UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
COMMISSION FILE NUMBER 1-5171
_____
SUPER FOOD SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2407235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3233 Newmark Drive, Dayton, Ohio 45342
(Address of principal executive offices, including zip code)
(513) 439-7500
(Registrant's telephone number, including area code)
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 registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
At May 4, 1996, there were 10,997,448 Common Shares, $1.00 par
value per share, of the issuer's Common Shares outstanding.
<PAGE>
2
SUPER FOOD SERVICES, INC. AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended
May 4, 1996
Table of Contents
Page
____
PART I. FINANCIAL INFORMATION:
Item 1.
Financial Statements:
Consolidated Summary Balance Sheets - May 4,
1996, May 6, 1995 and August 26, 1995. . . . . . . 3
Consolidated Summary Statements of Income -
Twelve Weeks Ended May 4, 1996 and
May 6, 1995. . . . . . . . . . . . . . . . . . . . 5
Consolidated Summary Statements of Income -
Thirty-Six Weeks Ended May 4, 1996
and May 6, 1995. . . . . . . . . . . . . . . . . . 6
Consolidated Summary Statements of Cash Flows -
Thirty-Six Weeks Ended May 4, 1996
and May 6, 1995. . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . 8
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 9
Part II. OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .12
<PAGE>
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Super Food Services, Inc. and Subsidiaries
Consolidated Summary Balance Sheets
May 4, 1996, May 6, 1995 and August 26, 1995
May 4, 1996 May 6, 1995 Aug. 26, 1995
_____________ _____________ _____________
ASSETS
Current Assets:
Cash $ 8,106,913 $ 3,898,885 $ 12,423,314
____________ ____________ ____________
Receivables:
Retailer-trade 70,525,884 71,895,337 59,832,159
-notes (current
portion) 5,510,885 4,543,046 5,510,885
Suppliers and
miscellaneous 10,418,163 8,616,495 8,619,826
____________ ____________ ____________
86,454,932 85,054,878 73,962,870
Less Allowance for
doubtful accounts (11,162,497) (9,422,380) (9,293,061)
____________ ____________ ____________
Net Receivables 75,292,435 75,632,498 64,669,809
____________ ____________ ____________
Merchandise inventory 77,916,968 81,084,601 67,181,311
____________ ____________ ____________
Future tax benefits 4,568,828 6,767,576 4,568,828
____________ ____________ ____________
Prepaid expenses 8,377,104 7,827,347 8,481,566
____________ ____________ ____________
Total Current
Assets 174,262,248 175,210,907 157,324,828
Notes Receivable-Retailers
(net long-term portion) 18,348,803 18,772,412 17,652,617
Land, Buildings and
Equipment, net 60,810,721 62,321,622 60,544,780
Other Assets 20,836,745 19,993,297 21,376,314
____________ ____________ ____________
Total Assets $274,258,517 $276,298,238 $256,898,539
____________ ____________ ____________
____________ ____________ ____________
The accompanying Notes are an integral part of these consolidated statements.
These interim statements are unaudited.
<PAGE>
4
LIABILITIES AND SHAREHOLDERS' EQUITY
May 4, 1996 May 6, 1995 Aug. 26, 1995
____________ ____________ _____________
Current Liabilities:
Accounts payable $ 41,037,260 $ 39,728,351 $ 36,650,208
Notes payable to banks 14,000,000 21,000,000 5,000,000
Current maturities of
long-term notes and
mortgages payable 400,000 2,657,000 800,000
Current maturities of
obligations under
capitalized leases 864,173 797,024 864,173
Current portion of
Florida closing
liabilities 0 161,376 0
Accrued payroll and
vacation 3,521,476 3,393,057 3,142,853
Taxes other than
income 1,931,612 1,820,442 2,252,103
Other current
liabilities 9,801,837 11,226,040 8,919,404
____________ ____________ ____________
Total Current
Liabilities 71,556,358 80,783,290 57,628,741
Long-term Notes and
Mortgages Payable 35,000,000 35,405,286 35,000,000
Obligations Under
Capitalized Leases 24,926,496 22,181,849 25,419,906
Long-term Florida
Closing Liabilities 882,864 1,904,293 971,836
____________ ____________ ____________
Total Liabilities 132,365,718 140,274,718 119,020,483
____________ ____________ ____________
Shareholders' Equity:
Common Shares, par
value $1.00, 35,000,000
shares authorized 10,997,448 10,948,814 10,948,814
Paid-in capital 29,827,174 29,407,949 29,407,949
Retained earnings 101,068,177 95,666,757 97,521,293
____________ ____________ ____________
Total Shareholders'
Equity 141,892,799 136,023,520 137,878,056
____________ ____________ ____________
Total Liabilities and
Shareholders' Equity $274,258,517 $276,298,238 $256,898,539
____________ ____________ ____________
____________ ____________ ____________
The accompanying Notes are an integral part of these consolidated statements.
