Marsh Posts Q3 Loss of $9.6M; Revenues Rise $3.9M
INDIANAPOLIS -- Marsh Supermarkets here posted a third-quarter net loss of $9.6 million, or $1.22 a share, compared with a year-earlier net profit of $2.7 million, or 34 cents a share.
Total revenues for the quarter increased to $407.5 million, an increase of $3.9 million or 1 percent over the prior year quarter. Same store supermarket and convenience store sales were 0.7 percent above last year, while comparable store merchandise sales, excluding gasoline, declined 1.4 percent vs. the same period in 2005.
Marsh said the financial results for the third fiscal quarter ended January 7, 2006 included previously announced non-cash impairment charges of $12.8 million before tax ($8.4 million after tax) resulting from store closings and other initiatives the chain implemented that are expected to save more than $15 million annually.
Marsh's third quarter results also included $1.9 million before tax ($1.2 million after tax) of costs related to its ongoing exploration of strategic alternatives and debt refinancing, as well as severance costs. Further, gains from real estate sales declined $1.7 million ($1.1 million after tax) from the prior year quarter.
"We made some difficult decisions that affected this quarter's bottom line, but which also will enhance our ability to improve future earnings," said Don E. Marsh, chairman and c.e.o.. He said management is committed to taking actions to improve its financial position long-term.
Marsh said on Feb. 8 it planned to close nine stores by the end of the month, to improve cash flow. Thus far, Marsh has closed six Village Pantry convenience stores (four in Indianapolis and two in Anderson), and the Trios Di Tuscanos restaurant in Noblesville. It will close the Marsh supermarket in Fort Wayne and the Savin*$ store in Muncie by the end of the month.
Upon those stores' closings, the regional supermarket chain said it expects to incur an additional charge of $6 million to $10 million in its fourth fiscal quarter, or $3.9 million to $6.5 million after tax.
The planned cost saving measures included a reduction of staffing, travel and corporate overhead at the company's headquarters. The company further expects to incur a fourth quarter charge of $5.8 to $6.8 million for future cash expenditures related to the reduction of staffing at the Company's headquarters. Additionally, the previously announced termination of the supplemental executive retirement plans is expected to reduce expenses by $3.0 to $4.0 million annually. Collectively, these actions are expected to save Marsh more than $15 million annually.
Marsh said it has had substantially all of its owned real estate appraised. It owns the real estate and buildings for 34 of its supermarkets, 44 of its convenience stores, and five of its other florist and catering facilities. In addition, the retailer owns its corporate headquarters, certain warehouses and other land and buildings.
Based on the recent appraisals, Marsh's management said it believes the estimated fair market value of its real estate and buildings exceeds the net book value of such real estate and buildings reflected on the company's consolidated financial statements, by $100 to $150 million.
Marsh operates 69 Marsh supermarkets, 38 LoBill Food stores, 8 O'Malias Food Markets, 154 Village Pantry convenience stores, and two Arthur's Fresh Market stores. The company also operates Crystal Catering Food Services, which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, and Primo Banquet Catering and Conference Centers; Floral Fashions, McNamara Florist and Enflora -- Flowers for Business.
Total revenues for the quarter increased to $407.5 million, an increase of $3.9 million or 1 percent over the prior year quarter. Same store supermarket and convenience store sales were 0.7 percent above last year, while comparable store merchandise sales, excluding gasoline, declined 1.4 percent vs. the same period in 2005.
Marsh said the financial results for the third fiscal quarter ended January 7, 2006 included previously announced non-cash impairment charges of $12.8 million before tax ($8.4 million after tax) resulting from store closings and other initiatives the chain implemented that are expected to save more than $15 million annually.
Marsh's third quarter results also included $1.9 million before tax ($1.2 million after tax) of costs related to its ongoing exploration of strategic alternatives and debt refinancing, as well as severance costs. Further, gains from real estate sales declined $1.7 million ($1.1 million after tax) from the prior year quarter.
"We made some difficult decisions that affected this quarter's bottom line, but which also will enhance our ability to improve future earnings," said Don E. Marsh, chairman and c.e.o.. He said management is committed to taking actions to improve its financial position long-term.
Marsh said on Feb. 8 it planned to close nine stores by the end of the month, to improve cash flow. Thus far, Marsh has closed six Village Pantry convenience stores (four in Indianapolis and two in Anderson), and the Trios Di Tuscanos restaurant in Noblesville. It will close the Marsh supermarket in Fort Wayne and the Savin*$ store in Muncie by the end of the month.
Upon those stores' closings, the regional supermarket chain said it expects to incur an additional charge of $6 million to $10 million in its fourth fiscal quarter, or $3.9 million to $6.5 million after tax.
The planned cost saving measures included a reduction of staffing, travel and corporate overhead at the company's headquarters. The company further expects to incur a fourth quarter charge of $5.8 to $6.8 million for future cash expenditures related to the reduction of staffing at the Company's headquarters. Additionally, the previously announced termination of the supplemental executive retirement plans is expected to reduce expenses by $3.0 to $4.0 million annually. Collectively, these actions are expected to save Marsh more than $15 million annually.
Marsh said it has had substantially all of its owned real estate appraised. It owns the real estate and buildings for 34 of its supermarkets, 44 of its convenience stores, and five of its other florist and catering facilities. In addition, the retailer owns its corporate headquarters, certain warehouses and other land and buildings.
Based on the recent appraisals, Marsh's management said it believes the estimated fair market value of its real estate and buildings exceeds the net book value of such real estate and buildings reflected on the company's consolidated financial statements, by $100 to $150 million.
Marsh operates 69 Marsh supermarkets, 38 LoBill Food stores, 8 O'Malias Food Markets, 154 Village Pantry convenience stores, and two Arthur's Fresh Market stores. The company also operates Crystal Catering Food Services, which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, and Primo Banquet Catering and Conference Centers; Floral Fashions, McNamara Florist and Enflora -- Flowers for Business.