SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 K
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Fiscal Year ended August 26, 1995
( ) Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from
to
Commission File number 0-80.
SEAWAY FOOD TOWN, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-4471466
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1020 Ford Street, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
419/893-9401
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
Title of each class
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, without par value (stated value $2.00 per share)
Title of Class
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 _____
Page 1 of 2 of Cover Page
<PAGE>
2
Disclosure of Delinquent Form Filing
Indicate by check mark if disclosure of delinquent filings pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive Proxy or information
statement incorporated by reference in Part III of this Form 10 K or any
amendments to this Form 10 K.
( X )
The aggregate market value of voting stock held by nonaffiliates of the
registrant is approximately $22,384,240 as of November 10, 1995.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 10, 1995
Common stock, without par 2,193,352 shares
value (stated value $2.00
per share)
Documents Incorporated in Part by Reference
Parts II and IV Portions of the 1995 Annual Report to Shareholders of
Seaway Food Town, Inc. ("Annual Report") are filed as
Exhibit 13 filed hereto.
Part III The Seaway Food Town, Inc. Proxy Statement, dated
December 8, 1995 ("Proxy Statement")
Page 2 of 2 of Cover Page
<PAGE>
3
PART I
Item 1. Business
Seaway Food Town, Inc., was founded in 1957 and is a leading regional
supermarket chain located predominantly in northwest and central Ohio and
southeast Michigan. Beginning in 1986, the Company began adding deep discount
drug stores to its chain. The merchandise sold in these stores is similar to
that sold in a conventional supermarket but with a greater emphasis on non-
food items and package size of such items. At year end, the Company operated
21 Food Town Supermarkets, 23 Food Town Plus Supermarkets, and 22 deep
discount drugstores under the name of the Pharm.
No material portion of the Company's business is seasonal, as that term
is commonly used, although holiday periods may result in greater sales volume.
There is substantial competition, principally price-oriented, from national
regional and local companies. The Company is in one line of business selling
substantially the same types of retail food and convenience-related non-food
merchandise.
The Company employs approximately 2,211 employees on a full-time basis
and 2,340 on a part-time basis.
Item 2. Properties
The Company leases 43 of its stores (3 of which are accounted for as
capital leases) and certain other facilities and equipment under leases
generally for fifteen years, although some are for shorter as well as longer
periods. The Company owns 23 stores and a relatively large distribution
center (approximately 477,174 square feet) which includes offices, warehousing
and shipping facilities, located in Maumee, Ohio. It also owns a 133,000
square foot warehouse in Toledo, Ohio which is used as a satellite facility
and a 105,000 square foot warehouse facility which houses health and beauty
aids and general merchandise operations. The Company believes that its
physical facilities, both leased and owned, are suitable and adequate for
the intended uses and purposes.
In addition, the Company leases 2 locations that are closed and not
subleased.
At August 26, 1995, the approximate undepreciated cost of real property
subject to mortgages was $20,616,000 and the approximate undepreciated cost of
real property subject to capital lease obligations was $7,272,000.
<PAGE>
4
Item 3. Legal Proceedings.
There are no significant legal proceedings pending.
Item 4. Submission of matters to a vote of Security Holders.
No matters have been submitted to a vote of security holders since the
Annual Meeting held January 5, 1995.
PART II
Item 5. Market for registrant's common equity and related security
holder matters.
Information with respect to the market for the registrant's common stock
and related security holder matters on page 29 of Exhibit (13) filed hereunder
is incorporated herein by reference.
Item 6. Selected financial data.
The five year summary of selected financial data on page 11 of Exhibit
(13) filed hereunder is incorporated herein by reference.
Item 7. Management's discussion and analysis of financial condition
and results of operations.
Management's discussion and analysis of financial condition and results
of operations included on pages 13 through 15 of Exhibit (13) filed hereunder
is incorporated herein by reference.
Item 8. Financial statements and supplementary data.
The consolidated financial statements and report of independent auditors
on pages shown below of Exhibit (13) filed hereunder are incorporated herein
by reference.
<TABLE>
<CAPTION>
Page(s)
<S> <C>
Comparative Highlights 12
Report of Independent Auditors 16
Consolidated Statements of Income 17
Consolidated Balance Sheets 18 & 19
Consolidated Statements of Cash Flows 20
Consolidated Statements of Shareholders' Equity 21
Notes to Consolidated Financial Statements 22 - 28
</TABLE>
Item 9. Changes in and disagreements with accountants on accounting
and financial disclosure.
There have been no disagreements on accounting and financial disclosure
matters reported on Form 8-K during the fiscal years ended August 26, 1995
and August 27, 1994.
<PAGE>
5
PART III
Item 10. Directors and executive officers of the Registrant.
Information with respect to non-officer directors is included in
the Proxy Statement in the Section entitled "Information concerning
Nominees and Directors" and is incorporated herein by reference.
Information with respect to executive officers, family relationships
and business experience is included in the Proxy Statement in the
Sections entitled "Executive Compensation," Compensation of Directors,"
and "Executive Officers". That information (except the Compensation
Committee Report, and the graph indicating Comparison of 4 Year
Cumulative Total Return), is incorporated herein by reference.
Item 11. Executive Compensation.
Information regarding Executive Compensation is included in the
Proxy Statement in the sections entitled "Interest of Management
in Certain Transactions," "Executive Compensation," and "Compensa-
tion of Directors". That information (except the Compensation Committee
Report, and the graph indicating Comparison of 4 Year Cumulative
Total Return), is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information as to Security Ownership of Certain Beneficial Owners and
Management included in the Proxy Statement in the Sections entitled
"Information Concerning Nominees and Directors," and "Principal Holders
of Voting Securities" is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
Information regarding Certain Relationships and Related Trans-
actions is included in the Proxy Statement in the Sections entitled
"Interest of Management in Certain Transactions," "Executive Compensation,"
and "Compensation of Directors". That information (except the
Compensation Committee Report, and the graph indicating Comparison
of 4 Year Cumulative Total Return), is incorporated herein by reference.
<PAGE>
6
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents or portions thereof indicated are filed
as a part of this report on Form 10-K.
