SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended April 18, 1998
Commission file number 1-12353
DOMINICK'S SUPERMARKETS, INC.
(Exact name of registrant as specified in charter)
Delaware 94-3220603
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
505 Railroad Avenue
Northlake, Illinois 60164
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 562-1000
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 at least the past 90 days. YES [X] NO [ ].
At June 1, 1998 there were 18,620,493 shares of Common Stock
outstanding and 2,861,354 shares of Non-Voting Common Stock
outstanding.
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of
April 18, 1998 (unaudited) and November 1, 1997........... 1
Consolidated Statements of Operations for the 12
weeks ended April 18, 1998 and April 19, 1997
(unaudited)............................................... 2
Consolidated Statements of Operations for the 24 weeks ended
April 18, 1998 and April 19, 1997 (unaudited)............. 3
Consolidated Statements of Cash Flows for the 24 weeks ended
April 18, 1998 and April 19, 1997 (unaudited)............. 4
Notes to Consolidated Financial Statements.................. 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ............................... 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................... 10
Item 2. Changes in Securities....................................... 10
Item 3. Defaults Upon Senior Securities............................. 10
Item 4. Submission of Matters to a Vote of Security Holders......... 10
Item 5. Other Information........................................... 10
Item 6. Exhibits and Reports on Form 8-K............................ 10
Signatures........................................................... 11
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
DOMINICK'S SUPERMARKETS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
April 18, 1998 November 1, 1997
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 19,978 $ 22,034
Receivables, net 18,510 18,241
Inventories 211,057 240,575
Prepaid expenses and other 33,512 39,656
Total current assets 283,057 320,506
Property and equipment, net 438,814 418,158
Other assets:
Deferred financing costs, net 3,694 3,694
Goodwill, net 370,679 375,312
Other 29,312 31,090
Total other assets 403,685 410,096
Total assets $ 1,125,556 $ 1,148,760
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 184,792 $ 228,969
Accrued payroll and related liabilities 30,941 35,906
Taxes payable 36,858 20,852
Other accrued liabilities 63,347 82,274
Current portion of long-term debt 345 377
Current portion of capital lease
obligations 15,429 14,147
Total current liabilities 331,712 382,525
Long-term debt:
Bank credit facilities and other 434,658 446,777
Capital lease obligations 157,182 140,032
Deferred income taxes and other liabilities 72,282 62,795
Stockholders' equity:
Common Stock, $.01 par value 50,000,000
shares authorized, 18,586,296 issued and
outstanding at April 18, 1998 and
17,851,891 at November 1, 1997 186 178
Non-Voting Common Stock, $.01 par value,
10,000,000 shares authorized, 2,861,354
shares issued and outstanding at
April 18, 1998 and 3,515,168 at
November 1, 1997 29 35
Additional paid-in capital 205,812 205,464
Retained deficit (76,305) (89,046)
Total stockholders' equity 129,722 116,631
Total liabilities and stockholders'
equity $ 1,125,556 $ 1,148,760
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
DOMINICK'S SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
12 Weeks 12 Weeks
Ended Ended
April 18, 1998 April 19, 1997
<S> <C> <C>
Sales $ 527,630 $ 583,455
Cost of sales 388,852 442,427
Gross profit 138,778 141,028
Selling, general and
administrative expenses 118,037 119,219
Operating income 20,741 21,809
Interest expense 12,936 13,765
Income before income taxes 7,805 8,044
Income tax expense 4,144 4,163
Net income $ 3,661 $ 3,881
Earnings Per Share
Basic earnings per share $ 0.17 $ 0.18
Diluted earnings per share $ 0.15 $ 0.18
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
DOMINICK'S SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
24 Weeks 24 Weeks
Ended Ended
April 18, 1998 April 19, 1997
<S> <C> <C>
Sales $ 1,116,072 $ 1,186,378
Cost of sales 822,797 903,043
Gross profit 293,275 283,335
Selling, general and
administrative expenses 242,501 238,231
Operating income 50,774 45,104
Interest expense 26,261 26,676
Income before income taxes 24,513 18,428
Income tax expense 11,772 9,361
Net income $ 12,741 $ 9,067
Earnings Per Share
Basic earnings per share $ 0.59 $ 0.42
