UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended----------------April 5, 2001------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from----------------------to------------------
Commission file number-----------------------1-11556--------------------
UNI-MARTS, INC.
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 25-1311379
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
477 East Beaver Avenue, State College, PA 16801-5690
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(Address of principal executive offices) (Zip Code)
(8l4) 234-6000
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report.)
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
-----
7,060,502 Common Shares were outstanding at May 11, 2001.
This Document Contains 21 Pages.
-1-
UNI-MARTS, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
------------------------------ PAGE(S)
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -
April 5, 2001 and September 30, 2000 3-4
Condensed Consolidated Statements of Operations -
Quarter Ended and Two Quarters Ended
April 5, 2001 and March 30, 2000 5
Condensed Consolidated Statements of Cash Flows -
Two Quarters Ended April 5, 2001 and March 30, 2000 6-7
Notes to Condensed Consolidated Financial Statements 8-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-15
Item 3. Quantitative and Qualitative Disclosures
about Market Risk 16
PART II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 17-19
Exhibit Index 21
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 5, September 30,
2001 2000
--------- -------------
ASSETS
CURRENT ASSETS:
Cash $ 3,749,021 $ 7,881,674
Accounts receivable - less allowances of
$217,600 and $226,200 4,554,166 6,106,062
Inventories 17,265,552 16,235,721
Prepaid and current deferred taxes 1,849,418 1,856,208
Property held for sale 1,426,495 1,603,421
Prepaid expenses and other 792,743 1,204,554
Loan due from officer - current portion 60,000 60,000
------------ ------------
TOTAL CURRENT ASSETS 29,697,395 34,947,640
PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation and
amortization of $56,759,700 and
$53,681,900 103,806,160 100,701,217
LOAN DUE FROM OFFICER 420,000 420,291
NET INTANGIBLE AND OTHER ASSETS 7,946,329 8,168,366
------------ ------------
TOTAL ASSETS $141,869,884 $144,237,514
============ ============
(Continued)
-3-
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
April 5, September 30,
2001 2000
------------ --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 12,977,386 $ 18,400,556
Gas taxes payable 3,526,110 3,399,429
Accrued expenses 6,716,286 7,028,709
Current maturities of long-term debt 2,224,035 2,232,728
Current obligations under capital leases 388,484 385,918
------------ ------------
TOTAL CURRENT LIABILITIES 25,832,301 31,447,340
LONG-TERM DEBT, less current maturities 79,021,636 74,219,620
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 543,947 786,205
DEFERRED TAXES 2,592,400 2,956,300
DEFERRED INCOME AND OTHER LIABILITIES 5,551,136 5,859,928
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, par value $.10 per share:
Authorized 15,000,000 shares
Issued 7,386,183 and 7,361,123
shares, respectively 738,618 736,112
Additional paid-in capital 23,838,279 23,816,387
Retained earnings 5,820,864 6,527,095
------------ ------------
30,397,761 31,079,594
Less treasury stock, at cost - 325,681
and 333,714 shares of Common Stock,
respectively ( 2,069,297) ( 2,111,473)
------------ ------------
28,328,464 28,968,121
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $141,869,884 $144,237,514
============ ============
See notes to consolidated financial statements
-4-
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
QUARTER ENDED TWO QUARTERS ENDED
April 5, March 30, April 5, March 30,
2001 2000 2001 2000
----------- ----------- ------------ ------------
REVENUES:
Merchandise sales $47,119,013 $35,406,199 $ 97,600,849 $ 71,898,832
Gasoline sales 49,242,127 32,566,295 107,701,249 66,044,921
Other income 391,676 661,693 1,068,609 931,669
----------- ----------- ------------ ------------
96,752,816 68,634,187 206,370,707 138,875,422
----------- ----------- ------------ ------------
COSTS AND EXPENSES:
Cost of sales 76,419,521 53,310,333 162,770,731 107,089,711
Selling 16,375,591 12,347,415 33,070,445 24,422,519
General and administrative 1,735,744 1,608,790 3,606,637 3,161,861
Depreciation and amortization 2,031,302 1,446,614 4,008,663 2,878,718
