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HOOK-SUPERX, INC. ANNOUNCES RESULTS OF OPERATIONS FOR FISCAL YEAR AND FOURTH QUARTER

 CINCINNATI, Nov. 5 /PRNewswire/ -- Hook-SupeRx, Inc. ("HSI" or the "company") (NYSE: HSX) today announced its results of operations for the fiscal year ended Aug. 31, 1993.
 "Fiscal 1993 was a very challenging year," said Philip E. Beekman, chairman and chief executive officer. "Lower pharmacy inflation, intense competitive activities in major markets and continuing downward pressure on third party gross margins all made the year extremely difficult and contributed to our disappointing operating results. The fact that these events occurred during a year in which we were making significant investments in the business only served to make our task that much more difficult."
 Excluding a restructuring charge of $19.7 million (as described below), operating income for fiscal 1993 was $47.5 million as compared with $68.3 million for the prior year. Interest expense was reduced 32.9 percent to $31.4 million from $46.7 million, as a result of HSI's recapitalization completed in fiscal 1992. No Federal income taxes were recorded by the company due to its net loss position for the year.
 In fiscal 1993, the company reported a loss before the cumulative effect of an accounting change (discussed below) of $3.6 million or $.17 per share (which includes the $19.7 million restructuring charge), compared to income before an extraordinary charge of $15.6 million or $.99 per share in fiscal 1992. The extraordinary charge of $22.8 million reflected in fiscal 1992 was the result of the early retirement of debt, net of tax benefits of $5,908. After providing for the cumulative effect of the accounting change for postretirement benefits other than pensions of $18.6 million, the company reported a net loss for the year of $22.2 million or $1.06 per share compared to a net loss of $7.2 million or $.46 per share in fiscal 1992.
 For fiscal 1993, sales of $2.3 billion represented an increase of 6.8 percent over the prior year amount of $2.1 billion, while comparable store sales increased 4.6 percent. For the year, prescription sales increased 10.1 percent to $1.15 billion which represented 50.5 percent of net sales, up from 48.9 percent in the prior year. Prescription sales to third party payors increased 19.6 percent to $552.7 million from $462.2 million and represented 48 percent of total prescription sales, up from 44 percent in the prior year. Total over-the-counter and prescription drug sales increased 9.2 percent to $1.4 billion or 63.3 percent of net sales, as compared with 61.9 percent for the prior year.
 Gross profit increased 3.8 percent to $677.9 million (29.7 percent of net sales) from $652.9 million (30.6 percent of net sales). The decline in gross profit margin is the result of factors discussed above. In fiscal 1993, the company recorded a LIFO charge of $6.3 million, as compared with $10.8 million for the prior year.
 As previously announced, the company undertook a reorganization of its store operations and marketing departments and a review of its existing asset base to identify underproductive stores as well as other non-productive and non-strategic assets for disposition. As a result of its review, the company identified approximately 60 stores for disposition, of which 16 stores contained no pharmacy and 44 were full- service stores. These stores were spread throughout the company's area of operations and were not concentrated in any specific markets. As of Aug. 31, 1993, the company had disposed of 37 stores and since that time through October 1993, an additional 10 stores have been disposed of. It is the intention of the company that the balance will be disposed of in fiscal 1994. The plan of disposition varied and was store specific in nature. It included outright sales to third parties, transferring prescription files to nearby HSI stores and selling of prescription files to third parties and subsequently closing the store. In addition to the asset review program, the company also undertook a plan to reorganize its store operations and marketing departments in a way that provides for a single company focus rather than a divisional focus which the company had utilized previously. As a result of the asset dispositions and departmental reorganization, the company has recorded a pre-tax charge of $19.7 million (94 cents per share) which provides principally for the estimated remaining contractual lease liability plus other occupancy costs relating to the closed stores and increased amounts for previously closed stores, the write-off of the net book value of fixtures and equipment, costs of redistributing inventory from closed stores to other stores and severance and relocation costs for employees affected by the store closing program and the above mentioned reorganization.
 During the fourth quarter, HSI adopted Statement of Financial Accounting Standards ("SFAS") No. 106 -- Employer's Accounting for Postretirement Benefits Other than Pensions, as of Sept. 1, 1992. Accordingly, the previously issued results of operations for the first three quarters of fiscal 1993 have been restated to reflect this adoption. This statement requires the accrual of costs of providing postretirement benefits other than pensions to employees during the active service period of the employee. The company elected to recognize immediately the transition obligation, which is the accumulated benefit obligation existing at Sept. 1, 1992, of $18.6 million (89 cents per share) and is presented in the Consolidated Statement of Operations as the cumulative effect of an accounting change. In addition, the current year impact of SFAS No. 106, which is included in selling, general and administrative expenses, was $1.3 million in excess of what would have been reflected under the prior method of accounting for these benefits.
