-----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, H0Bn33yQCOcnZHaIMcaPLR9OYZdmx9Iv4SP54wFrRq9JrlYbmKrKmWKhkZwWs90N np/WlsGHobISEyPWIkpHuA== 0000835582-97-000010.txt : 19970729 0000835582-97-000010.hdr.sgml : 19970729 ACCESSION NUMBER: 0000835582-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970614 FILED AS OF DATE: 19970728 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMELAND HOLDING CORP CENTRAL INDEX KEY: 0000835582 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 731311075 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11555 FILM NUMBER: 97646321 BUSINESS ADDRESS: STREET 1: 400 N E 36TH ST CITY: OKLAHOMA CITY STATE: OK ZIP: 73105 BUSINESS PHONE: 4055575500 MAIL ADDRESS: STREET 1: 400 N E 36TH CITY: OKLAHOMA CITY STATE: OK ZIP: 73125 FORMER COMPANY: FORMER CONFORMED NAME: SWO HOLDING CORP DATE OF NAME CHANGE: 19901017 FORMER COMPANY: FORMER CONFORMED NAME: SWO ACQUISTION CORP DATE OF NAME CHANGE: 19890716 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Quarterly Report Under Section 13 or 15 (d) of the Securities X Exchange Act of 1934 For the quarterly period ended June 14, 1997 OR Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from _________to _________ Commission file No.: 33-48862 HOMELAND HOLDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 73-1311075 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2601 Northwest Expressway Oil Center-East, Suite 1100 Oklahoma City, Oklahoma 73112 (Address of principal executive offices) (Zip Code) (405) 879-6600 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution under a plan confirmed by a court. Yes X No Indicate the number of shares outstanding of each of the registrant's classes of common stock as of July 18, 1997: Homeland Holding Corporation Common Stock: 4,758,025 shares HOMELAND HOLDING CORPORATION FORM 10-Q FOR THE TWENTY-FOUR WEEKS ENDED JUNE 14, 1997 INDEX Page PART 1 FINANCIAL INFORMATION ITEM 1. Financial Statements..................................... 1 Consolidated Balance Sheets as of June 14, 1997, and December 28, 1996.................. 1 Consolidated Statements of Operations Twelve Weeks ended June 14, 1997 (Successor Company), and June 15, 1996 (Predecessor Company).............................................. 3 Consolidated Statements of Operations Twenty-four Weeks ended June 14, 1997 (Successor Company), and June 15, 1996 (Predecessor Company).............................................. 4 Consolidated Statements of Stockholders Equity (Deficit) Twenty-four Weeks ended June 14, 1997 (Successor Company), and June 15, 1996 (Predecessor Company).............................................. 5 Consolidated Statements of Cash Flows Twenty-four Weeks ended June 14, 1997 (Successor Company), and June 15, 1996 (Predecessor Company).............................................. 6 Notes to Consolidated Financial Statements............... 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................ 8 PART II OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K......................... 13 i PART I - FINANCIAL INFORMATION Item 1. Financial Statements HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) ASSETS June 14, December 28, 1997 1996 (Unaudited) Current assets: Cash and cash equivalents $ 6,134 $ 1,492 Receivables, net of allowance for uncollectible accounts of $1,480 and $1,587 6,630 8,522 Inventories 43,160 45,009 Prepaid expenses and other current assets 2,226 2,760 Total current assets 58,150 57,783 Property, plant and equipment: Land and land improvements 8,731 8,731 Buildings 18,183 18,124 Fixtures and equipment 18,257 15,078 Leasehold improvements 11,456 11,374 Software 2,931 2,930 Leased assets under capital leases 7,485 7,569 Construction in progress 2,923 2,675 69,966 66,481 Less, accumulated depreciation and amortization 6,480 3,012 Net property, plant and equipment 63,486 63,469 Reorganization value in excess of amounts allocable to identifiable assets, less accumulated amortization of $12,643 at June 14, 1997, and $5,819 at December 28, 1996 30,733 39,570 Other assets and deferred charges 7,665 7,664 Total assets $ 160,034 $ 168,486 Continued The accompanying notes are an integral part of these consolidated financial statements. 