<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended April 1, 1995
Commission File Number: 0-1532
MARSH SUPERMARKETS, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-0918179
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
9800 CROSSPOINT BOULEVARD
INDIANAPOLIS, INDIANA 46256-3350
(Address of principal executive offices) (Zip Code)
317-594-2100
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Class A Common Stock
Class B Common Stock
7% Convertible Subordinated Debentures, due 2003
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, and (2) has been subject to such filing requirements for the
past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained to the best of the Registrant's knowledge, in the definitive
proxy statement incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K: ___
Aggregate market value of Class A Common Stock held by
non-affiliates of the Registrant as of June 5, 1995: $35,774,626. This
calculation assumes all shares of Common Stock beneficially held by
officers and members of the Board of Directors of the Registrant are
owned by "affiliates", a status which each of the officers and directors
individually disclaims.
At June 5, 1995, there were 3,879,123 shares of Class A Common Stock
and 4,588,415 shares of Class B Common Stock outstanding.
Portions of the annual shareholders report for the year ended April
1, 1995 are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual shareholders' meeting
to be held August 1, 1995, are incorporated by reference into Part III.
<PAGE> 2
The undersigned registrant hereby amends the following statements,
exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended April 1, 1995:
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Exhibit 13 - Annual Report to Shareholders (only portions
specifically incorporated by reference are
included herein)
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
MARSH SUPERMARKETS, INC.
May 31, 1996 By: /s/ Don E. Marsh
------------------------------------
Don E. Marsh, Chairman of the
Board, President and Chief Executive
Officer
2
<PAGE> 1
EXHIBIT 13
Portions of 1995 Annual Report to
Shareholders Incorporated by Reference
17
<PAGE> 2
SELECTED FINANCIAL DATA (in thousands, except per share amounts)
<TABLE>
<CAPTION>
April 1, April 2, March 27, March 28, March 30,
As of and for the year ended 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales and other revenues . . . . . . . . . $1,303,261 $1,263,191 $1,170,398 $1,131,326 $1,092,823
Income before income taxes and changes
in accounting principles . . . . . . . . 12,790 13,517 15,569 15,268 20,005
Income before cumulative effect of
changes in accounting principles . . . . 8,573 8,526 9,828 9,725 12,793
Cumulative effect of accounting changes . . - 1,941 - - -
---------- ---------- ---------- ---------- ----------
Net income . . . . . . . . . . . . . . . . $ 8,573 $ 10,467 $ 9,828 $ 9,725 $ 12,793
========== ========== ========== ========== ==========
Income per share before cumulative
effect of changes in accounting
principles - fully diluted (a) . . . . . $ .98 $ .97 $ 1.23 $ 1.23 $ 1.62
Net income per share - fully diluted (a). . $ .98 $ 1.17 $ 1.23 $ 1.23 $ 1.62
Dividends declared per share . . . . . . . $ .44 $ .44 $ .44 $ .43 $ .39
Total assets . . . . . . . . . . . . . . . $ 378,573 $ 375,349 $ 352,511 $ 305,031 $ 273,324
Long-term liabilities . . . . . . . . . . . 143,102 148,818 155,444 128,029 110,328
</TABLE>
(a) Earnings per share for 1995, 1994 and 1993 reflect dilutive options and
convertible debentures issued in March 1993.
Earnings per share for 1992 and 1991 reflect only dilutive options.
18
<PAGE> 3
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
------------------------------------- -------------------------------------
1995 1994
Fourth Third Second First Fourth Third Second First
------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales and other revenues . . . . . . . . . $296,494 $307,345 $396,933 $302,489 $312,044 $291,191 $375,189 $284,767
Gross profit. . . . . . . . . . . . . . . . 72,711 72,552 95,364 72,597 76,446 70,258 91,904 69,243
Selling, general and
administrative . . . . . . . . . . . . . 62,619 62,822 81,859 61,390 65,380 60,745 79,106 57,561
Depreciation and amortization . . . . . . . 4,327 4,287 5,597 4,265 5,038 4,093 5,267 3,808
-------- -------- -------- -------- -------- -------- -------- --------
Operating profit . . . . . . . . . . . . . 5,765 5,443 7,908 6,942 6,028 5,420 7,531 7,874
Interest and debt expense
amortization . . . . . . . . . . . . . . 3,130 2,971 4,023 3,144 3,392 2,982 4,016 2,946
-------- -------- -------- -------- -------- -------- -------- --------
Income before income tax provision
and cumulative effect of changes in
accounting principles . . . . . . . . . . 2,635 2,472 3,885 3,798 2,636 2,438 3,515 4,928
Income taxes . . . . . . . . . . . . . . . 578 722 1,499 1,418 916 870 1,382 1,823
-------- -------- -------- -------- -------- -------- -------- --------
Income before cumulative effect of
changes in accounting
principles . . . . . . . . . . . . . . . 2,057 1,750 2,386 2,380 1,720 1,568 2,133 3,105
Cumulative effect of changes in
accounting principles . . . . . . . . . - - - - - - - 1,941
-------- -------- -------- -------- -------- -------- -------- --------
Net income . . . . . . . . . . . . . . . . $ 2,057 $ 1,750 $ 2,386 $ 2,380 $ 1,720 $ 1,568 $ 2,133 $ 5,046
======== ======== ======== ======== ======== ======== ======== ========
EARNINGS PER SHARE -
Per primary share outstanding: . . . . . .
Before cumulative effect of
accounting changes . . . . . . . . . $ .24 $ .21 $ .28 $ .28 $ .20 $ .19 $ .25 $ .37
Cumulative accounting changes . . . . . - - - - - - - .23
-------- -------- -------- -------- -------- -------- -------- --------
Net income . . . . . . . . . . . . . . . $ .24 $ .21 $ .28 $ .28 $ .20 $ .19 $ .25 $ .60
======== ======== ======== ======== ======== ======== ======== ========
Assuming full dilution:
Before cumulative effect of
accounting changes . . . . . . . . . $ .24 $ .20 $ .27 $ .27 $ .20 $ .18 $ .25 $ .34
Cumulative accounting changes . . . . . - - - - - - - .20
-------- -------- -------- -------- -------- -------- -------- --------
Net income . . . . . . . . . . . . . . . $ .24 $ .20 $ .27 $ .27 $ .20 $ .18 $ .25 $ .54
======== ======== ======== ======== ======== ======== ======== ========
COMMON STOCK PRICES:
Class A - High . . . . . . . . . . $ 12.00 $ 12.00 $ 12.00 $ 11.00 $ 12.25 $ 12.75 $ 13.00 $ 14.75
Low . . . . . . . . . . . 9.75 10.00 10.25 9.50 9.50 9.50 11.50 12.50
Class B - High . . . . . . . . . . 10.25 10.75 11.00 10.50 11.25 12.50 12.50 13.25
Low . . . . . . . . . . . 9.13 9.00 9.25 9.00 9.50 9.50 11.00 11.75
CASH DIVIDEND: Class A . . . . . . . . . $ .11 $ .11 $ .11 $ .11 $ .11 $ .11 $ .11 $ .11
Class B . . . . . . . . . .11 .11 .11 .11 .11 .11 .11 .11
</TABLE>
Cash dividends have been paid on the common stock during each quarter of the
past 35 years.
- -------------------------------------------------------------------------------
Quarterly earnings per share are based on weighted average shares outstanding
and dilutive effect of options and convertible securities outstanding for the
quarter. The sum of the quarters may not equal the full year earnings per
share amount.
The second quarter is 16 weeks. The first, third and fourth quarters are 12
weeks, except the 1994 fourth quarter, which was 13 weeks.
Unusual or infrequently occurring items recognized in net income in the
quarterly results are as follows: Fourth quarter 1995: Income per fully
diluted share increased $.07 from sales of surplus real estate and $.04 from
a change in the effective income tax rate due to charitable donations and
research credits.
First quarter 1994: Includes changes in accounting methods related to
adopting FASB Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions", and FASB Statement No. 109,
"Accounting for Income Taxes". The cumulative effect of the accounting
changes was a $1.9 million increase in net income, or $.20 per fully
diluted share.
Fourth quarter 1994: Adjustments to various loss reserves decreased net
income $.05 per fully diluted share.
