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NATIONAL INTERGROUP REPORTS SIGNIFICANTLY HIGHER SALES AND OPERATING INCOME IN FOURTH QUARTER

 DALLAS, May 24 /PRNewswire/ -- National Intergroup, Inc. (NYSE: NII) today reported significantly higher sales and operating income for the fourth quarter ended March 31, 1993. Sales of $1.3 billion in the fourth quarter were 43.8 percent higher than sales of $927.4 million for the same period for the previous year.
 Operating income for the fourth quarter of fiscal 1993 was $19.5 million, an increase of 22.0 percent over $16.0 million in earnings for the final three months of the previous year.
 National Intergroup recorded a net loss of $4.3 million for the final three months of fiscal 1993, primarily due to a $22.4 million required accounting adjustment to reflect an unrealized loss on its investment in National Steel Corporation following the recent initial public offering of National Steel common stock. This adjustment reduced the carrying value of National Intergroup's common stock investment in National Steel Corporation to the stock's market value as of March 31, 1993. The market value on that date was approximately $15 million below the stock's market value as of May 21, 1993.
 As a result of pre-tax losses in the fourth quarter, National Intergroup's tax benefit was $2.7 million, compared with a $2.7 million tax provision for the same period the previous year. After payment of $1.3 million in preferred stock dividends, National Intergroup reported a net loss applicable to common shareholders of $5.6 million, or $0.28 per share, for the quarter ended March 31, 1993.
 For the fourth quarter of the previous year, National Intergroup reported net income of $8.7 million, including the recognition of a $4.1 million tax loss carryforward. The company paid $1.4 million in preferred stock dividends in the fourth quarter and reported net income applicable to common shareholders of $7.3 million, or $0.36 per share. Fiscal 1992 results have been restated to reflect the company's adoption of the SFAS 109 accounting standard. For the fourth quarter of fiscal 1992, the company had reported a $4.1 million extraordinary item from the use of tax-loss carryforwards; as a result of the adoption of SFAS 109, prior period tax provisions have been restated and utilization of net operating loss carryforwards previously reported as extraordinary items have been included with the income tax provision.
 Net income per share comparisons reflect the purchase of 890,900 shares of National Intergroup common stock by the company in the first nine months of fiscal 1993.
 "We're pleased with the achievement ?the fourth quarter at FoxMeyer and Ben Franklin Retail Stores," said Abbey J. Butler and Melvyn J. Estrin, National Intergroup's co-chairmen and co-chief executive officers. The parent company owns 80.5 percent of FoxMeyer's common stock, and 67 percent of Ben Franklin (NASDAQ: BFRS). "FoxMeyer's results reflect strong growth in sales and continued improvement in operating costs as a percent of sales. The company's results are beginning to show the synergies created by the integration of the warehouses that were acquired from the Harris Wholesale acquisition and from Snyder's Drug Stores in the past year." FoxMeyer is the nation's third largest pharmaceutical distributor.
 "At Ben Franklin, fourth quarter earnings were lower due to the change in our seasonal business profile. The six company-owned craft superstores that Ben Franklin opened in the past year have increased the impact of retail business cycles on our income statement, especially the annual slowdown in retail sales from January to March. Store traffic was also reduced by harsh winter weather," they said. "On the other hand, we're starting to see the favorable impact of the stream of royalties from the 24 franchised stores that have been opened as part of the new Ben Franklin Crafts Program."
 Ben Franklin Retail Stores is a franchisor to 669 variety stores and 244 craft stores in 47 states. Ben Franklin also owns and operates 10 crafts superstores.
 Fiscal 1993 Results
 For the year ended March 31, 1993, National Intergroup sales increased 42.2 percent to $4.9 billion, compared with $3.4 billion in the previous year.
 The company recorded $603,000 in net income for fiscal 1993, primarily due to the National Steel stock write-down in the fourth quarter and the $42.8 million unusual charge by FoxMeyer in its third quarter ended Dec. 31, 1992. The company also recorded an income tax benefit of $25.2 million for the year ended March 31, 1993, due to its adoption of the SFAS 109 accounting standard.
 After payment of $5.4 million in preferred stock dividends, the company reported a net loss applicable to common shareholders of $4.7 million, or $0.24 cents per share for the year ended March 31, 1993.
 For the year ended March 31, 1992, National Intergroup reported net income of $30.4 million, including a gain on disposal of discontinued operations of $25.6 million. Net income for the year ended March 31, 1992, was reduced by an extraordinary item of $5.8 million, due to a loss on the early retirement of debt.
