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SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES AND NET INCOME FOR THIRD QUARTER 1992

 SMITH'S FOOD & DRUG CENTERS REPORTS INCREASED SALES
 AND NET INCOME FOR THIRD QUARTER 1992
 SALT LAKE CITY, Oct. 27 /PRNewswire/ -- Smith's Food & Drug Centers Inc. (NYSE: SFD) today reported increased sales and net income for the third quarter 1992.
 Sales for the third quarter ended Oct. 3, 1992, totaled $653 million compared to $544 million for the same quarter last year, an increase of 20 percent. Net income was $13.8 million, up 13 percent over the $12.2 million reported last year. Net income per common share, diluted by additional shares issued in July 1991, was $.46 compared to $.42, an increase of 10 percent.
 For the first nine months of the year, sales totaled $1.96 billion, up 21 percent from $1.62 billion reported last year. Adjusting for an additional week in fiscal 1992 (40 weeks compared to 39 weeks) the sales increase would have been 18 percent. Net income was $40.5 million, up 21 percent over last year's $33.5 million. Net income per common share amounted to $1.35 compared to $1.26, an increase of 7 percent. Sales in comparable stores increased 2 percent for the third quarter and were relatively flat compared to the first nine months of the prior year due to modest deflation, consumer trading down and the weak economy in general.
 Although gross margins continued to improve in the third quarter of 1992 compared to 1991, the increase was mitigated by the company's aggressive efforts to improve comparable store sales in a very competitive environment. Additionally, the improvement in gross margins was offset by higher operating costs because of the entry into California. Net margins as a percent to sales decreased from 2.25 percent to 2.12 percent. Improvements in gross margins resulted from more efficient operations from maturing stores, distribution economies and higher private label sales.
 During the first nine months of fiscal 1992, six combination centers were opened in Arleta, Highland, Moreno Valley, Stanton, and Torrance, Calif., and Albuquerque, N.M., two store remodels were completed, and a conventional store in Las Vegas and a combination center in Albuquerque were closed. At Oct. 3, 1992, the company operated 113 stores totaling 7.2 million square feet compared to 101 stores totaling 6.1 million square feet at the end of prior year's third quarter. The expansion plan for the remainder of fiscal 1992 is to open six combination centers totaling approximately 500,000 square feet, including four centers in Southern California. The increase in square footage for 1992 will be approximately 13 percent.
 Smith's is a leading regional supermarket chain operating 115 stores in eight western states. Of these stores, 99 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 13 Weeks 40 Weeks 39 Weeks
 Ended Ended Ended Ended
 Oct. 3, Sept. 28, Oct. 3, Sept. 28,
 1992 1991 1992 1991
 Net sales $653,385 $544,026 $1,962,992 $1,623,955
 Cost of goods sold 502,396 422,101 1,513,477 1,264,890
 Total 150,989 121,925 449,515 359,065
 Expenses:
 Operating, selling
 and administrative 102,543 83,358 310,012 250,194
 Depreciation and
 amortization 16,361 11,201 46,030 32,192
 Interest 9,341 7,338 26,837 22,401
 Total 128,245 101,897 382,879 304,787
 INCOME BEFORE
 INCOME TAXES 22,744 20,028 66,636 54,278
 Income taxes 8,900 7,800 26,100 20,800
 NET INCOME $13,844 $12,228 $40,536 $33,478
 Net income per
 common share $.46 $.42 $1.35 $1.26
 Average common
 shares outstanding 29,962 29,086 29,962 26,543
 SMITH'S FOOD & DRUG CENTERS INC.
 Condensed Consolidated Balance Sheets
 (Unaudited)
 (In thousands)
 Oct. 3, Sept. 28,
 1992 1991
 ASSETS
 CURRENT ASSETS
 Cash and cash equivalents $12,088 $13,762
 Receivables 11,258 10,518
 Inventories 315,723 257,034
 Other current assets 21,062 2,581
 TOTAL CURRENT ASSETS 360,131 283,895
 PROPERTY AND EQUIPMENT
 Land 266,020 180,948
 Buildings 515,967 425,566
 Leasehold improvements 30,418 25,488
 Fixtures and equipment 405,395 327,374
 Total 1,217,800 959,376
 Less allowances (200,115) (148,610)
 TOTAL PROPERTY AND EQUIPMENT 1,017,685 810,766
 Other assets 12,303 10,386
 Total $1,390,119 $1,105,047
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Trade accounts payable $169,542 $149,150
 Accrued taxes 40,970 28,696
 Other accrued liabilities 59,668 51,862
 Current maturities 21,542 19,189
 TOTAL CURRENT LIABILITIES 291,722 248,897
 LONG-TERM DEBT 530,858 337,393
 DEFERRED INCOME TAXES 54,700 44,900
 REDEEMABLE PREFERRED STOCK 7,401 8,448
 COMMON STOCKHOLDERS' EQUITY 505,438 465,409
 Total $1,390,119 $1,105,047
 SMITH'S FOOD & DRUG CENTERS INC.
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 (In thousands)
 40 Weeks Ended 39 Weeks Ended
 Oct. 3, 1992 Sept. 28, 1991
 OPERATING ACTIVITIES:
 Net income $40,536 $33,478
 Adjustments to reconcile net
 income to net cash provided
 by operating activities:
 Depreciation and
 amortization 49,375 35,003
 Deferred income taxes 8,500 7,200
 Other 403 162
 Total 98,814 75,843
 Changes in operating assets
 and liabilities:
 Receivables 3,816 4,783
 Inventories (25,296) (47,403)
 Other current assets (17,207) 1,030
 Trade accounts payable (10,841) (13,182)
 Accrued taxes 10,128 389
 Other accrued liabilities (1,314) 8,703
 CASH PROVIDED BY
 OPERATING ACTIVITIES 58,100 30,163
 INVESTING ACTIVITIES:
 Additions to property and
 equipment (206,496) (210,844)
 Proceeds from sale of
 property and equipment 786 2,387
 Other (714) (1,682)
 CASH USED BY
 INVESTING ACTIVITIES (206,424) (210,139)
 FINANCING ACTIVITIES:
 Additions to long-term debt 173,465 33,687
 Payments on long-term debt (17,246) (20,328)
 Redemptions of preferred stock (314) (389)
 Proceeds from sale of Class B
 common stock --- 170,857
 Payment of dividends (9,887) (7,246)
 CASH PROVIDED BY
 FINANCING ACTIVITIES 146,018 176,581
 NET DECREASE IN CASH
 AND CASH EQUIVALENTS (2,306) (3,395)
 Cash and cash equivalents
 at beginning of year 14,394 17,157
 CASH AND CASH EQUIVALENTS
 AT END OF PERIOD $12,088 $13,762
 -0- 10/27/92
 /CONTACT: Robert D. Bolinder or Matthew G. Tezak of Smith's Food & Drug Centers, 801-974-1400/
 (SFD) CO: Smith's Food & Drug Centers Inc. ST: Utah IN: RET SU: ERN


JB-JL -- LA006 -- 5141 10/27/92 07:31 EST
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