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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 September 27, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _____________ to _______________
Commission file number: 002-94984
Roundy's, Inc.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0854535
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
875 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
- --------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
23000 Roundy Drive
Pewaukee, Wisconsin 53072
- --------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Registrant's telephone number, including area code: (414)231-5000
---------------
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
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
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2) Yes No X
As of November 7, 2003 there were 1,000 shares of the Registrant's
common stock outstanding, all of which were held by Roundy's
Acquisition Corp. ("RAC"). RAC is controlled by the Willis Stein Funds
(as defined in Note 2 to the financial statements contained in this report)
and certain associated investors, and approximately 100% of RAC's common
stock may be deemed to be beneficially owned by certain officers and
directors of the Registrant, all of whom are or may be deemed to be affiliates
of the Registrant. There is no established public trading market for such
stock.
ROUNDY'S, INC.
FORM 10-Q
For the period ended September 27, 2003
INDEX
Page No.
PART I. - Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Statements of Income 1
Consolidated Balance Sheets 2
Consolidated Statements of Cash Flows 3
Notes to Unaudited Consolidated Financial 4
Statements
Item 2. Management's Discussion and Analysis of 13
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Discussion about 21
Market Risk
Item 4. Controls and Procedures 21
PART II. - Other Information
Item 1. Legal Proceedings 22
Item 2. Changes in Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security 22
Holders
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
EXHIBIT
INDEX 24
PART I. Item 1. FINANCIAL STATEMENTS
ROUNDY'S, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
Successor Predecessor
-------------------------------------------- ------------
Thirteen Thirteen Thirty-nine June 7, December 30,
Weeks Weeks Weeks 2002 to 2001 to
Ended Ended Ended September June 6, 2002
September September September 28, 2002
27, 2003 28,2002 27, 2003
---------- --------- ---------- ---------- ------------
Revenues
Net sales and
service fees $ 1,142,692 $ 896,613 $3,014,832 $1,122,433 $1,545,647
Other - net 476 684 1,774 845 694
--------- -------- --------- ---------- ----------
1,143,168 897,297 3,016,606 1,123,278 1,546,341
--------- -------- --------- ---------- ----------
Cost and Expenses
Cost of sales 902,699 738,912 2,398,034 923,783 1,271,228
Operating and
administrative 202,848 134,324 514,502 166,990 235,607
SARs and other
termination costs 7,400
Interest expense 10,673 8,338 30,189 10,713 6,144
Amortization of deferred
financing costs 853 549 2,481 560 969
Interest rate swap
termination costs 6,652
--------- ------- --------- --------- ---------
1,117,073 882,123 2,945,206 1,102,046 1,528,000
--------- ------- --------- --------- ---------
Income Before Income
Taxes 26,095 15,174 71,400 21,232 18,341
Provision for Income
Taxes 10,438 6,221 28,560 8,705 7,413
------ ------ ------ ------ ------
Net Income $ 15,657 $ 8,953 $ 42,840 $ 12,527 $ 10,928
========= ======== ========= ========= =========
See notes to unaudited consolidated financial statements.
ROUNDY'S, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
Successor
---------------------------
September 27, December 28
Assets 2003 2002
------------- -----------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 70,165 $ 139,778
Notes and accounts receivable, less
allowance for losses of $5,109 and
$5,577, respectively 78,255 87,344
Merchandise inventories 271,499 236,465
Prepaid expenses 5,995 9,756
Deferred income tax benefits 16,169 15,871
------- -------
Total current assets 442,083 489,214
Property and Equipment - Net 315,058 214,548
Other Assets:
Deferred income tax benefits 25,640 25,231
Notes receivable, less allowance for
losses of $233 and $1,475,
respectively 3,023 3,523
Other assets - net 90,730 91,344
Goodwill 624,561 556,894
------- -------
Total other assets 743,954 676,992
------- -------
Total assets $1,501,095 $1,380,754
========== ==========
Liabilities and Shareholder's Equity
Current Liabilities:
Accounts payable $ 265,578 $ 240,845
Accrued expenses 153,385 137,416
Current maturities of long-term debt 3,627 2,961
Income taxes 13,084 13,370
------- -------
Total current liabilities 435,674 394,592
------- -------
Long-Term Debt 592,868 559,824
Other Liabilities 94,755 91,380
--------- ---------
Total liabilities 1,123,297 1,045,796
--------- ---------
Shareholder's Equity:
Common stock (1,000 shares issued and
outstanding at $0.01 par value)
Additional paid-in capital 314,500 314,500
Retained earnings 63,298 20,458
--------- ---------
Total shareholder's equity 377,798 334,958
---------- ---------
Total liabilities and shareholder's
equity $1,501,095 $1,380,754
========== ==========
See notes to unaudited consolidated financial statements.
ROUNDY'S, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Successor Predecessor
---------------------- -----------
Thirty-nine June 7, December 30,
Weeks Ended 2002 to 2001 to
September 27, September June 6,
2003 28, 2002 2002
----------- ----------- ----------
Cash Flows From Operating Activities:
Net income $ 42,840 $ 12,526 $ 10,928
Adjustments to reconcile net income
to net cash flows provided by operating
activities:
Depreciation and amortization,
including deferred financing costs 35,180 16,206 18,670
(Gain) loss on sale of property and
equipment (240) (161) 41
Deferred income taxes 3,247 1,635 (2,268)
Changes in operating assets and
liabilities, net of the effect of business
acquisitions:
Notes and accounts receivable 10,493 620 (7,079)
Merchandise inventories (4,099) (4,338) 13,767
Prepaid expenses 5,089 2,078 1,743
Other assets (8,672) (2,324) (1,371)
Accounts payable 15,931 (953) (27,541)
Accrued expenses 11,109 10,510 18,062
Income taxes (286) 3,162 19,731
Other liabilities (6,511) (1,898) 161
-------- --------- --------
Net cash flows provided by operating
activities 104,081 37,063 44,844
-------- --------- --------
Cash Flows From Investing Activities:
Capital expenditures (38,953) (12,936) (10,642)
Proceeds from sale of property and
equipment and other assets 301 337 478
Acquisition consideration (539,996)
Payment for business acquisitions net
of cash acquired (132,577)
Decrease in notes receivable, net 500 334 879
--------- ---------- --------
Net cash flows used in investing
activities (170,729) (552,261) (9,285)
---------- ---------- --------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 475,000
Settlement of interest rate swap
liability (6,652)
Debt issuance costs (506) (23,022)
Contributed capital 314,500
Payments of debt (2,459) (166,043) (48,618)
Common stock purchased (56)
-------- --------- --------
Net cash flows (used in) provided by
financing activities (2,965) 593,783 (48,674)
-------- -------- --------
Net (Decrease) Increase in Cash and
Cash Equivalents (69,613) 78,585 (13,115)
Cash and Cash Equivalents, Beginning
of Period 139,778 45,516
-------- -------- --------
Cash and Cash Equivalents, End
of Period $ 70,165 $ 78,585 $ 32,401
========== ========= ==========
Supplemental Cash Flow Information:
Cash paid during the period:
Interest $ 24,758 $ 4,642 $ 6,351
Income taxes 25,609 573 1,872
See notes to unaudited consolidated financial statements.
ROUNDY'S, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Roundy's,
Inc. ("Roundy's" or the "Company") as of September 27, 2003, for the three-
month and nine-month periods ended September 27, 2003 (successor), the
period from June 30, 2002 to September 28, 2002 (successor), and the period
from December 30, 2001 to June 6, 2002 (predecessor) reflect all
adjustments (consisting only of normal recurring adjustments) that are, in
the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The
unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States for interim financial information, in accordance with the
instructions for Form 10-Q and Article 10 of Regulation S-X and do not
include all of the information and footnotes required for complete, audited
financial statements. The unaudited consolidated financial statements
should be read in conjunction with the consolidated financial statements
and related notes thereto, together with Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in Item
2 of this report. The results of operations for the three-month and nine-
month periods ended September 27, 2003 may not necessarily be indicative of
the results that may be expected for the entire fiscal year ending January
3, 2004. For purposes of comparison, the results of operations for the
period June 7, 2002 to September 28, 2002 have been combined with the
results of operations of Roundy's for the period December 30, 2001 to June
6, 2002 and then compared with the results of operations of Roundy's for
the thirty-nine weeks ended September 27, 2003.
2. TRANSACTIONS
Transactions - On June 6, 2002, all of the issued and outstanding capital
stock of Roundy's was purchased by Roundy's Acquisition Corp. ("RAC") from
its former owners. This purchase is referred to throughout these financial
statements as the "Transactions."
RAC is a corporation formed at the direction of Willis Stein & Partners,
III, L.P. ("Willis Stein") for the purposes of acquiring Roundy's.
