Newspaper article THE JOURNAL RECORD
Charge Undercuts Fleming Earnings
Fleming Cos. second quarter net earnings fell 83.5 percent to $1.5 million, or 4 cents per share, due to a $13.3 million extraordinary charge retiring debt in the food distributor's $1.35 billion recapitalization program.
The Oklahoma City company had profits of $9.4 million, or 25 cents per share, for the same period in 1996.
Most of the charge represents a noncash writeoff of unamortized financing costs for debt prepaid as part of the recapitalization program, officials said Wednesday. Before the charge, earnings for the quarter ended July 12 increased 57.8 percent to $14.88 million. Fleming said adjusted earnings increased 17 percent in the second quarter to $13.4 million, or 35 cents per share, from $11.5 million, or 30 cents per share, in 1996. Net sales dropped 5.1 percent to $3.6 billion from $3.7 billion. For the first six months of 1997, Fleming net earnings fell 55.6 percent to $6.8 million, or 18 cents per share, from $15.3 million, or 41 cents per share, in 1996. Net sales slipped 6.8 percent to $8.3 billion from $8.9 billion. Fleming said adjusted earnings for the first half of `97 increased 36 percent to $28.3 million, or 75 cents per share, from $20.9 million, or 55 cents per share, the prior year. While Chairman and CEO Robert E. Stauth attributed the quarterly adjusted earnings hike to retail segment streamlining, he said Fleming is not overlooking its sales decline. "We are addressing our sales challenge and confirmed several new customers in the first half of 1997," he noted. As examples, Stauth pointed to additional military and Super Kmart Center business as well as it supplying the Bi-Rite Group in Cleveland. Fleming is hoping to rebound from a particularly troublesome recent history. It took a $20 million hit in settlement fees last year in connection with a lawsuit brought by David's Supermarkets, a Florida grocer that alleged overcharging. Fleming is also currently defending nine class action and shareholder derivative suits related to the disclosure of the David's litigation to its shareholders. …