These interim statements are unauditied.
<PAGE>
5
SUPER FOOD SERVICES, INC. AND SUBSIDIARIES
Consolidated Summary Statements of Income
For the Twelve Weeks Ended May 4, 1996 and May 6, 1995
1996 1995
_____________ _____________
Sales and Other Income $259,907,791 $261,314,808
Cost and Expenses:
Cost of Sales 247,342,006 249,349,220
Selling, General and
Administrative Expenses 9,022,583 8,313,431
Interest expense 1,511,444 1,745,378
Interest income (955,276) (919,992)
____________ ____________
Total Costs and Expenses 256,920,757 258,488,037
____________ ____________
Income Before Income Taxes 2,987,034 2,826,771
Provision for Income Taxes 1,135,619 1,095,904
____________ ____________
Net Income $ 1,851,415 $ 1,730,867
____________ ____________
____________ ____________
Weighted Average Number of
Common Shares outstanding 10,997,448 10,948,814
____________ ____________
____________ ____________
Earnings Per Common Share $ 0.17 $ 0.16
____________ ____________
____________ ____________
Dividends Declared Per
Common Share $ 0.10 $ 0.095
____________ ____________
____________ ____________
The accompanying Notes are an integral part of these consolidated statements.
These interim statements are unaudited.
<PAGE>
6
SUPER FOOD SERVICES, INC. AND SUBSIDIARIES
Consolidated Summary Statements of Income
For the Thirty-Six Weeks Ended May 4, 1996 and May 6, 1995
1996 1995
____________ ____________
Sales and Other Income $815,511,784 $792,439,344
Cost and Expenses:
Cost of Sales 775,313,969 753,755,100
Selling, General and
Administratiave Expenses 27,115,426 26,047,461
Interest expense 4,754,586 5,178,669
Interest income (2,763,244) (2,651,052)
____________ ____________
Total Costs and Expenses 804,420,737 782,330,178
____________ ____________
Income Before Income Taxes 11,091,047 10,109,166
Provision for Income Taxes 4,245,216 3,939,066
____________ ____________
Net Income $ 6,845,831 $ 6,170,100
____________ ____________
____________ ____________
Weighted Average Number of
Common Shares outstanding 10,982,858 10,948,814
____________ ____________
____________ ____________
Earnings Per Common Share $ 0.62 $ 0.56
____________ ____________
____________ ____________
Dividends Declared Per
Common Share $ 0.30 $ .285
____________ ____________
____________ ____________
The accompanying Notes are an integral part of these consolidated statements.
These interim statements are unaudited.
