What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 81 added, 60 removed, 379 unchanged (27% of the section changed)

36 unchanged sentences

150,000,000 shares authorized;

‎ 14,325,235 shares issued and outstanding March 26, 2022;

‎ 14,372,410 shares issued and outstanding June 25, 2022;

‎ 14,271,335 shares issued and outstanding at September 25, 2021

1 unchanged sentence

‎ 100,000,000 shares authorized;

‎ 4,669,141 shares issued and outstanding March 26, 2022;

‎ 4,621,966 shares issued and outstanding June 25, 2022;

‎ 4,723,041 shares issued and outstanding at September 25, 2021

Paid-in capital in excess of par value

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

( 3,426,140 )

19 unchanged sentences

Interest expense

Loss on early extinguishment of debt

Income before income taxes

Income tax expense

Other comprehensive income:

Other comprehensive income (loss):

Change in fair value of interest rate swap

Income tax expense

( 2,418,000 )

Income tax (benefit) expense

( 1,060,000 )

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax

Comprehensive income

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

Six Months Ended

Nine Months Ended

4,226,814,981

3 unchanged sentences

2,690,309,051

1,050,985,906

Operating and administrative expenses

3 unchanged sentences

Interest expense

Loss on early extinguishment of debt

Income before income taxes

2 unchanged sentences

Change in fair value of interest rate swap

Income tax expense

Income tax benefit

( 3,934,000 )

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

THREE AND SIX MONTHS ENDED MARCH 26, 2022 AND MARCH 27, 2021

THREE AND NINE MONTHS ENDED JUNE 25, 2022 AND JUNE 26, 2021

Comprehensive

21 unchanged sentences

( 3,056,682 )

Other comprehensive loss, net of income tax

Cash dividends

( 3,062,957 )

Stock repurchases, at cost

Common stock conversions

Balance, June 26, 2021

( 3,710,997 )

Balance, September 25, 2021

17 unchanged sentences

1,120,851,249

Other comprehensive income, net of income tax

Cash dividends

( 3,064,036 )

Common stock conversions

Balance, June 25, 2022

1,179,137,242

1,188,831,243

See notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

Cash Flows from Operating Activities:

5 unchanged sentences

( 3,644,501 )

Loss on early extinguishment of debt

Receipt of advance payments on purchases contracts

4 unchanged sentences

( 1,395,000 )

Changes in operating assets and liabilities:

( 1,204,000 )

Changes in operating assets and liabilities:

( 4,284,846 )

8 unchanged sentences

( 28,355,258 )

( 21,731,932 )

Net Cash Provided by Operating Activities

2 unchanged sentences

( 110,210,267 )

( 295,000,000 )

Proceeds from sales of property and equipment

9 unchanged sentences

( 692,507,850 )

Proceeds from issuance of bonds

Debt issuance costs

( 5,239,937 )

Principal payments on long-term borrowings

6 unchanged sentences

( 9,567,385 )

Net Cash Used by Financing Activities

( 17,575,986 )

( 44,642,387 )

Net (Decrease) Increase in Cash and Cash Equivalents

Net Cash (Used) Provided by Financing Activities

( 24,099,134 )

Net Increase in Cash and Cash Equivalents

Cash and cash equivalents at beginning of period

3 unchanged sentences

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

Three Months and Six Months Ended March 26, 2022 and March 27, 2021

Three Months and Nine Months Ended June 25, 2022 and June 26, 2021

BASIS OF PREPARATION

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the Company’s financial position as of March 26, 2022, and the results of operations and changes in stockholders’ equity for the three-month and six-month periods ended March 26, 2022 and March 27, 2021, and cash flows for the six months ended March 26, 2022 and March 27, 2021.

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the Company’s financial position as of June 25, 2022, and the results of operations and changes in stockholders’ equity for the three-month and nine-month periods ended June 25, 2022 and June 26, 2021, and cash flows for the nine months ended June 25, 2022 and June 26, 2021.

The adjustments made are of a normal recurring nature.

Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q.

It is suggested that these unaudited interim financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 25, 2021, filed with the Securities Exchange Commission on November 24, 2021.

The results of operations for the three-month and six-month periods ended March 26, 2022 are not necessarily indicative of the results to be expected for the full fiscal year.

