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Form 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year ended June 3, 2000
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 No. 0-5815
AMERICAN CONSUMERS, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-1033765
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
P.O. Box 2328, 418 Alamar Street, Ft. Oglethorpe, GA 30742
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (706) 861-3347
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.10 par value
(Title of Class)
Exhibit Index on Page 12
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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing.
As of August 15, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $161,973. (Calculated for
these purposes by multiplying the total number of outstanding shares held by
non-affiliates by available bid price information.)
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
835,618 shares of Common Stock, $0.10 par value, as of August 15, 2000.
List hereunder the following documents, if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated: (1) any annual
report to security holders; (2) any proxy or information statement; and (3) any
prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of
1933. The listed documents should be clearly described for identification
purposes:
(1) specified portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended June 3, 2000, incorporated by reference into Part II of this
report on Form 10-K.
(2) specified portions of the Registrant's Definitive Proxy Statement filed with
the Securities and Exchange Commission for the Registrant's Annual Meeting of
Shareholders to be held September 21, 2000 incorporated by reference into Part
III of this report on Form 10-K.
ii
Part I
ITEM 1. BUSINESS
Incorporated in Georgia in 1968, American Consumers, Inc. (the "Company"),
operates six (6) supermarkets within a compact geographical area that comprises
Northwest Georgia, Northeast Alabama, and Southeast Tennessee.
All of the Company's supermarkets are operated under the name "Shop-Rite."
All of the Company's supermarkets are self-service and are engaged in the retail
selling of groceries including meats, fresh produce, dairy products, frozen
foods, bakery products, tobacco products, and miscellaneous other non-food
items. The Company's supermarkets feature national brand merchandise with only a
minor part of sales from controlled-label, private-label or generic merchandise.
"Controlled-label" or "private-label" merchandise is merchandise purchased from
national or local suppliers under a trade name chosen by the wholesaler
supplying the merchandise. The Company's supermarkets offer milk and certain
dairy products, as well as frozen vegetables and jellies, under the
controlled-labels "Foodland," "Ultimate Choice," "Freshland," "Price Saver" and
"Select." Bread and related bakery items are also offered as controlled-label
groceries.
During the fiscal year ended June 3, 2000, the Company's major supplier of
staple groceries was Fleming Co., Inc. ("Fleming"), with its principal corporate
offices in Oklahoma City, Oklahoma, until March of 2000 when the company
switched suppliers from Fleming to Mitchell Grocery Corp. operating from
Albertville, Alabama. For the fiscal year ended June 3, 2000, approximately 77%
of the Company's total inventory purchases of $20,267,610 were made from Fleming
and Mitchell. Prior years' purchases from Fleming were approximately 74% of
total inventory. The inventory purchases that were switched from Fleming to
Mitchell covered all lines of the Company's groceries. Fleming had been the
Company's principal supplier of tobacco products and meat products. Purchases
from Specialty Produce Company also were switched to Mitchell, so that Mitchell
now accounts for the majority of the Company's produce purchases.
Various local suppliers within the geographical area served by the
Company's supermarkets provide the Company with approximately 30% of its
requirements of certain perishable items, including produce, and account for
approximately 23% of the Company's total inventory purchases. The Company
believes that there are other adequate and convenient sources of groceries,
including several area and local suppliers, which could meet its needs.
Accordingly, while the Company has elected to purchase the majority of its
inventory from Mitchell for reasons of cost, the Company is not dependent upon
any particular supplier for its requirements of groceries.
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The supermarket industry is highly competitive and the principal method of
competition historically has been the pricing of groceries. The Company's
current major competitors now include various local and four regional chains.
The nature of such price competition includes the sale of selected items at
below cost prices as "loss-leaders" or "advertised specials", the practice of
"double couponing" or matching coupon discounts with additional cash discounts,
loyalty card programs, as well as the sale of certain main line items at prices
below the Company's wholesale cost. The Company believes that its major
competitors have been and are able to obtain preferential treatment from
suppliers in the form of advertising allowances, lower prices and other
concessions not available to the Company, which puts the Company at a
competitive disadvantage.
