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BUTTREY FOOD AND DRUG STORES CO. ANNOUNCES EARNINGS FOR THE SECOND QUARTER OF 31 CENTS PER SHARE VERSUS 14 CENTS PER SHARE

 BUTTREY FOOD AND DRUG STORES CO. ANNOUNCES EARNINGS


FOR THE SECOND QUARTER OF 31 CENTS PER SHARE VERSUS 14 CENTS PER SHARE
 GREAT FALLS, Mont. Aug. 27 /PRNewswire/ -- Buttrey Food and Drug Stores Co. (NASDAQ: BTRY) today reported that net income for the 13 weeks ended Aug. 1, 1992, increased $1,658,000, or 181.0 percent, from $916,000 or 14 cents per share in the second quarter of 1991 to $2,574,000 or 31 cents per share in the second quarter of 1992. Net income before extraordinary items for the 26 weeks ended Aug. 1, 1992, increased $2,352,000, or 115.7 percent, from $2,033,000, or 32 cents per share, in 1991 to $4,385,000, or 54 cents per share, in 1992. After giving effect to the extraordinary charges in the first quarter resulting from the early retirement of debt and the refinancing of the company's bank agreement, the company reported net income for the 26 weeks ended Aug. 1, 1992 of $950,000, or 12 cents per share.
 Sales for the 13 weeks ended Aug. 1, 1992, decreased $12,921,000, or 10.1 percent, from $128,238,000 in the second quarter of 1991 to $115,317,000 in the second quarter of 1992. The decrease reflects an 11.1 percent decline in comparable store sales as the company continues to be impacted by new competition in specific markets, remodeling activities by existing competitors and general economic conditions including price deflation in certain significant food categories. Sales for the 26 weeks ended Aug. 1, 1992 decreased $15,033,000, or 6.1 percent, from $244,524,000 in 1991 to $229,491,000 in 1992. The decrease in sales for the 26 weeks ended Aug. 1, 1992 reflects a 7.2 percent decline in comparable store sales.
 Gross profit for the 13 weeks ended Aug. 1, 1992 decreased $1,753,000, from $31,310,000 in the second quarter of 1991 to $29,557,000 in the second quarter of 1992. However, gross profit as a percentage of sales increased 1.2 percentage points from 24.4 percent in the second quarter of 1991 to 25.6 percent in the second quarter of 1992. While total gross profit was adversely impacted by the decline in sales, it improved as a percentage of sales versus the prior year due to distribution efficiencies and increased sales of private label items. The 1.2 percentage point improvement also reflects the elimination of a non-cash charge of 0.5 percentage points for the amortization of a supply agreement with American Stores. (The supply agreement was terminated in October 1991, and the company's results for the quarter ended Aug. 1, 1992 therefore no longer reflect this amortization charge.) Gross profit for the 26 weeks ended Aug. 1, 1992 decreased $3,638,000 from $62,149,000, or 25.4 percent of sales, in 1991 to $58,511,000, or 25.5 percent in 1992.
 Earnings before interest, income taxes and depreciation and amortization on a FIFO basis ("EBITDA") for the 13 weeks ended August 1, 1992 decreased $160,000 from $8,862,000 in the second quarter of 1991 to $8,702,000 in the second quarter of 1992. However, EBITDA as a percentage of sales increased 0.7 percentage points from 6.9 percent of sales in the second quarter of 1991 to 7.6 percent of sales in the second quarter of 1992. The increase in EBITDA as a percentage of sales reflects a 0.7 percentage point increase in gross profit (excluding supply agreement amortization). EBITDA for the 26 weeks ended Aug. 1, 1992 decreased $1,211,000 from $17,968,000, or 7.3 percent of sales, in 1991 to $16,757,000, or 7.3 percent of sales, in 1992.
 "In addition to deflation and sluggish consumer spending, the continued impact of new competition in selected major markets coupled with the remodeling activities of existing competitors have been significant factors in the decline in sales", said Ed Agnew, president and chief executive officer. "During the quarter we have intensified our efforts to manage our expenses in a declining sales environment through the implementation of cost reduction programs. Our strategies have included the restructuring of store management teams in certain markets, productivity enhancements in the distribution centers and in the stores and an operational review of perishable departments performing at marginal levels. In some instances, these strategies have contributed to the decline in sales. However, in making some of these tough decisions, we believe that the long-term competitive position of the company is enhanced. Although we have experienced a moderation in the rate of decline in comparable sales since the end of the second quarter, we will continue to seek opportunities to improve our overall profitability."
 The company's capital investment program continued as planned during the second quarter with the completion of four remodels, the initiation of remodeling at two locations and the continuation of construction of two stores expected to open in the fourth quarter of this year. Additionally, the company will begin construction shortly on two new stores targeted to open during the first quarter of 1993. The two stores will be combination food and drug stores of approximately 48,000 square feet.
 Buttrey Food and Drug Stores Co. is headquartered in Great Falls, Mont., and currently operates 43 stores in Montana, Washington, Wyoming and North Dakota and three distribution centers in Montana (1) and Utah (2).
 BUTTREY FOOD AND DRUG STORES CO.
 Financial Highlights
 (In thousands, except per-share data)
 13 Weeks Ended: 26 Weeks Ended:
 Aug. 1, Aug. 3, Aug. 1, Aug. 3,
 1992 1991 1992 1991
 Sales $115,317 $128,238 $229,491 $244,524
 Cost of sales and
 related occupancy
 costs 85,760 96,928 170,980 182,375
 Gross profit 29,557 31,310 58,511 62,149
 Marketing, general and
 administrative
 expenses 24,431 26,514 48,901 52,169
 Operating income 5,126 4,796 9,610 9,980
 Interest expense 946 3,467 2,485 7,122
 Income before taxes
 and extraordinary
 charge 4,180 1,329 7,125 2,858
 Income taxes 1,606 413 2,740 825
 Income before
 extraordinary charge 2,574 916 4,385 2,033
 Extraordinary charge
 (net of tax) 0 0 3,435 0
 Net income $ 2,574 $ 916 $ 950 $ 2,033
 Net income per common
 share and common
 share equivalent:
 Income before
 extraordinary charge $ 0.31 $ 0.14 $ 0.54 $ 0.32
 Extraordinary charge
 (net of tax) 0.00 0.00 (0.42) 0.00
 Net income per share $0.31 $0.14 $0.12 $0.32
 Weighted average common
 and common equivalent
 shares outstanding 8,332.6 6,444.3 8,194.7 6,444.3
 Certain Non-Cash Charges:
 Lifo provision $ 250 $ 282 $ 500 $ 564
 Depreciation and
 amortization of
 property and
 capital leases 2,395 1,866 4,667 3,589
 Loss on disposal
 of owned property 0 0 3 0
 Amortization of excess
 cost over net assets
 acquired and other
 assets 931 1,918 1,977 3,835
 Amortization of deferred
 debt issuance costs
 (Included under interest
 expense) 46 809 173 1,580
 Total Non-Cash Charges $ 3,622 $ 4,875 $ 7,320 $ 9,568
 -0- 8/27/92
 /CONTACT: Wayne Peterson of Buttrey Food and Drug Stores, 406-454-7280/
 (BTRY) CO: Buttrey Food and Drug Stores Inc. ST: Montana IN: REA SU: ERN


JH -- SE001 -- 3803 08/27/92 09:16 EDT
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Date:Aug 27, 1992
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