TAMPA, Fla. (FNS) -- Kash n' Karry Food Stores here, which is expected to emerge from Chapter 11 bankruptcy protection by the end of the year, generated a net loss of $38 million in fiscal 1994 ended July 31, more than triple the $12 million loss of fiscal 1993.
About $11 million of the fiscal 1994 loss stemmed from costs associated with closing a net of 12 stores and various financing expenses, according to a 10-K annual report filed with the Securities and Exchange Commission. An additional $6 million in costs resulted from a temporary suspension of the company's "forward-buy" inventory program, a company spokesman said. In the 1994 fiscal year, sales at Kash n' Karry dropped 1.9%, to $1.065 billion on 100 stores from $1.086 billion on 115 stores in the year ended Aug. 1, 1993. Average sales per store each week rose to $196,000 from $183,000. Inventories in fiscal 1994 dropped 20.2%, to $76 million from $95.4 million. Kash n' Karry's earnings before interest, tax, depreciation and amortization fell 22.2% during the same period, to $42.6 million from $54.8 million. EBITDA constituted 4% of sales in fiscal 1994 and 5% of sales in fiscal 1993, the filing said. Losses in fiscal 1992, 1993 and 1994 were primarily attributed to interest costs and depreciation and amortization from a 1988 acquisition of Kash n' Karry and Suprex stores, the document said.
The spokesman would not say when the company expects to begin operating in the black, "but we've definitely, in our minds, turned a big corner with respect to getting our house in order," he said. "We've cut operating costs significantly, closed unprofitable stores, we will soon complete our capital restructuring to lower debt by one-third and interest expenses by half, and we're putting fresh capital into the company," the spokesman said. Over the last three years, "sales growth has been constrained primarily by the opening of 54 competitive supermarkets and the closing of 24 of the company's stores," the filing said. Kash n' Karry spent $15.5 million in fiscal 1994 on capital needs, down from $37.7 million in fiscal 1993, to remodel one store and complete construction of two stores. The company will not open any stores for the rest of the year, the filing said. Kash n' Karry intends to open units in the coming year, but the spokesman declined to say how many. Net interest expenses rose 4.9% to $45.4 million in fiscal 1994 from $43.3 million in fiscal 1993. Currently Kash n' Karry operates 92 multidepartment supermarkets, averaging 40,000 square feet; five conventional grocery stores, averaging 18,000 square feet; two Save 'n Pack Warehouse Stores, one 76,000 square feet and one 88,000 square feet, and 33 Kash n' Karry Liquor Stores ranging from 1,800 to 2,700 square feet. All of Kash n' Karry's stores are located in west central Florida, where it is the third-largest food retailer, the filing said.