Management believes that, in recent periods, entry into the Company's trade
area by Winn Dixie, Save-A-Lot and United Grocery Outlets, and further expansion
in the area by Food Lion and Wal-Mart in addition to the presence of Ingle's and
Bi-Lo, have created a situation of ongoing price competition and increasingly
expensive advertising and promotional activities which place an operation the
size of the Company at a significant competitive disadvantage. These
developments have resulted in increased pressure on the Company's market share,
sales and profits during fiscal 2000, the effects of which are threatening the
profitability of the Company. The Company began a promotional program at the end
of its 1998 fiscal year in an effort to increase sales without an adverse effect
on gross margin. Management believes that competitive pressures on the Company
will continue to increase over time as a result of larger competitors, which are
in a better position than the Company to withstand prolonged price competition,
opening more new stores in the Company's trade area.
A continuous effort is made to improve the gross margin and increase
profitability by obtaining the lowest cost for the Company's inventory. The
Company recently began purchasing the majority of its inventory from Mitchell
Grocery Corp. in an effort to improve its product acquisition cost.
Backlog is not a significant factor in the Company's business.
The Company employs approximately 80 full-time employees and approximately
107 part-time and seasonal employees.
The Company believes it is in compliance with all federal, state and local
laws relating to environmental protection. No capital expenditures for equipment
relating to environmental protection are presently anticipated.
The Company is engaged in a single line of business; namely, the retail,
self-service grocery business which is not divisible into separate segments. The
following table sets forth
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information for the last three (3) fiscal years as to the total sales and
revenue of the Company contributed by each class of products which contributed a
significant percentage of the total retail sales and revenues of the Company in
the last three (3) fiscal years. Fiscal 1998 and 1999 consisted of 52 weeks,
while fiscal 2000 consisted of 53 weeks.
2000 1999 1998
---- ---- ----
Meat $ 6,235,625 $ 5,858,943 $ 6,201,052
Produce 1,823,746 1,771,291 1,846,159
Grocery & Non-
Food Items 17,559,192 17,852,328 18,872,986
ITEM 2. PROPERTIES
The executive offices of the Company are located in an 1,800 square-foot
office building on Alamar Street, just off Battlefield Parkway in Fort
Oglethorpe, Georgia, which the Company holds under a lease for a term of three
years, expiring in November 2002.
The Company's supermarkets are located in Ringgold, LaFayette, Chatsworth,
and Chickamauga, Georgia; Stevenson, Alabama; and Dayton, Tennessee. All of the
six locations are leased from unaffiliated landlords. Summary information
concerning these leases is presented below:
Square Current Lease Renewal
Location Footage Term Options
- -------- ------- ------------------- -------------
Ringgold, GA 14,400 12/01/97 - 11/30/02 1-5 yr. term
LaFayette, GA 20,500 02/26/92 - 01/31/02 3-5 yr. terms
Chatsworth, GA 24,360 04/29/88 - 04/28/03 3-5 yr. terms
Chickamauga, GA 13,840 01/01/96 - 12/31/04 2-5 yr. terms
Stevenson, AL 23,860 06/01/94 - 05/31/04 3-5 yr. terms
Dayton, TN 23,004 08/01/92 - 07/31/02 2-5 yr. terms
-------
119,964
=======
The supermarkets in Ringgold, LaFayette, and Chatsworth, Georgia;
Stevenson, Alabama; and Dayton, Tennessee, are located in strip shopping
centers. The store in Chickamauga, Georgia, is free-standing.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party, or to which any of its property is subject, nor have any material legal
proceedings been terminated during the fourth quarter of the Company's fiscal
year.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
3
EXECUTIVE OFFICERS OF THE COMPANY
The Company's Board of Directors appoints the Company's Executive Officers
for a term of one year. The names, ages, offices held with the Company, business
experience during the past five years, and certain directorships held by each of
the Company's Executive Officers are set forth in the following table:
Name and Year Office(s) Presently
First Elected as Held, Business Experience
Executive Officer and Certain Directorships Age
- ----------------- ------------------------- ---
Michael A. Richardson Chairman of the Board of 54
1977 Directors, President, Chief
Executive Officer, member
of the Executive Committee
of the Board of Directors.