Interest 2,048,259 984,198 3,984,362 1,912,408
----------- ----------- ------------ ------------
98,610,417 69,697,350 207,440,838 139,465,217
----------- ----------- ------------ ------------
LOSS BEFORE INCOME TAXES ( 1,857,601) ( 1,063,163) ( 1,070,131) ( 589,795)
INCOME TAX BENEFIT ( 631,500) ( 318,900) ( 363,900) ( 176,900)
----------- ----------- ------------ ------------
NET LOSS ($ 1,226,101) ($ 744,263) ($ 706,231) ($ 412,895)
=========== =========== ============ ============
NET LOSS PER SHARE ($ 0.17) ($ 0.11) ($ 0.10) ($ 0.06)
=========== =========== ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,049,325 6,982,280 7,042,643 6,962,618
=========== =========== ============ ============
See notes to consolidated financial statements
-5-
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
TWO QUARTERS ENDED
April 5, March 30,
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $207,515,187 $137,299,458
Cash paid to suppliers and employees ( 205,050,740) ( 136,423,702)
Dividends and interest received 43,443 38,405
Interest paid (net of capitalized interest
of $263,800 and $0) ( 4,392,017) ( 1,790,370)
Income taxes received 6,790 31,693
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES ( 1,877,337) ( 844,516)
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from sale of capital assets 328,804 425,073
Purchase of property, equipment and
improvements ( 7,001,402) ( 3,093,957)
Note receivable from officer 291 0
Cash advanced for intangible and other
assets ( 72,406) ( 61,318)
Cash received for intangible and other
assets 31,017 542,384
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES ( 6,713,696) ( 2,187,818)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing on revolving credit agreement 2,004,651 1,200,000
Additional long-term borrowings 3,999,063 1,333,658
Principal payments on debt ( 1,554,397) ( 681,039)
Proceeds from issuance of common stock 9,063 2,294
------------ ------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 4,458,380 1,854,913
------------ ------------
NET DECREASE IN CASH ( 4,132,653) ( 1,177,421)
CASH:
Beginning of period 7,881,674 1,944,358
------------ ------------
End of period $ 3,749,021 $ 766,937
============ ============
-6-
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
TWO QUARTERS ENDED
April 5, March 30,
2001 2000
---------- ----------
RECONCILIATION OF NET LOSS TO NET CASH USED
IN OPERATING ACTIVITIES:
NET LOSS ($ 706,231) ($ 412,895)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES:
Depreciation and amortization 4,008,663 2,878,718
Loss on sale of capital assets and other 161,169 106,109
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 1,551,896 ( 1,285,043)
Inventories ( 1,029,831) ( 87,806)
Prepaid expenses 411,811 ( 130,622)
Increase (decrease) in:
Accounts payable and accrued expenses ( 5,608,912) ( 1,356,045)
Deferred income taxes and other liabilities ( 665,902) ( 556,932)
---------- ----------
TOTAL ADJUSTMENTS TO NET LOSS ( 1,171,106) ( 431,621)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES ($1,877,337) ($ 844,516)
========== ==========
See notes to consolidated financial statements
-7-
UNI-MARTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. FINANCIAL STATEMENTS:
The consolidated balance sheet as of April 5, 2001, the consolidated
statements of operations and the consolidated statements of cash
flows for the quarter ended and two quarters ended April 5, 2001 and
March 30, 2000, respectively, have been prepared by Uni-Marts, Inc.
(the "Company") without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position of the Company
at April 5, 2001 and the results of operations and cash flows for
all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000. Certain reclassifications have been made to the
September 30, 2000 financial statements to conform to classifications
used in fiscal year 2001. The results of operations for the interim
periods are not necessarily indicative of the results to be obtained
for the full year.
B. BUSINESS ACQUISITION:
In the Company's fiscal year 2000, pursuant to an asset purchase
agreement, the Company purchased the operating assets of Orloski
Service Station, Inc. and its owners (collectively "OSSI") for
approximately $42.7 million in cash. The transaction was accounted
for as a purchase, and accordingly, operations of the acquired OSSI
assets are included in the consolidated financial statements from the
date of acquisition.
