Fleming (NYSE:FLM) today reported a 52 percent increase in third quarter 2001 net earnings to $22.8 million, or $0.47 per share, after adjustments to exclude strategic plan charges and one-time items, compared to $15.0 million, or $0.37 per share, in the third quarter of 2000. Analysts' consensus estimate for third quarter 2001 earnings was $0.44 per share. Fleming also announced that it is increasing its 2001 adjusted earnings guidance from $1.96 to a range of $1.96 to $2.00. The company's fourth quarter guidance ranges from $0.61 to $0.65 per share on an adjusted basis.

With total sales just above $4 billion and net distribution sales of $3.5 billion for the 12-week quarter, Fleming took over the top position as the largest distributor in its industry following the successful integration and first full quarter of operations of the Kmart alliance. Third quarter adjusted operating earnings of $68.1 million increased 9.5 percent from $62.2 million in the prior year. Adjusted EBITDA increased to $110.2 million in 2001 from $106.7 million in 2000.

The third quarter results are even more impressive considering the following circumstances:

  • Continuing operations - Total company adjusted EBITDA increased 14 percent in the third quarter of 2001 when compared to 2000 on a continuing operations basis. Divested conventional retail stores contributed approximately $10 million more in EBITDA in the prior year's third quarter compared to the current year.
  • Growth of equity - The diluted share count increased to 51.0 million shares in the third quarter of 2001 from 40.4 million in 2000 (a 26.4 percent increase) as Fleming increased equity to fund growth. The majority of the share increases resulted from the sale of common stock to an affiliate of The Yucaipa Companies (3.8 million shares) and the issuance of $150 million of convertible debt securities (5.0 million shares). Additionally, ``in the money'' stock options and stock related to employee benefit programs added another 1.8 million shares.

"Fleming emerged from the third quarter as the leading distributor in our industry," said Mark S. Hansen, chairman of the board and chief executive officer of Fleming. Total company net sales for the 12-week third quarter were $4.02 billion, compared to $3.19 billion in the prior year, a 26 percent increase. Distribution accounted for 88 percent of net sales, up from 78 percent in the prior year, while retail accounted for 12 percent of net sales. The shift in sales mix between distribution (with its higher volumes and lower margin percentages) and retail is a factor in the comparison of margin percentages between the two years.

Distribution segment net sales increased 42 percent to $3.54 billion, up from $2.50 billion in the prior year. "Our distribution sales grew dramatically, attributable in large part to our alliance with Kmart. However, it's important to highlight the growth of the other conventional and alternative retailers we serve, including independent supermarket operators, convenience stores, supercenters, self-distributing grocery chains, and ethnic retailers," said Hansen. Approximately 11 of the 42 percentage point increase was attributable to customers other than Kmart.

Third quarter 2001 retail sales of $484.4 million declined compared to the prior year's $693.6 million. However, sales of continuing operations jumped 21 percent in the third quarter to $453.8 million compared to $375.9 million in 2000. Comparable store sales were up 1.5 percent for the quarter.

Distribution segment adjusted operating earnings, which climbed 29 percent to $102.1 million (2.89 percent of sales), were predominantly influenced by the higher sales levels.

"Our distribution centers are running at all-time high volumes, and we are only just beginning to leverage the scale and efficiencies inherent in these sales levels," noted Hansen. "The volume allowed us to immediately improve selling and administrative costs, which declined by 28 basis points." Adjusted EBITDA increased 28 percent to $130.4 million from $101.7 million in the prior year. Growth in both the Kmart and convenience store business was instrumental in increasing EBITDA dollars, albeit at a lower margin rate.

Retail segment adjusted operating earnings declined to $17.1 million from $19.4 million in the prior year's third quarter. Expressed as a percentage of sales, operating earnings increased in the current year's third quarter to 3.54 percent of sales from 2.79 percent of sales the prior year. A significant reduction in selling and administrative expense - nearly 200 basis points - contributed to the improved retail performance. Adjusted EBITDA improved 62 basis points to 6.14 percent of sales from 5.52 percent of sales. Commenting on the retail segment results, Hansen said, "Our price impact formats, with their high volumes and low operating costs, are a great fit with our distribution strategy. This allows us to be extremely competitive while developing a strong consumer following in this under-served niche of the retail grocery sector."

