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FRED MEYER REPORTS RECORD SALES AND NET INCOME FOR THE SECOND QUARTER AND FIRST HALF OF 1992

 FRED MEYER REPORTS RECORD SALES AND NET INCOME
 FOR THE SECOND QUARTER AND FIRST HALF OF 1992
 PORTLAND, Ore., Sept. 2 /PRNewswire/ -- Fred Meyer Inc. (NASDAQ: MEYR) announced today record sales and net income results for its 1992 second quarter (12 weeks) and 28 weeks ended Aug. 15, 1992.
 Net sales for the 1992 second quarter rose 4.2 percent to $641.7 million over the $615.9 million reported in the second quarter of last year. Comparable store sales increased 1.6 percent for the quarter.
 Net income increased 29 percent to $14.9 million in the second quarter of 1992, compared with $11.5 million reported in 1991's second quarter. Net earnings per share were 54 cents for the second quarter of 1992 based on 27,711,000 shares outstanding, compared with 46 cents for the prior year's quarter based on 25,073,000 shares outstanding. The increase in the number of shares outstanding in 1992's second quarter reflects the April 14, 1992, public offering of 2,000,000 new shares of common stock by the company.
 Income from operations for the 1992 second quarter was $25.7 million, a 16-percent increase over the $22.1 million reported in the prior year's second quarter.
 Net sales for the first 28 weeks of 1992 rose 6.1 percent to $1.47 billion over the $1.38 billion reported in 1991. Comparable store sales increased 2.8 percent for this 28-week period.
 Net income increased 35.2 percent to $26.4 million during the first 28-week period of 1992, compared with $19.6 million reported during the first half of 1991. Net earnings per share were 98 cents for the first 28 weeks of 1992 based on 26,941,000 shares outstanding, compared with 79 cents per share for the prior year based on 24,877,000 shares outstanding. The increase in the number of shares outstanding in the first 28 weeks of 1992 reflects the partial-year impact from the April 14, 1992, public offering of 2,000,000 new shares of common stock by the company.
 Income from operations for the first 28 weeks of 1992 was $47.4 million, an 18-percent increase over the $40.2 million reported in the comparable period of the prior year.
 Robert G. Miller, chairman of the board and chief executive officer, said, "We are pleased with our second-quarter sales and net income results, especially in light of food deflation and the drought conditions this summer in the Pacific Northwest. Our continued focus on lowering the company's expenses as a percent of sales primarily contributed to the improved net income results. The lower expense structure allowed us to absorb a slight decrease in gross margins in posting our record results.
 "Lower expenses were highlighted by reductions in corporate administrative and support department expenses, sales promotion costs, maintenance expenses and supply costs as a percent of sales. Expense reductions were partially offset by higher management information systems expenses as a percent of sales, and by the expensing of costs related to the company's election in the first quarter of 1992 to adopt the Statement of Financial Accounting Standards No. 106, entitled 'Employers' Accounting for Postretirement Benefits Other Than Pensions.'
 "Interest expense for 1992's second quarter decreased 46.1 percent to $2.1 million from the $3.8 million incurred in 1991's second quarter. The decrease primarily reflects lower interest rates and, to a lesser extent, lower borrowings resulting from receipt of proceeds from our public stock offering in April.
 "In 1992's second quarter we opened two mall jewelry stores and closed two other specialty stores, and in the third quarter opened a new multidepartment store in Newberg, Ore. We are on schedule to open a replacement store in Yakima, Wash., in November. In addition, we recently announced our plans to open five multidepartment stores in 1993. They include new stores in Anchorage, Alaska, Burlington, Orchards and Spokane, Wash., and Brookings, Ore. We also were pleased to recently announce that the company will begin trading its stock on the New York Stock Exchange under the symbol 'FMY' on Sept. 9, 1992," Miller said.
 Fred Meyer Inc., headquartered in Portland, is a leading regional retailer of a wide range of general merchandise, food, apparel, fine jewelry and home improvement products. The company currently operates 123 stores, including 95 large multidepartment stores, in Oregon, Washington, Utah, Alaska, Idaho, California and Montana.
 FRED MEYER INC.
 CONSOLIDATED STATEMENT OF OPERATIONS
 (Unaudited, in thousands, except per-share amounts)
 12 Weeks 28 Weeks
 Aug. 15, Aug. 17, Aug. 15, Aug. 17,
 Period Ended: 1992 1991 1992 1991
 Net sales $641,748 $615,878 $1,466,575 $1,382,720
 Costs and Expenses:
 Cost of merchandise
 sold (A) 448,220 429,640 1,030,453 971,224
 Operating and admin-
 istrative expenses 167,839 164,101 388,706 371,297
 Income from operations 25,689 22,137 47,416 40,199
 Interest expense (net) 2,061 3,825 5,453 9,154
 Income before income
 taxes 23,628 18,312 41,963 31,045
 Provision for income
 taxes 8,742 6,776 15,526 11,487
 Net income $ 14,886 $ 11,536 $ 26,437 $ 19,558
 Earnings per common
 share $ 0.54 $ 0.46 $ 0.98 $ 0.79
 Weighted average number
 of common shares
 outstanding 27,711 25,073 26,941 24,877
 (A) LIFO charge to
 cost of merchandise
 sold $ 2,307 $ 2,535 $ 5,383 $ 5,915
 FRED MEYER INC.
 CONDENSED BALANCE SHEETS
 (Unaudited, in thousands)
 Aug. 15, 1992 Aug. 17, 1991
 ASSETS
 Current Assets:
 Cash $ 26,596 $ 23,745
 Inventories 429,727 402,039
 Receivables (net) 14,484 18,645
 Prepaid and other 32,173 23,255
 Total current assets 502,980 467,684
 Property and equipment (net) 508,130 467,713
 Other assets 6,844 7,236
 Total $1,017,954 $ 942,633
 Aug. 15, 1992 Aug. 17, 1991
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities:
 Accounts payable/outstanding
 checks $ 245,439 $ 229,389
 Income taxes 20 7,544
 Accrued expenses/other 72,226 74,244
 Total current liabilities 317,685 311,177
 Long-term debt including
 mortgages 205,627 242,652
 Capital leases and lease
 obligations related to the
 restructuring charge 24,907 30,800
 Deferred lease transactions 42,587 38,191
 Deferred income taxes 16,565 14,581
 Other long-term liabilities 833 0
 Shareholders' equity 409,750 305,232
 Total $1,017,954 $ 942,633
 -0- 9/2/92
 /CONTACT: Ken Thrasher of Fred Meyer, 503-232-8844/
 (MEYR) CO: Fred Meyer Inc. ST: Oregon IN: REA SU: ERN


LM-SC -- SE013 -- 6180 09/02/92 20:31 EDT
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