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Buttrey Food and Drug Stores Company Announces Increased Sales and Net Income for the Third Quarter 1996

GREAT FALLS, Mont., Nov. 26 /PRNewswire/ -- Buttrey Food and Drug Stores Company (Nasdaq: BTRY) today reported that net income for the 13 weeks ended November 2, 1996 increased $446,000 to $749,000, or $0.09 per share from $303,000, or $0.04 per share for the 13 weeks ended October 28, 1995. The increase in net income is the result of increased sales and improved operating income. Net income for the 39 weeks ended November 2, 1996 increased $1,639,000 to $2,502,000, or $0.29 per share from $863,000, or $0.10 per share for the 39 weeks ended October 28, 1995. Results for the 39 weeks ended October 28, 1995 included an extraordinary charge of $85,000 ($51,000 on an after-tax basis, or $0.01 per share) as a result of the early retirement of debt and a net gain of $254,000 ($153,000 on an after-tax basis, or $0.02 per share) from asset sales. Excluding these two items from the prior year results, net income for the 39 weeks ended November 2, 1996 increased $1,741,000 to $2,502,000, or $0.29 per share from $761,000, or $0.09 per share for the 39 weeks ended October 28, 1995.

Sales for the 13 weeks ended November 2, 1996 increased $2,360,000, or 2.6%, to $92,843,000 from $90,483,000 for the 13 weeks ended October 28, 1995. Comparable store sales were equal to the 1995 level which reflects a reduction in Montana tourism and a more aggressive competitive environment. Sales for the 39 weeks ended November 2, 1996 increased $5,251,000, or 1.9% to $275,059,000 from $269,808,000 for the 39 weeks ended October 28, 1995. Comparable store sales increased 0.5%. for the 39 weeks ended November 2, 1996.

"We are pleased to again report increased sales and profitability," said Joseph H. Fernandez, chairman, president and chief executive officer of Buttrey. "Beginning this summer we saw a substantial reduction in tourism throughout our major Montana markets. Additionally, we see a cautious economy throughout our trade areas. These factors have depressed retail sales, and so have resulted in a more aggressive competitive environment. Because of this, we took aggressive steps to maintain our momentum, and are pleased with the results.

"We remain focused on increasing sales, reducing costs, and improving the productivity of our assets," continued Mr. Fernandez. "To that end, we announced several initiatives in the third quarter that are designed to strengthen and deepen our organization and accelerate our growth.

"To build profitable sales, we recently announced expanded responsibilities for new and current merchandising executives," said Mr. Fernandez. "We also combined the grocery and drug departments into the non-perishables department, introduced category management, and hired a new advertising agency. These team members are charged with communicating our messages of leadership in perishables, leadership in customer service, and great prices more effectively and efficiently in our competitive environment, while finding meaningful reductions in the cost of our products and their handling and delivery.

"Also to build sales, we are committed to accelerating our growth," added Mr. Fernandez. "During the third quarter, we completed the expansion and remodel of a Buttrey Fresh Foods store in Malta, Montana, and the expansion, remodel, and conversion of our third Buttrey Big Fresh store, in Lewistown, Montana. We also completed the acquisition of a competitor in Laramie, Wyoming, converting it to a Buttrey Food & Drug store in the quarter. In the beginning of the fourth quarter, we completed the remodel of a competing store we acquired in June in Cheyenne, Wyoming, and became the fourth Buttrey Big Fresh store in our chain upon its grand opening. Currently, we have a Buttrey Big Fresh store under construction to replace our outmoded facility in Bozeman, Montana, and we continue to review opportunities for acquisitions, new store development and renovations.

"Finally, to continue to manage our expenses better and improve the efficiency of our assets, and to position ourselves for the accelerated growth we contemplate, we also recently announced expanded responsibilities for new and current operations and store development executives," Mr. Fernandez concluded. "We combined our largest cost centers -- the stores, construction, supplies purchasing, and maintenance -- under one area of responsibility, and charged these team members with enhancing customer service while finding additional efficiencies in all their areas of responsibility. We are also developing more cost-efficient prototype stores and introducing even better methods of managing construction and remodel projects."

