Edgar Filing: UNI MARTS INC

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Page 1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended July 4, 2002

£ 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
	(State or other jurisdiction of	(I.R.S. Employer
	Incorporation or organization)	Identification No.)

	477 East Beaver Avenue
	State College, PA	16801-5690
	(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (814) 234-6000


(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 S No £


7,119,079 Common Shares were outstanding at August 9, 2002.







This Document Contains 22 Pages.

PAGE 2

UNI-MARTS, INC. AND SUBSIDIARIES
INDEX


PART I - FINANCIAL INFORMATION
		PAGE(S)

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets -
	July 4, 2002 and September 30, 2001	3-4

	Condensed Consolidated Statements of Operations -
	Quarter Ended and Three Quarters Ended
	July 4, 2002 and July 5, 2001	5

	Condensed Consolidated Statements of Cash Flows -
	Three Quarters Ended July 4, 2002 and July 5, 2001	6-7

	Notes to Condensed Consolidated Financial Statements	8-13

Item 2.	Management's Discussion and Analysis of Financial
	Condition and Results of Operations	14-18

Item 3.	Quantitative and Qualitative Disclosures
	about Market Risk	19

PART II - OTHER INFORMATION

Item 6.	Exhibits and Reports on Form 8-K	20

Exhibit Index		22

PAGE 3 PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statements


UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	July 4,					September 30,
	2002					2001

ASSETS

CURRENT ASSETS:
Cash			$ 5,982								$ 5,075
Accounts receivable - less allowances of $169 and $225			6,782								7,156
Inventories			19,585								18,471
Prepaid and current deferred taxes			1,668								1,672
Property held for sale			1,442								3,137
Prepaid expenses and other			863								1,448

TOTAL CURRENT ASSETS			36,322								36,959

PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation and
amortization of $62,882 and $59,166			99,767								103,488

LOAN DUE FROM OFFICER			360								420

NET INTANGIBLE AND OTHER ASSETS			7,445								7,763

TOTAL ASSETS			$143,894								$148,630
			=======								=======











(Continued)
PAGE 4
UNI-MARTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(CONTINUED)
(Unaudited)

				July 4,				September 30,
				2002						2001

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable					$ 14,177							$ 16,239
Gas taxes payable					3,981							3,360
Accrued expenses					6,401							6,820
Current maturities of long-term debt					2,968							2,920
Current obligations under capital leases					166							391

TOTAL CURRENT LIABILITIES					27,693							29,730

LONG-TERM DEBT, less current maturities					79,685							80,912

OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities					253							361

DEFERRED TAXES					2,312							2,917

DEFERRED INCOME AND OTHER LIABILITIES					5,506							5,217

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred Stock, par value $1.00 per share:
Authorized 100,000 shares
Issued none					0							0
Common Stock, par value $.10 per share:
Authorized 16,000,000 shares
Issued 7,419,928 and 7,388,083 shares, respectively					742							739

Additional paid-in capital					23,837							23,833

Retained earnings					5,805							6,978

					30,384							31,550
Less treasury stock, at cost - 300,849 and
323,275 shares of Common Stock, respectively		(			1,939		)		(				2,057	)

					28,445							29,493

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY					$143,894							$148,630
					=======							=======

See notes to consolidated financial statements

PAGE 5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

			QUARTER ENDED					THREE QUARTERS ENDED
				July 4,		July 5,			July 4,			July 5,
				2002		2001			2002			2001
REVENUES:
Merchandise sales			$ 58,075			$ 53,734			$166,904			$151,335
Gasoline sales			50,240			58,088			131,685			165,789
Other income			465			442			1,375			1,510

			108,780			112,264			299,964			318,634
COSTS AND EXPENSES:
Cost of sales			86,036			88,434			233,358			251,204
Selling			17,068			16,827			50,926			49,898
General and administrative			2,122			2,021			6,165			5,628
Depreciation and amortization			2,070			2,056			6,199			6,064
Interest			1,684			1,952			5,094			5,937
Provision for asset impairment			0			24			0			24

