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FRED MEYER REPORTS RECORD FOURTH-QUARTER AND ANNUAL NET INCOME AND SALES RESULTS FOR 1992

 PORTLAND, Ore., March 9 /PRNewswire/ -- Fred Meyer Inc. (NYSE: FMY) announced today record net income and sales results for its 1992 fourth quarter (12 weeks) and year ended Jan. 30, 1993.
 Net income increased 28.1 percent to $25.8 million in the fourth quarter of 1992, compared with $20.2 million reported in 1991's fourth quarter. Net earnings per share were 92 cents for the fourth quarter of 1992 based on 28,163,000 shares outstanding, compared with 79 cents for the prior year's quarter based on 25,678,000 shares outstanding. The increase in the number of shares outstanding is primarily the result of the company's April 1992 public stock offering.
 For the year, 1992 net income increased 34.0 percent to $60.6 million, compared with $45.2 million reported during the same period in 1991. Net earnings per share were $2.21 for 1992 based on 27,446,000 shares outstanding, compared with $1.80 for the prior year based on 25,182,000 shares outstanding. The increase in the number of shares outstanding is primarily the result of the company's April 1992 public stock offering.
 Net sales for the 1992 fourth quarter rose 5.9 percent to $758.0 million from the $716.0 million reported in the fourth quarter of last year. Comparable store sales increased 4.4 percent for the quarter. Food comparable store sales increased 4.1 percent, and nonfood comparable store sales increased 4.6 percent.
 For the year, 1992 net sales rose 5.6 percent to $2.85 billion from the $2.70 billion reported in 1991. Comparable store sales increased 3.0 percent for the year. Food comparable store sales increased 2.8 percent, and nonfood comparable store sales increased 3.2 percent.
 Income from operations for the 1992 fourth quarter was $42.7 million, a 25.4-percent increase over the $34.1 million reported in the prior year's fourth quarter.
 For the year, 1992 income from operations was $105.1 million, a 21.8-percent increase over the $86.3 million reported in the prior year.
 Interest expense for 1992's fourth quarter decreased 40.0 percent to $1.7 million from the $2.9 million reported in 1991's fourth quarter. The decrease primarily reflects lower interest rates and, to a lesser extent, lower borrowings resulting from the receipt of proceeds from the company's April 1992 public stock offering. The 1992 fourth-quarter effective tax rate was 37.0 percent, versus 1991's tax rate of 35.4 percent.
 For the year, 1992 interest expense decreased 41.8 percent to $8.9 million from the $15.3 million reported in the prior year. The decrease primarily reflects lower interest rates and, to a lesser extent, lower borrowings resulting from the receipt of proceeds from the company's April 1992 public stock offering. The 1992 effective tax rate was 37.0 percent, versus 1991's tax rate of 36.3 percent.
 Robert G. Miller, chairman of the board and chief executive officer, said, "We are very pleased with our record fourth-quarter and full-year net income and sales results. Our employees have worked hard in 1992 at lowering our cost structure. Their effort comes on top of 1991's cost reductions and has resulted in almost a 1-percent reduction in operating and administrative expenses as a percent of sales over two years. With the many new management information systems we have coming on line over the next two years, we expect to continue making expense improvements. Improved sales and good inventory controls also helped minimize markdowns during the fourth quarter. Gross margins were further benefitted from an increased LIFO credit due to low inflation rates.
 "The lower fourth-quarter expenses were highlighted by reductions in store labor costs, occupancy expenses, advertising expenditures and supply costs as a percent of sales. Better scheduling practices and strong fourth-quarter sales results were key factors in the improvement in store labor costs. Expense reductions were partially offset by higher MIS expenses as a percent of sales and by the continued 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.'
 "We are also pleased to announce our 1993 Capital Expenditure Plan at this time. Plan expenditures are estimated to be $250 million in 1993, reflecting our previously announced objective of increasing the rate of store expansion and remodels to five new stores per year and seven major remodels. Our 1992 capital expenditures were approximately $145 million. In 1993, we will have 10 new stores under construction as we work to open 1994 stores earlier in the year. New store openings in 1993 will be in the third and fourth quarters in Anchorage, Alaska; Burlington, Orchards and Spokane, Wash.; and Medford, Ore. In addition to the new store and remodel program, we are initiating many capital projects aimed at improving our operating efficiencies. They include improvements to our distribution centers, central bakery and dairy plant, continued MIS enhancements, and the construction of a new wing to our main office complex. The new office wing will allow us to consolidate our corporate offices into one facility from the three locations we currently occupy in the Portland area. We expect these capital projects will create efficiencies that will give us a reasonable return on the investment made and will more than cover any added depreciation and interest costs associated with the capital spent," 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 94 large multidepartment stores, in Oregon, Washington, Utah, Alaska, Idaho, California and Montana.
