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To Present C&S Agreement to Bankruptcy Court at August 4 Hearing
DALLAS, July 30, 2003 -- Fleming Companies, Inc. today announced that the company has received no qualifying bids to compete with the offer submitted by C&S Wholesale Grocery to acquire Fleming's wholesale grocery business. As a result, no auction will be held. The company will seek approval of the C&S asset purchase agreement by the U.S. Bankruptcy Court in Delaware during the hearing scheduled for August 4, 2003. About Fleming Fleming (OTC
Pink Sheets: FLMIQ) is a supplier of consumer package goods to independent
supermarkets, convenience-oriented retailers and other retail formats
around the country. To learn more about Fleming, visit the company's
Web site at www.fleming.com Fleming and
its operating subsidiaries filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code on April 1, 2003. The
filings were made in the U.S. Bankruptcy Court in Wilmington, Delaware.
Fleming's court filings are available via the court's website, at
www.deb.uscourts.gov Forward-Looking Statement This document contains forward-looking statements regarding future events. 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: the closing of the sale of the wholesale assets to C&S Wholesale Grocery, which is contingent upon closing conditions, regulatory approvals and resolution of monetary cure claims; the ability of the company to continue as a going concern; the ability of the company to operate pursuant to the terms of the DIP facility; court approval of the company's motions prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the company to obtain or maintain trade credit, and shipments and terms with vendors and service providers for current orders; the company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the company's liquidity or results of operations; the ability to fund and execute its business plan; the ability to retain and compensate key executives and associates; the ability of the company to retain customers; and changes in general economic conditions. Additional information about these and other factors is contained in Fleming's reports and filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date made and Fleming undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date of this release.
Signs Asset Purchase Agreement for Grocery Wholesale Business
DALLAS, July 8,
2003 -- Fleming Companies, Inc. and C&S Wholesale Grocers, Inc. have
signed a definitive asset purchase agreement to sell Fleming's wholesale
grocery business to C&S. The agreement includes substantially all
of the assets of the Fleming wholesale grocery business, other than
accounts receivable and certain other assets. The estimated purchase
price is expected to be $400 million. The definitive asset purchase
agreement is subject to, among other things, satisfactory completion
of due diligence, C&S obtaining financing and U.S. Bankruptcy Court
approval. Fleming intends to file the asset purchase agreement with
the U.S. Bankruptcy Court in Delaware.
Pete Willmott, Interim President and Chief Executive Officer, said, "We committed to identify a long-term solution for our grocery wholesale customer, associate, and creditor constituents. We are pleased to have begun operating under the recently signed supply arrangement with C&S and to have executed the asset purchase agreement. We view these as significant steps in delivering on our commitment."
Fleming has filed a motion with the U.S. Bankruptcy Court to establish the procedures for the sale of Fleming's grocery wholesale operations. The motion seeks approval of the sale process at a hearing scheduled for July 17, 2003. The sale procedure includes the process for other possible bidders to submit offers to purchase all or part of Fleming's grocery wholesale business, which would be due by July 28, with an auction to follow on July 31. The final sale hearing would be held August 4 and the closing date for the sale would be expected shortly thereafter.
Fleming's Core-Mark convenience business, which operates as a separate entity, is not affected by this action. The company maintains its focus on supporting the Core-Mark operation and has made substantial progress in restoring service levels of its convenience distribution business.
About Fleming
Fleming (OTC Bulletin Board: FLMIQ) is a supplier of consumer package goods to independent supermarkets, convenience-oriented retailers and other retail formats around the country.
Fleming and its operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 1, 2003. The filings were made in the U.S. Bankruptcy Court in Wilmington, Delaware. Fleming's court filings are available via the court's website, at www.deb.uscourts.gov Forward-Looking Statement
This document contains forward-looking statements regarding future events. 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: the Bankruptcy Court's approval of the bidding procedures (including the timing of such procedures); the closing of the sale of the wholesale assets to the highest or best bidder in the auction; the ability of the company to continue as a going concern; the ability of the company to operate pursuant to the terms of the DIP facility; court approval of the company's motions prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the company to obtain or maintain trade credit, and shipments and terms with vendors and service providers for current orders; the company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the company's liquidity or results of operations; the ability to fund and execute its business plan; the ability to retain and compensate key executives and associates; the ability of the company to retain customers; and changes in general economic conditions. Additional information about these and other factors is contained in Fleming's reports and filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date made and Fleming undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date of this release.
Signs Letter of Intent to Sell Grocery Wholesale Business
DALLAS, June 27,
2003 -- Fleming Companies, Inc. and C&S Wholesale Grocers, Inc. have
entered into a letter of intent regarding the sale of Fleming's wholesale
grocery business to C&S. The letter of intent contemplates the sale
of all of Fleming's grocery wholesale operations and assets to C&S.
The letter of intent is subject to the execution of a definitive asset
purchase agreement. In a separate arrangement, C&S has agreed to promptly
begin supplying Fleming with selected vendor products for distribution
to Fleming retail customers.
"These actions represent major steps in Fleming's Chapter 11 process,"
said Fleming's Interim President and Chief Executive Officer Pete
Willmott. "We believe the best way to maximize the value of the
business for our constituents is to sell Fleming's grocery wholesale
business to a strong buyer who can provide our customers with the
service and reliability they need. This arrangement with C&S, one
of the nation's largest grocery wholesalers, is designed to allow
performance to be restored and enhanced in our grocery wholesale
divisions, to the benefit of our customers and associates. The supply
arrangement with C&S, which is effective immediately, will provide
additional product to enhance service to Fleming customers."
C&S Executive Vice President Mark Gross said, "The purchase of
Fleming's wholesale grocery operations would allow us to expand
our business into parts of the country where we do not presently
operate. We are excited about working with Fleming and its chain
and independent supermarket customers in a mutually beneficial transition
for all parties."
Fleming expects to file a motion with the U.S. Bankruptcy Court
in Delaware to establish the procedures for the sale of Fleming's
grocery wholesale operations. The company also expects to file a
definitive binding asset purchase agreement with C&S. Fleming expects
to request that the Bankruptcy Court set an auction for the sale
of the grocery wholesale business by the end of July, with the highest
or best offer presented to the Bankruptcy Court for approval in
early August.
Fleming's Core-Mark convenience business, which operates as a separate
entity, is not affected by this action. The company maintains its
focus on supporting the Core-Mark operation and has made substantial
progress in restoring service levels of its convenience distribution
business.
About C&S
C&S Wholesale Grocers, Inc. is a privately owned grocery wholesale
company with annual sales in excess of $11 billion. As ranked by
Forbes magazine, C&S is the 11th largest privately held company
in the nation. Founded in 1918, C&S provides wholesale food distribution
to grocery chains, as well as independent stores throughout the
Northeastern and Midwestern United States, delivering to over 2,200
locations from its distribution centers in Vermont, Massachusetts,
Connecticut, New York, New Jersey, Maryland, Ohio and Pennsylvania.
About Fleming
Fleming (OTC Pink Sheets: FLMIQ) is a supplier of consumer package
goods to independent supermarkets, convenience-oriented retailers
and other retail formats around the country.
