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Thrifty Payless Holdings, Inc.
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FOR IMMEDIATE RELEASE: December 3, 1996
THRIFTY PAYLESS HOLDINGS, INC.
REPORTS FOURTH QUARTER AND YEAR END RESULTS
FOURTH QUARTER OPERATING PROFITS REACH $53.4 MILLION
Thrifty PayLess Holdings, Inc. (NYSE:TPD) announced results for its fourth
quarter and fiscal year ended September 29, 1996. For the quarter, operating
profit increased $49.0 million climbing to $53.4 million, up from $4.4 million
the prior year. Income before extraordinary loss was $19.9 million or $0.33 per
share versus a loss of $(26.8) million or $(0.76) per share the prior year.
Sales advanced 6.3 percent to $1,155.3 million from $1,086.6 million the prior
year. Comparable store sales increased 5.6 percent with pharmacy comparable
store sales up 13.2 percent and non-pharmacy merchandise comparable store sales
up 1.9 percent.
FISCAL 1996 OPERATING PROFITS REACH $190.4 MILLION
For the year, operating profit increased $78.8 million to $190.4 million or 4.0
percent of sales, up from $111.6 million or 2.4 percent of sales the prior year.
Income before extraordinary loss was $44.0 million or $0.95 per share versus a
loss of $(22.8) million or $(0.65) per share the prior year. An extraordinary
loss of $(112.8) million or $(2.43) per share, comprised of premiums, consents,
fees and expenses associated with the early extinguishment of debt, an element
of the April 1996 public offering and successful recapitalization, was also
recognized in the current year. Sales advanced 3.0 percent to $4,798.9 million
from $4,658.8 million the prior year. Comparable store sales increased 3.3
percent with pharmacy comparable store sales up 12.4 percent and non-pharmacy
merchandise comparable store sales lower by 0.7 percent.
MANAGEMENT COMMENT
Commenting on the results, Gordon D. Barker, President and Chief Executive
Officer stated, "We are extremely pleased with our operating results. Positive
out front sales, continued strong pharmacy sales and tight cost controls in the
fourth quarter enabled us to exceed our financial goals for the fourth quarter
and full year".
During the quarter, Thrifty PayLess opened 3 new stores and closed 3 stores and
as of September 29, 1996 operated 1,049 stores in eleven western states.
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FOR THE 13 WEEK PERIOD ENDED SEPTEMBER 29, 1996
Sales for the 13 week period ended September 29, 1996 (the "Quarter") increased
by $68.7 million or 6.3 percent as compared to the prior year. Pharmacy sales as
a percentage of total sales were 34.7 percent for the Quarter, up from 32.4
percent the prior year. Third-party pharmacy sales as a percent of total
pharmacy sales were 76.6 percent as compared to 73.4 percent the prior year.
Gross profit as a percent of sales was 27.0 percent for the Quarter compared to
26.0 percent the prior year. FIFO gross profit as a percentage of sales was 26.5
percent compared to 27.5 percent the prior year. The decrease in FIFO gross
profit results primarily from continued pressure on gross margins related to
lower margin third-party pharmacy sales. A LIFO valuation credit of $5.7 million
was recognized during the Quarter versus a LIFO valuation charge of $16.2
million the prior year.
Selling and administration expenses for the Quarter were 20.9 percent of sales
compared to 23.7 percent the prior year. The decrease results primarily from
cost reductions realized by combining administrative services and operations of
Thrifty Drug and PayLess Drug stores. Additionally, a gain on the sale of
properties of $4.0 million was realized in the Quarter with no such gain the
prior year.
Operating profit increased $49.0 million to $53.4 million or 4.6 percent of
sales compared to $4.4 million or 0.4 percent of sales the prior year.
Earnings before interest, income taxes, depreciation and LIFO valuation credit
(EBITDAL) increased to $64.1 million or 5.5 percent of sales for the Quarter
compared to $41.2 million or 3.8 percent of sales the prior year.
FOR THE 52 WEEK PERIOD ENDED SEPTEMBER 29, 1996
Sales for the 52 week period ended September 29, 1996 ("Fiscal 1996") increased
by $140.1 million or 3.0 percent as compared to the prior year. Comparable store
sales increased 3.3 percent with pharmacy comparable store sales up 12.4 percent
and non-pharmacy merchandise comparable store sales lower by 0.7 percent.
Pharmacy sales as a percentage of total sales were 33.3 percent for Fiscal 1996,
up from 30.7 percent of sales the prior year. Third-Party pharmacy sales as a
percent of total pharmacy sales were 74.9 percent compared to 70.0 percent the
prior year.
Gross profit as a percent of sales was 26.7 percent for Fiscal 1996, consistent
with the prior year. FIFO gross profit as a percentage of sales was 26.9 percent
compared to 27.3 percent the prior year. The decrease in FIFO gross profit
results primarily from continued pressure on gross margins related to lower
margin third-party pharmacy sales.
