INDIANAPOLIS, Feb. 8, 2006 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) today announced several major steps in its ongoing restructuring process.
The Board of Directors has elected William L. Marsh Interim President and Chief Operating Officer. Bill Marsh has served as a director of the Company since 1991 and as Senior Vice President -- Property Management since August of 1997. He has been employed by the Company in various supervisory and executive capacities since 1974.
The Company also announced a reduction in force of approximately 25 employees at the headquarters office, including four officers: David A. Marsh, President and Chief Operating Officer; Arthur Marsh, Executive Vice President -- Mergers and Acquisitions; Don Marsh, Jr., Vice President -- Specialty Procurement and Joseph Heerens, Senior Vice President -- Political Affairs.
"We believe the changes in management are critical to the Company's transformation. We would like to thank each of the executives for their prior contributions to the Company and wish them well in their future endeavors," said the Board of Directors.
In addition to the staff reduction, the Company will reduce travel and overhead at the headquarters and close the Marsh Supermarket in Fort Wayne, the Savin*$ Store in Muncie, six Village Pantry convenience stores (four in Indianapolis and two in Anderson) and the Trios Di Tuscanos restaurant in Noblesville by the end of the month. SEE NOTE BELOW. Collectively, these actions are expected to save the Company more than $12 million annually. Previously, the Company announced the termination of the supplemental executive retirement plans that will reduce expenses by $3 million to $4 million annually.
"This is a time when the Company's management needs to focus their efforts on restructuring the Company's operations, reducing costs and improving profitability. We recognize that these efforts will require sacrifices at many levels, and it is important that the Company's management lead the way," the Board of Directors stated. They also reported that a review of the Company's store base and expense structure would be ongoing.
The Company expects to incur a fourth quarter charge for future cash expenditures of $5.8 to $6.8 million related to the reduction of jobs at the Company's headquarters.
Upon closing of the stores, the Company expects to record an additional charge for future cash expenditures of $6 to $10 million ($3.9 to $6.5 million net of tax), primarily related to future lease payments. The Company will also record a non-cash impairment charge in the third quarter of approximately $12.8 million before tax ($8.4 million after tax). These non-cash charges are related to the stores to be closed as well as other store locations and will bring the book value of these assets in line with their fair market value, as well as account for differences between future lease payments and expected subleases.
Marsh is a leading regional chain, operating 69 Marsh(r) supermarkets, 38 LoBill(r) Food stores, 8 O'Malias(r) Food Markets, 154 Village Pantry(r) convenience stores, 2 Arthur's Fresh Market(r) stores in Indiana and western Ohio. The Company also operates Crystal Catering Food Services(sm) which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, and Primo Banquet Catering and Conference Centers; Floral Fashions(r), McNamara(r) Florist and Enflora(r) -- Flowers for Business.
NOTE:
#353 Savin*$
1827 East Memorial Drive
Muncie, IN 47302
#100 Marsh Supermarket
3701 Maplecrest Road
Ft. Wayne, IN 46835
Trios Restaurant
14575 Mundy Drive (corner of Hwy 37 and 146th Street)
Noblesville, IN 46060
#422 Village Pantry
10950 Pendleton Pike
Indianapolis, IN
#391 Village Pantry
2040 East Washington Street
Indianapolis, IN
#435 Village Pantry
3731 South Madison Avenue
Anderson, IN
#488 Village Pantry
1419 Broadway
Anderson, IN
#380 Village Pantry
2202 Hanna Avenue
Indianapolis, IN
#520 Village Pantry
2724 East Washington Street
Indianapolis, IN
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 statement 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: uncertainties regarding the effect or outcome of the Company's decision to explore strategic alternatives; the entry of new or remodeled competitive stores into the Company's market areas; the level of discounting and promotional spending by competitors; the Company's ability to improve comparable store sales; the level of margins achievable in the Company's operating divisions; the stability and timing of distribution incentives from suppliers; changes in the terms on which suppliers require the Company to pay for store merchandise; the Company's ability to control expenses including employee medical costs, labor, credit card fees, and workers compensation and general liability expense; uncertainties regarding gasoline prices and margins; the success of the Company's new and remodeled stores; uncertainties regarding the cost savings of store closings and other restructuring efforts; uncertainties regarding future real estate gains due to limited real estate holdings available for sale; potential interest rate increases on variable rate debt, as well as terms, costs and the availability of capital, the Company's ability to collect outstanding notes and accounts receivable; uncertainties related to state and federal taxation and tobacco and environmental legislation; uncertainties related to the outcome of pending litigation; the timely and on budget completion of store construction, conversion and remodeling; and other known and unknown risks and uncertainties. The Company undertakes no obligation to update or revise and forward-looking statements to reflect subsequent events or circumstances.