 After payment of $5.5 million in preferred stock dividends, National Intergroup reported net income applicable to common shareholders of $24.9 million, or $1.16 per share, for the year ended March 31, 1992. Fiscal 1992 results have been restated to reflect the company's adoption of the SFAS 109 accounting standard; as a result, utilization of $10.5 million of net operating loss carryforwards previously reported as extraordinary items have been included with the income tax provision.
 Net income per share comparisons reflect the purchase of 890,900 shares of National Intergroup common stock by the company in the first nine months of fiscal 1993.
 NATIONAL INTERGROUP, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Income
 (In thousands, except for per share data)
 Periods ended Three months Year
 March 31 1993 1992 1993 1992
 Net sales $1,333,434 $ 927,373 $4,851,609 $3,411,291
 Cost of goods sold 1,243,721 856,217 4,535,639 3,163,892
 Gross profit 89,713 71,156 315,970 247,399
 Selling, general
 and administrative
 expense (A) 66,119 52,762 292,647 204,588
 Depreciation and
 amortization 5,005 3,760 18,860 14,716
 Other income 888 1,336 5,626 9,682
 Operating income 19,477 15,970 10,089 37,777
 Income (loss) on
 investment in
 National Steel
 Corporation (B) (20,103) 1,872 (15,120) 7,543
 Net financing costs 5,050 1,490 14,442 17,236
 Income tax provision
 (benefit) (2,689) 2,671 (25,248) 7,955
 Minority interest 1,358 4,964 5,172 9,458
 Income (loss) from
 continuing opers. (4,345) 8,717 603 10,671
 Gain on disposal of
 discontinued opers. -- -- -- 25,569
 Income (loss) before
 extraordinary items (4,345) 8,717 603 36,240
 Extraordinary item -
 utilization of net
 operating loss
 carryforward and
 (loss on early
 retirement of debt) -- -- -- (5,837)
 Net income (loss) (4,345) 8,717 603 30,403
 Preferred stock
 dividend 1,264 1,375 5,352 5,500
 Net income (loss)
 applicable to common
 shareholders (5,609) 7,342 ($4,749) $24,903
 Per share of common
 stock: (C)
 Income (loss) from
 continuing
 operations ($0.28) $0.36 ($0.24) $0.24
 Discontinued
 operations -- -- -- 1.19
 Extraordinary item -- -- -- (0.27)
 Net income (loss)
 per share ($0.28) $0.36 ($0.24) $1.16
 Average number of
 shares outstanding 19,697 20,587 19,967 21,444
 (A) -- SG&A expense includes the effect of a $42.8 million one-time charge by FoxMeyer Corporation, consisting of a $40 million charge against amounts owed to FoxMeyer by Phar-Mor, Inc., a reserve against anticipated legal and collection costs, and certain chain-store-related software development costs. National Intergroup owns 80.5 percent of the common stock of FoxMeyer.
 (B) -- At March 31, 1993, the National Steel Corporation's common stock owned by National Intergroup was written down to $14 per share, less the estimated transaction costs to dispose of the shares from their previous carrying value of $20.14 per share.
 (C) -- Income per share reflects the repurchase of 890,900 shares of National Intergroup common stock by the company in the first nine months of fiscal 1993.
 NATIONAL INTERGROUP, INC. AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 March 31 1993 1992
 ASSETS
 Current assets
 Cash and short-term investments $ 54,504 $ 65,308
 Receivables - net 349,005 276,760
 Inventories 620,143 380,812
 Other current assets 60,478 16,042
 Total current assets 1,084,130 738,922
 Investment in National Steel Corporation 51,277 111,787
 Property, plant and equipment 132,916 110,822
 Less allowance for depreciation 56,494 47,534
 Net property, plant and equipment 76,422 63,288
 Other assets
 Goodwill 232,119 162,364
 Intangible assets 14,207 15,746
 Phar-Mor receivables and advances 29,465 --
 Deferred tax asset, net of
 valuation allowance 38,524 --
 Miscellaneous assets 35,951 45,264
 Total other assets 350,266 223,374
 Total assets $1,562,095 $1,137,371
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities
 Accounts payable $ 601,018 $ 349,921
 Accrued liabilities 52,199 25,951
 Salaries, wages and employee benefits 19,077 20,581
 Long-term debt due within one year 13,476 1,014
 Income taxes 25,182 33,628
 Total current liabilities 710,952 431,095
 Long-term debt 256,644 29,638
 Reserves and other liabilities 78,337 82,364
 Minority interest in consolidated subids. 105,469 161,722
 Redeemable preferred stock 50,599 55,000
 Stockholders' equity
 Common stock 119,942 119,940
 Capital in excess of par value 207,204 208,244
 Retained earnings 120,456 125,622
 Less: Common stock in Treasury 87,508 76,254
 Total stockholders' equity 360,094 377,552
 Total liabilities & stockholders' equity $1,562,095 $1,137,731
 -0- 5/24/93
 /CONTACT: J. Warren Henry of National Intergroup, Inc., 214-446-4270/
 (NII)


CO: National Intergroup, Inc. ST: Texas IN: HOU SU: ERN

TS -- NY071 -- 1760 05/24/93 13:58 EDT
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Date:May 24, 1993
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