Marsh Supermarkets, Inc. Reports Third Quarter Results Of Operations

Net Income Up $1,095,000


INDIANAPOLIS, Feb. 17, 2004 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) reports results of operations for the 12 weeks ended January 3, 2004.

Net income for the quarter was $2,324,000 compared to $1,229,000 last year -- an 89% improvement. Diluted earnings per common share were $0.29 compared to $0.15 last year.

Total revenues for the third quarter were $388,771,000 compared to $382,711,000 last year -- a 1.6% increase. Total sales in comparable supermarkets and convenience stores were slightly better than last year, up 0.04%. Comparable store merchandise sales which exclude gasoline decreased 0.8%. The comparable store merchandise sales decline is believed to be attributable to a weak economy, high unemployment, and competitive new supermarket square footage. The Company excludes gasoline sales from its analysis of comparable store merchandise sales because retail gasoline prices fluctuate widely and frequently.

During the third quarter, the Company opened one new Marsh supermarket and acquired one supermarket that is being operated under the LoBill Foods banner. One Village Pantry convenience store was closed.

Subsequent to quarter end, another new Marsh supermarket opened, and two Village Pantry convenience stores were closed.

"The new Marsh stores are Lifestyle stores and have a new innovative design and layout based on our customers' lifestyles and shopping behavior. Our vision for the future is reflected in these stores," said Don E. Marsh, Chairman and Chief Executive Officer. "Currently, Marsh stock has a strong dividend yield of approximately 3.9%."

In a separate release, the Company also announced today that it had amended its Form 10-K for the year ended March 29, 2003 and the Forms 10-Q for the quarters ended June 21, 2003, and October 11, 2003, in connection with its reconsideration of Emerging Issues Task Force Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor. The amendments resulted in a non-cash charge of $3.6 million net of income taxes for the year ended March 29, 2003, and additional net income of $0.4 million and $0.3 million for the quarters ended June 21, 2003 and October 11, 2003, respectively. There was no material impact from this accounting change for the quarter ended January 3, 2004.

Marsh is a leading regional supermarket chain operating 68 Marsh(r), 36 LoBill Foods(r) stores, 1 Savin*$(r), 9 O'Malia Food Markets, and 164 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(r) Florist and Enflora - Flowers for Business(r).

Cautionary Note Regarding Forward-Looking Statements

This report includes certain forward-looking statements (all 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 beyond the Company's control. The forward-looking statements and the Company's future results, liquidity and capital resources are subject to risks and uncertainties including, but not limited to, the following: 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 improve comparable store sales; 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 due to limited real estate holdings available for sale; 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 associated with pension and other retirement obligations; uncertainties related to state and federal taxation and tobacco and environmental legislation; the ability to collect outstanding notes and accounts receivable; the successful integration of acquisitions; potential interest rate increases on variable rate debt, as well as terms, costs and availability of capital; 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. 3,   Jan. 4,    Jan. 3,     Jan. 4,
                             2004      2003       2004        2003
                           --------  --------  ----------  ----------
 Sales and other
  revenues                 $388,417  $382,305  $1,275,382  $1,278,522
 Gains from sales of
  property                      354       406       2,168       3,952
                           --------  --------  ----------  ----------
 Total revenues             388,771   382,711   1,277,550   1,282,474
 Cost of merchandise
  sold, including
  warehousing and
  transportation,
  excluding
  depreciation              270,889   268,878     893,353     895,128
                           --------  --------  ----------  ----------
 Gross profit               117,882   113,833     384,197     387,346
 Selling, general and
  administrative            103,874   101,586     344,046     343,239
 Depreciation                 5,781     5,633      19,203      18,750
                           --------  --------  ----------  ----------
 Operating income             8,227     6,614      20,948      25,357
 Interest                     4,268     5,416      14,763      18,249
 Other non-operating
  income                         --      (971)       (961)       (971)
                           --------  --------  ----------  ----------
 Income from continuing
  operations before
  income taxes                3,959     2,169       7,146       8,079
 Income taxes                 1,635       965       2,881       3,390
                           --------  --------  ----------  ----------
 Income from continuing
  operations                  2,324     1,204       4,265       4,689
 Gain (loss) on disposal
  of discontinued
  operation, net of tax          --        25          --        (174)
                           --------  --------  ----------  ----------
 Net income                $  2,324  $  1,229  $    4,265  $    4,515
                           ========  ========  ==========  ==========

 Basic earnings per
 common share:

 Continuing operations     $    .29  $    .15  $      .54  $      .59
 Gain (loss) on disposal
  of discontinued
  operation                      --        --          --        (.02)
                           --------  --------  ----------  ----------
 Net income                $    .29  $    .15  $      .54  $      .57
                           ========  ========  ==========  ==========

 Diluted earnings per
 common share:

 Continuing operations     $    .29  $    .15  $      .53  $      .57
 Gain (loss) on disposal
  of discontinued
  operation                      --        --          --        (.02)
                           --------  --------  ----------  ----------
 Net income                $    .29  $    .15  $      .53  $      .55
                           ========  ========  ==========  ==========
 Dividends per share       $    .13  $    .11  $      .39  $      .33
                           ========  ========  ==========  ==========


                       MARSH SUPERMARKETS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                 -------------------------------------
                            (In thousands)
                              (Unaudited)
                                               January 3,   January 4,
                                                  2004         2003
                                               ---------    ---------
 Assets
 Current assets:
  Cash and equivalents                         $  36,609    $  36,634
  Accounts receivable                             26,073       35,594
  Inventories, less LIFO reserve: January 3,
   2004 - $1,469; January 4, 2003 - $1,899       128,064      136,609
  Prepaid expenses                                 6,420        5,898
  Recoverable income taxes                         2,764           --
                                               ---------    ---------
     Total current assets                        199,930      214,735
 Property and equipment, less allowances
  for depreciation                               299,150      308,258
 Other assets                                     51,893       47,234
                                               ---------    ---------
                                               $ 550,973    $ 570,227
                                               =========    =========

 Liabilities and Shareholders' Equity
 Current liabilities:
  Accounts payable                             $  78,633    $  77,953
  Accrued liabilities                             51,936       52,141
  Current maturities of long-term
   liabilities                                     3,364        3,389
                                               ---------    ---------
    Total current liabilities                    133,933      133,483

 Long-term liabilities:
  Long-term debt                                 181,755      203,002
  Capital lease obligations                       28,442       29,225
                                               ---------    ---------
    Total long-term liabilities                  210,197      232,227

 Deferred items:
  Income taxes                                    15,501       19,297
  Pension and post-retirement benefits            45,748       23,439
  Other                                           16,592       18,215
                                               ---------    ---------
    Total deferred items                          77,841       60,951

 Shareholders' Equity:
  Common stock, Classes A and B                   26,455       26,424
  Retained earnings                              133,081      137,423
  Cost of common stock in treasury               (15,062)     (14,704)
  Notes receivable - stock options                   (74)        (173)
  Deferred cost restricted stock                     (14)         (80)
  Accumulated other comprehensive loss           (15,384)      (5,324)
                                               ---------    ---------
   Total shareholders' equity                    129,002      143,566
                                               ---------    ---------
                                               $ 550,973    $ 570,227
                                               =========    =========


            

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