INDIANAPOLIS, June 10, 2004 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) reports results of operations for the 12 and 52 weeks ended March 27, 2004.
Net income for the fiscal year ended March 27, 2004 was $3,037,000, or $0.38 per diluted share, compared to $52,000, or $0.01 per diluted share, last year. Operating income for fiscal 2004 improved to $23,645,000 from $22,634,000 last year. In both our third and fourth quarters, operating income exceeded last year. Income from continuing operations, net of tax, was $3,037,000, or $0.38 per diluted share, compared to $406,000, or $0.05 per diluted share, last year. Last year, the Company recorded a non-cash charge of $3,639,000 net of tax, or $0.44 per share, related to the application of Emerging Issues Task Force Issue No. 02-16 regarding accounting for vendor consideration.
Sales and other revenues, excluding gains from sales of property, were $1,650,868,000 for fiscal year 2004, an increase of $3,334,000 over last year's $1,647,534,000. Retail sales in comparable supermarkets and convenience stores, were below last year by 1.4%. Comparable store merchandise sales, which exclude gasoline, declined 2.5% from last year (see Note). The decline is attributable to a continuing weak local 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.
For the twelve week fourth quarter ended March 27, 2004, total revenues were $376,365,000 compared to $373,261,000 last year. Retail sales in comparable supermarkets and convenience stores were below last year by 1.7%. Comparable store merchandise sales, which exclude gasoline sales, declined 3.3% from last year (see Note).
Net loss for the quarter was $1,228,000, or $0.15 per diluted share, compared to a net loss of $4,463,000, or $0.56 per diluted share, last year. Diluted loss per share from continuing operations was $0.15 compared to $0.54 last year. In last year's fourth quarter, the Company recorded a non-cash charge of $3,639,000 net of tax, or $0.44 per share, related to the application of Emerging Issues Task Force No. 02-16 regarding accounting for vendor consideration.
During the fourth quarter, Marsh Supermarkets opened the new "lifestyle" store in a new market. Two Village Pantry locations were closed. Subsequent to quarter end, one Marsh Supermarket was converted to a LoBill Foods.
The Company also opened Trios Di Tuscanos, its first casual, quick serve restaurant operated by Crystal Food Service, and a new McNamara Florist store adjoining the restaurant.
"We continue to differentiate ourselves from the competition by providing the highest quality of fresh product, superior customer service, and everyday value to our customers. We are constantly seeking fresh ideas to drive sales, streamline operations and enhance gross margin in order to increase profitability. These efforts produced improved results from retail operations in our third and fourth quarters. In fiscal 2004, we introduced our new "lifestyle" store, which features a unique design and products grouped to enhance customers' menu planning. We are pleased with the new concept and are encouraged by initial customer comments, and I believe that Fiscal 2005 will be a remarkably better year," said Don E. Marsh, Chairman and Chief Executive Officer.
Marsh is a leading regional chain, operating 67 Marsh(r) supermarkets, 37 LoBill(r) Foods stores, 9 O'Malia(r) Food Markets, 164 Village Pantry(r) convenience stores, and 1 Savin*$SM, in Indiana and western Ohio. The Company also operates Crystal Food ServicesSM, which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions; Primo Banquet Catering and Conference Centers; Floral Fashions(r), McNamara(r) Florist and Enflora(r) - Flowers for Business.