Fleming and its operating subsidiaries filed voluntary petitions
for reorganization under Chapter 11 of the U.S. Bankruptcy Code
on April 1, 2003. The filings were made in the U.S. Bankruptcy Court
in Wilmington, Delaware. Fleming's court filings are available via
the court's website, at www.deb.uscourts.gov Forward-Looking Statement
This document contains forward-looking statements regarding future
events, including statements regarding value maximization, the expected
timing for filing motions and a definitive asset purchase agreement
with the Bankruptcy Court, for seeking bids from potential bidders
in the auction, for conducting an auction and for holding a Bankruptcy
Court hearing to approve the highest and best offer resulting from
the auction. 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:
the failure to execute the definitive asset purchase agreement;
the Bankruptcy Court's approval of the bidding procedures (including
the timing of such procedures); the closing of the sale of the wholesale
assets to C&S; the ability of the company to continue as a going
concern; the ability of the company to operate pursuant to the terms
of the DIP facility; court approval of the company's motions prosecuted
by it from time to time; the ability of the company to develop,
prosecute, confirm and consummate one or more plans of reorganization
with respect to the Chapter 11 cases; risks associated with third
parties seeking and obtaining court approval to terminate or shorten
the exclusivity period for the company to propose and confirm one
or more plans of reorganization, for the appointment of a Chapter
11 trustee or to convert the cases to Chapter 7 cases; the ability
of the company to obtain or maintain trade credit, and shipments
and terms with vendors and service providers for current orders;
the company's ability to maintain contracts that are critical to
its operations; potential adverse developments with respect to the
company's liquidity or results of operations; the ability to fund
and execute its business plan; the ability to attract, retain and
compensate key executives and associates; the ability of the company
to attract and retain customers; and changes in general economic
conditions. Additional information about these and other factors
is contained in Fleming's reports and filings with the Securities
and Exchange Commission. The forward-looking statements speak only
as of the date made and Fleming undertakes no obligation to update
forward-looking statements to reflect developments or information
obtained after the date of this release.
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Obtains Approval for Sale of 40 Retail Stores
DALLAS, Jun 6, 2003 -- Fleming Companies, Inc. today announced that the U.S. Bankruptcy Court in Wilmington, Delaware approved agreements to sell 40 company-owned retail stores.
The Bankruptcy Court approved the sale of 31 of the Minnesota-based Rainbow Foods stores to Roundy's, Inc. for approximately $84 million in cash, inclusive of inventory estimated at approximately $40 million. Roundy's is also expected to assume long-term capital leases for the stores. The Court approved the sale of six California-based Food4Less stores to Save Mart Supermarkets for approximately $27 million in cash, inclusive of inventory estimated at approximately $5 million. Save Mart is also expected to assume long-term capital leases for the stores. The Court also approved the sale of three California-based Food4Less stores to Kroger Supermarkets for approximately $7.4 million in cash, inclusive of inventory estimated at approximately $2.4 million. Kroger is also expected to assume long-term capital leases for the stores.
In each case, the buyers have agreed to hire substantially all of the current store associates. The three transactions are expected to be completed by the end of June, 2003.
The sale of these assets is consistent with Fleming's previously announced strategy to ensure that the company maximizes the value of its assets and its business through the Chapter 11 process.
"It is gratifying that the sale of these stores will allow for a continued supermarket presence in each neighborhood, as a shopping destination and community employer," said Pete Willmott, Interim President and Chief Executive Officer. "The additional funds received from these divestitures should allow us to improve our in-stock position at our divisions, which we can use to enhance fill rates for retail customers."
Fleming Companies, Inc. and its operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 1, 2003. The filings were made in the U.S. Bankruptcy Court in Wilmington, Delaware. The case has been assigned to the Honorable Judge Mary F. Walrath under case number 03-10945 (MFW) (Jointly Administered). Fleming's court filings are available via the court's website, at www.deb.uscourts.gov About Fleming
Fleming (OTC Pink Sheets: FLMIQ) supplies consumer package goods to independent supermarkets, convenience-oriented retailers and other retail formats around the country.
Forward-Looking Statement
This document contains forward-looking statements regarding future events. 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: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the DIP facility; court approval of the Company's motions prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the Company to obtain trade credit, and shipments and terms with vendors and service providers for current orders; the Company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the Company's liquidity or results of operations; the ability to fund and execute its business plan; the ability to attract, retain and compensate key executives and associates; the ability of the Company to attract and retain customers; changes in general economic conditions; and, the ability to successfully sell the Company's retail operations. Additional information about these and other factors is contained in Fleming's reports and filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date made and Fleming undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date of this release.
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DoveBid to Conduct 4-Day Webcast Auction
FOSTER CITY, Calif., Jun 5, 2003 -- DoveBid, Inc., a global provider of capital asset auction and valuation services, announced today that it will conduct its first Webcast auction in a series of sales for Fleming Companies, Inc., a food distributor and retail grocer, who filed Chapter 11 bankruptcy protection in April 2003.
The 4-Day Webcast auction will be held near the Dallas-Fort Worth Airport at the Embassy Suites Hotel at 2401 Bass Pro Drive in Grapevine, Texas, on June 10, 2003 through June 13, 2003 beginning at 9:00 a.m. Central Time each day. The auction will feature 1.5 million square feet of warehouse and distribution centers, racking and moving stock, over 400 vehicles including trucks, tractors, trailers, and grocery store assets from over 20 supermarkets including deli, bakery, meat dept, coolers, gondola racking, point-of-sale systems and more.
Participants may attend in-person or bid online. Detailed preview information, asset catalog, and online bidding instructions are available at www.dovebid.com There are an additional 100+ upcoming auctions on DoveBid's auction calendar. For a complete list of our auctions, equipment asset catalogs, and brochures, please visit DoveBid's Web site at www.dovebid.com About DoveBid(R)
DoveBid, Inc. is a global provider of capital asset auction and valuation services to large corporations and financial institutions. DoveBid delivers an integrated set of services to its customers for the disposition, valuation and redeployment of their surplus capital assets. DoveBid offers an array of auction services to meet its customers' specific needs, including live Webcast auctions, on-site-only auctions, featured online auctions and privately negotiated sales. DoveBid Managed Services offers clients a hosted, Internet-based application to monitor surplus assets inside the corporation. DoveBid Valuation Services uses its database of transaction information to provide valuations of capital assets for financial institutions and large businesses.
Headquartered in Foster City, California, DoveBid has over 65 years of auction experience in the capital asset industry with more than 40 locations throughout North America, Europe and the Asia-Pacific region. More information on DoveBid can be found at www.dovebid.com DoveBid and the DoveBid logo are registered trademarks of DoveBid, Inc.
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Secures Bankruptcy Court Order on Net Operating Losses
DALLAS, May 22, 2003, -- Fleming Companies, Inc. today announced that on May 19, 2003, the U.S. Bankruptcy Court for the District of Delaware granted a motion, and on May 20, 2003 entered an order on the docket, intended to assist the company in preserving its historical net operating losses (NOLs) by prohibiting certain transfers of equity securities in the company and its subsidiaries. If preserved, these NOLs constitute a tax benefit for the company. The order will remain in effect until the Bankruptcy Court holds a hearing to consider the appropriateness of the relief on a final basis. A hearing is currently set for June 4, 2003.
In general, the NOL order applies to any person or entity that, directly or indirectly, beneficially owns (or would beneficially own as the result of a proposed transfer) equity securities of the company and its subsidiaries with an aggregate fair market value equal to or greater than five percent of the fair market value of the company's common stock. Pursuant to the NOL order, any purchase, sale or other transfer of equity securities in the company and its subsidiaries in violation thereof will be null and void.
For more detailed information, please read the NOL order in its entirety as attached to the Current Report on Form 8-K to be filed with the Securities and Exchange Commission.
