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VONS REPORTS 31 PERCENT INCREASE IN 1991 EARNINGS FROM OPERATIONS

 VONS REPORTS 31 PERCENT INCREASE IN 1991 EARNINGS FROM OPERATIONS
 ARCADIA, Calif., Feb. 24 /PRNewswire/ -- The Vons Companies, Inc. (NYSE: VON) today reported income before extraordinary items for the year ended Dec. 29, 1991, of $65.0 million compared with $49.7 million in 1990, a 31 percent increase. Income before extraordinary items was $1.56 per share compared with $1.28 per share a year ago, a 22 percent increase, in spite of an increase in average shares outstanding as a result of the company's successful public offering in June 1991.
 "By any measure, 1991 was a very successful year for the company. Income from operations increased more than 30 percent in the face of a very difficult economy. We opened six new stores, continued with our aggressive remodel and upgrade program using our dense merchandising strategy, and completed a successful stock offering which allowed the company to reduce debt significantly," said Roger E. Stangeland, chairman and chief executive officer.
 Net income for 1991 of $83.1 million was virtually flat compared with a year ago. Net income per share was down in 1991 at $2 per share compared with $2.12 per share a year ago due to a decrease in benefit from extraordinary items and a higher number of shares outstanding. Net income in both years benefited from the utilization of net operating loss and investment tax credit carryforwards of $24.4 million and $32.5 million in 1991 and 1990, respectively. In addition, net income in 1991 reflects a $6.3 million extraordinary after tax charge related to debt refinancing.
 Sales for fiscal 1991 were essentially flat at $5.4 billion. Identical store sales for the year increased 0.2 percent. Sales, particularly in the second half of 1991, were impacted by the effects of the recession as well as deflation in certain product categories, specifically meat and produce.
 Gross margin was 24.2 percent in 1991 compared with 22.9 percent a year earlier. Gross margin improvement reflects the impact of the company's remodel and upgrade programs which utilize a dense merchandising strategy, promotional and other buying opportunities, as well as pass through of market-wide structural cost increases.
 Operating cash flow (defined as operating income plus depreciation and amortization of goodwill and other assets and LIFO charge) was $280.7 million or 5.2 percent of sales compared with $263.7 million or 4.9 percent of sales in 1990.
 At Dec. 29, 1991, borrowings under its revolving debt totaled $140.8 million compared with $157.0 million at year end 1990. The company had unused credit of $243.6 million at Dec. 29, 1991, under its Revolving Credit Facility.
 In late 1991, the company repurchased $65.7 million of outstanding senior subordinated and subordinated debt. At year end 1991, senior debt and capital lease obligations totalled $320.0 million and subordinated debt was $376.8 million. Debt as a percent of total capital was 59 percent at year end 1991 compared with 74 percent at year end 1990.
 Net interest expense for 1991 was $86.4 million, a decrease of 11.5 percent compared with 1990. The decrease is due to the reduction in revolver borrowings, a lower weighted average interest cost in 1991 and the repurchase of debt. In 1991, the ratio of operating cash flow to total interest expense increased to 3.2 times, compared with 2.7 times in 1990.
 Income before extraordinary items in the fourth quarter of 1991 was $18.4 million compared with $17.7 million, a 4 percent increase. Income before extraordinary items was $.42 per share compared with $.46 per share in 1990, reflecting the increase in the number of shares outstanding. The effective tax rate in the fourth quarter of 1991 was 40.1 percent compared with 35.4 percent in the fourth quarter of 1990. The LIFO benefit in the fourth quarter of 1991 was $4.8 million compared with a $1.2 million benefit in the fourth quarter of 1990. Considering the difference in effective tax rates and LIFO benefits, fourth quarter earnings were flat when compared with a year ago.
 "While operating earnings in the fourth quarter of 1991 were essentially flat compared with the year ago quarter, we are pleased with this performance in light of the difficult operating environment we experienced in the latter half of 1991," Stangeland said.
 Net income was $15.0 million or $.34 per share in the fourth quarter of 1991 compared with $29.7 million or $.77 per share in the fourth quarter of 1990. Net income in the fourth quarter of 1991 includes an extraordinary after tax charge of $3.4 million for debt refinancing. Net income in the fourth quarter of 1990 included a $12.0 million benefit related to the utilization of net operating loss carryforwards.
 Fourth quarter 1991 sales of $1.2 billion were essentially flat. Same store sales in the fourth quarter declined 2.4 percent, reflecting the impact of the recession as well as deflation in key product categories.