The following table summarizes, on an unaudited pro forma basis, the
estimated combined statement of operations for the two quarters ended
March 30, 2000 as though the acquisition took place on October 1, 1999.
This pro forma information does not purport to be indicative of the
results of operations that would actually have been obtained if the
acquisition had been effective on the date indicated.
Two
Quarters Ended
March 30,
2000
--------------
Revenues $182,727,000
Loss before income taxes ($ 640,000)
Net loss ($ 384,000)
Pro forma loss per share ($ 0.05)
-8-
C. INTANGIBLE AND OTHER ASSETS:
Intangible and other assets consist of the following:
April 5, September 30,
2001 2000
---------- ------------
Goodwill $8,874,157 $8,874,157
Lease acquisition costs 439,153 439,153
Noncompete agreements 250,000 250,000
Other intangible assets 162,310 175,395
---------- ----------
9,725,620 9,738,705
Less accumulated amortization 2,833,348 2,601,107
---------- ----------
6,892,272 7,137,598
Other assets 1,054,057 1,030,768
---------- ----------
$7,946,329 $8,168,366
Goodwill represents the excess of costs over the fair value of net
assets acquired in business combinations and is amortized on a straight-
line basis over periods of 13 to 40 years. Lease acquisition costs are
the bargain element of acquired leases and are being amortized on a
straight-line basis over the related lease terms. It is the Company's
policy to periodically review and evaluate the recoverability of the
intangible assets by assessing current and future profitability and cash
flows and to determine whether the amortization of the balances over
their remaining lives can be recovered through expected future results
and cash flows.
D. REVOLVING CREDIT AGREEMENT:
On April 20, 2000, the Company executed a 3-year secured $10.0 million
revolving loan agreement (the "Agreement") with $3.5 million available for
letters of credit. During the second quarter of fiscal year 2001, the
Company amended the Agreement to increase the total credit line to $13.0
million, with $3.5 million available for letters of credit, and amend
certain financial covenants. Provisions of the Agreement require the
maintenance of certain covenants relating to minimum tangible net worth,
interest and fixed charge coverage ratios. Under the amended Agreement,
the Company was in compliance with these covenants as of April 5, 2001.
At April 5, 2001, $6.9 million was available for borrowings under the
Agreement. This Agreement expires on April 19, 2003. Borrowings of
$3.1 million and letters of credit of $3.0 million were outstanding at
April 5, 2001. This facility bears interest at the Company's option
based on a rate of either prime plus 1.0% or LIBOR plus 3.0%. The
interest rate at April 5, 2001 was 9.0%. The Agreement is collateralized
by substantially all of the Company's eligible inventories and eligible
receivables and selected properties. The net book value of these selected
properties at April 5, 2001 was $2,496,300.
-9-
E. LONG-TERM DEBT:
April 5, September 30,
2001 2000
----------- -------------
Mortgage Loan. Principal and interest will be
paid in 209 monthly installments. At April 5,
2001, the coupon rate was 9.08% and the effective
interest rate was 10.25%, net of unamortized fees
of $1,394,176 ($1,425,995 in 2000). $32,614,259 $33,047,242
Mortgage Loan. Principal and interest will be
paid in 230 monthly installments. The loan
bears interest at LIBOR plus 3.75%. At April 5,
2001, the coupon rate was 9.33% and the
effective interest rate was 10.10%, net of
unamortized fees of $420,716 ($437,653 in 2000). 21,597,338 21,804,203
Mortgage Loan. Principal and interest will be
paid in 230 monthly installments. At April 5, 2001,
the coupon rate was 10.39% and the effective
interest rate was 11.25%, net of unamortized fees
of $130,099 ($135,298 in 2000). 6,670,676 6,729,704
Mortgage Loans. Principal and interest are paid in
monthly installments. The loans expire in 2009,
2010, 2020 and 2021. Interest ranges from the
prime rate to LIBOR plus 3.75%. At April 5, 2001,
the blended coupon rate was 9.36% and the
effective interest rate was 10.01%, net of
unamortized fees of $118,651 ($0 in 2000). 6,796,482 3,466,311
Revolving Credit Agreement. Interest is paid
monthly. The interest rate at April 5, 2001 was
9.00%. (See Note D) 3,148,053 1,143,402
Equipment Loans. Principal and interest will be
paid in monthly installments. The loans expire
in 2010 and 2011 and bear interest at LIBOR plus
3.75%. At April 5, 2001, the coupon rate was 9.33%
and the effective interest rate was 10.16%, net of
unamortized fees of $178,444 ($176,414 in 2000). 9,327,103 9,028,276
Equipment Loan. Principal and interest will be
paid in 111 monthly installments. The loan expires
in 2010. At April 5, 2001, the coupon rate was
10.73% and the effective interest rate was 11.81%,
net of unamortized fees of $18,919
($20,713 in 2000). 1,021,841 1,058,413
Equipment Loans. Principal and interest are paid
in monthly installments. The loan expires in 2001
and bears interest at a rate of 10.00%. 69,919 174,797
----------- -----------
81,245,671 76,452,348
Less current maturities 2,224,035 2,232,728
----------- -----------
$79,021,636 $74,219,620
=========== ===========
-10-
E. LONG TERM DEBT (CONTINUED):
The mortgage loans are collateralized by $69,217,900 of property at
net book value, and the equipment loans are collateralized by
$5,754,600 of equipment, at net book value.