Approximately 90% of RAC's common and preferred stock is owned by
investment funds controlled by Willis Stein (the "Willis Stein Funds") and
certain associated equity investors.
Purchase Accounting - The acquisition of Roundy's by RAC was accounted for
as a purchase. As a result, all financial statements for periods
subsequent to June 6, 2002, the date the Transactions were consummated,
reflect the new reporting entity after adjustment of the carrying value of
assets and liabilities to their fair values as of June 7, 2002.
Predecessor/Successor - For purposes of the financial statement
presentation set forth herein, the Predecessor Company refers to the
Company prior to the consummation of the Transactions and Successor Company
refers to the Company after the consummation of the Transactions.
3. ACQUISITIONS
In November 2002, the Company entered into a definitive agreement to
acquire the capital stock of Prescott's Supermarkets, Inc. ("Prescott's")
for approximately $47.8 million (the "Prescott's Acquisition"). Prescott's
primarily owned and operated seven licensed Pick 'n Save stores located in
the Wisconsin cities of Fond du Lac (three stores), Oshkosh (two stores)
and West Bend (two stores). Goodwill of approximately $44.0 million
resulted from the acquisition, which was accounted for as a purchase. The
transaction closed on January 21, 2003 and the operating results of
Prescott's are included in the consolidated statements of income after this
date. The consolidated financial statements reflect the preliminary
allocation of the purchase price to the assets acquired and liabilities
assumed based on their fair values.
In April 2003, the Company acquired seven Kohl's grocery stores in the
Madison, Wisconsin area from The Great Atlantic & Pacific Tea Company, Inc.
("A&P") for approximately $19.0 million in cash for the equipment, fixtures
and leasehold interests plus net payments of approximately $1.1 million for
acquired inventory (the "Copps Madison Acquisition"). Goodwill of
approximately $15.0 million resulted from the acquisition, which was
accounted for as a purchase. In May 2003, the Company converted six stores
to Copps stores and consolidated the volume of the seventh store into an
existing Company-owned Copps store. These six new Copps stores opened in
late May and early June 2003. The consolidated financial statements
reflect the preliminary allocation of the purchase price to the assets
acquired and liabilities assumed based on their fair values.
In June 2003, the Company acquired 32 Rainbow Foods Stores ("Rainbow") from
Fleming Companies, Inc. ("Fleming"). The Company paid approximately $103.3
million consisting of (i) $67.1 million in cash ($44.3 million for the
equipment, fixtures and leasehold interests plus $22.8 million for usable
store level inventory) and (ii) the assumption of $36.2 million of
capitalized leases. The Company sold the one store located outside the
Minneapolis-St. Paul metropolitan area (located near Wausau, Wisconsin) to
an independent licensed Pick 'n Save operator in the area. Collectively
these transactions are referred to throughout these financial statements as
the "Rainbow Minneapolis Acquisition." Goodwill of approximately $8.7
million resulted from the acquisition, which was accounted for as a
purchase. The Rainbow Minneapolis Acquisition closed on a rolling schedule
from June 7 to June 27, 2003 and the operating results of each acquired
store are included in the consolidated statements of income after each
store's respective opening date. The consolidated financial statements
reflect the preliminary allocation of the purchase price to the assets
acquired and liabilities assumed based on their fair values.
On October 17, 2003, the Company completed the acquisition of the
equipment, fixtures and leasehold interests of seven former Kohl's grocery
stores from A&P for approximately $9.0 million in cash (the "Kohl's
Acquisition"). Six of these stores are located in the Milwaukee area while
the seventh store is located in the Racine, Wisconsin area. The Company
plans to reopen these stores under the Pick `n Save banner before the end
of the first quarter of 2004.
The pro forma effect of the 2003 acquisitions was not material.
4. RECENTLY ISSUED ACCOUNTING STANDARDS
The Company adopted Emerging Issues Task Force Issue No. 02-16 (EITF 02-
16), "Accounting by a Customer (including a Reseller) for Certain
Consideration Received from a Vendor," effective December 29, 2002.
Pursuant to EITF 02-16, vendor consideration related to vendor-funded
coupons and certain advertising and other programs have been reclassified
in the consolidated statements of income and prior periods have also been
consistently reclassified. Specifically, vendor-funded coupon
reimbursements, previously considered part of net sales at the point of
sale, are now reflected as a reduction to net sales and cost of sales.
Accordingly, $10.9 million and $7.4 million of such reimbursements in the
third quarter of 2003 and the third quarter of 2002, respectively, and
$31.3 million and $23.2 million for the nine months ended September 27,
2003 and September 28, 2002, respectively, have been classified as a
reduction in cost of sales with a corresponding decrease in net sales.
Vendor reimbursements previously classified as offsets to advertising and
other expenses have now also been reflected as reductions in cost of sales
pursuant to EITF 02-16. Accordingly, $11.8 million and $7.5 million of
such reimbursements in third quarter 2003 and third quarter 2002,
respectively, and $31.1 million and $22.9 million for the nine months ended
September 27, 2003 and September 28, 2002, respectively, have been
classified as a reduction in cost of sales with a corresponding increase in
operating and administrative expenses.
5. SEGMENT REPORTING
The Company and its subsidiaries sell and distribute food and nonfood
products that are typically found in supermarkets. The Company's stores
and those of its wholesale customers are located primarily in the Midwest.
The Company has two reportable segments - wholesale and retail. The
Company's retail segment sells directly to the consumer while the wholesale
distribution segment sells to both Company-owned and independent retail
food stores. Eliminations represent the activity between wholesale and
Company-owned retail stores. Inter-segment revenues are recorded at
amounts consistent with those charged to independent retail stores.
Identifiable assets are those used exclusively by that reportable segment.
Corporate assets are principally cash and cash equivalents, notes receivable,
transportation equipment, corporate office facilities and equipment.
Reportable segments, as defined by SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information," are components of an enterprise about
which separate financial information is available that is evaluated regularly by
the chief operating decision-maker in deciding resource allocation and assessing
performance.
Successor Predecessor
------------------------------------------------------ -----------
(In thousands) Thirteen Thirteen Thirty-nine June 7, 2002 December
Weeks Ended Weeks Ended Weeks Ended to 30, 2001
September September September September to June
27, 2003 28, 2002 27, 2003 28, 2002 6, 2002
------------ ---------- ------------ ----------- --------
NET SALES AND SERVICE FEES
Retail $ 668,286 $ 384,732 $1,639,772 $ 510,515 $ 632,586
Wholesale 844,314 740,533 2,328,958 916,581 1,303,749
Eliminations (369,908) (228,652) (953,898) (304,663) (390,688)
---------- ---------- ----------- ---------- ---------
Consolidated $1,142,692 $ 896,613 $3,014,832 $1,122,433 $1,545,647
========== ========== =========== ========== ==========
INCOME BEFORE INCOME TAXES
Retail $ 23,919 $ 15,039 $ 62,148 $ 25,588 $ 16,113
Wholesale 25,484 17,423 72,613 23,635 28,959
Corporate (23,309) (17,288) (63,361) (27,991) (26,731)
-------- -------- -------- ------- ---------
Consolidated $ 26,095 $ 15,174 $ 71,400 $ 21,232 $ 18,341
======== ======== ========= ======= =========
DEPRECIATION AND AMORTIZATION
Retail $ 6,552 $ 5,378 $ 16,209 $ 7,094 $ 9,105
Wholesale 1,539 2,364 4,619 3,153 4,405
Corporate 3,987 4,716 11,872 5,399 4,191
----- ------ ------- ------- ------
Consolidated $ 12,077 $ 12,458 $ 32,699 $ 15,646 $ 17,701
====== ====== ====== ======= ======
CAPITAL EXPENDITURES
Retail $ 11,277 $ 4,747 $ 27,235 $ 6,915 $ 5,273
Wholesale 910 1,396 3,898 2,183 1,426
Corporate 4,101 2,062 7,820 3,838 3,943
------ ----- ------ ------ ------
Consolidated $ 16,288 $ 8,205 $ 38,953 $ 12,936 $ 10,642
====== ===== ====== ====== ======
IDENTIFIABLE ASSETS (AT PERIOD END)
Retail $ 273,098 $ 351,452
Wholesale 750,526 399,705
Corporate 477,471 502,024
---------- ---------
Consolidated $1,501,095 $1,253,181
========== ==========
6. CONDENSED CONSOLIDATING INFORMATION
The following presents condensed consolidating financial statements of
Roundy's and its subsidiaries. All subsidiaries are 100% owned by
Roundy's. All of the domestic subsidiaries are guarantors of the Company's
$300 million 8 7/8% senior subordinated notes due 2012 (the "Notes").