Fleming Companies, Inc. and its operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 1, 2003. The filings were made in the U.S. Bankruptcy Court in Wilmington, Delaware. The case has been assigned to the Honorable Judge Mary F. Walrath under case number 03-10945 (MFW) (Jointly Administered). Fleming's court filings are available via the court's website, at www.deb.uscourts.gov About Fleming
Fleming (OTC Pink Sheets: FLMIQ) is a leading supplier of consumer package goods to independent supermarkets, convenience-oriented retailers and other retail formats around the country.
Forward-Looking Statement
This document contains forward-looking statements regarding future events. 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: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the DIP facility; court approval of the Company's motions prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the Company to obtain trade credit, and shipments and terms with vendors and service providers for current orders; the Company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the Company's liquidity or results of operations; the ability to fund and execute its business plan; the ability to attract, retain and compensate key executives and associates; the ability of the Company to attract and retain customers; changes in general economic conditions; and, the ability to successfully sell the Company's retail operations. Additional information about these and other factors is contained in Fleming's reports and filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date made and Fleming undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date of this release.
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Class Action Lawsuit Commenced on Behalf of Purchasers of Fleming Companies
NEW YORK, NY, May. 22, 2003 -- A securities class action lawsuit was commenced in the Eastern District of Texas on behalf of all persons who acquired securities of Fleming Companies, Inc. (FLM) ("Fleming" or the "Company") in connection with the public offering (the "Offering") dated June 17, 2002. A copy of the Complaint is available from the Court or from Bernstein Liebhard & Lifshitz, LLP.
In connection with the Offering, Fleming issued 9.2 million shares of common stock at $19.40 per share and $200 million in Notes (collectively, the "Fleming Securities"). The Fleming Securities were sold pursuant to a registration statement and prospectus, as amended (collectively, the "Registration Statement"), which contained false and misleading statements of material fact and omitted to state material facts necessary in order to make the statements made therein not misleading. The Registration Statement materially misstated the Company's financial results of operation in violation of Generally Accepted Accounting Principles ("GAAP") by, among other things, including financial statements that misrepresented and/or omitted facts concerning the Company's unauthorized deductions on invoices received from vendors, which reduced recognition of expenses associated with the cost of goods sold and understated accounts payable, the lengthened amortization period for long-term assets, and lack of control over costs.
Defendants also represented that Fleming's retail operations were profitable at a time when the Company was, in fact, losing money on its retail business and was in the process of divesting itself of those operations. Defendants presented sales figures for Fleming's retail operations such that Fleming's same store sales appeared to be increasing when they were actually declining. In addition, at the time of the Offering Fleming had been shipping undesirable and unsaleable merchandise from its distribution operations to its failing retail outlets in order to boost its distribution business earnings, while using its retail operations as a dumping ground for product that under GAAP should have been substantially written down or written off entirely.
On July 30, 2002, less than two months after defendants sold more than $378 million worth of the Fleming Securities to the public, Fleming issued a release announcing that, contrary to the prior positive statements contained in the Registration Statement, Defendants were in fact evaluating strategic alternatives for dealing with the Company's money-losing retail operations. The market's reaction to this news was swift and severe; Fleming's stock price fell more than 30% to $10.76 per share on August 2, 2002.
On September 5, 2002, The Wall Street Journal ran an expose of Fleming's practices of taking excessive and unauthorized deductions on the amounts it owed to vendors. The article confirmed that certain senior Fleming insiders had resisted engaging in the improper accounting practices and that some vendors were refusing to ship to Fleming because of disputes with Fleming over its improper accounting practices. Fleming's stock price dropped 30% in response to these revelations to just $6.51 per share on September 9, 2002, while the Fleming Notes declined approximately 10%. Thus, in two months, Fleming's stock price lost approximately 65% of its value as the truth regarding the Company's financial condition and its retail operations became known.
Then, on January 14, 2003, Fleming further confirmed the falsity of the Registration Statement when it announced in "a progress report on the divestiture of its price-impact retail operations" that it was marking down the realizable value of its retail stores by $116 million "to adjust the carrying value of retail assets to their estimated net realizable value." On January 23, 2003, Fleming announced a $190 million loss on its discontinued retail operations (including impairment of $115.3 million). On April 1, 2003, Fleming filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy code. Currently, Fleming's common stock trades below $.25 per share, while the Fleming Notes trade at a discount of approximately 16% of the price that they sold to the public.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Fleming securities in connection with the Offering. If you purchased or otherwise acquired Fleming securities in connection with the Offering, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than June 16, 2003.
Alead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard & Lifshitz, LLP, or other counsel of your choice, to serve as your counsel in this action.
Bernstein Liebhard & Lifshitz, LLP has been retained as one of the law firms to represent the class. The attorneys at Bernstein Liebhard & Lifshitz, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. bernlieb.com>.
If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Ms. Linda Flood, Director of Shareholder Relations, at Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, (800) 217-1522 or (212) 779-1414 or by e-mail at FLM@bernlieb.com.
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Reports on Reorganization Progress
DALLAS, May 6, 2003 -- Fleming Companies, Inc., today reported that it made significant progress in its Chapter 11 reorganization. The company has received final approval from the U.S. Bankruptcy Court for its $150 million secured debtor-in-possession financing package and its junior trade lien program. Fleming also received court approval for its critical trade vendor program, which is expected to contribute to the resumption of normalized business relationships with vendors.
In addition, Fleming has announced the appointment of Ted Stenger of AlixPartners, an international leader in corporate restructuring and turnaround services, as Chief Restructuring Officer.
Fleming is seeking to retain the Blackstone Group, a leading investment bank, as financial advisors in Fleming's restructuring. Part of its responsibilities will be to respond to expressions of interests related to the possible acquisition of certain Fleming operations, and to help ensure Fleming maximizes the value of its assets and its business through the company's restructuring.
Pete Willmott, Interim President and Chief Executive Officer, said, "With our financing approved and a new leadership team that combines restructuring and operating expertise, we have crossed very important milestones in our reorganization process."
About Fleming
Fleming (OTC Pink Sheets: FLMIQ) is a leading supplier of consumer package goods to independent supermarkets, convenience-oriented retailers and other retail formats around the country.
Forward-Looking Statement
This document contains forward-looking statements regarding future events. These forward-looking statements are subject to a number of factors that
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Suspends Regular Quarterly Dividend
DALLAS, May 6, 2003 -- Fleming Companies, Inc. today announced that, as a result of the company's recent filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code, the Board of Directors has indefinitely suspended the payment of future dividends on its common stock. Further, the Board has rescinded the previously declared but unpaid quarterly dividend scheduled for payment on June 10, 2003.
About Fleming
Fleming (OTC Pink Sheets: FLMIQ) is a leading supplier of consumer package goods to independent supermarkets, convenience-oriented retailers and other retail formats around the country.
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Receives
$50 Million Interim Funding Commitment
DALLAS, April
2, 2003 -- Fleming Companies, Inc. (NYSE: FLM) announced that in connection
with the company's Chapter 11 filing it has received a $50 million
interim debtor-in-possession (DIP) financing commitment from its existing
lenders as a bridge to a permanent $150 million DIP financing package.
"This interim financing represents an important first achievement
in our reorganization process," said Peter Willmott, Fleming's Interim
President and Chief Executive Officer. "With this financing and
the support of our vendors, we can deliver on our commitment to
provide Fleming's customers with the goods they need, when they
need them. To that end, we are developing, in connection with the
permanent DIP facility, a vendor support program that will provide
important financial assurances to our trade partners.
"We are pleased to have the support of our lenders at this critical
time for Fleming. We believe the permanent DIP financing package
and vendor support program will provide Fleming with the financing
it needs to successfully operate in and exit from Chapter 11. With
the anticipated DIP financing package in place and the protection
of the court process, we expect to achieve these goals and emerge
as a strong competitor."