<PAGE>
7
SUPER FOOD SERVICES, INC. AND SUBSIDIARIES
Consolidated Summary Statements of Cash Flows
For the Thirty-Six Weeks Ended May 4, 1996 and May 6, 1995
1996 1995
_____________ _____________
CASH PROVIDED BY (USED FOR) OPERATIONS
Net Income $ 6,845,831 $ 6,170,100
Items not affecting cash
Depreciation and amortization 5,972,078 5,332,631
Current items (excluding cash
and notes payable)-
Receivables (10,622,626) (9,933,109)
Merchandise Inventory (10,735,657) (17,741,623)
Prepaid expenses and other 104,462 1,007,811
Accounts payable 4,387,052 1,426,406
Other current liabilities 981,087 620,096
Florida Closing Liabilities (88,972) (1,588,331)
____________ ____________
NET CASH USED FOR OPERATIONS (3,156,745) (14,706,019)
____________ ____________
CASH PROVIDED BY (USED FOR) INVESTING:
Additions of property, equipment
and direct financing leases (5,738,972) (5,002,233)
Increase in long-term notes
receivable (5,172,775) (6,989,393)
Payments on long-term
notes receivable 4,476,589 4,396,130
____________ ____________
NET CASH USED FOR INVESTING (6,435,158) (7,595,496)
____________ ____________
CASH PROVIDED BY (USED FOR) FINANCING:
Notes payable to banks (short-term) 9,000,000 12,000,000
Notes payable to bank (long-term) 0 10,000,000
Payments on term debt
and capital leases (893,410) (8,514,075)
Proceeds from Stock Purchase
Plan/Stock Option Plan 467,859 0
Cash dividends (3,298,947) (3,120,003)
____________ ____________
NET CASH PROVIDED BY FINANCING 5,275,502 10,365,922
DECREASE IN CASH (4,316,401) (11,935,593)
CASH, BEGINNING OF YEAR 12,423,314 15,834,478
____________ ____________
CASH, END OF PERIOD $ 8,106,913 $ 3,898,885
____________ ____________
____________ ____________
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest (excludes interest
capitalized and imputed
interest on leases) $ 3,217,526 $ 3,489,984
____________ ____________
____________ ____________
Income taxes $ 5,758,600 $ 2,786,486
____________ ____________
____________ ____________
The accompanying Notes are an integral part of these consolidated statements.
These interim statements are unaudited.
<PAGE>
8
Super Food Services, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Financial Statements -
The condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the informa-
tion presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the
Company's latest annual report on Form 10-K.
2. Accounting Policies -
The interim financial information presented in this report has
been prepared in accordance with the accounting policies
described in the Notes to the Company's financial statements
filed on the most recent Form 10-K. While management believes
that the procedures followed in the preparation of interim
information are reasonable, the accuracy of some estimated
amounts is dependent upon facts that will exist or calculations
that will be accomplished later in the fiscal year. Examples
of such estimates (none individually significant) include
unpaid expenses not invoiced and pension costs. In addition,
an amount is expensed ratably for possible inventory shrinkage
(based on prior experience and is adjusted to actual twice
during the fiscal year) and to adjust the LIFO reserve (based
upon the Company's best estimate of inflation to date).
The information included in this Form 10-Q reflects all adjust-
ments which are of a normal recurring nature and, in the
opinion of management, necessary for a fair statement of the
results of operations for the period presented.
3. Reclassifications -
Certain reclassifications have been made to prior years'
amounts to make them comparable with the classifications of
such amounts for fiscal year 1996.
<PAGE>
9
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto. All dollar
information is in thousands, except per share amounts:
Third Quarter Comparisons
1996 1995 % Change
_________________________________________________________________
Sales and Other Income $259,908 $261,315 (.5)%
_________________________________________________________________
The decrease in sales for the quarter resulted primarily from
decreased volume from customers caused by competitive pressures and
unusual weather conditions. Included in sales are fees derived
from providing certain services to our customers, which are not
significant to total sales.
1996 1995 % Change
_________________________________________________________________
Cost of Sales $247,342 $249,349 (.8)%
_________________________________________________________________
Cost of sales includes cost of the products distributed as well as
warehouse, delivery and building expenses. The Company experienced
lower warehouse expenses ($264) due to continued cost control and
increased productivity. Building costs increased ($277) primarily
because of higher storage costs, amortization and repairs. In
addition, the Company experienced slightly higher margins as a
result of a favorable shift in product mix.
1996 1995 % Change
_________________________________________________________________
Selling, general and
administrative expenses $ 9,023 $ 8,313 8.5%
_________________________________________________________________
An increase in the provision for doubtful accounts ($525) and an
increase in other administrative expenses ($185), no one expense
item having a significant effect, resulted in a net increase in
selling, general and administrative expenses ($710).
1996 1995 % Change
_________________________________________________________________
Interest expense $ 1,511 $ 1,745 (13.4%)
_________________________________________________________________
Interest expense decreased due to lower average borrowing levels of
short-term debt and a decrease in overall borrowing rates.
