THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, July 1, 1995 TAG: 9507010498
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Short : 44 lines
Farm Fresh Inc. reported Friday that its losses continued to shrink, while its sales grew and its cash-flow improved in the quarter that ended June 17.
``The second quarter represented the fourth consecutive quarter of improvement for the company and reflects improving trends in all segments of the business,'' said Michael E. Julian, Farm Fresh chairman and chief executive.
That's welcome news for Farm Fresh debt-holders.
The Norfolk-based supermarket chain took on a mountain of debt as a result of a leveraged buyout by Citicorp Investments Inc. in the late 1980s. The company has struggled since to improve its results and remain competitive.
But Farm Fresh appears to have turned a corner.
Last year it improved its market share in Hampton Roads as the fight for consumer's grocery dollars stiffened with the entrance of new competitors.
In the quarter that ended June 17, Farm Fresh lost $1.3 million, nearly 70 percent less than $4.2 million in the second quarter last year.
The chain's sales increased 4.2 percent to $214.7 million in the quarter. Sales at stores that have been open at least a year rose 2.1 percent.
More significantly, cash flow at Farm Fresh jumped 20 percent to $12 million in the second quarter from $10 million a year earlier. Cash flow - or earnings before debt payments and taxes - is often the best measure of a heavily indebted company's health.
It shows what the company could be earning without their debt.
Farm Fresh attributed the improving results to its Richmond stores and its discount store division.
The company operates 64 stores in Virginia and North Carolina, including Farm Fresh and Gene Walters' Marketplace in Hampton Roads and North Carolina, The Grocery Store in Richmond and Rack N' Sack discount stores throughout its market area. by CNB