<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 1994
AMERICAN STORES COMPANY
____________________________________________________________________________
(Exact name of registrant as specified in charter)
Delaware 1-5392 87-0207226
____________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
709 East South Temple Street, Salt Lake City, Utah 84102
____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 539-0112
____________________________________________________________________________
Page 1 of 12
Exhibit Index on Page 4
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Item 5. Other Events
On March 1, 1994, the Company announced its 1993 fourth quarter and fiscal
year sales and earnings. A copy of the Company's press release dated March
1, 1994 is attached hereto as Exhibit 1 and is incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
1. Press Release dated March 1, 1994, issued by American Stores Company.
Page 2 of 12
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SIGNATURE
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.
Dated: March 8, 1994
AMERICAN STORES COMPANY
By: /S/ Kathleen E. McDermott
_________________________
Name: Kathleen E. McDermott
Title: Executive Vice President,
General Counsel and
Assistant Secretary
Page 3 of 12
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EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Title Page
1. Press Release dated March 1, 1994, issued 5
by American Stores Company.
Page 4 of 12
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News Release American Stores Company
Investor and Media Contact: Meredith C. Anderson
Vice President - Public, Government
and Investor Relations
801-539-0112
AMERICAN STORES COMPANY ANNOUNCES
1993 FOURTH QUARTER AND FISCAL YEAR RESULTS
SALT LAKE CITY, UTAH-March 1, 1994-American Stores Company (NYSE:ASC) today
announced 1993 fourth quarter earnings of $1.52 per share before non-
recurring charges compared to $1.35 per share in 1992. The fourth quarter
included non-recurring items totaling $0.09 per share, representing costs
associated with the January 1994 earthquake in southern California, legal
settlement related to meat products in California, and severance programs
stemming from the Company's expense reduction programs. Reported net
earnings were $101.7 million, or $1.43 per share.
Earnings for the fifty-two week fiscal year before the non-recurring charges
in each year (as described on page 10 of this press release) were $3.60 per
share in 1993 compared to $3.16 per share in 1992. Reported net earnings
were $247.1 million, or $3.48 per share, in 1993 and $207.5 million, or $2.96
per share, in 1992.
Total sales were $4.9 billion in the fourth quarter and $18.8 billion for the
full year. Like-stores sales, or sales from stores that have been open at
least one year, declined 0.4 percent in the year's final quarter, which
reflects an improvement from the earlier quarters of 1993. For the 52 weeks,
like-store sales fell one percent.
Operating profit in the 1993 fourth quarter, before non-recurring costs
related to operations of $7.6 million, increased to $240.7 million (4.94
percent of sales) from $220.3 million (4.54 percent of sales) in 1992. For
the year, operating profit before the non-recurring items improved to $649.5
million (3.46 percent of sales) from $623.3 million (3.27 percent of sales).
The operating profit figures for both the current and previous years include
an annual charge of approximately $79 million, or nearly $1 per share,
related to the Company's purchase accounting amortization. Operating profit
was $728.7 million (3.88 percent of sales) for the fiscal year and $260.5
million (5.35 percent of sales) for the fourth quarter, before this
amortization. The Company experienced lower inflation in its grocery and
drug stores throughout the year, which influenced the LIFO calculation. For
1993, the LIFO charge was $7.2 million, down from the prior year's charge of
$16.5 million. The LIFO credit in the fourth quarter was $22.8 million,
slightly lower than the $23.5 million credit recorded in the fourth quarter
of 1992.
Generally lower interest rates, in part resulting from the Company's
refinancings in 1993, helped lower total interest expense to $189.8 million
in 1993 from $214.4 million in 1992. At the fiscal year end, American Stores
Company's total debt was $2.2 billion, down $80.3 million from the prior year
end. The debt to total capital ratio improved to 55.4 percent at year end,
down sharply from 59.3 percent at the end of 1992.