The company added six new price-impact and four new limited assortment stores during the quarter. The company also completed the conversion of four former Sentry stores. In total, it operated 98 price impact (which includes the 44 Rainbow stores operated in the Minneapolis market and the six Sentry Stores in the Milwaukee market that are in the process of being remodeled and converted) and 16 limited assortment stores at the end of the quarter. Fleming affirmed its stated growth plan of operating 174 price impact stores by the end of 2003.

Selling and administrative adjusted expenses attributable to the company's support services totaled $46.9 million in the third quarter. Comprised primarily of salaries and expenses related to centralized procurement and back office operations (including centralized accounting, information technology, and human resources functions), the company believes that the move to centralization is substantially complete. "Approximately 80 percent of our total procurement needs are being addressed centrally and 20 percent locally," said Hansen. "We believe this makes our Lewisville facility the second-highest volume consumer packaged goods procurement office in the nation and an essential point of business for the vendor community."

An important upgrade in Fleming's debt ratings by Standard & Poor's, along with overall lower interest rates, lowered net interest expense by $4.7 million in the third quarter compared to the same quarter last year. Standard & Poor's upgraded Fleming's corporate credit rating to BB from BB- with a stable outlook. Moody's confirmed Fleming's Ba3 rating with an upgrade to a positive outlook. Additionally, Fleming received an initial debt rating from Fitch with a rating of BB+, one step below investment grade.

Similar to the first and second quarters of 2001, strategic plan charges were down substantially in the third quarter and totaled $6.3 million pre-tax compared to $100.7 million pre-tax in the prior year's third quarter. The company continues to expect an aggregate of approximately $20 million in strategic plan charges in 2001, compared to $309 million in 2000.

Unadjusted, the company had net earnings for the 12-week third quarter of $19.1 million, or $.40 per share on a fully diluted basis.

Other Accomplishments and Milestones Through Third Quarter, 2001

Distribution:

  • Successfully integrated an incremental $3 billion in Kmart food and consumables supply business that was not formerly handled by Fleming. One remaining product category, tobacco, will be integrated in early 2002, which is expected to add an additional $250 million in annualized sales.
  • Completed the acquisition of assets and inventory of Miller & Hartman South, a Leitchfield, Kentucky-based convenience store distributor serving 1,000 customers in 1,800 locations across eight southeastern states.
  • Added year-to-date approximately $800 million in gross annualized sales from acquired convenience store distribution businesses, principally Minter-Weisman and Miller & Hartman South.
  • Added year to date approximately $700 million in gross annualized new business (excluding the Kmart alliance) in the distribution segment. Customers included a variety of independent retailers operating both traditional supermarkets as well as non-traditional retail formats.
  • Completed a series of innovative transactions that placed former Furrs Supermarkets locations into the hands of independent retail operators (including eight IGA franchises). Fleming's net investment in the transaction was approximately $39 million.
  • Commenced operation of a new 540,000 square foot distribution center in South Brunswick, New Jersey. The facility, with an initial annual volume of approximately $600 million, is the second of two new full-line distribution centers opened in 2001.
  • Introduced two new private label lanes. Exceptional Value appeals to the price-focused customer. With a total of 210 items (and another 70 in development), Exceptional Value was on store shelves in August. Comida Sabrosa, Fleming's 80-item specialty line of Hispanic private label products, was introduced in September and will be expanded to a total of 100 items.

Retail:

  • Completed the acquisition of five El Paso and Las Cruces-area stores from Kroger. The stores will be operated in Fleming's price impact format style under the Rainbow Foods banner.
  • Completed the remodel and re-merchandising of four former Sentry stores in the Milwaukee area. Operating under the Rainbow Foods banner in Fleming's price impact format, the stores boasted dramatically lower prices on 16,000 items. Six additional stores are slated to be converted in the Milwaukee market over the coming months.
  • Entered the Amarillo, Texas market with the company's price impact format under the Rainbow Foods banner.
  • Completed the major remodel of seven northern California Food4Less stores.
  • Opened Fleming's 16th opening-price-point discount store, Yes!Less, in the Fort Worth, Texas market, joining 14 others in north Texas and one in Louisiana.
  • Raised $400,000 in customer and employee contributions at Fleming's Rainbow Foods, Food4Less, Yes!Less, and company office and warehouse locations for the American Red Cross September 11th Fund.