(1) The following consolidated financial statements of Seaway Food
Town, Inc. and its subsidiaries, included on pages 16 - 28 of
Exhibit (13) filed hereunder are incorporated by reference in
Item 8.
Report of Independent Auditors
Consolidated statements of Income - Years ended
August 26, 1995, August 27, 1994 and August 28, 1993
Consolidated balance sheets at August 26, 1995 and
August 27, 1994
Consolidated statements of cash flows - Years ended August 26,
1995, August 27, 1994 and August 28, 1993
Consolidated statement of shareholders' equity - Years ended
August 26, 1995, August 27, 1994 and August 28, 1993
Notes to consolidated financial statements - August 26, 1995
(2) The following consolidated financial statement schedules
of Seaway Food Town, Inc. and its subsidiaries are filed
under Item 14(d):
SCHEDULE PAGE(S)
Schedule II - Valuation and qualifying accounts 9
All other schedules have been omitted since the required information
is not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the consolidated financial statements or the notes thereto.
<PAGE>
7
b.) Reports on Form 8-K
No reports on Form 8-K were required to be filed for the
three months ended August 26, 1995.
c.) Exhibits Required by Item 601 of Regulation S-K Index.
Exhibit 3 - Data required by this item has previously been
filed and is incorporated by reference from the
Company's Annual Report on Form 10-K for the Year
Ended September 25, 1982, File 0-80.
A copy of the Amendment to the Articles of
Incorporation filed with the Secretary of State
of Ohio, January 17, 1989, is incorporated by
reference from the Company's Annual Report on
Form 10-K for the Year Ended August 26, 1989,
File 0-80.
4 - Data required by this item has previously been
filed and is incorporated herein by reference
from the Company's Annual Report on Form 10-K
for the Year Ended September 26, 1981, File 0-80.
10 - Contracts required by this item have previously
been filed and are Incorporated herein by reference
from the Company's Annual Report on Form 10-K for
the Years Ended September 26, 1981, September 24,
1983, the eleven months ended August 27, 1988, File
0-80, on the Company's Issuer Tender Offer Statement
on Schedule 13 E-4 filed November 4, 1987, and on
form 10-K for the years ended August 25, 1990,
August 31, 1991, August 29, 1992, August 28, 1993,
and August 27, 1994.
11 - Computation of income per share.
13 - Portions of the 1995 Annual Report to Shareholders
(to the extent incorporated by reference hereunder.)
22 - Subsidiaries of the Registrant.
23 - Consent of Independent Auditors.
99 - Financial Data Schedule
d.) Financial Statements Required by Regulation S-X.
Included in Item 14 (a), above.
<PAGE>
8
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
SEAWAY FOOD TOWN, INC.
(Registrant)
November 20, 1995 By /s/ Richard B. Iott
Date Richard B. Iott, President & Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
November 20, 1995 By /s/ Wallace D. Iott
Date Wallace D. Iott, Chairman of the Board
(Principal Executive Officer)
& Director
November 20, 1995 By /s/ Waldo E. Yeager
Date Waldo E. Yeager, Director
(Chief Financial Officer and
Treasurer)
November 20, 1995 By /s/ Paul L. Pope
Date Paul L. Pope, Director
November 20, 1995 By /s/ Robert J. Kirk
Date Robert J. Kirk, Director
November 20, 1995 By /s/ Thomas M. O'Donnell
Date Thomas M. O'Donnell, Director
November 20, 1995 By /s/ David J. Walrod
Date David J. Walrod, Director
November 20, 1995 By /s/ Richard K. Ransom
Date Richard K. Ransom, Director
November 20, 1995 By /s/ Joel A. Levine
Date Joel A. Levine, Director
<PAGE>
9
<TABLE>
<CAPTION>
SEAWAY FOOD TOWN, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended August 26, 1995, August 27, 1994, and August 28, 1993
Charge
Balance at (credit) to Charged Deductions Balance at
beginning costs and to other from end of
of period expenses accounts reserves period
Allowance --------- --------- -------- --------- ---------
for
doubtful
accounts:
<S> <C> <C> <C> <C> <C>
1995 $450,000 $ 7,249 $ 7,249(A) $ 450,000
========= ======== ======== ============ =========
1994 $400,000 $ 54,699 $ 4,699(A) $ 450,000
========= ======== ======== ============ =========
1993 $ 250,000 $ 150,000 - (A) $ 400,000
========= ======== ======== ============ =========
(A) - Accounts charged off during the year, net of
recoveries of accounts previously charged off.
</TABLE>
F-3
<PAGE>
10
<TABLE>
EXHIBIT 11
SEAWAY FOOD TOWN, INC.
COMPUTATION OF INCOME PER SHARE
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income before extraordinary item
and cumulative effect of change
in accounting (thousands of
dollars) $4,480 $2,438 $1,123 $2,375 $1,256
====== ====== ====== ====== ======
Net income (thousands of dollars) $4,480 $2,059 $1,123 $2,155 $1,256
====== ====== ====== ====== ======
Weighted average number of common
shares outstanding during the
period for purposes of computing
primary earnings per share 2,196,643 2,306,881 2,332,016 2,326,972 2,307,224
Net shares to be issued upon
exercise of dilutive options
after applying treasury stock --- --- --- --- ---
method ------ ------ ------ ------ -----
Adjusted outstanding shares for
purpose of computing income per
share assuming full dilution 2,196,643 2,306,881 2,332,016 2,326,972 2,307,224
========= ========= ========= ========= =========
Income per common share:
Assuming no dilution:
Income before extraordinary item
and cumulative effect of change
in accounting $2.04 $1.06 $.48 $1.02 $.54
Extraordinary item --- (.06) --- (.09) ---
accounting for income taxes --- (.11) --- --- ---
------ ------ ------ ------ ------
Net income $2.04 $.89 $.48 $.93 $.54
====== ====== ====== ====== ======
Fully diluted (A)
Income before extraordinary item
and cumulative effect of change
in accounting for income taxes $2.04 $1.06 $.48 $1.02 $.54
Extraordinary item --- (.06) --- (.09) ---
Cumulative effect of change in
accounting for income taxes --- (.11) --- --- ---
------ ------ ------ ------ ------
Net income $2.04 $.89 $.48 $.93 $.54
====== ====== ====== ====== ======
(A) - Not appearing on face of
income statement
</TABLE>
<PAGE>
<TABLE>
11 EXHIBIT (13)
<CAPTION>
PORTIONS OF THE 1995 ANNUAL REPORT TO SHAREHOLDERS
SEAWAY FOOD TOWN, INC.
