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Grand Union Reports Significantly Improved Third Quarter Results
WAYNE, N.J.--(BUSINESS WIRE)--Jan. 27, 1999--
Solid Improvement Trend Continues for Large Supermarket Chain
The Grand Union Company (GUCO-Nasdaq) announced today that EBITDA
(earnings before interest, taxes, depreciation, amortization, unusual
and extraordinary items) for its 12-week third quarter ended January
2, 1999, was $30.1 million, up $3.9 million or 14.9%, over the
previous year's comparable period.
With two less stores this year, sales during the third quarter
totaled $527.7 million, compared to sales of $534.3 million last year.
Comparable store sales for the third quarter decreased 0.93% due in
part to warm weather in areas of the Northern Division that delayed
the start of the ski season in resort areas. The Company said
comparable sales for its stores in the New York metropolitan area
which encompasses New Jersey, Long Island, Westchester County, NY, and
surrounding areas, continued positive for the fifth consecutive
quarter.
J. Wayne Harris, Chairman of the Board and Chief Executive
Officer, said "EBITDA continues to trend up each quarter, averaging
$10 million per four-week period during the third quarter, compared
with $9.1 million during the second quarter and $7.8 million during
the first quarter. At the same time, operating and administrative
expenses during the quarter were decreased by 87 basis points from
last year, following a 140 basis point decline during the comparable
quarter of the prior year. The savings realized from the lower expense
levels have been primarily reinvested into our existing store base,
allowing us to effectively compete in the marketplace."
Harris said that the Company's EBITDA rate to sales was 5.7% in
the third quarter, compared to a rate of 4.9% during the comparable
period last year. For the first 40 weeks of the current year, the
EBITDA to sales rate was 5.1%, compared to 2.8% last year.
He said, "While we experienced a slight sales shortfall for the
quarter compared to last year, comparable sales in all three operating
divisions trended positive at the close of the third quarter,
continuing into the fourth quarter."
He reported that the Company's capital development program has
been steadily gaining momentum in terms of the number of projects
underway. Two store renovations were completed during the third
quarter and an additional six renovations were completed in the first
two weeks of the fourth quarter. One new store, two format conversions
and one additional store renovation are expected to be completed by
the end of the fiscal year.
Harris said the Company should begin to realize more substantial
benefits from its capital development program beginning in the first
quarter of its new fiscal year. Today, the Company opened its first
limited assortment store under the Hot Dot Foods banner in a converted
supermarket in Winooski, Vermont. A second limited assortment store is
scheduled to open next month in Brattleboro, Vermont. Harris said the
low-price, low-overhead limited assortment format is particularly
suited to certain demographic and geographic areas.
EBITDA for the first 40 weeks of the Company's current fiscal year
totaled $88.5 million, a 79.6% increase over the $49.3 million
reported for the same period last year. Sales for the 40-week period
totaled $1.74 billion compared to sales of $1.76 billion during the
same period last year. Comparable store sales for the 40-week period
were negative 0.67%.
For the third quarter, the Company reported a net loss applicable
to common stock of $26.7 million, compared to a loss of $47.9 million
during the same period of the prior year. For the first 40 weeks, the
Company reported a net loss before unusual and extraordinary items of
$107.5 million, compared to a loss of $178.3 million last year. After
extraordinary items, the Company reported net income of $145.8
million, compared to a net loss of $182.0 million last year |