Virgil Bishop Vice-President, Director, 61
1974 member of the Executive
Committee of the Board
of Directors.
Paul R. Cook Executive Vice-President, 50
1987 Treasurer, Chief Financial
Officer, Director, member
of the Executive Committee
of the Board of Directors.
Director of Capital Bank,
Fort Oglethorpe, Georgia
since May 1993.
James E. Floyd Vice-President, member of 56
1991 the Executive Committee
(ex-officio). From 1966 to
1991, Mr. Floyd was
Grocery Supervisor for
the Company.
Reba S. Southern Secretary, member of the 47
1991 Executive Committee (ex-
officio). From 1972 to 1991,
Mrs. Southern was Administra-
tive Assistant for the Company.
4
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information required by this Item is incorporated herein by reference to
page 4 of the Company's Annual Report to security holders for the fiscal year
ended June 3, 2000.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated herein by reference to
page 3 of the Company's Annual Report to security holders for the fiscal year
ended June 3, 2000.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this Item is incorporated herein by reference to
pages 5 through 7 of the Company's Annual Report to security holders for the
fiscal year ended June 3, 2000.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated herein by reference to
pages 8 through 19 of the Company's Annual Report to security holders for the
fiscal year ended June 3, 2000.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information concerning the Company's Executive Officers is set forth in Part I
of this report on Form 10-K under the caption "Executive Officers of the
Company." The remaining information required by this Item is incorporated herein
by reference to the Company's definitive proxy statement filed with the
Securities and Exchange Commission pursuant to Regulation 14A for the Company's
Annual Meeting of Shareholders to be held September 21, 2000, under the heading
"INFORMATION ABOUT NOMINEES FOR DIRECTOR" and "SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to the
Company's definitive proxy statement filed with the Securities and Exchange
Commission pursuant to Regulation 14A
5
for the Company's Annual Meeting of Shareholders to be held September 21, 2000,
under the headings "DIRECTORS' FEES AND ATTENDANCE," "EXECUTIVE COMPENSATION"
and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to the
Company's definitive proxy statement filed with the Securities and Exchange
Commission pursuant to Regulation 14A for the Company's Annual Meeting of
Shareholders to be held September 21, 2000, under the headings "PRINCIPAL
SHAREHOLDERS" and "INFORMATION ABOUT NOMINEES FOR DIRECTOR."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to the
Company's definitive proxy statement filed with the Securities and Exchange
Commission pursuant to Regulation 14A for the Company's Annual Meeting of
Shareholders to be held September 21, 2000, under the headings "COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" AND "CERTAIN TRANSACTIONS."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. The following Financial Statements included in the Company's 2000
Annual Report to the security holders for the fiscal year ended June
3, 2000, are incorporated by reference in Item 8 hereof:
- Report of Independent Accountants
- Balance Sheets - June 3, 2000 and May 29, 1999
- Statements of Income and Retained Earnings - Fiscal Years Ended
June 3, 2000; May 29, 1999 and May 30, 1998
- Statements of Cash Flows - Fiscal Years Ended June 3, 2000; May
29, 1999 and May 30, 1998
- Notes to Financial Statements
2. None of the schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
required under the related instructions, or else are inapplicable to
the Company, and therefore no such schedules have been filed.
6
3. The following exhibits are either incorporated by reference or
attached to and made a part of this report:
Exhibit 3 Articles of Incorporation and By-Laws. Incorporated by
reference to Exhibit 3 to Form 10-K for the year ended May
29, 1993.
Exhibit 10.1 Line of Credit Loan Agreement, related Note and Security
Agreement dated as of August 1992 by and between the Company
and Wachovia Bank of Georgia, N.A. Incorporated by reference
to Exhibit 10(a) to Form 10-K for the year ended May 29,
1993.
Exhibit 10.2 Financial Management Account Investment/ Commercial Loan
Access Agreement dated October 1, 1993, Amending Line of
Credit Loan Agreement dated as of August 1992 by and between
the Company and Wachovia Bank of Georgia, N.A. Incorporated
by reference to Exhibit 10(b) to Form 10-K for the year
ended June 3, 1995.