1 HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS, Continued (In thousands, except share and per share amounts) LIABILITIES AND STOCKHOLDERS' EQUITY June 14, December 28, 1997 1996 (unaudited) Current liabilities: Accounts payable - trade $ 15,745 $ 17,416 Salaries and wages 2,747 3,499 Taxes 3,707 2,903 Accrued interest payable 2,478 2,689 Other current liabilities 7,118 8,470 Current portion of long-term debt 1,310 894 Current portion of obligations under capital leases 1,343 1,343 Total current liabilities 34,448 37,214 Long-term obligations: Long-term debt 72,445 72,724 Obligations under capital leases 2,322 3,005 Other noncurrent liabilities 2,671 2,602 Total long-term obligations 77,438 78,331 Stockholders' equity: Common Stock, $0.01 par value, authorized - 7,500,000 shares, issued 4,758,025 shares at June 14, 1997, and December 28, 1996 48 48 Additional paid-in capital 56,013 56,013 Accumulated deficit (7,913) (3,120) Total stockholders' equity 48,148 52,941 Total liabilities and stockholders' equity $ 160,034 $ 168,486 The accompanying notes are an integral part of these consolidated financial statements. 2 HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) (Unaudited) Successor Predecessor Company Company 12 weeks 12 weeks ended ended June 15, June 14, 1997 1996 Sales, net $ 116,264 $ 121,981 Cost of sales 87,603 91,703 Gross profit 28,661 30,278 Selling and administrative expenses 25,079 27,442 Financial restructuring costs - 1,800 Amortization of excess reorganization value 3,364 - Operating profit 218 1,036 Interest expense 1,833 2,051 Loss before income taxes (1,615) (1,015) Income tax expense 920 - Net loss $ (2,535) $ (1,015) Net loss per common share $ (0.53) $ (0.03) Weighted average shares outstanding 4,758,025 32,599,707 The accompanying notes are an integral part of these consolidated financial statements. 3 HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) (Unaudited) Successor Predecessor Company Company 24 weeks 24 weeks ended ended June 15, June 14, 1997 1996 Sales, net $ 236,314 $ 246,331 Cost of sales 178,481 185,910 Gross profit 57,833 60,421 Selling and administrative expenses 50,266 55,422 Financial restructuring costs - 3,150 Amortization of excess reorganization value 6,824 - Operating profit 743 1,849 Interest expense 3,815 5,207 Loss before income taxes (3,072) (3,358) Income tax expense 1,721 - Net loss $ (4,793) $ (3,358) Net loss per common share $ (1.01) $ (0.10) Weighted average shares outstanding 4,758,025 32,599,707 The accompanying notes are an integral part of these consolidated financial statements. 4 HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (In thousands, except share and per share amounts) (Unaudited)
Minimum Common Stock Additional Pension Successor Predecessor Paid-In Accumulated Liability Shares Shares Amount Capital Deficit Adjustment Balance, December 30, 1995 - 33,748,482 $ 337 $ 55,886 $ (80,188) $ (1,327) Net Loss - - - - (3,358) - Balance, June 15, 1996 - 33,748,482 $ 337 $ 55,886 $ (83,546) $ (1,327) Balance, December 28, 1996 4,758,025 - $ 48 $ 56,013 $ (3,120) - Net Loss - - - - (4,793) - Balance, June 14, 1997 4,758,025 - $ 48 $ 56,013 $ (7,913) - Continued
Total Treasury Stock Stockholders' Shares Amount Equity/Deficit Balance, December 30, 1995 2,869,493 $ (2,814) $ (28,106) Net Loss - - (3,358) Balance, June 15, 1996 2,869,493 $ (2,814) $ (31,464) Balance, December 28, 1996 - - $ 52,941 Net Loss - - (4,793) Balance, June 14, 1997 - - $ 48,148 The accompanying notes are an integral part of these consolidated financial statements. 5 HOMELAND HOLDING CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, except share and per share amounts) (Unaudited) Successor Predecessor Company Company 24 weeks 24 weeks ended ended June 14, June 15, 1997 1996 Cash flows from operating activities: Net loss $ (4,793 $ (3,358) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,510 3,282 Amortization of excess reorganization value 6,824 - Amortization of financing costs 29 315 Gain on disposal of assets (1) (41) Amortization of beneficial interest in operating leases 56 59 Adjustment to excess reorganization value 292 - Deferred income taxes 1,721 - Change in assets and liabilities: Decrease in receivables 1,892 549 Decrease in inventories 1,849 3,354 Decrease (increase) in prepaid expenses and other current assets 534 (3) Increase in other assets and deferred charges (118) (540) Decrease in accounts payable - trade (1,670) (231) Decrease in salaries and wages (752) (53) Increase in taxes 804 270 