INDIANAPOLIS, March 12, 2003 (PRIMEZONE) -- In recent conference calls, Marsh Supermarkets (Nasdaq:MARSA) (Nasdaq:MARSB) outlined a number of initiatives designed to improve future operating results. "The deflationary environment for food, changes in customer preferences and the competitive climate necessitated several new initiatives," said Don E. Marsh, Chairman and Chief Executive Officer.
Our plans now include:
-- Opening two new supermarkets, one of which will be a new concept store in a new market area where no sales will be transferred from existing Marsh units.
-- Upgrade and reimaging of 101 Village Pantry convenience stores scheduled for completion by March 29, 2003.
-- Four to six supermarkets are scheduled for remodel in the coming fiscal year.
-- Management has identified potential annualized expense and profit improvements of $30 million, of which up to $24 million should be achieved in fiscal 2004.
Certain headquarters staff expenses have been reduced by approximately $3.0 million annually. We anticipate that approximately $1.0 million in expense for this staff reduction will be recognized in the fourth quarter ended March 29, 2003. This reduction was largely accomplished by consolidating our multi-division supermarket operation into a single central service operation, consolidating purchasing functions for greater leverage with vendors.
Other identified improvements include energy savings, changes to medical plans, outsourcing of retail maintenance, improved labor and transportation scheduling, warehouse efficiencies and other actions, some of which are discussed in this release.
-- The quarterly dividend rate of 11 cents was increased to 13 cents per share per quarter effective with the dividend payable in May. At recent stock prices, the dividend yield is 4.6% to 5.3%, depending on class of shares.
-- The ad release day was changed to Thursdays. A Thursday release preempts the Sunday circular and allows our stores to be better prepared for the all-important weekend sales.
-- The Company introduced "MyMarsh", a quantum leap forward in loyalty card marketing. This system includes a touch screen at the point of sale and delivers static- and motion-based communications. The technology provides an economically viable method to communicate information, incentives and rewards to specific customers or customer groups. The system is a step toward fulfilling the promise of customer-specific one-to-one marketing. Additionally, individual MyMarsh kiosks are being installed at each Marsh store location so customers may receive offers as they begin their shopping experience.
-- The Ticketmaster in-store ticket centers began utilizing the Fresh Idea loyalty card to offer exclusive Marsh customer discounts on specified community events. Marsh also continues to serve as ticket center for not-for-profit community events.
-- A new state-of-the-art frozen food warehouse was opened. The additional space was needed because of the growing importance of this category.
-- The purchase of two Mr. D's Fresh Food Markets on the south side of the Indianapolis metro area, and the closing of a nearby LoBill Foods location, which will result in a transfer of sales to these stores. These stores are being operated under the O'Malia banner.
-- Closing the Fresh Express home delivery operation and twenty-two under-performing Village Pantry convenience stores.
-- Retirement of the 7% convertible debentures. By using proceeds from the revolving credit facility to retire this debt, annual interest expense will be reduced by approximately $700 thousand at current short-term rates.
-- The Company purchased at a discount, and subsequently retired, $15 million of senior subordinated notes. At current short-term interest rates, annual interest expense should improve by approximately $800 thousand.
"As a result of these and other initiatives, I expect improved operating results as we move through fiscal 2004 in an improving retail climate", said Don E. Marsh.
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.