01—Abstract
Summary
Summary of the 10-K/A filed March 18, 1998. Cited figures are marked; the original filing is the authoritative source.
This is Amendment No. 1 (Form 10-K/A) to Costco Companies, Inc.'s annual report for the fiscal year ended August 31, 1997, signed March 17, 1998.
The amendment is narrow. It contains only Item 13 (Certain Relationships and Related Transactions) and the signature page, with no financial statements, MD&A, business description, or risk factors, so it cannot support an assessment of revenue, margins, profitability, cash flow, or balance sheet strength. The filing reports an aggregate market value of non-affiliate common stock of about $7.99 billiona as of October 31, 1997, and 213,867,058 shares outstanding on that date.
Investors should review the original 10-K for fiscal 1997 for operating and financial results. The disclosed related-party items are modest in dollar terms relative to a company of this size. They include underwriting by DLJ, whose managing director Hamilton E.
James sits on Costco's board, for the Zero Coupon Convertible Subordinated Notes due 2017. They also include about $1.17 millionb in compensation paid to Meisenbach Capital Management, a firm controlled by principal shareholder John W. Meisenbach, for benefits consulting.
Several directors and officers had relatives on the payroll or doing business with the company. Governance-minded investors may note these arrangements, but the amounts disclosed do not appear material to the company's overall financial position.
02—Key points
Key Highlights
- The filing is a 10-K/A that amends only Item 13 and includes no audited financial statements, so it provides no operating or financial performance data.
- Aggregate market value of common stock held by non-affiliates was approximately $7.99 billion as of October 31, 1997.
- Shares outstanding were 213,867,058 as of October 31, 1997 (par value $0.01).
- DLJ, whose managing director Hamilton E. James is a Costco director, was managing underwriter for the Zero Coupon Convertible Subordinated Notes due 2017 issued in fiscal 1997.
- Meisenbach Capital Management, controlled by principal shareholder John W. Meisenbach, received $1,170,763 from third-party insurers in fiscal 1997 for benefits and insurance consulting.
- Several executives' relatives were employed by the company in fiscal 1997 at salaries ranging from $60,000 to $141,250, and one related party supplied merchandise worth $737,862.
- The filing names Costco Companies, Inc. (Delaware, IRS No. 33-0572969) with headquarters in Issaquah, Washington; the signatory is CFO Richard A. Galanti.
03—Questions
Frequently Asked Questions
Does this amendment contain Costco's financial results for fiscal 1997?
No. The amendment includes only Item 13 on related-party transactions and the signature page. Fiscal 1997 revenue, earnings, and balance sheet data would appear in the original 10-K, not in this filing.
Why was this 10-K/A filed?
The document does not state the reason. Its content is limited to Item 13, which suggests the amendment was filed to update or add related-party disclosure rather than to restate the full annual report.
What related-party transactions should investors be aware of?
The main items are the DLJ underwriting role for the 2017 zero coupon convertible notes, where a DLJ managing director is a Costco director; about $1.17 million paid to Meisenbach Capital Management, a firm tied to a principal shareholder; a $737,862 merchandise sale by a company owned by a director's sister; and salaries paid to relatives of several directors and officers. These amounts are small relative to the company's size, but they are relevant to governance and board independence.
How large is Costco's public float based on this filing?
The aggregate market value of voting stock held by non-affiliates was $7,992,988,812 as of October 31, 1997. This is a point-in-time figure and does not indicate the stock's current value or the company's current market capitalization.
04—Continue