19
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth certain income statement components, expressed
as a percentage of sales and other revenues, and the year-to-year percentage
changes in such components:
<TABLE>
<CAPTION>
Percentage of Revenues
Year Ended Percentage Change
------------------------------- ---------------------
April 1, April 2, March 27, 1995 1994
1995 1994 1993 vs. 1994 vs. 1993
-------- ------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Sales and other revenues . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 3.2% 7.9%
Gross profit . . . . . . . . . . . . . . . . . . . . . . 24.0 24.4 23.8 1.7 10.5
Selling, general and administrative . . . . . . . . . . . 20.6 20.8 20.2 2.2 11.2
Depreciation and amortization . . . . . . . . . . . . . . 1.4 1.4 1.4 1.5 10.3
Operating profit . . . . . . . . . . . . . . . . . . . . 2.0 2.1 2.2 ( 3.0) 3.7
Interest and debt amortization expense . . . . . . . . . 1.0 1.1 0.9 ( 0.5) 29.2
Income before income taxes and cumulative effect of
changes in accounting principles . . . . . . . . . . 1.0 1.1 1.3 ( 5.4) (13.2)
Income taxes . . . . . . . . . . . . . . . . . . . . . . 0.3 0.4 0.5 (15.5) (13.1)
Income before cumulative effect of changes in
accounting principles . . . . . . . . . . . . . . . . 0.7 0.7 0.8 0.6 (13.2)
Cumulative effect of changes in accounting principles . . - 0.2 - - -
Net income . . . . . . . . . . . . . . . . . . . . . . .
0.7 0.8 0.8 (18.1) 6.5
======== ======== ========
</TABLE>
SALES AND OTHER REVENUES
Consolidated sales and other revenues increased $40.1 million, or 3.2% in 1995,
a 52 week year, from 1994, a 53 week year. Approximately $23.6 million, or 2%,
of the 1994 revenue is attributable to the additional week. Supermarket,
convenience retail (Village Pantry) and convenience wholesale (CSDC) sales
accounted for 72%, 13%, and 15%, respectively, of consolidated revenues.
Supermarket Division retail sales increased 1.4%, accounting for approximately
$12.8 million of the $40.1 million increase in 1995 consolidated revenues. This
increase was due principally to new stores opened in 1994. CSDC sales to
unaffiliated customers increased approximately $13.0 million, or 7.3%, largely
due to a 3.8% increase in customers. Village Pantry retail sales increased
$10.1 million, or 6.5%, largely due to growth in comparable stores.
Excluding fuel sales, retail sales in comparable stores (includes replacement
stores and format conversions and ignores the 53rd week of 1994) improved 0.7%
in 1995 from 1994. This compared to a 1994 increase of 0.4%. From 1992 through
the second quarter of 1994, a weak economy adversely affected sales. In the
second half of 1994, moderate price inflation in food products combined with a
strengthening economy to increase revenue. These favorable impacts carried over
to 1995; however, new conventional supermarkets, discount stores, and wholesale
clubs opened by competitors partially offset the benefit of a strengthening
economy. The comparable store sales trend began to improve after reaching a
negative 3.2% in the second quarter of 1993. Compared to the same quarter of
1994, the fourth quarter of 1995 decreased 1.0%. The fourth quarter of 1994
benefited from Easter sales.
In 1994 the Supermarket, CSDC and Village Pantry divisions increased sales,
compared to 1993. The increases were $57.9 million or 6.8%, $25.9 million or
16.8%, and $6.9 million or 4.7%, respectively.
The Company anticipates continued improvement in the comparable store sales
trend. Recent economic improvement, the return of moderate food price
inflation, and the maturing of recently constructed stores should offset the
impact of increased competitive activity in 1996.
GROSS PROFIT
Gross profit is net of warehousing, transportation and promotional expenses.
Expressed as a percentage of revenue, consolidated gross profit was 24.0% in
1995. This was a 0.4% decline from 24.4% in 1994. From 1993 to 1994, gross
profit improved 0.6%, from 23.8% to 24.4%. The 1995 decrease was primarily
attributable to lower margins in the Village Pantry and CSDC divisions. As a
percentage of revenue, CSDC gross margin was impacted by pricing and
promotional reductions implemented by major cigarette manufacturers during the
second and third quarters of 1994. Lower Village Pantry gross profit resulted
from a disproportionate increase in fuel sales, which have a lower gross margin
than food products. Supermarket gross profit was slightly higher, as compared
to 1994.
In 1994, gross margin improvement was principally due to increased supermarket
retail margins. The improvement resulted from increased emphasis on perishable
and prepared foods that traditionally yield higher gross margins, expanded
product lines, improved merchandising mixes in new and enlarged stores, and
increased trade discounts from product procurement. Village Pantry and CSDC
margins also improved in 1994.
20
<PAGE> 5
LIFO inventory adjustments decreased gross profit by $100 thousand in 1995,
compared to an increase of $1.3 million in 1994, and a decrease of $135
thousand in 1993.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Expressed as a percentage of revenues, selling, general and administrative
expenses decreased 0.2%, from 20.8% in 1994, to 20.6% in 1995. This compared to
a 0.6% of revenues increase in 1994. Reductions in corporate overhead of $5.1
million resulted from the cost reduction plan announced in the fourth quarter
of 1994. Savings from the cost reduction plan offset an $11.0 million increase
in selling expenses, primarily attributable to stores opened during 1994 and
1995.
In 1995, selling expenses benefited from a decrease in direct wages in
comparable stores. However, healthcare and pension costs increased $1.9
million, or 18.6%. Advertising expense increased by $1.0 million, or 7.1%,
primarily in response to competition in the Indianapolis market. Other
occupancy expenses increased due to stores opened during 1994.
In 1994, the Company substantially increased advertising in anticipation of a
major new competitor who entered the Indianapolis market in the first quarter
of fiscal 1995. Also, in the fourth quarter of 1994, the Company announced the
previously mentioned cost reduction plan. The plan encompassed a reduction of
approximately 70 non-retail positions and changes to the Company automobile
program. The staff reductions resulted from a realignment of corporate
headquarters responsibilities and improved warehousing and transportation
operating efficiencies. The warehouse and transportation efficiencies resulted
from redesigning the physical layout of the Company's dry grocery distribution
center and the removal of an obsolete mechanized system. These changes reduced
labor and maintenance expense and provide more efficient space utilization.
Additional savings resulted from successfully implementing new warehouse labor
standards in the Company's product distribution centers and the linkage of the
standards to employee incentive programs. The 1994 fourth quarter pre-tax
charge for severance benefits and other expenses related to the cost reduction
plan was approximately $700 thousand.
DEPRECIATION AND AMORTIZATION EXPENSE
Depreciation and amortization, expressed as a percentage of revenue, remained
constant at 1.4% for 1995, 1994 and 1993. Depreciation and amortization
increased over the last three years due primarily to opening new stores.
OPERATING PROFIT
As a percentage of revenues, operating profit declined slightly to 2.0% in
1995, from 2.1% in 1994 and 2.2% in 1993. Improvements in administrative
expense percentages were offset by gross profit and increased selling expense.
INTEREST EXPENSE
As a result of principal reductions made during the year, interest expense
decreased $68 thousand, or 0.5%, in 1995 compared to 1994. Interest expense
increased $3.0 million, or 29.3% in 1994 compared to 1993. The increase
resulted from the Company's 1993 third quarter decision to replace $40 million
of long-term, floating rate bank debt with $50 million of unsecured fixed rate
senior notes. The new financing had a weighted average interest rate of 8.4%
compared to a 4.2% average rate on the floating rate bank debt. Additionally,
during the fourth quarter of 1993, the Company issued $20 million of 7%
convertible debentures.
INCOME TAXES
The effective income tax rate was 33.0% in 1995 and 36.9% in 1994 and 1993. The
1995 effective rate decrease resulted from increased charitable contributions,
Targeted Jobs Tax Credits and Research and Experimental Credits. During 1994,
increased charitable contributions largely negated a retroactive federal rate
increase. As discussed in Note G to the consolidated financial statements, the
Company adopted FASB Statement No. 109, "Accounting for Income Taxes," in the
first quarter of 1994.
CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES
The Company provides certain health care benefits to early retirees. In the
first quarter of 1994, the Company adopted FASB Statement No. 106, "Employers
Accounting for Postretirement Benefits Other than Pensions". This Statement
requires the accrual of the expected cost of such benefits over the employees'
years of service. Previously, costs associated with these benefits were
expensed when paid (amounts were not material). The Company recognized a $1.7
million (net of tax benefit) accrued benefit obligation upon adoption. Future
expense is expected to be immaterial and approximate the expense previously
recorded on the "pay as you go" basis.
Also, in the first quarter of 1994, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes", which requires the Company to utilize the
liability method of accounting for income taxes. The cumulative effect of this
change increased net income by $3.6 million. See Note G to the consolidated
financial statements for a detailed analysis of the Company's income tax
accounts.