Diluted earnings per share $ 0.53 $ 0.41
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
DOMINICK'S SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
24 Weeks 24 Weeks
Ended Ended
April 18, 1998 April 19, 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $ 12,741 $ 9,067
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 28,996 25,389
Amortization of deferred financing costs 329 516
Gain on disposal of assets (236) (77)
Changes in operating assets
and liabilities:
Receivables (269) (8,544)
Inventories 29,518 (14,316)
Prepaid expenses and other 3,246 (926)
Accounts payable (44,177) (2,592)
Accrued liabilities and taxes payable 2,900 22,511
Total adjustments 20,307 21,961
Net cash provided by operating activities 33,048 31,028
Cash flows from investing activities:
Capital expenditures (39,709) (37,490)
Proceeds from sale of assets and other 929 120
Net cash used in investing activities (38,780) (37,370)
Cash flows from financing activities:
Principal payments for long-term debt and
capital lease obligations (7,146) (6,901)
Proceeds from sale-leaseback of assets 22,800 9,844
Decrease in revolving debt (12,000) (2,000)
Proceeds from issuance of capital stock 351 --
Redemption of preferred stock -- (50,780)
Other (329) 308
Net cash provided by (used in)
financing activities 3,676 (49,529)
Net decrease in cash and cash equivalents (2,056) (55,871)
Cash and cash equivalents (including $50.8
million of cash reserved for preferred stock
redemption in 1997) at beginning of period 22,034 83,515
Cash and cash equivalents at end of period $ 19,978 $ 27,644
<FN>
See accompanying notes.
</TABLE>
<PAGE>
DOMINICK'S SUPERMARKETS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated balance sheet of Dominick's Supermarkets, Inc. (together
with its subsidiaries, the "Company") as of April 18, 1998, and the
consolidated statements of operations and cash flows for the 12 week and
24 week periods ended April 18, 1998 and April 19, 1997 are unaudited, but
include all adjustments which the Company considers necessary for a fair
presentation of its consolidated financial position, results of operations
and cash flows for these periods. These interim financial statements do not
include all disclosures required by generally accepted accounting principles
and, therefore, should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended November 1, 1997. Results of operations for interim periods
are not necessarily indicative of the results for a full fiscal year.
The Company uses a 52-53 week fiscal year ending on the Saturday closest to
October 31. The Company operates supermarkets in Chicago, Illinois, and its
suburbs. The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. The Company has no operations other
than those of its subsidiaries.
Inventories
Inventories are stated at the lower of cost, primarily using the last-in,
first-out (LIFO) method, or market. If inventories had been valued using
replacement cost, inventories would have been higher by $4,317,000 and
$3,855,000 at April 18, 1998 and November 1, 1997, respectively, and gross
profit and operating income would have been greater by $462,000, $231,000,
$1,208,000 and $604,000 for the 24 weeks and 12 weeks ended April 18, 1998 and
April 19, 1997, respectively.
<PAGE>
Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which requires the presentation of both basic and
diluted earnings per share. Under Statement 128, the dilutive effect of stock
options and warrants are excluded from the calculation of basic earnings per
share but continue to be included in the calculation of diluted earnings per
share. The following table sets forth the computation of basic and diluted
earnings per share (dollars and share information in thousands):
<TABLE>
12 Weeks 24 Weeks 12 Weeks 24 Weeks
Ended Ended Ended Ended
April 18, 1998 April 19, 1997
<S> <C> <C> <C> <C>
Net Income $ 3,661 $ 12,741 $ 3,881 $ 9,067
Weighted average common
shares outstanding
(share base for basic
earnings per share) 21,421 21,417 21,359 21,359
Effect of potentially
dilutive securities 2,912 2,822 758 759
Share base for diluted
earnings per share 24,333 24,239 22,117 22,118
Basic earnings per share $ .17 $ .59 $ .18 $ .42
Diluted earnings per share $ .15 $ .53 $ .18 $ .41
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The following table sets forth the historical results of the Company for the
12 weeks ended April 18, 1998, the 12 weeks ended April 19, 1997, the 24 weeks
ended April 18, 1998 and for the 24 weeks ended April 19, 1997, expressed in
millions of dollars and as a percentage of sales.
