Exhibit 99.2
KROGER 2ND QTR OPER NET PER SHARE:
57 CENTS VS. 27 CENTS
CINCINNATI, Ohio, July 19, 1994 --- The Kroger Co. said today that earnings
before extraordinary charges in the 1994 second quarter rose to $70.0
million, equal to 57 cents per share on a fully diluted basis, compared to
$29.6 million, or 27 cents per share, in the prior year's second quarter.
Operating cash flow -- earnings before interest, taxes, depreciation and
LIFO -- increased 9.8 percent to $261.2 million from $237.9 million in the
1993 second quarter.
The Company noted that last year's results included a one-time after tax
special charge of $15 million, or 12 cents per share fully diluted, for the
closing of San Antonio stores in 1993.
After the extraordinary charge from the early retirement of debt, net
earnings in the second quarter totaled $67.3 million, or 55 cents per share
fully diluted, compared to $27.5 million, or 25 cents per share fully
diluted, in last year's second quarter.
Total sales in the quarter increased 1.2 percent to $5.4 billion from $5.3
billion. Identical food store sales increased 1.8 percent.
Kroger's net interest expense in the second quarter declined 20.7 percent
to $75.0 million. Long-term debt at the end of the second quarter was
$3.944 billion, a decrease of $269.4 million from the previous year's
second quarter.
Joseph A. Pichler, Chairman and Chief Executive Officer, said the Company's
performance in the second quarter reflected across-the-board improvements
in operating efficiencies, the favorable impact of technology, and strong
merchandising programs tailored to individual markets.
"In the highly competitive environment of food retailing, Kroger is
succeeding by controlling distribution and logistics costs, and through the
implementation of new technologies," Pichler said. "At the same time, our
localized merchandising strategies are using the full strengths of Kroger's
combination food and drug stores and our strong private brands to maintain
our market leadership position," he added.
During the first half of 1994, Kroger opened, expanded or acquired 33
stores, which is on target with the Company's current plan to expand new
retail square footage by a minimum of approximately 5 to 6 percent annually
in 1994-96.
In the first half, operating cash flow increased 9.4 percent to $498.7
million, and sales increased 2.1 percent to $10.7 billion. Identical food
store sales through the first half were up 2.0 percent over the prior
year's first half.
Separately, Kroger said it expects to close a new bank credit agreement
later today that will lower costs of borrowing and permit increased capital
expenditures.
The Kroger Co.
Sales and Earnings
2nd Qtr 2nd Qtr Percent
1994 1993 Change
-------------- -------------- ---------
Sales $5,394,228,355 $5,329,372,598 1.2
============== ============== ==========
EBITD <F1> $ 261,170,719 $ 237,860,959 9.8
Non-EBITD
charges <F2> $ (4,500,000) $ (27,225,000)
LIFO $ (3,000,000) $ (3,750,000)
Interest $ (75,008,364) $ (94,590,856)
Depreciation
$ (64,383,531) $ (59,902,574)
--------------- ---------------
Pre-tax earnings
before extraordinary
loss $ 114,278,824 $ 52,392,529
Tax expense
$ (44,300,337) $ (22,771,217)
--------------- ---------------
Earnings before
extraordinary
loss $ 69,978,487 $ 29,621,312
Extraordinary
loss <F3> $ (2,645,544) $ (2,135,947)
--------------- ---------------
Net earnings
$ 67,332,943 $ 27,485,365
============== ===============
Primary earnings (loss) per
common share:
From operations
$ 0.62 $ 0.27
From extraordinary
loss <F3> $ (0.02) $ (0.02)
_______________ ________________
Primary net earnings
per common share
$ 0.60 $ 0.25
Fully-diluted earnings (loss)
per common share:
From operations
$ 0.57 $ 0.27
From extraordinary
loss <F3> $ (0.02) $ (0.02)
_______________ ________________
Fully-diluted net earnings
per common share
$ 0.55 $ 0.25
============== ===============
Number of shares
used in primary per share
calculation 112,966,394 108,392,949
Number of shares
used in fully-diluted
per share
calculation
130,271,502 125,482,008
[FN]
<F1> EBITD represents pre-tax earnings before interest, depreciation, and
LIFO as defined in the Company's Bank Credit Agreement.
<F2> Represents $4.5 million, or $2.7 million after-tax, for additional
quarterly charge from the adoption of FASB 106 in 1994 and 1993 and $22.7
million, or $15 million after-tax, in 1993 from the Company's
withdrawal from the San Antonio market, which are excluded from EBITD as
defined by the Company's Bank Credit Agreement.
<F3> Represents the after-tax loss from the early retirement of debt.
[CAPTION] 2 Qtrs 2 Qtrs Percent
1994 1993 Change
6/18/94 6/19/93
--------------- --------------- ----------
Sales $10,723,032,262 $10,503,298,306 2.1
=============== =============== ==========
EBITD <F1> $ 498,718,562 $ 455,928,697 9.4
Non-EBITD
charges <F2>
$ (9,000,000) $ (31,725,000)
LIFO $ (6,500,000) $ (7,750,000)
Interest $ (151,039,852) $ (191,579,989)
Depreciation
$ (126,693,700) $ (122,878,893
---------------- ----------------
Pre-tax earnings before
cumulative effect adjustment and
extraordinary
loss $ 205,485,010 $ 101,994,815
Tax expense
$ (79,816,711) $ (42,909,745)
---------------- ---------------
Earnings before
cumulative effect adjustment and
extraordinary
loss $ 125,668,299 $ 59,085,070
Extraordinary
loss <F3> $ (10,977,622) $ (11,177,855)
Cumulative effect of change
in accounting for
postretirement
benefits <F4>
$ NA $ (159,192,961)
---------------- ---------------
Net earnings
(loss) $ 114,690,677 (111,285,746)
================ ===============
Primary earnings (loss) per
common share:
From operations
$ 1.12 $ 0.57
From extraordinary
loss <F3> $ (0.10) $ (0.11)
From cumulative effect of
change in accounting for
postretirement
benefits <F4>
$ NA $ (1.54)
---------------- -----------------
Primary net earnings
(loss) per common
share $ 1.02 $ (1.08)
================ =================
Fully-diluted earnings (loss)
per common share:
From operations
$ 1.02 $ 0.55
From extraordinary
loss <F3> $ (0.08) $ (0.09)
From cumulative effect of
change in accounting for
postretirement
benefits <F4>
$ NA $ (1.32)
--------------- ----------------
Fully-diluted net earnings
(loss) per common
share: $ 0.94 $ (0.86)
=============== ================
Number of shares
used in primary per share
calculations 112,444,812 103,079,043
Number of shares
used in fully-diluted
per share
calculation
129,962,861 120,408,073
------------ ------------
[FN]
<F1> EBITD represents pre-tax earnings before interest, depreciation and
LIFO as defined in the Company's Bank Credit Agreement.
<F2> Represents $9.0 million, or $5.4 million after-tax, for additional
quarterly charges from the adoption of FASB 106 in 1994 and 1993 and $22.7
million, or $15 million after-tax in 1993, from the Company's withdrawal
from the San Antonio market, which are excluded from EBITD as defined by
the Company's Bank Credit Agreement.
<F3> Represents the after-tax loss from the early retirement of debt.
<F4> Represents the after-tax cumulative effect adjustment from the
adoption of FASB 106, "Accounting for Postretirement Benefits other than
Pensions".