The net effect of the above changes increased 1994 earnings by $1.9 million, or
$.20 per fully diluted share.
NET INCOME
Net income, before the cumulative effect of changes in accounting principles,
of $8.6 million compares to $8.5 million in the prior year. Fiscal 1995
benefited from the sale of excess land which partly offset earnings in fiscal
1994's extra week and a favorable LIFO adjustment. Net income exceeded last
year for the last three consecutive quarters. Supermarket Division and Village
Pantry earnings exceeded the prior year while CSDC and LoBill earnings were
lower.
Throughout 1993 and early 1994, a weak economy and increased competition
negatively impacted earnings. In 1994, a $1.0 million increase in operating
profit partially offset a $3.0 million increase in interest expense. In 1993,
gains from sales of property and equipment, approximating $450 thousand,
partially offset adverse economic and competitive conditions.
In 1994, improved Village Pantry and CSDC earnings offset lower Supermarket
earnings, primarily attributable to expenses associated with opening a
historically high number of new stores
21
<PAGE> 6
compared to recent years. In 1993, improved Village Pantry earnings offset
lower earnings from the Supermarket and CSDC divisions.
OTHER
In the retail food industry, changes in product cost generally result in higher
or lower retail prices with gross margin percentages remaining relatively
stable. Periods of very moderate food price inflation or price deflation tend
to affect operating results adversely since revenues are reduced while
inflationary increases continue in certain expense categories. Through the use
of the LIFO inventory costing method, current costs are reflected in the cost
of merchandise sold.
CAPITAL EXPENDITURES
Capital expenditures and major capital projects completed during the last three
years consisted of:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Capital expenditures (millions) . . . . . $30.6 $44.3 $26.2
===== ===== =====
Supermarkets
New/acquired stores . . . . . . . 1 6 4
Closed stores . . . . . . . . . . 0 3 0
Major remodels/expansions . . . . 0 2 1
Convenience stores
New/acquired stores . . . . . . . 5 5 3
Closed stores . . . . . . . . . . 1 1 2
</TABLE>
All years include land acquisitions for future store development.
During 1995, the Company constructed the following stores:
<TABLE>
<CAPTION>
SQUARE
TYPE / CATEGORY FEET LOCATION OPENED
--------------- ------ -------- ------
<S> <C> <C> <C> <C>
Superstore New 80,430 Fishers, IN Nov. 11, 1994
Convenience New 4,526 Indianapolis, IN Aug. 18, 1994
Convenience New 4,526 Plainfield, IN Sept. 1, 1994
Convenience New 4,465 Brownsburg, IN Nov. 3, 1994
Convenience New 4,465 Kokomo, IN Dec. 15, 1994
Convenience Replace 5,041 Indianapolis, IN Jan. 6, 1995
</TABLE>
The projects listed above (net of stores closed) increased sales area square
footage 3.0% in 1995. Supermarkets and Village Pantry increased selling area
square footage 2.8% and 4.2%, respectively. In addition to these projects, the
Company purchased the assets of Crystal Catering and its affiliated companies
for $4.7 million. An additional $900 thousand of purchase price is contingent
upon the cumulative performance of the catering division for 1996, 1997, and
1998. Crystal was the largest caterer in Indianapolis.
During 1994, the Company completed the following:
- - Opened two new Marsh supermarkets;
- - Replaced three Marsh supermarkets;
- - Constructed one new LoBill supermarket;
- - Constructed four new Village Pantry stores;
- - Replaced one Village Pantry store;
- - Expanded an existing Marsh supermarket; and
- - Converted a Marsh supermarket to the LoBill format.
These 1994 projects increased total sales area square footage 9.7%.
For 1996, the Company plans to open three new Marsh supermarkets (one is a
replacement store), convert three Marsh supermarkets to the LoBill format, open
five new convenience stores, and acquire several sites for future development.
The cost of these projects and other routine capital commitments is estimated
to be $35 million. Of this amount, $10 million will be funded through equipment
leasing, one supermarket will be leased, and the Company believes it can
finance the balance of this development program with current cash balances and
internally generated funds. The Company anticipates completion of most of these
projects by December 1995.
The Company's plans with respect to store construction, expansion, conversion
and remodeling may be revised in light of changing conditions, such as
competitive influences, its ability to successfully negotiate site acquisitions
or leases, zoning limitations, and other governmental regulations. The timing
of projects is subject to normal construction and other delays. It is possible
projects described above may not commence, others may be added, and a portion
of planned expenditures with respect to projects commenced during the current
fiscal year may carry over to the subsequent fiscal year.
In May 1995, the Company purchased the assets of Martz & Associates Food
Services, Inc., an Indianapolis based vending and cafeteria food services
company, for $1.5 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements are traditionally financed through
internally generated funds, long-term borrowings and lease financings,
including capital and operating leases; more-over, it anticipates continued
access to such financing sources.
The $8.7 million decrease in cash from April 2, 1994 to April 1, 1995, is
largely a function of capital expenditures, as previously discussed.
Of the total long-term debt and capital lease obligations at April 1, 1995, 98%
are at fixed rates of interest averaging 8.9%, while 2% are at fluctuating
rates of interest averaging 6.7%.
Bank revolving credit agreements provide $35 million of financing. Commitments
for short-term bank borrowings provide an additional $15 million. At April 1,
1995, $7 million was outstanding on a short-term bank borrowing.
The Company's senior note agreements prohibit additional long-term borrowings
if the Company's total long-term liabilities, including capital lease
obligations, would exceed 60% of the Company's consolidated net tangible
assets. Under the most restrictive of these borrowing limitations, additional
long-term borrowings are limited to approximately $23 million as of April 1,
1995. The senior note agreements also prohibit the Company from entering into
any operating leases having an original term greater than three years, unless
consolidated income available for fixed charges, as defined in the agreements,
exceeds 150% of fixed charges in three of the four most recently completed
fiscal years. As of April 1, 1995, consolidated income available for fixed
charges exceeded 150% of fixed charges in two of the four most recently
completed fiscal years. Accordingly, in 1996, the Company will not be able to
enter into any lease with a term in excess of three years.
22
<PAGE> 7
REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING
The management of Marsh Supermarkets, Inc. is responsible for the
preparation and integrity of the consolidated financial statements included in
this annual report. The financial statements were prepared in accordance with
generally accepted accounting principles and necessarily include some amounts
based on management's best estimates and judgment. All financial information
appearing in this annual report is consistent with that in the financial
statements.
The Company maintains a system of internal controls designed to provide
reasonable assurance, on a cost-effective basis, that assets are safeguarded
and transactions are properly authorized and recorded accurately in the
financial records. The Company believes its control system is enhanced by its
long-standing emphasis on conducting business in accordance with the highest
standards of conduct and ethics.
Independent auditors, Ernst & Young LLP, have audited the accompanying
financial statements and their report is included herein. Their audits,
conducted in accordance with generally accepted auditing standards, included
review and evaluation of selected internal accounting controls for purposes of
designing their audit tests.
The Audit Committee of the Board of Directors meets periodically with the
independent auditors to discuss the scope and results of their audit work,
their assessment of internal controls, and the quality of financial reporting.
The independent auditors are engaged by the Board of Directors, upon
recommendation of the Audit Committee.
<TABLE>
<S> <C> <C>
/s/ Don E. Marsh /s/ Douglas Dougherty /s/ Michael D. Castleberry
- ----------------------- ----------------------- --------------------------
Don E. Marsh Douglas Dougherty Michael D. Castleberry
Chairman of the Board, Vice President, Assistant Treasurer and
President and Chief Financial Officer Director of Accounting
Chief Executive Officer and Treasurer
</TABLE>
_______________________________________________________________________________
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of Marsh Supermarkets, Inc.
We have audited the accompanying consolidated balance sheets of Marsh
Supermarkets, Inc. and subsidiaries as of April 1, 1995 and April 2, 1994, and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for each of the three years in the period ended April 1, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Marsh
Supermarkets, Inc. and subsidiaries at April 1, 1995 and April 2, 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended April 1, 1995, in conformity with generally
accepted accounting principles.
As discussed in Note A to the consolidated financial statements, in 1994
the Company changed its methods of accounting for postretirement health benefits
and income taxes.