F. CONTINGENCIES:
Litigation -- The Company is involved in litigation and other legal
matters which have arisen in the normal course of business. Although
the ultimate results of these matters are not currently determinable,
management does not expect that they will have a material adverse
effect on the Company's consolidated financial position, results of
operations or cash flows.
-11-
ITEM 2.
UNI-MARTS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Set forth below are selected unaudited consolidated financial data of the
Company for the periods indicated:
QUARTER ENDED TWO QUARTERS ENDED
April 5, March 30, April 5, March 30,
2001 2000 2001 2000
-------- --------- -------- ---------
Revenues:
Merchandise sales 48.7% 51.6% 47.3% 51.8%
Gasoline sales 50.9 47.4 52.2 47.5
Other income 0.4 1.0 0.5 0.7
----- ----- ----- -----
Total revenues 100.0 100.0 100.0 100.0
Cost of sales 79.0 77.7 78.9 77.1
----- ----- ----- -----
Gross profit:
Merchandise (as a percentage of
merchandise sales) 32.4 33.1 32.8 33.7
Gasoline (as a percentage of
gasoline sales) 9.5 9.0 9.8 10.0
Total gross profit 21.0 22.3 21.1 22.9
Costs and expenses:
Selling 16.9 18.0 16.0 17.6
General and administrative 1.8 2.3 1.7 2.3
Depreciation and amortization 2.1 2.1 2.0 2.0
Interest 2.1 1.4 1.9 1.4
----- ----- ----- -----
Total expenses 22.9 23.8 21.6 23.3
Loss before income taxes ( 1.9) ( 1.5) ( 0.5) ( 0.4)
Income tax benefit ( 0.7) ( 0.4) ( 0.2) ( 0.1)
----- ----- ----- -----
Net loss ( 1.2)% ( 1.1)% ( 0.3)% ( 0.3)%
===== ===== ===== =====
OPERATING DATA (RETAIL LOCATIONS ONLY):
Average, per store, for stores open two
full comparable periods:
Merchandise sales $ 148,418 $ 141,810 $ 300,373 $ 293,378
Gasoline sales $ 179,608 $ 173,335 $ 390,440 $ 358,762
Gallons of gasoline sold 149,325 148,916 314,558 323,697
Total gallons of gasoline sold 41,036,492 27,963,860 86,673,643 59,548,712
Gross profit per gallon of
gasoline $ 0.114 $ 0.105 $ 0.122 $ 0.111
STORE INFORMATION:
Company-operated stores 292 246 292 246
Franchisee-operated stores 7 8 7 8
Locations with self-service gasoline 237 193 237 193
-12-
RESULTS OF OPERATIONS:
Matters discussed below should be read in conjunction with "Operating
Data (Retail Locations Only)" on the preceding page. Certain statements
contained in this report are forward looking, such as statements regarding
the Company's plans and strategies or future financial performance.
