-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JkaCyPJSp0KkNyxTApk/s88HWMoISQiDZLoTQyrKIgHE45O58SkSSn6J56iTodk8 y73eRuIZrIuDtrsM+HTSyQ== 0000893877-98-000472.txt : 19980619 0000893877-98-000472.hdr.sgml : 19980619 ACCESSION NUMBER: 0000893877-98-000472 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980618 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980618 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER INC CENTRAL INDEX KEY: 0001043273 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 911826443 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13339 FILM NUMBER: 98650356 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FORMER COMPANY: FORMER CONFORMED NAME: MEYER SMITH HOLDCO INC DATE OF NAME CHANGE: 19970730 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) June 18, 1998 ------------- FRED MEYER, INC. (Exact name of registrant as specified in its charter) Delaware 1-13339 91-1826443 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation or organization) File No.) Identification No.) 3800 SE 22nd Avenue, Portland, Oregon 97202 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (503) 232-8844 ---------------------------------------------------- (Registrant's telephone number, including area code) Item 5. Other Events On June 18, 1998, Fred Meyer, Inc. announced financial results for the first quarter of fiscal 1998. The press release announcing the results is included as Exhibit 99.1 and is incorporated herein by reference. Item 7. Financial Statements and Exhibits (c) Exhibits. 99.1 Press Release of Fred Meyer, Inc., dated June 18, 1998. 2 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 18, 1998 FRED MEYER, INC. By: ROGER A. COOKE ------------------------------------- Roger A. Cooke Senior Vice President, General Counsel and Secretary 3 EXHIBIT INDEX Sequential Exhibit No. Description Page No. - ----------- ----------- ---------- 99.1 Press Release of Fred Meyer, Inc., dated June 18, 1998. EX-99.1 2 PRESS RELEASE Exhibit 99.1 INVESTOR CONTACT: David R. Jessick, Chief Financial Officer (503) 797-7900 MEDIA CONTACT: Rob Boley, AVP-Public Relations (503) 797-7176 FOR IMMEDIATE RELEASE SYMBOL: "FMY" (N.Y.S.E.) FRED MEYER REPORTS FIRST QUARTER EPS OF $.27 EXCLUDING MERGER RELATED COSTS --------------------------------------------------------------------------- AND EXTRAORDINARY CHARGES ------------------------- Portland, Oregon, June 18, 1998 -- Fred Meyer, Inc. announced improved sales and operating earnings for its 1998 first quarter (16 weeks) ended May 23, 1998. 1998 first quarter results are not comparable to prior year results due to three recent acquisitions by Fred Meyer, Inc. (the Company). In September 1997, the Company acquired Smith's Food & Drug Centers, Inc. (Smith's), and in March 1998 the Company acquired Quality Food Centers, Inc. (QFC) and Food 4 Less Holdings, Inc. (Ralphs). The Smith's and Ralphs acquisitions were accounted for as purchases and the QFC acquisition was accounted for as a pooling of interests. Consequently, 1998 first quarter results include the results from the store operations of Fred Meyer (Fred Meyer Stores), Smith's and QFC for the full quarter and include Ralphs from March 10, 1998. First quarter 1997 results include only Fred Meyer Stores and QFC. FIRST QUARTER RESULTS Sales were $4.0 billion for the first quarter, an increase of $2.4 billion or 153.6 percent from the prior year's $1.6 billion. Sales at Fred Meyer Stores were $1.3 billion, up $129 million or 10.8 percent from the prior year. Comparable store sales increased 6.2 percent, with comparable food sales up 7.1 percent and comparable nonfood sales up 4.9 percent. Sales at QFC were $621 million, up $221 million from the prior year's $400 million. QFC completed two acquisitions during the first quarter of the prior year which contributed to the sales increase. Comparable store sales at QFC were up 2.6 percent. Sales at Smith's accounted for $951 million of the increase and sales at Ralphs accounted for $1.15 billion of the increase. In conjunction with the recent acquisitions, a charge for merger related costs and merger integration costs of $209 million was recorded in the first quarter. Additional merger integration charges will be recorded in future quarters as expenditures are incurred. Additionally, an extraordinary charge of $216 million, net of taxes, was recorded for early extinguishment of debt. This charge primarily consisted of premiums paid and deferred financing fees written off for Ralphs and QFC bonds that were purchased in tender offers on March 11, 1998. Earnings before interest, taxes, depreciation and amortization and the LIFO charge (EBITDA) were $314.9 million or 7.8 percent of sales in 1998's first quarter versus $104.5 million or 6.6 percent of sales in 1997's first quarter. Without the merger related charges and extraordinary charge, income would have been $41.4 million or $.27 per share on 154.5 million diluted weighted shares outstanding this year versus $22.5 million or $.25 per share on 88.3 million diluted weighted shares outstanding in the prior year. Including the charges, the Company recorded a loss of $312 million or $2.15 per share in the first quarter. COMMENTARY Commenting on the quarter, Robert G. Miller, President and Chief Executive Officer, said "We are pleased with first quarter sales and earnings results. Our recent acquisitions