1996 1995
_________________________________________________________________
Effective tax rate 38.0% 38.8%
_________________________________________________________________
The Company's effective tax rate showed a slight decrease because
of lower provisions for State income taxes.
<PAGE>
10
1996 1995
_________________________________________________________________
Net Income $ 1,851 $ 1,731
_________________________________________________________________
Earnings per common share $ .17 $ .16
_________________________________________________________________
As reported, the Company's earnings to sales ratio increased to
.71% in the third quarter of fiscal 1996 from .66% in the third
quarter of fiscal 1995.
Thirty-Six Weeks
1996 1995 % Change
_________________________________________________________________
Sales and Other Income $815,512 $792,439 2.9%
_________________________________________________________________
The increase in sales resulted primarily from increased volume from
existing customers; we continue to have competitive pressures in
sales. Included in sales are fees derived from providing certain
services to our customers, which are not significant to total
sales.
1996 1995 % Change
_________________________________________________________________
Cost of Sales $775,314 $753,755 2.9%
_________________________________________________________________
The Company experienced higher warehouse expense ($600) caused by
increased labor cost ($380), higher depreciation expense, repairs
and supplies. Delivery expense increased ($340) caused by
increased labor cost ($135), higher fuel cost, repair and higher
depreciation expense. Building cost increased ($300) primarily
because of higher storage costs, repairs, and higher amortization
expense. Slightly offsetting the increased warehouse, delivery and
building costs was a favorable shift in product mix.
1996 1995 % Change
_________________________________________________________________
Selling, general and
administrative expenses $ 27,115 $ 26,047 4.1%
_________________________________________________________________
Expenses increased ($1,068) due primarily to increase in allowance
for doubtful accounts ($770) and administrative expenses ($298), no
one expense item having a significant effect.
1996 1995 % Change
_________________________________________________________________
Interest expense $ 4,755 $ 5,179 (8.2%)
_________________________________________________________________
Interest expense decreased due to lower average borrowing levels of
short-term debt and a decrease in overall borrowing rates.
1996 1995
_________________________________________________________________
Effective tax rate 38.3% 38.9%
_________________________________________________________________
The Company's effective tax rate showed a slight decrease because
of lower provisions for State income taxes.
<PAGE>
11
1996 1995
_________________________________________________________________
Net Income $ 6,846 $ 6,170
Earnings per common share $ .62 $ .56
_________________________________________________________________
As reported, the Company's earnings to sales ratio increased to
.84% for the thirty-six weeks of fiscal 1996 from .78% for the
thirty-six weeks of fiscal 1995.
As of and for the 36 Weeks
Liquidity and in the period ended As of
__________________________ _____________
Capital Resources May 4, 1996 May 6, 1995 Aug. 26, 1995
_________________________________________________________________
Cash $ 8,107 $ 3,899 $ 12,423
_________________________________________________________________
Working Capital 102,706 94,428 99,696
_________________________________________________________________
Long-term debt 35,000 35,405 35,000
_________________________________________________________________
Cash provided by
(used for)
operations (3,157) (14,706)
_________________________________________________
Cash provided by
(used for)
investing (6,435) (7,595)
_________________________________________________
Cash provided by
(used for)
financing 5,276 10,366
_________________________________________________
The Company's financial condition remained strong as of May 4,
1996. The current ratio was 2.44 to 1 compared to 2.17 to 1 last
year.
Since fiscal year-end 1995, net receivables increased by $10,623
and inventories increased by $10,736 caused by seasonality in the
Company's business. During certain times of the year, the Company
experiences increases in accounts receivable and inventories
because of increased holiday sales. The Company built inventories
for expected sales in the third quarter which contained one
holiday. To support the higher levels of receivables and inven-
tory, the Company borrowed short-term from its banks an additional
$9,000 since year-end. In addition, the Company's accounts payable
level increased by $4,387 in conjunction with the additional
inventory purchases. However, due to decreased levels of new
long-term financing to retailers and increased payments by
retailers on existing long-term notes, the Company's average
borrowing levels are down compared to fiscal 1995. The Company
experienced minimal price increases on products distributed during
the first thirty-six weeks of fiscal 1996.
