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SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES AND NET INCOME FOR SECOND QUARTER 1992

 SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES
 AND NET INCOME FOR SECOND QUARTER 1992
 SALT LAKE CITY, July 28, /PRNewswire/ -- Smith's Food & Drug Centers, Inc. (NYSE: SFD) today reported increased sales and net income for the second quarter 1992.
 Sales for the second quarter ended July 4, 1992 totaled $640 million compared to $547 million for the same quarter last year, an increase of 17 percent. Net income was $13.5 million, up 25 percent over the $10.8 million reported last year. Net income per common share, diluted by additional shares issued in connection with the public offering in July 1991, was 45 cents compared to 43 cents, an increase of 5 percent.
 For the first six months of the year, sales totaled $1.31 billion, up 21 percent from $1.08 billion reported last year. Adjusting for the additional week in the first half of fiscal 1992 (27 weeks compared to 26 weeks) the sales increase would have been 17 percent. Net income was $26.7 million, up 26 percent over last year's $21.3 million. Net income per common share amounted to 89 cents compared to 84 cents, an increase of 6 percent. Sales in comparable stores were relatively flat compared to the first six months of the prior year due to modest deflation, consumer trading down and the weak economy in general.
 During the first six months of fiscal 1992, three combination centers were opened in Moreno Valley, Torrance and Arleta, California, two store remodels were completed, and a conventional store in Las Vegas was closed. At July 4, 1992, we operated 111 stores totaling 7.0 million square feet compared to 98 stores totaling 5.8 million square feet at the end of prior year's second quarter. The expansion plan for the remainder of fiscal 1992 is to open four stores in the third quarter and six stores in the fourth quarter totaling approximately 1.0 million square feet including seven stores in Southern California. The increase in square footage will be approximately 14 percent.
 Improvements in gross margins and net margins were caused by several factors. Stores opened during recent years have continued to build volume effecting economies of scale which added to profitability. Improvements and additions to our distribution facilities generated additional savings. Also the consumers purchased more private label products which yield higher margins to the company while giving the consumer a lower price. The improvement in margins was partially offset by higher operating costs due to our entry into California.
 Smith's is a leading regional supermarket chain operating 112 stores in eight western states. Of these stores, 96 are large combination food and drug centers.

 SMITH'S FOOD & DRUG CENTERS INC.
 Condensed Consolidated Statements of Income
 (Unaudited)
 (Amounts in thousands except per share data)
 13 Weeks 13 Weeks 27 Weeks 26 Weeks
 Ended Ended Ended Ended
 July 4, June 29, July 4, June 29,
 1992 1991 1992 1991
 Net sales $640,096 $547,007 $1,309,607 $1,079,929
 Cost of goods sold 492,799 426,722 1,011,081 842,789
 147,297 120,285 298,526 237,140
 Expenses:
 Operating, selling
 and administrative 100,570 84,197 207,469 166,836
 Depreciation and
 amortization 15,363 10,715 29,669 20,991
 Interest 9,020 7,829 17,496 15,063
 124,953 102,741 254,634 202,890
 INCOME BEFORE
 INCOME TAXES 22,344 17,544 43,892 34,250
 Income taxes 8,800 6,700 17,200 13,000
 NET INCOME $13,544 $10,844 $26,692 $21,250
 Net income per
 common share $.45 $.43 $.89 $.84
 Average common
 shares outstanding 29,962 25,272 29,962 25,272
 Condensed Consolidated Balance Sheets
 (Unaudited)
 (In thousands)
 July 4, June 29,
 1992 1991
 ASSETS
 CURRENT ASSETS
 Cash and cash equivalents $ 18,224 $ 15,473
 Receivables 9,762 10,852
 Inventories 293,733 243,513
 Other current assets 28,259 2,824
 TOTAL CURRENT ASSETS 349,978 272,662
 PROPERTY AND EQUIPMENT
 Land 228,558 178,292
 Buildings 491,873 392,127
 Leasehold improvements 29,914 24,999
 Fixtures and equipment 382,051 305,109
 1,132,396 900,527
 Less allowances (182,679) (136,069)
 TOTAL PROPERTY AND EQUIPMENT 949,717 764,458
 OTHER ASSETS 11,801 9,755
 $1,311,496 $1,046,875
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Trade accounts payable $ 158,774 $ 178,712
 Accrued taxes 37,850 19,166
 Other accrued liabilities 57,786 49,651
 Current maturities 23,008 18,477
 TOTAL CURRENT LIABILITIES 277,418 266,006
 LONG-TERM DEBT 479,920 444,654
 DEFERRED INCOME TAXES 52,000 42,800
 REDEEMABLE PREFERRED STOCK 7,401 8,448
 COMMON STOCKHOLDERS' EQUITY 494,757 284,967
 $1,311,496 $1,046,875
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 (In thousands)
 Twenty-Seven Twenty-Six
 Weeks Ended Weeks Ended
 July 4, 1992 June 29, 1991
 OPERATING ACTIVITIES:
 Net income $ 26,692 $ 21,250
 Adjustments to reconcile net
 income to net cash provided
 by operating activities:
 Depreciation and
 amortization 31,823 22,372
 Deferred income taxes 5,800 5,100
 Other 271 108
 64,586 48,830
 Changes in operating assets
 and liabilities:
 Receivables 5,312 4,449
 Inventories (3,306) (33,882)
 Other current assets (24,404) 787
 Trade accounts payable (21,609) 16,380
 Accrued taxes 7,008 (9,141)
 Other accrued liabilities (3,196) 6,492
 CASH PROVIDED BY
 OPERATING ACTIVITIES 24,391 33,915
 INVESTING ACTIVITIES:
 Additions to property and
 equipment (120,976) (150,204)
 Proceeds from sale of
 property and equipment 786 686
 Other (212) (1,051)
 CASH USED BY
 INVESTING ACTIVITIES (120,402) (150,569)
 FINANCING ACTIVITIES:
 Additions to long-term debt 116,042 130,266
 Payments on long-term debt (9,295) (10,358)
 Redemptions of Preferred Stock (314) (389)
 Payment of dividends (6,592) (4,549)
 CASH PROVIDED BY
 FINANCING ACTIVITIES 99,841 114,970
 NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS 3,830 (1,684)
 Cash and cash equivalents
 at beginning of year 14,394 17,157
 CASH AND CASH EQUIVALENTS
 AT END OF PERIOD $ 18,224 $ 15,473
 -0- 7/28/92
 /CONTACT: Robert D. Bolinder or Matthew G. Tezak both of Smith's Food & Drug Centers, 801-974-1400/
 (SFD) CO: Smith's Food and Drug Centers Inc. ST: Utah IN: FOD SU: ERN


BB -- DV001 -- 3878 07/28/92 09:08 EDT
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