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Thirteen Weeks Ended September 27, 2003 (Successor)
(In thousands)
Combined
Roundy's Subsidiaries Eliminations Total
--------- ------------ ------------ ---------
Revenues:
Net sales and service fees $421,737 $946,496 $(225,541) $1,142,692
Other-net 28 448 476
------- ------- --------- ---------
421,765 946,944 (225,541) 1,143,168
------- ------- --------- ---------
Costs and Expenses:
Cost of sales 379,801 743,010 (220,112) 902,699
Operating and administrative 34,093 174,184 (5,429) 202,848
Interest 5,499 6,027 11,526
------- ------- --------- --------
419,393 923,221 (225,541) 1,117,073
------- ------- --------- ---------
Income Before Income Taxes 2,372 23,723 26,095
Provision for Income Taxes 949 9,489 10,438
Equity in earnings of
subsidiaries 14,234 (14,234)
-------- -------- --------- ---------
Net Income $15,657 $ 14,234 $ (14,234) $ 15,657
======== ======== ========= =========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Thirty-nine Weeks Ended September 27, 2003 (Successor)
(In thousands)
Combined
Roundy's Subsidiaries Eliminations Total
----------- ------------ ------------ -----
Revenues:
Net sales and service fees $1,179,336 $2,480,157 $(644,661) $3,014,832
Other-net 513 1,261 1,774
---------- ---------- ---------- ----------
1,179,849 2,481,418 (644,661) 3,016,606
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of sales 1,059,585 1,969,015 (630,566) 2,398,034
Operating and administrative 94,114 434,483 (14,095) 514,502
Interest 15,916 16,754 32,670
-------- ---------- ----------- ---------
1,169,615 2,420,252 (644,661) 2,945,206
--------- ---------- ----------- ---------
Income Before Income Taxes 10,234 61,166 71,400
Provision for Income Taxes 4,094 24,466 28,560
Equity in earnings of
subsidiaries 36,700 (36,700)
-------- --------- --------- -------
Net Income $ 42,840 $ 36,700 $ (36,700) $ 42,840
======== ========= ========= ========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Thirteen Weeks Ended September 28, 2002 (Successor)
(In thousands)
Combined
Roundy's Subsidiaries Eliminations Total
--------- ------------ ------------ -------
Revenues:
Net sales and service fees $377,950 $674,988 $(156,325) $ 896,613
Other-net 80 604 684
------ ------- --------- --------
378,030 675,592 (156,325) 897,297
------- -------- --------- ---------
Costs and Expenses:
Cost of sales 344,451 547,726 (153,265) 738,912
Operating and administrative 25,519 111,865 (3,060) 134,324
Interest 4,820 4,067 8,887
------- -------- ---------- -------
374,790 663,658 (156,325) 882,123
------- ------- ---------- -------
Income Before Income Taxes 3,249 11,925 15,174
Provision for Income Taxes 1,332 4,889 6,221
Equity in earnings of
subsidiaries 7,036 (7,036)
------- -------- ---------- -------
Net Income $ 8,953 $ 7,036 $ (7,036) $ 8,953
======== ========= ========== =======
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Period from June 7, 2002 to September 28, 2002 (Successor)
(In thousands)
Combined
Roundy's Subsidiaries Eliminations Total
-------- ------------ ------------- --------
Revenues:
Net sales and service fees $472,395 $846,462 $(196,424) $1,122,433
Other-net 68 777 845
-------- -------- --------- ----------
472,463 847,239 (196,424) 1,123,278
-------- -------- --------- ----------
Costs and Expenses:
Cost of sales 430,411 685,946 (192,574) 923,783
Operating and administrative 31,607 139,233 (3,850) 166,990
Interest 5,891 5,382 11,273
-------- -------- -------- ---------
467,909 830,561 (196,424) 1,102,046
-------- --------- --------- ---------
Income (Loss) Before Income
Taxes 4,554 16,678 21,232
Provision for Income Taxes 1,867 6,838 8,705
Equity in earnings of
subsidiaries 9,840 (9,840)
------- -------- --------- --------
Net Income (Loss) $ 12,527 $ 9,840 $ (9,840) $ 12,527
======== ========= ========== ========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
December 30, 2001 to June 6, 2002 (Predecessor)
(In thousands)
Combined
Roundy's Subsidiaries Eliminations Total
---------- ------------ ------------ ---------
Revenues:
Net sales and service fees $642,969 $1,179,623 $(276,945) $1,545,647
Other-net (51) 745 694
--------- --------- ---------- ----------
642,918 1,180,368 (276,945) 1,546,341
--------- --------- ---------- ----------
Costs and Expenses:
Cost of sales 584,157 958,648 (271,577) 1,271,228
Operating and administrative 49,276 191,699 (5,368) 235,607
SARs and other termination
costs 7,400 7,400
Interest 6,498 7,267 13,765
-------- --------- --------- ---------
647,331 1,157,614 (276,945) 1,528,000
-------- ---------- ---------- ---------
Income (Loss) Before Income
Taxes (4,413) 22,754 18,341
(Benefit) Provision for
Income Taxes (1,783) 9,196 7,413
Equity in earnings of
subsidiaries 13,558 (13,558)
-------- --------- ---------- --------
Net Income $ 10,928 $ 13,558 $ (13,558) $ 10,928
========== =========== =========== ========
CONDENSED CONSOLIDATING BALANCE SHEETS
As of September 27, 2003 (Successor)
(In thousands)
Combined
Assets Roundy's Subsidiaries Eliminations Total
--------- ------------ ------------ -----
Current Assets:
Cash and cash equivalents $ 39,722 $ 30,443 $ 70,165
Notes and accounts
receivable-net 26,048 64,952 $ (12,745) 78,255
Merchandise inventories 66,559 204,940 271,499
Prepaid expenses and other 1,032 4,963 5,995
Deferred income tax
benefits (8,167) 24,336 16,169
------- ------- -------- -------
Total current assets 125,194 329,634 (12,745) 442,083
-------- ------- -------- -------
Property and Equipment-Net 13,861 36,840 315,058
Other Assets:
Investment in subsidiaries 229,535 (229,535)
Intercompany receivables 488,015 (488,015)
Deferred income tax
benefits 25,640 25,640
Notes receivable 500 2,523 3,023
Goodwill and other assets 250,842 464,449 715,291
------- -------- -------- -------
Total other assets 994,532 466,972 (717,550) 743,954
------- -------- -------- -------
Total assets $1,133,587 $1,097,803 $ (730,295)$1,501,095
========= ========= ======== =========
Liabilities and
Shareholder's Equity
Current Liabilities:
Accounts payable $ 123,774 $ 148,704 $ (6,900) $ 265,578
Accrued expenses and other 89,202 70,028 (5,845) 153,385
Current maturities of long-
term debt 2,500 1,127 3,627
Intercompany payable 488,015 (488,015)
Income taxes (18,837) 31,921 13,084
-------- ------- -------- --------
Total current
liabilities 196,639 739,795 (500,760) 435,674
-------- ------- --------- --------
Long-Term Debt 544,657 48,211 592,868
Other Liabilities 14,493 80,262 94,755
------- ------- --------- ----------
Total liabilities 755,789 868,268 (500,760) 1,123,297
------- ------- --------- ----------
Shareholder's Equity 377,798 229,535 (229,535) 377,798
------- ------- -------- --------
Total liabilities and
Shareholder's equity $1,133,587 $1,097,803 $ (730,295)$1,501,095
========== ========= ========== =========
CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 28, 2002 (Successor)
(In thousands)
Combined
Assets Roundy's Subsidiaries Eliminations Total
-------- ------------- ------------ ---------
Current Assets:
Cash and cash equivalents $117,307 $ 22,471 $139,778
Notes and accounts receivable-
net 35,543 56,317 $ (4,516) 87,344
Merchandise inventories 63,386 173,079 236,465
Prepaid expenses and other (4,649) 30,276 25,627
------- ------- ------- -------
Total current assets 211,587 282,143 (4,516) 489,214
------- ------- ------- -------
Property and Equipment-Net 10,873 203,675 214,548
Other Assets:
Investment in subsidiaries 190,732 (190,732)
Intercompany receivables 409,761 (409,761)
Deferred income tax benefits 25,231 25,231
Notes receivable 640 2,883 3,523
Goodwill and other assets 258,896 389,342 648,238
------- ------- -------- -------
Total other assets 885,260 392,225 (600,493) 676,992
------- ------- --------- -------
Total assets $1,107,720 $ 878,043 $ (605,009) $1,380,754
========== ========= ========== =========
Liabilities and Shareholder's Equity
Current Liabilities:
Accounts payable $ 127,742 $ 116,146 $ (3,043) $ 240,845
Accrued expenses and other 81,314 70,945 (1,473) 150,786
Current maturities of long-
term debt 2,500 461 2,961
Intercompany payable 409,761 (409,761)
-------- ------- --------- -------
Total current liabilities 211,556 597,313 (414,277) 394,592
-------- ------- --------- -------
Long-Term Debt 546,502 13,322 559,824
Other Liabilities 14,704 76,676 91,380
-------- ------- ---------- --------
Total liabilities 772,762 687,311 (414,277) 1,045,796
-------- ------- ---------- ---------
Shareholder's Equity 334,958 190,732 (190,732) 334,958