			108,980			111,314			301,742			318,755

EARNINGS (LOSS) BEFORE
INCOME TAXES	(		200		)	950	(		1,778	)	(	121	)
INCOME TAX PROVISION (BENEFIT)	(		56		)	323	(		605	)	(	41	)

NET EARNINGS (LOSS)	(		$ 144		)	$ 627	(		$ 1,173	)	(	$ 80
			=======			=======			=======			=======	)
BASIC EARNINGS (LOSS) PER SHARE	(		$ 0.02		)	$ 0.09	(		$ 0.17	)	(	$ 0.01	)
		=======				=======			=======			=======
DILUTED EARNINGS (LOSS) PER	(		$ 0.02		)	$ 0.09	(		$ 0.17	)	(	$ 0.01	)
SHARE		=======				=======			=======			=======

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING			7,112			7,062			7,092			7,049
			=======			=======			=======			=======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
ASSUMING DILUTION			7,112			7,097			7,092			7,049
			=======			=======			======			=======






See notes to consolidated financial statements

PAGE 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


	THREE QUARTERS ENDED
	July 4,									July 5,
		2002										2001

CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others				$302,550										$318,010
Cash paid to suppliers and employees	(			292,263				)	(					311,307			)
Dividends and interest received				35										62
Interest paid (net of capitalized interest
of $0 and $287)	(			5,411				)	(					6,256			)
Income taxes received (paid)				4					(					78			)

NET CASH PROVIDED BY OPERATING ACTIVITIES				4,915										431

CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from sale of capital assets				130										389
Purchase of property, equipment and
improvements	(			2,447				)	(					9,940			)
Note receivable from officer				60										60
Cash advanced for intangible and other assets	(			158				)	(					177			)
Cash received for intangible and other assets				59										56

NET CASH USED IN INVESTING ACTIVITIES	(			2,356				)	(					9,612			)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on revolving credit agreement				1,252										4,769
Additional long-term borrowings				0										4,900
Principal payments on debt	(			2,933				)	(					2,420			)
Proceeds from issuance of common stock				29										9

NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES	(			1,652				)						7,258

NET INCREASE (DECREASE) IN CASH				907					(					1,923			)

CASH:
Beginning of period				5,075										7,882

End of period				$ 5,982										$ 5,959
			=======											=======

PAGE 7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(CONTINUED)
(Unaudited)

					THREE QUARTERS ENDED
							July 4,								July 5,
							2002								2001

RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:

NET LOSS						(		$1,173			)		(			$ 80		)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization								6,199								6,064
Loss on sale of capital assets and other								389								309
Provision for asset impairment								0								24
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable								373					(			90		)
Inventories						(		1,114			)		(			1,384		)
Prepaid expenses and other								2,413								288
Increase (decrease) in:
Accounts payable and accrued expenses						(		1,861			)		(			4,113		)
Deferred income taxes and other liabilities						(		311			)		(			587		)

TOTAL ADJUSTMENTS TO NET LOSS								6,088								511

NET CASH PROVIDED BY OPERATING ACTIVITIES								$4,915								$ 431
								=====								=====














See notes to consolidated financial statements

PAGE 8

UNI-MARTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

A. FINANCIAL STATEMENTS:

The consolidated balance sheet as of July 4, 2002, the consolidated statements of operations and
the consolidated statements of cash flows for the quarter ended and three quarters ended July 4,
2002 and July 5, 2001, 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 July 4,
2002 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 accounting principles generally accepted in the United States of America 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, 2001. Certain reclassifications have
been made to the September 30, 2001 financial statements to conform to classifications used in
fiscal year 2002. The results of operations for the interim periods are not necessarily indicative of
the results to be obtained for the full year.

B. INTANGIBLE AND OTHER ASSETS:

Intangible and other assets consist of the following (in thousands):

	July 4,		July 5,
	2002		2001

Goodwill		$8,874		$8,874

Lease acquisition costs		315		378

Noncompete agreements		250		250

Other intangible assets		215		218

		9,654		9,720

Less accumulated amortization		3,282		2,888

		6,372		6,832

Other assets		1,073		1,054

		$7,445		$7,886
		=====		=====

PAGE 9

B. INTANGIBLE AND OTHER ASSETS (CONTINUED):

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.

