, plant and equipment ..................... (7,612) (5,929)
Proceeds from disposal of property, plant and equipment........... 295 100
Purchase of Henry Lee Minority Interest........................... (1,924) -
Other............................................................. 952 (1,074)
------- -------
Net cash used in investing activities........................ (8,289) (6,903)
------- -------
Cash Flows From Financing Activities:
Proceeds from issuance of common stock............................ 373 736
Bank line of credit............................................... (2,000) (2,000)
Payments on notes payable......................................... (1,040) (659)
Increase in payable to Parent and affiliates...................... 2,386 90
Quarterly dividend paid........................................... (1,119) (1,018)
------- -------
Net cash used in financing activities........................ (1,400) (2,851)
------- -------
Increase in cash and cash equivalents.................................. 3,577 321
Cash and cash equivalents at beginning of period....................... 22,891 16,795
------- -------
Cash and cash equivalents at end of period............................. $26,468 $17,116
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
SMART & FINAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
Smart & Final Inc. (the "Company") is a Delaware corporation and is a
55.4 percent owned subsidiary of Casino USA, Inc. (the "Parent"), and Casino
Realty, Inc., a wholly owned subsidiary of Casino USA.
The consolidated balance sheet as of March 29, 1998, the consolidated
statements of income and cash flows for the twelve weeks ended March 29, 1998
and March 23, 1997 are unaudited. In the opinion of management, all adjustments
necessary for a fair presentation of these financial statements have been
included. Such adjustments consisted only of normal recurring items. Interim
results are not necessarily indicative of results for a full year.
These consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Form 10-K statement for the year ended January 4, 1998.
(2) EARNINGS PER COMMON SHARE
Earnings per common share is based on the weighted average number of shares
of common stock outstanding. Earnings per common share, assuming dilution
includes the weighted average number of common stock equivalents outstanding
related to employee stock options and a stock purchase agreement.
(3) FISCAL YEARS
The Company's fiscal year ends on the Sunday closest to December 31.
Each fiscal year consists of twelve-week periods in the first, second and fourth
quarters and a sixteen-week period in the third quarter.
(4) DIVIDEND
On February 18, 1998, the Company declared a dividend of $0.05 per
share to stockholders of record at April 3, 1998. The dividend was paid on
April 24, 1998.
(5) INCOME TAXES
Tax sharing payments for state income taxes made by the Company to the
Parent were $541,000 in the twelve weeks ended March 23, 1997. In the twelve
weeks ended March 29, 1998, the Company received a refund of $1,771,000 from the
Parent for state income taxes overpaid, due to the loss for 1997. The Company
paid $675,000 in federal income taxes in the twelve week period ended March 23,
1997 and did not pay any in the twelve week period ended March 29, 1998 due to
losses in first quarter of 1998.
5
<PAGE>
SMART & FINAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
(6) LEGAL ACTIONS
The Company has been named as defendant in various legal actions arising in
the normal conduct of its business. In the opinion of management, after
consultation with counsel, none of these actions are expected to result in
significant liability to the Company.
(7) ACCOUNTING STANDARDS
During the first quarter of 1998, the Company adopted the provisions
of the American Institute of Certified Public Accountants Statement of Position
98-5, "Reporting on the Costs of Start-up Activities". This statement requires
that costs of start-up activities and organization costs be expensed as
incurred. Adoption of this statement resulted in a cumulative effect of
accounting change, net of tax, charge of $1.1 million, or $0.05 per diluted
share.
During the first quarter of 1998, the Company adopted the provisions of
Statement of Financial Accounting Standard No. 130 "Reporting Comprehensive
Income". This statement establishes standards for reporting and display of
comprehensive income. There was no difference between comprehensive income and
net income for the periods presented.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's discussion and analysis should be read in conjunction with the
accompanying consolidated financial statements and notes thereto and the
Company's Form 10-K statement for the year ended January 4, 1998.
SUMMARY
Smart & Final Inc. (the "Company") reported a net loss of $2.0 million, or
$0.09 per diluted share, for the twelve weeks ended March 29, 1998, compared to
earnings of $5.0 million, or $0.22 per diluted share, in the twelve weeks ended
March 23, 1997. The 1998 quarter includes a cumulative effect of accounting
change, net of tax, charge of $1.1 million, or $0.05 per diluted share, related
to adoption of the new American Institute of Certified Public Accountants
("AICPA") Statement of Position 98-5.
The decline in operating earnings from the prior year first quarter was
attributed to record rainfall which sharply reduced West Coast sales and
continuing distribution inefficiencies in Florida which began in mid-1997.
Vendor rebate and allowance income also declined from the prior year quarter as
sales growth slowed.
RESULTS OF OPERATIONS
The following table shows, for the periods indicated, certain condensed
consolidated income statement data, expressed as a percentage of total sales.
<TABLE>
<CAPTION>
Twelve Weeks Ended
--------------------
March 29, March 23,
1998 1997
--------------------
<S> <C> <C>
Sales:
Store sales 66.8% 72.9%
Foodservice distribution sales 33.2 27.1
----- -----
Total Sales................................................................ 100.0 100.0
Cost of sales, buying and occupancy........................................ 88.1 85.5
----- -----
Gross margin............................................................... 11.9 14.5
Operating and administrative expenses...................................... 11.8 11.3
----- -----
Income from operations.............................................. 0.1 3.2
Income expense, net........................................................ 0.6 0.5
----- -----
Income (loss) before income taxes, minority share
of net income, and cumulative effect of
accounting change................................................... (0.5) 2.7
Income taxes............................................................... (0.2) 1.1
Minority share of net income............................................... - -
----- -----
Income (loss) before cumulative effect of
accounting change................................................... (0.3) 1.6
Cumulative effect of accounting change (start-up costs).................... 0.3 -
----- -----
Net income (loss).......................................................... (0.6)% 1.6%
===== =====
</TABLE>
7
<PAGE>
BACKGROUND
The Company continued its expansion program in 1998 and 1997 as shown in
the following table:
<TABLE>
<CAPTION>
Quarter Ended Year Ended
March 29, March 23, January 4,
1998 1997 1998
---- ---- ----
<S> <C> <C> <C>
USA
Store count beginning 167 168 168
Store opened:
In new markets 1 - 1
In mature markets 1 1 3
------ ------ ------
Total 2 1 4
Relocations 2 - 7
Store relocated/closed (2) (2) (12)
------ ------ ------
Store count ending 169 167 167
====== ====== ======
MEXICO
Store count beginning 5 5 5
New stores opened 1 - -
------ ------ ------
Store count ending 6 5 5
====== ====== ======
Grand Total 175 172 172
====== ====== ======
</TABLE>
Mexico operations are not consolidated and are reported on the equity
basis.
Although new stores are important to the Company's continued growth and
profitability, each new store opening initially penalizes earnings because
stores are not immediately profitable. In recent years new stores opened in
existing market areas generally have achieved break even (after full allocation
of all corporate expenses) within the first six to eighteen months and new
stores opened in new market areas, which mature more slowly, generally have
achieved break even in approximately three years.
Each of the Company's fiscal years consists of twelve-week periods in the
first, second and fourth quarters of the fiscal year and a sixteen-week period
in the third quarter.
COMPARISON OF TWELVE WEEKS ENDED MARCH 29, 1998 WITH TWELVE WEEKS ENDED MARCH
23, 1997.
Sales. First quarter 1998 sales were $334.3 million, up 8.9% from the
comparable 1997 period. Smart & Final Stores Corporation ("Smart & Final") store
sales decreased 0.2%. Store sales decreased despite the eleven new stores,
including relocations, opened in 1997 and the five new stores, including one in
Mexico, opened in the first quarter of 1998. Comparable store sales for the
first quarter of 1998 declined 1.4% from the prior year period, due primarily to
record rainfall in the Company's major markets. Average comparable transaction
size declined slightly, by 1.7% to $30.86 in the first quarter of 1998.
8
<PAGE>
Foodservice distribution sales increased significantly from $83.2 million
in the first quarter of 1997 to $110.8 million in the current year first
quarter. Growth was strong at both Smart & Final Foodservice, formerly Port
Stockton Food Distributors, Inc, where sales increased 52.8% over the prior year
quarter and in Florida foodservice operations, including Henry Lee Company,
Southern Foods and Orlando Foodservice, Inc., where sales increased by 21.8%
over the prior year quarter.