Note: See attached Schedule - Reconciliation of Sales and Other Comparable Revenues
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 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; the Company's ability to improve comparable store sales; the level of discounting and promotional spending by competitors; the stability and timing of distribution incentives from suppliers; the level of margins achievable in the Company's operating divisions; softness in the local and national economies and the general retail food industry; the success of the Company's new and remodeled stores, including image and rebranding programs; potential interest rate increases on variable rate debt, as well as terms, costs and the availability of capital; the Company's ability to control employee medical costs; uncertainties regarding future real estate gains due to limited real estate holdings available for sale; the ability of the Company to predict and respond to changes in customer preferences and lifestyles; the ability of the Company to respond to commodity price fluctuations; uncertainties regarding gasoline prices and margins; the Company's ability to control costs including labor, rent, credit card, and workers compensation and general liability expense; the Company's ability to implement cost improvement initiatives; uncertainties related to state and federal taxation and tobacco and environmental legislation; the Company's ability to collect outstanding notes and accounts receivable; uncertainties associated with pension and other retirement obligations; the successful economic implementation of new technology; the impact of any acquisitions and dispositions; the timely and on budget completion of store construction, expansion, conversion and remodeling; 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.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
12 Weeks Ended 52 Weeks Ended
------------------ ----------------------
March 27, March 29, March 27, March 29,
2004 2003 2004 2003
-------- -------- ---------- ----------
Sales and other
revenues $375,486 $369,012 $1,650,868 $1,647,534
Gains from sales of
property 879 4,249 3,047 8,201
-------- -------- ---------- ----------
Total revenues 376,365 373,261 1,653,915 1,655,735
Cost of merchandise
sold, including
warehousing and
transportation,
excluding depreciation 262,902 268,029 1,156,255 1,163,157
-------- -------- ---------- ----------
Gross profit 113,463 105,232 497,660 492,578
Selling, general and
administrative 104,956 102,241 449,002 445,480
Depreciation 5,810 5,714 25,013 24,464
-------- -------- ---------- ----------
Operating income 2,697 (2,723) 23,645 22,634
Interest 4,287 5,021 19,050 23,270
Other non-operating
income -- (1,209) (961) (2,180)
-------- -------- ---------- ----------
Income (loss) from
continuing operations
before income taxes (1,590) (6,535) 5,556 1,544
Income taxes (benefit) (362) (2,252) 2,519 1,138
-------- -------- ---------- ----------
Income (loss) from
continuing operations (1,228) (4,283) 3,037 406
Loss on disposal,
net of tax -- (180) -- (354)
-------- -------- ---------- ----------
Net income (loss) $ (1,228) $ (4,463) $ 3,037 $ 52
======== ======== ========== ==========
Basic earnings per
common share:
Continuing operations $ (.15) $ (.54) $ .38 $ .05
Loss on disposal of
discontinued
operation -- (.02) -- (.04)
-------- -------- ---------- ----------
Net income (loss) $ (.15) $ (.56) $ .38 $ .01
======== ======== ========== ==========
Diluted earnings per
common share:
Continuing operations $ (.15) $ (.54) $ .38 $ .05
Loss on disposal of
discontinued
operation -- (.02) -- (.04)
-------- -------- ---------- ----------
Net income (loss) $ (.15) $ (.56) $ .38 $ .01
======== ======== ========== ==========
Dividends per share $ .13 $ .13 $ .52 $ .46
MARSH SUPERMARKETS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 27, March 29,
2004 2003
--------- ---------
Assets
Current Assets
Cash and equivalents $ 27,584 $ 28,313
Accounts receivable 23,864 27,203
Inventories 126,840 130,297
Prepaid expenses 6,495 5,731
Recoverable income taxes 5,400 --
--------- ---------
Total Current Assets 190,183 191,544
Property and Equipment 297,028 311,469
Other Assets 55,194 46,309
--------- ---------
$ 542,405 $ 549,322
========= =========
Liabilities and Shareholders' Equity
Current Liabilities
Notes payable to bank $ -- $ 1,700
Accounts payable 80,614 71,883
Accrued liabilities 48,170 49,665
Current maturities of long-term liabilities 3,427 3,452
--------- ---------
Total Current Liabilities 132,211 126,700
Long-term Liabilities
Long-term debt 174,161 198,148
Capital lease obligations 28,188 29,009
Pension and postretirement benefits 42,725 40,824
--------- ---------
Total Long-Term Liabilities 245,074 267,981
Deferred Items
Income taxes 18,309 9,606
Deferred gains sale/leaseback 15,238 15,595
Other 3,297 1,631
--------- ---------
Total Deferred Items 36,844 26,832
Shareholders' Equity
Common stock, classes A and B 26,570 26,439
Retained earnings 130,813 131,911
Cost of Common Stock in treasury (15,011) (14,928)
Deferred cost - restricted stock (211) (54)
Notes receivable - stock purchases (11) (175)
Accumulated other comprehensive loss (13,874) (15,384)
--------- ---------
Total Shareholders' Equity 128,276 127,809
--------- ---------
$ 542,405 $ 549,322
========= =========
MARSH SUPERMARKETS, INC.
Reconciliation of Sales and Other Comparable Revenues
12 Weeks Ended 52 Weeks Ended
------------------------- -----------------------------
March 27, March 29, % March 27, March 29, %
2004 2003 Change 2004 2003 Change
-------- -------- ----- ---------- ---------- -----
Sales
and Other
Revenues(a) $376,365 $373,261 0.80% $1,650,868 $1,647,534 0.20%
Less: Other
Revenues/
Non-Compar-
able
Sales 33,863 24,682 121,850 97,204
Comparable
Retail
Sales(b) 342,502 348,579 (1.70)% 1,529,018 1,550,330 (1.40)%
Less: Fuel
Sales 30,584 26,010 122,518 107,831
Comparable
Store
Merchandise
Sales $311,918 $322,569 (3.30)% $1,406,500 $1,442,499 (2.50)%
(a) Excluding gains from sales of property.
(b) Comparable supermarkets and convenience stores.