Other:

  • Announced the settlement of several complex and old lawsuits relating to certain retail supply agreements in Kansas City and Salt Lake City. The settlements covered a multitude of lawsuits with issues dating back as far as 30 years.
  • On October 15, we completed the offering of $150 million of senior subordinated notes, essentially matching the long-term nature of Fleming's recent acquisitions with long-term financing. The notes were the first significant high-yield issuance following the September 11th tragedy.

About Fleming Companies, Inc.

Fleming is the industry leader in distribution and has a growing presence in value retailing. Fleming's primary business is buying and selling merchandise. The company serves approximately 3,000 supermarkets, 6,800 convenience stores, and more than 2,000 supercenters, discount, limited assortment, drug, specialty, and other stores across the United States. To learn more about Fleming, visit our Web site at www.fleming.com.

Safe-Harbor Statement

This release, including the attached tables, includes forward-looking statements that (a) project or offer guidance regarding earnings, revenues, or other financial results, (b) depend on future events for their accuracy, or (c) rely upon projections and assumptions which may prove to be inaccurate. These forward-looking statements and the company's business and prospects are subject to a number of factors that could cause actual results to differ materially, including: adverse effects of the changing industry environment and increased competition; sales declines and loss of customers; the ability to achieve the expected synergies and anticipated cost savings from the Kmart alliance; unanticipated transition and start-up costs related to the Kmart alliance; the ability to obtain capital or obtain it on acceptable terms; unanticipated problems with product procurement; exposure to litigation and other contingent losses; the inability to integrate acquired companies and to achieve operating improvements at those companies; increases in labor costs and disruptions in labor relations with union bargaining units representing the company's employees; and negative effects of the company's substantial indebtedness and the limitations imposed by restrictive covenants contained in the company's debt instruments. These and other risk factors are described in the company's Securities and Exchange Commission reports, including but not limited to the company's Form 10-K. The company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof.

                  Fleming Companies, Inc. (NYSE:FLM)
           Consolidated Condensed Statements of Operations

    For the 12 weeks ended October 6, 2001, and September 30, 2000
               (In thousands, except per share amounts)
                                               2001

                                Reported    Adjustments      Adjusted
                                                (A)
Net sales (B)                 $4,022,085        $565      $4,022,650
     % change                                                   26.1%

Costs and expenses:
 Cost of sales (B)              3,748,895      (1,220)      3,747,675
 Selling and administrative       209,928      (3,056)        206,872
 Interest expense                  35,370                      35,370
 Interest income                   (5,494)                     (5,494)
 Equity investment results            689                         689
 Impairment/restructuring
  charge                            1,415      (1,415)              -
 Litigation charge                                                  -

     Total costs and expenses   3,990,803      (5,691)      3,985,112

Income (loss) before taxes         31,282       6,256          37,538
Taxes on income (loss)             12,207       2,506          14,713

Net income (loss)                 $19,075      $3,750         $22,825
     % change                                                   51.9%

Basic and diluted income
 (loss) per share:
  Basic                             $0.44       $0.09           $0.52
  Diluted                           $0.40       $0.07           $0.47
     % change                                                   27.0%
Weighted average shares
 outstanding:
  Basic                            43,728                      43,728
  Diluted                          51,032                      51,032


Additional information:
  Depreciation                     $33,676        ($35)        $33,641
  Goodwill amortization             $5,000                      $5,000
  Diluted EPS excluding
   goodwill amortization                                         $0.55
      % change
  Operating earnings                                           $68,103
      % change                                                    9.5%
  EBITDA (C)                                                  $110,238
      % of sales                                                 2.74%
      % change                                                    3.3%

                                               2000

                                Reported   Adjustments       Adjusted
                                               (A)
Net sales (B)                 $3,197,655     ($8,327)     $3,189,328
     % change

Costs and expenses:
 Cost of sales (B)              2,894,341     (10,969)      2,883,372
 Selling and administrative       260,019     (16,264)        243,755
 Interest expense                  40,111                      40,111
 Interest income                   (6,322)                     (6,322)
 Equity investment results          2,097         (31)          2,066
 Impairment/restructuring
  charge                           83,356     (83,356)              -
 Litigation charge                 (1,916)      1,916               -

     Total costs and expenses   3,271,686    (108,704)      3,162,982

Income (loss) before taxes        (74,031)    100,377          26,346
Taxes on income (loss)            (28,472)     39,792          11,320

Net income (loss)                ($45,559)    $60,585         $15,026
     % change