/s/ Ernst & Young LLP
- ---------------------
Ernst & Young LLP
Indianapolis, Indiana
May 19, 1995
23
<PAGE> 8
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED April 1, 1995 April 2, 1994 March 27, 1993
<S> <C> <C> <C>
Sales and other revenues . . . . . . . . . . . . . . $1,303,261 $1,263,191 $1,170,398
Cost of merchandise sold, including warehousing
and transportation . . . . . . . . . . . . . . . 990,037 955,340 891,764
--------- ---------- ----------
Gross profit . . . . . . . . . . . . . . . . . . . . 313,224 307,851 278,634
Selling, general and administrative . . . . . . . . . 268,690 262,792 236,244
Depreciation and amortization . . . . . . . . . . . . 18,476 18,206 16,503
--------- ---------- ----------
Operating profit . . . . . . . . . . . . . . . . . . 26,058 26,853 25,887
Interest and debt expense amortization - Note C . . . 13,268 13,336 10,318
--------- ---------- ----------
Income before income taxes and cumulative effect of
changes in accounting principles . . . . . . . . 12,790 13,517 15,569
Income taxes - Note G . . . . . . . . . . . . . . . . 4,217 4,991 5,741
--------- ---------- ----------
Income before cumulative effect of changes in
accounting principles . . . . . . . . . . . . . . 8,573 8,526 9,828
Cumulative effect of changes in accounting principles
(net of tax benefits) - Notes F and G . . . . . - 1,941 -
--------- ---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . $ 8,573 $ 10,467 $ 9,828
========= ========== ==========
EARNINGS PER SHARE:
Primary
- -------
Before cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . $ 1.02 $ 1.01 $ 1.24
Cumulative effect of accounting changes . . . . . . . - .23 -
--------- ---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . $ 1.02 $ 1.24 $ 1.24
========= ========== ==========
Fully diluted
- -------------
Before cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . $ .98 $ .97 $ 1.23
Cumulative effect of accounting changes . . . . . . . - .20 -
--------- ---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . $ .98 $ 1.17 $ 1.23
========= ========== ==========
Dividends per share . . . . . . . . . . . . . . . . . $ .44 $ .44 $ .44
========= ========== ==========
- --------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
</TABLE>
24
<PAGE> 9
CONSOLIDATED BALANCE SHEETS (in thousands)
<TABLE>
<CAPTION>
April 1, 1995 April 2,1994
------------- ------------
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash and equivalents . . . . . . . . . . . . . . . . . . $ 15,366 $ 24,112
Accounts receivable, less allowances of $893 in
1995, and $859 in 1994 . . . . . . . . . . . . . . . 18,186 16,247
Inventories - Note B . . . . . . . . . . . . . . . . . . 83,284 87,806
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 4,694 5,159
Recoverable income taxes . . . . . . . . . . . . . . . . 504 102
Deferred income taxes - Note G . . . . . . . . . . . . . 3,810 2,399
--------- ---------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . 125,844 135,825
Property and Equipment - Note C
Land . . . . . . . . . . . . . . . . . . . . . . . . . . 41,027 38,231
Buildings . . . . . . . . . . . . . . . . . . . . . . . 121,589 112,792
Fixtures and equipment . . . . . . . . . . . . . . . . . 100,739 100,287
Leasehold improvements . . . . . . . . . . . . . . . . . 46,832 45,937
Construction in progress . . . . . . . . . . . . . . . . 3,604 2,295
Property under capital leases . . . . . . . . . . . . . 17,681 18,350
--------- ---------
331,472 317,892
Allowances for depreciation and amortization . . . . . . 107,103 96,215
--------- ---------
TOTAL PROPERTY AND EQUIPMENT . . . . . . . . . . . 224,369 221,677
Other assets . . . . . . . . . . . . . . . . . . . . . . . 28,360 17,847
--------- ---------
$ 378,573 $ 375,349
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Notes payable to banks . . . . . . . . . . . . . . . . . $ 7,000 $ 4,000
Accounts payable . . . . . . . . . . . . . . . . . . . . 48,871 50,370
Employee compensation and other liabilities . . . . . . 11,036 9,634
State and local taxes . . . . . . . . . . . . . . . . . 9,959 10,128
Other accounts payable and accrued expenses . . . . . . 16,779 15,068
Dividends payable . . . . . . . . . . . . . . . . . . . 926 929
Current maturities of long-term liabilities . . . . . . 7,142 7,246
--------- ---------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . 101,713 97,375
Long-term Liabilities
Long-term debt - Note C . . . . . . . . . . . . . . . . 133,939 138,484
Capital lease obligations - Note D . . . . . . . . . . . 9,163 10,334
--------- ---------
TOTAL LONG-TERM LIABILITIES . . . . . . . . . . . . 143,102 148,818
Deferred Items
Income taxes - Note G . . . . . . . . . . . . . . . . . 12,531 12,583
Other . . . . . . . . . . . . . . . . . . . . . . . . . 6,913 6,779
--------- ---------
TOTAL DEFERRED ITEMS . . . . . . . . . . . . . . . 19,444 19,362
Shareholders' Equity - Notes C and H
Series A Junior Participating Cumulative Preferred stock:
Authorized: 5,000,000 shares; Issued: None
Class A Common Stock, no par value:
Authorized: 15,000,000 shares; Issued: 4,695,253 . . 8,552 8,552
Class B Common Stock, no par value:
Authorized: 15,000,000 shares; Issued: 5,265,158 . . 15,974 15,461
Retained earnings . . . . . . . . . . . . . . . . . . . 97,078 92,204
Cost of Common Stock in treasury
Class A: 1995 - 817,530; 1994 - 762,655 shares . . . ( 3,677) ( 3,058)
Class B: 1995 - 728,494; 1994 - 755,754 shares . . . ( 3,301) ( 3,012)
Notes receivable-stock options . . . . . . . . . . . . . ( 312) ( 353)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . . . . 114,314 109,794
--------- ---------
$ 378,573 $ 375,349
========= =========
- ---------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
</TABLE>
25
<PAGE> 10
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Class A Class B Cost of
Common Common Retained Stock in
Stock Stock Earnings Treasury Other Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 28, 1992 . . . . . . . . . . . . . $ 8,346 $ 8,383 $79,127 $( 6,415) $( 857) $ 88,584
Net income . . . . . . . . . . . . . . . . . . . 9,828 9,828
Cash dividends declared . . . . . . . . . . . . . (3,504) ( 3,504)
Public offering of 500,000 shares . . . . . . . . 6,016 6,016
Exercise of stock options . . . . . . . . . . . . 48 34 76 158
Amortization of deferred cost - employee
stock plan . . . . . . . . . . . . . . . . . . 409 409
Other . . . . . . . . . . . . . . . . . . . . . . 54 ( 6) 48
-------- ------- ------- -------- -------- --------
Balance at March 27, 1993 8,394 14,487 85,451 ( 6,345) ( 448) 101,539
Net income . . . . . . . . . . . . . . . . . . . 10,467 10,467
Cash dividends declared . . . . . . . . . . . . . ( 3,714) ( 3,714)
Public offering of 69,900 shares. . . . . . . . . 837 837
Exercise of stock options . . . . . . . . . . . . 158 137 275 570
Notes receivable - stock options. . . . . . . . . ( 353) ( 353)
Amortization of deferred cost - employee. . . . .