 FRED MEYER INC.
 CONSOLIDATED STATEMENT OF OPERATIONS
 (In thousands, except per-share amount)
 Jan. 30, Feb. 1, Percent
 Twelve Weeks Ended: 1993 1992 Change
 Net sales $ 758,013 $ 715,970 5.87
 Cost of merchandise sold (A) 524,133 497,611 5.33
 Gross margin 233,880 218,359 7.11
 Operating and admin. expenses (B) 191,161 192,579 (0.74)
 Reversal of restructuring charge -- (8,289) 100.00
 Income from operations 42,719 34,069 25.39
 Interest expense (net) 1,719 2,866 (40.02)
 Income before income taxes 41,000 31,203 31.40
 Provision for income taxes 15,170 11,045 37.35
 Net income $ 25,830 $ 20,158 28.14
 Earnings per common share $ 0.92 $ 0.79 16.46
 Weighted average number of
 common shares outstanding 28,163 25,678 --
 (A) Includes LIFO charge/(credit)
 to cost of merchandise sold $ (3,216) $ (1,278) --
 (B) The write-off of previously capitalized MIS development costs in the fourth quarter of 1991 increased operating and administrative expenses by $8,748. Without the write-off, 1992 operating and administrative expenses increased 3.99 percent for the fourth quarter, and 3.99 percent for the year over adjusted 1991 expense levels.
 Jan. 30, Feb. 1,
 Twelve Weeks Ended: 1993 1992
 As a Percent of Sales:
 Gross margin -- reported (pct) 30.85 30.50
 Gross margin -- FIFO (pct) 30.43 30.32
 Operating and admin. expenses (pct) 25.22 25.74(C)
 Income from operations (pct) 5.64 4.76
 Net income (pct) 3.41 2.82
 Comparable Store Sales:
 Total company (pct) 4.4 3.3
 Food (pct) 4.1 3.8
 Nonfood (pct) 4.6 3.2
 (C) Includes reversal of restructuring charge.
 Jan. 30, Feb. 1, Percent
 Fifty-Two Weeks Ended: 1993 1992 Change
 Net sales $2,853,962 $2,702,721 5.60
 Cost of merchandise sold (A) 1,996,876 1,892,821 5.50
 Gross margin 857,086 809,900 5.83
 Operating and admin. expenses (B) 752,004 731,892 2.75
 Reversal of restructuring charge -- (8,289) 100.00
 Income from operations 105,082 86,297 21.77
 Interest expense (net) 8,912 15,302 (41.76)
 Income before income taxes 96,170 70,995 35.46
 Provision for income taxes 35,583 25,768 38.09
 Net income $ 60,587 $ 45,227 33.96
 Earnings per common share $ 2.21 $ 1.80 22.78
 Weighted average number of
 common shares outstanding 27,446 25,182 --
 (A) Includes LIFO charge/(credit)
 to cost of merchandise sold $ 4,167 $ 6,172 --
 (B) The write-off of previously capitalized MIS development costs in the fourth quarter of 1991 increased operating and administrative expenses by $8,748. Without the write-off, 1992 operating and administrative expenses increased 3.99 percent for the fourth quarter, and 3.99 percent for the year over adjusted 1991 expense levels.
 Jan. 30, Feb. 1,
 Fifty-Two Weeks Ended: 1993 1992
 As a Percent of Sales:
 Gross margin -- reported (pct) 30.03 29.97
 Gross margin -- FIFO (pct) 30.18 30.19
 Operating and admin. expenses (pct) 26.35 26.77(C)
 Income from operations (pct) 3.68 3.19
 Net income (pct) 2.12 1.67
 Comparable Store Sales:
 Total company (pct) 3.0 4.0
 Food (pct) 2.8 4.5
 Nonfood (pct) 3.2 3.8
 (C) Includes reversal of restructuring charge.
 FRED MEYER INC.
 CONDENSED BALANCE SHEETS
 (In thousands)
 Jan. 30, 1993 Feb. 1, 1992
 ASSETS
 Current assets:
 Cash $ 31,884 $ 29,988
 Inventories 426,078 403,275
 Receivables (net) 14,715 14,442
 Prepaid and other 57,496 39,057
 Total current assets 530,173 486,762
 Property and equipment (net) 542,210 479,025
 Other assets 6,720 7,007
 Total assets $1,079,103 $ 972,794
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities:
 Accounts payable/outstanding checks $ 259,230 $ 244,711
 Income taxes 15,418 1,731
 Accrued expenses/other 70,268 66,278
 Total current liabilities 344,916 312,720
 Long-term debt including mortgages 195,837 240,968
 Capital lease and lease obligations
 related to the restructuring charge 25,528 27,370
 Deferred lease transactions 44,785 40,017
 Deferred income taxes 16,376 16,565
 Other long-term liabilities 1,533 --
 Shareholders' equity 450,128 335,154
 Total liabilities and
 shareholders' equity $1,079,103 $ 972,794
 -0- 3/9/93
 /CONTACT: Ken Thrasher, senior vice president-finance, of Fred Meyer, 503-232-8844, ext. 7900/
 (FMY)


CO: Fred Meyer Inc. ST: Oregon IN: REA SU: ERN

LM-JH -- SE005 -- 4696 03/09/93 17:31 EST
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Date:Mar 9, 1993
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