Basic and diluted income
 (loss) per share:
  Basic                            ($1.17)      $1.56           $0.39
  Diluted                          ($1.17)      $1.56           $0.37
     % change
Weighted average shares
 outstanding:
  Basic                            38,902                      38,902
  Diluted                          38,902                      40,364


Additional information:
  Depreciation                     $33,286       ($350)        $32,936
  Goodwill amortization             $4,784                      $4,784
  Diluted EPS excluding
   goodwill amortization                                         $0.51
      % change
  Operating earnings                                           $62,201
      % change
  EBITDA (C)                                                  $106,743
      % of sales                                                 3.35%
      % change


A   - Adjustments relating to the strategic plan, which was announced
    in December 1998, totaled $6.3 million in 2001 compared to $100.7
    million in 2000. Charges include non-cash impairments or
    impairment adjustments of asset values and cash restructuring
    costs for severance, lease termination, real estate disposition
    costs for discontinued operations and other related expenses.
    There were no one-time adjustments for 2001. The one-time
    adjustments for 2000 are an $8.6 million gain from the sale of a
    facility, $10.2 million in charges relating to closing certain
    company-owned retail stores, and $1.9 million net income from
    litigation settlements.

B   - Sales of distribution and total company have been restated for
    quarters prior to quarter 4, 2000 due to adoption of SAB 101 and
    EITF 99-19. Offset is cost of sales; gross margin is not affected.

C   - EBITDA is earnings before interest expense, income taxes,
    depreciation and amortization, equity investment results, and LIFO
    provision ($2,000 credit in 2001 and $500 charge in 2000).



                  Fleming Companies, Inc. (NYSE:FLM - news)
                         Segment Information
                            Income (Loss)

 For the 12 weeks ended October 6, 2001, and September 30, 2000
       (In thousands, except per share amounts)

                                                 2001
                                 Reported    Adjustments      Adjusted
Distribution

 Gross sales (A)           $ 3,798,652         $ 518    $ 3,799,170
 Intersegment elimination (A) (260,895)            -       (260,895)

 Net sales (A)             $ 3,537,757         $ 518    $ 3,538,275
  % change                                                     41.8%

 Gross margin                $ 170,743         $ 812      $ 171,555
  % of distribution
    gross sales                                                4.52%
 Selling and administrative    (60,889)        1,078        (59,811)
  % of distribution
    gross sales                                               -1.57%
 Intersegment elimination       (9,655)            -         (9,655)

 Operating earnings          $ 100,199       $ 1,890      $ 102,089
  % of distribution
    net sales                                                  2.89%
  % change                                                     28.7%

 EBITDA                      $ 129,570         $ 849      $ 130,419
  % of distribution
    net sales                                                  3.69%
  % change                                                     28.2%


Retail

 Net sales                   $ 484,328          $ 47      $ 484,375
  % change                                                    -30.2%

 Gross margin                $ 107,289         $ 356      $ 107,645
  % of retail sales                                           22.22%
 Selling and administrative   (101,627)        1,473       (100,154)
  % of retail sales                                          -20.68%
 Intersegment profit             9,655             -          9,655

     Operating earnings       $ 15,317       $ 1,829       $ 17,146
  % of retail sales                                            3.54%
  % change                                                    -11.5%

 EBITDA                       $ 25,908       $ 3,853       $ 29,761
  % of retail sales                                            6.14%
  % change                                                    -22.3%

Support Services

 Gross margin                 $ (4,842)        $ 617       $ (4,225)
  % of total company sales                                    -0.11%
 Selling and administrative    (47,412)          505        (46,907)
  % of total company sales                                    -1.17%

 Operating earnings          $ (52,254)      $ 1,122      $ (51,132)
  % of total company sales                                    -1.27%

 EBITDA                      $ (51,461)      $ 1,519      $ (49,942)
  % of total company sales                                    -1.24%


                                                2000
                               Reported     Adjustments     Adjusted
Distribution

 Gross sales (A)            $ 2,881,606       $ (8,327)  $ 2,873,279
 Intersegment elimination(A)   (377,577)             -      (377,577)

 Net sales (A)              $ 2,504,029       $ (8,327)  $ 2,495,702
  % change

 Gross margin                 $ 147,620       $ (1,784)    $ 145,836
  % of distribution
    gross sales                                                 5.08%
 Selling and administrative     (54,725)         1,599       (53,126)
  % of distribution
    gross sales                                                -1.85%
 Intersegment elimination       (13,359)             -       (13,359)

