Marsh Supermarkets, Inc. Announces Fourth Quarter and Fiscal 2004 Results

INDIANAPOLIS, Indiana, UNITED STATES


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.


        

Contact Data