Exhibit 99b
Financial Information
The unaudited summary financial data set forth below
should be read in conjunction with the Financial Statements and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the Quarterly Report on Form
10-Q for the period ended September 10, 1994 of Holding.
The projected 1994 financial information represents
actual operating data for the 44 weeks ended November 5, 1994 and
projected performance for the 8 weeks ending December 31, 1994,
without, in each case, giving effect to the Transaction. The
adjusted projected 1994 financial information was prepared by
Homeland to illustrate the estimated effects of the Transaction and
certain related transactions as if the Transaction and related
transactions had occurred as of January 2, 1994.
The financial information set forth below (including the
projected 1994 financial information) has been prepared by Homeland
to present the effects of the Transaction and related transactions,
but is not factual and should not be relied upon as being
representative of future results. The estimates and assumptions
underlying such information are inherently uncertain, being based
upon events that have not taken place, are subject to economic,
competitive and other uncertainties and contingencies beyond
Homeland's control and involve judgments based upon past
performance and industry trends which may not necessarily be
indicative of future performance or trends. Consequently, there
may be no assurance that (a) the assumptions underlying such
information will prove correct, (b) the results reflected in such
information can be realized, or (c) the actual results will not be
higher or lower than those projected. However, Homeland believes
that the basis for such information is reasonable, taking into
account the purpose for which it has been prepared.
The financial information set forth below was not
prepared with a view towards public disclosure or compliance with
the published guidelines of the Securities and Exchange Commission
or the American Institute of Certified Public Accountants or
generally accepted accounting principles. The independent auditors
of Homeland have not examined, reviewed or compiled such
information and, accordingly, do not express an opinion or any
other form of assurance on it.
Homeland does not intend to update or otherwise revise
the financial information set forth below to reflect circumstances
existing after the date hereof or to reflect the occurrence of
unanticipated events, even in the event any or all of the
underlying assumptions are shown to be in error. Furthermore,
Homeland does not intend to update or revise such information to
reflect changes in general economic or industry conditions.
However, upon the consummation of the Transaction, Homeland intends
to file a Current Report on Form 8-K that would include the
information required by Items (2) and (7) of Form 8-K.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
UNAUDITED SUMMARY FINANCIAL DATA
For the 52 Weeks Ending December 31, 1994
(In thousands)
Adjusted
Projected Projected
Dec. 31, 1994 Dec. 31, 1994
(1)
Summary Income Statement
Sales $ 779,230 $ 527,404 (3)
Gross Profit 199,431 140,595 (3)
Selling and Administrative 188,117 128,846 (4)
Earnings before Interest and Taxes 11,314 11,749
Depreciation, Amortization and
Non-cash Items 19,058 11,393 (5)
EBITDA 30,372 23,142
Interest Expense 18,135 11,504 (7)
Cash Capital Expenditures 6,200 5,000 (8)
Summary Capitalization
Notes Payable $ 750 $ 750
Floating Senior Notes-Series A 12,000 7,997
Floating Senior Notes-Series D 33,000 21,993
11.75% Senior Notes-Series C 75,000 49,984
Revolving Credit Loans 35,000 23,326
Capital Leases 17,757 8,612
Total Debt 173,507 112,662 (6)
Equity 32,443 (2) 16,483 (9)
Book Capitalization $205,950 $129,145
Summary Coverage Rating
EBITDA/Interest 1.67 2.01
EBITDA-CapEx/Interest 1.33 1.58
Debt/EBITDA 5.71 4.87
The accompanying notes are an integral part
of this summary financial data.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED PROJECTED SUMMARY FINANCIAL DATA
1. Projected 1994:
The projected 1994 financial information represents actual
operating data for the 44 weeks ended November 5, 1994 and
projected performance for the 8 weeks ending December 31, 1994
without, in each case, giving effect to the Transaction or to the
closing of certain stores. The balance shown for the Revolving
Credit Loans includes outstanding letters of credit of $9.5
million.
2. Projected Equity:
Reflects the early adoption of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" during the fourth quarter of fiscal
1994. The impact of adoption has resulted in a one-time charge
against equity of $1.9 million.
3. Sales and Gross Profit:
Net sales and gross profit represents actual operating data for the
44 weeks ended November 5, 1994 and projected performance for the
8 weeks ending December 31, 1994 for the continuing stores. Gross
profit has been impacted by the following:
(a) A reduction by 0.5% to reflect the anticipated initial
increase in inventory costs during the Company's transition to
AWG's purchasing programs and procedures. Management believes
that the impact of the transition will be reduced over time.
(b) An increase by 1.0% to reflect the purchase rebates offered
pursuant to the Transaction as set forth in the Letter of
Intent.
4. Selling and Administrative:
Includes management's estimates of certain anticipated corporate
cost reductions, such as reduced headcount and other administrative
expenses, likely to arise from the Transaction. The adjusted
projected results also give effect to the estimated cost impact of
senior ranking union employees employed in the stores to be sold to
AWG or closed, replacing junior union employees in the continuing
stores as provided for in the United Food and Commercial Workers of
North America collective bargaining agreement.
5. Depreciation, Amortization and Non-Cash Items:
Includes certain anticipated corporate asset disposals resulting
from the Transaction.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED PROJECTED SUMMARY FINANCIAL DATA
6. Debt:
Debt repayments are based on an estimate of the net cash proceeds
to be received from the Transaction and sale of certain assets
relating to closed stores allocated on a pro rata basis to the
projected outstanding debt as of December 31, 1994. The effect of
such pro rata allocation of proceeds may not be consistent with the
requirements set forth under the Company's Revolving Credit
Agreement and Senior Note Indenture. Capital leases are reduced by
$9.1 million resulting from the assumption of some leases and the
termination of others in conjunction with the Transaction and
closing of certain stores.
7. Interest Expense:
Interest expense for the year is estimated based on the rates in
effect during fiscal 1994 applied to the outstanding debt during
the fiscal year assuming the estimated pro rata debt repayments
described in Note 6 above were made as of January 2, 1994.
8. Cash Capital Expenditures:
Represents projected cash capital expenditures to be incurred
during fiscal 1995 for the continuing stores.
9. Adjusted Projected Equity:
Represents the impact of the Transaction on equity and includes the
following:
(a) Estimated net book loss resulting from the Transaction.
(b) Estimated net loss resulting from closing certain stores.
(c) Estimated costs of debt restructuring and other Transaction
related expenses.