Safeway Inc. (SWY, Financial) filed Quarterly Report for the period ended 2010-03-27.
Safeway Inc. has a market cap of $9.3 billion; its shares were traded at around $23.91 with a P/E ratio of 14.9 and P/S ratio of 0.2. The dividend yield of Safeway Inc. stocks is 1.7%.SWY is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Charles Brandes of Brandes Investment, Richard Snow of Snow Capital Management, L.P., Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.
Net cash flow used by operating activities was $242.0 million in the first quarter of 2010 compared to $151.0 million in the first quarter of 2009. This was primarily due to a greater decline in third-party gift card payables, net of receivables, in the first quarter of 2010 compared to the first quarter of 2009. Cash from the sale of third-party gift cards is held for a short period of time and then remitted, less Safeways commissions, to card partners. Excluding the effect of these third-party gift cards, cash flow from operating activities improved to $134.3 million in the first quarter of 2010 from $66.1 million in the first quarter of 2009.
CREDIT AGREEMENT The Company has a $1,600.0 million credit agreement (as amended, the Credit Agreement) with a syndicate of banks which has a termination date of June 1, 2012 and provides for two additional one-year extensions of the termination date. There are approximately 30 banks in the syndicate with individual commitments to lend ranging from approximately $20 million to approximately $115 million. The Credit Agreement provides (i) to Safeway a $1,350.0 million revolving credit facility (the Domestic Facility), (ii) to Safeway and Canada Safeway Limited a Canadian facility of up to $250.0 million for U.S. Dollar and Canadian Dollar advances and (iii) to Safeway a $400.0 million sub-facility of the Domestic Facility for issuance of standby and commercial letters of credit. The Credit Agreement also provides for an increase in the credit facility commitments up to an additional $500.0 million, at the option of the lenders and subject to the satisfaction of certain conditions. The restrictive covenants of the Credit Agreement limit Safeway with respect to, among other things, creating liens upon its assets and disposing of material amounts of assets other than in the ordinary course of business. Additionally, the Company is required to maintain a minimum Adjusted EBITDA, as defined in the Credit Agreement, to interest expense ratio of 2.0 to 1 and is required to not exceed an Adjusted Debt (total consolidated debt less cash and cash equivalents in excess of $75.0 million) to Adjusted EBITDA ratio of 3.5 to 1. As of March 27, 2010, the Company was in compliance with these covenant requirements. As of March 27, 2010, there were no borrowings, and letters of credit totaled $46.0 million under the Credit Agreement. Total unused borrowing capacity under the Credit Agreement was $1,554.0 million as of March 27, 2010.
DIVIDENDS ON COMMON STOCK Dividends paid on common stock totaled $38.8 million and $35.6 million for the first quarters of 2010 and 2009, respectively. Note K to the Companys condensed consolidated financial statements in this report provides additional information on dividends declared and dividends paid on Safeway common stock.
STOCK REPURCHASE PROGRAM From the initiation of the Companys stock repurchase program in 1999 through the end of the first quarter of 2010, the aggregate cost of shares of common stock repurchased by the Company, including commissions, was approximately $4.8 billion, leaving an authorized amount for repurchases of approximately $1.2 billion. This includes an increase in the total authorized level of the repurchase program by $1.0 billion to $6.0 billion approved by the Board of Directors in December 2009. During the first quarter of 2010, Safeway repurchased 4.0 million shares of its common stock under the repurchase program at an aggregate price, including commissions, of $99.2 million. The average price per share, excluding commissions, was $24.78. The Company will evaluate the timing and volume of future repurchases based on several factors, including market conditions, and may repurchase stock in the near- or long-term as circumstances warrant.
Safeway invested $192.6 million in capital expenditures in the first quarter of 2010. The Company completed nine Lifestyle remodels and closed 13 stores. For the year, Safeway plans to invest $0.9 to $1.0 billion in capital expenditures, open 20 new Lifestyle stores and complete 80 Lifestyle remodels.
