Marsh Supermarkets, Inc. Third Quarter Results of Operations

INDIANAPOLIS, Indiana, UNITED STATES


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
                                               =========    =========


        

Contact Data