It is suggested that these unaudited interim financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended September 25, 2021, filed by the Company under the Securities Exchange Act of 1934, on November 24, 2021.

The results of operations for the three-month and nine-month periods ended June 25, 2022 are not necessarily indicative of the results to be expected for the full fiscal year.

NEW ACCOUNTING PRONOUNCEMENTS

12 unchanged sentences

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Receivables are presented net of an allowance for doubtful accounts of $ 602,000 at March 26, 2022 and $ 157,000 at September 25, 2021.

Receivables are presented net of an allowance for doubtful accounts of $ 602,000 at June 25, 2022 and $ 157,000 at September 25, 2021.

The Company’s effective tax rate differs from the federal statutory rate primarily as a result of state income taxes and tax credits.

10 unchanged sentences

The Company is currently insured for covered costs in excess of $ 1.0 million per occurrence for workers’ compensation and for general liability and $ 450,000 per covered person for medical care benefits for a policy year.

The Company’s self-insurance reserves totaled $ 32.3 million and $ 32.1 million at March 26, 2022 and September 25, 2021, respectively.

Of this amount, $ 13.3 million is accounted for as a current liability and $ 19.0 million as a long-term liability, which is inclusive of $ 4.2 million of expected self-insurance recoveries from excess cost insurance or other sources that are recorded as a receivable at March 26, 2022.

The Company’s self-insurance reserves totaled $ 31.0 million and $ 32.1 million at June 25, 2022 and September 25, 2021, respectively.

Of this amount, $ 13.1 million is accounted for as a current liability and $ 17.9 million as a long-term liability, which is inclusive of $ 4.0 million of expected self-insurance recoveries from excess cost insurance or other sources that are recorded as a receivable at June 25, 2022.

At September 25, 2021, $ 13.3 million was accounted for as a current liability and $ 18.8 million as a long-term liability, which is inclusive of $ 4.2 million of expected self-insurance recoveries from excess cost insurance or other sources that are recorded as a receivable.

Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 7.0 million and $ 8.2 million for the three-month periods ended March 26, 2022 and March 27, 2021, respectively.

For the six-month periods ended March 26, 2022 and March 27, 2021, employee insurance expense, net of employee contributions totaled $ 20.3 million and $ 20.5 million, respectively.

Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 7.9 million and $ 7.8 million for the three-month periods ended June 25, 2022 and June 26, 2021, respectively.

For both the nine-month periods ended June 25, 2022 and June 26, 2021, employee insurance expense, net of employee contributions totaled $ 28.2 million.

The Company’s fuel operations contain underground tanks for the storage of gasoline and diesel fuel.

1 unchanged sentence

The Company followed the FASB ASC 410 model for determining the asset retirement cost and asset retirement obligation.

The amounts recorded are immaterial for each fuel center as well as in the aggregate at March 26, 2022 and September 25, 2021.

The amounts recorded are immaterial for each fuel center as well as in the aggregate at June 25, 2022 and September 25, 2021.

LONG-TERM DEBT

2 unchanged sentences

2029 and thereafter

The Company had a $ 175.0 million line of credit that was scheduled to mature in S eptember 2022 .

The Company had a $ 175.0 million line of credit that was scheduled to mature in September 2022.

In June 2021, the Company replaced that line by entering into a $ 150.0 million line of credit (the “Line”) that matures in June 2026.

The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate, or LIBOR.

The Line allows the Company to issue up to $ 10.0 million in letters of credit, of which none were issued at March 26, 2022.

The Line allows the Company to issue up to $ 10.0 million in letters of credit, of which none were issued at June 25, 2022.

The Company is not required to maintain compensating balances in connection with the Line.

At March 26, 2022, the Company had no borrowings outstanding under the Line.

At June 25, 2022, the Company had no borrowings outstanding under the Line.

In December 2010, the Company completed the funding of $ 99.7 million of bonds (the “ Bonds”) for construction of new warehouse and distribution space adjacent to its existing space in Buncombe County, North Carolina (the “Project”).

2 unchanged sentences

Mandatory redemption of the Bonds by the Company in the annual amount of $ 4.5 million began on January 1, 2014 .

The outstanding balance of the Bonds was $ 59.0 million as of March 26, 2022.

The outstanding balance of the Bonds was $ 59.0 million as of June 25, 2022.