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands except share and per share data)
CONSOLIDATED SUMMARY OF 1995 1994 1993 1992 1991(1)
OPERATIONS ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net sales $559,244 $546,193 $566,883 $554,565 $571,221
Cost of merchandise sold 418,128 409,305 428,478 418,515 434,187
-------- -------- -------- -------- --------
Gross profit 141,116 136,888 138,405 136,050 137,034
Selling,general and 131,267 129,921 133,175 128,378 130,602
administrative expenses -------- -------- -------- -------- --------
Operating profit 9,849 6,967 5,230 7,672 6,432
Interest expense (4,469) (4,410) (4,660) (5,174 (5,831)
Other income 1,815 1,169 1,133 1,102 1,347
-------- -------- -------- -------- --------
Income before income taxes,
extraordinary item and
cumulative effect 7,195 3,726 1,703 3,600 1,948
Provision for income taxes 2,715 1,288 580 1,225 692
-------- -------- -------- -------- --------
Income before extraordinary
item and cumulative effect 4,480 2,438 1,123 2,375 1,256
Extraordinary item (2) --- (123) --- (220) ---
Cumulative effect of change --- (256) --- --- ---
in accounting (3) -------- -------- -------- -------- --------
Net income $ 4,480 $ 2,059 $ 1,123 $ 2,155 $ 1,256
======== ======== ======== ======== ========
PER COMMON SHARE DATA
Income before extraordinary
item and cumulative effect $ 2.04 $ 1.06 $ .48 $ 1.02 $ .54
Net income 2.04 .89 .48 .93 .54
Cash dividends .39 .36 .36 .36 .36
Book value 18.57 16.76 16.00 16.00 15.32
YEAR END POSITION
Total assets $154,001 $155,203 $152,771 $150,523 $150,193
Property and equipment - net 84,000 85,346 85,653 80,914 83,488
Net working capital 6,086 8,937 6,555 10,519 8,897
Long term debt 48,399 55,060 55,705 53,206 53,695
Shareholders' equity 40,731 37,585 37,173 36,704 35,370
FINANCIAL RATIOS
Income before extraordinary
item and cumulative effect
as a percent of sales .80% .45% .20% .43% .22%
Current ratio 1.11:1 1.16:1 1.12:1 1.19:1 1.16:1
Long-term debt to equity ratio 1.19:1 1.46:1 1.50:1 1.45:1 1.52:1
OTHER DATA
Weighted average shares of
common stock outstanding 2,196,643 2,306,881 2,332,016 2,326,972 2,307,224
Net cash provided by operations $19,829 $16,183 $16,534 $13,651 $11,642
Property and equipment addition 13,698 12,681 17,353 9,842 18,940
Depreciation and amortization 12,551 12,311 11,562 11,645 10,711
LIFO charge (credit) included in
cost of merchandise sold 581 (18) (492) 49 303
Employees at year end 4,551 4,500 4,860 4,713 4,762
Stores in operation 66 66 64 65 67
Notes: (1) 53 week year; (2) Loss from early extinguishment of debt, less
applicable income taxes; (3) Reflects adoption of Statement of Financial
Accounting Standards No. 109 "Accounting for income taxes".
</TABLE>
<PAGE>
<TABLE>
12
<CAPTION>
SEAWAY FOOD TOWN, INC.
COMPARATIVE HIGHLIGHTS
(Dollars in thousands, except per share data)
1995 1994 1993
----- ----- -----
RESULTS OF OPERATIONS
<S> <C> <C> <C>
Net sales $559,244 $546,193 $566,883
Operating profit 9,849 6,967 5,230
Income before income taxes, extra-
ordinary item and cumulative effect 7,195 3,726 1,703
Income before extraordinary item and
cumulative effect 4,480 2,438 1,123
Per common share 2.04 1.06 .48
Percent of sales .80% .45% .20%
Percent of shareholders' equity 11.00% 6.49% 3.02%
Cash dividends per common share .39 .36 .36
OTHER FINANCIAL INFORMATION
Working capital $6,086 $8,937 $6,555
Capital expenditures 13,698 12,681 17,353
Depreciation and amortization 12,551 12,311 11,562
Long-term debt 48,399 55,060 55,705
Shareholders' equity 40,731 37,585 37,173
Book value per common share 18.57 16.76 16.00
Weighted average shares outstanding 2,196,643 2,306,881 2,332,016
Number of stores in operation, at
year end 66 66 64
NASDAQ National Market Price Range 16 1/4 - 9 1/2 13 1/4 - 9 1/2 13 - 9 1/2
</TABLE>
<PAGE>
13
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements and notes thereto contained herein.
RESULTS OF OPERATIONS
The following table sets forth certain income statement components
expressed as a percentage of net sales and the year-to-year percentage changes
in such components. As of the end of fiscal 1995, Seaway Food Town, Inc.
operated 66 retail stores, 44 supermarkets, 24 of which were large combination
stores operating as Food Town Plus stores, and 22 deep discount drugstores
operating as the Pharm. This compares to 44 supermarkets, 20 of which were
Food Town Plus stores, and 22 Pharm deep discount drugstores as of the end of
fiscal 1994. During 1995 the Company converted four conventional supermarkets
to Food Town Plus stores. All stores operate predominately in northwest and
central Ohio and southeast Michigan.
<TABLE>
____________________________________________________________________________
<CAPTION>
Percentage change
from prior year
------------------
1995 1994
1995 1994 1993 Compared Compared
------- ------- ------- to 1994 to 1993
-------- --------
<C> <C> <C> <S> <C> <C>
100.0% 100.0% 100.0% Net sales 2.4% -3.6%
25.2 25.1 24.4 Gross profit 3.1 -1.1
Selling,general and adminis-
23.5 23.8 23.5 trative expenses 1.0 -2.4
1.8 1.3 .9 Operating profit 41.4 33.2
.8 .8 .8 Interest expense 1.3 -5.4
.3 .2 .2 Other income - net 55.3 3.2
Income before income taxes,
extraordinary item and
1.3 .7 .3 cumulative effect 93.1 118.8
</TABLE>
Net Sales
Consolidated net sales increased 2.4% in 1995 and decreased 3.6% in 1994.