Although the Company believes that its expectations are based on reasonable
assumptions within the bounds of its knowledge, investors and prospective
investors are cautioned that such statements are only projections and that
actual events or results may differ materially from those expressed in any
such forward-looking statements. In addition to the factors discussed
elsewhere in this report, the Company's actual consolidated quarterly or
annual operating results have been affected in the past, or could be affected
in the future, by additional factors, including, without limitation, general
economic, business and market conditions; environmental, tax and tobacco
legislation or regulation; volatility of gasoline prices, margins and
supplies; merchandising margins; customer traffic; weather conditions; labor
costs and the level of capital expenditures.
BUSINESS ACQUISITION
--------------------
On April 21, 2000, the Company acquired the operating assets and business of
Orloski Service Station, Inc. and its affiliates (collectively "OSSI"). OSSI
operated a chain of 43 convenience stores in northeastern Pennsylvania. The
acquisition has had a significant impact on levels of revenues and expenses
in the quarter ended April 5, 2001 in comparison to the quarter ended
March 30, 2000 and the two-quarter periods ending on the same dates. Total
revenues generated by these locations were $20.2 million and $45.3 million
for the quarter ended April 5, 2001 and two quarters ended April, 5, 2001,
respectively. Gross profits were $4.7 million for the second fiscal quarter
and $10.1 million for the six months ended April 5, 2001.
QUARTERS ENDED APRIL 5, 2001 AND MARCH 30, 2000
-----------------------------------------------
Total revenues in the Company's second fiscal quarter ended April 5, 2001
were $96.8 million compared to total revenues of $68.6 million in the
quarter ended March 30, 2000, an increase of $28.1 million, or 41.0%.
Merchandise sales increased $11.7 million, or 33.1%, to $47.1 million,
compared to merchandise sales of $35.4 million in the second quarter of
fiscal year 2000. Additional stores in operation as a result of the
Company's April 21, 2000 acquisition of 43 convenience stores, and a 4.7%
increase in merchandise sales at stores open during both periods,
contributed to the merchandise sales growth. For the second quarter of
fiscal year 2001, gasoline sales increased $16.7 million, or 51.2%, to
$49.2 million, compared to $32.6 million in the second quarter of fiscal
year 2000. While gasoline gallons sold at stores open during both periods
were unchanged, total gasoline gallons sold increased by 13.1 million
during the quarter. These sales increases were primarily the result of the
operation of a larger store base, and a $0.04 increase in the average
retail price of gasoline sold during the second quarter of fiscal year 2001.
Sales of gasoline and merchandise during the second fiscal quarter were
also affected by the harsher than normal weather conditions in the Northeast
and the slower economy.
Gross profits on merchandise sales in the quarter ended April 5, 2001 were
$15.2 million, an increase of $3.5 million, or 30.0%, over gross profits of
$11.7 million in the quarter ended March 30, 2000. This resulted from
increased merchandise sales. Gross profit on merchandise sales as a
percentage of merchandise sales, however, decreased from 33.1% to 32.4% due
to competitive pressures on margins. Gross profits from gasoline sales
-13-
grew by $1.8 million, or 59.8%, to $4.7 million in the second quarter of
fiscal year 2001 from $2.9 million for the same period of fiscal 2000.
The gross profit increase is primarily due to an additional 13.1 million
gallons of gasoline sold and a slightly higher gross profit rate per gallon.
Selling expenses were $16.4 million in the quarter ended April 5, 2001
compared to $12.3 million in the quarter ended March 30, 2000, an increase
of$4.0 million, or 32.6%, due primarily to the additional stores in operation.
General and administrative expense increased by $127,000, or 7.9%, due to
higher staffing levels as well as pay increases granted at the beginning of
fiscal year 2001. Depreciation and amortization increased by $585,000, or
40.4%, due to an additional 45 stores in operation, store remodels and
gasoline facility upgrades. Interest expense increased by $1.1 million due
to higher borrowing levels from financing the April 2000 acquisition and new
store construction.
The loss before income tax benefit in the quarter ended April 5, 2001 was
$1.9 million compared to a loss before income tax benefit of $1.1 million
for the quarter ended March 30, 2000. The income tax benefit of these losses
was $632,000 in fiscal year 2001 and $319,000 in fiscal year 2000. The net
loss for the second quarter of fiscal year 2001 was $1.2 million, or $0.17 per
share, compared to a net loss of $744,000, or $0.11 per share, for the second
quarter of fiscal year 2000.