The Company may redeem the Bonds without penalty or premium at any time prior to December 17, 2029 .

4 unchanged sentences

The Covenant Agreement incorporates substantially all financial covenants included in the Line.

In September 2017, the Company refinanced approximately $ 60 million secured borrowing obligations with a LIBOR-based amortizing floating rate loan secured by real estate maturing in October 2027 .

In September 2017, the Company refinanced approximately $ 60 million of secured borrowing obligations with a LIBOR-based amortizing floating rate loan secured by real estate maturing in October 2027 .

The Company has an interest rate swap agreement for a current notional amount of $ 32.0 million at a fixed rate of 3.92 %.

9 unchanged sentences

The Company has designated the swaps as cash flow hedges and records the changes in the estimated fair value of the swaps to other comprehensive income each period.

For the three- and six-month periods ended March 26, 2022, the Company recorded $ 7.5 million and $ 8.9 million of other comprehensive income, respectively, net of income taxes, in its Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 7.2 million were recorded as an asset at fair value in the line “Other Assets” on the Consolidated Balance Sheet as of March 26, 2022.

For the three- and six-month periods ended March 27, 2021, the Company recorded $ 5.1 million and $ 7.2 million of other comprehensive income, respectively, net of income taxes, in its Consolidated Statements of Comprehensive Income.

Unrealized losses of $ 4.0 million were recorded as a liability at fair value in the line “Other Long Term Liabilities” on the Consolidated Balance Sheet as of March 27, 2021.

For the three- and nine-month periods ended June 25, 2022, the Company recorded $ 3.3 million and $ 12.2 million of other comprehensive income, net of income taxes, respectively, in its Consolidated Statements of Comprehensive Income.

Unrealized gains of $ 11.6 million are recorded as an asset at fair value in the line “Other Assets” on the Consolidated Balance Sheet as of June 25, 2022.

For the three- and nine-month periods ended June 26, 2021, the Company recorded $ 0.7 million of other comprehensive loss and $ 6.5 million of other comprehensive income, net of income taxes, respectively, in its Consolidated Statements of Comprehensive Income.

Unrealized losses of $ 4.9 million are recorded as a liability at fair value in the line “Other Long Term Liabilities” on the Consolidated Balance Sheet as of June 26, 2021.

The Company’s long-term debt agreements generally contain provisions that under certain circumstances would permit lending institutions to terminate or withdraw their respective extensions of credit to the Company.

Included among the triggering factors permitting the termination or withdrawal of the Line to the Company are certain events of default, including both monetary and non-monetary defaults, the initiation of bankruptcy or insolvency proceedings, and the failure of the Company to meet certain financial covenants designated in its respective loan documents.

The Company was in compliance with all financial covenants at March 26, 2022.

The Company was in compliance with all financial covenants at June 25, 2022.

The Company’s long-term debt agreements generally have cross-default provisions which could result in the acceleration of payments due under all long-term debt agreements in the event of default under any one instrument.

At March 26, 2022, property and equipment with an undepreciated cost of approximately $ 274.4 million was pledged as collateral for long-term debt.

At June 25, 2022, property and equipment with an undepreciated cost of approximately $ 271.5 million was pledged as collateral for long-term debt.

Long-term debt and Line agreements contain various restrictive covenants requiring, among other things, minimum levels of net worth and maintenance of certain financial ratios.

At March 26, 2022, the Company had excess net worth totaling $ 305.9 million calculated under covenants in the Notes, the Bonds, the Loan, and the Line.

At June 25, 2022, the Company had excess net worth totaling $ 340.0 million calculated under covenants in the Notes, the Bonds, the Loan, and the Line.

This amount is available to pay dividends;

4 unchanged sentences

The Company paid cash dividends of $ 0.165 for each share of Class A Common Stock and $ 0.15 for each share of Class B Common Stock on January 13, 2022 to stockholders of record on January 6, 2022 .

For additional information regarding the dividend rights of the Class A Common Stock and Class B Common Stock, please see Note 8, “Stockholders’ Equity” to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K filed by the Company with the Securities Exchange Commission on November 24, 2021.

The Company paid cash dividends of $ 0.165 for each share of Class A Common Stock and $ 0.15 for each share of Class B Common Stock on April 14, 2022 to stockholders of record on April 7, 2022 .

