Seaway Food Town, Inc., (Nasdaq:SEWY – news) today reported financial results for the fiscal 2000 third quarter and thirty-nine weeks that ended May 27, 2000, and declared a regular cash dividend of $.045 per share, payable July 17, 2000, to shareholders of record as of July 7, 2000.

Sales for the fiscal 2000 third quarter increased 2.7% to a third quarter record $171,887,000 from $167,306,000 for the year-ago quarter. Net income rose 88.5% to a third quarter record $3,511,000, or $0.53 per share, from $1,863,000, or $0.28 per share, for the corresponding quarter last year. Sales in comparable stores (stores in operation during the third quarter of both fiscal 2000 and fiscal 1999) increased 3.0% in the year-over-year comparison.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Sales for the thirty-nine weeks of fiscal 2000 were $520,254,000, up 5.2% from $494,318,000 for the same period last year. Net income for the year-to-date increased 52.6% to $8,555,000, or $1.28 per share, from $5,608,000, or $0.84 per share, for the nine months of fiscal 1999. On a trailing four quarter basis, net income was $10,421,000 or $1.56 per share which compares to $7,428,000 or $1.11 per share for the prior four quarters, a 40.3% increase. The current year’s increase in earnings is attributable to improved margins, and strong sales promotion.

The Company’s operating cash flow (defined as EBITDA, or earnings before interest, taxes, depreciation, amortization, and LIFO charges/credits) during the third quarter of fiscal 2000 increased 31.6% to $10,131,000 (5.89% of sales) from $7,697,000 (4.60% of sales) for the same period in fiscal 1999. For the year-to-date, EBITDA increased 19.9% to $27,411,000 (5.27% of sales) from $22,861,000 (4.62% of net sales) for the nine months of fiscal 1999. On a trailing four-quarter basis, EBITDA was $34,351,000 (5.02% on sales) compared with $30,582,000 (4.70% on sales) for the same period one year earlier, a 12.3% increase.

Capital expenditures (which does not include the store acquisitions) for the nine months of fiscal 2000 were $5,428,000 compared with $11,281,000 for the nine months of fiscal 1999. The Company’s long-term debt to equity ratio improved to 0.51 to 1 as of the end of the third quarter of fiscal 2000 from 0.79 to 1 one year earlier, the lowest level in the Company’s history. The Company’s fixed charge coverage ratio was 2.61 to 1 for the nine months of the current fiscal year compared with 2.05 to 1 for the nine months of fiscal 1999. The Company continues to maintain a very strong balance sheet.

On April 6, 2000, the Company’s Board of Directors approved an Agreement and Plan of Merger (Merger Agreement) among the Company, Spartan Stores, Inc., and Spartan Acquisition Corp. Based on the Merger Agreement, each of the Company’s shareholders will receive a cash payment of $5.00 and one share of Spartan new common stock for each share of Company stock held. Immediately prior to consummation of the merger, Spartan shareholders will exchange their existing shares of Spartan Stores Class A common stock for approximately 13.2 million shares of Spartan new common stock. The merger is subject to shareholder approval of both companies, with shareholder meetings scheduled to occur on July 18, 2000. Following the expected shareholder approval, the closing of the merger is expected to occur on the following day, July 19, 2000.

Seaway Food Town is a leading food and drug retailer operating 73 retail units – 47 Food Town Super-markets and 26 deep discount drugstores operating under the name of The Pharm. All stores are located in northwestern and central Ohio and southeastern Michigan.

Cautionary Statement for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995:

This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Potential risks and uncertainties include, but are not limited to, competitive pressures from other major supermarket operations, economic conditions in the Company’s primary markets, and the other uncertainties which will be detailed from time to time in the Company’s public releases. 

SEAWAY FOOD TOWN, INC.

ATTACHMENT TO PRESS RELEASE FOR 3RD QUARTER, 2000 F.Y.
(dollars in thousands, except share and per share data)

3rd Quarter
———–

5/27/00 5/29/99 5/27/00 5/29/99
13 weeks 13 weeks 39 weeks 39 weeks
——— ——— ——— ———-
Net sales $ 171,887 $ 167,306 $ 520,254 $ 494,318

Costs of merchandise
sold 125,772 124,558 385,512 369,006
——— ——— ——— ———-
Gross profit 46,115 42,748 134,742 125,312

Total operating &
administrative
expense 39,576 38,945 118,626 113,830
——— ——— ——— ———-
Operating profit 6,539 3,803 16,116 11,482

Interest expense (772) (1,001) (2,659) (3,000)

Other income – net (70) 91 122 246
——— ——— ——— ———-
Income before
income taxes 5,697 2,893 13,579 8,728

Provision for
income taxes 2,186 1,030 5,024 3,120
——— ——— ——— ———-
Net income $ 3,511 $ 1,863 $ 8,555 $ 5,608
——— ——— ——— ———-
——— ——— ——— ———-

Earnings per share $ 0.53 $ 0.28 $ 1.28 $ 0.84
——— ——— ——— ———-
——— ——— ——— ———-

Total number
of shares
outstanding 6,712,810 6,673,643 6,694,865 6,662,417
——— ——— ——— ———-
——— ——— ——— ———-