Increase (decrease) in accrued interest payable (211) 3,649 Decrease in other current liabilities (1,352) (1,201) Decrease in noncurrent restructuring reserve - (353) Increase (decrease) in other noncurrent liabilities 113 (872) Net cash provided by operating activities 8,727 4,826 Cash flow used in investing activities: Capital expenditures (3,559) (1,404) Cash received from sale of assets 20 1,729 Net cash (used in) provided by investing activities (3,539) 325 Cash flows used by financing activities: Borrowings under revolving credit loans 63,409 60,423 Payments under revolving credit loans (63,241) (63,838) Principal payments under note payable (31) - Principal payments under capital lease obligations (683) (1,239) Net cash used in financing activities (546) (4,654) Net increase in cash and cash equivalents 4,642 497 Cash and cash equivalents at beginning of period 1,492 6,357 Cash and cash equivalents at end of period $ 6,134 $ 6,854 Supplemental information: Cash paid during the period for interest $ 4,005 $ 1,287 The accompanying notes are an integral part of these consolidated financial statements. 6 HOMELAND HOLDING CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Preparation of Consolidated Financial Statements: The accompanying unaudited interim consolidated financial statements of Homeland Holding Corporation ("Holding") and its Subsidiary, Homeland Stores, Inc. ("Stores" and together with Holding, the "Company"), reflect all adjustments, which consist only of normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and the consolidated results of operations and cash flows for the periods presented. The consolidated financial statements as of and for the periods subsequent to August 10, 1996, were prepared in accordance with the American Institute of Certified Public Accountants Statement of Position No. 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP No. 90.7"). The accounting under SOP No. 90.7 resulted in "fresh-start" reporting for the Company in which a new entity was created for financial reporting purposes. The periods prior to August 10, 1996, have been designated "Predecessor Company" and the periods subsequent to August 10, 1996, have been designated "Successor Company." These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the period ended December 28, 1996, and the notes thereto. 2. Accounting Policies: The significant accounting policies of the Company are summarized in the consolidated financial statements of the Company for the 52 weeks ended December 28, 1996, and the notes thereto. 3. Net Loss Per Share: Net loss per share of common stock for the 12 weeks and 24 weeks ended June 14, 1997, and June 15, 1996, is based on the weighted average outstanding shares during the period. Net loss per share of common stock for periods prior to the reorganization, which was consummated in August 1996, is not meaningful due to the significant change in capital structure. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General The Company's plan of reorganization became effective on August 2, 1996. For financial reporting purposes, the Company accounted for the consummation of the reorganization effective as of August 10, 1996. As a result of the adoption of "fresh-start" reporting and the consummation of the reorganization, the periods prior to and subsequent to August 10, 1996, for financial reporting purposes are not necessarily comparable. The table below sets forth selected items from the Company's consolidated income statement as a percentage of net sales of the periods indicated: 12 weeks ended 24 weeks ended June 14, June 15, June 14, June15, 1997 1996 1997 1996 Net Sales 100.0% 100.0% 100.0% 100.0% Cost of Sales 75.3 75.2 75.5 75.5 Gross Profit 24.7 24.8 24.5 24.5 Selling and administrative 21.6 22.5 21.3 22.5 Financial restructuring cost - 1.5 - 1.3 Amortization of excess reorganization value 2.9 - 2.9 - Operating profit 0.2 0.8 0.3 0.8 Interest expense 1.6 1.7 1.6 2.1 Loss before income taxes (1.4) (0.8) (1.3) (1.4) Income tax provision 0.8 - 0.7 - Net loss (2.2) (0.8) (2.0) (1.4) Results of Operations. Comparison of Twelve Weeks and Twenty-Four Weeks ended June 14, 1997, with Twelve Weeks and Twenty-Four Weeks ended June 15, 1996. Net sales for the 12 weeks and 24 weeks ended June 14, 1997, decreased 4.7% and 4.1%, respectively, from the net sales of the corresponding period of 1996. The