<TABLE>
12 Weeks Ended 24 Weeks Ended
April 18, 1998 April 19, 1997 April 18, 1998 April 19, 1997
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $527.6 100.0% $583.5 100.0% $1,116.1 100.0% $1,186.4 100.0%
Gross profit 138.7 26.3% 141.0 24.2% 293.3 26.3% 283.3 23.9%
Selling, general
and administrative
expenses 118.0 22.4% 119.2 20.4% 242.5 21.7% 238.2 20.1%
Operating income 20.7 3.9% 21.8 3.8% 50.8 4.6% 45.1 3.8%
Interest expense 12.9 2.4% 13.8 2.4% 26.3 2.4% 26.7 2.2%
Income tax expense 4.1 0.8% 4.1 0.7% 11.8 1.1% 9.3 0.8%
Net income 3.7 0.7% 3.9 0.7% 12.7 1.1% 9.1 0.8%
</TABLE>
Comparison of Results of Operations for the 12 Weeks Ended April 18,
1998 with the 12 Weeks Ended April 19, 1997
Sales: Sales decreased $55.9 million, or 9.6%, from $583.5 million
in the 12 weeks ended April 19, 1997 to $527.6 million in the 12
weeks ended April 18, 1998. The lower sales levels are primarily
attributable to the former Omni stores, which were changed in October
1997 from a high volume, price impact format to the Dominick's format
in name only and without any significant remodel. Sales of the 14
new Dominick's Fresh Stores opened since May 1997 partially offset
the lower sales attributable to the format change of the former Omni
stores. Comparable store sales decreased 1.8% for the 12 weeks ended
April 18, 1998.
Gross Profit: Gross profit decreased $2.3 million, or 1.6%, from
$141.0 million in the 12 weeks ended April 19, 1997 to $138.7 million
in the 12 weeks ended April 18, 1998. Gross profit as a percentage
of sales increased from 24.2% in the 12 weeks ended April 19, 1997 to
26.3% in the 12 weeks ended April 18, 1998, due primarily to the
positive impact of converting the former Omni stores to the full-service
Dominick's format, the Company's ongoing initiatives to lower its cost of
goods, and the maturing and expansion of its base of Fresh Stores.
<PAGE>
Selling, General and Administrative Expenses: Selling, general and
administrative expenses ("SG&A") decreased $1.2 million, or 1.0%,
from $119.2 million in the 12 weeks ended April 19, 1997 to $118.0
million in the 12 weeks ended April 18, 1998. SG&A increased from
20.4% of sales in the 12 weeks ended April 19, 1997 to 22.4% of sales
in the 12 weeks ended April 18, 1998. SG&A expenses as a percentage
of sales increased primarily as a result of the lower level of sales as
well as the increased service levels related to the conversion of the high
volume Omni format to the Dominick's format and planned increases in
occupancy costs and depreciation expense associated with the Company's new
store and remodel program.
Operating Income: Operating income for the 12 weeks ended April
18, 1998 decreased $1.1 million, or 5.0%, from $21.8 million in the
12 weeks ended April 19, 1997 to $20.7 million as a result of the
factors discussed above.
Interest Expense: Interest expense decreased from $13.8 million in
the 12 weeks ended April 19, 1997 to $12.9 million in the 12 weeks
ended April 18, 1998. The decrease in interest expense was due to
lower borrowings and interest rates following the Company's retirement of
its Senior Subordinated Notes in October 1997.
Net Income: Net income decreased $0.2 million from $3.9 million in the
12 weeks ended April 19, 1997 to $3.7 million in the 12 weeks ended
April 18, 1998 as a result of the factors discussed above.