 "While fourth quarter sales were impacted by the lingering efforts of the recession, we are pleased to note that same store sales have improved in 1992 and are positive on a year to date basis. However, we remain cautious in our outlook for same store sales, particularly in the first half of 1992," Stangeland said.
 Gross margin in the fourth quarter improved from 24.0 percent in 1990 to 25.3 percent in 1991. This improvement reflects the on-going benefit of the company's remodel, upgrade and remerchandising programs as well as the pass through of market-wide structural cost increases.
 Selling and administrative expenses as a percent of sales in the fourth quarter of 1991 was 21.1 percent compared with 19.8 percent in the fourth quarter of 1990.
 Fourth quarter operating cash flow was $64.3 million or 5.2 percent of sales compared with $65.9 million or 5.2 percent of sales in the sales in the prior year.
 During 1991, six stores were opened and six closed, 40 stores were remodeled and 26 stores were upgraded.
 The Vons Companies, Inc. is the largest supermarket operator in Southern California. The company currently operates 338 stores under the names Vons, Vons Food and Drug, Pavilions, Tianguis and Williams Bros., and also operates the Jerseymaid dairy and ice cream plant.
 THE VONS COMPANIES, INC.
 Condensed Consolidated Results of Operations
 (In millions, except share data)
 (Unaudited)
 52 Weeks Ended 12 Weeks Ended
 12/29/91 12/30/90 12/29/91 12/30/90
 Sales $5,350.2 $5,333.9 $1,239.6 $1,261.9
 Costs and expenses:
 Cost of sales, buying
 and occupancy 4,057.0 4,111.4 925.5 959.0
 Selling and administrative
 expenses 1,079.4 1,024.2 262.1 250.2
 Amortization of excess cost over
 net assets acquired 14.0 14.6 3.2 3.3
 Total 5,150.4 5,150.2 1,190.8 1,212.5
 Operating income 199.8 183.7 48.8 49.4
 Interest expense, net 86.4 97.6 18.1 22.0
 Income before income taxes and
 extraordinary items 113.4 86.1 30.7 27.4
 Income tax provision 48.4 36.4 12.3 9.7
 Income before extraordinary
 items 65.0 49.7 18.4 17.7
 Extraordinary items:
 Utilization of net operating
 loss and investment tax
 credit carryforwards 24.4 32.5 -- 12.0
 Debt restructuring, net of tax
 benefit (6.3) -- (3.4) --
 Net income 83.1 82.2 15.0 29.7
 Income per common share:
 Income before extraordinary
 items $1.56 $1.28 $.42 $.46
 Extraordinary items .44 .84 (.08) .31
 Net income 2.00 2.12 .34 .77
 Non-cash charges
 LIFO charge $ .6 $ 6.2 $(4.8) $(1.2)
 Depreciation and amortization
 of property and capital leases 62.2 55.2 16.1 13.5
 Amortization of excess cost over
 net assets acquired and other
 assets 18.1 18.6 4.2 4.2
 Amortization of debt discount
 and deferred financing costs 7.6 16.7 1.5 1.7
 Total non-cash charges $88.5 $96.7 $17.0 $18.2
 THE VONS COMPANIES, INC.
 Condensed Consolidated Balance Sheets
 (Unaudited, in millions)
 Dec. 29, 1991 Dec. 30, 1990
 ASSETS
 Current assets:
 Inventories $359.2 $348.0
 Other current assets 88.4 79.4
 Total current assets 447.6 427.4
 Property and equipment, net 795.0 704.7
 Excess of cost over net assets
 acquired 505.3 519.4
 Other 54.7 60.5
 TOTAL ASSETS 1,802.6 1,712.0
 LIABILITIES AND SHAREHOLDERS'
 EQUITY
 Current liabilities:
 Current maturities of capital
 lease obligations and
 long-term debt $ 5.5 $ 5.1
 Other current liabilities 517.8 543.1
 Total current liabilities 523.3 548.2
 Accrued self-insurance and
 noncurrent liabilities 110.3 116.5
 Senior debt and capital lease
 obligations 314.5 336.7
 Subordinated debt, net 376.8 437.9
 Shareholders' equity 477.7 272.7
 TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY $1,802.6 $1,712.0
 -0- 2/24/92
 /CONTACT: Mary McAboy of the Vons Companies, 818-821-7897/
 (VON) CO: The Vons Companies, Inc. ST: California IN: REA SU: ERN


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