The interim DIP commitment is subject to approval of the Bankruptcy
Court, the pledge to the existing lenders of the company's unencumbered
assets and other conditions. Under this arrangement, the company
will have the right to use cash collateral and the interim DIP prior
to the effectiveness of the permanent DIP financing. Motions to
approve the interim DIP commitment and use of cash collateral are
expected to be heard by the Court on Thursday, April 3, 2003.
Fleming and its lenders are in the process of finalizing the permanent
$150 million DIP facility which will be subject to a borrowing base.
This DIP facility is expected to provide the company with necessary
financing throughout the Chapter 11 process. Initial borrowing under
this DIP facility would be subject to certain conditions, including
the completion of certain due diligence, execution of definitive
documentation and receipt of Bankruptcy Court approval.
The permanent DIP facility would permit Fleming to establish a
vendor support program, including a junior lien on the company's
assets in favor of the company's vendors. Participation in the vendor
support program, which is subject to Bankruptcy Court approval,
would be open to vendors who contractually agree to ship goods on
normal trade terms through the pendency of the Chapter 11 proceedings.
About Fleming
Fleming is a leading supplier of consumer package goods to retailers
of all sizes and formats in the United States. Fleming serves a
wide range of retail locations across the country, including supermarkets,
convenience stores, discount stores, concessions, limited assortment,
drug, supercenters, specialty, casinos, gift shops, military commissaries
and exchanges and more.
Forward-Looking Statement
This document contains forward-looking statements regarding future
events. 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:
the ability of the Company to continue as a going concern; the ability
of the Company to operate pursuant to the terms of the DIP facility;
court approval of the Company's first day papers and other motions
prosecuted by it from time to time; the ability of the Company to
develop, prosecute, confirm and consummate one or more plans of
reorganization with respect to the Chapter 11 cases; risks associated
with third parties seeking and obtaining court approval to terminate
or shorten the exclusivity period for the Company to propose and
confirm one or more plans of reorganization, for the appointment
of a Chapter 11 trustee or to convert the cases to Chapter 7 cases;
the ability of the Company to obtain trade credit, and shipments
and terms with vendors and service providers for current orders;
the Company's ability to maintain contracts that are critical to
its operations; potential adverse developments with respect to the
Company's liquidity or results of operations; the ability to fund
and execute its business plan; the ability to attract, retain and
compensate key executives and associates; the ability of the Company
to attract and retain customers; changes in general economic conditions;
and, the ability to successfully sell the Company's retail operations.
Additional information about these and other factors is contained
in Fleming's reports and filings with the Securities and Exchange
Commission, including its 2001 Form 10-K. The forward-looking statements
speak only as of the date made and Fleming undertakes no obligation
to update forward-looking statements to reflect developments or
information obtained after the date of this release.
Provides
Update on Financing Discussions and
DALLAS, March
28, 2003 -- Fleming Companies, Inc. (NYSE: FLM) announced today that
it is engaged in discussions with alternative financing sources and
its vendors regarding the Company's near-term liquidity constraints.
Based on discussions with its lenders earlier today, the Company does
not expect to reach closure on an amendment to its credit facility
and now believes that additional near-term financing is necessary
to permit the Company to continue to fulfill its obligations on a
timely basis.
Peter Willmott, Fleming's Interim President and Chief Executive
Officer, said, "Our management and associates are committed to working
closely with our vendors to meet the continuing needs of our mutual
retail customers."
The Company will file the necessary documentation with the Securities
and Exchange Commission to obtain a 15-day extension of the March
28, 2003 due date for the filing of its Annual Report on Form 10-K
for the fiscal year ended December 28, 2002. The extension of time
is necessary to permit the Company to properly account for and assess
the significant business changes affecting the Company. Although
the conclusions that will result from the Company's ongoing assessment
of these issues and the related Audit and Compliance Committee investigation
are not yet complete, it is likely that the Company will restate
certain of its historical financial statements and related disclosures
previously filed with the SEC.
Unless the Company is able to obtain sufficient alternative financing,
the Company now believes that its 2002 financial statements will
likely include a going concern uncertainty.
Fleming has settled all pre-petition and post-petition disputes
with Kmart relating to Kmart's bankruptcy filing and the subsequent
termination of the parties' supply agreement. The bankruptcy court
entered an order approving the settlement on March 25, 2003 and
Fleming received $37 million in cash payments thereunder earlier
today.
Fleming also announced the completion of the sale of three of its
retail stores located in the Salt Lake City, Utah market and two
of its retail stores in the El Paso, Texas market to Albertsons.
About Fleming
Fleming is a leading supplier of consumer package goods to retailers
of all sizes and formats in the United States. Fleming serves a
wide range retail locations across the country, including supermarkets,
convenience stores, discount stores, concessions, limited assortment,
drug, supercenters, specialty, casinos, gift shops, military commissaries
and exchanges and more. Fleming serves more than 600 North American
stores of global supermarketer IGA.
Forward-Looking Statement
This document contains forward-looking statements regarding future
events. 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; 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; the ability to successfully sell our retail operations;
the ability to obtain financing; successful execution of the operational
realignment and cost reduction plan; 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 filings
with the Securities and Exchange Commission, including its 2001
Form 10-K. The forward-looking statements speak only as of the date
made and Fleming undertakes no obligation to update forward-looking
statements to reflect developments or information obtained after
the date of this release.
Settles Kmart Bankruptcy Claims
DALLAS, March
24, 2003 -- Fleming Companies, Inc. (NYSE: FLM) today announced that
the company has reached a settlement of all pre-petition and post-petition
disputes between Kmart and the company related to Kmart's bankruptcy
filing and the subsequent termination of the parties' supply agreement.
A related hearing is scheduled in the bankruptcy court on March 25,
2003. Subject to bankruptcy court approval and satisfaction of other
conditions of the settlement, Fleming expects to receive $37 million
in cash payments.
The company's new senior management team is focusing on the improvement
of its cash management systems and financing needs. Fleming has
retained Gleacher Partners as well as Glass & Associates to assist
the company in these efforts and with its relationships with vendors,
bondholders and other constituencies. Among the duties assigned
to these advisors are discussions concerning a new or amended credit
agreement with its current lenders and other third parties.
About Fleming
Fleming is a leading supplier of consumer package goods to retailers
of all sizes and formats in the United States. Fleming serves a
wide range retail locations across the country, including supermarkets,
convenience stores, discount stores, concessions, limited assortment,
drug, supercenters, specialty, casinos, gift shops, military commissaries
and exchanges and more. Fleming serves more than 600 North American
stores of global supermarketer IGA.
Forward-Looking Statement
This document contains forward-looking statements regarding future
events. 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; bankruptcy court approval
and the entry of an order of the Kmart settlement; adverse effects
of the changing industry and increased competition; sales declines
and/or loss of customers; 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; the ability to successfully sell our retail
operations; successful execution of the operational realignment
and cost reduction plan; 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 filings with the Securities
and Exchange Commission, including its 2001 Form 10-K. The forward-looking
statements speak only as of the date made and Fleming undertakes
no obligation to update forward-looking statements to reflect developments
or information obtained after the date of this release.
Appoints Peter S. Willmott Interim CEO and President
DALLAS, March
3, 2003 -- Fleming Companies, Inc. (NYSE:FLM) announced today that
it has named Peter S. Willmott as Interim Chief Executive Officer
and President and Archie R. Dykes as Non-Executive Chairman of the
Board, effective immediately. They succeed Mark Hansen, who has resigned.