Comparison of Results of Operations for the 24 Weeks Ended April 18, 1998 with
the 24 Weeks Ended April 19, 1997
Sales: Sales decreased $70.3 million, or 5.9%, from $1,186.4 million in
the 24 weeks ended April 19, 1997 to $1,116.1 million in the 24 weeks ended
April 18, 1998. The lower sales levels are primarily attributable to the
former Omni stores, which were changed in October 1997 from a high volume,
price impact format to the Dominick's format in name only and without any
significant remodel. Sales of the 14 new Dominick's Fresh Stores opened
since May 1997 partially offset the lower sales attributable to the format
change of the former Omni stores. Comparable store sales increased 0.4% for
the 24 weeks ended April 18, 1998.
Gross Profit: Gross profit increased $10.0 million, or 3.5%, from $283.3
million in the 24 weeks ended April 19, 1997 to $293.3 million in the 24
weeks ended April 18, 1998. Gross profit as a percentage of sales increased
from 23.9% in the 24 weeks ended April 19, 1997 to 26.3% in the 24 weeks
ended April 18, 1998, due primarily to the positive impact of converting the
former Omni stores to the full-service Dominick's format, the Company's
ongoing initiatives to lower its cost of goods, and the maturing and
expansion of its base of Fresh Stores.
<PAGE>
Selling, General and Administrative Expenses: Selling, general and
administrative expenses ("SG&A") increased $4.3 million, or 1.8%, from $238.2
million in the 24 weeks ended April 19, 1997 to $242.5 million in the 24
weeks ended April 18, 1998. SG&A increased from 20.1% of sales in the 24
weeks ended April 19, 1997 to 21.7% of sales in the 24 weeks ended April 18,
1998. SG&A expenses as a percentage of sales increased primarily as a
result of the lower level of sales as well as the increased service levels
related to the conversion of the high volume Omni format to the Dominick's
format and planned increases in occupancy costs and depreciation expense
associated with the Company's new store and remodel program.
Operating Income: Operating income for the 24 weeks ended April 18, 1998
increased $5.7 million, or 12.6%, from $45.1 million in the 24 weeks ended
April 19, 1997 to $50.8 million as a result of the factors discussed above.
Interest Expense: Interest expense decreased from $26.7 million in the 24
weeks ended April 19, 1997 to $26.3 million in the 24 weeks ended April 18,
1998. The decrease in interest expense was due to lower borrowings and
interest rates following the Company's retirement of its Senior Subordinated
Notes in October 1997.
Net Income: Net income increased $3.6 million from $9.1 million in the 24
weeks ended April 19, 1997 to $12.7 million in the 24 weeks ended
April 18, 1998 as a result of the factors discussed above.
Liquidity and Capital Resources
The Company's principal sources of liquidity are cash flow from operations,
borrowings under its 1997 Credit Facility (defined below) and capital and
operating leases. The Company's principal uses of liquidity are to provide
working capital, finance capital expenditures and meet debt service
requirements.
On October 28, 1997, the Company entered into a revolving credit facility
with a syndicate of financial institutions (the "1997 Credit Facility") which
provides borrowing availability of $575 million for general corporate and
working capital purposes including up to $50 million for letters of credit.
The Company uses letters of credit to cover workers' compensation
self-insurance liabilities and for other general purposes. The 1997 Credit
Facility matures on April 28, 2004. The Company is required to make
prepayments or reduce availability under the 1997 Credit Facility, subject to
certain exceptions, with the proceeds from certain asset sales, issuances of
debt securities and any pension plan reversions.
The Company generated approximately $33.0 million of cash from operating
activities during the 24 weeks ended April 18, 1998 compared to $31.0 million
in the same period last year. The increase in cash generated from operating
activities during the 24 weeks ended April 18, 1998 is attributable to
increased profitability offset inpart by the timing of cash payments for
interest. The Company anticipates that one of the principal uses of cash in
its operating activities will be inventory purchases. However, supermarket
operators typically require small amounts of working capital since inventory
is generally sold prior to the time that payments to suppliers are due. This
reduces the need for short-term borrowings and allows cash from operations to
be used for non-current purposes such as financing capital expenditures and
other investing activities. Consistent with this pattern, the Company had a
working capital deficit of $48.7 million at April 18, 1998.
<PAGE>
The Company used $38.8 million in investing activities for the 24 weeks
ended April 18, 1998, which consisted principally of capital expenditures.