reduction in net sales was primarily due to fewer operating stores in 1997 plus the effect of negative comparable store sales. Comparable store sales for the 12 weeks and 24 weeks ended June 14, 8 1997, decreased by 3.4% and 2.2%, respectively, as compared to the corresponding periods of 1996. The decrease in comparable store sales was attributed to increased competitive activities, lower food price inflation and lower sales to food stamp recipients as a result of more stringent eligibility requirements. Gross profit as a percentage of sales for the 12 weeks ended June 14, 1997, was 24.7%, a slight decrease from the corresponding period in 1996 of 24.8%. Gross profit as a percentage of sales for the 24 weeks ended June 14, 1997, and the corresponding period in 1996, amounted to 24.5%. Selling and administrative expenses for the 12 weeks ended June 14, 1997, decreased to 21.6%, as a percentage of net sales, compared to 22.5% for the corresponding period of 1996. For the 24 weeks ended June 14, 1997, selling and administrative expenses decreased by 1.2%, as a percentage of net sales, to 21.3% from 22.5% in the corresponding period of 1996. The reduction in selling and administrative expenses resulted primarily from lower labor costs associated with the modified union agreements and lower occupancy cost that resulted from renegotiated leases, all commencing in August 1996. The Company also benefited in cost savings from termination of its information outsourcing contract in March 1996. For the 12 weeks and 24 weeks ended June 15, 1996, the Company incurred $1.8 million and $3.2 million of financial restructuring costs. These costs were related to the reorganization consummated in August 1996, and are not recurring. The Company recorded amortization of excess reorganization value of $3.4 million and $6.8 million for the 12 weeks and 24 weeks ended June 14, 1997, respectively. The amortization of the excess reorganization value is expected to negatively affect earnings for the next nine fiscal quarters. Interest expense for the 12 weeks ended June 14, 1997, was $1.8 million, a reduction of $0.2 million from the $2.0 million in the corresponding period of 1996. Interest expense for the 24 weeks ended June 14, 1997, was $3.8 million, a reduction of $1.4 million from the corresponding period of $5.2 million in 1996. The reduction in interest expenses was due primarily to the reduction of debt level resulting from the consummation of the reorganization in August 1996. In the second quarter of 1996, the Company's interest obligation on its outstanding senior secured notes was stayed as a result of filing Chapter 11 petition on May 13, 1996. The Company recorded income tax provisions of $0.9 million and $1.7 million for the 12 weeks and 24 weeks ended June 14, 1997, respectively. The effective tax rate differs from the statutory rate due to amortization of excess reorganization value, which is not deductible for income tax purposes. The net operating loss carryforwards available for utilization in 1997 ("NOL Carryforward") are limited to approximately $4.5 million, the benefit 9 of which is being recorded as a reduction of excess reorganization value rather than a reduction of income tax expense. The NOL Carryforward is expected to be utilized in the third quarter of 1997 and, accordingly, the Company will commence to incur tax liabilities. The Company's EBITDA (as defined hereinafter) for the 12 weeks ended June 14, 1997, improved to $5.4 million or 4.7% of net sales, from the EBITDA of $4.5 million, before financial restructuring costs, or 3.7% of net sales for the corresponding period of 1996. For the 24 weeks ended June 14, 1997, EBITDA was $11.1 million or 4.7% of net sales. This is a 33.5% improvement over the 1996 corresponding period EBITDA of $8.3 million, before financial restructuring costs, or 3.4% of net sales. The improvement in EBITDA is attributable to the cost savings efforts realized as a result of the reorganization that was consummated in August 1996. Net loss for the 12 weeks ended June 14, 1997, was $2.5 million or $0.53 per share compared to $1.0 million or $0.03 per share for the corresponding period in 1996. Net loss for the 24 weeks ended June 14, 1997, was $4.8 million or $1.01 per share compared to $3.4 million or $0.10 per share for the corresponding period in 1996. As a result of the reorganization that