Gross Margin. Gross margin declined 10.9% from $44.6 million in the first
quarter of 1997 to $39.7 million in the current year quarter. As a percentage of
sales, gross margin declined from 14.5% to 11.9%. The decline was primarily due
to three factors: reduced vendor rebate and allowance income due to lower sales
growth, a higher mix of foodservice sales which generate lower gross margins and
require lower operating expenses than store sales, and lower foodservice gross
margins compared to 1997 caused by increased meat processing and chain account
sales.
Operating and Administrative Expenses. Operating and administrative
expenses for the first quarter of 1998 were $39.4 million, up $4.6 million, or
13.2%, over the first quarter of 1997. These expenses, as a percentage of sales,
increased from 11.3% in the first quarter of 1997 to 11.8% in the first quarter
of 1998. The increased expense levels were the result of management
reorganization and inefficiencies from the severe rainfall experienced in
the quarter.
Interest expense, net. Interest expense, net increased from $1.5 million
in the first quarter of 1997 to $2.1 million in the first quarter of 1998
primarily as the result of higher weighted average revolving debt borrowings.
FINANCIAL CONDITION
Cash and cash equivalents were $22.9 million on January 4, 1998, and
$26.5 million at March 29, 1998. Cash provided by operating activities for the
twelve weeks ended March 29, 1998 was $13.3 million and other changes in
financing activities provided $2.7 million of cash for the quarter. The net
decrease in debt was $3.0 million for the quarter. Investments in fixed assets
and other additions were $8.3 million and $1.1 million of dividends were paid.
Inventories declined by $4.1 million as a result of a comprehensive
turnover analysis at all operating levels to achieve lower carrying costs. Other
changes in operating assets and liabilities generally reflect the timing of
receipts and disbursements. Trade notes and accounts receivable decreased $2.5
million, prepaid expenses decreased $2.7 million, accounts payable increased
$3.1 million, and other liabilities decreased $5.0 million in the quarter.
Stockholders' equity decreased by $2.6 million to $197.7 million at
March 29, 1998 as a result of the $2.0 million loss for the first quarter of
1998 and the quarterly cash dividend of $1.1 million less $0.5 million increase
from stock related activity.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of liquidity is cash flow from operations.
Cash provided by operating activities was $13.3 million in the first quarter of
1998, up from $10.1 million in the comparable 1997 period. At March 29, 1998,
the Company had cash of $26.5 million, compared to $22.9 million at January 4,
1998. The Company had $81.5 million of long-term debt and shareholders' equity
of $197.7 million at March 29, 1998.
The Company expects to be able to fund future acquisitions and other cash
requirements by a combination of available cash, cash from operations, lease
financings and other borrowings and proceeds from the issuance of equity
securities. During the quarter, the Company announced the acquisition of a chain
of cash and carry stores operating in the Pacific Northwest for $42.5 million in
cash and $17.5 million in five year unsecured notes payable. The cash payment is
being
9
<PAGE>
financed by a bridge loan from the Company's major commercial bank. The
acquisition is expected to close during the second quarter of 1998. In addition
the Company is constructing a new distribution facility which will be used to
serve its Southern California operations. The facility and related fixtures and
equipment will cost approximately $37 million, most of which will be financed by
a lease transaction which is currently being finalized. The amount budgeted for
other capital expenditures is approximately $40.0 million for fiscal 1998.
From time to time Smart & Final may publish forward-looking statements
about anticipated results. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply with
the terms of the safe harbor, the Company notes that such forward-looking
statements are based upon internal estimates which are subject to change because
they reflect preliminary information and management assumptions, and that a
variety of factors could cause the Company's actual results and experience to
differ materially from the anticipated results or other expectations expressed
in the Company's forward-looking statements. The factors which could cause
actual results or outcomes to differ from such expectation include the extent of
the company's success in (i) changing market conditions (ii) unforeseen costs
and expenses (iii) ability to attract new customers and retain existing
customers (iv) gain or losses from sales along with the uncertainties and other
factors, including unusually adverse weather conditions, described from time to
time in the company's SEC filing and reports. This report includes " forward-
looking statements" including, without limitation, statements as to the
Company's liquidity and availability of capital resources.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
Not applicable.
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 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number Description of Exhibit
10.82 First Amendment to Agreement to Sell and Purchase
Real Property and Escrow Instructions dated as of
April 6, 1998 among the Company and Certified
Grocers of California, Ltd.
10.91 Agreement Between Smart & Final Foodservice
Distributors and Food Distributors Employee
Association dated as of April 1, 1998
27 Financial Data Schedule
(b) Reports on Form 8-K
None
11
<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.
SMART & FINAL INC.
By:
Date: May 7, 1998
/s/ MARTIN A. LYNCH
__________________________________
Martin A. Lynch
Executive Vice President,
Principal Financial Officer, and
Principal Accounting Officer of the Company
12
<PAGE>
SMART & FINAL INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Number Description of Exhibit Page
- -------------- ---------------------- ------
<C> <S> <C>
10.82 First Amendment to Agreement to Sell and Purchase
Real Property and Escrow Instructions
10.91 Agreement Between Smart & Final Foodservice
Distributors and Food Distributors Employee Association
27 Financial Data Schedule
</TABLE>
13
<PAGE>
EXHIBIT 10.82
FIRST AMENDMENT TO AGREEMENT
TO SELL AND PURCHASE REAL PROPERTY
AND ESCROW INSTRUCTIONS
This First Amendment to Agreement to Sell and Purchase Real Property
and Escrow Instructions (the "Amendment") is entered into as of April 6, 1998,
by and between Certified Grocers of California, Ltd., a California corporation
("Seller") and Smart & Final Stores Corporation, a California corporation
("Buyer") with respect to the following facts and circumstances:
A. Buyer and Seller have previously entered into that certain
Agreement to Sell and Purchase Real Property and Escrow Instructions dated
September 12, 1997 (the "Purchase Agreement"). Capitalized terms used but not
otherwise defined in this Agreement shall have the meanings given those terms in
the Purchase Agreement.
B. Buyer and Seller desire to amend the Purchase Agreement on the
terms and conditions contained herein.
It is, therefore, agreed as follows:
1. The List of Particulars in the Purchase Agreement is hereby
amended by changing the "Purchase Price" to read "Ten-Million Eight-Hundred
Thousand Dollars ($10,800,000.00), as may be adjusted pursuant to Article 2
herein, payable as provided in this Agreement".
2. The List of Particulars in the Purchase Agreement is hereby
amended by changing the "Closing Date" to read "June 1, 1998, unless advanced or
extended as provided in this Agreement".
3. The following new Section 1.2 is hereby added to the Purchase
Agreement:
"1.2 Separate Areas. Prior to the Closing Date, Seller shall
--------------
clearly establish, divide and document (as reasonably necessary to satisfy
Buyer) the Property into two (2) separate areas. The "Reserved Areas" shall
be a single area comprised of (i) the "Office Building" (as defined below)
and (ii) the "Construction Zone" (as defined below). The second area shall
comprise all other areas of the Property (the "Principal Area"). Following
-1-
<PAGE>
the Closing Date, the definition of Reserved Areas may not increase in
size".
4. Section 2.3 of the Purchase Agreement is hereby amended by the
addition of "So long as Seller shall occupy the Reserved Areas, Seller shall
retain the rights of reasonable ingress and egress through the adjacent areas of
the Property between the Reserved Areas and public streets and sidewalks, as
well as continued connection and use of those utilities necessary for the
continued operation of the occupied portions of the Reserved Areas."