stock plan. . . . . . . . . . . . . . . . . . . 448 448
-------- ------- ------- -------- -------- --------
Balance at April 2, 1994 . . . . . . . . . . . . . 8,552 15,461 92,204 ( 6,070) ( 353) 109,794
Net income . . . . . . . . . . . . . . . . . . . 8,573 8,573
Cash dividends declared . . . . . . . . . . . . . ( 3,699) ( 3,699)
Issuance of shares - Crystal Catering
acquisition . . . . . . . . . . . . . . . . . . 513 415 928
Repurchase of 125,425 shares. . . . . . . . . . . ( 1,323) ( 1,323)
Other . . . . . . . . . . . . . . . . . . . . . . 41 41
-------- ------- ------- -------- -------- --------
Balance at April 1, 1995 . . . . . . . . . . . . . $ 8,552 $15,974 $97,078 $( 6,978) $( 312) $114,314
======== ======= ======= ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
</TABLE>
26
<PAGE> 11
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
<TABLE>
<CAPTION>
Year Ended April 1, 1995 April 2, 1994 March 27, 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Income before cumulative effect of changes in accounting principles . . $ 8,573 $ 8,526 $ 9,828
Cumulative effect of changes in accounting principles . . . . . . . . . - 1,941 -
------- ------ --------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,573 10,467 9,828
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . 18,476 18,206 16,503
Amortization of other assets . . . . . . . . . . . . . . . . . . . 6,408 6,370 4,802
Increase (decrease) in deferred income . . . . . . . . . . . . . . ( 378) ( 661) 2,649
Increase (decrease) in deferred income taxes . . . . . . . . . . . ( 1,463) 544 61
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . ( 1,873) ( 1,459) ( 3,477)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . 4,522 (12,915) 501
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 63 1,250 ( 3,904)
Accounts payable and accrued expenses . . . . . . . . . . . . . 1,446 14,461 6,418
Cumulative effect of accounting changes . . . . . . . . . . . . . . - ( 1,941) -
Other operating activities . . . . . . . . . . . . . . . . . . . . ( 507) 1,961 690
------- ------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . 35,267 36,283 34,071
INVESTING ACTIVITIES
Acquisition of property, equipment and land for expansion . . . . . . . (30,607) (44,322) (26,221)
Disposition of property and equipment . . . . . . . . . . . . . . . . . 2,835 126 1,322
Other investing activities, principally acquisition of rental video
tapes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 6,871) ( 5,941) ( 4,652)
------- ------- -------
NET CASH USED FOR INVESTING ACTIVITIES . . . . . . . . . . . . . . (34,643) (50,137) (29,551)
FINANCING ACTIVITIES
Proceeds of short-term borrowings . . . . . . . . . . . . . . . . . . . 3,000 4,000 -
Proceeds of long-term borrowings . . . . . . . . . . . . . . . . . . . 10,000 4,000 90,278
Payments of long-term debt and capital lease obligations . . . . . . . (17,345) ( 7,909) (66,226)
Proceeds of public offering of Class B Common Stock . . . . . . . . . . - 837 6,016
Purchase of Class A and Class B Common Stock for treasury . . . . . . . ( 1,323) - -
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . ( 3,702) ( 3,707) ( 3,439)
Other financing activities . . . . . . . . . . . . . . . . . . . . . . - 216 206
------- ------- -------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . ( 9,370) ( 2,563) 26,835
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS . . . . . . . . . . . . . . . ( 8,746) (16,417) 31,355
Cash and equivalents at beginning of year . . . . . . . . . . . . . . . . . . 24,112 40,529 9,174
------- ------- -------
CASH AND EQUIVALENTS AT END OF YEAR . . . . . . . . . . . . . . . . . . . . . $15,366 $24,112 $40,529
======= ======= =======
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
27
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts or as otherwise noted)
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies followed in preparation of the consolidated
financial statements are:
FISCAL YEAR
The Company's fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references herein to "1995, 1994 and 1993" relate to the
fiscal years ended April 1, 1995, April 2, 1994 and March 27, 1993,
respectively. Fiscal year 1994 includes 53 weeks, compared with 52 weeks in
each of 1995 and 1993.
PRINCIPLES OF CONSOLIDATION AND BUSINESS SEGMENT REPORTING
The consolidated financial statements include the accounts of the Company and
all subsidiaries. Significant inter-company accounts and transactions have been
eliminated. The Company is principally involved in a single significant
business segment, the distribution and retail sale of food and related products
through supermarkets, convenience stores, and food services.
CASH AND EQUIVALENTS
Cash equivalents consist of highly liquid investments with a maturity of three
months or less when purchased. The carrying amount approximates fair value of
these assets.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by
the last-in, first-out (LIFO) method for the principal components of
inventories, and by the first-in, first-out (FIFO) method for the remainder
(see Note B).
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, including a provision for
capitalized interest. For financial reporting purposes, depreciation is
computed by the straight-line method over the estimated useful lives of the
assets. For income tax purposes, accelerated methods and statutory lives are
used to compute depreciation.
CAPITALIZED LEASE PROPERTY
Capitalized lease assets are amortized using the straight-line method over the
term of the lease, or in accordance with practices established for similar
owned assets if ownership transfers to the Company at the end of the lease
term. Amortization is included with depreciation expense.
EXCISE TAXES
Sales and cost of merchandise sold include state and federal excise taxes on
tobacco, gasoline and alcohol products of approximately $86 million, $72
million and $62 million in 1995, 1994 and 1993, respectively.
ADVERTISING COSTS
In the first quarter of fiscal 1996, the Company will be required to adopt
AICPA Statement of Position No. 93-7 "Reporting on Advertising Costs". In
general, this Statement requires costs of advertising to be expensed in the
period incurred or the first time the advertising is distributed. The Company
historically capitalized certain costs of advertising (primarily television
commercial production) and amortized these costs over the period in which the
advertising was used. As of April 1, 1995, all such costs were fully amortized;
therefore, the adoption of this Statement will not require the recording of a
cumulative change in accounting method. Advertising expenses in the amounts of
$13.8 million, $12.9 million, and $9.7 million were recorded for 1995, 1994 and
1993, respectively.
COSTS OF OPENING STORES
Non-capital expenditures associated with opening new stores are expensed as
incurred.
EARNINGS PER SHARE
Earnings per share are presented on a "primary" and "fully diluted" basis.
"Primary" shares are based on the weighted average number of common shares
outstanding and the share equivalent effect of dilutive stock options. "Fully
diluted" shares consider the dilutive effect of stock options and the
conversion of convertible debentures. The Company was required to report fully
diluted earnings per share beginning in 1994. The 1993 earnings per share are
presented on a fully diluted basis for comparability.
ACCOUNTING CHANGES
Effective March 28, 1993, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions" and
FASB Statement No. 109, "Accounting for Income Taxes". The $1.9 million net of
tax, cumulative effect of these changes was as follows:
<TABLE>
<CAPTION>
Income/ Per Share
(Expense) Fully Diluted
--------- -------------
<S> <C> <C>
FASB Statement No. 106 . . . . . . . . . . . ($2,700)
Tax effect . . . . . . . . . . . . . . . . . 1,005
-------
(1,695) ($ .17)
FASB Statement No. 109 . . . . . . . . . . . 3,636 .37
------- -------
Cumulative effect of accounting changes . . . $ 1,941 $ .20
======= =======
</TABLE>
NOTE B -- INVENTORIES
Inventories valued by the last-in, first-out (LIFO) method represented
approximately 83% and 86% of consolidated inventories at April 1, 1995 and
April 2, 1994, respectively. Current inventory cost exceeded the carrying
amount of LIFO inventories by $18.9 million at April 1, 1995, and $18.8 million
at April 2, 1994.
28
<PAGE> 13
NOTE C -- DEBT ARRANGEMENTS
<TABLE>
<CAPTION>
Long-term debt consisted of the following: 1995 1994
---- ----
Notes payable to insurance companies:
<S> <C> <C>
8.54% Senior Notes, unsecured . . . . . . . . . $ 35,000 $ 35,000
8.13% Senior Notes, unsecured . . . . . . . . . 13,636 15,000
9.48% Senior Notes, unsecured . . . . . . . . . 22,500 25,000
10.05% notes . . . . . . . . . . . . . . . . . 20,191 20,775
9.05% notes . . . . . . . . . . . . . . . . . . 20,938 21,508
7% convertible subordinated debentures. . . . . . . 20,000 20,000
Economic development bond . . . . . . . . . . . . 2,225 2,333
6.9% (average rate) mortgage notes,
due in installments through 1999 . . . . . . . 4,000 4,861
Other . . . . . . . . . . . . . . . . . . . . . . 1,430 -
Less current maturities . . . . . . . . . . . . . ( 5,981) ( 5,993)
-------- --------
$133,939 $138,484
======== ========
</TABLE>
The 8.54% notes are payable in installments of $3.5 million due each December
31 from 1998 to 2007.
The 8.13% notes are payable in installments of $1.4 million due each December
31 through 2004.
The 9.48% notes are payable in installments of $2.5 million due each June 30
through 2003.
The 10.05% notes are payable in monthly installments (principal and interest)
of $220 thousand through 2009.
The 9.05% notes are payable in quarterly installments (principal and interest)
of $625 thousand through 2011. In 2000, the Company or lender may initiate an
interest rate renegotiation or require retirement of the notes.
The 7% convertible subordinated debentures mature February 15, 2003. They are
convertible, at the holder's option at any time, into Class B Common Stock, at
a conversion price of $15.50 per share. They are redeemable at the Company's
option beginning February 15, 1996, at declining prices starting at 103.5% of
the principal amount in 1996. The debentures are subordinated to all present
and future senior indebtedness.
The economic development bond bears interest at 8.25%, and is due in monthly
installments of $25 thousand (principal and interest) through 2006.
Real estate with a net carrying amount of approximately $53 million is pledged
as collateral to the 10.05% notes, the 9.05% notes, the economic development
bond and the mortgage notes.
The Company guarantees a portion of two mortgages for a 25% owned,
unconsolidated, subsidiary. The total guarantee is $1.5 million.
