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RYKOFF-SEXTON REPORTS PROFITABLE FOURTH QUARTER; LOSS FOR YEAR, INCLUDING THIRD QUARTER RESTRUCTURING CHARGE

 LOS ANGELES, June 24 /PRNewswire/ -- Rykoff-Sexton Inc. (NYSE: RYK) today announced it had a profitable fourth quarter although, as previously reported, it sustained a net loss for its full fiscal year due to one-time adjustments recorded during the third quarter.
 The net loss for the fiscal year ended May 1, 1993, amounted to $19.0 million, or $1.63 per share. This included a one-time third quarter restructuring charge of $31 million or, on an after-tax basis, $19.5 million, equal to $1.68 per share and an additional provision of $1.4 million, primarily for bad debts. Also, the company implemented FAS 109, accounting for income taxes, which contributed $732,000, or $.06 per share.
 Rykoff-Sexton had net income of $10.0 million, or $.86 per share, for the prior fiscal year, including an extraordinary charge amounting to $2.6 million, or $.23 per share, for a litigation settlement. Sales for fiscal 1993 declined to $1.49 billion from $1.52 billion the previous year.
 For the fourth quarter ended May 1, 1993, Rykoff-Sexton reported net income of $329,000, or $.03 per share, compared with $2.8 million, or $.24 per share, for the corresponding prior-year period. Sales for the fourth quarter were $363.4 million, compared with $378.0 million last year.
 Mark Van Stekelenburg, president and chief executive officer, said that despite the earnings drop, the fourth quarter showed the company is "on the way back" after a $22.4 million third quarter loss, or $1.93 per share, which included one-time after-tax adjustments of $20.4 million, or $1.75 per share.
 Van Stekelenburg stated the lower sales comparison reflected the effect of an additional week of operations in the prior fiscal year, elimination of a few selected customer accounts, closure of five small operations, food price deflation during the year and continued weak market conditions, particularly in California where the company has a high concentration of business. Gross profit margins were adversely affected by changes in customer and product mix, as well as lower prices due, in part, to the competitive environment.
 "On the positive side, our fourth quarter showed that good progress is being made to reduce the company's overhead and operating costs," said Van Stekelenburg. "The restructuring program is well underway and steps already have been taken to reduce labor expenses by about $7 million annually. We anticipate substantial additional cost savings from facility improvements and implementation of state-of-the-art warehouse and transportation technologies throughout the company.
 "While Rykoff-Sexton still faces many challenges, our professional sales force, high-quality products, strong brand recognition and solid customer reputation will return the company to sustained growth and profitability," Van Stekelenburg added.
 Rykoff-Sexton Inc. is a leading manufacturer and distributor of food and related products for restaurants, institutions and membership warehouse stores nationwide, as well as one of the country's largest restaurant equipment, supply, contract and design companies. Manufacturing, processing and packaging operations are based in Los Angeles, Indianapolis, Englewood, N.J., Brooklyn, N.Y., and Des Moines, Iowa. The company's 28 distribution centers are located throughout the United States.
 RYKOFF-SEXTON INC.
 Condensed Consolidated Statements of Income
 For the Fiscal Year Ended For the Fourth Quarter Ended
 May 1, 1993 May 2, 1992 May 1, 1993 May 2, 1992
 Net
 sales $1,488,072,000 $1,519,010,000 $363,415,000 $377,957,000
 Income
 (loss)
 before
 provision
 for income
 taxes, extra-
 ordinary
 item and
 accounting
 change(a) (31,270,000) 21,026,000 549,000 4,685,000
 Provision
 (benefit)
 for income
 taxes (11,578,000) 8,410,000 220,000 1,874,000
 Income (loss)
 before extra-
 ordinary item
 and accounting
 change (19,692,000) 12,616,000 329,000 2,811,000
 Extraordinary
 item, net of
 income taxes(b) --- (2,610,000) --- ---
 Cumulative effect
 of change in
 accounting for
 income taxes 732,000 --- --- ---
 Net income
 (loss) ($18,960,000) $10,006,000 $329,000 $2,811,000
 Earnings (loss)
 per share:
 Income (loss)
 before extra-
 ordinary item
 and accounting
 change(a) ($1.69) $1.09 $.03 $.24
 Extraordinary
 item --- (.23) --- ---
 Accounting
 change .06 --- --- ---
 Net income
 (loss) ($1.63) $.86 $.03 $.24
 Weighted average
 number of shares
 outstanding 11,605,750 11,617,435 11,609,945 11,622,364
 (a) Includes a one-time restructuring charge of $31 million.
 (b) Provision for a litigation settlement.
 -0- 6/24/93
 /CONTACT: Richard J. Martin, senior VP and CFO of Rykoff-Sexton, 213-622-4131; or Roger S. Pondel of Pondel Parsons & Wilkinson, 310-207-9300, for Rykoff-Sexton/
 (RYK)


CO: Rykoff-Sexton Inc. ST: California IN: FOD SU: ERN

JL-BP -- LA016 -- 5174 06/24/93 09:04 EDT
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Publication:PR Newswire
Date:Jun 24, 1993
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