EXHIBIT 99.1
<Table>
FLEMING NEWS RELEASE
CONTACTS: Fleming Companies, Inc.
(Media) Shane Boyd 972.906.8824 1945 Lakepointe Drive
(Media) Randy Hatcher 972.906.8823 P.O. Box 299013
(Investors-Equity) Meredith Anderson 972.906.8592 Lewisville, Texas
(Investors-Debt) Matt Hildreth 972.906.8126 75029
telephone 972.906.8000
facsimile 972.906.1561
www.fleming.com
</Table>
MAJOR TRANSACTIONS OPEN SIGNIFICANT
NEW GROWTH OPPORTUNITIES FOR FLEMING
ACQUISITIONS OF CORE-MARK AND HEAD DISTRIBUTING ADVANCE FLEMING'S
STRATEGY TO SERVE RETAILERS OF ANY SIZE, ANY FORMAT, ANY LOCATION
FURTHERS #1 POSITION AS SUPPLIER OF CONSUMER PACKAGE GOODS TO RETAIL
DALLAS, TEXAS, APRIL 24, 2002 -Fleming (NYSE: FLM) today said that it is
acquiring privately-held companies Core-Mark International, Inc. and Head
Distributing, two of the nation's foremost convenience-store distributors. The
acquisitions further Fleming's strategic transformation into an efficient,
national, multi-tier supply chain for consumer package goods to retailers of any
size, format, or location. With approximately $22 billion in projected 2003
revenue, Fleming furthers its #1 position as a supplier of consumer package
goods to the U.S. retail industry.
Core-Mark, a leading piece-pick distributor to convenience stores and
other retail customers in western North America, had 2001 sales of $3.4 billion.
Core-Mark is known for its excellent management team and customer-focused
associates. It serves nearly 30,000 locations from its network of 19
distribution centers. Current Core-Mark customers include Circle K, Phillips
Petroleum, ARCO AM-PM, EZ Mart, Chevron and Shell dealers, 7-11 franchisees,
Long's Drug Stores, Albertson's, and Safeway.
Head Distributing, a Georgia-based distributor, operates two piece-pick
distribution centers and serves 3,000 retail locations in six southeastern
states. Head Distributing's fiscal 2001 sales were approximately $350 million.
Head's largest customer is Ahold's convenience operations.
Core-Mark's solid presence in the west combined with Head's
southeastern positioning perfectly complements Fleming's piece-pick strength in
the midwest and east. Combined, Fleming will have a nationwide network of
high-velocity piece-pick distribution centers that will serve approximately one
out of every five of the convenience store outlets in the United States, along
with many other retail customers.
Page 1 of 5
Also, as a result of these acquisitions, Fleming will have:
o significant opportunities to expand sales and marketing
initiatives as one of only two piece-pick suppliers capable of
national distribution to convenience stores and other
convenience-related retail formats;
o a national, interconnected network of multi-tier distribution
centers, with piece-pick (meaning products selected in single unit
quantities and distributed in totes), case-pick (meaning products
selected in case quantities, aggregated and distributed on
pallets), and flow-through (meaning distribution in full pallet
quantities);
o an increasingly efficient supply chain with expanded procurement
and merchandising scale; and
o further diversification of its customer base, with enhanced sales
and earnings growth potential.
"These acquisitions benefit all of Fleming's stakeholders," said Mark
Hansen, Fleming's chairman and chief executive officer. "Our shareholders will
be clear beneficiaries of Fleming's expanded sales and the increased earnings we
anticipate from these acquisitions. Our customers will be advantaged as we
continue to drive costs out of the supply chain through the benefits of size and
scale. Consolidating $22 billion of annualized wholesale volume into one company
and serving nearly 50,000 retail locations is of tremendous value to vendors.
Fleming associates, including the outstanding teams who will be joining us from
Core-Mark and Head Distributing, will benefit as we continue to grow our
enterprise and execute our winning business model."
The Head Distributing acquisition closed on April 23. Fleming currently
expects the Core-Mark acquisition to close within 90 days, subject to certain
closing conditions. The combined purchase price of these two acquisitions is
expected to be approximately $430 million, which includes the payment of cash
and assumption of debt of these two companies. The projected annual EBITDA run
rate of the Core-Mark and Head operations is approximately $80 million.
In conjunction with these transactions, Fleming plans to file a shelf
registration statement for the sale of up to $600 million of debt and/or common
stock. The company anticipates issuing a combination of debt securities and
common stock in public offerings in order to fund these acquisitions. The
company also plans to refinance its existing senior credit facility later this
spring. Upon completion, the company anticipates that its new capital structure
will eliminate all debt securities maturing before 2007 and result in an
improved leverage position, including reducing its debt-to-total capital and
debt-to-EBITDA ratios.
Page 2 of 5
SIGNIFICANT OPPORTUNITIES TO EXPAND SALES
Fleming's multi-tier distribution network provides it with broad growth
opportunities. Its new, national footprint for piece-pick distribution that
results from the Core-Mark and Head Distributing acquisitions is key in its
ability to increase its share of the piece-pick market segment, which Fleming
estimates at $100 billion of the total $480 billion addressable market for
distribution of consumer package goods in the United States. It includes
consumer package goods sales to traditional convenience stores and a variety of
other convenience-oriented retail, such as drug stores, fuel stations, mass
merchandise stores and supermarkets (for checkstand candy, snacks and tobacco),
dollar stores, and other specialty retail outlets including casinos, hotel gift
shops, airport concession stands, cigarette and tobacco shops, and military
exchanges. Convenience merchandise typically includes candy, snacks,
ready-to-eat foods, tobacco, beverages, and certain grocery, frozen, general
merchandise, and health and beauty care items. Fleming believes there is an
increasing demand for a national network of distribution facilities that can
uniformly meet the piece-pick needs of the large-scale chains that are being
created through retail and oil industry consolidation. Fleming's multi-tier
network will offer all retail formats a low-cost, high-service alternative to
other distribution competitors or self-distribution.
