RICHMOND, Va - Richfood Holdings, Inc. announced record second quarter net earnings of $15.0 million, or $0.32 per share, for the twelve-week period ended October 18, 1997, a 19.4% increase over net earnings of $12.6 million, or $0.27 per share, for the prior year quarter. Net earnings for the twenty-four week period ended October 18, 1997, were $29.5 million, or $0.62 per share, an 18.0% increase over net earnings of $25.0 million, or $0.53, for the prior year period.
Sales for the second quarter of fiscal 1998 were $719.5 million, a 2.7% decrease from sales of $739.6 million for the second quarter of fiscal 1997. The decrease in sales was primarily attributable to the previously announced expiration of a frozen foods supply agreement in June 1997. Excluding the effect of the lost frozen food sales in the second quarter of fiscal 1997, sales for the second quarter of fiscal 1998 would have increased $18.6 million, or 2.7%. Fiscal 1998 year-to-date sales were $1.46 billion versus sales of $1.49 billion for the prior year period. Fiscal 1997 year-to-date sales would have been $1.43 billion excluding the effect of the expired frozen foods supply agreement.
John E. Stokely, President and Chief Executive Officer, commented, "We are delighted to report another quarter of outstanding performance and record net earnings at Richfood. The ability of Richfood's management team to focus on efficient, low-cost operations while providing excellent customer service continues to be the primary driver behind the Company's results. While the wholesale food industry currently presents many challenges," Stokely added, "Richfood is exceptionally well-positioned. With Richfood's low-cost operating model and strong financial position, our management looks forward enthusiastically to the second half and, with it, the opportunity to capitalize on a changing environment."
On September 9, 1997, Richfood announced that it had reached an agreement in principle to acquire substantially all of the assets of Farm Fresh, Inc., a Norfolk, Virginia-based supermarket chain, for approximately $220 million cash plus the assumption of certain capital leases and 1.5 million warrants for the purchase of shares of Richfood common stock. The transaction, which is expected to be effected through a prepackaged voluntary reorganization of Farm Fresh under Chapter 11 of the U.S Bankruptcy Code, is expected to close in early 1998. On October 6, 1997, Richfood announced the appointment of Ronald E. Dennis, who will assume direct responsibility for the Farm Fresh operation as its President upon completion of the transaction.
Richfood Holdings, Inc., headquartered in Richmond, Virginia, is the largest wholesale food distributor in the Mid-Atlantic operating region. The Company provides a full range of grocery, dairy, frozen food, produce, meat and non-food items to chain and independent retailers throughout the region. The Company also operates a chain of sixteen retail grocery stores in the metropolitan Baltimore area.
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