Page 5 of 12
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Victor L. Lund, president and chief executive officer, said "We are extremely
pleased with the 1993 fiscal year results, and especially the performance
turned in by our associates in the fourth quarter. In retail, the fourth
quarter is key, and our team truly rose to the occasion."
Each of the Company's three operating segments achieved higher profits in the
1993 fourth quarter compared to the prior year. In particular, fourth
quarter operating profit before non-recurring costs was up 19.0 percent over
1992 in the western food operations. "The fourth quarter like-stores sales
in our southern California Lucky operations were the highest we have recorded
since the second quarter of 1990, reflecting the benefit of the price program
we initiated at the beginning of the year. Consumers appreciate Lucky's
consistent everyday low price strategy, especially in these tough economic
times." said Mr. Lund.
Mr. Lund also praised each of the Company's operations for their expense
management in the fourth quarter. Operating expenses in the final quarter of
1993 were lower than the previous year as a percentage of sales. "Our teams
have aggressively attacked expenses at all levels of the organization. This
approach is important to our current success. In fact, it is essential to
our survival in this extremely competitive retail environment."
The Company's ambitious capital expenditure plan was fulfilled in 1993.
Total capital expenditures for the fifty-two week year were $652.9 million,
with 39 new stores opened and 233 remodels completed. Additionally, the
Company acquired and integrated 55 Reliable drug stores and 4 Thrifty drug
stores during the year. Mr. Lund reiterated the Company's commitment to its
capital spending program in 1994.
The Omnibus Budget Reconciliation Act of 1993 increased the Company's tax
rate by one percent. The fourth quarter impact of this increase totaled two
cents per share, and for the year, the impact totaled thirteen cents per
share, including a one-time deferred tax adjustment of six cents per share.
American Stores Company is one of the nation's largest food and drug
retailers. It operates 1,695 stores in 27 states. Its principal retail
operations include Jewel Food Stores, headquartered in Melrose Park,
Illinois; Acme Markets, headquartered in Malvern, Pennsylvania; Star Market,
headquartered in Cambridge, Massachusetts; Lucky Stores, headquartered in San
Leandro and Buena Park, California; Jewel Osco, headquartered in Albuquerque,
New Mexico; Osco Drug, headquartered in Oak Brook, Illinois; and Sav-on
drugs, headquartered in Anaheim, California.
Page 6 of 12
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AMERICAN STORES COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands)
(Unaudited)
<TABLE>
13 Weeks Ended 52 Weeks Ended
Jan. 29, Jan. 30, Jan. 29, Jan. 30,
1994 1993 (1) 1994 1993 (1)
__________ __________ __________ ___________
<S> <C> <C> <C> <C>
Sales $4,870,562 $4,850,275 $18,763,439 $19,051,180
Cost of sales (3,566,895) (3,558,536) (13,808,403) (14,059,238)
LIFO provision 22,796 23,451 (7,204) (16,549)
__________ __________ ___________ ___________
Gross profit 1,326,463 1,315,190 4,947,832 4,975,393
27.23% 27.12% 26.37% 26.12%
Operating expenses (1,093,378) (1,094,914) (4,305,950) (4,352,079)
-22.45% -22.57% -22.95% -22.84%
__________ __________ ___________ ___________
Operating profit 233,085 220,276 641,882 623,314
4.79% 4.54% 3.42% 3.27%
Interest expense (45,927) (50,759) (189,773) (214,394)
Gains (losses) on asset sales, other (2) (4,373) 20 28,696 (30,639)
__________ __________ ___________ ___________
Earnings before income taxes and
extraordinary item 182,785 169,537 480,805 378,281
Federal & state income taxes (81,111) (74,792) (218,715) (170,815)
__________ __________ ___________ ___________
Earnings before extraordinary item $101,674 $94,745 $262,090 $207,466
Extraordinary item - early retirement
of debt, net of taxes (3) 0 0 (15,000) 0
__________ __________ ___________ ___________
Net earnings $101,674 $94,745 $247,090 $207,466
========= ========= ========== ==========
Average shares outstanding 71,240 70,777 71,101 70,157
Earnings per share before extraordinary
item $1.43 $1.35 $3.69 $2.96
Extraordinary item 0 0 (0.21) 0
__________ __________ ___________ ___________
Net earnings per share $1.43 $1.35 $3.48 $2.96
========= ========= ========== ==========
EPS before non-recurring items (4) $1.52 $1.35 $3.60 $3.16
========= ========= ========== ==========
Dividends per share $0.200 $0.175 $0.800 $0.725
========= ========= ========== ==========
(1) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," as if effective at the beginning of fiscal 1989. The restatement increased
previously reported 1992 fourth quarter and year-to-date earnings by $0.02 per share.