C. 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. Provisions of the
Agreement require the maintenance of certain covenants relating to minimum tangible net worth,
interest and fixed-charge coverage ratios, as measured on a quarterly basis. In addition, the
Agreement places limitations on capital expenditures, additional debt and payment of dividends.
In the second quarter of fiscal year 2001, the Agreement was amended to increase the total credit
line to $13.0 million, with $3.5 million available for letters of credit, and to amend certain
financial covenants. During the first quarter of fiscal year 2002, the Agreement was amended to
extend the maturity date to April 20, 2004, to amend certain covenants and to provide an
additional $2.0 million for borrowing on a seasonal basis. The Company was in compliance with
these covenants as of July 4, 2002. Borrowings of $7.0 million and letters of credit of $3.0
million were outstanding at July 4, 2002. 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 blended interest rate at July
4, 2002 was 5.49%. The Agreement is collateralized by substantially all of the Company's
inventories, receivables, other personal property and selected real properties. The net book value
of these selected real properties at July 4, 2002 was $2.5 million.

PAGE 10

D. LONG-TERM DEBT:

		July 4,		September 30,
		2002		2001
	(In thousands)
Mortgage Loan. Principal and interest will be paid in 194 remaining monthly installments. At July 4, 2002, the coupon rate was 9.08% and the effective interest rate was 9.78%, net of unamortized fees of $1,235,529 ($1,329,757 in 2001).			$31,690		$32,331

Mortgage Loan. Principal and interest will be paid in 215 remaining monthly installments. The loan bears interest at LIBOR plus 3.75%. At July 4, 2002, the coupon rate was 5.59% and the effective interest rate was 6.04%, net of unamortized fees of $374,658 ($403,779 in 2001).			20,586		21,249

Mortgage Loan. Principal and interest will be paid in 215 remaining monthly installments. At July 4, 2002, the coupon rate was 10.39% and the effective interest rate was 10.70%, net of unamortized fees of $117,237 ($124,901 in 2001).			6,532		6,628

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 July 4, 2002, the blended coupon rate was 6.42% and the effective interest rate was 6.84%, net of unamortized fees of $146,391 ($151,688 in 2001).			7,256		7,496

Revolving Credit Agreement. Interest is paid monthly. The blended interest rate at July 4, 2002 was 5.49%. (See Note C)			7,010		5,758

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 July 4, 2002, the blended coupon rate was 5.59% and the effective interest rate was 6.00%, net of unamortized fees of $145,159 ($174,996 in 2001).			8,643		9,375

Equipment Loan. Principal and interest will be paid in 96 remaining monthly installments. The loan expires in 2010. At July 4, 2002, the coupon rate was 10.73% and the effective interest rate was 11.19%, net of unamortized fees of $14,613 ($17,124 in 2001).			936		995

			82,653		83,832
Less current maturities			2,968		2,920

			$79,685		$80,912
			======		======

PAGE 11

D. LONG-TERM DEBT (CONTINUED):

The mortgage loans are collateralized by $69,087,100 of property, at net book value, and the
equipment loans are collateralized by $5,199,200 of equipment, at net book value.

Aggregate maturities of long-term debt (net of loan fee amortization) during the next five years
are as follows (in thousands):

September 30,
2002	$ 588
2003	2,923
2004	10,107
2005	3,357
2006	3,640
Thereafter	62,038

	$82,653
	======

E.    RELATED PARTY TRANSACTIONS:

        Certain directors and officers of the Company are also directors, officers or controlling
        shareholders of other entities from which the Company leases its corporate headquarters and
        various store and other locations under agreements classified as operating leases. Aggregate
        rentals in connection with all such leases for the three quarters ended July 4, 2002 and July 5,
        2001 were $906,200 and $507,000. In addition, two new store locations are under construction
        and are to be leased from entities controlled by, or from persons related to, certain directors and
        officers of the Company. The aggregate amount of rentals associated with these properties will
        not be determined until completion of the construction.

        The Company charges an affiliate for general and administrative services provided. Such charges
        amounted to $8,400 and $8,400 in the three quarters ended July 4, 2002 and July 5, 2001, respectively.

        During the first three quarters of fiscal years 2002 and 2001, the Company made payments of
        $59,600 and $59,300, respectively, to a director of the Company for consulting fees and
        reimbursement of expenses.

PAGE 12

F. NEW ACCOUNTING PRONOUNCEMENTS:

In June 2001, the Financial Accounting Standards Board issued SFAS No. 142 and, in
August 2001, issued SFAS No. 144. SFAS No. 142, "Goodwill and Other Intangible Assets,"
requires that such assets with indefinite lives not be amortized but be tested annually for
impairment and provides specific guidance for such testing. This statement also requires
disclosure of information regarding goodwill and other assets that was previously not required.
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," provides
additional guidance for impairment testing and determination of when an asset is considered to be
for sale. The Company is not required to adopt these accounting standards until fiscal year 2003.
At this time, the Company has not determined the impact these standards will have on the
Company's financial statements.

G. COMMITMENTS AND CONTINGENCIES:

(1)     Leases -- The Company leases its corporate headquarters, 131 of its store locations and
         certain equipment. Future minimum lease payments under capital leases and
         noncancellable operating leases with initial or remaining terms in excess of one year at
         July 4, 2002 are shown below. Some of the leases provide for additional rentals when
         sales exceed a specified amount and contain variable renewal options and escalation
         clauses.

	Capital		Operating		Rental
	Leases		Leases		Income
		(In thousands)

Three months ending
September 30, 2002	$ 73			$ 1,669	$ 210
Fiscal Year 2003	180			6,279	700
Fiscal Year 2004	140			5,439	525
Fiscal Year 2005	31			4,227	304
Fiscal Year 2006	31			2,921	217
Thereafter	52			9,915	430

Total future minimum
lease payments	507			$30,450	$2,386
				======	=====
Less amount representing
interest	88

Present value of future
payments	419

Less current maturities	166

	$253
	====

PAGE 13

G. COMMITMENTS AND CONTINGENCIES (CONTINUED):

(2)     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.

H. CHANGES IN SECURITIES:

On February 6, 2002, the Company adopted a shareholder rights plan and declared a dividend
distribution of one Common Stock Purchase Right on each outstanding share of its common stock.
Pursuant to the rights plan, the Company distributed to all shareholders of record on February 19,
2002, as a dividend on each outstanding share of common stock, a right to purchase two-thirds of
a share of common stock for a purchase price of $10.67. The rights, however, are exercisable
(subject to limited grandfathering provisions for certain shareholders who currently beneficially
own more than 15% of the Company's stock) only if: (1) a person or group acquires 15% or more
of the Company's common stock, other than through an offer for all shares of the common stock at
a price and on terms determined by the Board of Directors to be fair to all shareholders, or (2) a
person or group commences a tender or exchange offer for 15% or more of the Company's
common stock. If the rights become exercisable, the rights will be modified automatically to
entitle the rightholders (other than the acquiring person or group) to purchase shares of the
Company's common stock at a 50% discount from the then market value. In addition, if the
Company is acquired in a merger or other transaction after such person or group has acquired a
15% common stock interest, the rightholders (other than such person or group) will be entitled to
purchase shares of common stock of the surviving company at the same discount from market
value. Initially, the rights will be represented by existing Uni-Marts stock certificates. Should the
rights become exercisable, the Company will issue separate rights certificates to all holders. Uni-
Marts can redeem the rights at any time before (but not after) a person or group has acquired 15%
or more of the Company's common stock as described above. If not redeemed prior to January 31,
2012, the rights will expire on that date. Terms of the Shareholder Rights Plan are set forth in a
Rights Agreement dated as of February 6, 2002 between the Company and Mellon Investor
Services LLC, as Rights Agent, which was filed as an exhibit to an amendment to the Registration
Statement on Form 8-A pursuant to which the Company's common stock, par value $0.10, is
registered under the Securities Exchange Act of 1934.

PAGE 14 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											THREE QUARTERS ENDED
			July 4, 2002				July 5, 2001						July 4, 2002				July 5, 2001
Revenues:
Merchandise sales				53.4	%			47.9	%					55.6		%		47.5	%
Gasoline sales				46.2				51.7						43.9				52.0
Other income				0.4				0.4						0.5				0.5
Total revenues				100.0				100.0						100.0				100.0

Cost of sales				79.1				78.8						77.8				78.8

Gross profit:
Merchandise (as a percentage of merchandise sales)				30.5				32.1						30.9				32.5
Gasoline (as a percentage of gasoline sales)				9.1				10.6						10.4				10.1

Total gross profit				20.9				21.2						22.2				21.2

Costs and expenses:
Selling				15.7				15.0						17.0				15.6
General and administrative				2.0				1.8						2.0				1.8
Depreciation and amortization				1.9				1.8						2.1				1.9
Interest				1.5				1.7						1.7				1.9
Provision for asset impairment				0.0				0.0						0.0				0.0

Total expenses				21.1				20.3						22.8				21.2

Earnings (loss) before income taxes	(			0.2	)			0.9			(			0.6		)		0.0

Income tax provision (benefit)	(			0.1	)			0.3			(			0.2		)		0.0

Net earnings (loss)	(			0.1	)%			0.6	%		(			0.4		)%		0.0	%
				====				====						====				====
OPERATING DATA (RETAIL LOCATIONS ONLY): (In thousands, except per gallon data)
Average, per store, for stores open two
full comparable periods:
Merchandise sales		$ 191				$ 182				$ 550					$ 518
Gasoline sales		$ 199				$ 235				$ 509					$ 665
Gallons of gasoline sold		178				176				504					520
Total gallons of gasoline sold		45,194				43,858				131,321					130,532
Gross profit per gallon of
gasoline		$ 0.101				$ 0.140				$ 0.105					$ 0.128

STORE INFORMATION:
Company-operated stores		296				294				296					294
Franchisee-operated stores		5				7				5					7
Locations with self-service gasoline		239				237				239					237

PAGE 15

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.

In the last twelve months, the Company continued its store evaluation and strategic initiative program
by converting convenience store locations to Choice Cigarette Discount Outlets ("Choice") or closing
locations. During that period, 11 convenience stores were converted to Choice stores and three
convenience stores were closed. The Company also expanded its store base during this period by
constructing two convenience stores and one Choice location. The Company intends to
aggressively pursue the conversion of convenience stores to Choice outlets to achieve additional
improvement to store profitability. As previously announced, in April 2002 the Company hired
financial advisors to assist the Company in the exploration and evaluation of all of its strategic
alternatives to enhance stockholder value. If this evaluation leads to the disposition of assets in excess
of certain amounts, Messrs. Sahakian, Kervandjian and Petrick will be eligible to receive bonuses
pursuant to a Transaction Success Bonus Plan adopted by the Company. The aggregate amount of
such bonuses will be based upon the total consideration received for such assets.

Quarters Ended July 4, 2002 and July 5, 2001

For the third quarter of fiscal 2002, ended July 4, 2002, total revenues were $108.8 million, a decline
of $3.5 million, or 3.1%, compared to total revenues of $112.3 million for the third quarter of fiscal
2001, ended July 5, 2001. Revenues declined due to a $7.9 million, or 13.5%, decline in gasoline sales
to $50.2 million for the current fiscal quarter compared to gasoline sales of $58.1 million in the third
quarter of fiscal 2001. This decline is the result of a 21.3 cent per gallon decline in the average
retail price per gallon of petroleum sold at the Company's locations in the third quarter of fiscal 2002
compared to the same quarter of fiscal 2001. Merchandise sales for the current fiscal quarter increased
by $4.3 million, or 8.1%, to $58.1 million, while other income increased by $23,000, or 5.2%, to
$465,000 compared to the third quarter of fiscal 2001. Merchandise sales at comparable stores
increased by 4.6% and gasoline gallons sold at comparable stores increased by 1.2% for the third
quarter of fiscal 2002 compared to the same quarter of fiscal 2001. Seasonably warm weather
conditions, combined with increased consumer travel in the current fiscal quarter, contributed to the
growth in comparable store sales.

PAGE 16

Gross profits on merchandise sales increased by $485,000, or 2.8%, to $17.7 million compared to
$17.2 million in the third quarter of fiscal 2001, despite a 1.6% decline in the gross margin rate for the
current fiscal quarter. Gasoline gross profits declined by $1.6 million, or 25.9%, to $4.6 million, while
gasoline gallons sold in the current fiscal quarter increased by 1.3 million gallons, or 3.1%, to 45.2
million gallons sold. Gasoline gross profit per gallon declined by 3.9 cents per gallon for the current
fiscal quarter when compared to the third quarter of fiscal 2001. In the third quarter of fiscal 2002, the
Company improved merchandise gross profit and gasoline gallon sales levels; however, the gasoline
gross margin per gallon sold declined due to competitive gasoline market conditions in the Company's
operating area.

In the third quarter of fiscal 2002, selling, general and administrative, and depreciation and
amortization expenses increased marginally, while interest expense declined when compared to the
third quarter of fiscal 2001. Selling expenses increased by $241,000, or 1.4%, to $17.1 million due to
additional operating leases for store improvements and higher insurance reserves. General and
administrative expense increased by $101,000, or 5.0%, to $2.1 million due to increased legal and
professional fees, in part associated to the Company's hiring of its financial advisors. Depreciation and
amortization expense increased by $14,000, or 0.7%, to $2.1 million as the result of depreciation of
new equipment for store improvements. Interest expense declined by $268,000, or 13.7%, to $1.7
million for the third quarter of fiscal 2002 due to lower borrowing levels and lower interest rates.

Losses before income taxes were $200,000 in the third quarter of fiscal 2002 compared to a pre-
tax profit of $950,000 in the third quarter of fiscal 2001. Lower gasoline margins, which were partially offset by increases in merchandise margins, were the leading factors in the Company's financial
performance for the third quarter of fiscal 2002. The provision for income taxes remained the same as
a percentage of earnings before income taxes for the comparable quarters. Net losses were $144
thousand, or $0.02 per share, for the quarter ended July 4, 2002, compared to a net profit of $627,000,
or $0.09 per share, for the quarter ended July 5, 2001.

Three Quarters Ended July 4, 2002 and July 5, 2001

Total revenues for the first three quarters of fiscal 2002 were $300.0 million, a decline of $18.6
million, or 5.9%, compared to total revenues of $318.6 million for the first three quarters ended July 5,
2001. The decline in revenues was due to a $34.1 million, or 20.6%, decline in gasoline sales to
$131.7 million compared to gasoline sales of $165.8 million reported in the first nine months of fiscal
2001. A 26.7 cent per gallon decline in the Company's average retail price per gallon of petroleum
sold in its markets for the first three quarters of fiscal 2002 when compared to the same period of fiscal
2001 resulted in lower gasoline dollar sales. Merchandise sales increased by $15.6 million, or 10.3%,
to $166.9 million from $151.3 million in the first nine-month period of fiscal 2001. Other income was
$1.4 million, a decline of $135,000, or 8.9%, when compared to the first three quarters of fiscal 2001.
At comparable stores, merchandise sales increased by 6.2%, while gasoline gallons sold declined by
3.0%, for the first three quarters of fiscal 2002 compared to the same period of fiscal 2001.

Gross profits on merchandise sales for the first three quarters of fiscal 2002 increased by $2.3 million,
or 4.6%, to $51.5 million compared to merchandise gross profits of $49.2 million for the first three
quarters of the prior fiscal year. The merchandise gross margin rate declined by 1.7% for the current
nine-month period. The Company achieved increases in gasoline gallon sales during the first three

PAGE 17

quarters of fiscal 2002, however realized lower gross margins per gallon sold during this period as a
result of a competitive gasoline market environment. Gasoline gallon sales increased by 789,000
gallons, or 0.6%, to 131.3 million gallons sold, while gross profit per gallon declined by 2.3 cents per
gallon in the first three quarters ended July 4, 2002 compared to the same period ended July 5, 2001.
Gasoline gross profit margins declined by $3.0 million, or 17.8%, to $13.7 million for the first three
quarters of fiscal 2002.

Selling expenses increased by $1.0 million, or 2.1%, to $50.9 million due primarily to additional store
operating leases and increased insurance reserves. General and administrative expense increased by
$537,000, or 9.5%, to $6.2 million primarily as the result of increased legal and professional fees and
additional salaried positions. Depreciation and amortization expense for the first nine months of fiscal
2002 increased by $135,000, or 2.2%, to $6.2 million due to depreciation of new equipment and
improvements at existing stores and stores converted to Choice Cigarette Discount Outlets. Lower
borrowing levels and lower interest rates levels resulted in a $843,000, or 14.2%, decline in interest
expense to $5.1 million for the first three quarters ended July 4, 2002.

Losses before income taxes were $1.8 million for the first three quarters of fiscal 2002, compared to a
pre-tax loss of $121,000 for the first three quarters of fiscal 2001. Improved merchandise sales at
comparable stores were offset by lower gasoline gross margins due to a competitive petroleum market
in the Company's operating area during the current nine-month reporting period. The provision for
income taxes remained relatively the same as a percentage of earnings before income taxes for the
comparable reporting periods. Net losses for the first three quarters of fiscal 2002 were $1.2 million,
or $0.17 per share, compared to net losses of $80,000, or $0.01 per share, for the first three quarters of
fiscal 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 a portion of its cash to acquire and construct new stores and
renovate existing locations.

Capital requirements for debt service and capital leases for the remainder of fiscal year 2002 are
approximately $700,000. Anticipated capital expenditures in the balance of the fiscal year are
approximately $200,000 for the replacement of store equipment and upgrading the Company's data
processing systems.

Operating lease commitments for the balance of fiscal year 2002 are approximately $1.7 million.
These commitments for fiscal years 2003, 2004, 2005 and 2006 are approximately $6.3 million, $5.4
million, $4.2 million, and $2.9 million, respectively.

Management believes that cash from operations and its available credit facility will be sufficient to
meet the Company's obligations for the foreseeable future.

PAGE 18

NEW ACCOUNTING PRONOUNCEMENTS:

In June 2001, the Financial Accounting Standards Board issued SFAS No. 142 and, in August 2001,
issued SFAS No. 144. SFAS No. 142, "Goodwill and Other Intangible Assets," requires that such
assets with indefinite lives not be amortized but be tested annually for impairment and provides
specific guidance for such testing. This statement also requires disclosure of information regarding
goodwill and other assets that was previously not required. SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," provides additional guidance for impairment testing
and determination of when an asset is considered to be for sale. The Company is not required to adopt
these accounting standards until fiscal year 2003. At this time, the Company has not determined the
impact these standards will have on the Company's financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

Our discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate
our estimates, including those related to self insured liabilities, impairment and income taxes. We base
our estimates on historical experience, current and anticipated business conditions, the condition of the
financial markets, and various other assumptions that are believed to be reasonable under existing
conditions. Actual results may differ from these estimates.

We believe that the following critical accounting policies affect our more significant judgements and
estimates used in the preparation of our consolidated financial statements:

Self insurance liabilities -- We record estimates for self insured worker's compensation and general
liability insurance coverage. Should a greater amount of claims occur compared to what was
estimated, or costs increase beyond what was anticipated, reserves recorded may not be sufficient, and
additional expense may be recorded.