was consummated in August 1996, the Company's financial structure has changed significantly so that results of earnings per share are not comparable to prior years. The Company is amortizing the reorganization value over a three-year period and it has affected earnings negatively. If the Company excluded such amortization of reorganization value for the 12 weeks and 24 weeks ended June 14, 1997, the Company would record income of $0.8 million or $0.18 per share and $2.0 million or $0.42 per share, respectively. Liquidity and Capital Resources The primary sources of liquidity and capital for the Company's operations have been borrowings under the revolving credit facility and internally-generated funds. 10 The Company's EBITDA (earnings before interest, taxes, depreciation and amortization) before financial restructuring costs, as presented below, is the Company's measurement of internally-generated cash for working capital needs, capital expenditures and payment of debt obligations: 12 weeks ended 24 weeks ended June 14, June 15, June 14, June 15, 1997 1996 1997 1996 Loss before income taxes (1,615) (1,015) (3,072) (3,358) Interest expense 1,833 2,051 3,815 5,207 Amortization of reorganization value 3,364 - 6,824 - Financial restructuring costs - 1,800 - 3,150 Depreciation and amortization 1,821 1,653 3,566 3,341 EBITDA 5,403 4,489 11,133 8,340 As a percentage of sales 4.7% 3.7% 4.7% 3.4% As a multiple of interest expense 3.0x 2.2x 2.9x 1.6x Cash flow from operations provided $8.7 million for the 24 weeks ended June 14, 1997, and $4.8 million for the 24 weeks ended June 15, 1996. The improvement in cash flow from operations was due primarily to better operating results. The Company's investing activities used net cash of $3.5 million in the 24 weeks ended June 14, 1997, as compared to net cash provided by investing activities of $0.3 million in the 24 weeks ended June 15, 1996. The cash used in investing activities for 1997 is for the 1997 remodeling program implemented by the Company. As of June 14, 1997, 7 of the 23 remodeling projects have been completed. The Company expects to expend approximately $11.6 million in cash capital expenditures for fiscal 1997, which includes acquiring a Pratt Discount Foods' store in Oklahoma City, Oklahoma. The acquisition is expected to be completed in August 1997. The Company currently plans to construct two new stores by the end of 1998: one in Oklahoma City, Oklahoma and the other in Tulsa, Oklahoma. Financing activities of the Company used net cash of $0.5 million and $4.7 million for the 24 weeks ended June 14, 1997, and June 15, 1996, respectively. 11 Management believes that the revolving credit facility and cash flows from operations will be adequate for the Company's short-term requirements including its 1997 capital expenditure program and the scheduled quarterly payments required under the term loan commencing on September 30, 1997. As of July 18, 1997, the Company had $0.9 million of borrowings and $5.7 million of letters of credit outstanding under its revolving credit facility. The revolving credit facility provides for borrowings of up to the lesser of (a) $27.5 million or (b) the applicable borrowing base. The applicable borrowing base on July 18, 1997, was approximately $26.3 million. 12 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: The following exhibits are filed as part of this report: Exhibit No. Description 27 Financial Data Schedule. 99 Press release of July 10, 1997, issued by the Company announcing its 1997 second quarter results. (b) Report on Form 8-K: The Company did not file any Form 8-K during the quarter ended June 14, 1997. 13 SIGNATURES Pursuant to the requirements 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. HOMELAND HOLDING CORPORATION Date: ___________ By: _____________________________________ James A. Demme, Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) Date: ___________ By: _____________________________________ Larry W. Kordisch, Executive Vice President/Finance, Chief Financial Officer and Secretary (Principal Financial Officer) EX-27 2
5 6-MOS JAN-03-1998 JUN-14-1997 6,134 0 8,110 1,480 43,160 58,150 69,966 6,480 160,034 34,448 60,000 0 0 48 48,100 160,034 236,314 236,314 178,481 178,481 57,090 0 3,815 (3,072) 1,721 (4,793) 0 0 0 (4,793) (1.01) (1.01)