Mr. Hansen had served as Chairman and Chief Executive Officer since
1998. The Board also named Robert Allen to the new position of Acting
Chief Operating Officer.
Mr. Willmott and Mr. Allen are directing day-to-day operations
of the Company while the Board conducts an executive search. The
Board has retained an executive search firm to conduct the search
process.
Dr. Dykes said, "The Board of Directors concluded that a change
in the management of the company is necessary. The Board has great
confidence in Pete's leadership and we are fully focused on supporting
Pete as we guide the company through this transition and conduct
the executive search to put a new Chief Executive Officer in place
as promptly as possible. The Board appreciates Mark Hansen's efforts
on behalf of the company and we wish him the best."
Mr. Willmott said, "We look forward to working closely and cooperatively
with the company's customers, suppliers and other constituencies
during this time. Working with me in this regard is a group of knowledgeable
wholesale veterans on the Fleming team. I am especially pleased
that Rob Allen has accepted this added responsibility as Acting
Chief Operating Officer. Rob is a customer-focused leader who, as
President and Chief Executive Officer, has grown Core-Mark International
to industry prominence.
"The company's goals remain focused on cash flow, reducing debt
and realigning costs. Efforts are underway to realign our expense
structure and to strengthen our capital structure."
Dr. Dykes has been a director of Fleming since 1981. He is Chairman
and Chief Executive Officer of Capital City Holdings, a venture
capital organization. He is the Lead Director of PepsiAmericas,
Inc., a director of Midas, Inc. and Raytech Corporation. He is a
former chancellor of the University of Kansas and of the University
of Tennessee.
Mr. Willmott joined the Fleming Board of Directors in December
2002. He is Chairman of Willmott Services, Inc. and a Director of
Federal Express Corporation. His career includes leadership positions
at Federal Express, including Chief Financial Officer and, later,
President and Chief Operating Officer, and at Zenith Corporation,
where he was President and Chief Executive Officer. He also served
as Chairman, President and Chief Executive Officer of the department
store, food service and retail services company Carson Pirie Scott
& Co.
Mr. Allen joined Fleming in June 2002, when Core-Mark International
was acquired by Fleming. Most recently, he served Fleming as Executive
Vice President, President and Chief Executive Officer, Convenience
Distribution. In addition to his new role, Mr. Allen will continue
to lead Fleming's convenience distribution business.
About Fleming Forward-Looking Statement
Names William May Executive Vice President and President, Wholesale
DALLAS, February
26, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today announced William
May has been promoted to Executive Vice President and President, Wholesale.
May succeeds Steve Davis, who will retire from Fleming after 43 years
of service.
May has served as Senior Vice President of Operations for Fleming
since 2002. He joined Fleming from The Gap where he was the Vice
President of Gap Global Distribution. May also held the role of
Vice President of Old Navy Distribution. Prior to joining The Gap,
May was Executive Vice President/Chief Operating Officer at Nash
Finch Company. May has also served in leadership positions with
Spartan Stores and Certified Grocers of Florida.
"Bill is a proven executive with a strong customer orientation
and familiarity with Fleming, our customers and our industry," said
Mark Hansen, Fleming Chairman and Chief Executive Officer. "In addition
to Bill's experience with supply chain logistics, IT, finance and
retail, he has earned an excellent reputation with our customers.
We are very proud to announce his promotion to Executive Vice President
and President, Wholesale."
May said, "I am pleased to have this expanded opportunity to support
our Division associates and the many independent and chain retail
customers we serve around the country."
About Fleming
E. Stephen Davis to Retire After 43 Years
DALLAS, February
26, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today announced E.
Stephen Davis, 62, will retire following 43 years of service. Davis
currently serves as Executive Vice President and President, Wholesale.
"Throughout his career, Steve has played a central role in building
Fleming into a national distribution company and the leader within
our industry," said Fleming Chairman and Chief Executive Officer
Mark Hansen. "Steve has been an instrumental part of our company
during decades of dramatic industry change. Steve's impact on our
company and the industry itself has been significant and his long-planned
retirement is certainly well earned."
Davis will remain involved in the organization through May 1,
2003, and will be active in supporting the transition to his successor.
Davis joined Fleming in March of 1960 as a Clerk in Fleming's
Kansas City Division. At the time, Fleming had sales of approximately
$181 million and served retailers in parts of just six states. Early
in his career, Davis worked in a number of distribution positions
and later served as Warehouse and Transportation Manager for two
Fleming Divisions. Davis was named Director of Warehousing for Fleming
in 1975 and was quickly promoted to Distribution Director then Vice
President, Distribution.
Davis was elected as an officer of the company in 1981 and was
named Senior Vice President in 1983. Under his guidance, leading
the company's distribution functions, Fleming experienced consistent
and substantial productivity improvements each year. He was promoted
to Executive Vice President in 1989 and was named EVP and President,
Wholesale in 2000.
"I am proud to be part of what has been accomplished by countless
Fleming associates over the past 43 years," said Davis. "I have
been fortunate enough to work with the best in the business during
my career, including the finest retailers in the country."
"I move forward with my retirement with confidence in the succession
plan in place, and I couldn't be more pleased with the company's
decision regarding my successor," said Davis.
Hansen added, "On behalf of the Board of Directors and the associates
of Fleming, I thank Steve for all he has done for our company and
am pleased we will continue to benefit from his contributions made
during his many years of service."
About Fleming
DALLAS, February
25, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today announced an
operational realignment and cost reduction plan. The plan is the result
of work performed in conjunction with Bain & Company -- a global business
consulting firm -- and was authorized and approved by the company's
Board of Directors. The plan includes adjustments to the company's
supply chain and administrative infrastructure to remove costs and
to better match resources to the future needs of the business. The
company also announced impairment and other costs related to the plan
and provided an update on other matters, including the inquiry by
the Securities and Exchange Commission.
Cost Reductions Fleming will cease operations at two Divisions currently managed
by third-party operators -- the South Brunswick (New Jersey) Division
and the Fort Wayne (Indiana) Division. These Divisions have been
dedicated to supplying Kmart and will close soon after deliveries
to Kmart stores conclude on or about March 8, 2003. With the conclusion
of the Kmart supply arrangement, no Fleming customer will account
for more than 3% of Fleming's total annual revenue.
Fleming will consolidate the business of two other case-pick Divisions
into other Fleming Divisions. Combining these operations is expected
to achieve efficiencies for the respective markets and the customers
served. The company intends to maintain its market presence and
local customer support in the related areas. Upon completion of
these consolidations, Fleming's national supply chain will include
49 distribution centers -- 20 case-pick facilities, 24 convenience-oriented
piece-pick divisions and five general merchandise piece-pick facilities.
Fleming continues with the integration of its convenience operations
following the 2002 acquisitions of Core-Mark International and Head
Distributing, which created Fleming's coast-to-coast piece-pick
footprint. This national distribution network supports Fleming's
convenience-oriented supply business to retailers of all formats.
Debt Reduction The cash portion of these costs is expected to be approximately
$115 million, of which $100 million is expected to be incurred in
2003. Fleming expects to substantially complete the realignment
and cost reduction plan by the end of 2003.
In accordance with Statements of Financial Accounting Standards
109 and 144, respectively, the company may also be required to record
a valuation allowance against its deferred tax assets and/or to
impair the book value of its retail assets held for sale. Additionally,
in accordance with SFAS 142, Fleming may be required to impair the
valuation of its goodwill. Should the non-cash valuation allowances
or impairments occur, the company's previously announced 2002 financial
results may be negatively impacted. Management is currently analyzing
these accounting standards to determine if any impact will occur.
