Exhibit 99.3
GRISTEDE'S FOODS, INC.
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Executive Offices 823 Eleventh Avenue
New York, NY 10019-3545
(Phone) 212-956-5803
(Fax) 212-247-4509
FOR IMMEDIATE RELEASE
GRISTEDE'S FOODS, INC.
("GRI" - AMERICAN STOCK EXCHANGE)
GRISTEDE'S EBITDA INCREASES 6.4% TO $4,921,934 FROM
$4,625,272 FOR SIX MONTHS ENDING 5/30/04
New York, NY., August 27, 2004: Gristede's Foods Inc. announced today that its
EBITDA for the first six months (26 weeks) ending 5/30/04 increased by 6.4% to
$4,921,934 from $4,625,272 for the comparable period last year.
Sales for the 2004 first six months decreased to $134,995,099 from $145,586,712
for the comparable period last year due to the closing of two stores as well as
the reduction of promotional pricing implemented for seven new stores recently
opened by Gristede's. In addition, Gristede's has lost sales due to a new
entrant into the New York e-commerce grocery market.
6 months 6 months
(26 weeks) ended (26 weeks) ended
May 30, 2004 June 1, 2003
------------ ------------
Sales $ 134,995,099 $ 145,586,712
EBITDA* 4,921,934 4,625,272
Net loss (1,591,866) (2,297,245)
Earnings (loss) per share $ (0.08) $ (0.12)
Weighted average number
of shares 19,636,574 19,636,574
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3 months 3 months
(13 weeks) ended (13 weeks) ended
May 30, 2004 June 1, 2003
------------ ------------
Sales $ 65,156,917 $ 70,991,953
EBITDA* 1,736,779 2,510,629
Net loss (1,340,294) (912,756)
Earnings (loss) per share $ (0.07) $ (0.05)
Weighted average number
of shares 19,636,574 19,636,574
o EBITDA is net income before interest expense, income taxes,
depreciation amortization and changes in deferred rent.
The negative EBIDTA reported during fiscal 2003 from the seven new stores during
the first year of operation (and 2 closed stores), was approximately $3,700,000.
The negative EBITDA for these stores for the six months ending 5/30/04 has been
reduced to approximately $700,000.
The Company uses the term "EBITDA" to mean net income before income taxes,
interest expense, depreciation, amortization, and changes in deferred rent and
other non-cash charges. EBITDA is a term not defined under United States
generally accepted accounting principles. The Company's management considers
EBITDA to be an important measure in evaluating the Company's financial
performance and uses this measure in managing its ongoing operations. The
Company's method of computation of EBITDA may or may not be comparable to other
similarly titled measures used by other companies. (See reconciliation of EBITDA
to net loss in the table set forth below).
Reconciliation of EBITDA to Net Loss:
6 months (26 weeks) 6 months (26 weeks)
ended ended
May 30, 2004 June 1, 2003
------------ ------------
Net (loss) $(1,591,866) $(2,297,245)
Interest expense 1,424,919 1,610,435
Income tax expense 0 0
Depreciation, amortization &
changes in deferred rent 5,088,881 5,312,082
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EBITDA 4,921,934 4,625,272
----------- -----------
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3 months (13 weeks) 3 months (13 weeks)
ended ended
May 30, 2004 June 1, 2003
------------ ------------
Net (loss) $ (1,340,294) $ (912,756)
Interest expense 647,990 767,786
Income tax expense 0 0
Depreciation, amortization &
changes in deferred rent 2,429,083 2,655,599
------------ ------------
EBITDA 1,736,779 2,510,629
------------ ------------
Supplemental Data
** Loan by UAC to Gristede's $ 26,177,666 $ 19,948,931
** UAC is United Acquisition Corp., a company indirectly 100% owned by Mr.
Catsimatidis, the majority shareholder, which has advanced monies to Gristede's.
Of the amount advanced at 5/30/04, $23.5 million is subordinated to the
Company's banks.
UAC Line of Credit
Pending final settlement of the Company's August 14, 2003 "Northeast Blackout"
insurance claim, United Acquisition Corp. (UAC), agreed to provide the Company
with a $5 million liquidity credit facility available during fiscal 2004. As of
May 30, 2004, UAC advanced approximately $3,250,000 of the $5 million.
Bank Line of Credit
On May 25, 2004, the Company's revolving line of credit was increased from $17
million to $19.5 million, and the revolver maturity was extended by 2 years to
March 31, 2007.
Going Private
On April 13, 2004, the Company announced that it had received a letter from John
Catsimatidis, the holder with certain of his affiliates of in excess of 90% of
the outstanding shares of common stock of the Company, stating his intention of
cashing out the public stockholders of the Company at $0.87 per share. On April
14, 2004, the Company's Board of Directors (John Catsimatidis abstaining)
appointed a special committee of independent directors to evaluate the offer.
The special committee has engaged a financial advisor to evaluate the fairness,
from a financial point of view to the public shareholders, and to deliver such
an opinion to the special committee. The
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financial advisor has completed its review and is in the process of finalizing
its evaluation and opinion.
August 14, 2003 "Northeast Blackout" Insurance Proceeds
The Company's insurer is in the process of completing its review. The Company is
owed a remaining balance of approximately $3 million in insurance proceeds from
the Blackout. The Company is hopeful that it will receive it later during fiscal
2004. The Company has already received $3 million as an advance against this
claim.
XpressGrocer.COM
The Company started XpressGrocer.com on October 14, 2003. XpressGrocer.com had a
start-up negative EBITDA amounting to approximately $400,000 for the first six
months ended 5/30/04.
Gristede's has signed a contract with a national internet retailer to sell and
fulfill grocery orders through their web venue. This venture is slated to launch
September 2004. The Company has not yet determined the extent of sales or
profitability this venture will generate.
The statements contained herein that are not purely historical are forward
looking statements within the meaning of the Securities Exchange Act of 1934.
All forward-looking statements contained herein are based upon information
available to the Company as of that date hereof, and the Company assumes no
obligation to update any such forward-looking statements. Actual results could
differ materially from the Company's current expectations. Factors that could
cause or contribute to such differences include, but are not limited to, the
factors and risks discussed in the Company's Annual Report on Form 10-K for the
fiscal year ended November 30, 2003, and the other reports filed from time to
time by the Company with the Securities and Exchange Commission.
For further information, please contact Mr. Catsimatidis, Chairman & Chief
Executive Officer, Gristede's Foods, Inc., at (212) 956-5803.
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