Capital expenditures were made for store remodels, new store openings and, to
a lesser extent, expenditures for warehousing, distribution, and
manufacturing facilities and equipment, including data processing and
computer systems. The Company financed a portion of its capital expenditures
through capital leases of certain equipment purchases which amounted to $22.8
million during the 24 week period.
The Company plans to make gross capital expenditures of approximately $140
million (or $80 million net of expected capital leases) in fiscal 1998. Such
expenditures consist of approximately $55 million for the conversion of the
Company's 17 Omni stores to the Dominick's format, $65 million related to
other remodels and new stores, as well as ongoing store expenditures for
equipment and maintenance, and approximately $20 million related to
warehousing, distribution and manufacturing facilities and equipment,
including computer software and hardware. Management expects that these
capital expenditures will be financed primarily through cash flow from
operations, capital leases and the Company's $75.0 million real property
lease financing facility. The capital expenditure budget for fiscal 1998
does not include certain environmental remediation costs which are expected
to be incurred over the next several years in the range of approximately
$4 million to $6 million.
The capital expenditure plans discussed above do not include potential
acquisitions which the Company could make to expand within its existing
market or contiguous markets. The Company may consider such acquisition
opportunities from time to time. Any such future acquisition may require the
Company to seek additional debt or equity financing.
On April 27, 1998, the Company's Board of Directors authorized the
repurchase of up to one million shares of its Common Stock. Any such
repurchase will be made on the open market from time to time at prevailing
market prices.
The Company is a holding company that has no material operations other than
its ownership of the capital stock of Dominick's Finer Foods, Inc.
("Dominick's"). As a result, the Company is dependent upon distributions or
advances from Dominick's to obtain cash to pay dividends or for other
corporate purposes. The Company's and its subsidiaries' principal debt
instruments generally restrict Dominick's from paying dividends or otherwise
distributing cash to the Company, except under certain limited circumstances,
including for the payment of taxes and, subject to limitations, for general
administrative purposes.
<PAGE>
The Company, in the ordinary course of its business, is party to various
legal actions. One case currently pending alleges gender discrimination by
Dominick's and seeks compensatory and punitive damages in an unspecified
amount. The plaintiffs' motion for class certification was granted by the
Court as to the female subclass but was denied as to the national origin
subclass in fiscal 1997. Due to the numerous legal and factual issues which
must be resolved during the course of this litigation, the Company is unable
to predict the ultimate outcome of this lawsuit. If Dominick's were held
liable for the alleged discrimination (or otherwise concludes that it is in
the Company's best interest to settle the matter), it could be required to
pay monetary damages (or settlement payments) which, depending on the theory
of recovery or the resolution of the plaintiffs' claims for compensatory and
punitive damages, could be substantial and could have a material adverse
effect on the Company. Based upon the current state of the proceedings, the
Company's assessment to date of the underlying facts and circumstances and
the other information currently available, and although no assurances can be
given, the Company does not believe that the resolution of this litigation
will have a material adverse effect on the Company's overall liquidity. As
additional information is gathered and the litigation proceeds, the Company
will continue to assess its potential impact. See "Legal Proceedings."
Certain of the Company's computer programs were written using two digits
to define the applicable year. Consequently, such programs may recognize a
date using "00" as the year 1900 rather than the year 2000 (the "Year 2000
Issue"). The Company's management has made an assessment of the Year 2000
Issue and its overall information system requirements and has commenced an
action plan which includes program and system conversions as well as
modifications of existing programs. The Company has been replacing a
substantial number of its computer systems and related programs over the past
several years. Accordingly, the Company's management estimates that the
costs associated with correcting the Year 2000 Issue will not be material and
that the Year 2000 Issue will not pose significant operational problems for
its computer systems.
The Company is highly leveraged. Based upon current levels of operations
and anticipated cost savings and future growth, the Company believes that its
cash flow from operations, together with available borrowings under the 1997
Credit Facility and its other sources of liquidity (including leases) will be
adequate to meet its anticipated requirements for working capital, debt
service and capital expenditures over the next few years.