Selling and administration expenses for Fiscal 1996 were 21.3 percent of sales
compared to 22.9 percent the prior year. The decrease results primarily from
cost reductions realized by combining administrative services and operations of
Thrifty Drug and PayLess Drug stores. Additionally, a gain on the sale of
properties of $7.8 million was realized in Fiscal 1996 with no such gain the
prior year.
Operating profit increased $78.8 million to $190.4 million or 4.0 percent of
sales compared to $111.6 million or 2.4 percent of sales the prior year.
The Company completed a recapitalization in Fiscal 1996 resulting in a $(112.8)
million, (net of a $19.8 million tax benefit), extraordinary loss associated
with early extinguishment of debt. In the prior year, the Company realized a
$(11.9) million (without tax benefit) extraordinary loss related to early
extinguishment of debt.
EBITDAL was $267.6 million or 5.6 percent of sales for Fiscal 1996 compared to
$204.1 million or 4.4 percent of sales the prior year.
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Thrifty PayLess Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
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For the 13 Week For the 13 Week For the 52 Week For the 52 Week
Period Ended Period Ended Period Ended Period Ended
September 29, 1996 October 1, 1995 September 29, 1996 October 1, 1995
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<S> <C> <C> <C> <C>
Sales $ 1,155.3 $ 1,086.6 $ 4,798.9 $ 4,658.8
Cost of goods sold, buying
and occupancy 843.7 803.6 3,517.5 3,413.0
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Gross profit 311.6 283.0 1,281.4 1,245.8
Costs and expenses:
Selling and administration 241.8 258.0 1,023.2 1,065.7
Depreciation and
amortization 16.4 20.6 67.8 68.5
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Operating profit 53.4 4.4 190.4 111.6
Interest expense, net 20.0 35.1 115.1 137.2
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Income (loss) before
income taxes and
extraordinary loss 33.4 (30.7) 75.3 (25.6)
Income tax expense (benefit) 13.5 (3.9) 31.3 (2.8)
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Income (loss) before
extraordinary loss 19.9 (26.8) 44.0 (22.8)
Extraordinary loss, net of
income taxes - (11.9) (112.8) (11.9)
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Net income (loss) $ 19.9 $ (38.7) $ (68.8) $ (34.7)
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SUPPLEMENTAL DATA:
Earnings (loss) per Class A & B
common share:
Income (loss) before
extraordinary loss $ 0.33 $ (0.76) $ 0.95 $ (0.65)
Extraordinary loss - (0.34) (2.43) (0.34)
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Net earnings (loss) per share $ 0.33 $ (1.10) $ (1.48) $ (0.99)
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Weighted average shares outstanding 60,236,683 35,183,808 46,417,191 35,221,410
EBITDAL $ 64.1 $ 41.2 $ 267.6 $ 204.1
LIFO (credit) charge $ (5.7) $ 16.2 $ 9.4 $ 24.0
Number of stores 1,049 1,040 1,049 1,040
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</TABLE>
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Thrifty PayLess Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollars in millions)
<TABLE>
<CAPTION>
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September 29, October 1,
1996 1995
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<S> <C> <C>
Current assets:
Cash $ 5.6 $ 5.2
Receivables 106.9 82.8
Inventories 1,160.0 1,160.7
Prepaid expenses and other current
assets 33.1 42.8
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Total current assets 1,305.6 1,291.5
Property, plant and equipment, net 557.4 581.9
Leasehold interests, net 86.7 94.1
Deferred income taxes 36.3 17.3
Other assets 95.3 114.4
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$2,081.3 $2,099.2
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Current liabilities:
Current maturities of long-term debt $ 28.1 $ 32.3
Accounts payable 366.9 342.7
Accrued expenses 237.5 251.7
Deferred taxes 180.9 152.0
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Total current liabilities 813.4 778.7
Long-term debt, excluding current
maturities 794.4 1,052.6
Other long-term liabilities 73.8 106.5
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Total liabilities 1,681.6 1,937.8
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Commitments and contingencies
Shareholders' equity:
Common stock, paid in capital
and related equity accounts 493.5 186.4
Accumulated deficit (93.8) (25.0)
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Total shareholders' equity 399.7 161.4
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$2,081.3 $2,099.2
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</TABLE>
PRESS / EARNINGS RELEASES available through Company News On-Call by Fax, (800)-
758-5804, ext. 112313, or http://www.prnewswire.com// CONTACT: Thrifty PayLess
Holdings, Inc. David R. Jessick, Executive Vice President and Chief Financial
Officer or Allen R. Westergard, Vice President and Corporate Controller at (503)
682-4100.