 Operating earnings            $ 79,536         $ (185)     $ 79,351
  % of distribution
    net sales                                                   3.18%
  % change

 EBITDA                       $ 101,966         $ (261)    $ 101,705
  % of distribution
    net sales                                                   4.08%
  % change


Retail

 Net sales                    $ 693,626            $ -     $ 693,626
  % change

 Gross margin                 $ 160,929        $ 2,230     $ 163,159
  % of retail sales                                            23.52%
 Selling and administrative    (168,461)        11,323      (157,138)
  % of retail sales                                           -22.65%
 Intersegment profit             13,359              -        13,359

     Operating earnings         $ 5,827       $ 13,553      $ 19,380
  % of retail sales                                             2.79%
  % change

 EBITDA                       $ (48,904)      $ 87,214      $ 38,310
  % of retail sales                                             5.52%
  % change

Support Services

 Gross margin                  $ (5,235)       $ 2,196      $ (3,039)
  % of total company sales                                     -0.10%
 Selling and administrative     (36,833)         3,342       (33,491)
  % of total company sales                                     -1.05%

 Operating earnings           $ (42,068)       $ 5,538     $ (36,530)
  % of total company sales                                     -1.15%

 EBITDA                       $ (46,315)      $ 13,043     $ (33,272)
  % of total company sales                                     -1.04%

A   - Sales of distribution and total company have been restated for
    quarters prior to quarter 4, 2000 due to adoption of SAB 101 and
    EITF 99-19. Offset is cost of sales; gross margin is not affected.


                  Fleming Companies, Inc. (NYSE:FLM - news)
           Consolidated Condensed Statements of Operations

    For the 40 weeks ended October 6, 2001, and September 30, 2000
               (In thousands, except per share amounts)

                                             2001

                               Reported   Adjustments      Adjusted
                                              (A)
Net sales (B)               $11,640,555       ($762)    $11,639,793
   % change                                                    7.7%

Costs and expenses:
 Cost of sales (B)           10,737,764     (30,882)     10,706,882
 Selling and administrative     736,305     (14,122)        722,183
 Interest expense               127,307      (2,833)        124,474
 Interest income                (20,554)      1,102         (19,452)
 Equity investment results          761                         761
 Impairment/restructuring
  charge                        (25,561)     25,561               -
 Litigation charges              48,628     (48,628)              -

   Total costs and expenses  11,604,650     (69,802)     11,534,848

Income (loss) before taxes       35,905      69,040         104,945
Taxes on income (loss)           14,822      27,660          42,482

Income (loss) before
 extraordinary charge           $21,083     $41,380         $62,463
Extraordinary charge from
 early retirement
 of debt (net of taxes)          (3,469)      3,469               -

Net income (loss)               $17,614     $44,849         $62,463
   % change                                                    52.4%

Basic income (loss) per share:
 Income (loss) before
  extraordinary charge            $0.50       $0.98           $1.48
 Extraordinary charge from
  early retirement
  of debt (net of taxes)          (0.08)       0.08               -
 Net income (loss)                $0.42       $1.06           $1.48

Diluted income (loss)
 per share:
 Income (loss) before
  extraordinary charge            $0.47       $0.92           $1.35
 Extraordinary charge from
  early retirement
  of debt (net of taxes)          (0.08)       0.08               -
 Net income (loss)                $0.39       $1.00           $1.35
    % change                                                   31.1%
Weighted average shares
 outstanding:
  Basic                          42,177                      42,177
  Diluted                        44,670                      48,316

Additional information:
 Depreciation                  $109,911        ($35)       $109,876
 Goodwill amortization          $16,216                     $16,216
 Diluted EPS excluding
  goodwill amortization                                       $1.66
     % change                                                  16.1%
 Operating earnings                                        $210,728
     % change                                                  15.1%
 EBITDA (C)                                                $353,665
     % of sales                                                3.04%
     % change                                                   4.8%


                                                2000

                               Reported    Adjustments      Adjusted
                                               (A)
Net sales (B)                $10,819,031     ($6,672)    $10,812,359
   % change

Costs and expenses:
 Cost of sales (B)             9,807,789     (46,300)      9,761,489
 Selling and administrative      893,700     (25,931)        867,769
 Interest expense                131,659                     131,659
 Interest income                 (25,167)                    (25,167)
 Equity investment results         5,682        (315)          5,367
 Impairment/restructuring
  charge                         146,514    (146,514)              -
 Litigation charges               (1,916)      1,916               -