As of April 1, 1995 and April 2, 1994, the carrying amount of long-term debt,
including current maturities, were $139.9 million and $144.5 million,
respectively. The estimated fair value, determined using a discounted cash
flow method and estimated current incremental borrowing rates for similar types
of borrowing arrangements, exceeds the carrying amount by $721 thousand, as of
April 1, 1995, and $665 thousand as of April 2, 1994.
<TABLE>
<CAPTION>
The fair value of each obligation is: 1995 1994
---- ----
Notes payable to insurance companies:
<S> <C> <C>
8.54% Senior Notes, unsecured . . . . . . . . . $ 35,929 $ 35,301
8.13% Senior Notes, unsecured . . . . . . . . . 13,431 14,992
9.48% Senior Notes, unsecured . . . . . . . . . 23,611 26,465
10.05% notes . . . . . . . . . . . . . . . . . 21,582 22,680
9.05% notes . . . . . . . . . . . . . . . . . . 20,949 22,076
7% convertible subordinated debentures . . . . . . 17,709 16,413
Economic development bond . . . . . . . . . . . . 2,240 2,311
6.9% (average rate) mortgage notes, due in
installments through 1999 . . . . . . . . . . . . 4,010 4,904
Other . . . . . . . . . . . . . . . . . . . . . . 1,180 -
Less current maturities . . . . . . . . . . . . . ( 5,981) ( 5,993)
-------- --------
$134,660 $139,149
======== ========
</TABLE>
Several of the loan agreements require maintenance of minimum working capital,
as well as limit cash dividends, repurchases of common stock, future
indebtedness, lease obligations, investments, and disposition of assets. Under
the most restrictive covenant, retained earnings available for payment of
dividends was approximately $21 million at April 1, 1995.
The Company's revolving credit agreements permit borrowings up to $35 million.
On August 1 of each year, either the Company or the banks may elect not to
renew the arrangements, in which event, revolving credit borrowings would
convert to term loans payable in twenty quarterly installments, on the
following July 31. Interest is based on various money market rates selected by
the Company at the time of borrowing. The Company pays a commitment fee of
1/4% on unused amounts.
The Company has commitments from various banks for short-term borrowings of up
to $15 million, at rates at or below the prime rates of the committed banks, of
which $7 million, at an average rate of 7.0%, was utilized at April 1, 1995.
This compares to $4 million, at an average rate of 3.8%, utilized at April 2,
1994.
The aggregate principal payments of long-term debt outstanding at April 1, 1995
for the succeeding five years and thereafter are as follows:
<TABLE>
<S> <C>
1996 . . . . . . . . $ 5,981
1997 . . . . . . . . 6,218
1998 . . . . . . . . 6,264
1999 . . . . . . . . 9,903
2000 . . . . . . . . 10,036
Thereafter . . . . . 101,518
</TABLE>
<TABLE>
<CAPTION>
Interest expense consisted of: 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Long-term debt . . . . . . . . . . $12,035 $11,960 $ 8,554
Capital lease obligations . . . . . 1,214 1,376 1,682
Other . . . . . . . . . . . . . . . 19 - 82
------- ------- -------
Total interest expense . . . . . . $13,268 $13,336 $10,318
======= ======= =======
Interest capitalized . . . . . . . $ 555 $ 1,257 $ 1,263
======= ======= =======
Cash payments for interest . . . . $13,690 14,383 $10,509
======= ======= =======
</TABLE>
29
<PAGE> 14
The senior note agreements preclude the Company from becoming obligated, as a
leasee, under any operating lease having an original term greater than three
years, unless at the time the lease is entered into, consolidated income
available for fixed charges, as defined by the agreement, exceeds 150% of fixed
charges in three out of the four most recently completed years. As of April 1,
1995, only two of the four most recently completed years had consolidated
income available for fixed charges in excess of 150% of fixed charges.
Accordingly, the Company will not be able to enter into any leases, with a term
of more than three years, in 1996.
NOTE D -- LEASES
Of the Company's 269 retail stores, 111 are commercial lease agreements
providing for initial terms generally from 15 to 20 years with options to
extend the initial term up to an additional 20 years.
In addition, one supermarket and two warehouses are leased under equity lease
arrangements where ownership transfers to the Company at lease expiration. The
net carrying amount at April 1, 1995, included in capitalized lease property,
was $2.8 million. The Company also leases a portion of its transportation and
store equipment for periods of from five to eight years plus renewal and
purchase options.
Capitalized lease property consisted of:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Store facilities . . . . . . . . . . . . $13,765 $14,424
Warehouses . . . . . . . . . . . . . . . 3,916 3,926
------- -------
17,681 18,350
Accumulated amortization . . . . . . . . (11,072) (10,911)
------- -------
$ 6,609 $ 7,439
======= =======
</TABLE>
Future minimum lease payments under capital and operating leases with terms in
excess of one year, and the present value of capital lease obligations, at
April 1, 1995 were as follows:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------ ------
<S> <C> <C>
1996 . . . . . . . . . . . . . . $ 2,250 $13,926
1997 . . . . . . . . . . . . . . 4,931 12,414
1998 . . . . . . . . . . . . . . 1,406 11,391
1999 . . . . . . . . . . . . . . 1,142 10,856
2000 . . . . . . . . . . . . . . 1,105 10,242
Later years . . . . . . . . . . . 4,294 20,420
------- -------
15,128 $79,249
=======
Less:
Estimated executory costs . . . 96
Amounts representing interest . 4,708
-------
Present value of net minimum
lease payments . . . . . . . . $10,324
=======
</TABLE>
Minimum annual lease payments will be reduced by $2.6 million from future
sublease rentals due over the term of the sublease arrangements.
Rental expense consisted of:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Minimum rentals . . . . . . . . . . $19,514 $19,225 $17,733
Contingent rentals . . . . . . . . 242 151 166
Sublease rental income . . . . . . ( 2,023) ( 1,814) ( 1,828)
------- ------- -------
$17,733 $17,562 $16,071
======= ======= =======
</TABLE>
NOTE E -- RETIREMENT PLANS
The Company has a qualified defined benefit pension plan covering the majority
of its non-union (retail and administrative) employees and a supplemental
retirement plan. The current benefit formula, under the qualified plan, is
based upon years of service and the highest consecutive four years of earnings
during the last ten years worked. The benefits under both plans are similar;
however, the supplemental plan takes into consideration compensation in excess
of amounts that can be recognized under the qualified plan. For the qualified
plan, the Company's funding policy is consistent with federal laws and
regulations. Funding in the amount of $2.2 million was made in fiscal 1995 with
respect to the 1994 and 1995 plan years. No contributions were required in
fiscal years 1993 or 1994. Funding in the approximate amount of $1.9 million
is required in fiscal 1996 with respect to the 1995 and 1996 plan years. Plan
assets consist principally of listed stocks, corporate and government notes and
bonds, and 92,675 shares each of Class A and Class B Common Stock of the
Company with an April 1, 1995, market value of $1.9 million. The supplemental
plan is unfunded.
The funded status of the plans and amounts recognized in the consolidated
balance sheets at April 1, 1995 and April 2, 1994, were as follows:
<TABLE>
<CAPTION>
Actuarial present value of benefit obligations: 1995 1994
---- ----
<S> <C> <C>
Vested benefits . . . . . . . . . . . . . . $ 28,558 $ 26,391
Nonvested benefits . . . . . . . . . . . . . 3,125 3,082
-------- --------
Accumulated benefit obligation . . . . . . . . 31,683 29,473
Effect of projected future salary increases . . 6,250 6,389
-------- --------
Projected benefit obligation . . . . . . . . . 37,933 35,862
Plan assets at fair value . . . . . . . . . . . 29,320 27,574
-------- --------
Funded status . . . . . . . . . . . . . . . ( 8,613) ( 8,288)
Unrecognized net loss from past
experience different from that assumed . . . . 10,112 10,044
Unrecognized net asset at adoption . . . . . . ( 2,270) ( 2,601)
Unrecognized prior service benefit . . . . . . ( 576) ( 418)
--------- --------
Accrued pension cost . . . . . . . . . . . . . $( 1,347) $( 1,263)
========= ========
</TABLE>
The components of net pension expense included:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost-benefits earned . . . $1,921 $1,663 $1,438
Interest cost on projected benefit
obligation . . . . . . . . . . . 2,867 2,645 2,409
Actual return on plan assets . . . (1,436) (1,392) (1,944)
Net amortization and deferral . . (1,026) (1,311) ( 881)
------ ------ ------
Net pension expense . . . . . . . $2,326 $1,605 $1,022
====== ====== ======
</TABLE>
The following actuarial assumptions were used to compute net pension expense
and funded status of the plans:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Discount rate . . . . . . . . . . . . . 8.3% 8.0% 8.5%
Rate of increase in compensation . . . 3.5 3.5 4.0
Expected long-term rate
of return on assets . . . . . . . . . 10.0 10.0 10.0
</TABLE>
30
<PAGE> 15
The 0.3% change in discount rate decreased the projected benefit obligation at
April 1, 1995 by approximately $1.5 million.