Exhibit 10.3 Addendum to Financial Management Account Investment/
Commercial Loan Access Agreement between the Company and
Wachovia Bank of Georgia, N.A., dated July 6, 1994.
Incorporated by reference to Exhibit 10(c) to Form 10-K for
the year ended June 3, 1995.
Exhibit 10.4 Letter Agreement dated December 5, 1994 amending Financial
Management Account Investment/Commercial Loan Access
Agreement between the Company and Wachovia Bank of Georgia,
N.A. Incorporated by reference to Exhibit 10(d) to Form 10-K
for the year ended June 3, 1995.
Exhibit 10.5 Note and Security Agreement dated February 14, 2000,
together with related Commitment Letter dated February 10,
2000, between the Company and Wachovia Bank of Georgia, N.A.
Incorporated by reference to Exhibits 10.1 (Note and
Security Agmt.) and 10.2 (Commitment Letter) to Form 10-Q
for the quarterly period ended February 26, 2000.
7
Exhibit 10.6 Lease for the Company's Ringgold, Georgia location.
Incorporated by reference to Exhibit 10(e) to Form 10-K for
the year ended May 29, 1993.
Exhibit 10.7 Lease Agreement for the Company's LaFayette, Georgia
location. Incorporated by reference to Exhibit 10(f) to Form
10-K for the year ended May 29, 1993.
Exhibit 10.8 Lease Agreement for the Company's Chatsworth, Georgia
location. Incorpor- ated by reference to Exhibit 10(g) to
Form 10-K for the year ended May 29, 1993.
Exhibit 10.9 Lease Agreement for the Company's Chickamauga, Georgia
location. Incorpor- ated by reference to Exhibit 10(h) to
Form 10-K for the year ended May 29, 1993.
Exhibit 10.10 Renewal Lease Agreement for the Company's Stevenson, Alabama
location. Incorporated by reference to Exhibit 10(h) to Form
10-K for the year ended May 28, 1994.
Exhibit 10.11 Lease Agreement for the Company's Dayton, Tennessee
location. Incorporated by referenced to Exhibit 10(j) to
Form 10-K for the year ended May 29, 1993.
Exhibit 10.12 Lease Agreement for the Company's Executive Offices.
Incorporated by reference to Exhibit 10.1 to Form 10-Q for
the quarterly period ended August 28, 1999.
Exhibit 10.13 Equipment Lease and Master License Agreement dated March 31,
1995 between the Company and Fleming Companies, Inc.
pertaining to the equipment and software for the Company's
electronic cash registers and scanning equipment.
Incorporated by reference to Exhibit 10(n) to Form 10-K for
the year ended June 1, 1996.
8
Exhibit 10.14 Collateral Assignment of Deposit, between the Company and
Wachovia Bank of Georgia, N.A., dated November 15, 1999.
Incorporated by referenced to Exhibit 10(a) to Form 10-Q for
the quarterly period ended November 27, 1999.
Exhibit 13 Annual Report to Shareholders for the Fiscal Year ended June
3, 2000.
Exhibit 23 Consent of Hazlett, Lewis & Bieter, PLLC.
Exhibit 27 Financial Data Schedule (EDGAR version only).
(b) The Company has not filed any report on Form 8-K during the last quarter of
the period covered by this report.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICAN CONSUMERS, INC.
Date: August 30, 2000 By: s/Michael A. Richardson
-------------------------------
Michael A. Richardson
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
s/Michael A. Richardson Chairman of the Board, August 30, 2000
- ------------------------ President and Chief
Michael A. Richardson Executive Officer
s/Paul R. Cook Executive Vice- August 30, 2000
- ------------------------ President, Chief
Paul R. Cook Financial Officer,
Treasurer (Chief
Accounting Officer) and
Director
s/Virgil E. Bishop Vice-President and August 30, 2000
- ------------------------ Director
Virgil E. Bishop
s/John P. Price Director August 30, 2000
- ------------------------
John P. Price
s/Thomas L. Richardson Director August 30, 2000
- ------------------------
Thomas L. Richardson
s/Jerome P. Sims Director August 30, 2000
- ------------------------
Jerome P. Sims, Sr.
s/ Andrew V. Douglas Director August 30, 2000
- ------------------------
Andrew V. Douglas
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