5. Section 2.4, 2.5, 2.6 and 2.7 of the Purchase Agreement are
hereby amended in their entirety to read as follows:
"2.4 Payment for Vacation of Principal Area; Closing. Upon
-----------------------------------------------
satisfaction of the last to occur of the following (a) Seller's complete
vacation of the entire Property excluding the Reserved Areas, (b)
---------
completion of the Pre-Closing Site Work (as defined below) to be performed
by Seller relative to the Principal Area, (c) satisfaction (or written
waiver by Buyer) of the conditions contained in Section 5.9.1, and (d)
satisfaction (or written waiver by Seller) of the conditions contained in
Section 5.9.2, the Closing shall occur, Buyer shall take title to the
entire Property (subject to Seller's rights under Section 5.10.1) and Buyer
will pay to Seller a portion of the Purchase Price equal to Eight-Million
and Fifty Thousand Dollars ($8,050,000.00) through escrow, subject to
adjustment pursuant to Sections 2.5, 2.6, and 5.6 hereof. The balance of
the Purchase Price shall be paid as provided in Section 2.7, below.
2.5 Vacancy Incentive Price Increases. Upon performance by
---------------------------------
Seller, Buyer will make certain incentive price increases (the "Incentive
Price Increases") at the Close of Escrow as an incentive to Seller to
vacate the Property (other than the Reserved Areas) as soon as possible.
The Incentive Price Increases shall equal Seven-Thousand Five-Hundred
Dollars ($7,500.00) for each day prior to the Closing Date that Seller has
accomplished the complete vacation of the Property (other than the Reserved
Areas) and otherwise satisfied the conditions described in clauses (i),
(iii), (iv) and (v) of Section 5.9.1, as evidenced by delivery to Buyer of
Seller's notice of vacancy. The amount of such incentives shall be without
limit.
-2-
<PAGE>
2.6 Late Delivery Penalty. So long as Buyer shall have performed
---------------------
all of its obligations under this Agreement, shall have satisfied the
conditions described in clauses (i) and (ii) of Section 5.9.2, and is
otherwise ready, willing and able to proceed with the Closing on the
Closing Date, there shall be a reduction in the Purchase Price of the sum
of Ten-Thousand Dollars ($10,000.00) for each such day the Closing is
delayed after the Closing Date solely by reason of Seller's inability to
accomplish the complete vacation of the Property (other than the Reserved
Areas) and otherwise satisfy the conditions described in clauses (i),
(iii), (iv) and (v) of Section 5.9.1. The reduction in the Purchase Price
under this Section 2.6 shall be limited to a maximum of Eight-Hundred
Thousand Dollars ($800,000.00).
2.7 Reserved Areas Holdback; Balance of Purchase Price. At
--------------------------------------------------
Closing, Buyer shall additionally deposit with Escrow Holder the sum of
One-Million Five-Hundred Thousand Dollars ($1,500,000.00), representing the
balance of the Purchase Price (the "Holdback Funds"). Escrow Holder shall
retain this sum and shall invest it in accordance with instructions of
Seller from time to time. Interest so generated on the Holdback Funds shall
be separately accounted for by Escrow Holder and designated as "Holdback
Interest". The Holdback Funds and the Holdback Interest shall be disbursed
as provided in Section 5.10.2."
6. Section 3.1.4 of the Purchase Agreement is hereby amended by
adding the word "Pre-Closing" before the words "Site Work".
7. Section 3.2 of the Purchase Agreement is hereby amended by adding
the word "Pre-Closing" before the words "Site Work" in the second and ninth
lines thereof.
8. Section 4.1 of the Purchase Agreement is hereby amended by adding
the following new Section 4.1.7:
"4.1.7 Seller's occupancy under Section 5.10 of this Agreement."
9. Section 5.8 of the Purchase Agreement is hereby amended by (a)
adding the phrase, "subject to Seller's rights to the Reserved Areas as provided
in Section 5.10" at the end of the first sentence thereof, and (b) adding the
following at the end of Section 5.8:
-3-
<PAGE>
"Prior to the Close of Escrow, Seller shall perform the Site Work on those
portions of the Property other than the Reserved Areas (the "Pre-Closing
Site Work"). The Site Work for the Reserved Areas (the "Post-Closing Site
Work") shall be completed in accordance with Section 5.10."
10. Section 5.9.1 of the Purchase Agreement is hereby amended by
adding the word "Pre-Closing" before the words "Site Work" in the seventh line
thereof.
11. The Purchase Agreement is hereby amended by adding the following
new Sections 5.10, 5.11 and 5.12 after the end of Section 5.9:
"5.10 Rights to Reserved Areas and Post-Closing Site Work.
---------------------------------------------------
5.10.1 Rights to Use and Occupy. After the Closing, Seller
------------------------
shall have the right to continue to occupy and use portions of the
Property a s follows:
(i) Seller and its employees, agents, invitees and
contractors (collectively, the "Seller Parties") shall have the right
to occupy and use the Office Building without charge for the conduct
of Seller's business and shall have the right to occupy the Reserved
Areas without charge for the purpose of performing the Post-Closing
Site Work.
(ii) Seller shall be liable for any damage or injury to any
person or property occasioned by the acts of Seller Parties during any
such occupancy and Post-Closing Site Work, and Seller shall, and does
hereby, indemnify, defend and hold harmless Buyer and its officers,
directors, agents and employees from any and all liens, claims,
demands or liability resulting therefrom. At Closing, Seller shall
deliver to Buyer evidence reasonably satisfactory to Buyer that Seller
maintains: (a) comprehensive general liability insurance covering
Seller's operations in the minimum amount of Two-Million Dollars
($2,000,000.00) per occurrence, and (b) workers' compensation
insurance covering Seller's employees.
5.10.2 Holdback Funds and Holdback Interest. Within five (5)
------------------------------------
days after delivery by Seller to Escrow
-4-
<PAGE>
Holder and Buyer of a written statement (the "Holdback Demand") certifying
Seller's complete vacation of the Reserved Areas and the completion of the
Post-Closing Site Work, Buyer shall either (a) provide written notice to
Escrow Holder instructing it to disburse to Seller the amount of the
Holdback Funds by such means as Seller may direct in writing to Escrow
Holder, or (b) give written notice (the "Dispute Notice") to Seller and
Escrow Holder that Seller failed to complete the Post-Closing Site Work and
vacate the Reserved Areas. If Buyer gives a Dispute Notice, Buyer and
Seller shall attempt to resolve the dispute for ten (10) business days
after the giving of the Dispute Notice. If the dispute is not resolved
within such ten (10) business day period, the dispute shall be determined
by arbitration pursuant to Section 5.12. The Dispute Notice shall specify
with reasonable particularity the basis of Buyer's claim that the Post-
Closing Site Work has not been completed. If the Holdback Demand is
delivered on or prior to September 1, 1998, Escrow Holder shall also
distribute Holdback Interest to Seller; if such date is later than
September 1, 1998, Escrow Holder shall distribute Holdback
Interest to Buyer.
5.11 Delay in Delivery of Reserved Areas. In the event that
-----------------------------------
Seller has not completed the Post-Closing Site Work and given notice of
complete vacation of the Reserved Areas prior to the Outside Closing Date,
Buyer shall be entitled to exercise immediate possession and sole occupancy
of the Reserved Areas and the right to take control of and to complete any
remaining Post-Closing Site Work, at Seller's expense in a commercially
reasonable manner. In the event of such a delay beyond the Outside Closing
Date and Buyer's exercise of its self-help right under this Section 5.11,
Buyer shall be entitled to reimbursement of the actual and reasonable costs
incurred by Buyer in completing the Post-Closing Site Work and Seller shall
be entitled to the balance of the Holdback Funds. If Buyer has exercised
its self-help rights under this Section 5.11, then upon completion of the
Post-Closing Site Work, Buyer and Seller each may give a Holdback Demand to
the other and to Escrow Holder. Within five (5) days after delivery of the
Holdback Demand, the party receiving the Holdback Demand (the "Responding
Party") shall either (a) provide written notice to Escrow Holder
instructing it to disburse to the party making the Holdback Demand (the
"Requesting Party") the amount claimed in that Holdback Demand by such
means as the Requesting Party may direct in writing to Escrow Holder, or
(b) give written notice (the "Self-Help Reimbursement Dispute Notice") to
the Requesting Party and Escrow Holder specifying (i) the amount
-5-
<PAGE>
(if any) claimed in the Holdback Demand that is not being disputed by the
---
Responding Party (and the Self-Help Reimbursement Dispute Notice shall
constitute the Responding Party's instruction to Escrow Holder to disburse
to the Requesting Party the undisputed portion of the Holdback Funds), and
(ii) the basis of the Responding Party's claim that the amount requested by
the Requesting Party exceeds the amounts to which the Requesting Party is
entitled under this Section 5.11. If either or both Buyer and Seller give
a Self-Help Reimbursement Dispute Notice, Buyer and Seller shall attempt to
resolve the dispute for ten (10) business days after the giving of the
Self-Help Reimbursement Dispute Notice. If the dispute is not resolved
within that ten (10) business day period, the rights of Buyer and Seller to
receive Holdback Funds shall be determined by a single arbitration pursuant
to Section 5.12.
