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Kroger Annual Report, Year Ended Feb 3, 2001

Filing Date
Filed May 2, 2001
Period End
February 3, 2001
Security
KR
In the record · 2016–202610-K1210-Q328-K137

KR filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. FY2022 annual report10-K · Mar ’22Mar ’22
  4. Impairment8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed May 2, 2001. Cited figures are marked; the original filing is the authoritative source.

The Kroger Co. reported fiscal 2000 results for the 53 weeks ended February 3, 2001, with sales of $49.0 billiona, up from $45.4 billion in the prior 52-week year, and net earnings of $877 million, or $1.04 diluted earnings per share, compared with $613 million, or $0.72 per diluted share, in 1999 as restated.

Gross profit reached 26.91% of sales, and operating, general and administrative expenses were 18.65% of sales. EBITDA rose to $3,536 millionb from $3,124 million, and the company stated it was in compliance with its EBITDA-based covenants. Results were affected by a $191 million impairment charge, $145 million of one-time expenses related to mergers, and $15 million of merger related costs in 2000.

Cash flow from operations was $2,281 millionc in 2000, up from $1,548 million in 1999, and total debt including capital leases was $8.5 billion at year-end. The company plans capital expenditures of $2.0 billion for fiscal 2001 excluding acquisitions, and it has no dividends in the past three fiscal years, with its Credit Agreement prohibiting cash dividends. Shareholder capital returns have been through buybacks: the Board authorized an incremental $1 billion repurchase program on March 1, 2001, in addition to the existing $750 million program, and the company made open market purchases of $539 million under the $750 million program during 2000.

The filing also discloses that financial statements for 1999 and 1998 were restated for intentional improper accounting practices at the Ralphs subsidiary, which reduced 1999 net earnings by $14 milliond. The company operated 2,354 supermarkets at year-end, and it reports that it expects to face continued fierce competition from other grocers, supercenters, club stores and drug stores, along with labor risk from 96 collective bargaining agreements expiring in 2001.

02—Key points

Key Highlights

  1. Sales of $49.0 billion for the 53 weeks of 2000, up from $45.4 billion in 1999, with identical food store sales up 1.5%.
  2. Net earnings of $877 million, or $1.04 diluted EPS, versus $613 million, or $0.72 diluted EPS, in 1999 as restated.
  3. EBITDA of $3,536 million, up from $3,124 million, and the company stated it was in compliance with its EBITDA-based covenants.
  4. Operating results absorbed a $191 million asset impairment charge and $145 million of one-time expenses related to mergers, plus $15 million of merger related costs.
  5. Cash flow from operations was $2,281 million, up from $1,548 million, and total debt was $8.5 billion at year-end.
  6. Capital expenditures are planned at $2.0 billion for fiscal 2001, excluding acquisitions, and the Board authorized an incremental $1 billion share repurchase on March 1, 2001.
  7. Financial statements for 1999 and 1998 were restated for intentional improper accounting practices at the Ralphs subsidiary, and the company has not paid dividends in the past three fiscal years.

03—Questions

Frequently Asked Questions

  1. Is Kroger paying a dividend?

    No. The filing states the company has not paid dividends on its Common Stock for the past three fiscal years, and its Credit Agreement prohibits cash dividends during its term. The company is permitted to pay dividends in the form of stock.

  2. How much has Kroger's profitability improved?

    Net earnings rose to $877 million, or $1.04 per diluted share, in 2000 from $613 million, or $0.72 per diluted share, in 1999 as restated. Gross profit grew to 26.91% of sales from 26.48% in 1999, and EBITDA increased to $3,536 million from $3,124 million.

  3. What share repurchase activity has Kroger undertaken?

    During 2000, the company made open market purchases of approximately $43 million under its stock option program and $539 million under the $750 million program. On March 1, 2001, the Board authorized an incremental $1 billion repurchase, which the company expects to use over the next 24 months, in addition to the $750 million plan.

  4. What risks does the filing highlight for investors?

    The filing cites fierce competition from grocers, supercenters, club stores and drug stores, with possible price reductions that would reduce margins. It also notes that 96 collective bargaining agreements expire in 2001 and a prolonged work stoppage could have a material adverse effect, and that the company retains exposure for workers' compensation and general liability claims.

  5. Were prior financial results changed?

    Yes. The filing states that 1999 and 1998 financial statements reflect restatements resulting from intentional improper accounting practices at the Ralphs subsidiary. The restatement reduced 1999 net earnings by $14 million and 1999 total assets by $35 million.

04—Continue

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