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SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES AND NET INCOME FOR FISCAL 1991

 SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES
 AND NET INCOME FOR FISCAL 1991
 SALT LAKE CITY, Jan. 29 /PRNewswire/ -- Smith's Food & Drug Centers Inc. (NYSE: SFD) today reported increased sales and net income for fiscal 1991.
 For the fiscal year ended Dec. 28, 1991, sales totaled $2.22 billion, up 9 percent from $2.03 billion reported last year. Net income was $45.1 million,
up 31 percent over last year's $34.3 million. Net income per common share, diluted by additional shares issued in connection with the public offering in July 1991, amounted to $1.65 compared to $1.36, an increase of 21 percent. Sales in comparable stores increased 1 percent over the prior year.
 Sales for the fourth quarter ended Dec. 28, 1991 totaled $593 million compared to $532 million reported last year, an increase of 11 percent. Net income was $11.6 million, up 29 percent over the $9.0 million reported last year. Net income per common share for the fourth quarter, diluted by additional shares issued in connection with the public offering, was 39 cents compared to 36 cents, an increase of 8 percent. Sales in comparable stores were flat compared to the fourth quarter last year.
 Sales were affected by general economic conditions and our store development program over the last two years. Consumer fear of the weakening economy has influenced spending habits. Less is being purchased on each trip to the store along with a shift to lower priced products. The store development program of closing 18 stores during fiscal 1990 and the timing of new stores opened in fiscal 1991 impacted sales growth. No new stores were opened during the first quarter of 1991. Three new stores were opened during the second quarter in Las Vegas, Nev.; Chandler and Globe, Ariz. Four new stores were opened during the third quarter in Rio Rancho, N.M.; Tucson and Phoenix, Ariz.; and the company's first California store in Oxnard. Ten new stores were opened during the fourth quarter in Lake Havasu and Scottsdale, Ariz. and eight additional stores in California located in Lancaster, Fullerton, Rialto, Covina, Fontana, Riverside, La Puente and Yorba Linda. During the year, the company closed a small store in Utah, sold a combination store in Casa Grande, Ariz., and replaced one store in New Mexico.
 Improvements in net income were caused by several factors. The new stores opened during the past several years have continued to realize economies of scale which added to profitability. The stores closed during the like period have been the company's less profitable stores. Additional distribution facilities and continuing improvements in backstage efficiencies also improved net income. Also, the consumers purchased more private label products which yield higher margins to the company while giving the consumer a lower price. Increases in interest expenses were moderated by the new share offering.
 On July 16, 1991 the company sold 4,690,000 shares of Class B Common Stock at $38 per share in a public offering. The net proceeds of $171 million were used to reduce outstanding revolving credit indebtedness, to finance expansion and for general corporate purposes.
 The company's new million square foot, fully integrated distribution center located in Tolleson, Ariz. began supplying stores in the Southwest Region and was fully operational in August. This new center also includes a dairy processing plant which began operations in September. The new stores in Southern California are currently supplied by the Tolleson distribution center.
 Smith's is a leading regional supermarket chain operating 109 stores in eight western states. Of these stores, 92 are large combination food and drug centers.
 SMITH'S FOOD & DRUG CENTERS INC.
 Condensed Consolidated Statements of Income
 (Unaudited)
 (Amounts in thousands except per share data)
 13 Weeks Ended 52 weeks ended
 Dec 28, Dec 29, Dec 28, Dec 29,
 1991 1990 1991 1990
 Net sales $593,482 $532,271 $2,217,437 $2,031,373
 Cost of goods sold 458,958 415,846 1,723,848 1,589,055
 134,524 116,425 493,589 442,318
 Expenses:
 Operating, selling
 and administrative 94,169 84,383 344,363 323,792
 Depreciation and
 amortization 13,318 10,624 45,510 38,217
 Interest 7,918 6,997 30,319 25,595
 115,405 102,004 420,192 387,604
 INCOME BEFORE
 INCOME TAXES 19,119 14,421 73,397 54,714
 Income taxes 7,500 5,400 28,300 20,400
 NET INCOME $11,619 $9,021 $45,097 $34,314
 Net income per
 common share $.39 $.36 $1.65 $1.36
 Average common
 shares outstanding 29,962 25,272 27,398 25,272
 Condensed Consolidated Balance Sheets
 (Unaudited)
 (In thousands)
 Dec 28, Dec 29,
 1991 1990
 ASSETS
 CURRENT ASSETS
 Cash and cash equivalents $ 14,394 $ 17,157
 Receivables 15,074 15,301
 Inventories 290,427 209,631
 Other current assets 3,855 3,611
 TOTAL CURRENT ASSETS 323,750 245,700
 PROPERTY AND EQUIPMENT
 Land 186,672 134,464
 Buildings 455,853 327,705
 Leasehold improvements 26,046 26,297
 Fixtures and equipment 356,457 282,180
 1,025,028 770,646
 Less allowances (163,678) (133,334)
 TOTAL PROPERTY AND EQUIPMENT 861,350 637,312
 OTHER ASSETS 11,589 8,704
 $1,196,689 $891,716
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Trade accounts payable $ 180,383 $162,332
 Accrued taxes 30,842 28,307
 Other accrued liabilities 60,982 43,159
 Current maturities 20,863 17,422
 TOTAL CURRENT LIABILITIES 293,070 251,220
 LONG-TERM DEBT 375,632 326,190
 DEFERRED INCOME TAXES 46,200 37,700
 REDEEMABLE PREFERRED STOCK 7,401 8,448
 COMMON STOCKHOLDERS' EQUITY 474,386 268,158
 $1,196,689 $891,716
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 (In thousands)
 52 weeks ended
 Dec 28, Dec 29,
 1991 1990
 OPERATING ACTIVITIES:
 Net income $ 45,097 $ 34,314
 Adjustments to reconcile net
 income to net cash provided
 by operating activities:
 Depreciation and
 amortization 50,495 40,577
 Deferred income taxes 8,500 2,900
 Other 216
 104,308 77,791
 Changes in operating assets
 and liabilities:
 Receivables 227 (3,324)
 Inventories (80,796) (27,961)
 Other current assets (244) (1,024)
 Trade accounts payable 18,051 38,712
 Accrued taxes 2,535 6,115
 Other accrued liabilities 17,823 17,437
 CASH PROVIDED BY
 OPERATING ACTIVITIES 61,904 107,746
 INVESTING ACTIVITIES:
 Additions to property and
 equipment (281,560) (183,873)
 Proceeds from sale of
 property and equipment 7,027 17,329
 Other (2,885) (2,500)
 CASH USED BY
 INVESTING ACTIVITIES (277,418) (169,044)
 FINANCING ACTIVITIES:
 Additions to long-term debt 77,007 95,990
 Payments on long-term debt (24,124) (24,064)
 Redemptions of Preferred Stock (1,047) (1,094)
 Proceeds from sale of Class B
 Common Stock 170,857
 Payment of dividends (9,942) (7,076)
 CASH PROVIDED BY
 FINANCING ACTIVITIES 212,751 63,756
 NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS (2,763) 2,458
 Cash and cash equivalents
 at beginning of year 17,157 14,699
 CASH AND CASH EQUIVALENTS
 AT END OF YEAR $ 14,394 $ 17,157
 -0- 1/29/92
 /CONTACT: Robert D. Bolinder or Matthew G. Tezak both of Smith's Food & Drug Centers, 801-974-1400/
 (SFD) CO: Smith's Food and Drug Centers Inc. ST: Utah IN: REA SU: ERN


BB -- DV003 -- 4533 01/29/92 07:33 EST
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