SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 31, 1995
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
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Item 5. Other Events
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On January 31, 1995, the Company released its
earnings for the fourth quarter and fiscal year 1994
in the form attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
99.1 Other Exhibits--Earnings Release for
Fourth Quarter and Fiscal Year 1994
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SIGNATURE
---------
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 hereto duly authorized.
THE KROGER CO.
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January 31, 1995 By (Paul W. Heldman)
Paul W. Heldman
Vice President,
Secretary and
General Counsel
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EXHIBIT INDEX
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Exhibit
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99.1 Other Exhibits--Earnings Release for Fourth Quarter
and Fiscal Year 1994
EXHIBIT 99.1
KROGER 4TH QTR OPER NET PER SHARE : 75 CENTS VS 71 CENTS
COMPANY RECORDS SET IN 1994 FOR EARNINGS,
CASH FLOW, AND SALES
CINCINNATI, Ohio, January 31, 1995 --- The Kroger Co. said
today that 1994 fourth quarter operating earnings rose 6.4
percent over 1993 and that the Company's full-year results set
records for earnings, operating cash flow, and sales.
In the fourth quarter, earnings before an extraordinary item
rose to $92.0 million, or 75 cents per share fully diluted,
from $86.5 million, or 71 cents per fully diluted share, in
the prior year, when the Company had one of its strongest
fourth quarter performances. After the extraordinary item for
the early retirement of debt, fourth quarter net earnings
totaled $91.5 million, or 74 cents per share fully diluted,
compared to $82.7 million, or 68 cents per share, fully
diluted, in the 1993 fourth quarter.
Fourth quarter operating cash flow -- pre-tax earnings
before interest, depreciation, LIFO and extraordinary items --
rose 7.4 percent to $291.3 million from $271.2 million in
1993's final quarter. Sales in the fourth quarter increased
3.4 percent to $5.6 billion from $5.4 billion in the 1993
fourth quarter. Food store sales increased 5.9 percent in the
quarter and identical food store sales rose 2.5 percent.
For the year 1994, earnings before an extraordinary item were
a record $268.9 million, or $2.19 per fully diluted share,
compared to $170.8 million, or $1.50 per fully diluted share,
in 1993. After the extraordinary charge for debt retirement,
Kroger's 1994 net earnings totaled $242.2 million, or $1.98
per fully diluted share, versus a loss of $12.2 million in
1993. The prior year loss was after a charge for early debt
retirement and a $159.2 million charge for a change in
accounting.
Full-year operating cash flow rose 9.0 percent to a record
$1.065 billion from $976.8 million in 1993. Sales in 1994
totaled $23.0 billion, also a record and a 2.6 percent
increase over 1993 sales of $22.4 billion. Food store sales
rose 4.9 percent, while identical food store sales were up 2.2
percent for the year.
Kroger Chairman and Chief Executive Officer Joseph A. Pichler
said the Company's record-setting 1994 performance was
attributable to the successful implementation of strategies
that accelerated store development, reduced costs, and
strengthened the Company's competitive position as a value-
oriented merchant.
"Kroger's sales gained momentum as the year progressed and
culminated in an exceptional fourth quarter performance,"
Pichler said. "We benefited from the positive impact of new
technologies and systems that lowered the cost of product,
improved distribution and information efficiencies, and
solidified Kroger's market position by expanding our
combination store base in major markets. These factors,
coupled with very strong sales of Kroger's store brands and a
record performance by the Company's convenience store group,
resulted in a truly gratifying year."
Net interest expense in 1994 declined 16 percent to $327.6
million. For 1995, net interest expense should be
approximately $330 million based upon the current interest
rate environment. Debt at year-end declined approximately
$350 million from 1993 after adjustments for certain
investments.
During 1994, capital expenditures totaled approximately $534
million, an increase of 42 percent over 1993. Kroger expanded
food store square footage by 4.7 percent by completing 82 new
stores, expansions and acquisitions, and 66 remodels. For
1995, Kroger said it expects to increase food store square
footage by approximately 5.5 percent by opening or expanding
approximately 90 stores and completing 65 remodels.