5.12 Holdback Arbitration. Seller and Buyer waive their
--------------------
respective rights to trial by jury of any contract or tort claim,
counterclaim, cross-complaint, or cause of action in any action,
proceeding, or hearing brought by either party against the other on any
matter arising out of or in any way connected with the rights of Seller or
Buyer to the Holdback Funds. Any dispute as to the Holdback Funds shall be
resolved by neutral binding arbitration before a single arbitrator to be
held in accordance with the then existing Rules of Practice and Procedure
of J.A.M.S./Endispute. Judgment on the award rendered by the arbitrator may
be entered in any Court having jurisdiction over the dispute.
15.12.1 The arbitrator shall be a retired judge of a California
Superior Court, California District Court of Appeals or California Supreme
Court.
15.12.2 Hearings shall be held in Los Angeles, California or
another venue determined by mutual agreement of the parties.
15.12.3 Any demand for arbitration must be made in writing to
the other party. No demand for arbitration may be made after the date on
which the institution of legal proceedings based on the claim, dispute, or
other matter is barred by the applicable statute of limitations. Any
questions as to the applicable statute of limitations shall be determined
by the arbitration proceeding.
15.12.4 The arbitrator shall have the power to determine whether
the Post-Closing Site Work has been
-6-
<PAGE>
completed, the date it was completed and, as to a Self Help Reimbursement
Dispute Notice, the amount of the funds from the Holdback Funds that Buyer
is entitled to receive. The arbitrator shall prepare and provide to the
parties a written decision on all matter subject to the arbitration,
including factual findings and the reasons that form the basis of the
arbitrator's decision. The arbitrator shall not have the power to commit
errors of law or legal reasoning, and the award of the arbitrator shall be
subject to vacation or correction for any such error or any other grounds
specified in Code of Civil Procedure Section 1286.2 or Section 1286.6. The
award of the arbitrator shall be mailed to the parties no later than thirty
(30) days after the close of the arbitration hearing. The arbitration
proceeding shall be reported by a certified shorthand court reporter.
Written transcripts of the proceedings shall be prepared and made available
to the parties.
15.12.5 The parties shall have the right to whatever discovery
the arbitrator shall approve. All discovery disputes shall be resolved by
the arbitrator.
15.12.6 The provisions of the California Evidence Code shall
apply to the arbitration hearing.
15.12.7 The prevailing party shall be awarded from funds
provided by the losing party (rather than from Holdback Funds): reasonable
attorney fees, expert and nonexpert witness expenses, and other costs and
expenses incurred in connection with the arbitration, including without
limitation the costs and fees of the arbitration and arbitrator. Any
dispute over such fees, costs and expenses shall also be resolved by
arbitration in accordance with the terms of this Section 15.12 and the
decision of the arbitrator in such proceeding may not be appealed by either
party.
12. The Purchase Agreement is hereby amended by deleting Exhibit E
---------
therefrom and replacing it with Exhibit E attached hereto to reflect a change in
---------
the Construction Zone.
13. Seller agrees to execute and deliver, at no cost to Seller, an
easement in the form of the Easement Grant attached hereto.
14. Section 9.1.2 of the Purchase Agreement is hereby amended by
increasing the amount $10,500,000.00 to the
-7-
<PAGE>
amount $10,800,000.00, both places that it appears.
15. Except as and to the extent expressly amended hereby, the
Purchase Agreement is unmodified and in full force and effect. This Agreement
and the Purchase Agreement are the entire agreement between Buyer and Seller
with respect to the matters described therein and herein, and neither the
Purchase Agreement nor this Agreement may modified except by a written agreement
signed by Buyer and Seller. No reference to this Agreement is necessary in any
instrument or document at any time referring to the Purchase Agreement, a
reference to the Purchase Agreement being deemed a referenced to the Purchase
Agreement, as amended by this Agreement. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California. This Agreement may be executed in any number of counterparts, each
of which when executed and delivered will be deemed an original and all of
which, when taken together, will be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SELLER:
CERTIFIED GROCERS OF CALIFORNIA, LTD.
a California corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
BUYER:
SMART & FINAL STORES CORPORATION,
a California corporation
By: /s/ Robert G. Wess
---------------------------
Name: Robert G. Wess
---------------------------
Title: Vice President
---------------------------
-8-
<PAGE>
By: /s/ Richard N. Phegley
________________________
Name: Richard N. Phegley
________________________
Title: Vice President
________________________
-9-
<PAGE>
EXHIBIT 10.91
AGREEMENT
BETWEEN
SMART & FINAL FOODSERVICE DISTRIBUTORS
AND
FOOD DISTRIBUTORS EMPLOYEES ASSOCIATION
(APRIL 1, 1998 THROUGH APRIL 2, 2001)
THIS AGREEMENT CANCELS AND SUPERSEDES THE PREVIOUS AGREEMENT DATED APRIL 2, 1995
THROUGH APRIL 1, 1998.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C> <C>
ARTICLES OF AGREEMENT.........................................................3
ARTICLE I RECOGNITION...................................................................3
ARTICLE II HOURS OF WORK.................................................................4
ARTICLE III REPORTING TIME PAY............................................................5
ARTICLE IV GRIEVANCES....................................................................5
ARTICLE V PAYDAYS.......................................................................5
ARTICLE VI CLASSIFICATIONS AND WAGES.....................................................6
ARTICLE VII SENIORITY.....................................................................6
ARTICLE VIII INSURANCE BENEFITS-LIFE, MEDICAL, DENTAL, VISION..............................7
ARTICLE IX RETIREMENT BENEFITS...........................................................7
ARTICLE X HOLIDAY PAY...................................................................8
ARTICLE XI VACATIONS.....................................................................8
ARTICLE XII SICK/PERSONAL NECESSITY LEAVE................................................10
ARTICLE XIII JURY DUTY....................................................................10
ARTICLE XIV FUNERAL LEAVE................................................................11
ARTICLE XV MISCELLANEOUS PROVISIONS.....................................................11
ARTICLE XVI NO STRIKE - NO LOCKOUT.......................................................12
ARTICLE XVII JOB POSTING..................................................................12
ARTICLE XVIII INSURANCE COVERAGE...........................................................13
ARTICLE XIX EXAMINATIONS.................................................................14
ARTICLE XX DURATION OF AGREEMENT........................................................15
EXHIBIT A CLASSIFICATIONS AND WAGES....................................................16
</TABLE>
2
<PAGE>
ARTICLES OF AGREEMENT
---------------------
THIS AGREEMENT made and entered into, by and between SMART & FINAL
FOODSERVICE DISTRIBUTORS, hereinafter referred to as the Company, and the FOOD
DISTRIBUTORS EMPLOYEES ASSOCIATION, hereinafter referred to as the Association.
It is mutually agreed the Company's obligation to operate its business
profitably and to fulfill its obligation to its associates should not be
obstructed by disputes between the Company and the associates.
It is, therefore, the intent of the parties hereto, to set forth herein,
their agreements with respect to rates of pay, hours of work, and conditions of
employment; to be observed by the Company and the associates covered by this
Agreement; to provide procedures for equitable adjustment of grievances; to
prevent interruptions of work, work stoppages, slow downs, or other
interference's with the work of the Company during the life of this Agreement;
and to promote harmonious relations between the Company and the associates.
ARTICLE I RECOGNITION
- --------- -----------
SECTION 1 In consideration of the purpose and intent of this Agreement,
the Company hereby recognizes the Association as the exclusive
bargaining representative for those full time associates working
under the terms and conditions of this Agreement.
SECTION 2 Current management policy directives of the Company shall be
applicable to associates covered by this Agreement except to the
extent such directives conflict with any provision in this
Agreement. Should the current management directives be modified,
added to or deleted from, the Company will give seventy-two (72)
hours notice of such action to the Association, and provide the
Association with an opportunity to meet and confer concerning
such changes.
