Beat the street, great numbers
Grand Union Reports Improved
Second Quarter Results
WAYNE, N.J.--(BUSINESS WIRE)--Nov. 17, 1998--The Grand Union Company
(Nasdaq:GUCO - news) today announced significantly improved second quarter results. The
Company reported EBITDA (earnings before interest, taxes, depreciation, amortization, unusual and
extraordinary items) for its 12-week second quarter ended October 10, 1998, of $27.3 million, up
$13.8 million over the previous year's second quarter. The increase resulted from stronger sales,
improved gross margin and a significant reduction in operating and administrative expenses
throughout the Company.
Sales during the quarter totaled $519.5 million, up from sales of $518.9 million during the
comparable period last year. Comparable store sales for the second quarter increased 0.61%, with
all three of the Company's operating divisions reporting positive comparable store sales. The
Company said sales trends were especially encouraging during the last four weeks of the quarter.
J. Wayne Harris, Chairman of the Board and Chief Executive Officer, said the Company's second
quarter results represent further improvement over the positive sales, gross margin and expense
reduction trends reported in the first quarter. ''We are especially encouraged that all three of our
divisions achieved higher comparable store sales during a quarter when Grand Union was emerging
from a major capital restructuring. We are also pleased that EBITDA as a percent of sales improved
each period during the quarter, totaling 5.26% for the entire quarter,'' Harris said, ''and operating
and administrative expenses were reduced 1.35% as a rate of sales from last year.''
''Our continued progress in expense reduction has enabled the Company to invest in marketing and
promotional programs that are successfully driving customer traffic and total sales. Grand Union
associates throughout the organization have responded enthusiastically to our initiatives to improve
service, enhance perishable excellence and operate the business more efficiently. We are in a strong
position to build on this momentum as we begin implementation of an aggressive capital program
with investments in new stores, remodels and improved technology.''
EBITDA for the first half totaled $58.4 million, a 153% increase over the $23.1 million reported for
the same period last year. Sales for the 28-week first half of fiscal 1999 totaled $1.211 billion, a
decrease of 1.3% from sales of $1.227 billion in last year's first half.
For the second quarter, the Company reported a net loss before unusual and extraordinary items of
$26.8 million, compared to a net loss of $56.9 million during the same period of the prior year. After
an unusual charge of $927,000 for expenses related to the Company's restructuring and an
extraordinary gain of $260.8 million related to the early extinguishment of debt, the Company
reported net income for the fiscal 1999 second quarter of $233.1 million, compared to a net loss of
$59 million in the prior year.
For the first half, the Company reported a net loss before unusual and extraordinary items of $81.1
million, compared to a net loss of $136.2 million last year. After the unusual items discussed above,
the Company reported net income of $170.2 million, compared to a net loss of $140.3 million last
year. |