Certain of the statements contained in this news release are forward looking statements that are subject to certain risks and uncertainties including, among other things, certain restrictions imposed by the Company's lenders, the competitive environment in which the Company operates, the Company's ability to complete its expansion plans on a timely basis, general economic conditions in the geographic areas in which the Company operates, control of the Company by certain stockholders, and other risks detailed from time to time in the Company's SEC reports.

Buttrey Food and Drug Stores Company is a leading supermarket and pharmacy retailer in the Intermountain Region, proud to celebrate its Centennial throughout 1996. Buttrey Food and Drug Stores Company operates 42 supermarkets. There are four Buttrey Big Fresh stores -- three in Montana and one in Wyoming -- and 30 Buttrey Food & Drug combination stores -- 20 in Montana, two in North Dakota, and eight in Wyoming. The Company also operates eight Buttrey Foods stores throughout Montana, and runs the only Mail-Order Pharmacy business in the region. Including its two distribution centers in Montana and Utah, the Company employs over 2,800 associates in its various locations.
 BUTTREY FOOD AND DRUG STORES COMPANY
 FINANCIAL HIGHLIGHTS
 (in thousands, except per share data)
 13 WEEKS 13 WEEKS 39 WEEKS 39 WEEKS
 ENDED ENDED ENDED ENDED
 NOV. 2, OCT. 28, NOV. 2, OCT. 28,
 1996 1995 1996 1995
 Sales $ 92,843 $ 90,483 $275,059 $269,808


Cost of sales and related
 occupancy costs 70,967 68,788 210,095 205,762
 Gross profit 21,876 21,695 64,964 64,046


Marketing, general and
 administrative expenses 19,913 20,633 58,838 60,757
 Operating income 1,963 1,062 6,126 3,289


Other income (expense):
 Gain on disposal of assets 0 35 11 254
 Interest income 58 58 114 279
 Interest expense (783) (650) (2,092) (2,299)
 (725) (557) (1,967) (1,766)


Income before extraordinary
 charge 1,238 505 4,159 1,523
 Income taxes 489 202 1,657 609
 Income before extraordinary charge 749 303 2,502 914
 Extraordinary charge (net of tax) 0 0 0 (51)
 Net income $ 749 $ 303 $ 2,502 $ 863


Net income per common share and

common share equivalent:

Income before taxes and
 extraordinary charge $ 0.09 $ 0.04 $ 0.29 $ 0.11


Extraordinary charge
 (net of tax) 0.00 0.00 0.00 (0.01)
 Net income $ 0.09 $ 0.04 $ 0.29 $ 0.10


Weighted average common and common
 equivalent shares outstanding 8623.6 8,607.8 8625.4 8,606.4


Certain Non-Cash Charges:
 Lifo provision $ 125 $ 125 $ 390 $ 375


Depreciation and amortization of
 property and capital leases 2,272 2,879 6,436 8,579


Amortization of excess cost over net
 assets acquired and other assets 106 74 163 214
 Total non-cash charges $ 2,503 $ 3,078 $ 6,989 $ 9,168
 BUTTREY FOOD AND DRUG STORES COMPANY
 FINANCIAL HIGHLIGHTS
 CONDENSED CONSOLIDATED BALANCE SHEET
 (in thousands)
 NOVEMBER 2,
 1996
 (Unaudited)


ASSETS

Current Assets:
 Cash $ 6,223
 Accounts Receivable 4,319
 Inventories 47,213
 Other 2,639
 Total Current Assets 60,394
 Property and equipment, net 93,751
 Intangible assets, net 4,253
 Other 587
 Total Assets $158,985


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
 Current installments of long-term debt
 and capital leases $ 6,019
 Trade Payables 21,825
 Accrued Liabilities 11,092
 Total Current Liabilities 38,936
 Long-term debt and capital lease obligations 27,507
 Deferred Taxes Payable 1,735
 Total Liabilities 68,178
 Stockholders' Equity 90,807
 Total Liabilities and Stockholders' Equity $158,985


SOURCE Buttrey Food and Drug Stores Co.
 -0- 11/26/96


/CONTACT: Wayne S. Peterson, Senior Vice President and Chief Financial Officer of Buttrey Food and Drug Stores Company, 406-454-7280/

(BTRY)

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

SM -- SFTU003 -- 4227 11/26/96 09:15 EST http://www.prnewswire.com
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