----------- -------- ---------- ---------
Total liabilities and
shareholder's equity $ 1,107,720 $878,043 $(605,009) $1,380,754
=========== ======== ========== ==========
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the thirty-nine weeks ended September 27, 2003 (Successor)
In thousands
Combined
Roundy's Subsidiaries Total
--------- ------------ -------
Net Cash Flows From Operating Activities: $ (15,934) $120,015 $ 104,081
------- ------- -------
Cash Flows From Investing Activities:
Capital expenditures-net of proceeds (5,732) (32,920) (38,652)
Payment for business acquisitions net of
cash acquired (132,577) (132,577)
Notes receivable 140 360 500
-------- -------- ---------
Net cash flows used in investing
activities (138,169) (32,560) (170,729)
-------- -------- ----------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings
Settlement of interest rate swap liability
Debt issuance cost (506) (506)
Contributed capital
Payments of debt (1,230) (1,229) (2,459)
Intercompany receivables-net 78,254 (78,254)
------- -------- -------
Net cash flows (used in) provided by
financing activities 76,518 (79,483) (2,965)
------ -------- -------
Net (Decrease) Increase in Cash and Cash
Equivalents (77,585) 7,972 (69,613)
Cash And Cash Equivalents, Beginning Of
Period 117,307 22,471 139,778
------- ------- --------
Cash And Cash Equivalents, End Of Period $ 39,722 $ 30,443 $ 70,165
======= ======= ========
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the period from June 7, 2002 to September 28, 2002 (Successor)
In thousands
Combined
Roundy's Subsidiaries Total
-------- ------------ --------
Net Cash Flows From Operating Activities: $(29,527) $ 66,590 $ 37,063
--------- -------- -------
Cash Flows From Investing Activities:
Capital expenditures-net of proceeds (934) (11,665) (12,599)
Acquisition consideration (539,996) (539,996)
Notes receivable (44) 378 334
--------- ------- ---------
Net cash flows used in investing
activities (540,974) (11,287) (552,261)
--------- ------- ---------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 475,000 475,000
Settlement of interest rate swap liability (6,652) (6,652)
Debt issuance cost (23,022) (23,022)
Contributed capital 314,500 314,500
Payments of debt (165,900) (143) (166,043)
Intercompany receivables-net 32,054 (32,654)
------- -------- --------
Net cash flows (used in) provided by
financing activities 626,580 (32,797) 593,783
------- -------- --------
Net Increase in Cash and Cash Equivalents 56,079 22,506 78,585
Cash And Cash Equivalents, Beginning Of
Period
-------- ------- --------
Cash And Cash Equivalents, End Of Period $ 56,079 $ 22,506 $ 78,585
========= ======= ========
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the period from December 30, 2001 to June 6, 2002 (Predecessor)
(In thousands)
Combined
Roundy's Subsidiaries Total
---------- ----------- -------
Net Cash Flows From Operating Activities: $ (5,620) $ 50,464 $ 44,844
------- ------- ------
Cash Flows From Investing Activities:
Capital expenditures-net of proceeds (4,007) (6,157) (10,164)
Notes receivable 443 436 879
------ ------ -------
Net cash flows used in investing
activities (3,564) (5,721) (9,285)
------- ------- -------
Cash Flows From Financing Activities:
Payments of debt (48,450) (168) (48,618)
Common stock purchased (56) (56)
Intercompany receivables-net 39,915 (39,915)
------- -------- --------
Net cash flows (used in) financing
activities (8,591) (40,083) (48,674)
------- -------- --------
Net Increase (Decrease) in Cash and Cash
Equivalents (17,775) 4,660 (13,115)
Cash And Cash Equivalents, Beginning Of
Period 23,137 22,379 45,516
-------- -------- --------
Cash And Cash Equivalents, End Of Period $ 5,362 $ 27,039 $ 32,401
======== ======== ========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
On April 8, 2002, Roundy's and RAC entered into a share exchange agreement
pursuant to which, among other things and subject to the terms and
conditions contained therein, RAC consummated the Transactions by acquiring
all of the issued and outstanding capital stock of Roundy's on June 6,
2002.
Results of Operations
The following table sets forth each category of statement of income data as
a percentage of net sales and service fees. The results of operations for
the thirty-nine weeks ended September 28, 2002 includes the results of the
Company for the period from December 30, 2001 to June 6, 2002 (predecessor)
and the period from June 7, 2002 through September 28, 2002 (successor).
As part of the Transactions, the Company entered into various financing
arrangements and as a result, the Company now has a different capital
structure. In addition, as a result of the Transactions, the Company's
assets and liabilities were adjusted to reflect their estimated fair market
values, and the purchase price in excess of fair market value was recorded
as goodwill. Accordingly, the results of operations for periods subsequent
to the consummation of the Transactions and related financing transactions
will not necessarily be comparable to prior periods.
Statements of Income Data
Thirteen Weeks Ended Thirty-nine Weeks Ended
------------------------------ -------------------------------
September 27, September 28, September 27, September 28,
2003 2002 2003 2002
----------------- --------------- ----------------- --------------
(Dollars in thousands):
Revenues:
Net sales and
service fees $1,142,692 100.0% $896,613 100.0% $3,014,832 100.0% $2,668,080 100.0%
Other-net 476 0.0 684 0.1 1,774 0.1 1,539 0.1
--------- ----- ------- ---- --------- ----- ---------- -----
Total 1,143,168 100.0 897,297 100.1 3,016,606 100.1 2,669,619 100.1
--------- ----- ------- ----- --------- ----- --------- -----
Cost and Expenses:
Cost of sales 902,699 79.0 738,912 82.4 2,398,034 79.5 2,195,011 82.3
Operating and
administrative 202,848 17.7 134,324 15.0 514,502 17.1 402,597 15.1
SARS and other
termination costs 7,400 0.3
Interest expense 10,673 0.9 8,338 0.9 30,189 1.0 16,857 0.6
Amortization of
deferred financing
costs 853 0.1 549 0.1 2,481 0.1 1,529 0.1
Interest rate swap
termination costs 6,652 0.2
--------- ---- ------- ----- --------- ---- --------- ----
1,117,073 97.7 882,123 98.4 2,945,206 97.7 2,630,046 98.6
--------- ---- ------- ----- --------- ---- --------- ----
Income before
income taxes 26,095 2.3 15,174 1.7 71,400 2.4 39,573 1.5
Provision for
income tax 10,438 0.9 6,221 0.7 28,560 1.0 16,118 0.6
---------- ---- -------- ----- ------ ----- ------- ----
Net income $ 15,657 1.4% $ 8,953 1.0% $ 42,840 1.4% $ 23,455 0.9%
========== ==== ======= ==== ======== ==== ========= ====
Net Sales and Service Fees
Net sales and service fees represent product sales less returns and
allowances and sales promotions. The Company derives its net sales and
service fees from the operation of retail grocery stores and the wholesale
distribution of food and non-food products. In addition, the Company
provides specialized support services for retail grocers, which include
promotional merchandising and advertising programs, accounting and
inventory control, store development and financing and assistance with
other aspects of store management.
The table below indicates the portion of the Company's net sales and
service fees attributable to retail sales and wholesale distribution for
the periods indicated. The results of operations for the thirty-nine weeks
ended September 28, 2002 include the results of the Company for the period
from December 30, 2001 through June 6, 2002 (predecessor) and the period
from June 7, 2002 through September 28, 2002 (successor). Eliminations
represent the intercompany activity between the Company's wholesale
operations and its retail operations (in thousands):
Period Ended
-----------------------------------------------------
Thirteen Weeks Ended Thirty-nine Weeks Ended
------------------------- --------------------------
September 27, September 28, September 27, September 28,
2003 2002 2003 2002
------------- ------------- ------------ -----------
Net Sales and Service Fees
Retail $668,286 $384,732 $1,639,772 $1,143,100
Wholesale 844,314 740,533 2,328,958 2,220,330
Eliminations (369,908) (228,652) (953,898) (695,350)
--------- --------- ---------- ----------
Total $1,142,692 $896,613 $3,014,832 $2,668,080
========== ========= =========== ==========
Costs and Expenses
Costs and expenses consist of cost of sales, operating and administrative
expenses, SARs and other termination costs and interest expense.
* Cost of sales includes product costs and freight.
