INDIANAPOLIS, Feb. 17, 2004 (PRIMEZONE) -- Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) reports results of operations for the 12 weeks ended January 3, 2004.
Net income for the quarter was $2,324,000 compared to $1,229,000 last year -- an 89% improvement. Diluted earnings per common share were $0.29 compared to $0.15 last year.
Total revenues for the third quarter were $388,771,000 compared to $382,711,000 last year -- a 1.6% increase. Total sales in comparable supermarkets and convenience stores were slightly better than last year, up 0.04%. Comparable store merchandise sales which exclude gasoline decreased 0.8%. The comparable store merchandise sales decline is believed to be attributable to a weak 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.
During the third quarter, the Company opened one new Marsh supermarket and acquired one supermarket that is being operated under the LoBill Foods banner. One Village Pantry convenience store was closed.
Subsequent to quarter end, another new Marsh supermarket opened, and two Village Pantry convenience stores were closed.
"The new Marsh stores are Lifestyle stores and have a new innovative design and layout based on our customers' lifestyles and shopping behavior. Our vision for the future is reflected in these stores," said Don E. Marsh, Chairman and Chief Executive Officer. "Currently, Marsh stock has a strong dividend yield of approximately 3.9%."
In a separate release, the Company also announced today that it had amended its Form 10-K for the year ended March 29, 2003 and the Forms 10-Q for the quarters ended June 21, 2003, and October 11, 2003, in connection with its reconsideration of Emerging Issues Task Force Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor. The amendments resulted in a non-cash charge of $3.6 million net of income taxes for the year ended March 29, 2003, and additional net income of $0.4 million and $0.3 million for the quarters ended June 21, 2003 and October 11, 2003, respectively. There was no material impact from this accounting change for the quarter ended January 3, 2004.
Marsh is a leading regional supermarket chain operating 68 Marsh(r), 36 LoBill Foods(r) stores, 1 Savin*$(r), 9 O'Malia Food Markets, and 164 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(r) Florist and Enflora - Flowers for Business(r).
Cautionary Note Regarding Forward-Looking Statements
This report includes certain forward-looking statements (all 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; 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 improve comparable store sales; 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 due to limited real estate holdings available for sale; 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 associated with pension and other retirement obligations; uncertainties related to state and federal taxation and tobacco and environmental legislation; the ability to collect outstanding notes and accounts receivable; the successful integration of acquisitions; potential interest rate increases on variable rate debt, as well as terms, costs and availability of capital; 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. 3, Jan. 4, Jan. 3, Jan. 4,
2004 2003 2004 2003
-------- -------- ---------- ----------
Sales and other
revenues $388,417 $382,305 $1,275,382 $1,278,522
Gains from sales of
property 354 406 2,168 3,952
-------- -------- ---------- ----------
Total revenues 388,771 382,711 1,277,550 1,282,474
Cost of merchandise
sold, including
warehousing and
transportation,
excluding
depreciation 270,889 268,878 893,353 895,128
-------- -------- ---------- ----------
Gross profit 117,882 113,833 384,197 387,346
Selling, general and
administrative 103,874 101,586 344,046 343,239
Depreciation 5,781 5,633 19,203 18,750
-------- -------- ---------- ----------
Operating income 8,227 6,614 20,948 25,357
Interest 4,268 5,416 14,763 18,249
Other non-operating
income -- (971) (961) (971)
-------- -------- ---------- ----------
Income from continuing
operations before
income taxes 3,959 2,169 7,146 8,079
Income taxes 1,635 965 2,881 3,390
-------- -------- ---------- ----------
Income from continuing
operations 2,324 1,204 4,265 4,689
Gain (loss) on disposal
of discontinued
operation, net of tax -- 25 -- (174)
-------- -------- ---------- ----------
Net income $ 2,324 $ 1,229 $ 4,265 $ 4,515
======== ======== ========== ==========
Basic earnings per
common share:
Continuing operations $ .29 $ .15 $ .54 $ .59
Gain (loss) on disposal
of discontinued
operation -- -- -- (.02)
-------- -------- ---------- ----------
Net income $ .29 $ .15 $ .54 $ .57
======== ======== ========== ==========
Diluted earnings per
common share:
Continuing operations $ .29 $ .15 $ .53 $ .57
Gain (loss) on disposal
of discontinued
operation -- -- -- (.02)
-------- -------- ---------- ----------
Net income $ .29 $ .15 $ .53 $ .55
======== ======== ========== ==========
Dividends per share $ .13 $ .11 $ .39 $ .33
======== ======== ========== ==========
MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands)
(Unaudited)
January 3, January 4,
2004 2003
--------- ---------
Assets
Current assets:
Cash and equivalents $ 36,609 $ 36,634
Accounts receivable 26,073 35,594
Inventories, less LIFO reserve: January 3,
2004 - $1,469; January 4, 2003 - $1,899 128,064 136,609
Prepaid expenses 6,420 5,898
Recoverable income taxes 2,764 --
--------- ---------
Total current assets 199,930 214,735
Property and equipment, less allowances
for depreciation 299,150 308,258
Other assets 51,893 47,234
--------- ---------
$ 550,973 $ 570,227
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 78,633 $ 77,953
Accrued liabilities 51,936 52,141
Current maturities of long-term
liabilities 3,364 3,389
--------- ---------
Total current liabilities 133,933 133,483
Long-term liabilities:
Long-term debt 181,755 203,002
Capital lease obligations 28,442 29,225
--------- ---------
Total long-term liabilities 210,197 232,227
Deferred items:
Income taxes 15,501 19,297
Pension and post-retirement benefits 45,748 23,439
Other 16,592 18,215
--------- ---------
Total deferred items 77,841 60,951
Shareholders' Equity:
Common stock, Classes A and B 26,455 26,424
Retained earnings 133,081 137,423
Cost of common stock in treasury (15,062) (14,704)
Notes receivable - stock options (74) (173)
Deferred cost restricted stock (14) (80)
Accumulated other comprehensive loss (15,384) (5,324)
--------- ---------
Total shareholders' equity 129,002 143,566
--------- ---------
$ 550,973 $ 570,227
========= =========