Nearly 50% of the 1995 net sales increase is attributable to the supermarkets
which recovered from some competitive pressures, which were particularly strong
during the first three quarters of 1994. The remaining increase in 1995 was
attributable to the Pharm drugstores offset by a 0.6% decline resulting from
the sale of the Company's dairy operation in November of 1994. Nearly all of
the 1994 net sales decrease was attributable to the supermarkets. Retail
sales in stores that were open throughout all three years increased
approximately 1.95% in 1995 compared to 1994 and decreased approximately 1.26%
in 1994 over 1993.
Management believes that the inflation component in sales was less than
1.5% in 1995, and 1% in 1994 and 1993.
<PAGE>
14
Gross Profit
In 1995,the gross profit percentage increased from 25.1% to 25.2%. Margins
improved in both the supermarkets and the deep discount drugstores in 1995
compared to 1994. In 1995 warehousing and transportation expenses, which are
included in cost of sales, increased a mere $128,000. In 1994, gross margins
increased on both the supermarkets and the deep discount drugstores, and
warehousing and transportation expenses decreased nearly $800,000.
Selling, General and Administrative Expenses
In 1995, selling, general and administrative expenses increased by $1.3
million, but decreased as a percentage of sales due to higher sales. This
dollar increase was attributable principally to an increase in retail store
wage expense as well as supply costs. In 1994, selling, general and
administrative expenses increased 0.3% as a percentage of sales, but
declined $3.3 million. This decrease was attributable to decreased selling
expenses, principally wage expense as well as lower workers' compensation
expense. General and administrative expenses in 1994 increased as a result
of costs associated with enhancing management information systems. Costs
associated with closed stores were approximately $204,000 in 1995, $285,000
in 1994, and $961,000 in 1993.
Interest Expense
Interest expense increased $59,000 in 1995 resulting from higher interest
rates offset by lower borrowing levels. Interest expense decreased $250,000
in 1994 due to declining interest rates and the early retirement of certain
higher cost borrowings. The weighted average interest rate on long-term debt
increased 0.64% from 1994 to 1995 and declined 0.59% from 1993 to 1994.
Other Income
Other income increased $646,000 over fiscal 1994. This increase is due
primarily to a gain of $637,000 recognized on the sale of the company's dairy
operations.
Income Taxes
The effective tax rates for 1995, 1994, and 1993 were 37.7%, 34.6%, and
34.1%, respectively, which approximated the statutory rates in effect. The
increase in 1995 is primarily attributable to higher state and local income
taxes.
Net Income
Net income in 1995 was $4,480,000 as compared to $2,059,000 in 1994.
This increase was principally due to increasing margins on higher sales volume
offset by slightly higher selling, general and administrative expenses. In
addition, 1994 net income was decreased by an extraordinary charge and
cumulative effect of an accounting change. Net income in 1994 was $936,000
higher than in 1993 principally due to lower selling, general, and
administrative expenses along with the effect of increasing margins on
lower sales, cumulative effect of change in accounting for income taxes and
an extraordinary item of the early extinguishment of debt. Excluding
extraordinary items and cumulative effect of the change in accounting,
income as a percent of net sales was 0.80% in 1995, 0.45% in 1994, and
0.20% in 1993.
<PAGE>
15
LIQUIDITY AND CAPITAL RESOURCES
Capital Expenditures And Financing
During 1995 capital expenditures were $13,698,000 compared to $12,681,000
in 1994 and $17,353,000 in 1993. These were financed by operations and
additional long-term debt. The Company continues to upgrade its corporate
information systems to provide more timely and sophisticated information to
improve the Company's competitive advantage. The Company continues to expand
the benefits of the Company's Plus Card program, which, launched in 1993,
initially provided instant discounts (paperless coupons) to customers. In
1995 the program provided customers with the opportunity to pay for their
purchases with a bank ATM card, credit card, or their Plus Card which enables
them to make their purchase via the Federal Reserve's Automated Clearing House
(ACH). This feature has been made a part of the Plus Card so that the customer
can make a fast, paperless check transaction when paying for their purchases
while the Company experiences reduced costs. The Company is expecting
capital expenditures of approximately $12,000,000 in fiscal 1996.
As of the end of 1995, the Company had a total of $17.6 million borrowed
against its revolving credit loan agreements with banks which provide maximum
borrowings of $35.0 million. This compares to $22.7 million borrowed against
revolving credit agreements which provided maximum borrowings of $35.0 million
at the end of 1994. The Company believes that cash provided by operations
along with the remaining $17.4 million available under the credit agreements
will be sufficient to finance fiscal 1996 capital additions and other business
needs. The Company's plan for store construction, acquisition, remodeling
and expansion is frequently reviewed and revised in light of changing
conditions. The Company's ability to proceed with projects, or to complete
projects during a particular period, is subject to normal construction and
other delays. Therefore, it is possible that the projects included in the
above mentioned figure will not all commence or be completed in the 1996
fiscal year.
The long-term debt-to-shareholders' equity ratio was 1.19 to 1 at the end
of 1995 compared to 1.46 to 1 at the end of 1994 and 1.50 to 1 at the end of
1993.
Liquidity
Measures of liquidity for each of the last three fiscal years were as
follows:
<TABLE>
1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>
Working capital (1) $24.2 million $26.5 million $24.1 million
Current ratio (1) 1.42 to 1 1.49 to 1 1.44 to 1
Unused lines of credit $17.4 million $12.3 million $8.0 million
(1) Includes add-back of gross LIFO reserve
</TABLE>
<PAGE>
16
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Seaway Food Town, Inc.
We have audited the accompanying consolidated balance sheets of Seaway Food
Town, Inc. as of August 26, 1995 and August 27, 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended August 26, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Seaway Food Town,
Inc. at August 26, 1995 and August 27, 1994, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended August 26, 1995 in conformity with generally accepted accounting
principles.