SECTION 3 If a majority of the assets or a majority of the stock of the
Company is sold to a purchaser which is not affiliated with
Smart & Final, Inc., the Company will obtain agreement of the
purchaser to assume the Company's obligations under this
Agreement. In addition, the Company will consider severance pay
for any full-time associates who are not offered employment by
the purchaser.
3
<PAGE>
ARTICLE II HOURS OF WORK
- ---------- -------------
SECTION 1 A workday is defined as a twenty-four (24) consecutive hour
period beginning with the start-time for each respective shift.
The workday shall be eight (8), ten (10), or thirteen (13)
continuous hours interrupted by a non-paid lunch break of not
less than one-half (1/2) hour taken at approximately the middle
of the scheduled shift.
A workweek is defined as seven (7) consecutive workdays
beginning at the same time each calendar week. The normal
workweek consists of five (5) 8 hour days, four (4) 10 hour
days, three (3) 13 hour days of work or any combination thereof
that would guarantee 39 or 40 hours.
Lunch Periods - 8 or 10 hour day = 1 - 30 minute lunch break
13 hour day = 1 - 30 minute lunch break
SECTION 2 For warehouse associates, a rest period of 15 minutes is allowed
in each half of the associate's regular work shift.
SECTION 3 The Company has the right to add additional shifts, or eliminate
shifts and change working schedules. The Company agrees it shall
discuss changes with the Association in advance of at least
seventy-two (72) hours prior to any changes except that routing
changes may occur on a daily basis.
SECTION 4 The Association recognizes, due to the nature of their duties,
certain associates must be scheduled to start prior to or after
the normal work shifts.
SECTION 5 All full time associates will be provided a regular work week
guaranteed of 39 or 40 hours.
SECTION 6 Where an associate is scheduled for five (5) 8 hours days,
overtime will begin after eight (8) hours worked in the workday,
or after forty (40) hours worked in the workweek.
SECTION 7 Where an associate is scheduled for four (4) 10 hour days,
overtime will begin after ten (10) hours worked in the workday,
or after forty (40) hours worked in the workweek.
SECTION 8 Where an associate is scheduled for three (3) 13 hour days,
overtime will begin after thirteen (13) hours worked in the
workday, or after thirty-nine (39) hours worked in the workweek.
4
<PAGE>
ARTICLE III REPORTING TIME PAY
- ----------- ------------------
SECTION 1 Each workday an associate reports for work as required but is
not put to work or is furnished less than one-half of the
associate's usual or scheduled day's work, the Associate shall
be paid for half the usual or scheduled day's work, but in no
event for less than four (4) hours, at the associate's regular
rate of pay.
ARTICLE IV GRIEVANCES
- ---------- ----------
SECTION 1 It is the desire and agreement of the parties to this Agreement
that any dispute or grievance which might arise concerning the
interpretation or application of this Agreement be decided
pursuant to the below grievance procedure.
SECTION 2 The Company has ten (10) working days to take action against an
associate from day of the incident. The associate may file a
grievance within ten (10) working days after the Company takes
action. To resolve such grievances, it is hereby agreed that for
the life of this Agreement, a Grievance Board shall be created
consisting of four (4) members; two (2) members to be appointed
by the Association and two (2) members appointed by the Company.
A majority vote of all members of the Board shall be necessary
for any action. Any action of the Board taken upon a grievance
shall be final and binding on all parties concerned with the
grievance.
SECTION 3 If the majority of the Board does not agree upon a matter
submitted to it twenty-four (24) hours after final submission,
the Board may call in a fifth (5th) person acceptable to the
majority of the Board, such fifth (5th) person being called an
arbitrator. The arbitrator shall resolve the grievance, and such
resolution shall be final and binding upon all parties concerned
with the grievance. Losing party shall be responsible for any
fees of the arbitrator.
ARTICLE V PAYDAYS
- --------- -------
SECTION 1 All associates shall be paid their wages in full, each week, on
designated pay days.
SECTION 2 Should there be an acknowledged error on an associate's
paycheck, associate will be paid within 24 hours. If there is a
dispute concerning hours worked, associate will be paid
immediately after determination is made as to the correct hours
worked.
5
<PAGE>
ARTICLE VI CLASSIFICATIONS AND WAGES
- ---------- -------------------------
SECTION 1 Classifications and wage rates are set forth hereafter in
Exhibit "A" attached hereto and by reference made a part hereof,
and are effective for hours worked on and after the dates shown
thereon.
SECTION 2 A regular full-time associate is one who is designated as such
by the Company, and is regularly scheduled to work a minimum of
forty (40 ) hours per week, or a minimum of thirty-nine (39)
hours for associates regularly scheduled to work a three (3) 13
hour day workweek.
SECTION 3 A regular part-time associate is one who is designated as such
by the Company, and is, under normal operating conditions,
regularly scheduled to work less than a thirty-two (32) hour
workweek. Part-time associates may be required to work more than
thirty-two (32) hours in a workweek in order to meet the
Company's operating needs. The Company will ensure that a part-
time associate works no more than 1,664 hours during an entire
year. If any part-time associate works more than 1,664 hours
during a year, then the next part-time associate in seniority
will be promoted to full-time status. Year is defined as April
to April.
SECTION 4 No more than twenty-five percent (25%) of the warehouse
workforce will be made up of regularly scheduled part-time
associates. Newly hired part-time associates will not be counted
in this ratio until training is complete. The training period is
90 days. A maximum of five (5) newly hired part time associates
will be placed on each shift. It is understood that this number
may be modified with the agreement of both the Company and the
Association.
SECTION 5 No more than fifteen percent (15%) of the driver group will be
made up of regularly scheduled part-time associates.
ARTICLE VII SENIORITY
- ----------- ---------
SECTION 1 In the case of a reduction of force due to slackness of work,
part-time associates will be laid off before any full time
associate is laid off. The last part-time associate hired shall
be the first associate laid off, and in rehiring, the last part-
time associate laid off shall be the first associate rehired.
SECTION 2 Preference in the selection of overtime and vacation periods
will be based upon seniority.
SECTION 3 Seniority is defined as the period of time from the date of hire
as a full-time associate.
6
<PAGE>
SECTION 4 Seniority shall be broken by discharge for cause, resignation,
or six (6) consecutive months of unemployment, excluding
Workers' Compensation cases.
SECTION 5 A leave of absence granted by the Company (in writing) shall not
interrupt continuity of employment or be considered a break in
seniority.
SECTION 6 To be a regular full time associate and receive benefits, an
associate hired to fill a regular full time associate position
must satisfactorily complete ninety (90) consecutive days as a
regular associate. An associate moving from part-time to full-
time associate status must satisfactorily complete thirty (30)
consecutive days in full-time status and not less than ninety
(90) consecutive days of total service as an associate with the
Company to receive benefits.
SECTION 7 A no over-time list for the warehouse will be created each
calendar quarter. Up to 10% of each shift may sign-up for the no
over-time status and will be filled by seniority. It will be up
to the associates on the no over-time list to accept or deny
daily/weekly over-time. It is understood that the Company can
use part-time associates to fill-in when needed to cover
unexpected business demands; however, full-time associates will
be asked to perform overtime first.
ARTICLE VIII INSURANCE BENEFITS - LIFE, MEDICAL, DENTAL, VISION
- ------------ --------------------------------------------------
SECTION 1 The Company will provide its insurance plans for the regular
full-time associates and their dependents with no increase in
associate contribution during the length of this Agreement.
ARTICLE IX RETIREMENT BENEFITS
- ---------- -------------------
SECTION 1 The Company will provide to associates covered by this Agreement
the same retirement benefits provided to other non-exempt
associates of the Company as such may be amended from time to
time.
401K Plan: The company will match a minimum 25% of the
associate's elective deferral contribution. The Company will
match the associate's elective deferrals up to but not exceeding
6% of the associate's compensation. The Company will modify the
401(k) Profit Sharing Plan so as to provide for an additional
25% match, subject to the attainment of annual budgeted pre-tax
income.
Defined Retirement Plan: Effective January 4, 1999 all
associates will roll into the Smart & Final pension plan. All
associates will receive past service credit for vesting service.
7
<PAGE>
ARTICLE X HOLIDAY PAY
- --------- -----------
SECTION 1 Paid holidays shall be: New Years Day, Memorial Day, Fourth of
July, Labor Day, Thanksgiving Day, Christmas Day and three
floating holidays.
In order to be entitled to holiday pay, an associate must work
his/her full scheduled workday immediately preceding and
immediately following the holiday except for excusable absences
such as illness, or injury. A Doctor's note will be required to
qualify for holiday pay based on illness. In addition, all
floating holidays must be used each calendar year.
SECTION 2 Regular full-time associates shall receive holiday pay as
follows: Each regular eight (8) hour associate will be granted
eight (8) hours pay and each regular ten (10) hour associate
will be granted ten (10) hours pay for each paid holiday and
each regular thirteen (13) hour associate will receive thirteen
(13) hours pay if the holiday falls on a regular scheduled work
day. If the holiday falls on a unscheduled work day the
associate will receive eight (8) hours of straight time pay.
SECTION 3 In addition to the holiday pay specified in Section 2, an
associate working on a paid holiday shall receive time and one-
half (1/2) for all hours worked on such paid holiday. Paid
holiday ends at 12:00 (midnight), the remaining shift is paid on
straight time pay.
SECTION 4 If during a holiday week, full time associates are required to
work an additional day (other than a regularly scheduled day),
such work shall be compensated at the rate of time and one-half
(1/2) for all hours worked on that day.
SECTION 5 If a holiday falls during a thirty (30) day period following an
associate's absence from work due to layoff , illness or
disability, such associate shall receive full pay for the
holiday.
SECTION 6 Floating holiday bidding (three (3) floaters) will begin in
December of the previous year.
SECTION 7 The number of paid holidays shall not decrease during the length
of this agreement. Adding additional holidays will be controlled
by corporate Smart & Final in Los Angeles. The Company will
immediately modify the holiday policy when such changes are made
at the corporate level.
ARTICLE XI VACATIONS
- ---------- ---------
SECTION 1 Each regular full time associate during their first year of
employment will accrue vacation at the rate of one week per year
up to a maximum accrual of one week. No vacation may be taken
until January 1st of the year following commencement of
employment or full-time status.
8
<PAGE>
SECTION 2 Each regular full time associate who has been employed one to
four years shall accrue vacation at the rate of two weeks per
year up to a maximum accrual of four weeks vacation. Once the
maximum accrual is reached no more vacation will be accrued
until the associate takes the vacation and the accrued vacation
falls below the maximum accrual.
SECTION 3 Each regular full time associate who has been employed five to
fourteen years shall accrue vacation at the rate of three weeks
per year up to a maximum accrual of six weeks vacation. Once the
maximum accrual is reached no more vacation will be accrued
until the associate takes the vacation and the accrued vacation
falls below the maximum accrual.
SECTION 4 Each regular full time associate who has been employed fifteen
to nineteen years shall accrue vacation at the rate of four
weeks per year up to a maximum accrual of eight weeks vacation.
Once the maximum accrual is reached no more vacation will be
accrued until the associate takes the vacation and the accrued
vacation falls below the maximum accrual.
SECTION 5 Each regular full time associate who has been employed twenty
years or more shall accrue vacation at the rate of five weeks
per year up to a maximum accrual of ten weeks vacation. Once the
maximum accrual is reached no more vacation will be accrued
until the associate takes the vacation and the accrued vacation
falls below the maximum accrual.
SECTION 6 As of January 1 of any year an associate may take the amount of
vacation the associate will be entitled to as of the associate's
next date, even if the associate's actual accrued vacation is
less than the amount that would be accrued as of the anniversary
date. However, the associate's vacation accrual will be debited
for the amount of vacation taken in excess of actually accrued
vacation and subsequent accruals will be applied to the debited
vacation until it has been repaid.
SECTION 7 Continuity of service for the purpose of receiving full vacation
benefits, as set forth above, shall not be considered broken
because of illness, disability or layoffs, provided such
absences do not exceed ninety (90) working days per year.
SECTION 8 When a recognized holiday falls within an associate's paid
vacation, such associate shall receive an additional day's pay.
SECTION 9 Any regular full time associate who resigns or is terminated
shall receive his/her accrued vacation as of the date of the
termination of employment.
SECTION 10 Vacations will be scheduled by considering length of service.
Ten (10) percent of the shift can be scheduled for vacation at
one time.
9
<PAGE>
SECTION 11 Vacation must be taken in forty (40) hour increments. There will
be no individual vacation days allowed.
SECTION 12 Vacation bidding will begin in December of the previous year.
SECTION 13 The weeks of paid vacations shall not decrease during the length
of this agreement. Adding additional weeks will be controlled by
corporate Smart & Final in Los Angeles. The Company will
immediately modify the vacation policy when such changes are
made at the corporate level.
ARTICLE XII SICK/PERSONAL NECESSITY LEAVE
- ----------- -----------------------------
SECTION 1 Regular associates covered by this Agreement, who have been
continuously employed by the Company for a period of at least
one (1) year, shall thereafter be entitled to forty (40)
straight-time hours of sick and/or personal necessity leave with
pay per year of continuous employment.
(1) Unused sick leave benefits in any one (1) year shall
accumulate from year to year to a maximum of thirty-five (35)
eight hour days or 280 hours. Unused sick leave accumulated in
excess of thirty-five (35) days (280 hours) shall be paid on the
associate's anniversary date up to a maximum of five (5) days
based upon his/her straight-time hourly rate in effect on such
anniversary date. In the event an associate should leave the
Company (termination or voluntary), any unused sick time shall
be paid out at their current hourly pay rate.
(2) Sick benefit allowance for bona fide illness or accident
will commence with the first work day's absence. Where workman's
compensation or UCD payments cover all or part of the period
during which benefits under this provision are paid, the sum of
the two shall not exceed the payments provided for herein for
said period.
SECTION 2 Personal necessity for which leave and benefits may be granted
shall be determined in advance of the absence by the Company in
consultation with the associate, unless an emergency dictates no
advance notice. In an emergency the associate should call in as
soon as possible.
ARTICLE XIII JURY DUTY
- ------------ ---------
SECTION 1 When summoned to jury duty, an associate who has one (1) or more
years of seniority with the Company shall be paid the difference
between jurors' compensation and regular straight time wages for
jury service, provided he/she exhibits to the Company his/her
properly endorsed check and permits the Company to copy the
check or voucher he/she received for such service. This policy
shall apply only in cases where an associate is summoned to jury
duty in any Municipal, County, State or Federal court,
10
<PAGE>
and shall not apply to voluntary jury duty, such as service on a
coroner's jury.
Associates must come to work on days when they are not required
to be present for jury duty. If an associate is excused from
jury duty service and there are four (4) or more hours remaining
in their work shift, on a scheduled workday, they shall
immediately report for work to complete the remaining hours of
this scheduled work shift. In the event the associate does not
return to work or it is a hardship (geographically, etc.),
he/she may request incentive time or voluntary time off.
SECTION 2 Each associate is entitled to one trial over the duration of the
agreement.
ARTICLE XIV FUNERAL LEAVE
- ----------- -------------
SECTION 1 In the event of a death in the immediate family of an associate
who has one (1) or more years of seniority with Company, he/she
shall, upon request, be granted such time off with pay as is
necessary to make arrangements for the funeral and attend same,
not to exceed three (3) regularly scheduled working days if the
funeral is held within the State of California, and not to
exceed five (5) regularly scheduled working days, if the funeral
is held outside the State of California. This provision does not
apply if the death occurs during the associate's paid vacation,
or while the associate is on leave of absence, layoff or sick
leave. Funeral leave covered in this section can not be refused.
SECTION 2 For the purpose of this Article, the immediate family shall be
restricted to associate's father, mother, brother, sister,
spouse, child, mother-in-law, father-in-law, step mother, step
father, grandparents, and grandchildren.
SECTION 3 Funeral leave applies only in instances in which the associate
attends the funeral, or is required to make funeral
arrangements, but is not applicable for other purposes such as
settling the estate of the deceased.