* Operating and administrative expenses consist primarily of personnel
costs, sales and marketing expenses, depreciation and amortization
expenses, expenses associated with the Company's facilities, internal
management expenses, business development expenses and expenses for
finance, legal, human resources and other administrative departments.
* SARs and other termination costs include the costs associated with the
termination of the predecessor company's stock appreciation rights
program and the termination of employment agreements associated with
certain former officers of the predecessor company, all of which was
incurred in connection with the Transactions. These SARs and other
termination costs aggregate $7.4 million for the nine months ended
September 28, 2002.
* Interest expense includes interest on the Company's outstanding
indebtedness and amortization of deferred financing costs. In the
predecessor company, interest expense also includes $6.7 million
interest rate swap termination costs and $0.9 million for the write
off of deferred financing costs for the nine months ended
September 28, 2002.
Three Months Ended September 27, 2003 Compared With Three Months Ended
September 28, 2002
Net Sales and Service Fees
Net sales and service fees totaled $1,142.7 million in the third quarter of
2003, a $246.1 million, or 27.4%, increase from $896.6 million in the third
quarter of 2002. Retail sales were $668.3 million for the third quarter of
2003, a $283.6 million, or 73.7%, increase from $384.7 million for the
third quarter of 2002. This increase in retail sales was primarily due to
the effect of five acquired store groups, consisting of 51 stores in total,
that now operate under the Company's ownership (collectively, the "Acquired
Stores"). These Acquired Stores now operate as: (i) 31 Rainbow retail
grocery stores in the Minneapolis-St. Paul area acquired from Fleming in
June 2003 and reopened immediately by the Company; (ii) 14 Pick 'n Save
retail grocery stores acquired in three separate transactions (as discussed
in the Company's first quarter 2003 press release and Form 10-Q); and (iii)
six Copps Food Stores in the Madison, Wisconsin area acquired from A & P in
April 2003 and reopened in late May and early June 2003. None of the
Acquired Stores were owned or operated by the Company in the third quarter
of 2002. The Acquired Stores contributed approximately $271.2 million to
the third quarter retail sales increase. As of September 27, 2003, the
Company operated 111 retail grocery stores including 49 Pick 'n Save
stores, 31 Copps stores and 31 Rainbow stores.
Third quarter 2003 same store sales at the Company's retail stores
(including acquired Pick 'n Save licensed stores operated in 2002 by their
prior owners) improved 2.6% from the third quarter of 2002.
Wholesale sales were $844.3 million for the third quarter of 2003, a $103.8
million, or 14.0%, increase from $740.5 million for the third quarter of
2002. This improvement was due to increased sales to Company-owned stores
and new independent customers supplied by the Company's Wisconsin wholesale
divisions, as well as new independent customers supplied by the Company's
non-Wisconsin wholesale divisions.
Gross Profit
Gross profit was $240.0 million for the third quarter of 2003, an $82.3
million, or 52.2%, increase from $157.7 million for the third quarter of
2002. The increase in the Company's gross profit for the quarter was
primarily due to the Acquired Stores. The gross profit percentage for the
third quarters of 2003 and 2002 was 21.0% and 17.6%, respectively. The
increase in the gross profit percentage for the quarter was primarily due
to the increase in sales mix attributable to Company-owned retail stores,
which have higher gross profit percentages than the Company's wholesale
segment. Retail sales for the third quarter of 2003 represented 58.5% of
net sales and service fees compared with 42.9% for the third quarter of
2002. The increase in retail sales concentration was primarily due to the
Acquired Stores. The retail gross profit percentage was 25.9% and 24.9%
for the third quarter of 2003 and 2002, respectively. The increase in
retail gross profit percentage was primarily due to certain of the
Company's Acquired Stores which have a higher gross profit percentage than
the Company's other stores. Wholesale gross profit percentage was 8.8% in
both the third quarters of 2003 and 2002.
Operating and Administrative Expenses
Operating and administrative expenses were $202.8 million for the third
quarter of 2003, a $68.5 million, or 51.0%, increase from $134.3 million
for the third quarter of 2002. Operating and administrative expenses, as a
percentage of net sales and service fees, increased to 17.8% for the third
quarter of 2003 compared with 15.0% in the third quarter of 2002. The
percentage increase was attributable to the Acquired Stores and the
resulting increased concentration of sales in the Company's retail
operating segment for the third quarter of 2003, which has a significantly
higher ratio of operating costs to sales than the Company's wholesale
operations. Retail operating and administrative expenses increased to
22.3% of retail sales for the third quarter of 2003 compared with 21.0% for
the third quarter of 2002 primarily due to a higher ratio of operating
costs to sales for certain of the Company's Acquired Stores in comparison
to the Company's other stores. In addition, the higher ratio is, in part,
attributable to continuing investments in store-level service in these
stores consistent with levels experienced during a typical new store ramp-
up period. Wholesale operating and administrative expenses decreased to
5.8% of wholesale sales for the third quarter of 2003 compared with 6.5%
for the same period in 2002. This decrease was due to operational and
productivity improvements in the Company's wholesale operations as well as
increased wholesale sales.
Interest Expense
Interest expense (excluding amortization of deferred financing costs) was
$10.7 million for the third quarter of 2003, a $2.4 million increase from
$8.3 million for the third quarter of 2002. The increase in interest
expense was primarily due to increased levels of indebtedness compared with
the third quarter of 2002.
Income Taxes
Provision for income taxes was $10.4 million for the third quarter of 2003,
an increase of $4.2 million from $6.2 million for the third quarter of
2002. The effective income tax rates for the third quarters of 2003 and
2002 were 40.0% and 41.0%, respectively.
Net Income
Net income was $15.7 million for the third quarter of 2003, a $6.7 million
increase from $9.0 million in the third quarter of 2002. The net income
margin was 1.4% and 1.0% for the third quarters of 2003 and 2002,
respectively.
Nine Months Ended September 27, 2003 Compared With Nine Months Ended
September 28, 2002
Net Sales and Service Fees
Net sales and service fees totaled $3,014.8 million for the nine months
ended September 27, 2003, a $346.8 million, or 13.0%, increase from
$2,668.1 million for the nine months ended September 28, 2002. Retail
sales were $1,639.8 million for 2003, a $496.7 million, or 43.4%, increase
from $1,143.1 million in 2002. This increase in retail sales was primarily
due to the effect of the Acquired Stores, which contributed approximately
$472.0 million of the increase. As of September 27, 2003, the Company
operated 111 retail grocery stores including 49 Pick 'n Save stores, 31
Copps stores and 31 Rainbow stores.
Year-to-date 2003 same store sales at Company-owned retail stores
(including acquired Pick 'n Save licensed stores operated in 2002
by their prior owners)improved 2.1% from 2002.
Wholesale sales were $2,329.0 million for 2003, a $108.6 million, or 4.9%,
increase from $2,220.3 million in 2002. This increase was primarily due to
increased sales to Company-owned stores in the Wisconsin wholesale
divisions partially offset by lower sales to customers served by the
Company's non-Wisconsin divisions due to heightened retail competition.
Gross Profit
Gross profit was $616.8 million for 2003, a $143.7 million, or 30.4%,
increase from $473.1 million in 2002. The increase in the Company's gross
profit was due to the Acquired Stores, an increase in sales mix
attributable to higher profits derived by Company-owned retail stores and
increased wholesale sales. The gross profit percentage for the same
periods of 2003 and 2002 was 20.5% and 17.7%, respectively. The increase
in gross profit percentage for 2003 was primarily due to the increase in
sales mix attributable to Company-owned retail stores which have higher
gross profit percentages than the Company's wholesale segment. Retail
sales for 2003 represented 54.4% of net sales and service fees compared
with 42.8% for the same period in 2002. The retail gross profit percentage
was 25.6% and 24.9% for 2003 and 2002, respectively. The increase in
retail gross profit percentage was primarily due to certain of the
Company's Acquired Stores which have a higher gross profit percentage than
the Company's other stores. Year-to-date 2003 wholesale gross profit
percentage was 9.2% as compared with 9.0% in 2002.
Operating and Administrative Expenses
Operating and administrative expenses were $514.5 million for 2003, a
$111.9 million, or 27.8%, increase from $402.6 million in 2002. Operating
and administrative expenses, as a percentage of net sales and service fees,
increased to 17.1% for 2003 compared with 15.1% in 2002. The percentage
increase was attributable to the Acquired Stores and the resulting
increased concentration of sales in the Company's retail operating segment
in 2003, which has a significantly higher ratio of operating costs to sales
than its wholesale operations. Retail operating and administrative
expenses increased to 21.8% of retail sales for 2003 compared with 21.3%
for 2002. This increase was due to pre-opening expenses associated with
the certain Acquired Stores as well as continuing store-level service
investments in these stores. Wholesale operating and administrative
expenses decreased to 6.1% of wholesale sales for 2003 as compared with
6.6% for 2002. This decrease was due to operational and productivity
improvements in the Company's wholesale operations as well as increased
wholesale sales.