Litigation and SEC Update About Fleming Forward-Looking Statement
Declares Regular Quarterly Dividend
DALLAS, February
21, 2003 -- Fleming Companies, Inc. (NYSE:FLM) declared a quarterly
dividend of two cents per share of common stock, payable June 10,
2003, to shareholders of record on May 20, 2003.
About Fleming
Completes Sale of 17 Stores to Save Mart
DALLAS, February
18, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today announced the
company has completed the sale of 17 Food4Less locations to Save Mart
Supermarkets, for cash proceeds of approximately $82 million, of which
approximately $9 million was received in the fourth quarter of 2002.
Fleming intends to apply the cash proceeds from this transaction to
reduce the company's senior secured term loan balance. The transaction
also reduces Fleming's capital lease obligations by approximately
$20 million.
The company is supplying these Save Mart locations through Fleming's
Divisions in Sacramento and Fresno, California. Save Mart has hired
substantially all of the store associates in the acquired locations.
As previously announced, Save Mart Supermarkets has agreed to
purchase another 11 Fleming-owned Food4Less locations in California.
The sale of two of the locations, which are under construction,
is anticipated to be final this quarter. The sale of the other nine
stores is subject to review by the Federal Trade Commission.
Fleming continues to pursue the divestiture of its remaining retail
locations. The company anticipates that proceeds from the sale of
the remaining stores would be used to further strengthen Fleming's
balance sheet by reducing debt.
"Once we complete our retail sales, Fleming will become the only
pure-play wholesale distribution company with a national footprint,"
said Mark Hansen, Fleming Chairman and Chief Executive Officer.
"Exiting retail means we will not be competing with our important
retail distribution customers for shoppers' dollars, which is an
important value proposition to many retailers in today's competitive
retail environment."
About Fleming Forward-Looking Statement
ConocoPhillips Selects Fleming to Supply 114 Outlets
DALLAS, February
14, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today announced that
it has entered into an agreement with ConocoPhillips to supply 114
Conoco-branded convenience stores in five states. The agreement anticipates
approximately $35 million in annual volume and commences in April
of 2003. The stores will be supplied by Fleming's Denver, Albuquerque,
Salt Lake City and Ft. Worth Divisions. Fleming currently supplies
more than 700 stores for ConocoPhillips through an existing, multi-
year agreement, which will include these additional 114 locations.
Fleming also provides third-party operations for ConocoPhillip's Circle
K business, serving more than 500 Circle K stores from Phoenix.
"We are pleased to be expanding our relationship with ConocoPhillips
by earning the opportunity to serve these 114 stores," said Mike
Walsh, Executive Vice President of Sales, Fleming Convenience. "This
agreement is another example of the additional growth opportunities
for Fleming in the convenience sector. We believe that this contract
is a strong testament to our overall business strategy, our decision
to fully focus on our wholesale distribution business and the advantage
that we have to attract customers that know we do not compete with
them for retail products or fuel."
About Fleming Forward-Looking Statement
Announces Agreement to Sell Five Stores
DALLAS, February
12, 2003 - Fleming Companies, Inc. (NYSE:FLM) today announced that
it has entered into an agreement with Albertsons for the sale of five
Fleming stores. Three Food4Less facilities are located in the Salt
Lake City, Utah market and two Rainbow Foods stores are located in
the El Paso, Texas market. Fleming also completed the sale of a previously
announced Milwaukee, Wisconsin Rainbow Foods store to an independent
Sentry Foods operator.
Fleming anticipates net proceeds of approximately $12 million,
including capital leases, for the six locations. The transaction
with Albertsons is expected to be finalized within 60 days and is
subject to closing conditions and completion of due diligence. Upon
receipt, the company intends to apply the cash proceeds from these
transactions to Fleming's senior secured term loan balance.
About Fleming Forward-Looking Statement
Terminate Supply Arrangement; Court Approves Rejection of Contract
TROY, Mich., and
DALLAS, February 3, 2003 -- Kmart Corporation (Pink Sheets: KMRTQ)
and Fleming Companies, Inc. (NYSE:FLM) announced today that they had
terminated their supply relationship by means of a rejection of the
parties' 2001 contract through Kmart's Chapter 11 reorganization.
The companies determined that the continuation of the supply arrangement
was not in either of their best interests. Kmart and Fleming are continuing
their ongoing discussions regarding transition arrangements and resolution
of outstanding claims under the agreement.
Kmart President and Chief Executive Officer Julian Day said, "At
this critical juncture in our chapter 11 cases, as we move forward
with the plan confirmation process and, soon thereafter, emergence
from chapter 11 altogether, we have determined that given the change
in our store base, among other things, the Fleming supply arrangement
no longer meets our needs and the rejection of the contract at this
time is appropriate."
Fleming Chairman and Chief Executive Officer Mark Hansen said,
"Despite our mutual efforts to negotiate modifications to the supply
agreement, it was clear to both parties that termination was the
right solution. The basis on which the parties entered into the
agreement have substantially changed, warranting an end to the relationship."
Kmart said that the termination of the Fleming relationship was
supported by the Plan Investors under the Company's proposed Plan
of Reorganization and that the action was permitted under both the
Company's DIP financing and exit financing facilities as approved
by the Bankruptcy Court on January 28, 2003. The supply agreement
would have otherwise expired in February 2011 and could not have
been clearly terminated by Kmart without cause until the first quarter
of 2007.
Fleming said that the termination of the Kmart relationship is
consistent with its expectations announced last month. Fleming intends
to release its revised business implications after the parties finalize
a transition arrangement.
Kmart Corporation is a mass merchandising company that serves
America through its Kmart and Kmart SuperCenter retail outlets.
The Company's common stock is currently quoted on the Pink Sheets
Electronic Quotation Service under the symbol KMRTQ.
With its national, multi-tier supply chain network, Fleming is
the number one supplier of consumer package goods to retailers of
all sizes and formats in the United States. Fleming serves nearly
50,000 retail locations, including supermarkets, convenience stores,
supercenters, discount stores, concessions, limited assortment,
drug, specialty, casinos, gift shops, military commissaries and
exchanges and more. Fleming serves more than 600 North American
stores of global supermarketer IGA.
Kmart Cautionary Statement Regarding Forward-Looking Information
Fleming Cautionary Statement Regarding Forward-Looking Information
Reports Fourth Quarter And Fiscal 2002 Results
DALLAS, January
23, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today reported earnings
from continuing operations of $5.8 million for the fourth quarter
of 2002, or $.11 per share on a diluted basis. This compares to earnings
from continuing operations for the fourth quarter of 2001 of $8.6
million or $.19 per share, which included goodwill amortization of
$3.4 million or $.06 per share. Continuing operations include Fleming's
wholesale distribution business. Discontinued operations include Fleming's
price-impact retail stores, which the company is in the process of
divesting.
As the company reported January 14, 2003, the fourth quarter results
were impacted by numerous factors endemic to the supermarket industry.
A deflationary and promotional retail environment and general softness
in the economy affected earnings. Operating expenses were negatively
affected by higher employment-related expenses such as pension,
healthcare and insurance costs.
Fleming also experienced certain costs in the fourth quarter,
including impairments associated with customer leases, start-up
costs associated with several new supply arrangements, expenses
associated with the integration of Core-Mark International, and
wind-down costs related to the company's exit from the Oklahoma
City Division. These costs totaled approximately $.19 per diluted
share.