For additional information regarding the dividend rights of the Class A Common Stock and Class B Common Stock, please see Note 8, “Stockholders’ Equity” to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K filed by the Company under the Securities Exchange Act of 1934, on November 24, 2021.

EARNINGS PER COMMON SHARE

10 unchanged sentences

Three Months Ended

Six Months Ended

March 26, 2022

Nine Months Ended

June 25, 2022

Allocated net income

8 unchanged sentences

Three Months Ended

Six Months Ended

March 27, 2021

Nine Months Ended

June 26, 2021

Allocated net income

13 unchanged sentences

Step rent provisions, escalation clauses and lease incentives are taken into account in computing minimum lease payments.

Operating lease cost for all operating leases totaled $ 3.0 million for the three months ended March 26, 2022 and $ 5.6 million for the six months ended March 26, 2022.

Operating lease cost for all operating leases totaled $ 2.6 million for the three months ended June 25, 2022 and $ 8.2 million for the nine months ended June 25, 2022.

This amount includes short-term (less than one year) leases, common area expenses, and variable lease costs, all of which are insignificant.

Cash paid for lease liabilities in operating activities approximates operating lease cost.

Maturities of operating lease liabilities as of March 26, 2022 were as follows:

Maturities of operating lease liabilities as of June 25, 2022 were as follows:

Remainder of 2022

2 unchanged sentences

Present value of lease liabilities

On the Condensed Consolidated Balance Sheets, lease extensions exercised during fiscal year 2022 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $ 5.0 million each during the six months ended March 26, 2022.

On the Condensed Consolidated Balance Sheets, lease extensions exercised less leased properties purchased during fiscal year 2022 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $ 3.1 million each during the nine months ended June 25, 2022.

The weighted average remaining lease term for the Company’s operating leases is 13.5 years.

The weighted average discount rate used to determine lease liability balances as of March 26, 2022 was 3.51 %, based on recent Company financings collateralized by store properties.

The weighted average discount rate used to determine lease liability balances as of June 25, 2022 is 3.51 %, based on the most recent Company financings collateralized by store properties.

Leases as Lessor

At March 26, 2022, the Company owned and operated 83 shopping centers in conjunction with its supermarket operations.

At June 25, 2022, the Company owned and operated 84 shopping centers in conjunction with its supermarket operations.

The Company leases to others a portion of its shopping center properties.

3 unchanged sentences

Three Months Ended

Six Months Ended

March 26, 2022

Nine Months Ended

June 25, 2022

Rents earned on owned and subleased properties:

5 unchanged sentences

( 1,976,474 )

Future minimum operating lease receipts at March 26, 2022 were as follows:

Future minimum operating lease receipts at June 25, 2022 are as follows:

Remainder of 2022

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues from unaffiliated customers:

7 unchanged sentences

The perishables category includes meat, produce, deli and bakery.

The fluid dairy operation had $ 13.1 million and $ 12.3 million in sales to the retail grocery segment for the three-month periods ended March 26, 2022 and March 27, 2021, respectively.

The fluid dairy had $ 25.6 million and $ 23.7 million in sales to the retail grocery segment for the six-month periods ended March 26, 2022 and March 27, 2021, respectively.

For the three-month periods ended June 25, 2022 and June 26, 2021, the fluid dairy operation had $ 12.8 million and $ 11.1 million in sales, respectively to the grocery sales segment.

The fluid dairy operation had $ 38.5 million and $ 34.8 million in sales to the retail grocery segment for the nine-month periods ended June 25, 2022 and June 26, 2021, respectively.

These sales have been eliminated in consolidation and are excluded from the amounts in the table above.

13 unchanged sentences

The inputs into the determination of fair value require significant management judgment or estimation.

The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified retirement plan assets at March 26, 2022 were as follows (in thousands):

The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified retirement plan assets at June 25, 2022 were as follows (in thousands):

Facility Bonds

8 unchanged sentences

The Company will from time to time make short-term non-interest bearing loans to the Company’s Investment/Profit Sharing Plan to allow the plan to meet distribution obligations during a time when the plan was prohibited from selling shares of the Company’s Class A Common Stock.

During the three months ended March 26, 2022, there were no such loans made, repaid or outstanding.

During the nine months ended June 25, 2022, no such loans were made, repaid or outstanding.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements