Fresh Brands, Inc, has reported record sales and earnings per share for its fiscal year ended 29 December 2001.
Go deeper with GlobalData
Net sales for 2001 were a record US$580.2m, a 15.6% increase over the prior year’s sales of US$502.1m. The significant sales increase was largely attributable to the June, 2001 acquisition of Dick’s Supermarkets, Inc. Dick’s Supermarkets contributed US$57.2m to net sales in 2001. Net earnings for the year were US$7.8m, compared to net earnings of US$7.9m in 2000. Diluted earnings per share for 2001 were $1.48, an 11.3% increase over diluted earnings per share of US$1.33 in the prior year. The improvement in 2001 earnings per share was principally attributable to share repurchases during the year.
EBITDA for 2001 was US$20.1m, a 14.9% increase year on year. Dick’s Supermarkets added US$2m to 2001 EBITDA.
Retail sales for 2001 improved 30.8% to US$271.4m, compared to US$207.5m in the prior year. The acquisition of Dick’s Supermarkets added US$54.7m to 2001 retail sales. Net wholesale sales for fiscal 2001 increased 4.9% to US$308.8m, compared to US$294.5m in 2000.
For the Q4 of fiscal 2001, net sales were US$147.1m, a 21% increase over the prior year’s Q4 sales of US$121.6m. Net earnings for the Q4 of 2001 were essentially flat at US$2.58m. Diluted earnings per share for the Q4 of 2001 were US$0.50, a 13.6% increase from 2000.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataRetail sales for the Q4 of 2001 improved 50.1% to US$73.8m, compared to US$49.2m in the Q4 of 2000. The acquisition of Dick’s added US$23.3m to this figure and 47.4% to the increase in retail sales over the Q4 in 2000. Net wholesale sales for the Q4 of 2001 increased 1.2% to US$73.3m, compared to US$72.4m year on year.
Elwood F. Winn, president and CEO of Fresh Brands commented: “We are pleased with our 2001 performance and with the progress we made during the year in pursuing our strategy to grow by adding additional brands and expanding our geographic reach.
“The addition of Dick’s Supermarkets to the Fresh Brands family in June, and the opening of our state-of-the-art flagship store in Sheboygan, Wisconsin, in August, were major accomplishments for our company in 2001.
“In addition, we took steps to build the management information systems and facilities infrastructure that will support our future growth. We initiated the process of expanding our freezer and warehouse square footage in Sheboygan to increase the current mix of frozen food items, dairy products and general merchandise we offer and to support our future growth plans. We are also investigating potential products and services that are at the forefront of national industry trends that have the potential to increase same-store sales. These include expanded general merchandise offerings, pharmacies and gas stations.”
Winn noted that same store sales for Piggly Wiggly franchise and corporate retail stores increased 2.1% for the Q4 and 3.4% for the FY, year on year. Same store sales represent sales of all Piggly Wiggly corporate and franchise stores that were open throughout 2001 and 2000.
“Other factors contributing to Q4 and 2001 sales increases included our successful Preferred Power Pricing program, new store replacements and conversions, and store closures by certain competitors. Our gross margin increased to 18.2% in 2001 from 16.5% for the prior year, reflecting a higher retail sales mix following the acquisition of Dick’s,” he said.
Operating expenses for 2001, as a percent of sales, were 15.9%, compared to 14.0% in 2000. Winn indicated that increased operating expenses primarily reflected the increase in the company’s percentage of retail sales resulting from the Dick’s acquisition. Additionally, ongoing increases in health and accident insurance costs, including a US$500,000 supplemental assessment from the retail multi-employer union health plan, gave rise to a higher percentage. Increases also included approximately US$1m in additional depreciation and amortization costs incurred as a result of the Dick’s acquisition.
“We are very pleased with the results of the Dick’s acquisition and with the progress we have made in gaining synergies as we have integrated both organizations. The increases in our retail and wholesale sales, improvement in our gross margin and nominal earnings growth are consistent with our plan. For 2001, Dick’s was nominally accretive to our earnings per share. Additionally, the corresponding increase in operating expenses was an anticipated result of the increased mix of retail sales,” Winn said.
Winn said the company opened a new corporate replacement store in Zion, Illinois in January 2002. During the remainder of the year, the company expects additional openings including: a new market corporate store in Kenosha, Wisconsin; one new market franchise store in Oostburg, Wisconsin; two expanded and renovated franchise stores in Waunakee and Mequon, Wisconsin; and new franchise replacement stores in West Bend and Howard, Wisconsin.
“The new and expanded stores incorporate many of the innovative design features of our new flagship prototype store in Sheboygan.
“Looking ahead, our goal is to achieve a 15% compound annual growth rate in sales over the next five years. We currently expect that our earnings for 2002 will be in the range of US$1.60 to US$1.75 per share, barring any unusual or unforeseen occurrences in the economy, our markets or our business.”
Both the sales growth rate and the projected earnings per share range assume that the company can achieve its 2002 objectives relating to same store sales growth, additional store conversions into Piggly Wiggly or Dick’s Supermarkets, continued successful integration of the Dick’s acquisition into Fresh Brands, and one additional multi-store acquisition.
During the Q4 of 2001, the company repurchased 74,000 shares of its common stock at an aggregate price of US$1.4m. During 2001, the company repurchased a total of 743,000 shares at an aggregate price of US$9.7m. At the end of the year, approximately US$1.9m remained available from the company’s Board-authorized US$25m share repurchase plan. Also during the Q4 of 2001, the company announced the sale of 200,000 shares of its common stock in a private transaction for US$3,300,000 to two highly respected local investors. The 200,000 shares represent approximately 3.8% of the 5,269,000 weighted average shares and equivalents outstanding.
Separately, the company announced that its Board of Directors declared a regular first quarter cash dividend of US$0.09 per share, payable March 8, 2002, to shareholders of record 22 February 2002.