also have contributed to strong improvement in our Company's cash flow. Comparable store sales continued to be very strong at Fred Meyer Stores and at QFC. Sales at Ralphs and Smith's were below plan for the first quarter but overall, comparable store sales for the combined Company were among the strongest in the industry. " We are very happy with our merger integration efforts and the related cost savings continue to be on schedule. The Hughes store integration into Ralphs is now substantially complete and the QFC and Smith's integrations are progressing with an expected completion date of fiscal year-end for the Smith's integration and mid-1999 for the QFC integration." Fred Meyer, Inc., headquartered in Portland, Oregon, is one of the nation's largest food and drug retailers. The Company's four subsidiaries -- Fred Meyer Stores, QFC, Ralphs and Smith's -- operate more than 800 stores in a variety of food and drug and multi-department formats located primarily in 11 western states from Alaska to Texas. In addition, the Company operates 259 fine jewelry stores across the United States under the banners of Fred Meyer, Merksamer and Fox's Jewelers. WEB SITE: http://www.fredmeyer.com -- Three tables follow --
FRED MEYER, INC. Condensed Consolidated Statements of Operations (unaudited) 16 weeks 16 weeks ended ended May 23, May 24, (In thousands, except per share amounts) 1998 1997 - ---------------------------------------- ----------- ----------- Net sales $ 4,040,448 $ 1,593,437 Cost of goods sold 2,849,017 1,121,353 ----------- ----------- Gross margin 1,191,431 472,084 Operating and administrative expenses 988,676 415,784 Amortization of goodwill 22,302 1,003 Merger related costs 208,965 - ----------- ----------- Income (loss) from operations (28,512) 55,297 Interest expense 99,811 18,648 ----------- ----------- Income (loss) before income taxes and extraordinary charge (128,323) 36,649 Provision (benefit) for income taxes (32,770) 14,136 ----------- ----------- Income (loss) before extraordinary charge (95,553) 22,513 Extraordinary charge, net of taxes 216,441 - ----------- ----------- Net income (loss) $ (311,994) $ 22,513 =========== =========== Basic earnings per common share: Income (loss) before extraordinary charge $ (.66) $ .27 Extraordinary charge (1.49) - ----------- ----------- Net income (loss) $ (2.15) $ .27 =========== =========== Basic weighted average number of common shares outstanding 145,141 84,758 =========== =========== Diluted earnings per common share: Income (loss) before extraordinary charge $ (.66) $ .25 Extraordinary charge (1.49) - ----------- ----------- Net income (loss) $ (2.15) $ .25 =========== =========== Diluted weighted average number of common and common equivalent shares outstanding 145,141 88,335 =========== ===========
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FRED MEYER, INC. Supplemental Operating Data (unaudited) 16 weeks 16 weeks (In thousands, except per share data ended ended and percentages) May 23, May 24, 1998 1997 ---------- ---------- Earnings before interest, taxes, depreciation and amortization (EBITDA) $ 314,928 $ 104,549 LIFO expense 5,975 2,013 Depreciation and amortization expense 106,198 46,236 Amortization of Goodwill: Deductible for tax 2,464 - Nondeductible for tax 19,838 1,003 As a percent of sales: Food sales 86.90% 69.90% Nonfood sales 13.10% 30.10% Gross margin -- LIFO 29.49% 29.63% Gross margin -- excluding LIFO expense 29.64% 29.75% Operating and administrative expenses 24.47% 26.09% Amortization of goodwill .55% .06% Income from operations, excluding merger related costs 4.47% 3.47% Merger related costs 5.17% - Income (loss) from operations (.71%) 3.47% Interest expense 2.47% 1.17% Income (loss) before extraordinary charge (2.37%) 1.41% Net income (loss) (7.72%) 1.41% EBITDA 7.79% 6.56% LIFO .15% .13% Comparable store sales (excluding Smith's and Ralphs): 5.60% 6.30% Fred Meyer Stores: Food sales 7.10% 6.00% Nonfood sales 4.90% 8.70% Total sales 6.20% 7.00% Quality Food Centers (QFC) 2.60% 3.40%
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FRED MEYER, INC. Condensed Consolidated Balance Sheets (unaudited) May 23, May 24, (In thousands) 1998 1997 - -------------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 163,773 $ 127,979 Receivables 123,745 49,199 Inventories 1,795,974 742,968 Prepaid expenses and other 51,060 51,358 Current deferred taxes 270,495 17,226 ------------ ------------ Total current assets 2,405,047 988,730 Property and equipment - net 3,500,583 1,502,518 Goodwill - net 3,593,444 238,755 Long-term deferred tax assets 222,271 - Other assets 167,633 59,042 ------------ ------------ Total assets $ 9,888,978 $ 2,789,045 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and bank overdrafts $ 1,161,422 $ 515,785 Income taxes payables - 12,342 Accrued expenses and other 1,126,431 186,226 Current portion long-term debt and capital leases 44,967 2,123 ------------ ------------ Total current liabilities 2,332,820 716,476 Long-term debt 4,815,013 958,397 Capital lease obligations 189,886 39,869 Deferred lease transactions 34,659 41,547 Deferred income taxes - 98,826 Other long-term liabilities 437,608 25,221 Stockholders' equity 2,078,992 908,709 ------------ ------------ Total liabilities and stockholders' equity $ 9,888,978 $ 2,789,045 ============ ============
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