As discussed in Note 3 to the financial statements, in fiscal 1994, the Company
changed its method of accounting for income taxes.
/s/ Ernst & Young LLP
October 13, 1995
Toledo, Ohio
<PAGE>
<TABLE>
17
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED AUGUST 26, 1995, AUGUST 27, 1994, AND AUGUST 28, 1993
(Dollars in thousands, except per share data)
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Net sales $559,244 $546,193 $566,883
Cost of merchandise sold 418,128 409,305 428,478
-------- -------- --------
Gross profit 141,116 136,888 138,405
Selling, general and administrative
expenses 131,267 129,921 133,175
-------- -------- --------
Operating profit 9,849 6,967 5,230
Interest expense (4,469) (4,410) (4,660)
Other income - net 1,815 1,169 1,133
-------- -------- --------
Income before income taxes,extra-
ordinary item and cumulative
effect 7,195 3,726 1,703
Provision for income taxes 2,715 1,288 580
-------- -------- --------
Income before extraordinary item
and cumulative effect 4,480 2,438 1,123
Extraordinary item - losses from
early extinguishment of debt, less
applicable income taxes of $63
(Note 2) --- (123) ---
Cumulative effect of change in
accounting for income taxes (Note 3) --- (256) ---
-------- -------- --------
Net income $4,480 $2,059 $1,123
======== ======== ========
Per common share:
Income before extraordinary item
and cumulative effect $2.04 $1.06 $ .48
Extraordinary item --- ( .06) --
Cumulative effect of change in
accounting for income taxes --- ( .11) ---
-------- -------- --------
Net income $2.04 $ .89 $ .48
======== ======== ========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
18
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AUGUST 26, 1995 AND AUGUST 27, 1994
(Dollars in thousands, except per share data)
ASSETS
1995 1994
----- -----
<S> <C> <C>
Current assets
Cash and cash equivalents $7,402 $7,137
Income tax recoverable --- 600
Notes and accounts receivable, less
allowance of $450 for doubtful
accounts 6,587 5,627
Merchandise inventories 44,064 44,749
Prepaid expenses 1,371 1,272
Deferred income taxes 4,211 4,036
-------- --------
Total current assets 63,635 63,421
Other assets 6,366 6,436
Property and equipment, at cost
Land 4,160 4,202
Buildings and improvements 65,983 62,453
Leasehold improvements 28,921 26,005
Equipment 89,356 92,165
-------- --------
188,420 184,825
Less accumulated depreciation and
amortization 104,420 99,479
-------- --------
Net Property and equipment 84,000 85,346
-------- --------
$154,001 $155,203
======== ========
</TABLE>
<PAGE>
<TABLE>
19
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AUGUST 26, 1995 AND AUGUST 27, 1994
(Dollars in thousands, except per share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
1995 1994
----- -----
<S> <C> <C>
Current liabilities
Accounts payable - trade $38,889 $36,318
Income taxes 1,027 407
Accrued liabilities
Insurance 5,521 5,027
Payroll 2,994 2,766
Taxes, other than income 2,352 2,434
Other 3,213 4,191
-------- --------
14,080 14,418
Long-term debt due within one year 3,553 3,341
-------- --------
Total current liabilities 57,549 54,484
Long-term debt 48,399 55,060
Deferred income taxes 5,276 5,495
Deferred other 2,046 2,579
Shareholders' equity
Serial preferred stock, without par
value: 300,000 shares authorized
none issued --- ---
Common stock, without par value
(stated value $2 per share):
6,000,000 shares authorized,
2,193,352 shares outstanding
(2,242,373 in 1994) 4,387 4,485
Capital in excess of stated value 680 434
Retained earnings 35,664 32,666
-------- --------
Total shareholders' equity 40,731 37,585
-------- --------
$154,001 $155,203
======== ========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
20
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED AUGUST 26, 1995, AUGUST 27, 1994, AND AUGUST 28, 1993
(Dollars in thousands)
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 4,480 $ 2,059 $ 1,123
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 12,551 12,311 11,562
Provision for ESOP 334 529 492
Deferred income taxes (394) 645 (549)
Equity in income of affiliates (93) (31) (46)
Loss (gain) on disposal of property
and equipment (553) 153 206
Changes in assets and liabilities
affecting operations:
Notes and accounts receivable (460) 968 70
Merchandise inventories 685 (430) 2,476
Prepaid expenses (99) 236 501
Accounts payable
and accrued liabilities 2,158 (114) 560
Income taxes 1,220 (143) 139
-------- -------- --------
Net cash provided by operating activities 19,829 16,183 16,534
Cash flows from investing activities
Expenditures for property
and equipment (12,079) (12,066) (14,376)
Proceeds from sale of property and
equipment 3,046 182 270
Other 163 (624) (714)
-------- -------- --------
Net cash used in investing activities (8,870) (12,508) (14,820)
Cash flows from financing activities
Proceeds from issuance of long-term debt 2,275 19,721 3,554
Payments of long-term debt (10,343) (20,853) (3,540)
Contributions to ESOP -- -- (15)
Payments for acquisitions of common shares (817) (1,342) (291)
Dividends paid (851) (834) (840)
Decrease in deferred other (958) (760) (455)
-------- -------- --------
Net cash used in financing activities (10,694) (4,068) (1,587)
Increase (decrease) in cash and cash -------- -------- --------
equivalents 265 (393) 127
Cash and cash equivalents at
beginning of year 7,137 7,530 7,403
Cash and cash equivalents at -------- -------- --------
end of year $ 7,402 $ 7,137 $ 7,530
======== ======== ========
Supplemental disclosures of cash flow
information
Cash paid during the year for:
Interest $ 4,480 $ 4,508 $ 4,632
Income taxes 1,756 939 991
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
21
<CAPTION>
SEAWAY FOOD TOWN, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED AUGUST 26, 1995, AUGUST 27, 1994 AND AUGUST 28, 1993
(Dollars in thousands, except per share data)
Capital
ESOP- in Excess Total
COMMON STOCK UNALLOCATED of Share-
----------------- --------------- Stated Retained holders'
Shares Amount Shares Amount Value Earnings Equity
------- ------ ------- ------- ----- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at August 29, 1992 2,389,593 $4,779 (76,152) $(1,028) $504 $32,449 $36,704
Net income 1,123 1,123
Purchase of common
shares for treasury (25,800) (51) (8) (232) (291)
Dividends received by ESOP (15) (15)
Allocation by ESOP 34,969 518 (26) 492
Dividends paid - $.36
per share (80) (840)
--------- ----- ------- ------ ---- ------ ------
Balance at August 28, 1993 2,363,793 4,728 (41,183) (525) 470 32,500 37,173
Net income 2,059 2,059
Purchase of common
shares for treasury (124,220) (248) (35) (1,059) (1,342)
Allocation by ESOP 41,183 525 (29) 496
Issuance of common
shares to ESOP 2,800 5 28 33
Dividends paid - $.36
per share (834) (834)
--------- ------ ------ ------ ---- ------ ------
Balance at August 27, 1994 2,242,373 4,485 0 0 434 32,666 37,585
Net income 4,480 4,480
Purchase of common
shares for treasury (82,421) (165) (21) (631) (817)
Issuance of common
shares to ESOP 33,400 67 267 334
Dividends paid - $.39
per share (851) (851)
--------- ------ ------- ------ ---- ------ ------
Balance at August 26, 1995 2,193,352 $4,387 0 $0 $680 $35,664 $40,731
========= ====== ======= ====== ==== ====== ======
See accompanying notes
</TABLE>
<PAGE>
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
BUSINESS -- The business of Seaway Food Town, Inc. and its consolidated
subsidiaries (the Company) consists of the sale and distribution of food,
drugs, and related products, principally through supermarkets and drugstores
predominately in northwest and central Ohio and southeast Michigan.