TWO QUARTERS ENDED APRIL 5, 2001 AND MARCH 30, 2000
---------------------------------------------------
Total revenues in the first two quarters of fiscal year 2001 were $206.4
million compared to total revenues of $138.9 million in the first two
quarters of fiscal year 2000, an increase of $67.5 million, or 48.6%.
Merchandise sales were $97.6 million and $71.9 million for the same
respective periods, an increase of $25.7 million, or 35.7%. This increase
is primarily due to the addition of 43 acquired and 2 newly constructed
stores. A 2.4% increase in merchandise sales at stores open during both
periods also contributed to the merchandise sales growth. Gasoline sales
grew by $41.7 million, or 63.1%, to $107.7 million in the two quarters ended
April 5, 2001 compared to gasoline sales of $66.0 million in the two quarters
ended March 30, 2000. This increase is also largely due to sales from a
higher number of stores in operation as well as a $0.13 increase in the
average retail selling price per gallon of gasoline. For the first two
quarters of fiscal year 2001, total gasoline gallons sold increased by 27.1
million, while gasoline gallons sold at stores open both periods declined by
2.8%.
Gross profits on merchandise sales grew by $7.7 million, or 31.9%, reflecting
profits on the additional merchandise sales, offset by a lower gross profit
percentage. Gross profits on gasoline sales increased by $3.9 million, or
59.7%, due to the sale of an additional 27.1 million gallons of gasoline as
well as a $0.01 per gallon increase in the gross profit rate.
Selling expenses increased by $8.6 million, or 35.4%, in the first two
quarters of fiscal year 2001 compared to the same period of fiscal year 2000
due to the increased number of stores in operation. General and administrative
expense increased by $445,000, or 14.1%, due to additional staffing, higher
salary levels and incentive programs. Depreciation and amortization increased
by $1.1 million, or 39.3%, due to the additional stores acquired and
constructed in the prior 12-month period. Interest expense increased by $2.1
million due primarily to higher borrowing levels from acquisition and
construction financing.
-14-
The Company incurred a loss before income tax benefit of $1.1 million in the
first two quarters of fiscal year 2001 compared to a loss before income tax
benefit of $590,000 in the first two quarters of fiscal year 2000. The income
tax benefit of those losses was $364,000 and $177,000, respectively. The net
loss for the two quarters ended April 5, 2001 was $706,000, or $0.10 per share,
compared to a net loss of $413,000, or $0.06 per share, for the two quarters
ended March 30, 2000. Poor weather conditions throughout the Northeast
combined with a declining economy during the second fiscal quarter, adversely
affected the Company's financial performance for the first six months of fiscal
year 2001.
LIQUIDITY AND CAPITAL RESOURCES:
Most of the Company's sales are for cash and its inventory turns over rapidly.
As a result, the Company's daily operations do not generally require large
amounts of working capital. From time to time, the Company utilizes
substantial portions of its cash to acquire and construct new stores and
renovate existing locations.
In the first two quarters of fiscal year 2001, the Company had capital
expenditures of $7.0 million, including $5.3 million for new store
construction and $1.7 million for remodeling and equipping store locations.
These expenditures were financed with $4.0 million of secured mortgage and
equipment loans and $3.0 million from existing cash balances. Capital
requirements for debt service and capital leases for the remaining two quarters
of fiscal year 2001 are approximately $1.1 million. The Company also
anticipates capital expenditures of $2.0 million during this period for store
remodeling and modernization and new store construction. During the second
quarter, the Company amended its revolving credit agreement to increase the
total credit line to $13.0 million. Management believes that cash from
operations and the available credit facilities will be sufficient to meet the
Company's obligations for the foreseeable future.
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company uses its revolving credit facility and its mortgage and equipment
loans to finance a significant portion of its operations and capital
expenditures. These on-balance sheet financial instruments, to the extent
they provide for variable rates of interest, expose the Company to interest
rate risk resulting from changes in the LIBOR or prime rate.
