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BUTTREY FOOD AND DRUG STORES COMPANYANNOUNCES EARNINGS FOR THE SECOND QUARTER

 GREAT FALLS, Mont., Sept. 2 /PRNewswire/ -- Buttrey Food and Drug Stores Co. (NASDAQ: BTRY) today reported that net income before extraordinary items for the 13 weeks ended July 31, 1993 decreased $2,345,000 to $229,000, or 3 cents per share, from $2,574,000, or 31 cents per share for the 13 weeks ended Aug. 1, 1992. An extraordinary charge of $137,000 resulting from the early retirement of debt was recorded during the quarter. After giving effect to this extraordinary charge, net income for the 13 weeks ended July 31, 1993 decreased $2,482,000 to $92,000, or 1 cent per share, from $2,574,000, or 31 cents per share for the 13 weeks ended Aug. 1, 1992.
 Net income before extraordinary charges for the 26 weeks ended July 31, 1993 decreased $4,149,000 to $236,000, or 3 cents per share, from $4,385,000, or 54 cents per share for the 26 weeks ended Aug. 1, 1992. Extraordinary charges of $3,435,000, or 42 cents per share, were recorded in the first quarter of 1992 resulting from the early retirement of debt and the refinancing of the company's bank agreement. After giving effect to these extraordinary charges, net income for the 26 weeks ended July 31, 1993 decreased $851,000 to $99,000, or 1 cents per share, from $950,000, or 12 cents per share for the 26 weeks ended Aug. 1, 1992.
 Sales for the 13 weeks ended July 31, 1993 decreased $3,338,000, or 2.9 percent, to $111,979,000 from $115,317,000 for the 13 weeks ended Aug. 1, 1992. The decrease in sales reflects a 7.6-percent decline in comparable store sales partially offset by sales generated by the company's new stores in Miles City, Billings, and Livingston, Mont. Comparable store sales have been impacted by previously announced new competition (that has yet to anniversary) in certain markets, a reduction in the average retail value of items sold as a result of aggressive merchandising strategies and a reduction in the sale of summer seasonal merchandise due to adverse weather conditions. Sales for the 26 weeks ended July 31, 1993 decreased $10,600,000, or 4.6 percent, to $218,891,000 from $229,491,000 in the comparable period in the prior year. The decrease in sales for the 26 weeks ended July 31, 1993 reflects an 8.6-percent decline in comparable store sales.
 Earnings before interest, income taxes and depreciation and amortization on a FIFO basis ("EBITDA") for the 13 weeks ended July 31, 1993 decreased $3,297,000 to $5,405,000, or 4.8 percent of sales, from $8,702,000, or 7.6 percent of sales, in the comparable 13-week period in the prior year. The decline in EBITDA as a percentage of sales is partially attributable to a reduction in gross profit margin as a result of the company's aggressive merchandising strategies in response to competitive activity and an increase in operating expenses as a percentage of sales which is mostly attributable to an increase in store labor costs on a lower sales base. EBITDA for the 26 weeks ended July 31, 1993 decreased $6,024,000 to $10,733,000, or 4.9 percent of sales, from $16,757,000, or 7.3 percent of sales, in the comparable period in the prior year.
 On July 30, 1993, the company retired the remaining $2,000,000 of its 13.25 percent Senior Subordinated Notes. As a result of the early retirement of debt, the company recorded an extraordinary charge for the 13 weeks ended July 31, 1993 of $228,000 ($137,000 on an after-tax basis) consisting of a premium on the redemption of the Senior Subordinated Notes and a non-cash write-off of unamortized deferred debt issuance costs.
 Subsequent to the close of the second quarter, the company entered into an agreement to sell its Yakima, Wash. store. The transaction is anticipated to close during October with a portion of the proceeds being used to further reduce the company's long-term debt.
 In addition to opening a new store in Livingston, Mont. during the first quarter, the company is currently constructing a replacement store in Butte, Mont., which is scheduled to open during the fourth quarter.
 The company also announced that effective Sept. 1, 1993, Joseph H. Fernandez, president and chief operating officer will assume the additional responsibilities of chief executive officer and Edward C. Agnew will continue as chairman of the board.
 Buttrey Food and Drug Stores Co. is headquartered in Great Falls, Mont., and currently operates 45 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
 JULY 31 AUG. 1 JULY 31 AUG. 1
 1993 1992 1993 1992
 Sales 111,979 115,317 218,891 229,491
 Cost of sales and
 related occupancy
 costs 84,967 85,760 166,067 170,980
 Gross profit 27,012 29,557 52,824 58,511
 Marketing, general
 and administrative
 expenses 25,682 24,431 50,261 48,901
 Operating income 1,330 5,126 2,563 9,610
 Interest expense 949 946 2,175 2,485
 Income before taxes 381 4,180 388 7,125
 and extraordinary charge
 Income taxes 152 1,606 152 2,740
 Income before
 extraordinary charge 229 2,574 236 4,385
 Extraordinary charge
 (net of tax) 137 0 137 3,435
 Net Income 92 2,574 99 950
 Net income per common
 share and common share
 equivalent:
 Income before extraordinary
 charge 0.03 0.31 0.03 0.54
 Extraordinary charge
 (net of tax) -0.02 0.00 -0.02 -0.42
 Net Income per share 0.01 0.31 0.01 0.12
 Weighted average common
 and common equivalent
 shares outstanding 8220.1 8332.6 8216.5 8194.7
 Certain Non-Cash Charges:
 LIFO provision 261 250 522 500
 Depreciation and
 amortization of
 property and capital
 leases 2,820 2,395 5,628 4,667
 Loss on disposal of
 owned property 0 0 1 3
 Amortization of excess
 cost over net assets
 acquired and other
 assets 994 931 2,019 1,977
 Amortization of deferred
 debt issuance costs
 (Included under interest
 expense) 34 46 67 173
 Total Non-Cash Charges 4,109 3,622 8,237 7,320
 -0- 9/2/93
 /CONTACT: Wayne Peterson, vice president and chief financial officer, of Buttrey Food and Drug Stores Co., 406-454-7280/
 (BTRY)


CO: Buttrey Food and Drug Stores Co. ST: Montana, Washington IN: REA SU: ERN

JH -- SE002 -- 8287 09/02/93 09:21 EDT
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Date:Sep 2, 1993
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