   Total costs and expenses   10,958,261    (217,144)     10,741,117

Income (loss) before taxes      (139,230)    210,472          71,242
Taxes on income (loss)           (54,449)     84,692          30,243

Income (loss) before
 extraordinary charge           ($84,781)   $125,780         $40,999
Extraordinary charge from
 early retirement
 of debt (net of taxes)                                            -

Net income (loss)               ($84,781)   $125,780         $40,999
   % change

Basic income (loss) per shar
 Income (loss) before
  extraordinary charge            ($2.19)      $3.25           $1.06
 Extraordinary charge from
  early retirement
  of debt (net of taxes)               -                           -
 Net income (loss)                ($2.19)      $3.25           $1.06

Diluted income (loss)
 per share:
 Income (loss) before
  extraordinary charge            ($2.19)      $3.22           $1.03
 Extraordinary charge from
  early retirement
  of debt (net of taxes)               -                           -
 Net income (loss)                ($2.19)      $3.22           $1.03
    % change
Weighted average shares
 outstanding:
  Basic                           38,651                      38,651
  Diluted                         38,651                      39,897

Additional information:
 Depreciation                   $114,217     ($6,662)       $107,555
 Goodwill amortization           $15,857                     $15,857
 Diluted EPS excluding
  goodwill amortization                                        $1.43
     % change
 Operating earnings                                         $183,101
     % change
 EBITDA (C)                                                 $337,580
     % of sales                                                 3.12%
     % change

A   - Adjustments relating to the strategic plan, which was announced
    in December 1998, totaled $18.7 million in 2001 compared to $210.8
    million in 2000. Charges include non-cash impairments or
    impairment adjustments of asset values and cash restructuring
    costs for severance, lease termination, real estate disposition
    costs for discontinued operations and other related expenses. The
    one-time adjustments for 2001 are $48.6 million in charges from
    litigation settlements and net additional interest expense of $1.7
    million due to early retirement of debt. The one-time adjustments
    for 2000 are an $8.6 million gain from the sale of a facility,
    $10.2 million in charges relating to closing certain company-owned
    retail stores, and $1.9 million net income from litigation
    settlements.

B   - Sales of distribution and total company have been restated for
    quarters prior to quarter 4, 2000 due to adoption of SAB 101 and
    EITF 99-19. Offset is cost of sales; gross margin is not affected.

C   - EBITDA is earnings before interest expense, income taxes,
    depreciation and amortization, equity investment results, and LIFO
    provision ($2,607 credit in 2001 and $5,900 charge in 2000)



                 Fleming Companies, Inc. (NYSE:FLM - news)
                         Segment Information
                            Income (Loss)

    For the 40 weeks ended October 6, 2001, and September 30, 2000
               (In thousands, except per share amounts)

                                                   2001

                                Reported       Adjustments    Adjusted
Distribution

 Gross sales (A)             $ 10,748,942        $ 2,775  $ 10,751,717
 Intersegment elimination (A)    (949,125)             -      (949,125)

     Net sales (A)            $ 9,799,817        $ 2,775   $ 9,802,592
         % change                                                18.2%

 Gross margin                   $ 522,552        $ 6,735     $ 529,287
         % of distribution
           gross sales                                           4.92%
 Selling and administrative      (177,202)         2,476      (174,726)
         % of distribution
           gross sales                                          -1.63%
 Intersegment elimination         (35,584)             -       (35,584)

  Operating earnings            $ 309,766        $ 9,211     $ 318,977
         % of distribution
           net sales                                             3.25%
         % change                                                28.5%

  EBITDA                        $ 393,384       $ 16,949     $ 410,333
         % of distribution
           net sales                                             4.19%
         % change                                                27.2%


Retail

 Net sales                    $ 1,840,738       $ (3,537)  $ 1,837,201
         % change                                               -27.0%

 Gross margin                   $ 400,639       $ 21,667     $ 422,306
         % of retail sales                                      22.99%
 Selling and administrative      (394,153)         9,501      (384,652)
         % of retail sales                                     -20.94%
 Intersegment profit               35,584              -        35,584

     Operating earnings          $ 42,070       $ 31,168      $ 73,238
         % of retail sales                                       3.99%
         % change                                                26.4%

     EBITDA                     $ 122,218       $ (4,804)    $ 117,414
         % of retail sales                                       6.39%
         % change                                                -2.4%

