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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 11, 1994
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Drug Emporium, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-16998 31-1064888
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
155 Hidden Ravines Drive, Powell, Ohio 43065
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 614-548-7080
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(Former name or former address,>if changed from last report.)
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PART I.
Item 5. Other Events.
Drug Emporium, Inc. hereby reports information related to its
Washington, D.C. market as set forth in a press release, dated
November 11, 1994, entitled DRUG EMPORIUM TO DOWNSIZE WASHINGTON, D.C.
OPERATIONS, incorporated by reference and included herein as Exhibit
A.
PART II.
Item 7 (c). Exhibit A.
Press Release dated November 11, 1994.
2
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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.
DRUG EMPORIUM, INC.
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(Registrant)
Date November 22, 1994 By /s/ David L. Kriegel
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David L. Kriegel
Chairman
Chief Executive Officer
Date November 22, 1994 By /s/ Timothy S. McCord
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Timothy S. McCord
Chief Financial Officer
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EXHIBIT A
Page 1 of 2
FOR IMMEDIATE RELEASE SYMBOL: DEMP
Friday, November 11, 1994 TRADED: NASDAQ National Market System
DRUG EMPORIUM TO DOWNSIZE
WASHINGTON, D.C. OPERATIONS
COLUMBUS, Ohio, Nov. 11, 1994--Drug Emporium, Inc. announced today
that it has entered into an agreement with CVS, a subsidiary of Melville
Corporation, to sell seven Drug Emporium stores located in the Washington, D.C.
market.
Drug Emporium also announced that it will close an additional 14
stores, leaving it with five stores in the Washington, D.C. market.
David L. Kriegel, Drug Emporium's chairman and chief executive
officer, said, "We began in January 1993 executing a turnaround plan which is
well under way, as evidenced by seven consecutive profitable quarters. The
stores being sold or closed have not responded sufficiently to our turnaround
efforts and are preventing the company from demonstrating its earnings and
cash-flow potential. We intend to redeploy the capital from the Washington,
D.C. market to our better performing regions."
The 21 stores to be sold or closed had revenues of $46 million for the
six months ended August 27, 1994. These stores generated a pretax loss of $2.5
million during that same period. Total company sales for the six months ended
August 27, 1994 were $372.8 million and pretax profits were $822,000. Net
income for the same period was $497,000 or four cents per share.
Mr. Kriegel said the costs associated with the 21 stores will result
in an estimated charge of $11.8 million in the company's third quarter.
Operating results for the stores will be included in the company's financial
statements through the date the stores close. The sale and store closings are
expected to occur before February 28, 1995.
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EXHIBIT A
Page 2 of 2
Proforma operating results for the six months ended August 27, 1994
assuming the stores had been closed as of February 26, 1994 are as follows:
<TABLE>
<CAPTION>
($=000s except per share amounts)
Reported Proforma
Six Months Ended Six Months Ended
August 27, 1994 Adjustments August 27, 1994
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<S> <C> <C> <C> <C>
Sales $372,847 $(46,070) $326,777
Cost of sales 294,784 (36,528) 258,256
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78,063 (9,542) 68,521
Selling, general and
occupancy expenses 73,901 (11,247) 62,654
Interest expense, net 3,340 (795) 2,545
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Income before income taxes
822 2,500 3,322
Provision for income taxes
325 1,000 1,325
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Net income $ 497 $ 1,500 $ 1,997
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Net income per share $ .04 $ .15
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</TABLE>
Drug Emporium is a national chain of 130 company-owned stores
specializing in competitively priced health and beauty aids, cosmetics and
prescription drugs. The company also franchises an additional 106 Drug
Emporium stores.
FOR FURTHER INFORMATION: Drug Emporium, Inc.
614/548-7080, X 207
Timothy S. McCord
Chief Financial Officer
- or -
Investor Relations Consultants, Inc.
614/436-5592