To the extent that the Company's financial instruments expose the Company to
interest rate risk, they are presented in the table below. The table
presents principal cash flows and related interest rates by year of maturity
for the Company's revolving credit facility, mortgage loans and equipment
loans at April 5, 2001.
Fiscal Year of Maturity
(dollar amounts in thousands)
Total Fair
Due At Value at
2001 2002 2003 2004 2005 Thereafter Maturity 4/5/01
------- ------ ------ ------ ------ ---------- -------- --------
Interest-rate sensitive assets:
------------------------------
Noninterest-bearing
checking accounts $3,419 $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,419 $ 3,419
Interest-bearing
checking accounts $ 330 $ 0 $ 0 $ 0 $ 0 $ 0 $ 330 $ 330
Average interest rate 4.45% 4.45%
_____________________________________________________________________________
$3,749 $ 3,749 $ 3,749
0.39% 0.39% --
Interest-rate sensitive liabilities:
-----------------------------------
Variable-rate borrowings $ 525 $1,457 $4,449 $1,448 $1,612 $29,726 $39,217 $39,935
Average interest rate 8.82% 8.81% 8.82% 8.80% 8.80% 8.80% 8.80% --
Fixed-rate borrowings $ 489 $1,068 $1,123 $1,248 $1,385 $36,716 $42,029 $46,174
Average interest rate 9.35% 9.35% 9.35% 9.35% 9.35% 9.35% 9.35% --
_____________________________________________________________________________
$1,014 $2,525 $5,572 $2,696 $2,997 $66,442 $81,246 $86,109
9.09% 9.09% 9.10% 9.10% 9.10% 9.11% 9.11% --
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of Uni-Marts, Inc. was held on
February 22, 2001 at which the following matters were voted upon:
(1) Election of three Class II directors to serve until the Annual
Meeting of Stockholders in 2004.
(2) Ratification of the appointment of independent auditors.
The results of the votes on the matters considered at the Annual Meeting of
Stockholders are set forth below:
Election of Directors:
Votes Votes Broker
"For" "Withheld" Non-Votes
--------- ---------- ---------
Stephen B. Krumholz 5,386,605 8,116 0
Jack G. Najarian 5,381,150 13,571 0
Anthony S. Regensburg 5,385,940 8,781 0
Class I and Class III directors whose terms of office expire in 2003
and 2002, respectively:
Class I Class III
------- ---------
Henry D. Sahakian M. Michael Arjmand
Herbert C. Graves Frank R. Orloski, Sr.
Gerold C. Shea Daniel D. Sahakian
Ratification of appointment of independent auditors:
Votes Votes Votes Broker
"For" "Against" "Abstain" Non-Votes
--------- --------- --------- ---------
5,388,841 4,203 1,677 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1 Amended and Restated Certificate of Incorporation of the
Company (Filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the period ended March 30, 1995
and incorporated herein by reference thereto).
3.2 By-Laws of the Company (Filed as Exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the period
ended March 30, 1995 and incorporated herein by reference
thereto).
4.1 Form of the Company's Common Stock Certificate (Filed as
Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q
for the period ended April 1, 1993, File No. 1-11556, and
incorporated herein by reference thereto).
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10.1 Uni-Marts, Inc. Amended and Restated Equity Compensation
Plan (Filed as Exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the period ended March 30, 1995 and
incorporated herein by reference hereto).
10.2 Uni-Marts, Inc. Retirement Savings & Incentive Plan (Filed
as Exhibit 4.2 to the Company's Registration Statement on
Form S-8, File No. 33-9807, filed on July 10, 1991, and
incorporated herein by reference thereto).
10.3 Form of Indemnification Agreement between Uni-Marts, Inc. and
each of its Directors (Filed as Exhibit A to the Company's
Definitive Proxy Statement for the February 25, 1988 Annual
Meeting of Stockholders, File No. 0-15164, and incorporated
herein by reference thereto).
10.4 Uni-Marts, Inc. Deferred Compensation Plan (Filed as Exhibit 10.8
to the Annual Report of Uni-Marts, Inc. on Form 10-K for the year
ended September 30, 1990, File No. 0-15164, and incorporated
herein by reference thereto).