(2) Includes non-recurring expenses associated with the earthquake in Southern California of $3,600
in the 13 weeks and 52 weeks ended 1/29/94.
(3) A pre-tax charge of $25 million for early retirement of debt which was reported in "Gains
(losses) on asset sales, other" in first quarter has been reclassified as an extraordinary item.
(4) See page 10 for details.
Page 7 of 12
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AMERICAN STORES COMPANY
SALES AND OPERATING PROFIT DETAIL
(Amounts in thousands)
(Unaudited)
<TABLE>
13 Weeks Ended 52 Weeks Ended
Jan. 29, Jan. 30, Jan. 29, Jan. 30,
1994 1993 (1) 1994 1993 (1)
__________ __________ ___________ ___________
<S> <C> <C> <C> <C>
Like Store Sales:
Eastern food operations -1.24% -1.79%
Western food operations -0.92% -1.86%
Drug store operations 1.68% 1.96%
__________ ___________
Total -0.42% -1.00%
========== ===========
Sales:
Eastern food operations $1,848,025 $1,870,702 -1.21% $ 7,246,608 $ 7,387,617 -1.91%
Western food operations 1,801,070 1,764,676 2.06% 7,182,877 7,134,502 0.68%
Drug store operations 1,218,312 1,142,129 6.67% 4,321,923 4,001,895 8.00%
Other 3,155 72,768 12,031 270,269
__________ __________ ___________ ___________
Comparable 4,870,562 4,850,275 0.42% 18,763,439 18,794,283 -0.16%
Disposed of stores 0 0 0 256,897
__________ __________ ___________ ___________
Total sales $4,870,562 $4,850,275 0.42% $18,763,439 $19,051,180 -1.51%
========== ========== =========== ===========
Operating Profit: (2)
Eastern food operations $88,907 $87,149 2.02% $267,948 $269,154 -0.45%
Western food operations 70,716 62,378 13.37% 248,648 256,670 -3.13%
Drug store operations 68,047 67,679 0.54% 197,041 204,964 -3.87%
LIFO 22,796 23,451 (7,204) (16,549)
Purchase accounting amortization (19,786) (19,646) (79,245) (79,472)
Other 2,405 (735) 14,694 3,002
__________ __________ ___________ ___________
Comparable 233,085 220,276 5.81% 641,882 637,769 0.64%
Disposed of stores 0 0 0 (14,455)
__________ __________ ___________ ___________
Total operating profit $ 233,085 $ 220,276 5.81% $ 641,882 $ 623,314 2.98%
========== ========== =========== ===========
NOTES:
______
Eastern food operations include Acme Markets, Jewel Food Stores and Star Market.
Western food operations include Lucky Northern California Division, Lucky Southern California
Division and Jewel Osco New Mexico.
Drug store operations include Osco Drug and Sav-on.
(1) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
(2) Includes non-recurring expenses associated with legal settlement related to meat products
in California and severance programs stemming from the Company's expense reduction programs
($3,400 Eastern food, $3,500 Western food, $700 Drug store) in the 13 weeks and 52 weeks
ended 1/29/94.
Page 8 of 12
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AMERICAN STORES COMPANY
OPERATING OVERVIEWS
(Amounts in thousands)
(Unaudited)
<TABLE>
Eastern Food Operations
_______________________
13 Weeks Ended 52 Weeks Ended
Jan. 29, 1994 Jan. 30, 1993 Jan. 29, 1994 Jan. 30, 1993
_____________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
Sales $1,848,025 $1,870,702 $7,246,608 $7,387,617
Gross Profit 475,971 480,661 1,830,732 1,855,194
% sales 25.76% 25.69% 25.26% 25.11%
Operating Expenses 387,064 393,512 1,562,784 1,586,040
% sales 20.94% 21.04% 21.57% 21.47%
_____________ _____________ _____________ _____________
Operating Profit $88,907 $87,149 $267,948 $269,154
% sales 4.81% 4.66% 3.70% 3.64%
============= ============= ============= =============
Western Food Operations
_______________________
13 Weeks Ended 52 Weeks Ended
Jan. 29, 1994 Jan. 30, 1993 Jan. 29, 1994 Jan. 30, 1993
_____________ _____________ _____________ _____________
Sales $1,801,070 $1,764,676 $7,182,877 $7,134,502
Gross Profit 487,967 471,873 1,903,857 1,888,946
% sales 27.09% 26.74% 26.51% 26.48%
Operating Expenses 417,251 409,495 1,655,209 1,632,276
% sales 23.17% 23.21% 23.04% 22.88%
_____________ _____________ _____________ _____________
Operating Profit $70,716 $62,378 $248,648 $256,670
% sales 3.93% 3.53% 3.46% 3.60%
============= ============= ============= =============
Drug Store Operations
_____________________
13 Weeks Ended 52 Weeks Ended
Jan. 29, 1994 Jan. 30, 1993 Jan. 29, 1994 Jan. 30, 1993
_____________ _____________ _____________ _____________
Sales $1,218,312 $1,142,129 $4,321,923 $4,001,895
Gross Profit 338,481 326,160 1,216,341 1,151,119
% sales 27.78% 28.56% 28.14% 28.76%
Operating Expenses 270,434 258,481 1,019,300 946,155
% sales 22.20% 22.63% 23.58% 23.64%
_____________ _____________ _____________ _____________
Operating Profit $68,047 $67,679 $197,041 $204,964
% sales 5.59% 5.93% 4.56% 5.12%
============= ============= ============= =============
Page 9 of 12
</TABLE>
<PAGE>
AMERICAN STORES COMPANY
(Amounts in thousands, except store count)
(Unaudited)
CONSOLIDATED CONDENSED BALANCE SHEETS
Jan. 29, 1994 Jan. 30, 1993 (1)
_____________ _____________
Assets
______
Inventory $1,539,610 $1,576,499
Other current assets 456,199 439,422
Property, plant and equipment, net 2,704,040 2,441,573
Property under capital leases, net 97,127 108,623
Goodwill, net 1,827,334 1,880,821
Other assets 303,124 316,855
_____________ _____________
$6,927,434 $6,763,793
============= =============
Liabilities and Shareholders' Equity
____________________________________
Current maturities of long-term
debt and capital leases $76,538 $64,268
Accounts payable 958,272 958,083
Other current liabilities 1,019,289 892,355
Long-term debt, less current
maturities 2,003,866 2,086,464
Obligations under capital leases,
less current maturities 87,595 97,584
Other liabilities 1,039,589 1,121,025
Shareholders' equity 1,742,285 1,544,014
_____________ _____________
$6,927,434 $6,763,793
============= =============
STORE COUNT
<TABLE>
Beg. of Stores Stores End of
Quarter Ended January 29, 1994 Quarter Opened Closed Quarter Remodels
______________________________ _______ ______ ______ _______ ________
<S> <C> <C> <C> <C> <C>
Eastern food operations* 475 3 (6) 472 18
Western food operations 438 0 (2) 436 26
Drug store operations* 799 7 (19) 787 91
_______ ______ ______ _______ ________
Total 1,712 10 (27) 1,695 135
======= ====== ====== ======= ========
Beg. of Stores Stores 1993 Year-
Year-to Date January 29, 1994 Year Opened Closed to-date Remodels
_____________________________ _______ ______ ______ _______ ________
Eastern food operations* 490 10 (28) 472 41
Western food operations 441 4 (9) 436 55
Drug store operations* 741 84 ** (38) 787 137
_______ ______ ______ _______ ________
Total 1,672 98 (75) 1,695 233
======= ====== ====== ======= ========
*Includes 148 jointly operated Jewel Osco combination stores which are counted in both the eastern
food and drug store totals.
**Includes the acquisition of 55 Reliable drug stores and 4 Thrifty drug stores.
(1) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
Page 10 of 12
</TABLE>
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AMERICAN STORES COMPANY
CONSOLIDATED CONDENSED CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
52 Weeks Ended
Jan. 29, 1994 Jan. 30, 1993 (1)
_____________ _____________
<S> <C> <C>
Cash Flows From Operating Activities:
_____________________________________
Net earnings $247,090 $207,466
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 384,307 370,439
Net loss on asset sales 16,060 34,227
Changes in operating assets and liabilities (2) 42,989 (141,350)
_____________ _____________
Net cash provided by operating activities 690,446 470,782
_____________ _____________
Cash Flows From Investing Activities:
_____________________________________
Proceeds from the sale of assets 38,007 478,223
Capital expenditures (3) (593,785) (386,106
_____________ _____________
Net cash (used in) provided by investing activities (555,778) 92,117
_____________ _____________
Cash Flows From Financing Activities:
_____________________________________
Proceeds from long term borrowing 100,000 401,602
Net reduction in borrowing under existing facilities (2) (180,317) (951,863)
Cash dividends (56,905) (51,007)
Other changes in equity 8,086 21,125
_____________ _____________
Net cash used in financing activities (129,136) (580,143)
_____________ _____________
Net Increase (Decrease) in Cash and Cash Equivalents 5,532 (17,244)
Cash and Cash Equivalents at Beginning of Period 54,048 71,292
_____________ _____________
Cash and Cash Equivalents at End of Period $59,580 $54,048
============= =============
(1) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
(2) Amounts reflected for 1992 are net of effects of the sale of 74 Jewel Osco combination
stores.
(3) Total capital expenditures, including the present value of new leases, were $154.2
million for the quarter and $652.9 million for the year-to-date ended January 29, 1994
and $190.5 million for the quarter and $476.6 million for the year-to-date ended
January 30, 1993.
Page 11 of 12
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AMERICAN STORES COMPANY
RECONCILIATION OF NON-RECURRING ITEMS
(Unaudited)
<TABLE>
1993
______________________________________________________
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net earnings per share $0.59 $0.82 $0.64 $1.43 $3.48
Extraordinary item, early retirement
of debt 0.21 0.21
Resolution of the "Rule of 80"
litigation (0.39) (0.39)
Miscellaneous one-time charges 0.12 0.12
FAS109: deferred tax adjustment 0.06 0.06
FAS109: increased tax rate applied
retroactively to prior quarters 0.03 0.03
Earthquake, severance, legal settlement 0.09 0.09
_______ _______ _______ _______ _______
Earnings per share before non-recurring
items $0.53 $0.82 $0.73 $1.52 $3.60
======= ======= ======= ======= =======
1992 (1)
______________________________________________________
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net earnings per share $0.26 $0.73 $0.62 $1.35 $2.96
Loss on sale of 74 Jewel-Osco stores 0.20 0.20
_______ _______ _______ _______ _______
Earnings per share before non-recurring
items $0.46 $0.73 $0.62 $1.35 $3.16
======= ======= ======= ======= =======
(1) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
Page 12 of 12
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