PROVIGO POSTS NET LOSS AS SALES FALL IN QUARTER

MONTREAL -- Provigo Inc. here reported slightly lower sales and a loss for the third quarter and 40 weeks ended Nov. 5. Excluding the company's U.S. subsidiary, Provigo Corp., which was sold Nov. 30, net income in Canada before an unusual item rose 20% to $8 million (U.S.) for the 12-week quarter and 30% to $29.5 million for the year to date. The unusual item was a net loss of $106.5 million, or $1.18 per share, from the sale of Provigo Corp., consisting principally of a write-off of the investment and of the advances granted to the subsidiary. The net loss for the quarter was $100.5 million, compared with a loss of $53.7 million a year ago, and a loss of $82 million for the 40 weeks, compared with a loss of $42.8 million a year ago. Overall sales fell 0.8% for the quarter to $1.03 billion and 0.7% for the 40 weeks to $3.5 billion. Sales in Canada rose 2.1% for the quarter to $924.8 million and 1.2% for the year to date to $3.1 billion. Sales in the United States dropped 20.7% in the quarter to $106.3 million and dropped 13.7% for the year to date to $383.5 million. "With the sale of Provigo Corp., the company has eliminated a major element with a negative impact on its financial performance," said Pierre L. Mignault, president and chief executive officer. "All of Provigo's subsidiaries are now profitable, and the company's energies can be focused on the development of its Canadian operations. The cash flow from operations will be sufficient to enable the company to finance its development plan while at the same time strengthening its financial position. "In the course of the next three years, Provigo intends to invest $181 million on the expansion and modernization of its retail network in Quebec and Ontario," Mignault said.