BASIS OF PRESENTATION -- The consolidated financial statements include the
accounts of Seaway Food Town, Inc. and all wholly-owned subsidiaries.
CASH AND CASH EQUIVALENTS -- The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be
cash equivalents. The carrying amount reported in the balance sheets for
cash equivalents approximates its fair value.
INVENTORIES -- Meat, produce and drug inventories are valued at the lower of
cost, using the first-in, first-out (FIFO) method, or market. All other
merchandise inventories are valued at the lower of cost, using the last-in,
first-out (LIFO) method, or market. Inventories have been reduced by
$18,157,000 and $17,576,000 at August 26, 1995 and August 27, 1994,
respectively, from amounts which would have been reported under the FIFO
method (which approximates current cost).
During 1995 and 1994, merchandise inventory quantities were reduced. These
reductions resulted in liquidation of the LIFO inventory quantities carried
at lower costs prevailing in prior years as compared with costs of 1995 and
1994 purchases, the effect of which increased consolidated net income by
approximately $89,000 ($.04 per share) in 1995 and $75,000 ($.03 per share)
in 1994.
DEPRECIATION AND AMORTIZATION -- Depreciation and amortization are provided
principally under the straight-line method at rates based upon the estimated
useful lives of the various classes of assets. Capital leases not involving
a purchase of the assets are amortized over the lease term.
ADVERTISING -- The Company expenses the costs of advertising as incurred.
Advertising expense was $4,029,000 in 1995, $3,704,000 in 1994 and
$4,160,000 in 1993.
PENSION -- The Company contributes to pension plans covering substantially
all employees. Pension costs include defined contributions based upon wages,
and specified amount per hour as required under collective bargaining
agreements. The Company's policy is to fund pension costs annually in the
amount accrued.
DEFERRED INCOME TAXES -- Deferred income taxes are provided on the asset and
liability method for all significant temporary differences between income
reported for financial statement purposes and taxable income.
NET INCOME PER COMMON SHARE -- Net income per common share is based upon the
weighted average number of common shares outstanding of 2,196,643 in 1995,
2,306,881 in 1994 and 2,332,016 in 1993. Unallocated shares held by the ESOP
were not considered outstanding.
<PAGE>
23
2. NOTES PAYABLE AND LONG-TERM DEBT
Long-term debt at August 26, 1995 and August 27, 1994 consisted of the
following (in thousands):
<TABLE>
<CAPTION>
1995 1994
------- ------
<S> <C> <C>
9.1% to 9.22% senior
notes payable to insurance
company, due 2005 $12,000 $12,000
8.15% to 8.75% mortgage
notes payable to insurance
companies, payments due
quarterly to 2002 2,024 2,357
6% to 9% mortgage
notes payable, payments
due annually to 2008 6,971 6,716
7.75% to 10.3% term
notes payable, payments
due quarterly and annually
to 1999 5,122 6,535
Revolving credit loan agree-
ments with banks, with
interest of 6.72% to 8.75% 17,600 22,700
Long-term lease obligations (see Note 5):
7.138% to 7.25% industrial
development revenue
bonds, payments due
annually to 2000. 1,265 1,465
Other, 5.72% to 13%,
payments due in varying
monthly amounts through
2004. 6,970 6,628
-------- --------
51,952 58,401
Less amount due within one
year. 3,553 3,341
-------- --------
$48,399 $55,060
======== ========
</TABLE>
The Company has four revolving credit loan agreements permitting borrowings
up to $35,000,000 in the aggregate. The loan agreements are due in fiscal
1997, at which time the borrowings are convertible into term notes payable
over four years. Interest is charged, at the Company's option, at the
current prime rates charged by the banks or 1.25% in excess of the current
LIBOR rate. The Company is required to pay a fee of .25% per annum on any
unused portion of the loan commitment. Under these agreements, the Company
had borrowed $17,600,000 and $22,700,000 at August 26, 1995 and August 27,
1994, respectively.
<PAGE>
24
The Company has entered into interest rate cap agreements in the management
of interest rate exposure. These transactions reduce the Company's exposure
to significant variations in interest rates. At August 26, 1995, a notional
amount of $20,000,000 was covered by these agreements at an average borrowing
rate of 9.375% through 1999. If the counterparties to these agreements fail
to perform, the Company would no longer be protected from interest rate
fluctuations by these agreements and could incur additional interest expense
as a result. However, the Company does not anticipate nonperformance by the
counterparties, since all of these agreements are with banks with which the
Company has revolving credit agreements and have right of offset.