10.5 Uni-Marts, Inc. Performance Unit Plan (Filed as Exhibit 10.9 to
the Annual Report of Uni-Marts, Inc. on Form 10-K for year ended
September 30, 1994 and incorporated herein by reference thereto).
10.6 Composite copy of Change in Control Agreements between Uni-Marts,
Inc. and its executive officers (Filed as Exhibit 10.10 to the
Annual Report of Uni-Marts, Inc. on Form 10-K for the year ended
September 30, 1994 and incorporated herein by reference thereto).
10.7 Uni-Marts, Inc. 1996 Equity Compensation Plan (Filed as Exhibit A
to the Company's Definitive Proxy Statement for the February 22,
1996 Annual Meeting of Stockholders and incorporated herein by
reference thereto).
10.8 Amendment 1998-1 to the Uni-Marts, Inc. Equity Compensation Plan
(Filed as Exhibit 10.10 to the Annual Report of Uni-Marts, Inc.
on Form 10-K for the year ended September 30, 1998 and
incorporated herein by reference thereto).
10.9 Amended and Restated Note between Henry D. Sahakian and Uni-Marts,
Inc. dated January 25, 1999 (Filed as Exhibit 10.10 to the
Company's Quarterly Report on Form 10-Q for the period ended
April 1, 1999 and incorporated herein by reference thereto).
10.10 Loan Agreement between FFCA Acquisition Corporation and Uni-Marts,
Inc. dated June 30, 1998 (filed as Exhibit 10.10 to the Company's
Quarterly Report on Form 10-Q for the period ended on July 2, 1998
and incorporated herein by reference thereto).
10.11 Uni-Marts, Inc. Employee Stock Purchase Plan (Filed as Exhibit A
to the Company's Definitive Proxy Statement for the February 25,
1999 Annual Meeting of Stockholders and incorporated herein by
reference thereto).
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10.12 Loan Agreement between FFCA Acquisition Corporation and Uni Realty
of Wilkes-Barre, L.P. dated April 21, 2000 (Filed as Exhibit 20.1
to the Company's Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.13 Loan Agreement between FFCA Funding Corporation and Uni Realty of
Luzerne, L.P. dated April 21, 2000 (Filed as Exhibit 20.2 to the
Company's Form 8-K filed on May 8, 2000 and incorporated herein
by reference thereto).
10.14 Equipment Loan Agreement between FFCA Acquisiton Corporation and
Uni-Marts, Inc. dated April 21, 2000 (Filed as Exhibit 20.3 to
the Company's Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.15 Equipment Loan Agreement between FFCA Funding Corporation and
Uni-Marts, Inc. dated April 21, 2000 (Filed as Exhibit 20.4 to
the Company's Form 8-K filed on May 8, 2000 and incorporated
herein by reference thereto).
10.16 Revolving Credit Loan Agreement between Provident Bank and Uni-
Marts, Inc. dated April 20, 2000 (Filed as Exhibit 10.15 to the
Company's Quarterly Report on Form 10-Q for the period ended
June 29, 2000 and incorporated herein by reference thereto).
10.17 Amendment to the Revolving Credit Loan Agreement between Provident
Bank and the Company dated January 16, 2001.
10.18 Amendment to the Revolving Credit Loan Agreement between Provident
Bank and the Company dated March 31, 2001.
11 Statement regarding computation of per share loss.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the quarter ended
April 5, 2001.
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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.
Uni-Marts, Inc
------------------------------
(Registrant)
Date May 21, 2001 /s/ Henry D. Sahakian
------------ ------------------------------
Henry D. Sahakian
Chairman of the Board
(Principal Executive Officer)
Date May 21, 2001 /s/ N. Gregory Petrick
------------ ------------------------------
N. Gregory Petrick
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
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UNI-MARTS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Number Description
------ -----------
10.17 Amendment to the Revolving Credit Loan
Agreement between Provident Bank and
Uni-Marts, Inc. dated January 16, 2001.
10.18 Amendment to the Revolving Credit Loan
Agreement between Provident Bank and
Uni-Marts, Inc. dated March 31, 2001.
11 Statement regarding computation of per
share loss.
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