ARTICLE XV MISCELLANEOUS PROVISIONS
- ---------- ------------------------
SECTION 1 No one but associates working under the jurisdiction of this
Agreement, with the exception of the Director of Transportation,
or any company authorized representative acting in their
respective capacities, shall accompany the drivers on their
routes.
SECTION 2 The Company may require associates to wear safety-related
equipment or clothing depending on the nature of the work
performed. Such safety-related equipment or clothing will be
issued at the Company's expense. Replacement will be provided by
the Company on an "as needed - exchange basis". Lost or
negligently damaged items will be replaced, however, the
associate will be required to authorize payroll withholding to
cover the cost thereof.
11
<PAGE>
SECTION 3 Officers of the Association, will be allowed access to records
of hours worked for the warehouse, drivers, and part-time
associates. Any such review will take place during Officer's
off-time and at a time convenient for the Human Resources
Department.
SECTION 4 Associates are allowed representation and counseling. All issues
needing representation will take place during the associate in
question scheduled work shift. All other problems/issues will
take place during off-hours.
ARTICLE XVI NO STRIKE - NO LOCKOUT
- ----------- ----------------------
SECTION 1 The Association agrees that during the term of this Agreement
there shall be no strike, work stoppage, picketing, slowdown,
withholding of work, or interference of any kind or nature with
the operations of the Company in any manner by the Association
or individual associates.
SECTION 2 The Company agrees that during the term of this Agreement
neither it nor its representatives will put into effect a
lockout. It is understood and agreed that a shutdown for
economic reasons, or when cessation of work is due to
circumstances beyond the Company's control, shall not be
considered a lockout.
ARTICLE XVII JOB POSTING
- ------------ -----------
SECTION 1 All job openings shall be posted for a period of nine (9)
working days to allow interested associates to apply for such
jobs. Associates on vacation or sick leave shall be notified of
posted positions.
SECTION 2 After the posting period for a job opening, the Company shall
determine which associate is to receive the job opening on the
basis of seniority. It is understood and agreed that for part
time associates bidding on full-time job openings, the
determination will be on the basis of qualifications, past work
performance, and length of employment with the Company. For any
associate bidding on a truck driving opening, the determination
will be on the basis of necessary qualifications including
required driver license and endorsements and length of
employment with the Company.
SECTION 3 All vacated posted jobs will be re-posted within five (5)
working days. It is understood that some bid jobs will be added
or eliminated during the course of the year.
SECTION 4 The Company and associates have a 90 day probation period to
determine if associate will remain at the posted job. If it is
determined that the associate does not qualify he will go back
to the order selecting pool according to the level of seniority
in the warehouse and the next associate in the line of seniority
that signed the posting shall receive that posting. Drivers will
go back to relief. The Company will show just cause based on
performance.
12
<PAGE>
SECTION 5 During the ninety (90) day probation, if another posting becomes
available the associate may not sign up for the open bid.
SECTION 6 Warehouse positions will re-bid yearly. In 1998 the bidding
process will begin in April with the bid effective in May.
Thereafter and for the life of the agreement, the bidding
process will take place in December with the bid effective
January. The Company may re-bid during the course of the year
based upon business needs.
Driver bids will occur every two years during the life of the
agreement. In 1998 the bidding process will begin in April with
the bid effective in May. Thereafter, the bidding process will
take place in March with the bid effective in April. It is
understood that the store driver bids will fluctuate based on
the stores selling cycles so changes will be made to the bid as
needed. The Company may re-bid during the course of the year
based upon business needs.
SECTION 7 The warehouse order selection pool will be used to replace jobs
that temporarily open up due to sickness, vacations, etc.. It is
understood that it is the Company's decision whether to replace
a bid during the course of the week.
ARTICLE XVIII INSURANCE COVERAGE
- ------------- ------------------
SECTION 1 If the Company's insurance carrier notifies the Company that it
will not insure a driver at the normal and regular premium rate
charged to the Company to insure all other Drivers, the Driver
shall be placed in a Warehouse position and pay rate.
SECTION 2 If a Driver's driving privilege is suspended or revoked for
other than driving under the influence, the Driver shall be
placed in the warehouse order selection pool position and
receive a pay rate based on his/her hours worked.
SECTION 3 If a Driver's driving privilege is suspended or revoked for
driving under the influence, or if the Company's insurance
carrier notifies the Company that it will not insure a Driver at
the normal and regular premium rate charged to the Company to
insure all other Drivers because of such a suspension or
revocation for driving under the influence, the Driver shall be
immediately terminated from the employment of the Company.
SECTION 4 Should the Company's insurance carrier notify the Company that
the insurability of a Driver is in jeopardy because of the
Driver's driving record, the Company shall caution, warn the
Driver concerning such as requested by the insurance carrier.
13
<PAGE>
SECTION 5 If the Company changes insurance carriers that have different
standards or requirements, the Company shall ensure that all
drivers are covered during the duration of this agreement.
ARTICLE XIX EXAMINATIONS
- ----------- ------------
SECTION 1 The Company and the Association recognize that the use of
alcohol or drugs by associates during work hours, being under
the influence of alcohol or drugs when in the workplace, or to
have alcohol or drugs present in an associate's system during
work time, poses a serious problem and threat to the business of
the Company and to associate safety and therefore will not be
condoned.
SECTION 2 The Company and Association reaffirm the applicability of the
Company's Alcohol and Drug Policy to associates covered by the
Association Agreement and hereby incorporate said policy into
this agreement by reference.
SECTION 3 Any associate of the Company considered for transfer into a job
classification covered by the Association Agreement will be
required to complete an alcohol and drug test and receive a
negative test result prior to regular assignment to such a
position.
SECTION 4 Associates covered by the Association Agreement being promoted
from part-time status to full time status for a job
classification covered by the Association Agreement will be
required to complete a alcohol and drug test and receive a
negative test result prior to and in conjunction with a pending
promotion.
SECTION 5 Associates covered by the Association Agreement will be subject
to random alcohol or drug testing when required by the Company.
SECTION 6 The Company will test for alcohol and/or any prohibited
substance in an associate's after every work incurred industrial
accident or significant incident involving product or equipment
damage or personal injury.
SECTION 7 It shall be cause for termination of employment for any
associate covered by the Association Agreement to use alcohol or
drugs during work hours, for any associate to be under the
influence of alcohol or drugs in the workplace, or for any
associate to test positive on any company required alcohol or
drug test.
SECTION 8 If an associate comes forth and admits to a drug or alcohol
problem the company shall follow Federal or State guidelines to
assist the associate in a recovery program without fear of
termination. It is understood that the associate must come
forward before any incident involving reasonable cause for
suspicion occurs or notification that random testing is to
occur.
14
<PAGE>
ARTICLE XX DURATION OF AGREEMENT
- ---------- ---------------------
SECTION 1 The provisions of this Agreement shall remain in full force and
effect from April 1, 1998 through April 2, 2001, subject to the
following terms and conditions:
SECTION 2 This Agreement may be reopened by either party for changes,
amendment or termination to be effective at a date following the
expiration of this Agreement by giving written notice to the
other party, not less than sixty (60) days prior to the
expiration date of this Agreement. Failure of any party to give
such sixty (60) days written notice will continue the Agreement
for another year, and from year to year thereafter until and
unless such written notice is given.
SMART & FINAL FOODSERVICE DISTRIBUTORS
Dated: April 1, 1998 By: /s/ John Goneau
__________________________ ___________________________________
JOHN GONEAU
Dated: April 1, 1998 By: /s/ Dennis Harrity
__________________________ ___________________________________
DENNIS HARRITY
FOOD DISTRIBUTORS ASSOCIATES ASSOCIATION
Dated: April 1, 1998 By: /s/ Barry Schrader
__________________________ ___________________________________
BARRY SCHRADER
Dated: April 1, 1998 By: /s/ Remo Serbo
__________________________ ___________________________________
REMO SERBO
Dated: April 1, 1998 By: /s/ Randy Haywood, Sr.
__________________________ ___________________________________
RANDY HAYWOOD, SR.
15
<PAGE>
EXHIBIT A CLASSIFICATIONS AND WAGES
- --------- -------------------------
Effective August 16, 1998 the Company will institute a night shift premium.