The Company participates in a multi-employer plan that provides defined
benefits to its union employees. Company expense for this plan (in thousands)
amounted to $583, $534, and $473 in 1995, 1994 and 1993, respectively.
Effective January 1, 1993, the Company established the Marsh Supermarkets, Inc.
401(k) plan, increasing the number of defined contribution savings plans to
two. These plans allow 401(k) contributions covering employees who work a
minimum of 1,000 hours per year, are age 21 or older and elect to participate.
The plans provide additional financial security during retirement by providing
employees an incentive to make tax advantaged contributions to a savings plan.
Company expense for the plans (in millions) was $1.1, $1.1, and $0.5 in 1995,
1994 and 1993, respectively.
NOTE F -- POSTRETIREMENT HEALTH BENEFITS
The Company provides certain health care benefits for its non-union retirees
and their eligible spouses. The plans are contributory with retiree
contributions adjusted annually and certain other cost sharing features such as
deductibles and coinsurance. Eligibility for these benefits is generally
limited to retirees, who are at least age 55 and less than age 65, with ten or
more years of vested service. Optional spousal coverage continues for the
lesser of five years after retirement or until the spouse reaches age 65.
Benefits generally cease after reaching age 65, at which time the retiree or
spouse is generally eligible for Medicare.
Prior to 1994 these benefits were expensed when paid (amounts were not
material). Effective March 28, 1993, the Company adopted FASB Statement No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions",
which requires the expected cost of such benefits to be accrued over the
employees' years of service. The Company elected to recognize the entire
unaccrued benefit obligation as of the date of adoption. Accordingly, the
Company recorded an accumulated postretirement benefit obligation of $2.7
million, before taxes, for active employees and retirees as of March 28, 1993.
During 1995, favorable claims experience and reduced levels of participation
lowered the benefit obligation. The amounts recognized in the consolidated
balance sheet at April 1, 1995 and April 2, 1994, for the Company's
contributory defined benefit postretirement plans were as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Accumulated benefit obligation:
Current retirees. . . . . . . . . . . . . . . . . $ 626 $1,234
Fully eligible active plan participants . . . . . 759 1,272
Other active plan participants . . . . . . . . . 790 535
------ ------
Total benefit obligation. . . . . . . . . . . . 2,175 3,041
Unrecognized gain (loss). . . . . . . . . . . . . . 912 ( 145)
------ ------
Accrued postretirement benefit cost . . . . . . . . $3,087 $2,896
====== ======
</TABLE>
Net postretirement benefit expense includes the following components:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Service cost of benefits earned during the year. . . . . $ 88 $ 64
Interest cost on liability . . . . . . . . . . . . . . . 225 201
---- ----
$313 $265
==== ====
</TABLE>
For measurement purposes, the weighted average discount rate used in
determining the accumulated postretirement benefit obligation and related
expense was 8.3% and 8.0% for 1995 and 1994, respectively. The Company's
assumed healthcare cost trend rate is 11% for 1996, decreasing gradually to 6%
by year 2011, and thereafter. If these trend rates increased by one percentage
point each year, the accumulated postretirement benefit obligation and expense
would have increased by approximately 5% and 7%, respectively.
NOTE G -- INCOME TAXES
Effective March 28, 1993, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes". The adoption resulted in a cumulative effect
adjustment that increased 1994 net income by $3.6 million.
Using the liability method of accounting for income taxes pursuant to FASB
Statement No. 109, deferred tax assets and liabilities are based on differences
between financial reporting and tax basis of assets and liabilities, measured
using enacted tax rates and laws expected to be in effect when the differences
reverse. Prior to the adoption of FASB Statement No. 109, income tax expense
was determined by the deferred method. Deferred income tax expense was based
on items of income and expense, reported in different years in the financial
statements and tax returns, measured at tax rates in effect in the year the
differences originated.
The following are components of deferred tax assets and liabilities at April 1,
1995 and April 2, 1994:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax assets:
Compensation and benefit accruals. . . . . . . . $ 2,647 $ 2,019
Self insurance reserves. . . . . . . . . . . . . 1,556 1,327
Federal tax benefit for deferred state taxes . . 386 449
Provision for doubtful accounts. . . . . . . . . 371 253
Contribution carryforward . . . . . . . . . . . 337 -
EPA remediation reserves . . . . . . . . . . . . 332 298
Targeted jobs tax credit carryforward. . . . . . 157 157
Other. . . . . . . . . . . . . . . . . . . . . . 429 194
-------- --------
Total deferred tax assets . . . . . . . . . . 6,215 4,697
Deferred tax liabilities:
Property and equipment, including
leased property . . . . . . . . . . . . . . . (12,425) (12,136)
State income taxes . . . . . . . . . . . . . . . ( 1,161) ( 1,309)
Prepaid employee benefits. . . . . . . . . . . . ( 658) ( 669)
Inventory . . . . . . . . . . . . . . . . . . . ( 515) ( 568)
Other . . . . . . . . . . . . . . . . . . . . . ( 177) ( 199)
-------- --------
Total deferred tax liabilities. . . . . . . . (14,936) (14,881)
-------- --------
Net deferred tax liability. . . . . . . . . . . . $( 8,721) $(10,184)
======== ========
</TABLE>
31
<PAGE> 16
Income tax expense (credit) consisted of the following:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current - Federal. . . . . . $4,023 $4,805 $4,734
State . . . . . . 964 730 946
Deferred - Federal. . . . . . ( 725) ( 525) 61
State. . . . . . . ( 45) ( 19) -
------ ------ ------
$4,217 $4,991 $5,741
====== ====== ======
Cash Payments . . . . . . . . $5,947 $5,922 $6,080
====== ====== ======
</TABLE>
A reconciliation of the effective income tax rate is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal statutory tax rate. . . . . . . . . . . . 35.0% 35.0% 34.0%
State and local, net of federal tax benefit . . . 4.7 3.4 4.0
New jobs tax credits. . . . . . . . . . . . . . . ( 1.9) ( 0.5) ( 0.7)
Contributions . . . . . . . . . . . . . . . . . . ( 3.9) ( 1.6) ( 0.3)
Research and experimental credits . . . . . . . . ( 0.9) - -
Federal income tax rate increase. . . . . . . . . - 0.6 -
Other . . . . . . . . . . . . . . . . . . . . . . - - ( 0.1)
----- ------ -----
Effective income tax rate . . . . . . . . . . . . 33.0% 36.9% 36.9%
===== ====== =====
</TABLE>
NOTE H -- SHAREHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS
COMMON STOCK
Class A Common Stock has one vote per share; Class B is non-voting except with
respect to certain matters affecting the rights and preferences of that class.
Each class is entitled to equal per share dividends and consideration in any
merger, consolidation or liquidation of the Company. A person who, subsequent
to May 15, 1991, acquires 10% or more of out-standing Class A Common Stock
without acquiring a like percentage of Class B Common Stock must make a public
tender offer to acquire additional Class B Common Stock. Failure to do so
results in suspension of the voting rights of the Class A Common Stock held by
such person.
STOCK OPTION PLANS AND SHARES RESERVED
Option activity under the 1987 and 1991 plans is as follows:
<TABLE>
<CAPTION>
Shares
Option ------
Price Class A Class B
------- ------- -------
<S> <C> <C> <C>
Outstanding at March 28, 1992. . . $10.63-15.94 184,650 362,650
Canceled . . . . . . . . . . . . 13.50-13.81 ( 600) ( 1,900)
-------- --------
Outstanding at March 27, 1993. . . 10.63-15.94 184,050 360,750
Canceled . . . . . . . . . . . . 10.63-13.81 ( 15,400) ( 25,700)
-------- --------
Outstanding at April 2, 1994 . . . 10.63-15.94 168,650 335,050
Granted. . . . . . . . . . . . . 9.50-10.38 - 132,100
Canceled . . . . . . . . . . . . 9.50-15.30 ( 6,025) ( 17,825)
-------- --------
Outstanding at April 1, 1995 . . . 9.50-13.81 162,625 449,325
======== ========
</TABLE>
Grants made prior to 1992 were under the 1987 Stock Option Plan at prices equal
to 85% of market value at date of grant. They are exercisable pro-rata over a
four year period and expire 10 years from date of grant. At April 1, 1995, 1987
Plan options for 325,250 shares were exercisable. No further grants may be made
under the 1987 Plan.