The senior note agreements provide for repurchases of the notes, at either
the Company's or holder's option, in amounts not in excess of $4,000,000 in
1997 and $8,000,000 in 2000. In addition, the agreement allows for
prepayments, at the Company's option, subject to certain prepayment
provisions.
The senior notes and revolving credit loan agreements referred to above
include certain working capital, net worth and debt service covenants along
with restrictions on the payment of cash dividends. The restriction of
dividends is based on a percentage of income available for debt service above
debt service.
At August 26, 1995, the approximate undepreciated cost of property and
equipment subject to mortgages was $20,616,000.
In 1994 the Company recorded extraordinary losses from early extinguishment
of debt which consisted mainly of prepayment penalties and unamortized
financing fees amounting to $123,000 (net of $63,000 income tax benefit).
Annual maturities of long-term debt for each of the five fiscal years
subsequent to August 26, 1995 are as follows: 1996 - $3,553,000; 1997 -
$7,099,000; 1998 - $2,931,000; 1999 - $4,990,000; 2000 - $8,778,000.
At August 26, 1995, the carrying value of the long-term debt in aggregate,
excluding capitalized lease obligations, approximates its fair value due to
the significant amount of variable rate long-term debt. The fair value is
estimated using discounted cash flow analyses, based on the Company's current
incremental borrowing rates.
3. INCOME TAXES
Effective August 29, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." As
permitted by Statement 109, prior year financial statements have not been
restated to reflect the change in accounting method. The cumulative effect
as of August 29, 1993 of adopting Statement 109 decreased 1994 net income by
$256,000 or $.11 per share.
Under Statement 109, the asset and liability method is used in accounting for
income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Prior
to the adoption of Statement 109, income tax expense was determined using the
liability method prescribed by Statement 96, which is superseded by Statement
109.
<PAGE>
25
The provision (credit) for income taxes consists of the following (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Current:
Federal $2,263 $ 674 $1,091
State and local 846 225 38
--------- --------- ---------
3,109 899 1,129
Deferred:
Federal (132) 415 (618)
State and local (262) (26) 69
-------- --------- ---------
(394) 389 (549)
-------- --------- ---------
$2,715 $1,288 $ 580
======== ======== ========
</TABLE>
The consolidated effective tax rate differs from the statutory U.S. Federal
tax rate for the following reasons and by the following percentages:
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ -----
<S> <C> <C> <C>
Statutory U.S. Federal
tax rate 34.0% 34.0% 34.0%
Increase (reduction) in taxes
resulting from:
State and local income
taxes net of the related
reduction in federal
income taxes 5.9 4.2 1.5
Tax credits (2.2) (2.3) ---
Contribution of
merchandise ( .4) (1.1) (3.7)
Other .4 ( .2) 2.3
------ ------- -------
Effective tax rate 37.7% 34.6% 34.1%
====== ====== ======
</TABLE>
Significant components of the Company's deferred income tax assets and
liabilities as of August 26, 1995 and August 27, 1994 are as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Deferred income tax assets:
Accrued expenses $3,715 $3,221
Tax credit carryforwards 308 1,626
Expenses inventoried for tax purposes 873 913
Other 762 704
------- ------
$5,658 $6,464
======= ======
Deferred income tax liabilities:
Excess tax depreciation $5,565 $6,464
Deferred project costs 1,002 1,259
Other 156 200
------- ------
$6,723 $7,923
======= ======
</TABLE>
<PAGE>
26
The above are reflected in the balance sheets as of August 26, 1995 and
August 27, 1994 as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Current deferred income tax asset $4,211 $4,036
======= ======
Noncurrent deferred income tax liability $5,276 $5,495
======= ======
</TABLE>
Under the provisions of Statement 96, the 1993 deferred tax provision by
major element was attributable to the following (in thousands):
Tax credit carryforwards $(631)
Deferred project costs 552
Self insurance accruals (378)
Other accrued expenses (181)
Closed store accruals (115)
Compensation 106
ESOP contribution ( 94)
Expenses inventoried for tax purposes 87
Prepaid insurance 84
Other 21
-------
$(549)
=======
The Company has alternative minimum tax credit carryforwards of $308,000
which can be applied against regular tax liabilities in future years.
4. EMPLOYEE BENEFIT PLANS
For eligible nonunion employees, the Company has a 401(k) salary deferral
plan which permits employee salary deferrals of up to 15%, but not to exceed
the maximum annual allowable amount for income tax purposes, and an Employee
Stock Ownership Plan (ESOP). The Company used $2,000,000 of excess pension
plan assets returned to the Company upon termination of the Defined Benefit
Pension Plan in fiscal 1988 to advance fund the ESOP. The amount of shares
held by the ESOP which had not been allocated to plan participants were
considered to be treasury shares and were shown as a reduction of
Shareholders' Equity. All such shares were allocated in fiscal 1994.
Allocations to the participants in the ESOP are not less than 2 1/2% of total
annual compensation. Company matching contributions to the 401(k) plan are
50% of employee salary deferral contributions. The Company matching
contributions are not made on salary deferrals in excess of 6% of an
employee's compensation. The Company's expense for these plans was $946,000
in 1995, $832,000 in 1994, and $991,000 in 1993.
In addition, the Company contributes to several area-wide defined benefit
union pension plans established under collective bargaining agreements. The
aggregate costs for these plans amounted to $2,293,000 in 1995, $2,428,000
in 1994, and $2,963,000 in 1993. Under the Multi-employer Pension Plan
Amendments Act of 1980, the Company could become liable for its proportionate
share of unfunded vested benefits, if any, in the event of the termination
of, or its withdrawal or partial withdrawal from, the union-sponsored plans
to which the Company makes contributions. The 1993 expense is higher
principally because of the withdrawal liability related to one of the union
sponsored pension plans.