For the full fiscal year 2002, Fleming reported earnings from
continuing operations of $40.2 million, or $.80 per share. This
compares to earnings from continuing operations for fiscal year
2001 of $9.0 million or $.20 per share, which included goodwill
amortization of $14.6 million or $.27 per share. EBITDAL (earnings
before interest expense, taxes, depreciation, amortization and LIFO)
from continuing operations for the fourth quarter and full fiscal
year 2002 was $71.9 million and $322.3 million, respectively. EBITDAL
from continuing operations for the fourth quarter and full fiscal
year of 2001 was $71.0 million and $251.9 million, respectively.
Sales from continuing operations for the fourth quarter and full
year 2002 were $4.08 billion and $15.50 billion, respectively. This
compares to sales from continuing operations for the fourth quarter
and full year 2001 of $3.46 billion and $13.23 billion, respectively.
Full-year 2002 sales from continuing operations represent a 17 percent
increase over 2001, largely due to the acquisitions of the Core-Mark
and Head Distributing businesses and, to a lesser extent, new supply
arrangements with Albertson's, Target, and more than 100 supermarkets
previously supplied by wholesaler C.B. Ragland.
At fiscal year-end 2002, Fleming's net debt was approximately
$1.95 billion, compared with $2.16 billion at the end of the third
quarter 2002. Cash flow from operations in the fourth quarter of
2002 was $181 million, compared to $113 million in the fourth quarter
of 2001 and $99 million in the fourth quarter of 2000. The company
intends to continue to focus on strengthening its balance sheet
by paying down debt. Fleming has no material scheduled debt maturities
due until 2007.
Fleming continues to be in compliance with all of its bank covenants.
In light of the fourth quarter EBITDAL results and the anticipated
amount and timing of the proceeds from the retail store divestiture,
the company secured an amendment to the debt/EBITDA covenant in
its credit agreement for the first quarter of 2003. A copy of this
amendment will be filed with the Securities and Exchange Commission
on Form 8-K. The company plans to continue coordinating with the
lenders in its credit facility for an updated covenant package and
structure that better reflects Fleming's substantial current asset
base.
"While our levels of earnings are not where we want them to be,
we did make substantial progress in a number of strategic areas
in 2002," said Fleming Chairman and Chief Executive Officer Mark
Hansen. "A highlight of 2002 was the acquisitions of Core-Mark and
Head Distributing, which allowed us to create a national distribution
footprint that efficiently serves retailers of any format. Another
key event of the year was our strategic decision to divest our retail
stores, allowing us to fully focus resources on retail customers
in our growing distribution business.
"Operationally, we have continued to grow Fleming's business and
diversify our customer base. We also maintained our focus on reducing
costs and improving productivity to create a more efficient operation,
which we believe creates a competitive advantage for our company.
We are committed to continuing such necessary improvements, to match
the ever-changing needs of our expanding customer base in today's
rapidly evolving marketplace," said Hansen.
Kmart Status Update and Guidance Outlook Fleming intends to provide updated sales and earnings guidance
for 2003 upon completion of the analysis and discussions with Kmart.
Guidance will also reflect the current weakness in the nationwide
retail environment, Fleming's previously announced divestiture of
its company-owned retail operations, and the actions Fleming will
take to adjust its internal operations as appropriate in response
to these and other market conditions.
Conference Call and Webcast About Fleming Forward-Looking Statement This document contains forward-looking
statements regarding future events and the future 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 emerge from bankruptcy, to assume
the supply contact in the bankruptcy process, to operate pursuant
to the terms of its debtor-in- possession financing or complete
its reorganization; 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; the ability to successfully sell our retail
operations; 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 filings with the Securities and
Exchange Commission, including its 2001 Form 10-K. The forward-looking
statements speak only as of the date made and Fleming undertakes
no obligation to update forward-looking statements to reflect developments
or information obtained after the date of this release.
Declares Regular Quarterly Dividend
DALLAS, January
22, 2003 -- Fleming Companies, Inc. (NYSE:FLM) declared a quarterly
dividend of two cents per share of common stock, payable March 10,
2003, to shareholders of record on February 20, 2003. The Board of
Directors also set March 14, 2003, as the record date for the annual
shareholders' meeting that will be held Tuesday, May 13, 2003.
About Fleming
To Issue Fourth Quarter 2002 Earnings and Hold Conference Call
DALLAS, January
17, 2003 -- Fleming (NYSE:FLM) today said that it plans to issue its
fourth quarter 2002 results on Thursday, January 23, 2003, before
the market opens.
There will be a conference call to discuss these results on January
23 at 7:30 a.m. Central Standard Time. An audio webcast of the conference
call will be available on the Internet at www.fleming.com . The
conference call can also be accessed by phone by calling 913.981.4900.
An audio replay of the conference call will be available by calling
402.280.9273 from 12:30 p.m. Eastern Time on January 23 through
midnight Eastern Time on February 6, 2003. The access code for the
live call and audio replay is 435129. The audio replay of the conference
call will also be archived on the Internet at www.fleming.com .
About Fleming
DALLAS, January
14, 2003 -- Fleming Companies, Inc. (NYSE:FLM) today provided an estimate
of its fourth quarter results, a progress report on the divestiture
of its price-impact retail operations and the status of its debt reduction.
Preliminary Fourth Quarter 2002 Results The fourth quarter results were negatively impacted by numerous
factors endemic to the supermarket industry. Continuing meat deflation,
soft comparable store sales and a highly promotional retail environment
affected earnings, as did higher employment-related expenses such
as pension, healthcare and insurance costs.
For the full year 2002, Fleming expects to report earnings from
continuing operations of approximately $39.5 to $40.5 million, or
$.78 to $.80 per share. This compares to earnings from continuing
operations for fiscal year 2001 of $9.0 million or $.20 per share,
which included goodwill amortization of $14.6 million or $.27 per
share.
EBITDAL from continuing operations for the fourth quarter and
full year 2002 is expected to range between $70 to $73 million and
$320 to $323 million, respectively. EBITDAL from continuing operations
for the fourth quarter and full year of 2001 was $71 million and
$252 million, respectively.
Sales from continuing operations for the fourth quarter and full
year 2002 will be approximately $4.08 billion and $15.50 billion,
respectively. Fourth quarter 2002 sales represent an 18% increase
over sales from continuing operations in the fourth quarter of 2001,
largely due to the acquisitions of the Core-Mark International and
Head Distributing convenience distribution businesses plus the company's
first full quarter of its new supply agreement with Albertson's.
New business initiated in the fourth quarter also includes a previously
announced, expanded distribution arrangement with Target to supply
products to more than 1,000 Target store locations. In addition,
Fleming began service to more than 100 supermarkets previously supplied
by wholesaler C.B. Ragland.
In the fourth quarter of 2002, Fleming's net debt was reduced
by more than $200 million, which exceeded projections by approximately
$60 million. At year-end 2002, Fleming's net debt was approximately
$1.95 billion compared with $2.16 billion at the end of the third
quarter 2002. Cash flow from operations in the fourth quarter of
2002 is expected to be approximately $180 million, as compared to
$113 million in the fourth quarter of 2001 and $99 million in the
fourth quarter of 2000. Debt reduction will continue to be a priority
for the company.
"While we made excellent progress on a number of fronts, our earnings
levels are not where we want them to be largely due to the extended
weakness in retailing, particularly among supermarkets. Consumer
trade-downs, a hyper-promotional retailing environment, and meat
deflation are affecting the entire industry. Accordingly, we have
been and will continue to take affirmative steps by growing and
diversifying our customer base and making our operations more efficient,"
said Hansen.
