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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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(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 January 25, 1996
[ ] 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 1-8978
LONGS DRUG STORES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Maryland 68-0048627
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
141 North Civic Drive
Walnut Creek, California 94596
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (510) 937-1170
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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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
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The Exhibit Index is located on page 4 of this form.
(Cover page 1 of 2 pages)
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. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant as computed by the price of the registrant's shares on the New York
Stock Exchange at the close of business on April 9, 1996, was approximately
$902,896,434.
There were 19,898,544 shares of common stock outstanding as of April 9, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
The Longs Drug Stores Corporation Annual Report to Shareholders for the year
ended January 25, 1996 (hereinafter referred to as the Annual Report), has been
incorporated by reference into:
Part I - Items 1 and 3
Part II - Items 5, 6, 7, and 8
Part IV - Item 14(a)(1)
The definitive proxy statement dated April 19, 1996, as filed with the
Commission on April 18, 1996, involving the election of directors, has been
incorporated by reference into Part III, Items 10, 11, 12, and 13.
(Cover page 2 of 2 pages)
PART I
ITEM 1. BUSINESS
Longs Drug Stores is one of the largest drug store chains in North America
serving the American West. The Company's stores are located in California,
Colorado, Hawaii, and Nevada.
Pharmacy is the cornerstone of our business, accounting for over 30% of our
sales. Complementing the pharmacy business are the principal categories of
photo, cosmetics, greeting cards, over-the-counter health care products, and the
newly-added convenience foods. The Company's decentralized philosophy allows
store managers to enhance the product mix of their store based on customer
preference in the communities they serve. Longs sells nationally advertised
name-brand merchandise. Customers are provided extra value with items sold
under Longs' private label.
The Company's business is highly competitive. It competes in the retail drug
industry with local and national chains as well as with independent merchants.
Merchandise of the kind sold by the Company can be found in variety stores,
discount stores, supermarkets, and other retail facilities. Price, quality of
goods and services, product mix, and convenience to the customer are a few
principal elements of competition. Our business is seasonal, peaking in the
fourth quarter due to the Thanksgiving and Christmas holidays and cold and flu
season. Seasonality is consistent with our competitors in the retail drug
industry.
The remainder of the information required by this item is contained in the
Annual Report under the headings "Management's Discussion and Analysis" (pages
10-11), "Significant Accounting Policies" and "Employee Compensation and
Benefits" (page 16), and "Acquisition of Hawaii Stores" (page 18).
ITEM 2. PROPERTIES
As of January 25, 1996, Longs operates 328 stores; 284 in California, 32 in
Hawaii, and 6 each in Colorado and Nevada. Our stores vary in size, with the
majority ranging from 15,000 to 25,000 square feet, approximately 68% of which
is devoted to selling space. The average size of the stores opened this past
fiscal year is 23,000 square feet. The general office and 118 of our stores are
Company-owned buildings on Company-owned land; 41 stores are Company-owned
buildings on leased land; and 169 are totally leased. The Company's properties
are in satisfactory condition and suitable to meet its needs.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is not a party to any material pending legal proceedings other
than described in the Annual Report under the heading "Settlement of Lawsuit"
(page 18).
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
There were no matters submitted to a vote of stockholders during the fourth
quarter period covered by this report.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following persons are now executive officers of the Company and the Board of
Directors intends to reelect them to their current offices.
POSITION
HELD
NAME AGE PRIMARY EXECUTIVE POSITION WITH REGISTRANT SINCE(1)(2)
R. M. Long 57 Chairman of the Board and 1991
Chief Executive Officer(3) 1977
S. D. Roath 55 President(3) 1991
B. M. Brandon 57 Senior Vice President 1988
G. A. Duey 63 Senior Vice President 1988
D. J. Fong 47 Senior Vice President, Pharmacy 1995
O. D. Jones 57 Senior Vice President, Properties, 1975
and Secretary
R. A. Plomgren 62 Senior Vice President, Development(3) 1976
G. H. Saito 51 Senior Vice President, District Manager(3) 1995
D. R. Wilson 54 Senior Vice President, Marketing 1988
G. L. White 55 Vice President, Controller, 1988
and Secretary
C. E. Selland 39 Treasurer, Assistant Secretary 1994
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(1) Each officer is elected for a one-year term.
(2) All of the executive officers of the Company have been employed by the
Company for at least the past five years in executive capacities or in
related areas of responsibility.
(3) Also serves as a Director of the Company.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The principal market on which the Company's common stock is traded is the
New York Stock Exchange under the symbol "LDG". The additional information
required by this item is contained in the Annual Report under the headings
"Statements of Consolidated Stockholders' Equity" (page 15), "Stockholders'
Equity" (page 17), and "Quarterly Financial Data (Unaudited)" (page 18).
Such information is hereby incorporated by reference and filed herewith.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item is contained in the Annual Report under the
heading "Management's Discussion and Analysis" (pages 10-11), "Five Year
Selected Financial Data" (page 18), and "Selected Financial Data" (page 11).
Such information is hereby incorporated by reference and filed herewith.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required by this item is contained in the Annual Report under the
headings "Message to Shareholders" (pages 3-9) and "Management's Discussion and
Analysis" (pages 10-11). Such information is hereby incorporated by reference
and filed herewith.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is contained in the Annual Report (pages 12-
18). Such information is hereby incorporated by reference and filed herewith.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by this item with respect to directors is contained in a
definitive proxy statement dated April 19, 1996, as filed with the Securities
and Exchange Commission on April 18, 1996. Such information is hereby
incorporated by reference. Certain information relating to executive
officers of the Company is reported in Part I, Item 4 (page 2) of this
report, entitled "Executive Officers of the Registrant."