<PAGE>
27
5. LEASE COMMITMENTS
Capital leases
The cost and accumulated amortization of property leased under long-term
noncancellable leases are as follows (in thousands):
1995 1994
-------- --------
Land $ 256 $ 256
Buildings 7,995 7,988
Equipment 6,895 5,295
---------- ----------
15,146 13,539
Less accumulated
amortization 7,874 6,542
-------- --------
$ 7,272 $ 6,997
======== ========
Future minimum lease payments under capital leases together with the present
value of net minimum lease payments as of August 26, 1995 are as follows (in
thousands):
1996 $ 2,415
1997 2,174
1998 1,814
1999 1,362
2000 1,059
Later years 1,457
--------
Total minimum lease payments 10,281
Less amount representing interest 2,046
--------
Present value of net minimum lease
payments (included in long-term
debt at August 26, 1995 -- see
Note 2) $ 8,235
=======
OPERATING LEASES
Minimum annual rentals for facilities leased under operating leases
aggregate approximately $40,084,000 payable as follows (in thousands):
1996 $ 5,242
1997 5,170
1998 4,757
1999 4,601
2000 4,182
Later years 16,132
-------
$40,084
=======
The leases expire at various dates from 1996 to 2010 and substantially all
are renewable for one or more successive five year periods, in some cases at
slightly higher rentals.
<PAGE>
28
Total rent expense attributable to operating leases amounted to approximately
$5,915,000 in 1995, $6,130,000 in 1994, and $6,709,000 in 1993 and included
provisions for additional rentals of $234,000 in 1995, $222,000 in 1994, and
$256,000 in 1993 based upon gross sales in excess of specified amounts.
The Company entered into capital leases amounting to approximately $1,619,000
in 1995, $615,000 in 1994 and $1,844,000 in 1993.
6. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial data for the years ended August 26, 1995, and August
27, 1994 are presented below (in thousands of dollars, except per share
amounts):
<TABLE>
<CAPTION>
First Second Third Fourth
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales:
1995 $136,988 $143,953 $139,160 $139,143
1994 132,500 139,404 136,191 138,098
Gross profit:
1995 $34,344 $36,501 $34,990 $35,281
1994 32,567 34,444 34,663 35,214
Income (loss)
before extra-
ordinary item
and cumula-
tive effect:
1995 1,109 1,534 589 1,248
1994 (249) 974 963 750
Net income
(loss):
1995 1,109 1,534 589 1,248
1994 (505) 974 893 697
Income (loss)
before extra-
ordinary item
and cumula-
tive effect per
common share:
1995 .50 .70 .27 .57
1994 (.11) .42 .42 .33
Net income (loss)
per common
share:
1995 .50 .70 .27 .57
1994 (.22) .42 .39 .30
</TABLE>
<PAGE>
<TABLE>
29
<CAPTION>
INVESTOR INFORMATION
MARKET PRICE OF COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Common Stock Price Range
Common Divi-
Fiscal dends paid
Quarter High Low (Per share)
------- ------ ------ -----------
<S> <C> <C> <C>
1994 1st 13 1/4 11 .09
2nd 12 3/4 10 1/2 .09
3rd 11 1/2 9 1/2 .09
4th 10 1/2 9 1/2 .09
1995 1st 10 3/4 9 1/2 .09
2nd 13 9 1/2 .10
3rd 15 1/2 13 .10
4th 16 1/4 14 1/2 .10
The price is the high and low price on the NASDAQ
National Market. The Company's NASDAQ ticker symbol
is "SEWY". As of August 26, 1995, the approximate
number of record holders of common stock was 519.
</TABLE>
<PAGE>
30
EXHIBIT 22
SEAWAY FOOD TOWN, INC.
SUBSIDIARIES OF REGISTRANT
At the fiscal year ended August 26, 1995 the Company had the
following subsidiaries, all of which are included in the consolidated
financial statements:
<TABLE>
<CAPTION>
State in
Percentage of voting which
Name Securities owned incorporated
- ------------------------- -------------------- ------------
<S> <C> <C>
Northern Distributing Co. 100 Ohio
Gruber's Food Town, Inc. 100 Michigan
Tracy & Avery Food Town, Inc. 100 Ohio
Fjord Properties, Inc. 100 Michigan
Second Fjord Properties, Inc. 100 Ohio
Third Fjord Properties, Inc. 100 Ohio
Third Fjord Properties Community
Urban Redevelopment Corp. 100 Ohio
Fifth Fjord Properties, Inc. 100 Michigan
Fifth Fjord Properties of
Ohio, Inc. 100 Ohio
Seaway Properties, Inc. 100 Ohio
Custer Pharmacy, Inc. 75 Michigan
Buckeye Discount, Inc. 100 Ohio
Seaway Milk Processing, Inc. 100 Ohio
Monroe Acquisition Corporation 100 Michigan
JRHW6 Corporation 100 Michigan
The following affiliate is accounted for on the equity basis:
Port Clinton Realty Co.
(Partnership) 39 N/A
</TABLE>
<PAGE>
31
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report
[Form 10-K] of Seaway Food Town, Inc. of our report dated October
13, 1995, included in Exhibit 13 to Form 10-K.
Our audits also included the financial statement schedule of Seaway
Food Town, Inc. listed in Item 14(a). This schedule is the
responsibility of the Company's management. Our responsibility is
to express an opinion based on our audits. In our opinion, the
financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth
therein.
/s/ ERNST & YOUNG LLP
Toledo, Ohio
October 13, 1995
<PAGE>
EXHIBIT 99
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-26-1995
<PERIOD-END> AUG-26-1995
<CASH> 7,402
<SECURITIES> 0
<RECEIVABLES> 6,587
<ALLOWANCES> 450
<INVENTORY> 44,064
<CURRENT-ASSETS> 63,635
<PP&E> 188,420
<DEPRECIATION> 104,420
<TOTAL-ASSETS> 154,001
<CURRENT-LIABILITIES> 57,549
<BONDS> 48,399
<COMMON> 4,387
0
0
<OTHER-SE> 36,344
<TOTAL-LIABILITY-AND-EQUITY> 154,001
<SALES> 559,244
<TOTAL-REVENUES> 559,244
<CGS> 418,128
<TOTAL-COSTS> 418,128
<OTHER-EXPENSES> 131,267
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,469
<INCOME-PRETAX> 7,195
<INCOME-TAX> 2,715
<INCOME-CONTINUING> 4,480
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,480
<EPS-PRIMARY> 2.04
<EPS-DILUTED> 2.04