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Safeway Inc. has a market cap of $9.3 billion; its shares were traded at around $23.91 with a P/E ratio of 14.9 and P/S ratio of 0.2. The dividend yield of Safeway Inc. stocks is 1.7%.SWY is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Charles Brandes of Brandes Investment, Richard Snow of Snow Capital Management, L.P., Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Net income attributable to Safeway Inc. was $96.0 million ($0.25 per diluted share) for the first quarter of 2010 compared to $144.2 million ($0.34 per diluted share) in the first quarter of 2009.Net cash flow used by operating activities was $242.0 million in the first quarter of 2010 compared to $151.0 million in the first quarter of 2009. This was primarily due to a greater decline in third-party gift card payables, net of receivables, in the first quarter of 2010 compared to the first quarter of 2009. Cash from the sale of third-party gift cards is held for a short period of time and then remitted, less Safeways commissions, to card partners. Excluding the effect of these third-party gift cards, cash flow from operating activities improved to $134.3 million in the first quarter of 2010 from $66.1 million in the first quarter of 2009.
CREDIT AGREEMENT The Company has a $1,600.0 million credit agreement (as amended, the Credit Agreement) with a syndicate of banks which has a termination date of June 1, 2012 and provides for two additional one-year extensions of the termination date. There are approximately 30 banks in the syndicate with individual commitments to lend ranging from approximately $20 million to approximately $115 million. The Credit Agreement provides (i) to Safeway a $1,350.0 million revolving credit facility (the Domestic Facility), (ii) to Safeway and Canada Safeway Limited a Canadian facility of up to $250.0 million for U.S. Dollar and Canadian Dollar advances and (iii) to Safeway a $400.0 million sub-facility of the Domestic Facility for issuance of standby and commercial letters of credit. The Credit Agreement also provides for an increase in the credit facility commitments up to an additional $500.0 million, at the option of the lenders and subject to the satisfaction of certain conditions. The restrictive covenants of the Credit Agreement limit Safeway with respect to, among other things, creating liens upon its assets and disposing of material amounts of assets other than in the ordinary course of business. Additionally, the Company is required to maintain a minimum Adjusted EBITDA, as defined in the Credit Agreement, to interest expense ratio of 2.0 to 1 and is required to not exceed an Adjusted Debt (total consolidated debt less cash and cash equivalents in excess of $75.0 million) to Adjusted EBITDA ratio of 3.5 to 1. As of March 27, 2010, the Company was in compliance with these covenant requirements. As of March 27, 2010, there were no borrowings, and letters of credit totaled $46.0 million under the Credit Agreement. Total unused borrowing capacity under the Credit Agreement was $1,554.0 million as of March 27, 2010.
DIVIDENDS ON COMMON STOCK Dividends paid on common stock totaled $38.8 million and $35.6 million for the first quarters of 2010 and 2009, respectively. Note K to the Companys condensed consolidated financial statements in this report provides additional information on dividends declared and dividends paid on Safeway common stock.
STOCK REPURCHASE PROGRAM From the initiation of the Companys stock repurchase program in 1999 through the end of the first quarter of 2010, the aggregate cost of shares of common stock repurchased by the Company, including commissions, was approximately $4.8 billion, leaving an authorized amount for repurchases of approximately $1.2 billion. This includes an increase in the total authorized level of the repurchase program by $1.0 billion to $6.0 billion approved by the Board of Directors in December 2009. During the first quarter of 2010, Safeway repurchased 4.0 million shares of its common stock under the repurchase program at an aggregate price, including commissions, of $99.2 million. The average price per share, excluding commissions, was $24.78. The Company will evaluate the timing and volume of future repurchases based on several factors, including market conditions, and may repurchase stock in the near- or long-term as circumstances warrant.
Safeway invested $192.6 million in capital expenditures in the first quarter of 2010. The Company completed nine Lifestyle remodels and closed 13 stores. For the year, Safeway plans to invest $0.9 to $1.0 billion in capital expenditures, open 20 new Lifestyle stores and complete 80 Lifestyle remodels.
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