INDIANAPOLIS, Ind., Feb. 18, 2003 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) reports results of operations for the 12 weeks ended January 4, 2003.
Total revenues for the third quarter were $382,711,000 compared to $385,835,000 last year -- a 0.8% decrease. Retail sales in comparable stores decreased 3.8%. The decline is attributable to a weak economy and new competitive supermarket square footage.
Net income for the quarter was $1,229,000 compared to $3,355,000 last year. Diluted earnings per common share were $0.15 compared to $0.38 last year.
Total EBITDA for the third quarter was $13,548,000 compared to $17,070,000 last year. Long term debt, including current maturities, of $235,616,000 was reduced by $30,867,000 since the beginning of the year. The trailing year ratio of long term debt to EBITDA was improved at 3.8x compared to 4.1x at the end of last year.
Operating income was $6,614,000 compared to $10,720,000 last year. The quarter results include a $406,000 gain from the sales of property compared to $771,000 last year, and income of $971,000 related to the discounted purchase and retirement of $15,000,000 of senior subordinated notes.
"Because of our industry's economic and competitive climate, we are focusing on cash flow and placing significant emphasis on expense reduction, inventory and capital management. We have lowered long term debt, and selling, general and administrative expense was controlled to levels approximately equal to last year. I expect further improvements in the coming months. Our merchandising strategy, coupled with our cash flow focus, will serve us well during this difficult time," said Don E. Marsh, Chairman and Chief Executive Officer.
During the quarter, the Company closed two Village Pantry convenience stores. The remodel of 101 convenience stores continues, with 64 complete at quarter end.
Subsequent to quarter end, the Company announced that its O'Malia Food Division had reached an agreement to purchase two Mr. D's Fresh Food Markets on the south side of the Indianapolis metro area. A nearby LoBill Foods location was closed. It was also announced that the Fresh Express home delivery operation will be closed.
Marsh is a leading regional chain, operating 67 Marsh(r) supermarkets, 35 LoBill Foods(r) stores, 3 Savin*$(r), 6 O'Malia Food Markets, and 167 Village Pantry(r) convenience stores in central Indiana and western Ohio. The Company also operates Crystal Food Services(tm), which provides upscale catering, cafeteria management, office coffee, vending and concessions; Primo Banquet Catering and Conference Centers; McNamara Florist and Enflora - Flowers for Business(r).
Cautionary Note Regarding Forward-Looking Statements
This report includes certain forward-looking statements (statements other than those made solely with respect to historical fact). Actual results could differ materially and adversely from those contemplated by the forward-looking statements due to known and unknown risks and uncertainties, many of which are out of the Company's control. The forward-looking statements and the Company's future results, liquidity and capital resources are subject to the following risks and uncertainties: the entry of new competitive stores and their impact on the Company; softness in the local and national economies and the general retail food industry; the level of discounting and promotional spending by competitors; the Company's ability to implement its improvement initiatives; the ability of the Company to predict and respond to changes in customer preferences and lifestyles; food price deflation; uncertainties regarding future real estate gains; stability and timing of distribution incentives from suppliers; the Company's ability to control cost including labor, medical, rent, credit card, and workers compensation and general liability expense; the impact of any acquisitions and dispositions; the level of margins achievable in the Company's operating divisions; uncertainties regarding gasoline prices and margins; the success of the Company's new and remodeled stores, including image and rebranding programs; the successful economic implementation of new technology; uncertainties related to state and federal taxation and tobacco and environmental legislation; the successful integration of acquisitions; potential interest rate increases on variable rate debt; the timely and on budget completion of store construction, expansion, conversion and remodeling; the ability to complete share repurchases, and other known and unknown risks and uncertainties. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
12 Weeks Ended 40 Weeks Ended
Jan. 4, Jan. 5, Jan. 4, Jan. 5,
2003 2002 2003 2002
-------- -------- --------- ---------
Sales and other revenues $382,305 $385,064 $1,278,522 $1,266,658
Gains from sales of property 406 771 3,952 2,658
-------- -------- --------- ---------
Total revenues 382,711 385,835 1,282,474 1,269,316
Cost of merchandise sold,
including warehousing
and transportation 268,878 267,749 895,128 888,515
-------- -------- --------- ---------
Gross profit 113,833 118,086 387,346 380,801
Selling, general
and administrative 101,586 101,587 343,239 332,330
Depreciation 5,633 5,779 18,750 17,476
-------- -------- --------- ---------
Operating income 6,614 10,720 25,357 30,995
Interest 5,416 5,138 18,249 16,923
Other non-operating income (971) -- (971) --
-------- -------- --------- ---------
Income from continuing
operations
before income taxes 2,169 5,582 8,079 14,072
Income taxes 965 1,837 3,390 4,630
-------- -------- --------- ---------
Income from continuing
operations 1,204 3,745 4,689 9,442
Discontinued operation:
Loss from operations,
net of tax -- -- -- (859)
Gain (loss) on disposal,
net of tax 25 (390) (174) 2,885
-------- -------- --------- ---------
Net income $ 1,229 $ 3,355 $ 4,515 $ 11,468
======== ======== ========= =========
Basic earnings per
common share:
Continuing operations $ .15 $ .47 $ .59 $ 1.19
Discontinued operation -- (.05) -- (.16)
Gain (loss) on disposal of
discontinued operation -- -- (.02) .41
-------- -------- --------- ---------
Net income $ .15 $ .42 $ .57 $ 1.44
======== ======== ========= =========
Diluted earnings per
common share:
Continuing operations $ .15 $ .42 $ .57 $ 1.07
Discontinued operation -- (.04) -- (.13)
Gain (loss) on disposal of
discontinued operation -- -- (.02) .35
-------- -------- --------- ---------
Net income $ .15 $ .38 $ .55 $ 1.29
======== ======== ========= =========
Dividends per share $ .11 $ .11 $ .33 $ .33
======== ======== ========= =========
MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 4, January 5,
2003 2002
--------- ---------
Assets
Current assets:
Cash and equivalents $ 36,634 $ 33,536
Accounts receivable 35,594 36,128
Inventories, less LIFO reserve:
January 4, 2003 - $1,899;
January 5, 2002 - $2,636 136,609 139,108
Prepaid expenses 5,898 5,928
Recoverable income taxes -- --
--------- ---------
Total current assets 214,735 214,700
Property and equipment, less
allowances for depreciation 308,258 317,058
Other assets 47,234 54,093
--------- ---------
$ 570,227 $ 585,851
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to bank $ -- $ 2,900
Accounts payable 77,953 72,255
Accrued liabilities 57,845 61,962
Current maturities of long-term liabilities 3,389 2,558
--------- ---------
Total current liabilities 139,187 139,675
Long-term liabilities:
Long-term debt 203,002 245,474
Capital lease obligations 29,225 15,160
--------- ---------
Total long-term liabilities 232,227 260,634
Deferred items:
Income taxes 19,297 16,641
Other 35,950 23,252
--------- ---------
Total deferred items 55,247 39,893
Shareholders' Equity:
Common stock, Classes A and B 26,424 26,158
Retained earnings 137,423 134,473
Cost of common stock in treasury (14,704) (13,613)
Notes receivable - stock options (173) (1,024)
Deferred cost restricted stock (80) (345)
Accumulated other comprehensive loss (5,324) --
--------- ---------
Total shareholders' equity 143,566 145,649
--------- ---------
$ 570,227 $ 585,851
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