EX-99 3 HMLD Reports Second Quarter Results Page 3 July 10, 1997 -MORE- FOR IMMEDIATE RELEASE Homeland Stores, Inc. Contact: James A. Demme Oil Center East Chairman 2601 N.W. Expressway (405) 879-6600 Oklahoma City, Oklahoma 73112 HOMELAND STORES REPORTS 20.4% INCREASE IN SECOND QUARTER EBITDA ALSO ANNOUNCES AGREEMENT TO PURCHASE PRATT DISCOUNT FOODS STORE AT 89TH & SOUTH PENN IN OKLAHOMA CITY Oklahoma City, Oklahoma (July 10, 1997) James A. Demme, Chairman, President and Chief Executive Officer of Homeland Holding Corporation (Nasdaq/NM: HMLD), today announced financial results for the second quarter and first two quarters of 1997. For the second quarter, a 12-week period ended June 14, 1997, sales were $116,264,000 compared with $121,981,000 for the second quarter of 1996, a 12-week period ended June 15, 1996. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 20.4% to $5,403,000 from $4,489,000, excluding nonrecurring financial restructuring costs for the 1996 period. Net income for the latest quarter, excluding amortization of excess reorganization value, was $829,000, or $0.18 per share. For the first two quarters of 1997, sales were $236,314,000 compared with $246,331,000 for the same period in 1996. Same store sales declined 2.2%. EBITDA increased 33.5% to $11,133,000 from $8,340,000, excluding nonrecurring financial restructuring costs for the 1996 period. Net income, excluding amortization of excess reorganization value, was $2,031,000, or $0.42 per share, for the first twenty-four weeks of 1997. Mr. Demme remarked, "As in the first quarter of 1997, the improvement in Homeland's EBITDA for the second quarter was primarily attributable to cost savings from the reorganization of the Company in August 1996. The growth in EBITDA to 4.7% of sales for the period from 3.7% for the comparable prior-year period was accomplished in spite of a 4.7% decline in sales, which resulted both from having fewer stores in operation during the latest quarter and from a 3.4% decrease in same-store sales. The Company's same store sales performance reflected increased competitive activities, low food price inflation and more stringent eligibility requirements for food stamps." "Looking forward, Homeland will have several grand openings of remodeled stores that will help offset the recent sluggish sales. In addition, the Company has an objective to expand its store base through new store development and acquisitions." "Pursuant to this strategy, we also announced today that Homeland has agreed to purchase the Pratt Discount Foods store located at 89th and South Penn., Oklahoma City, Oklahoma, in a transaction expected to close in about 30 days. Plans are being made to invest $1.7 million to completely remodel the store and expand it by 10,000 square feet. This investment will enable us to increase grocery variety and make a strong commitment to the meat, produce, bakery and deli departments. Through the purchase of this store at 89th & South Penn., we expect to provide our existing and new customers in the area an outstanding store that will offer superior service and value. We also intend to continue having discussions with other potential acquisition candidates." Homeland Stores, Inc. is the leading supermarket chain in Oklahoma, southern Kansas, and the Texas panhandle region, operating a total of 66 stores. The Company operates in four distinct marketplaces: Oklahoma City, Oklahoma; Tulsa, Oklahoma; Amarillo, Texas; and certain rural areas of Oklahoma, Kansas and Texas. HOMELAND HOLDING CORPORATION Unaudited Financial Highlights (In thousands, except per share data)
For the 12 Weeks Ended For the 24 Weeks Ended June 14, June 15, June 14 June 15 1997 1996 1997 1996 Sales $ 116,264 $ 121,981 $ 236,314 $ 246,331 Earnings before interest, taxes, depreciation and amortization $ 5,403 $ 4,489 $ 11,133 $ 8,340 Net (loss) $ (2,535) (1) $ (1,015) (2) $ (4,793) (1) $ (3,358) (2) Net (loss) per share $ (0.53) (1) $ (0.03) (2) $ (1.01) (1) $ (0.10) (2) Weighted average shares outstanding 4,758 32,600 4,758 32,600
(1) Includes amortization of excess reorganization value of $3,364, or $0.71 per share, and $6,824, or $1.43 per share, for the 12 weeks and 24 weeks ended June 14, 1997, respectively. (2) Includes nonrecurring financial restructuring costs of $1,800, or $0.06 per share, and $3,150, or $0.10 per share, for the 12 weeks and 24 weeks ended June 15, 1996, respectively. -END- -----END PRIVACY-ENHANCED MESSAGE-----