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THE KROGER CO.
SALES AND EARNINGS
4TH QUARTER 4TH QUARTER PERCENT
1994 1993 CHANGE
12/31/94 1/1/94
Sales $ 5,585,833,138 $ 5,402,358,067 3.4
EBITD <F1> $ 291,341,003 $ 271,188,098 7.4
Non-EBITD
charges $ (2,743,321) $ (4,500,000)
LIFO $ (587,674) $ 6,922,316
Interest $ (75,787,777) $ (78,497,246)
Depreciation $ (68,482,730) $ (62,883,827)
Pre-tax earnings
before extraordinary
loss $ 143,739,501 $ 132,229,341
Tax expense $ (51,701,758) $ (45,718,001)
Earnings before
extraordinary
loss $ 92,037,743 $ 86,511,340
Extraordinary
loss <F2> $ (554,505) $ (3,820,151)
Net earnings $ 91,483,238 $ 82,691,189
Primary earnings
per common share:
From operations $0.80 $0.79
From extraordinary
loss <F2> ($0.01) ($0.03)
Primary net earnings
per common share $0.79 $0.76
Fully-diluted earnings
per common share:
From operations $0.75 $0.71
From extraordinary
loss <F2> ($0.01) ($0.03)
Fully-diluted net earnings
per common share $0.74 $0.68
Average number of common shares
used in primary per share
calculation 114,537,156 110,182,912
Average number of common shares
used in fully-diluted per share
calculation 126,456,564 127,477,752
<F1> EBITD represents pre-tax earnings before interest,
depreciation and LIFO as defined in the Company's Bank Credit
Agreement.
<F2> Represents the after-tax loss from the early retirement of
debt.
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4 QUARTERS 4 QUARTERS PERCENT
1994 1993 CHANGE
Sales $ 22,959,121,897 $ 22,384,301,359 2.6
EBITD <F1> $ 1,064,857,957 $ 976,791,604 9.0
Non-EBITD
charges <F2> $ (22,106,956) $ (42,225,000)
LIFO $ (16,087,674) $ 3,172,316
Interest $ (327,550,066) $ (389,991,080)
Depreciation $ (277,750,378) $ (263,809,864)
Pre-tax earnings before
extraordinary
loss $ 421,362,883 $ 283,937,976
Tax expense $ (152,459,937) $ (113,132,952)
Earnings before
extraordinary
loss $ 268,902,946 $ 170,805,024
Extraordinary
loss <F3> $ (26,707,105) $ (23,831,820)
Cumulative effect of change
in accounting $ n/a $ (159,192,961)
Net earnings
(loss) $ 242,195,841 $ (12,219,757)
Primary earnings (loss)
per common share:
From operations $2.37 $1.60
From extraordinary
loss <F3> ($0.24) ($0.22)
From cumulative effect
of change in accounting n/a ($1.49)
Primary net earnings (loss)
per common share $2.13 ($0.11)
Fully-diluted earnings (loss)
per common share:
From operations $2.19 $1.50
From extraordinary
loss <F3> ($0.21) ($0.19)
From cumulative effect
of change in accounting n/a ($1.28)
Fully-diluted net earnings
per common share $1.98 $0.03
Average number of common shares used
in primary per share calculation
113,537,369 106,710,872
Average number of common shares used
in fully-diluted per share calculation
129,714,182 124,293,314
<F1> EBITD represents pre-tax earnings before interest,
depreciation and LIFO as defined in the Company's Bank Credit
Agreement.
<F2> Represents $17.7 million and $19.5 million for additional
charge from the adoption of FASB 106 in 1994 and 1993,
respectively, a $4.4 million contribution to the Kroger
Charitable Trust in 1994 and $22.7 million from the withdrawal
from San Antonio in 1993, all of which are excluded from EBITD
as defined by the Company's Bank Credit Agreement.
<F3> Represents the after-tax loss from the early retirement of
debt.