Kmart Status Update Through the current analysis of Kmart's expected store closure
announcement, Fleming will determine the appropriate adjustments
required to optimize its distribution network and will make necessary
refinements to the resources applied to support this customer. Despite
any necessary actions on Fleming's part in response to Kmart's store
closures, the company is confident that Fleming's national distribution
footprint will continue to provide opportunities to serve and grow
the company's customer base throughout the country.
Divestiture of Discontinued Retail Operations The company expects approximately $175 million of net proceeds
from these transactions, including approximately $58 million attributable
to the nine stores pending regulatory approval. The company continues
negotiations with bidders on the remaining stores.
Through the entire divestiture process, Fleming has attempted
to balance two important strategic objectives: to maximize net proceeds
and to enter into new supply arrangements to increase continuing
operations revenues. In certain instances, the benefits from a new
supply arrangement warranted accepting a lower selling price. While
the company initially anticipated total supply agreements of $400
million and total net proceeds in excess of $450 million, based
upon the current status of the divestiture process, the company
now believes the level of new supply agreements will exceed the
projected $400 million and that the total net proceeds will be less
than $450 million.
The company anticipates that any shortfall in net proceeds from
the sale of the retail operations will be partially mitigated by
the higher-than-anticipated cash from operations in the fourth quarter
of 2002.
In connection with the company's retail divestitures, the company
will record a non-cash charge of approximately $116 million to discontinued
operations in the fourth quarter, to adjust the carrying value of
the retail assets to their estimated net realizable value. This
charge to discontinued operations excludes the Minneapolis-based
Rainbow Foods stores. As there are various scenarios that exist
for the Minneapolis Rainbow stores, Fleming currently does not anticipate
any loss nor any impairment in their values as of the end of the
fourth quarter. Approximate net book value for these Rainbow assets
is $160 million.
Strategic Goals and Business Forecast "Overall, Fleming today is the market leader in our sector, with
an expanded platform that has broadened our potential market. We
are confident this formula will position us well to continue executing
our strategy," said Hansen.
Fleming is scheduled to report complete 2002 results on January
23, 2003. The company intends to provide updated sales and earnings
guidance for 2003 upon the completion of the analysis and discussions
with Kmart relating to Kmart's 2003 business plans.
Conference Call and Webcast About Fleming Forward-Looking Statement
Announces Pending Sale of Certain Wisconsin Retail Stores
DALLAS, December
5, 2002 -- Fleming Companies, Inc. (NYSE:FLM) today announced plans
for the sale of its Rainbow Foods stores in Wisconsin. Fleming is
engaged in advanced negotiations with current and prospective Sentry
retailers for the sale of eight Rainbow Foods stores in Wisconsin.
In addition, the company has entered into an agreement with Roundy's,
Inc., for the sale of three Rainbow Foods stores located in Brookfield,
Kenosha and Waukesha, Wisconsin. The transaction with Roundy's is
expected to be finalized within 45 days and is subject to closing
conditions.
Financial terms for the total transactions, including net proceeds
and anticipated supply arrangements with the Sentry retailers, will
be disclosed in aggregate after the signing of the remaining purchase
agreements. Upon receipt, the company intends to apply the cash
proceeds from these transactions to Fleming's senior secured term
loan balance. Fleming continues to pursue the divestiture of its
remaining retail locations.
About Fleming Forward-Looking Statement
Announces Completion of Exchange Offer
DALLAS, November
19, 2002 -- Fleming Companies, Inc. (NYSE:FLM) announced today that
it has completed its offer to exchange (the "Exchange Offer") any
and all of its outstanding 9 7/8% Senior Subordinated Notes due 2012
(the "Old Notes") for 9 7/8% Senior Subordinated Notes due 2012 that
have been registered under the Securities Act of 1933, as amended.
All of the $260 million aggregate principal amount of the Old Notes
were tendered and received or were covered by guaranteed delivery
prior to the expiration of the Exchange Offer at 5:00 p.m., New York
City time, on November 18, 2002.
This announcement is not an offer to sell any securities, or a
solicitation of any offer to buy any securities, with respect to
the Old Notes. The Exchange Offer was made solely by means of a
written prospectus dated October 18, 2002.
About Fleming
Informed of Informal SEC Inquiry
DALLAS, November
13, 2002 -- Fleming Companies, Inc. (NYSE:FLM) today said that the
Fort Worth staff of the Securities and Exchange Commission has informed
the Company that it has commenced an informal inquiry into several
matters. According to the staff, the focus of the preliminary fact
finding inquiry will consist of previous media speculation regarding
Fleming's vendor trade practices, the presentation of second quarter
2001 adjusted earnings per share data in Fleming's second quarter
2001 and 2002 earnings press releases, the company's accounting for
drop-ship sales transactions with an unaffiliated vendor in Fleming's
discontinued retail operations, and the company's calculation of comparable
store sales in its discontinued retail operations.
"We will, of course, cooperate fully with the informal inquiry
and will provide the staff with all the information it needs in
responding to its fact- finding," said Mark Hansen, Chairman of
the Board and Chief Executive Officer of Fleming. "I hope, however,
that this event does not detract from the very significant announcement
we made earlier today regarding the first agreement to sell a number
of our retail stores and the supply agreement we entered into with
Save Mart Supermarkets."
About Fleming
Announces Agreement for Sale of 28 California Food4Less Locations
DALLAS, November
13, 2002 -- Fleming Companies, Inc. (NYSE:FLM) today announced that
it has entered into an agreement with Save Mart Supermarkets of Modesto,
California for the sale of 26 Fleming-owned Food4Less stores in California,
plus two locations currently under construction. The company anticipates
net proceeds of up to $165 million for these 28 locations. We expect
that proceeds will be comprised of up to $130 million in cash, inclusive
of inventory, and a $35 million reduction of long-term liabilities
in the form of capital leases. The purchase price is subject to adjustment
based on store sales through closing. Upon receipt, the company intends
to apply the cash proceeds from this transaction to reduce Fleming's
senior secured term loan balance.
Save Mart is a leading supermarket operator with 97 stores operating
in California under the Save Mart, Food Maxx, and S-Mart banners.
The transaction is expected to be finalized within 60 days and is
subject to customary regulatory approvals and other closing conditions.
Save Mart is expected to offer employment opportunities to substantially
all of the current Food4Less associates.
The agreement provides that, upon closing of the transaction,
Fleming will supply these 28 stores through a five-year supply arrangement
with Save Mart Supermarkets. The supply agreement is expected to
represent approximately $385 million in annual sales volume the
first year and $340 million for each of the remaining four years,
making Save Mart Supermarkets one of Fleming's five largest customers.
The stores will be supplied by Fleming Divisions in Sacramento and
Fresno, California.
"The proceeds we expect to receive for these stores are within
our anticipated range," said Mark Hansen, Fleming's chairman of
the board and chief executive officer. "Save Mart is a successful
and growing retailer, and we expect that the Food4Less stores will
prosper under Save Mart's ownership. We look forward to working
with Save Mart in affecting a smooth transition and beginning a
new and sizeable, long-term supply relationship."
Fleming continues the process of selling its remaining 84 retail
locations this quarter and in 2003. The company intends to use the
proceeds from these sales to further strengthen its balance sheet
by reducing debt.
"Once we complete our retail sales, Fleming will become the only
pure-play wholesale distribution company with a national footprint.
Exiting retail means we will not be competing with our important
retail distribution customers for shoppers' dollars. This is a unique
business model that we believe will appeal, increasingly, to a broad
category of retailing customers," said Hansen.
Bob Spengler, vice president of Food Maxx, said "Save Mart looks
forward to a mutually beneficial relationship with Fleming."
About Fleming Forward-Looking Statement
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