Information regarding compliance with Section 16 of the Securities and Exchange
Act of 1934 is set forth in the definite proxy statement dated April 19, 1996,
as filed with the commission on April 18, 1996, and is hereby incorporated by
reference.
Items 11, 12, and 13 are omitted since the Company filed on April 18, 1996,
with the Securities and Exchange Commission a definitive proxy statement
dated April 19, 1996, involving the election of directors, for the Annual
Meeting on May 21, 1996. Such information is hereby incorporated by
reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS
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The following financial statements and independent auditors' report
appearing in the Annual Report on pages 12 through 18 are incorporated
herein by reference:
Independent Auditors' Report.
Statements of Consolidated Income for the fiscal years ended
January 25,1996, January 26, 1995, and January 27, 1994.
Consolidated Balance Sheets as of January 25, 1996, and January
26, 1995.
Statements of Consolidated Cash Flows for the fiscal years
ended January 25, 1996, January 26, 1995, and January 27,
1994.
Statements of Consolidated Stockholders' Equity for the fiscal
years ended January 25, 1996, January 26, 1995, and January 27,
1994.
Notes to Consolidated Financial Statements.
(a)(2) Not applicable.
(a)(3) EXHIBITS
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Exhibit
No.
3. Articles of Incorporation and By-Laws
a. A copy of the Articles of Incorporation and By-Laws of Longs
Drug Stores Corporation is incorporated herein by reference
as previously filed with the Commission on March 18, 1985,
as Exhibit 3 to Form S-14, Registration No. 2-96486.
10. Material Contracts
a. Agreement for terminal benefits in the event of uninvited
change in corporate control of Longs Drug Stores California,
Inc., is incorporated herein by reference as previously
filed with the Commission on April 28, 1986, as Exhibit 10f
to Form 10-K.
b. A copy of the Rights Agreement of Longs Drug Stores
Corporation dated August 19, 1986, is incorporated herein by
reference as previously filed with the Commission on August
21, 1986, as Exhibits 1 and 2 to Form 8-A.
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Exhibit Page
No.: Number
c. A copy of the Long Term Incentive Plan of 1987 of Longs Drug
Stores Corporation is incorporated herein by reference as
previously filed with the Commission on March 13, 1987, on
Form S-8, Registration No. 33-12653.
d. A copy of the undertakings of Longs Drug Stores Corporation
is incorporated herein by reference as previously filed with
the Commission on April 10, 1987, into Form S-8,
Registration No. 2-97578.
e. A copy of the First Amendment to Rights Agreement of Longs
Drug Stores Corporation dated November 15, 1988, is
incorporated herein by reference as previously filed with
the Commission on December 1, 1988, as Exhibit 1 to Form
8-K.
f. A copy of the Note Purchase Agreement of Longs Drug Stores
California, Inc., dated April 28, 1989, is incorporated
herein by reference as previously filed with the Commission
on April 18, 1990, as Exhibit 10n to Form 10-K.
g. A copy of the Proposal to acquire Bill's Drugs, Inc. is
incorporated herein by reference as previously filed with
the Commission on August 6, 1993, on Form S-4, Registration
No. 033-49935.
h. A copy of the 1995 Long-Term Incentive Plan of Longs Drug
Stores Corporation is incorporated herein by reference as
previously filed with the Commission on August 5, 1994, on
Form S-8, Registration No. 033-54959.
i. A copy of the Longs Drug Stores Corporation Deferred
Compensation Plan of 1995 is incorporated herein by
reference as previously filed with the Commission on June 6,
1995, on Form S-8, Registration No. 033-60005.
13. Annual Report..........................................(Enclosed)
21. Subsidiary of the Registrant - Longs Drug Stores California,
Inc., a California Corporation.
23. Consent of Auditors
a. Independent Auditors' Consent.......................... 9
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
There have been no reports on Form 8-K filed during the quarter ended
January 25, 1996.
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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.
LONGS DRUG STORES CORPORATION
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(REGISTRANT)
Date April 19, 1996 /s/ G. L. White
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(G. L. White)
Vice President - Controller
(PRINCIPAL ACCOUNTING OFFICER)
Date April 19, 1996 /s/ C. E. Selland
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(C. E. Selland)
Treasurer
(PRINCIPAL FINANCIAL OFFICER)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been duly signed by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Date Signature
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April 19, 1996 By /s/ R. M. Long
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(R. M. Long)
Chairman of the Board
Chief Executive Officer and Director
April 19, 1996 By /s/ S. D. Roath
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(S. D. Roath)
President and Director
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Date Signature
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April 19, 1996 By /s/ R. M. Brooks
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(R. M. Brooks)
Director
April 19, 1996 By /s/ W. G. Combs
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(W. G. Combs)
Retired Vice President and Director
April 19, 1996 By /s/ D. G. DeSchane
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(D. G. DeSchane)
Director
April 19, 1996 By /s/ E. E. Johnston
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(E. E. Johnston)
Director
April 19, 1996 By /s/ Mary S. Metz
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(Mary S. Metz)
Director
April 19, 1996 By /s/ R. A. Plomgren
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(R. A. Plomgren)
Senior Vice President - Development
and Director
April 19, 1996 By /s/ H. R. Somerset
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(H. R. Somerset)
Director
April 19, 1996 By /s/ T. R. Sweeney
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(T. R. Sweeney)
Director
April 19, 1996 By /s/ F. E. Trotter
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(F. E. Trotter)
Director
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Date Signature
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April 19, 1996 By /s/ D. L. Sorby,
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(D. L. Sorby, Ph.D.)
Director
April 19, 1996 By /s/ G. H. Saito
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(G. H. Saito)
Director
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