 Beekman indicated, "Included in our investments during fiscal 1993 were the opening of 69 new stores and the remodeling of 155 stores, recently completing the expansion of the Indianapolis distribution center, opening of a state-of-the-art mail order facility, beginning the development of point-of-sale scanning technology, implementing certain PC-based store operating systems, continuing the development of common operating and merchandising systems throughout all of HSI, and consolidating the operations group to provide us with a more efficient and effective means of operating the company."
 The company also announced that it has entered into a four year agreement with The Chase Manhattan Bank (National Association) ("Chase") under which Chase will purchase on a continuous basis up to $75 million of the company's health care receivables. Proceeds received by the company will be applied to reduce borrowings under the revolving line of credit. On Nov. 2, 1993, the company completed the first sale of such receivables to Chase and received $34 million in proceeds.
 At Aug. 31, 1993, HSI operated 1,124 drug stores and 33 home health care centers, primarily in the Midwestern and Northeastern regions of the United States.
 Digest of Earnings
 (dollars in thousands except per share amounts)
 (unaudited)
 For The Year Ended August 31,
 1993 Pct. 1992 Pct.
 Sales $2,280,048 --- $2,134,670 ---
 Gross Profit 677,919 29.7 652,861 30.6
 Selling, general
 and administrative
 expense 527,956 23.1 491,952 23.1
 Rent 68,218 3.0 60,060 2.8
 Depreciation &
 amortization 34,244 1.5 32,570 1.5
 Restructuring Charge 19,704 .9 --- ---
 Operating income 27,797 1.2 68,279 3.2
 Interest 31,378 1.4 46,728 2.2
 Income (loss) before
 income tax and
 extraordinary item
 and cumulative effect
 of accounting
 change (3,581) (.2) 21,551 1.0
 Income taxes 38 --- 5,967 .3
 Income (loss) before
 extraordinary item
 and cumulative effect
 of accounting
 change (3,619) (.2) 15,584 .7
 Extraordinary
 charge resulting
 from early
 retirement of debt
 (net of tax
 benefits $5,908) --- --- (22,855) (1.0)
 Cumulative effect of
 accounting change for
 postretirement benefits
 other than
 pensions (18,612) (.8) --- ---
 Net loss $(22,231) (1.0) $(7,271) ( .3)
 Average shares
 outstanding 20,958,854 --- 15,691,305 ---
 Earnings per share:
 Income (loss) before
 extraordinary item
 and cumulative effect
 of accounting
 change $( .17) --- $.99 ---
 Extraordinary item
 resulting from early
 retirement of debt --- --- (1.45) ---
 Cumulative effect of
 accounting change for
 postretirement benefits
 other than pensions ( .89) --- --- ---
 Net loss $(1.06) --- $(.46) ---
 DIGEST OF EARNINGS
 (dollars in thousands except per share amounts)
 For The Three Months Ended August 31,
 1993 Pct. 1992 Pct.
 Sales $ 559,518 --- $ 537,274 ---
 Gross Profit 159,875 28.6 165,554 30.8
 Selling, general
 & administrative
 expenses 128,417 23.0 124,941 23.2
 Rent 18,458 3.3 15,958 3.0
 Depreciation &
 amortization 8,726 1.6 8,745 1.6
 Restructuring charge 19,704 3.5 --- ---
 Operating income
 (loss) (15,430) (2.8) 15,910 3.0
 Interest 7,626 1.4 9,995 1.9
 Income (loss) before
 income taxes and
 extraordinary items (23,056) (4.1) 5,915 1.1
 Income taxes (7,625) 1.4 1,446 .3
 Income (loss) before
 extraordinary items (15,431) (2.8) 4,469 .8
 Extraordinary item
 resulting from net
 operating loss
 carryforward (6,141) (1.1) (2,100) (.4)
 Extraordinary item
 resulting from early
 retirement of debt
 (net of tax benefits
 of $5,908) --- --- (22,855) (4.2)
 Net loss $ (21,572) (3.9) $ (20,486) (3.8)
 Average shares
 outstanding 21,002,121 --- 21,061,768 ---
 Earnings per share:
 Income (loss) before
 extraordinary items $(.74) --- $.21 ---
 Extraordinary item
 resulting from net
 operating loss
 carryforward (.29) --- (.10) ---
 Extraordinary item
 resulting from early
 retirement of debt --- --- (1.08) ---
 Net loss $(1.03) --- $(.97) ---
 NOTE: Consistent with the provisions of SFAS No. 106, when adoption of this statement is in any quarter other than the first, the adoption is effective as of the beginning of the fiscal year (Sept. 1, 1992). Accordingly, the previously issued results of operations for the first three quarters of fiscal 1993 have been restated to reflect the adoption of SFAS No. 106. The three months ended Aug. 31, 1993, reflects only the portion of the current year charge applicable to this period.
 OTHER DATA
 Comparable store sales 1.6 pct 4.7 pct
 Prescription sales $ 286,021 $ 263,534
 Third party prescription sales $ 140,171 $ 103,710
 LIFO charge (credit) $ 511 $ (1,087)
 -0- 11/5/93
 /CONTACT: Keith A. Cheesman, 513-782-3573, or Chris Beseler, 513-782-3115, both of Hook-SupeRx/
 (HSX)


CO: Hook SupeRx, Inc. ST: Ohio IN: REA SU: ERN

AR-KL -- CL015 -- 1432 11/05/93 18:24 EST
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Date:Nov 5, 1993
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