SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report
(Date of earliest
event reported): October 30, 2000
SCHULTZ SAV-O STORES, INC.
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(Exact name of registrant as specified in its charter)
Wisconsin 0-549 39-0600405
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
2215 Union Avenue, Sheboygan, Wisconsin 53081
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(Address of principal executive offices, including zip code)
(920) 457-4433
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(Registrant's telephone number)
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Item 9. Regulation FD Disclosure.
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On October 30, 2000, the Registrant issued the following press
release, which it is hereby furnishing in this Form 8-K.
CONTACTS: Elwood F. Winn Armand C. Go
Executive Vice President Vice President, Treasurer &
Chief Financial Officer Chief Accounting Officer
920-208-4109 920-208-4200
FOR IMMEDIATE RELEASE:
SCHULTZ SAV-O STORES REPORTS THIRD QUARTER 2000 RESULTS OF OPERATIONS; DECLARES
FOURTH QUARTER DIVIDEND
SHEBOYGAN, WI, OCTOBER 30, 2000: Schultz Sav-O Stores, Inc. (Nasdaq: SAVO) today
reported net earnings for its twelve-week third quarter ended October 7, 2000 of
$1,555,000, a decrease of 7.1%, compared to $1,673,000 for the same period in
1999. Diluted earnings per share for both 2000 and 1999 third quarters were
$0.26. Net sales for the third quarter of 2000 increased 2.6% to $116,341,000,
compared to $113,406,000 for the same period last year. As a result of
significant Company stock repurchases in 1999, the weighted average common
shares and equivalents for the third quarter of 2000 was 5,998,000, compared to
6,421,000 for the same quarter in 1999.
For the forty-week period ended October 7, 2000, representing the first three
quarters of the Company's fiscal year, net earnings decreased 3.9% to
$5,326,000, compared to $5,542,000 in 1999. Diluted earnings per share increased
6.0% to $0.89 in 2000 from $0.84 in 1999. Net sales for the first three quarters
of 2000 increased 1.3% to $380,488,000, compared to $375,481,000 in 1999.
The Company's operational results during the third quarter were consistent with
trends that started in early 2000. The Company's gross margin for the third
quarter of 2000 and 1999 was constant at 16.2%. However, for the three quarters
ended October 7, 2000, the Company's gross margin has improved to 16.5%,
compared to 16.2% for the same period last year. This improvement, primarily due
to retail operations, continued to be attributable to merchandising and product
promotional mix changes that were initiated at the beginning of 2000. This gross
margin improvement was, however, offset by increased operating and
administrative expenses. For the first three quarters of 2000, the Company has
incurred additional retail health and accident insurance expenses aggregating
$910,000, incremental distribution payroll and fuel costs totaling $490,000 and
one-time professional fees approximating $380,000.
Retail sales for the third quarter of 2000 increased 1.8% to $47,689,000,
compared to $46,833,000 for the same quarter last year. Total retail sales
volume was positively impacted by sales generated from one corporate store that
was converted from a franchise unit in November 1999 and the increased volume
resulting from the replacement of one corporate store in Racine, Wisconsin in
May 2000. However, several of the Company's retail stores continue to experience
intense competitive activities.
Net wholesale sales for the third quarter of 2000 increased 3.1% to $68,652,000,
compared to the same period last year. The net wholesale sales improvement was
attributable to: (1) the successful conversion to the Piggly Wiggly program of
two new market Wisconsin franchise stores from other wholesalers during the
third quarter of 1999; (2) the successful conversion to the Piggly Wiggly
program of one new market Wisconsin franchise unit from another wholesaler in
January 2000; and (3) the opening of one new market franchise supermarket in
Kewaskum, Wisconsin in June 2000. The conversion of one franchise supermarket
into a corporate store in November 1999 and additional competitive activities in
certain franchise market areas offset some of the net wholesale sales volume
increase.