All warehouse and driver associates overlapping work on their regular scheduled
bid between the hours of 11:00 P.M. and 3:00 A.M. will be entitled to a .25
cent premium per hour.
Coordinator positions will pay an additional $.25 per hour.
WAREHOUSE 1: There are eight associates that have been grandfathered
- ------------
several pay and benefit issues. At the signing of this agreement the Company
will authorize for each such associate a one (1) week paid vacation that must be
used within four weeks. In all other aspects, these associates will fall under
the pay and benefit policies as laid out in this agreement.
NEW WAGES AND CLASSIFICATIONS:
- ------------------------------
<TABLE>
<CAPTION>
Effective Effective Effective
04/05/98 04/04/99 04/02/00
--------- --------- ---------
<S> <C> <C> <C>
Warehouse $16.00 $16.50 $17.25
Drivers $18.00 $18.50 $19.25
</TABLE>
WAREHOUSE HIRED AFTER APRIL 4, 1998
- -----------------------------------
<TABLE>
<CAPTION>
Hrs. Worked
- -----------
<S> <C>
0 - 1040 $ 8.00
1041 - 2080 $ 9.00
2081 - 3120 $10.00
3121 - 4160 $11.00
4161 - 5190 $12.00
5191 - 6240 $13.00
6241 - 8320 $14.00
8321 - 9360 $15.00
9361+ Top Rate
</TABLE>
DRIVERS TRACTORS/TRAILERS HIRED AFTER APRIL 4,1998
- --------------------------------------------------
<TABLE>
<CAPTION>
Hrs. Worked
- -----------
<S> <C>
0 - 2080 $14.00
2081 - 4160 $15.00
4161 - 6240 $16.00
6241 - 8320 $17.00
8321 - 9360 $18.00
9361+ Top Rate
</TABLE>
16
<PAGE>
DRIVERS BOBTAIL/HOT TRUCK EFFECTIVE APRIL 5, 1998
- -------------------------------------------------
<TABLE>
<CAPTION>
Hrs. Worked
- -----------
<S> <C>
0 - 2080 $12.00
2081 - 4160 $13.00
4161 - 6240 $14.00
6241 - 8320 $15.00
8321 - 9360 $16.00
9361+ $17.00
</TABLE>
It is understood that the current fleet of bobtails used at Smart & Final
Foodservice, Davis Lay, and Craig & Hamilton will not increase during the course
of this Agreement. If the fleet does increase the number of bobtail trucks,
the driver tractor/trailer wages will be used for the additional trucks. It is
also understood that the current Smart & Final Foodservice drivers and the Craig
& Hamilton drivers are all to be considered the same since the acquisition of
Craig & Hamilton in 1996. The Davis Lay drivers shall maintain their current
wage rates as of April 1, 1998 and for each such associate their hours worked as
of April 1, 1998 shall be deemed to be the lowest number of hours that would
qualify that associate for his or her current wage rate pursuant to this Exhibit
A. Wage rates thereafter shall be determined pursuant to this Exhibit A
according to the hours worked.
ADDITIONAL JOB CLASSIFICATIONS:
- -------------------------------
REPACK
Full time associates in the repack department (this does not include the
produce quality associates) will be members of the Association and covered by
this Agreement and all wage, benefit, and working policies and procedures
provided under this Agreement. Part time associates in the repack department
will be covered by the wage rates provided by this Agreement. The repack
department includes the work completed at 2040 E. Fremont Street. The
following will apply to repack associates:
. Current full-time repack associates will go to the bottom of the full-time
warehouse seniority list as of April 1, 1998.
. Current part-time repack associates will go to the bottom of the part-time
warehouse seniority list as of April 1, 1998.
. Open bidding for the repack positions will start on the January 1999 bid.
. The full time and part time repack associates shall maintain their current
wage rates as of April 1, 1998 and for each such associate their hours worked
as of April 1, 1998 shall be deemed to be the lowest number of hours that
would qualify that associate for his or her current wage rate pursuant to
this Exhibit A. Wage rates thereafter shall be determined pursuant to this
Exhibit A according to the hours worked.
YARD DRIVERS
Full time yard drivers will be members of the Association and covered by this
Agreement and all the wage, benefit, working policies and procedures provided
under this Agreement. Part time yard drivers will be covered by the wage rates
provided by this Agreement. Yard drivers shall maintain their current wage
rates as of April 1, 1998 and for each such associate their hours worked as of
April 1, 1998 shall be deemed to be the lowest number of hours that would
qualify that associate
17
<PAGE>
for his or her current wage rate pursuant to this Exhibit A. Wage rates
thereafter shall be determined pursuant to this Exhibit A according to hours
worked.
<TABLE>
<CAPTION>
Hrs. Worked
- --------------
<S> <C>
0-2080 $10.00
2081 - 4160 $10.50
4161 - 6240 $11.00
6241 - 8320 $11.50
8320+ $12.00
</TABLE>
DAVIS LAY PRODUCE COMPANY AND CRAIG & HAMILTON MEAT COMPANY INTEGRATION
- -----------------------------------------------------------------------
WAREHOUSE: The D.L./C&H warehouse associates will move over to the new
perishable facility when it opens in September. The D.L./C&H warehouse
associates shall maintain their current wages as of April 1, 1998 and for each
such associate their hours worked as of April 1, 1998 shall be deemed to be the
lowest number of hours that would qualify that associate for his or her current
wage rate pursuant to the Exhibit A. Wage rates thereafter shall be determined
pursuant to this Exhibit A according to hours worked. The bids at the new
facility will be established in the following manner:
. The D.L./C&H full-time associates will go to the bottom of the full-time
seniority list.
. The D.L./C&H part-time associates will go to the bottom of the part-time
seniority list.
. The bids the D.L./C&H associates are currently working at D.L./C&H will be
filled by the current D.L./C&H associates for the first two years following
the opening of the new perishable facility. At the end of these two years,
all bids in all facilities will be open based on seniority.
. All perishable bids (1998 bid) at Smart & Final Foodservice will be moved to
the new perishable facility.
. Any new bids that come up due to business demands will be posted and filled
by overall Association seniority.
DRIVERS: The D.L. drivers will move to the new perishable facility when it
opens in September. The D.L. drivers shall maintain their current wage rates
as of April 1, 1998 and for each such associate their hours worked as of April
1, 1998 shall be deemed to be the lowest number of hours that would qualify that
associate for his or her current wage rate pursuant to this Exhibit A. Wage
rates thereafter shall be determined pursuant to this Exhibit A according to the
hours worked. The bids at the new perishable facility will be established in
the following manner:
. The D.L. business is the bulk of our bobtail needs.
. The D.L. full-time associates go to the bottom of the full-time seniority
list.
. The D.L. part-time associates go to the bottom of the part-time seniority
list.
. The bids currently being worked by D.L. associates will be filled by current
D.L. associates for the first two years following the opening of the new
perishable facility. At the end of these two years, all bids in all
facilities shall be based on seniority.
18
<PAGE>
. All perishable bids (1998 bid) at Smart & Final Foodservice will be moved to
the new perishable facility. It is understood that the Smart & Final
Foodservice routes will still be delivering deli/produce/meat/etc. on their
routes.
. Any new bids that come up due to business demands will be posted and filled
by overall Association seniority.
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-START> JAN-05-1998
<PERIOD-END> MAR-29-1998
<CASH> 26,468
<SECURITIES> 0
<RECEIVABLES> 77,506
<ALLOWANCES> 3,969
<INVENTORY> 125,645
<CURRENT-ASSETS> 249,007
<PP&E> 278,309
<DEPRECIATION> 91,326
<TOTAL-ASSETS> 480,924
<CURRENT-LIABILITIES> 183,161
<BONDS> 78,977
0
0
<COMMON> 224
<OTHER-SE> 197,457
<TOTAL-LIABILITY-AND-EQUITY> 480,924
<SALES> 334,278
<TOTAL-REVENUES> 334,278
<CGS> 294,538
<TOTAL-COSTS> 294,538
<OTHER-EXPENSES> 39,418
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,128
<INCOME-PRETAX> (1,806)
<INCOME-TAX> (780)
<INCOME-CONTINUING> (896)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 1,090
<NET-INCOME> (1,986)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