Support Services

 Gross margin                   $ (20,400)       $ 1,718     $ (18,682)
         % of total company
           sales                                                -0.16%
 Selling and administrative      (164,950)         2,145      (162,805)
         % of total company
           sales                                                -1.40%

     Operating earnings        $ (185,350)       $ 3,863    $ (181,487)
         % of total company
           sales                                                -1.56%

     EBITDA                    $ (228,109)      $ 54,027    $ (174,082)
         % of total company
           sales                                                -1.50%

                                                   2000

                                Reported      Adjustments     Adjusted
Distribution

 Gross sales (A)              $ 9,647,094       $ (6,672)  $ 9,640,422
 Intersegment elimination (A)  (1,343,941)             -    (1,343,941)

     Net sales (A)            $ 8,303,153       $ (6,672)  $ 8,296,481
         % change

 Gross margin                   $ 449,284       $ 21,843     $ 471,127
         % of distribution
           gross sales                                           4.89%
 Selling and administrative      (177,400)         2,286      (175,114)
         % of distribution
           gross sales                                          -1.82%
 Intersegment elimination         (47,753)             -       (47,753)

  Operating earnings            $ 224,131       $ 24,129     $ 248,260
         % of distribution
           net sales                                             2.99%
         % change

  EBITDA                        $ 270,354       $ 52,280     $ 322,634
         % of distribution
           net sales                                             3.89%
         % change


Retail

 Net sales                    $ 2,515,878            $ -   $ 2,515,878
         % change

 Gross margin                     576,921          8,799     $ 585,720
         % of retail sales                                      23.28%
 Selling and administrative      (589,239)        13,720      (575,519)
         % of retail sales                                     -22.88%
 Intersegment profit               47,753              -        47,753

     Operating earnings          $ 35,435       $ 22,519      $ 57,954
         % of retail sales                                       2.30%
         % change

     EBITDA                       $ 6,049      $ 114,245     $ 120,294
         % of retail sales                                       4.78%
         % change


Support Services

 Gross margin                   $ (14,963)       $ 8,986      $ (5,977)
         % of total company
           sales                                                -0.06%
 Selling and administrative      (127,061)         9,925      (117,136)
         % of total company
           sales                                                -1.08%

     Operating earnings        $ (142,024)      $ 18,911    $ (123,113)
         % of total company
           sales                                                -1.14%

     EBITDA                    $ (142,318)      $ 36,970    $ (105,348)
         % of total company
           sales                                                -0.97%


A   - Sales of distribution and total company have been restated for
    quarters prior to quarter 4, 2000 due to adoption of SAB 101 and
    EITF 99-19. Offset is cost of sales; gross margin is not affected.



                  Fleming Companies, Inc. (NYSE:FLM - news)
           Consolidated Condensed Balance Sheet Information
                            (In thousands)

                                  Oct. 6,     Dec. 30,    Sept. 30,
                                   2001        2000         2000
Assets

Cash and cash equivalents       $ 43,491     $ 30,380     $ 49,673
Receivables, net                 571,503      509,045      467,995
Inventory                      1,094,935      831,265      867,145
Other current assets             129,082      252,383      247,308

    Total current assets       1,839,011    1,623,073    1,632,121

Property and equipment, net      737,874      716,457      723,191

Other assets                   1,170,892    1,063,281      994,500

    Total assets             $ 3,747,777  $ 3,402,811  $ 3,349,812


Liabilities and
 shareholders' equity

Accounts payable             $ 1,016,873    $ 943,279    $ 846,851
Current portion of  LT debt
 and cap lease obligations        60,584       59,837       58,662
Other current liabilities        199,847      229,272      175,146

   Total current liabilities   1,277,304    1,232,388    1,080,659

Long-term debt and capital
 lease obligations             1,851,855    1,609,639    1,677,466

Other liabilities                109,688      133,592      111,847

Shareholders' equity             508,930      427,192      479,840

    Total liabilities and
     shareholders' equity    $ 3,747,777  $ 3,402,811  $ 3,349,812


Additional Information

Adjusted EBITDA to interest
 expense (LTM)                     2.82 x       2.61         2.58 x

Total debt as a percentage of
 total capitalization              79.0%        79.6%        78.3%

Capital expenditures (YTD)     $ 168,504    $ 150,837    $ 107,623

Inventory turns (YTD)              14.5 x       14.3 x       13.6 x