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James H. Dickelman, Chairman, President and CEO stated that "Although sales
increased nominally, our operational results during the third quarter were
disappointing. During the quarter and throughout 2000, we continued to
experience intense competitive activity in several market areas. Furthermore,
operating expenses increased principally due to health and accident insurance
expenses, distribution payroll and fuel costs and certain professional fees that
negatively impacted our operating results. Despite a projected sales volume
increase from the opening in May 2000 of a replacement store in Racine,
Wisconsin, for the remainder of the year, we anticipate corporate retail sales
to be flat or to decrease relative to last year's same quarter due to the
successful 50th anniversary of Piggly Wiggly in Wisconsin held during the fourth
quarter of 1999. However, we expect the anticipated fourth quarter sales
decrease to be mitigated, in part, by projected higher gross margin.
Additionally, we project fourth quarter wholesale sales volume increases
resulting from the June 2000 opening of one new market franchise store in
Kewaskum, Wisconsin and the September 2000 opening of a replacement franchise
store in New Holstein, Wisconsin."
Separately, the Company announced that its Board of Directors declared its
fourth quarter cash dividend on its common stock of $0.09 per share. The
quarterly cash dividend will be payable on November 24, 2000 to shareholders of
record on November 10, 2000.
As a follow-up to this press release, the Company is setting up a conference
call scheduled for Tuesday, October 31st, at 9:00 a.m. CST. Any interested
parties are invited to call 1-888-391-6746 (press 7286 as passcode) at such
time. The Company will be happy to field questions during this scheduled
conference call.
Schultz Sav-O Stores, Inc. is engaged in the food distribution business through
franchised and corporate-owned retail supermarkets and as a wholesaler to
independent food stores. The Company's franchised and corporate-owned corporate
retail supermarkets operate under the name of Piggly Wiggly(R).
ATTACHMENT
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this press release are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
Company's future plans, objectives, strategies or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties including, but not limited, to the following: (1) presence of
intense competitive market activity in the Company's market areas; (2) ability
to identify and develop new market locations and opportunities for expansion
purposes; (3) continuing ability to obtain reasonable vendor marketing funds for
promotional purposes; (4) ongoing advancing information technology requirements;
(5) the Company's ability to continue to recruit, train and retain quality
franchise and corporate retail store operators; and (6) the potential
recognition of repositioning charges resulting from potential closures,
conversions and consolidations of retail stores due principally to the
competitive nature of the industry and to the quality of the Company's retail
store operators. Shareholders, potential investors and other readers are urged
to consider these factors carefully in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are only made as of the
date of this report and the Company undertakes no obligation to publicly update
such forward-looking statements to reflect subsequent events or circumstances.
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<TABLE>
SCHULTZ SAV-O STORES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
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For the 12-weeks ended For the 40-weeks ended
October 7, 2000 October 9, 1999 October 7, 2000 October 9, 1999
------------------------------------ ------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C> <C>
Net sales $ 116,341,000 $ 113,406,000 $ 380,488,000 $ 375,481,000
Costs and expenses:
Cost of products sold 97,498,000 95,053,000 317,716,000 314,584,000
Operating and
administrative expenses 16,510,000 15,774,000 54,476,000 52,225,000
Operating income 2,333,000 2,579,000 8,296,000 8,672,000
Interest income 372,000 331,000 950,000 973,000
Interest expense (197,000) (177,000) (656,000) (590,000)
Earnings before income taxes 2,508,000 2,733,000 8,590,000 9,055,000
Provision for income taxes 953,000 1,060,000 3,264,000 3,513,000
------------------------------------ ------------------- ------------------ ------------------- -------------------
Net earnings $ 1,555,000 $ 1,673,000 $ 5,326,000 $ 5,542,000
==================================== =================== ================== =================== ===================
Earnings per share - diluted $ 0.26 $ 0.26 $ 0.89 $ 0.84
Cash dividends paid per share
of common stock $ 0.09 $ 0.09 $ 0.27 $ 0.25
Weighted average common shares and
equivalents 5,998,000 6,421,000 5,994,000 6,607,000
</TABLE>
# # #
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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 hereunto duly authorized.
SCHULTZ SAV-O STORES, INC.
Date: October 30, 2000 By: /s/ Armand C. Go
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Armand C. Go
Vice President, Treasurer
and Chief Accounting Officer
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