Interest Expense
Interest expense (excluding amortization of deferred financing costs and
interest rate swap termination costs) was $30.2 million for 2003, a $13.3
million increase from $16.9 million for 2002. The increase was primarily
due to increased borrowings associated with the purchase of the Company's
stock by RAC in June 2002.
Income Taxes
Provision for income taxes was $28.6 million for 2003, an increase of $12.4
million from $16.1 million for 2002. The effective income tax rates for
the first nine months of 2003 and 2002 were 40.0% and 40.7%, respectively.
Net Income
Net income was $42.8 million for 2003, a $19.4 million increase from $23.5
million for the prior year. In 2002, the Company recorded pre-tax one-time
charges of $6.7 million relating to the termination of an interest rate
swap and $7.4 million relating to the termination of the predecessor
Company's SARs program and termination of employment agreements associated
with certain former officers of the predecessor Company. The net income
margin was 1.4% and 0.9%, respectively, for 2003 and 2002.
Liquidity and Capital Resources
The Company's cash and cash equivalents totaled $70.2 million at September
27, 2003, compared with $139.8 million at December 28, 2002. Cash flows
provided by operating activities were $104.1 million for the nine months
ended September 27, 2003. Net cash used in investing activities totaled
$170.7 million primarily due to the Prescott's Acquisition of $47.8
million, the cash portion of the Rainbow Minneapolis Acquisition of $67.1
million, the Copps Madison Acquisition of $21.1 million and capital
expenditures. Net cash used in financing activities for the nine months
ended September 27, 2003 totaled $3.0 million.
Capital expenditures totaled $39.0 million for the nine months ended
September 27, 2003. Capital expenditures consisted primarily of remodeling
and maintenance of newly acquired and existing retail stores as well as
maintenance of the wholesale distribution network. Total capital
expenditures for fiscal 2003, excluding any acquisitions, are estimated to
be approximately $60 million. The Company's senior credit facility was
amended to approve the Rainbow Minneapolis Acquisition and increase capital
expenditure limits in 2003 and later years primarily to allow for (i) the
remodeling of the Company's expanded store base and (ii) the upgrade of the
Wisconsin distribution facilities that service these stores.
Working capital amounted to $6.4 million at September 27, 2003, compared
with $94.6 million at December 28, 2002. The decrease was primarily
related to a reduction in cash and cash equivalents resulting from the use
of cash for the Prescott's Acquisition, the Copps Madison Acquisition, the
Rainbow Minneapolis Acquisition and capital expenditures.
As a result of the Transactions, the Company has significant debt service
obligations, including interest, in future years. On June 6, 2002, in
connection with the Transactions, the Company entered into a credit
agreement with various lenders, (the "Credit Agreement"), allowing it to
borrow $250.0 million under a term loan, and up to $125.0 million under a
revolving line of credit. There are no outstanding borrowings under the
revolving line of credit. The Credit Agreement requires 28 consecutive
quarterly payments, the first 24 of which are $625,000 each and the last
four are $58.8 million each. In addition, the Company issued $300.0
million in aggregate principal amount of the Notes of which $225.0 million
was issued as of the date of the Transactions and $75.0 million was issued
in December 2002.
The Credit Agreement contains various restrictive covenants which: (i)
prohibit the Company from prepaying other indebtedness, (ii) require the
Company to maintain specified financial ratios, such as (a) a minimum fixed
charge coverage ratio, (b) a maximum ratio of senior debt to Consolidated
EBITDA (as defined in the Credit Agreement) and (c) a maximum ratio of
total debt to Consolidated EBITDA; and (iii) require the Company to satisfy
financial condition tests including annual limitations on capital
expenditures. In addition, the Credit Agreement prohibits the Company from
declaring or paying any dividends and prohibits it from making any payments
with respect to the Notes if the Company fails to perform its obligations
under or fails to meet the conditions of, the Credit Agreement or if
payment creates a default under the Credit Agreement. Failure to comply
with these covenants could have a material adverse impact upon the
Company's financial condition. The Company was in compliance with its
quarterly covenants at September 27, 2003.
The indenture governing the Notes, (the "Indenture") among other things,
(i) restricts the Company's ability and the ability of its subsidiaries to
incur additional indebtedness, issue shares of preferred stock, incur
liens, pay dividends or make certain other restricted payments and enter
into certain transactions with affiliates; (ii) prohibits certain
restrictions on the ability of certain of its subsidiaries to pay dividends
or make certain payments to it; and (iii) places restrictions on the
Company's ability and the ability of its subsidiaries to merge or
consolidate with any other person or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets.
Concurrent with the Rainbow Minneapolis Acquisition, the Company incurred
$36.2 million of additional capitalized lease obligations associated with
seven stores. Under the Company's senior credit facility, capitalized
lease obligations are included in senior indebtedness for the purpose of
calculating the Company's credit statistics. The Company's senior credit
facility was amended to allow this additional indebtedness to be incurred
in connection with the Rainbow Minneapolis Acquisition.
The Company's principal source of liquidity is cash flow generated from
operations and borrowings under its revolving credit facility. The
Company's principal use of cash is to meet debt service requirements,
finance its capital expenditures, make acquisitions and provide for working
capital. The Company expects that current excess cash and cash available
from operations, combined with funds available under its $125.0 million
revolving line of credit, will be sufficient to fund its operations, debt
service and capital expenditures for at least the next 12 months.
The Company's ability to make payments on and to refinance its debt, and to
fund planned capital expenditures will depend on its ability to generate
sufficient cash in the future. This, to some extent, is subject to general
economic, financial, competitive and other factors that are beyond the
Company's control. The Company believes that, based upon current levels of
operations, it will be able to meet its debt service obligations when due.
Significant assumptions underlie this belief, including, among other
things, that the Company will continue to be successful in implementing its
business strategy and that there will be no material adverse developments
in its business, liquidity or capital requirements. If the Company's
future cash flow from operations and other capital resources are
insufficient to pay its obligations as they mature or to fund its liquidity
needs, it may be forced to reduce or delay its business activities and
capital expenditures, sell assets, obtain additional debt or equity capital
or restructure or refinance all or a portion of its debt, on or before
maturity. There can be no assurance that the Company would be able to
accomplish any of these alternatives on a timely basis or on satisfactory
terms, if at all. In addition, the terms of the Company's existing and
future indebtedness may limit its ability to pursue any of these
alternatives. Also see "Forward-Looking Statements," below.
Critical Accounting Policies and Estimates
The preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States require the
Company to make estimates, assumptions and judgments that affect amounts of
assets and liabilities reported in the consolidated financial statements,
the disclosure of contingent assets and liabilities as of the date of the
financial statements and reported amounts of revenues and expenses during
the year. The Company believes its estimates and assumptions are
reasonable; however, future results could differ from those estimates under
different assumptions or conditions.
Critical accounting policies are policies that reflect material judgment
and uncertainty and may result in materially different results using
different assumptions or conditions. The Company identified the following
critical accounting policies and estimates: discounts and vendor
allowances, allowance for losses on receivables, closed facility lease
commitments, reserves for self-insurance and pension costs. For a detailed
discussion of accounting policies, refer to the notes to the consolidated
financial statements and management's discussion and analysis contained in
the Company's Annual Report on Form 10-K for the year ended December 28,
2002.
The following policy reflects certain updates relating to the Company's
adoption of EITF 02-16.
Discounts and Vendor Allowances
Purchases of product at discounted pricing are recorded in inventory at the
discounted price until sold. Volume and other program allowances are
accrued as a receivable when it is reasonably assured they will be earned
and reduce the cost of the related inventory for product on hand or cost of
sales for product already sold. Vendor monies received for slotting are
initially deferred and recognized as a reduction to cost of sales after
completion of an estimated slotting cycle of approximately nine months.
Vendor allowances received to fund specific, identifiable, incremental
advertising and certain other expenses are recorded as a reduction of the
Company's related advertising or other expense. Any excess reimbursement
above the Company's cost reduces cost of sales.