Effects of Inflation
The Company's primary costs, inventory and labor, are affected by a number
of factors that are beyond its control, including the availability and price
of merchandise, the competitive climate and general and regional economic
conditions. As is typical of the supermarket industry, the Company has
generally been able to maintain gross profit margins by adjusting its retail
prices, but competitive conditions may from time to time render it unable to
do so while maintaining its market share.
<PAGE>
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995
When used in this report, the words "estimate," "expect," "project" and
similar expressions, together with other discussion of future trends or
results, are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Such statements are subject to certain
risks and uncertainties, including those discussed below, that could cause
actual results to differ materially from those projected. These
forward-looking statements speak only as of the date hereof. All of these
forward-looking statements are based on estimates and assumptions made by
management of the Company, which although believed to be reasonable, are
inherently uncertain and difficult to predict; therefore, undue reliance
should not be placed upon such estimates. There can be no assurance that the
savings or other benefits anticipated in these forward looking statements
will be achieved. For discussion of certain factors which could cause the
Company not to achieve the cost savings or other benefits contemplated herein
or otherwise cause the Company's results of operations to be adversely
affected in future periods, see the section entitled "Risk Factors" in the
Company's Form 10K annual report for fiscal year ended November 1, 1997. In
addition, there can be no assurance that unforeseen costs and expenses or
other factors will not offset or adversely affect the projected cost savings
or other benefits in whole or in part.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On March 16, 1995, a lawsuit was filed in the United States District Court
for the Northern District of Illinois against Dominick's by two employees of
Dominick's. The plaintiffs' original complaint asserted allegations of
gender discrimination and sought compensatory and punitive damages in an
unspecified amount. The plaintiffs filed an amended complaint on
May 1, 1995. The amended complaint added four additional plaintiffs and
asserted allegations of gender and national origin discrimination.
The plaintiffs filed a second amended complaint on August 16, 1996 adding
three additional plaintiffs. On April 8, 1997, the plaintiffs' motion for
class certification was granted by the court as to the female subclass but
was denied as to the national origin subclass. The Company plans to
vigorously defend this lawsuit. Due to the numerous legal and factual
issues which must be resolved during the course of this litigation, the
Company is unable to predict the ultimate outcome of this lawsuit.
If Dominick's were held liable for the alleged discrimination (or otherwise
concludes that is in the Company's best interest to settle the matter), it
could be required to pay monetary damages (or settlement payments) which,
depending on the theory of recovery or the resolution of the plaintiffs'
claims for compensatory and punitive damages, could be substantial and could
have a material adverse effect on the Company. Based upon the current state
of the proceedings, the Company's assessment to date of the underlying facts
and circumstances and the other information currently available, and although
no assurances can be given, the Company does not believe that the resolution
of this litigation will have a material adverse effect on the Company's
overall liquidity. As additional information is gathered and the litigation
proceeds, the Company will continue to assess its potential impact.
<PAGE>
The Company, in its ordinary course of business, is party to various other
legal actions. Management believes these are routine in nature and
incidental to its operations. Management believes that the outcome of any
such other proceedings to which the Company currently is a party will not
have a material adverse effect upon its business, financial condition or
results of operations. However, adverse developments with respect to any
pending or future litigation could adversely affect the market price of the
Company's common stock.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: June 2, 1998 DOMINICK'S SUPERMARKETS, INC.
/s/Robert A. Mariano
Robert A. Mariano
President and Chief Executive Officer
/s/ Darren W. Karst
Darren W. Karst
Executive Vice President, Chief Financial Officer<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-18-1998
<CASH> 19,978
<SECURITIES> 0
<RECEIVABLES> 18,510
<ALLOWANCES> 0
<INVENTORY> 211,057
<CURRENT-ASSETS> 283,057
<PP&E> 438,814
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,125,556
<CURRENT-LIABILITIES> 331,712
<BONDS> 0
0
0
<COMMON> 213
<OTHER-SE> 129,722
<TOTAL-LIABILITY-AND-EQUITY> 1,125,556
<SALES> 1,116,072
<TOTAL-REVENUES> 1,116,072
<CGS> 822,797
<TOTAL-COSTS> 822,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,261
<INCOME-PRETAX> 24,513
<INCOME-TAX> 11,772
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 12,741
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</TABLE>