Impairment -- We evaluate long-lived assets, including stores, for impairment annually, or whenever
events or changes in circumstances indicate that the assets may not be recoverable. The impairment is
measured by calculating the estimated future cash flows expected to be generated by the store, and
comparing this amount to the carrying value of the store's assets. Cash flows are calculated utilizing
individual store forecasts and total company projections for the remaining estimated lease lives of the
stores being analyzed. Should actual results differ from those forecasted and projected, we may be
subject to future impairment charges related to these facilities.

Income taxes -- We currently have net operating loss ("NOL") carryforwards that can be utilized to
offset future income for federal and state tax purposes. These NOLs generate a significant deferred tax
asset. However, we have recorded a valuation allowance against this deferred tax asset as we have
determined that it is more likely than not that we will not be able to fully utilize the NOLs. Should our
assumptions regarding the utilization of these NOLs change, we may reduce some or all of this
valuation allowance, which would result in the recording of an income tax benefit.

PAGE 19

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. 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
July 4, 2002.

The carrying amounts of cash and short-term debt approximate fair value. The Company estimates the
fair value of its long-term, fixed-rate debt generally using discounted cash flow analysis based on the
Company's current borrowing rates for debt with similar maturities. The Company estimates the fair
value of its long-term, variable-rate debt based on carrying amounts plus unamortized loan fees
associated with the debt.

Fiscal Year of Maturity
(dollar amounts in thousands)

														Total		Fair
														Due At		Value at
		2002		2003		2004		2005		2006		Thereafter		Maturity		7/4/02

Interest-rate sensitive assets:
Noninterest-bearing
checking accounts	$2,820		$ 0		$ 0		$ 0		$ 0		$ 0		$ 2,820		$ 2,820

Interest-bearing
checking accounts	$3,162		$ 0		$ 0		$ 0		$ 0		$ 0		$ 3,162		$ 3,162
Average interest rate	1.55%												1.55%		---
	__________________________________________________________________________________
	$5,982		$ 0		$ 0		$ 0		$ 0		$ 0		$ 5,982		$ 5,982
	0.82%												0.82%		---

Interest-rate sensitive liabilities:
Variable-rate borrowings	$ 294		$1,803		$ 8,862		$1,975		$2,108		$26,802		$41,844		$41,844
Average interest rate	5.57%		5.57%		5.57%		5.59%		5.59%		5.59%		5.59%		---

Fixed-rate borrowings	$ 294		$1,120		$ 1,245		$1,382		$1,532		$35,236		$40,809		$45,283
Average interest rate	9.34%		9.34%		9.34%		9.34%		9.34%		9.34%		9.34%		---
	___________________________ ______________________________________________________
	$ 588		$2,923		$10,107		$3,357		$3,640		$62,038		$82,653		$87,127
	7.43%		7.43%		7.45%		7.66%		7.69%		7.72%		7.44%		---

PAGE 20

PART II - OTHER INFORMATION

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 April 4, 2002 and incorporated herein by reference thereto).

	3.2	Amended and Restated By-Laws of the Company (Filed as exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended April 4, 2002 and incorporated herein by reference thereto).

	10.1	Composite copy of Change of Control Agreement between the Company and its Senior Vice President, Facilities Development and its Senior Vice President, Budgeting and Planning dated May 28, 2002.

	11	Statement regarding computation of per share earnings (loss).

	99.1	Certification of the Chairman and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	99.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the quarter ended July 4, 2002.

PAGE 21

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 August 16, 2002	___/S/ HENRY D. SAHAKIAN____
	Henry D. Sahakian
	Chairman of the Board
	(Principal Executive Officer)



Date August 16, 2002	___/S/ N. GREGORY PETRICK____
	N. Gregory Petrick
	Executive Vice President and
	Chief Financial Officer
	(Principal Accounting Officer)
	(Principal Financial Officer)

PAGE 22

UNI-MARTS, INC. AND SUBSIDIARIES
EXHIBIT INDEX



Number	Description

10.1	Composite copy of Change of Control Agreement between the Company and its Senior Vice President, Facilities Development and its Senior Vice President, Budgeting and Planning dated May 28, 2002.

11	Statement regarding computation of per share earnings (loss).

99.1	Certification of the Chairman and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.