Forward-Looking Statements
This Form 10-Q filing contains forward-looking statements within the
meaning of Section 27A of the Securities Exchange Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts included herein or
therein are forward-looking statements. In particular, without limitation,
terms such as "anticipate," "believe," "estimate," "expect," "goal,"
"indicate," "may be," "objective," "plan," "predict," "should," "will" or
similar words are intended to identify forward-looking statements. Forward-
looking statements are subject to certain risks, uncertainties and
assumptions which could cause actual results to differ materially from
those predicted. Important factors that could cause actual results to
differ materially from such expectations ("Risk Factors") are disclosed in
the Company's Annual Report on Form 10-K for the year ended December 28,
2002 filed on March 27, 2003 (SEC File No. 002-94984) under the caption
"Item 1. Business - Risk Factors." Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to have been
correct. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by the Risk Factors. Additional
information concerning factors that could cause actual results to differ
materially from those in the forward-looking statements is contained from
time to time in the Company's SEC filings, including, but not limited to
information under the caption "Risk Factors" contained in the prospectus
filed on February 6, 2003 forming a part of the Company's Registration
Statement on Form S-4 under the Securities Act of 1933 (Registration No.
333-102779).
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in the Company's market risk since
December 28, 2002. See the discussion under Part II Item 7A in the
Company's Annual Report on Form 10-K for the year ended December 28, 2002.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in
the Company's reports under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") is recorded, processed,
summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated
and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
The Company carried out an evaluation as of September 27, 2003
(the "Evaluation Date"), under the supervision and with the
participation of the Company's management, including the
Company's chief executive officer and its chief financial
officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 15d-
14 of the Securities and Exchange Act of 1934 (the "Exchange
Act"). Based upon that evaluation, the chief executive officer
and chief financial officer concluded that as of the Evaluation
Date, the Company's disclosure controls and procedures (as
defined in Rule 15d-14 under the Exchange Act) are effective to
ensure that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and
forms.
It should be noted that any system of controls, however well
designed and operated, can provide only reasonable, and not
absolute, assurance that the objectives of the system are met.
In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control
systems, there can be no assurance that any design will succeed
in achieving its stated goals under all potential future
conditions, regardless of how remote.
(b) Changes in internal controls.
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
these controls subsequent to the date of their most recent
evaluation nor were there any significant deficiencies or
material weaknesses in the Company's internal controls.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to routine litigation incidental to its
business. Management believes that none of this litigation is
likely to have a material adverse effect on the Company's
consolidated financial position and results of operations. There
have been no material changes to the information contained in Item
3. Legal Proceedings in the Company's Annual Report filed on Form
10-K for the year ended December 28, 2002.
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The Exhibit Index contained in this report immediately following
the signature pages to this report is incorporated herein by
this reference.
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during the quarter
ended September 27, 2003:
Date of
Date Filed Report Item
-------------- --------- ------
August 7, 2003 August 7, The Company reported (and filed as
2003 an Exhibit a press release
announcing) financial results for
the six months ended June 28,
2003.
August 21, 2003 August 21, The Company filed a report on Form
2003 8-K/A relating to its June 2003
acquisition of certain of the
assets of Fleming Companies, Inc.
and Rainbow Food Group, Inc.
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.
ROUNDY'S, INC.
----------------
(Registrant)
Date: November 10, 2003 /s/ROBERT A. MARIANO
---------------- ----------------------------------
Robert A. Mariano, Chairman of the
Board, Chief Executive Officer and
President(Principal Executive Officer)
Date: November 10, 2003 /s/DARREN W. KARST
---------------- ----------------------------------
Darren W. Karst, Executive Vice
President and Chief Financial Officer
(Principal Financial Officer)
Roundy's, Inc.
Quarterly Report on Form 10-Q under the Securities Exchange Act of 1934
for the quarter ended September 27, 2003
EXHIBIT INDEX
The following exhibits to the Quarterly Report are filed herewith or, where
noted, are incorporated by reference herein:
Exhibit
No. Description
- ------- -------------
2.1 Stock Purchase Agreement by and among Roundy's, Inc. and
the Shareholders of Prescott's Supermarkets, Inc. dated
as of December 10, 2002 (1)
2.2 Asset Purchase Agreement dated October 18, 2002, by and
among B&H Gold Corporation, Gold's, Inc., Gold's Market,
Inc., Gold's of Mequon, LLC, Mega Marts, Inc. and
Roundy's, Inc. (2)
2.3 Share Exchange Agreement dated April 8, 2002 by and
between Roundy's Acquisition Corp. and Roundy's, Inc.(3)
2.4 Share Exchange Agreement dated May 18, 2001, by and
between Roundy's, Inc. and The Copps Corporation(4)
2.5 Asset Purchase Agreement dated February 21, 2003 among
Roundy's, Inc., The Copps Corporation, Kohl's Food
Stores, Inc. and The Great Atlantic & Pacific Tea
Company, Inc. (5)
2.6 Asset Purchase Agreement dated May 2, 2003, by and
between Fleming Companies, Inc., Rainbow Foods Group,
Inc., RBF Corp., and Roundy's, Inc. (6)
2.7 First Amendment dated June 4, 2003 to Asset Purchase
Agreement dated May 2, 2003 by and between Fleming
Companies, Inc., Rainbow Foods Group, Inc., RBF Corp.,
and Roundy's, Inc. (7)
3.1 Roundy's, Inc. Amended and Restated Articles of
Incorporation(8)
3.2 Amended and Restated By-Laws of Roundy's, Inc.(9)
4.1 Indenture of Trust dated June 6, 2002 between Roundy's,
Inc. and BNY Midwest Trust Company, as Trustee(10)
4.2 Form of $225,000,000 Roundy's, Inc. 8 7/8% Senior
Subordinated Notes due 2012(11)
4.3 Form of $75,000,000 Roundy's, Inc. 8 7/8% Senior
Subordinated Notes due 2012(11)
4.4 Form of Guaranty issued by Cardinal Foods, Inc., Holt
Public Storage, Inc., Insurance Planners, Inc., I.T.A.,
Inc., Jondex Corp., Kee Trans, Inc., Mega Marts, Inc.,
Midland Grocery of Michigan, Inc., Pick 'n Save
Warehouse Foods, Inc., Ropak, Inc., Rindt Enterprises,
Inc., Scot Lad Foods, Inc., Scot Lad-Lima, Inc., Shop-
Rite, Inc., Spring Lake Merchandise, Inc., The Copps
Corporation, The Midland Grocery Company, Ultra Mart
Foods, Inc., and Village Market, LLC as Guarantors of
the Registrant's $225,000,000 Roundy's, Inc. 8 7/8%
Senior Subordinated Notes due 2012 and $75,000,000
Roundy's, Inc. 8 7/8% Senior Subordinated Notes due
2012(12)
10.1 A/B Exchange Registration Rights Agreement dated as of
June 6, 2002 by and among Roundy's, Inc. as Issuer, the
subsidiary guarantors of Roundy's, Inc. listed on
Schedule A thereto, and Bear, Stearns & Co. Inc., CIBC
World Markets Corp. as Initial Purchasers(13)
10.2 A/B Exchange Registration Rights Agreement dated as of
December 17, 2002 by and among Roundy's, Inc. as Issuer,
the subsidiary guarantors of Roundy's, Inc. listed on
Schedule A thereto, and Bear, Stearns & Co. Inc., CIBC
World Markets Corp. as Initial Purchasers(14)
10.3 $375,000,000 Credit Agreement among Roundy's Acquisition
Corp., Roundy's, Inc., as Borrower, The Several Lenders
from Time to Time Parties Hereto, Bear Stearns Corporate
Lending Inc., as Administrative Agent, Canadian Imperial
Bank of Commerce, as Syndication Agent Bank One,
Wisconsin, Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland", New York
Branch, LaSalle Bank National Association, Associated
Bank, N.A., Harris Trust and Savings Bank, M&I Marshall
& Ilsley Bank, U.S. Bank, National Association, as
Documentation Agents Dated as of June 6, 2002(15)(16)
10.4 First Amendment to the Credit Agreement, dated as of
December 10, 2002, among Roundy's Acquisition Corp.,
Roundy's Inc., as Borrower, the several banks, financial
institutions and other entities from time to time
parties thereto, Bear Stearns & Co. Inc., as sole lead
arranger and sole bookrunner, Bear Stearns Corporate
Lending Inc., as administrative agent, Canadian Imperial
Bank of Commerce, as syndication agent, and the
institutions listed in the Credit Agreement as
documentation agents (17)
10.5 Guarantee and Collateral Agreement made by Roundy's
Acquisition Corp., Roundy's, Inc. and certain of its
Subsidiaries in favor of Bear Stearns Corporate Lending
Inc., as Administrative Agent Dated as of June 6,
2002(18)
10.6 Consulting Agreement dated July 1, 2002 between the
Registrant and Gerald F. Lestina(19)
10.7 Roundy's, Inc. Supplemental Employee Retirement Plan for
certain executive officers including Mr. Lestina(20)
10.8 Board of Directors Resolution dated March 19, 2002
adopting Amendment to Supplemental Employee Retirement
Plan(21)
10.9 Excerpts from Board of Directors Consent Resolution
adopting Amendment to Supplemental Employee Retirement
Plan effective June 7, 2002(22)
10.10 Form of Deferred Compensation Agreement between the
Registrant and certain executive officers including
Messrs. Schmitt and Kitz(23)
10.11 Amendment dated March 31, 1998 to Form of Deferred
Compensation Agreement between the Registrant and
certain executive officers including Messrs. Schmitt and
Kitz(24)
10.12 Second Amendment dated June 3, 1998 to Form of Deferred
Compensation Agreement for certain executive officers
including Messrs. Kitz and Schmitt(25)
10.13 Directors and Officers Liability and Corporation
Reimbursement Policy issued by American Casualty Company
of Reading, Pennsylvania (CNA Insurance Companies) as of
June 13, 1986(26)
10.14 Declarations page for renewal through November 1, 2003
of Directors and Officers Liability and Corporation
Reimbursement Policy(27)
10.15 Employment Agreement dated June 6, 2002 between
Registrant and Robert F. Mariano(28)
10.16 Employment Agreement dated June 6, 2002 between
Registrant and Darren W. Karst(29)
