INDIANAPOLIS, July 30, 2004 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) reports results of operations for the 12 weeks ended June 19, 2004.
Net income for the quarter was $1,618,000 compared to $1,258,000 last year -- a 28.6% improvement. Earnings per diluted common share were $0.20 compared to $0.16 last year. Operating income for the first quarter improved 14.1% to $6,905,000 from $6,050,000 last year. This is the third consecutive quarter of improved operating income.
Sales and other revenues for the first quarter were $399,852,000, an increase of $21,842,000 or 5.8% over last year.
Sales in comparable supermarkets and convenience stores were above last year by 3.2%. Comparable store merchandise sales, which excludes gasoline sales, declined 0.4% from last year. This is a 2.9 percentage point improvement from the comparable store sales rate reported last quarter. The direction of the comparable store merchandise sales change is positive. The Company excludes gasoline sales from its analysis of comparable store merchandise sales because retail gasoline prices fluctuate widely and frequently, which make analytical comparisons difficult.
"We are encouraged by the improving economy, but believe Indiana is lagging behind the U.S. recovery because of the heavy manufacturing base in central Indiana, which experienced significant job losses and plant closings in the past two years. Marsh has a competitive advantage over other supermarkets and supercenters by offering superior service and quality, combined with a pleasant and convenient shopping experience. In an improved economy, these strengths will drive sales and profitability," said Don E. Marsh, Chairman and Chief Executive Officer.
During the quarter, the Company converted one Marsh supermarket to the LoBill Foods banner. Crystal Food Service opened a new casual, quick service restaurant, Trios Di Tuscanos, adjacent to a new McNamara Florist location. The combined units utilize the floral shop to provide a unique visual effect.
Subsequent to quarter end, the Company opened a new concept store called Arthur's Fresh Market. The Arthur's format, which, at 21,000 square feet, is smaller than a Marsh store, is focused on high quality perishables and customer convenience (easy in and out). The store is designed for efficient operations while carrying a complete line of fresh options and a full variety of grocery items. An O'Malia Store was converted to the LoBill Foods banner and a new LoBill store was also opened after quarter end.
Marsh is a leading regional chain, operating 67 Marsh(r) supermarkets, 39 LoBill(r) Foods stores, 8 O'Malia(r) Food Markets, 164 Village Pantry(r) convenience stores, 1 Arthur's Fresh Market, and 1 Savin*$(SM), in Indiana and western Ohio. The Company also operates Crystal Food Services(SM), which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, restaurant management, Primo Banquet Catering and Conference Centers; Floral Fashions(r), McNamara(r) Florist and Enflora(r) -- Flowers for Business.
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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(in thousands except per share amounts)
(Unaudited)
12 Weeks Ended
--------------
June 19, June 21,
2004 2003
--------- ---------
Sales and other
revenues $ 399,396 $ 378,010
Gains from sales of
property 456 --
--------- ---------
Total revenues 399,852 378,010
Cost of merchandise
sold, including
warehousing and
transportation,
excluding
depreciation 281,123 264,079
--------- ---------
Gross profit 118,729 113,931
Selling, general and
administrative 106,039 102,119
Depreciation 5,785 5,762
--------- ---------
Operating income 6,905 6,050
Interest 4,283 4,570
Other non-operating
income -- (634)
--------- ---------
Income before income
taxes 2,622 2,114
Income taxes 1,004 856
--------- ---------
Net income $ 1,618 $ 1,258
========= =========
Earnings per common
share:
Basic $ .20 $ .16
Diluted .20 .16
Dividends per share $ .13 $ .13
MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
June 19, June 21,
2004 2003
--------- ---------
Assets
Current assets:
Cash and equivalents $ 41,656 $ 25,947
Accounts receivable 22,924 28,704
Inventories 127,280 125,917
Prepaid expenses 3,829 4,019
Recoverable income
taxes 3,289 --
--------- ---------
Total current assets 198,978 184,587
Property and
equipment, less
allowances for depreciation 294,955 311,417
Other assets 52,801 44,998
--------- ---------
$ 546,734 $ 541,002
========= =========
Liabilities and
Shareholders' Equity
Current liabilities:
Accounts payable $ 76,333 $ 70,842
Accrued liabilities 46,925 49,287
Current maturities
of long-term
liabilities 5,080 3,177
--------- ---------
Total current
liabilities 128,338 123,306
Long-term liabilities:
Long-term debt 181,163 191,312
Capital lease
obligations 27,935 28,787
Pension and
post-retirement
benefits 43,766 41,684
--------- ---------
Total long-term
liabilities 252,864 261,783
Deferred items:
Income taxes 18,483 9,840
Gains from
sale/leasebacks 15,337 15,329
Other 3,526 2,681
--------- ---------
Total deferred items 37,346 27,850
Shareholders' Equity:
Common stock,
Classes A and B 26,588 26,443
Retained earnings 131,399 132,137
Cost of common
stock in treasury (15,724) (14,917)
Deferred cost -
restricted stock (11) (39)
Notes receivable -
stock purchases (191) (177)
Accumulated other
comprehensive loss (13,875) (15,384)
--------- ---------
Total shareholders'
equity 128,186 128,063
--------- ---------
$ 546,734 $ 541,002
========= =========
MARSH SUPERMARKETS, INC.
Reconciliation of Sales and Other Comparable Revenues
12 Weeks Ended
------------------
June 19, June 21, %
2004 2003 Change
------ ------- -------
Sales and Other
Revenues(1) $392,405 $378,067 3.79%
Less: Other Revenues/
Non-Comparable Sales 27,528 24,571
Comparable Retail
Sales(2) 364,877 353,496 3.22%
Less: Fuel Sales 37,065 24,328
Comparable Store
Merchandise Sales 327,812 329,168 (0.41)%
(1) Excluding gains from sales of property
(2) Comparable supermarkets and convenience stores