AN INCREASINGLY EFFICIENT AND POWERFUL SUPPLY CHAIN DRIVEN BY TECHNOLOGY
Fleming's unique national distribution business model, which it calls
"multi-tier distribution," melds its piece-pick, case-pick, and flow-through
capabilities into a seamless supply chain architecture that optimizes the
particular volume, value, and velocity characteristics of each product. The
model uses, and benefits from, cross-docking, which maximizes productivity and
minimizes truck miles. It further benefits from the scale derived from its
centralized procurement system and consolidated purchasing leverage. Fleming
will manage this integrated system with its information technology capabilities
and, in particular, its state-of-the-art "F1" supply chain technologies that are
currently being rolled out throughout the company's warehouses and central
procurement operations. The powerful piece-pick systems created by the Core-Mark
team will be incorporated into Fleming's F1 initiative.
RETURN OPPORTUNITIES AND VALUE CREATION
Synergies will help drive the bottom line results of these acquisitions. Fleming
anticipates synergies will be produced from the opportunities in sales to
national accounts, purchasing, supply chain
Page 3 of 5
efficiencies, and administrative savings. Additionally, Fleming's historic
grocery expertise will be of particular benefit to convenience retailers as they
seek ways to grow sales of grocery and ready-to-eat items. Synergies are
initially estimated at approximately $20 million in 2003, and are expected to
increase to approximately $30 million in 2004.
The Core-Mark and Head Distributing acquisitions meet Fleming's
rigorous and disciplined investment strategy of a minimum second-year
cash-on-cash return of 25%. Importantly, Fleming anticipates several important
factors will contribute to the smooth integration of Core-Mark and Head
Distributing. In particular, Fleming's planned adoption of Core-Mark's
outstanding technology platform for piece-pick operations will contribute
significantly to the overall implementation and improvement of the combined
operations. Also, Fleming will be adding the acquired companies' management
expertise in piece-pick distribution to its talent pool. In addition, Fleming's
recent and successful experiences with the integration of its distribution
network, centralized support services, new business, and acquisitions will serve
it well.
EARNINGS GUIDANCE FOR 2002 AND 2003
Because of these acquisitions, Fleming anticipates increasing guidance for 2003,
pending finalization of its financing and integration plans. Fleming will issue
its first quarter 2002 results on May 7, at which time it will update 2002
guidance, factoring in both these acquisitions and its recent transaction with
Albertson's. The update will include a discussion of the one-time costs
necessary to realize the full synergies of these events.
ABOUT FLEMING
With its national, multi-tier supply chain network, Fleming is the #1 supplier
of consumer package goods to retailers of all sizes and formats in the United
States. Pro forma for the completion of the Core-Mark and Head Distributing
acquisitions, Fleming will serve nearly 50,000 retail locations, including
supermarkets, convenience stores, supercenters, discount stores, concessions,
limited assortment, drug, specialty, casinos, gift shops, military exchanges and
more. In addition, Fleming is the nation's leading distributor to Hispanic
markets. Fleming also has a growing presence in value retailing, operating 102
stores under the Food4Less and Rainbow Foods banners. To learn more about
Fleming, visit our Web site at http://www.fleming.com.
Note: This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any of the Company's securities.
Page 4 of 5
NOTE TO THE FINANCIAL COMMUNITY:
Today's news release, along with other information about Fleming, is available
on the Internet at www.fleming.com. There will be a conference call for the
financial community today, Wednesday, April 24, 2002, at 9:00 a.m. EDT. An audio
webcast of the meeting as well as the speakers' slide presentation will be
available on the Internet at www.fleming.com The conference can be accessed by
phone by calling 800.289.0493 in the U.S. or 913.981.5510 internationally. An
audio replay of the meeting will be available shortly following the meeting. The
replay can be accessed by telephone at 888.203.1112 in the U.S. or at
719.457.0820 internationally. The access code is 696647. The meeting replay will
also be archived on www.fleming.com.
NOTE TO THE MEDIA:
Members of the media can participate in a briefing at 10:00 a.m. EDT by calling
800.810.0924 in the United States or 913.981.4900 internationally. An audio
replay of the media briefing will be available shortly following the meeting.
The replay can be accessed at 888.203.1112 in the United States or 719.457.0820
internationally. The access code is 670539.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements regarding future events and
the future financial performance of Fleming. These forward-looking statements
are subject to a number of factors that could cause actual results to differ
materially from those stated in this release, including without limitation:
changes in general economic conditions; adverse effects of the changing industry
and increased competition; sales declines and/or loss of customers; the ability
of Kmart to continue as a going concern, to operate pursuant to the terms of its
debtor-in-possession financing, or to complete its reorganization according to
its plan; non-consummation of the Core-Mark transaction; the ability to obtain
financing or to 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 Fleming's employees; and the negative
effects of Fleming's substantial indebtedness and the limitations imposed by
restrictive covenants contained in Fleming's debt instruments. Additional
information about these factors is contained in Fleming's reports and filing
with the Securities and Exchange Commission, including its 2001 Form 10-K.
Fleming undertakes no obligation to update forward-looking statements to reflect
developments or information obtained after the date of this presentation.
# # #
Page 5 of 5