10.17 Employment Contract between the Registrant and Gary L.
Fryda dated March 31, 2000(30)
10.18 Excerpts from Roundy's, Inc. Board of Directors
resolution adopted March 19, 2002 relating to group term
carve-out, executive extension on COBRA continuation
rights and professional outplacement services for
Company Officers, including Messrs. Lestina, Fryda,
Schmitt and Kitz(31)
10.19 Confidentiality and Noncompete Agreement dated June 6,
2002 between the Registrant and Gerald F. Lestina(32)
10.20 Roundy's, Inc. Deferred Compensation Plan Amended and
Restated August 13, 2002(33)
10.21 Employment Agreement dated December 27, 2002 between
Registrant and Donald S. Rosanova (34)
10.22 Investor Rights Agreement dated June 6, 2002 by and
among Roundy's Acquisition Corp., Willis Stein &
Partners III, L.P., Willis Stein & Partners III-C, L.P.,
Willis Stein & Partners Dutch III-A, L.P., and Willis
Stein & Partners Dutch III-B, L.P., the investors listed
on the Schedule of Coinvestors, and certain executive
employees of Roundy's, Inc. (35)
10.23 First Amendment dated October 28, 2002 to Investor
Rights Agreement dated June 6, 2002, including form of
Transfer Notice and Joinder Agreement (36)
10.24 Second Amendment dated May 12, 2003 to $375,000,000
Credit Agreement dated as of June 6, 2002 among Roundy's
Acquisition Corp., Roundy's Inc., as Borrower, The
Several Lenders from Time to Time Parties Hereto, Bear
Stearns Corporate Lending Inc., as Administrative Agent,
Canadian Imperial Bank of Commerce, as Syndication
Agent, Bank One, Wisconsin, Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland",
New York Branch, LaSalle Bank National Association,
Associated Bank, N.A., Harris Trust and Savings Bank,
M&I Marshall & Ilsley Bank, U.S. Bank, National
Association, as Documentation Agents dated as of June 6,
2002. (37)
31.1 Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (FILED
HEREWITH)
31.2 Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (FILED
HEREWITH)
32.1 Certification of Principal Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (FILED
HEREWITH)
32.2 Certification of Principal Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (FILED
HEREWITH)
- ------
(1) Incorporated by reference to Exhibit 2.1 to Registrant's Registration
Statement on Form S-4 filed on January 28, 2003 (Commission File No. 333-
102779)
(2) Incorporated by reference to Exhibit 2.2 to Registrant's Registration
Statement on Form S-4 filed on January 28, 2003 (Commission File No. 333-
102779)
(3) Incorporated by reference to Exhibit 2.1 to Registrant's Registration
Statement on Form S-4 filed on August 2, 2002 (Commission File No. 333-
97623)
(4) Incorporated by reference to Exhibit 2.4 to Registrant's Current
Report on Form 8-K filed with the Commission on June 1, 2001 (Commission
File No. 002-94984)
(5) Incorporated by reference to Exhibit 2.5 to Registrant's Quarterly
Report on Form 10-Q for the period ended March 29, 2003 filed with the
Commission on May 9, 2003 (Commission File No. 002-94984)
(6) Incorporated by reference to Exhibit 2.9 to Registrant's Current
Report on Form 8-K filed with the Commission on June 23, 2003 (File No. 002-
94984)
(7) Incorporated by reference to Exhibit 2.10 to Registrant's Current
Report on Form 8-K filed with the Commission on June 23, 2003 (File No. 002-
94984)
(8) Incorporated by reference to Exhibit 3.1 to Registrant's Registration
Statement on Form S-4 filed with the Commission on August 2, 2002 (File No.
333-97623)
(9) Incorporated by reference to Exhibit 3.2 to Registrant's Registration
Statement on Form S-4 filed with the Commission on August 2, 2002 (File No.
333-97623)
(10) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-4 filed with the Commission on August 2, 2002 (File No.
333-97623)
(11) Incorporated by reference to Exhibits A-1 and A-2 to the Indenture of
Trust, Exhibit 4.1 to Registrant's Registration Statement on Form S-4 filed
with the Commission on August 2, 2002 (File No. 333-97623)
(12) Incorporated by reference to Exhibit E to the Indenture of Trust,
Exhibit 4.1 to Registrant's Registration Statement on Form S-4 filed with
the Commission on August 2, 2002 (File No. 333-97623)
(13) Incorporated by reference to Exhibit 10.1 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(14) Incorporated by reference to Exhibit 10.1 to Registrant's
Registration Statement on Form S-4 filed with the Commission on January 28,
2003 (Commission File No. 333-102779)
(15) Incorporated by reference to Exhibit 10.2 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(16) The Exhibits listed on page v of the Credit Agreement, Exhibit 10.2,
consist of the form of Guarantee and Collateral Agreement and the exhibits
thereto which are included as part of Exhibit 10.5.
(17) Incorporated by reference to Exhibit 10.3 to Registrant's
Registration Statement on Form S-4 filed with the Commission on January 28,
2003 (File No. 333-102779)
(18) Incorporated by reference to Exhibit 10.3 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(19) Incorporated by reference to Exhibit 10.6 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(20) Incorporated by reference to Exhibit 10.9 to Registrant's Form 10-Q
for the quarterly period ended July 3, 1999, filed with the Commission on
August 9, 1999 (Commission File No. 002-94984)
(21) Incorporated by reference to Exhibit 10.8 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(22) Incorporated by reference to Exhibit 10.9 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(23) Incorporated by reference to Exhibit 10.1 of Registrant's
Registration Statement on Form S-2 (File No. 33-57505) dated April 24, 1997
(24) Incorporated by reference to Exhibit 10.1(a) to Registrant's
Registration Statement on Form S-2 filed with the Commission on April 28,
1998 (Commission File No. 33-57505)
(25) Incorporated by reference to Exhibit 10.9 to Registrant's Quarterly
Report on Form 10-Q for the period ended October 3, 1998, filed with the
Commission on November 10, 1998 (Commission File No. 002-94984)
(26) Incorporated by reference to Exhibit 10.3 to Registrant's Annual
Report on Form 10-K for the fiscal year ended January 3, 1987, filed with
the Commission on April 3, 1987 (Commission File Nos. 002-66296 and 002-
94984)
(27) Incorporated by reference to Exhibit 10.16 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 28, 2002 filed
with the Commission on March 27, 2003 (Commission File No. 002-94984)
(28) Incorporated by reference to Exhibit 10.18 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(29) Incorporated by reference to Exhibit 10.19 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(30) Incorporated by reference to Exhibit 10.11 to Registrant's Form 8-K
dated April 14, 2000, filed with the Commission on April 14, 2000
(Commission File No. 002-94984)
(31) Incorporated by reference to Exhibit 10.23 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(32) Incorporated by reference to Exhibit 10.25 to Registrant's
Registration Statement on Form S-4 filed with the Commission on August 2,
2002 (File No. 333-97623)
(33) Incorporated by reference to Exhibit 10.27 to Amendment No. 1 to
Registrant's Registration Statement on Form S-4 filed with the Commission
on October 18, 2002 (File No. 333-97623)
(34) Incorporated by reference to Exhibit 10.30 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 28, 2002 filed with
the Commission on March 27, 2003 (Commission File No. 002-94984)
(35) Incorporated by reference to Exhibit 10.31 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 28, 2002 filed
with the Commission on March 27, 2003 (Commission File No. 002-94984)
(36) Incorporated by reference to Exhibit 10.32 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 28, 2002 filed
with the Commission on March 27, 2003 (Commission File No. 002-94984)
(37) Incorporated by reference to Exhibit 10.24 to Registrant's Current
Report on Form 8-K filed with the Commission on June 23, 2003 (File No.
002-94984)