Depreciation and amortization of property, equipment and capital
leases amounted to $5,972 in fiscal 1996 compared to $5,333 in
fiscal 1995. This increase is due primarily to the Bridgeport
expansion. Total capital expenditures for the thirty-six weeks
ended May 4, 1996 were $5,739 compared to $5,002 during the second
quarter of fiscal 1996.
The cash dividend on common shares was increased from $.095 to $.10
effective with the dividend paid on December 15, 1995.
<PAGE>
12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) Exhibits:
11 Computation of Net Income Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the
twelve weeks ended May 4, 1996.
<PAGE>
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Super Food Services, Inc.
(Registrant)
Date: June 18, 1996 By /s/ Jack Twyman
______________________________
Jack Twyman
Chairman of the Board
(Chief Executive Officer)
Date: June 18, 1996 By /s/ Robert F. Koogler
______________________________
Robert F. Koogler
Senior Vice President-Finance,
Treasurer and
Assistant Secretary
(Chief Financial and
Accounting Officer)
<PAGE>
EXHIBIT 11
SUPER FOOD SERVICES, INC.
COMPUTATION OF NET INCOME PER SHARE
Weighted
Average
Number of
Shares
Outstanding Net Income Per Share
__________________________________
May 6, 1995 - 12 Weeks
Net Income $1,731,000
__________________________________
Common Stock outstanding
as of February 12, 1995 10,949,000 $1,731,000 $0.16
__________________________________
__________________________________
Effect of outstanding
stock options which is
less than 3% and not
required to be disclosed
in the financial state-
ments (249,000 shares) 36,000
__________________________________
10,985,000 $1,731,000 $0.16
__________________________________
__________________________________
May 6, 1995 - 36 Weeks
Net Income $6,170,000
__________________________________
Common Stock outstanding
as of August 28, 1994 10,949,000 $6,170,000 $0.56
__________________________________
__________________________________
Effect of outstanding
stock options which is
less than 3% and not
required to be disclosed
in the financial state-
ments (249,000 shares) 36,000
__________________________________
10,985,000 $6,170,000 $0.56
__________________________________
__________________________________
May 4, 1996 - 12 Weeks
Net Income $1,851,000
__________________________________
Common Stock outstanding
as of February 11, 1996 10,997,000 $1,851,000 $0.17
__________________________________
__________________________________
Effect of outstanding
stock options which is
less than 3% and not
required to be disclosed
in the financial state-
ments (248,000 shares) 52,000
__________________________________
11,049,000 $1,851,000 $0.17
__________________________________
__________________________________
May 4, 1996 - 36 Weeks
Net Income $6,846,000
__________________________________
Common Stock outstanding
as of August 27, 1995 10,949,000
Exercise of incentive plan
(49,000 shares issued) 34,000
__________________________________
10,983,000 $6,846,000 $0.62
__________________________________
__________________________________
Effect of outstanding
stock options which is
less than 3% and not
required to be disclosed
in the financial state-
ments (248,000 shares) 52,000
__________________________________
11,035,000 $6,846,000 $0.62
__________________________________
__________________________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED SUMMARY BALANCE SHEETS AS OF MAY 4, 1996 AND THE CONSOLIDATED
SUMMARY STATEMENTS OF INCOME FOR THE 36 WEEKS ENDED MAY 4, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> MAY-04-1996
<CASH> 8,107
<SECURITIES> 0
<RECEIVABLES> 76,037
<ALLOWANCES> 11,162
<INVENTORY> 77,917
<CURRENT-ASSETS> 174,262
<PP&E> 131,192
<DEPRECIATION> 70,381
<TOTAL-ASSETS> 274,259
<CURRENT-LIABILITIES> 71,556
<BONDS> 59,926
0
0
<COMMON> 10,997
<OTHER-SE> 130,895
<TOTAL-LIABILITY-AND-EQUITY> 274,259
<SALES> 812,211
<TOTAL-REVENUES> 815,512
<CGS> 775,314
<TOTAL-COSTS> 775,314
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,435
<INTEREST-EXPENSE> 4,755
<INCOME-PRETAX> 11,091
<INCOME-TAX> 4,245
<INCOME-CONTINUING> 6,846
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,846
<EPS-PRIMARY> .62
<EPS-DILUTED> .62
</TABLE>