Under the 1991 Employee Stock Incentive Plan 300,000 shares of common stock, in
any combination of Class A and Class B, are reserved for the grant of stock
options, stock appreciation rights, restricted stock, deferred stock, stock
purchase rights, and/or other stock-based awards. Grants made under this plan
represent non-qualified options. Substantially all grants were at market value
at date of grant. They become exercisable pro-rata over a four year period
beginning one year from date of grant. At April 1, 1995, 118,800 shares were
exercisable.
Under an expired 1980 plan, options were exercised at $8.28 per share as
follows: 1994 - 36,876 Class A and 31,813 Class B shares; 1993 - 11,250 Class A
and 7,875 Class B shares; 1992 - 4,187 Class A and 12,624 Class B shares. The
Company presently holds notes receivable totaling $312 thousand from four
employees of the Company. The notes arose when the Company loaned the employees
money to exercise the stock options mentioned above. The notes bear interest at
6% per annum, are due on May 28, 1995, and are collateralized by the shares.
The amount of the receivable is shown on the balance sheet as a reduction of
equity.
At the 1992 Annual Meeting, shareholders approved the 1992 Stock Option Plan
for Outside Directors under which 50,000 shares of Class B Common Stock were
reserved for the grant of stock options and restricted stock to non-employee
directors. Options were granted for 4,500 shares on August 4, 1992 ($15.50 per
share), 3,000 shares on August 3, 1993 ($11.75 per share), and 1,500 shares on
August 4, 1994 ($10.38 per share). Options were granted at fair market value at
date of grant. Additionally, 3,000 shares of restricted stock have been issued.
The options become exercisable and restrictions lapse in equal installments on
the date of each of the two Annual Meetings, following the date of grant.
As of April 1, 1995, a total of 1,290,323 shares of Class B Common Stock is
reserved for conversion of debentures, and 13,300 shares in any combination of
Class A and Class B are reserved for future awards under the 1991 Plan.
CHANGES IN SHARES OUTSTANDING
Changes in shares issued and treasury shares during the three years ended April
1, 1995, were as follow:
<TABLE>
<CAPTION>
Issued shares: Class A Class B
- -------------- ------- -------
<S> <C> <C>
Balance at March 28, 1992. . . . . . . 4,695,253 4,695,258
Public offering. . . . . . . . . . . - 500,000
--------- ---------
Balance at March 27, 1993. . . . . . . 4,695,253 5,195,258
Public offering. . . . . . . . . . . - 69,900
--------- ---------
Balance at April 2, 1994 and
April 1, 1995. . . . . . . . . . . . 4,695,253 5,265,158
========= =========
<CAPTION>
Treasury shares: Class A Class B
- ---------------- ------- -------
<S> <C> <C>
Balance at March 28, 1992. . . . . . . 808,871 800,435
Exercise of stock options. . . . . . ( 11,250) ( 7,875)
Issuance of restricted shares. . . . - ( 3,000)
Acquisition (issuance) of shares . . 1,910 ( 1,993)
--------- ---------
Balance at March 27, 1993. . . . . . . 799,531 787,567
Exercise of stock options. . . . . . ( 36,876) ( 31,813)
--------- ---------
Balance at April 2, 1994 . . . . . . . 762,655 755,754
Acquisition of shares. . . . . . . . 54,875 70,550
Issuance of shares -
Crystal Catering acquisition . . . - ( 97,810)
--------- ---------
Balance at April 1, 1995 . . . . . . . 817,530 728,494
========= =========
</TABLE>
32
<PAGE> 17
MARSH EQUITY OWNERSHIP PLAN
The Marsh Equity Ownership Plan is an employee stock ownership plan in which
retail and administrative employees, meeting minimum age and service
requirements, participate. In 1988 and 1987, the Company sold 238,508 shares
of common stock to the Plan for a total of $2.7 million. In connection
therewith, the Company re-loaned to the Plan such portion of a bank loan, and
undertook to make future contributions to the Plan sufficient to enable it to
meet its debt service requirements. The $2.7 million cost was amortized to
expense over a period which ended in 1994.
SHAREHOLDER RIGHTS PLAN
Under the 1989 Shareholder Rights Plan, preferred stock purchase rights
(Rights) were distributed as a dividend at the rate of one Right for each
common share held. Each Right entitles a shareholder to buy one one-hundredth
of a newly issued share of Series A Junior Participating Cumulative Preferred
Stock of the Company at an exercise price of $65. The Rights will be
exercisable only if a person or group acquires beneficial ownership of 20% or
more of either class of the Company's common stock or commences a tender or
exchange offer upon consummation of which such person or group would
beneficially own 20% or more of either class of the Company's common stock. If
any person becomes the beneficial owner of 20% or more of either class of the
Company's common stock, or if a 20% or more shareholder engages in certain
self-dealing transactions or a merger transaction with the Company in which the
Company is the surviving corporation and its common shares are not changed or
converted, then each Right not owned by such person or related parties will
entitle its holder to purchase, at the Right's then-current exercise price,
shares of common stock (or, in certain circumstances as determined by the
Board, cash, property or other securities of the Company) having a value of
twice the Right's exercise price. In addition, if the Company is involved in a
merger or other business combination transaction with another person in which
its common stock is changed or converted, or sells 50% or more of its assets or
earning power to another person, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, common shares of such
other person having a value of twice the Right's exercise price. The Company
will generally be entitled to redeem the rights at $.01 per Right at any time
until the 15th day following public announcement that a 20% position has been
acquired. The Rights expire on July 31, 1999.
NOTE I -- ACQUISITIONS
On January 1, 1995, the Company purchased the assets of the Crystal Catering
and affiliated companies, the largest caterer in Indianapolis. The purchase
price of $4.8 million includes; (i) $2.4 million cash, (ii) a $1.4 million note
payable to Crystal, and (iii) issuance of 97,810 shares of Class B Common
Stock, valued at $1.0 million. An additional $900 thousand adjustment is
contingent on the cumulative performance of the catering division in achieving
specified profitability levels for 1996, 1997 and 1998. In the event the
contingent payment is earned, it will be treated as a purchase price
adjustment, and recorded when earned. The results of operations from this
acquisition, although not material, are recorded in the Company's 1995 fourth
quarter results. Goodwill, resulting from this acquisition in the amount of
$4.0 million, will be amortized using a straight-line method over a twenty year
life.
In May 1995, the Company purchased the assets of Martz and Associates Food
Services, Inc., an Indianapolis vending and food services firm. The purchase
price includes $1.0 million cash and 49,751 shares of Class B Common Stock,
valued at $500 thousand. Results of operations from the acquisition will be
reflected beginning in the Company's 1996 first quarter results.
33
<PAGE> 18
SHAREHOLDER INFORMATION
STOCK LISTING
At April 1, 1995, there were 3,743 record holders of Class A Common Stock and
4,053 record holders of Class B Common Stock (a composite total of 4,334
holders of Marsh common stock).
Both classes of common stock trade on the NASDAQ National Market System under
the symbols MARSA (Class A Common Stock) and MARSB (Class B Common Stock). As
of April 1, 1995, the following firms acted as market makers:
A. G. Edwards & Sons, Inc.
City Securities Corporation
Goldman, Sachs & Co.
Herzog, Heine, Geduld, Inc.
Howard, Weil, Labouisse, Friedrichs, Inc.
J.J.B. Hilliard, W.L. Lyons, Inc.
Kemper Securities, Inc.
Mayer & Schweitzer, Inc.
McDonald & Co. Securities, Inc.
Raffensperger, Hughes & Co., Inc.
Robinson Humphrey Co., Inc.
Sherwood Securities Corp.
Troster Singer Corp.
SHAREHOLDER INVESTMENT PLAN
The plan provides shareholders a means by which to acquire shares of common
stock through regular dividend reinvestment and voluntary cash payments. For
details, contact: Plan Administrator, National City Bank, Corporate Trust
Department, 1900 E. Ninth Street, Cleveland, OH 44114-3484; telephone (800)
622-6757.
FORM 10-K AND FINANCIAL INFORMATION
Shareholders, members of the financial community, and news media desiring
further information or copies of the annual report on Form 10-K to the
Securities and Exchange Commission should contact: Douglas Dougherty, Chief
Financial Officer, Marsh Supermarkets, Inc., 9800 Crosspoint Boulevard,
Indianapolis, IN 46256-3350; telephone (317) 594-2628.
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders will be held at 10:00 A.M., Tuesday, August
1, 1995, at the Company's principal executive offices at 9800 Crosspoint
Boulevard, Indianapolis, Indiana.
35
