RICHMOND, Va. -- Richfood Holdings here said the acquisitions of Rotelle, Philadelphia, and, to a lesser extent, the wholesale division of Camellia Food Stores, Norfolk, Va., resulted in record sales and earnings for the year ended April 29. Net income for the year rose 47.7% to $25.4 million -- the fifth consecutive year of record earnings, the company said. Net income on continuing operations rose 16.9% for the year. Sales increased 19.2% to $1.5 billion. Sales from Richfood, the company's principal operating subsidiary, rose 0.8% to $1.3 billion, while sales from Rotelle -- the wholesale frozen food distributor that Richfood acquired in late August -- totaled $235 million for the eight months Richfood has owned it. For the 16-week quarter net income rose 167.4% to $8.8 million overall and 17.9% compared with earnings from continuing operations. Sales for the quarter rose 23.7% to $498.9 million. Besides acquiring Rotelle, Richfood also purchased the wholesale division of Camellia Food Stores in early April, as reported.
Donald D. Bennett, Richfood's president and chief executive officer, said gross margins increased to 8.9% during the year, compared with 8.4% a year ago, due primarily to higher-margin frozen food sales. He also said operating and administrative expenses rose to 6.0% of sales, compared with 5.7% a year ago, "due to a higher operating expense ratio for Rotelle's wholesale frozen food operation and expenses incurred in the transition of the Camellia sales volume to [Richfood's] warehouse." Tom Thomson, a securities analyst with Wheat First Butcher Singer here, said Camellia accounted for about $10 million of fourth-quarter sales. He also said earnings were impacted by 1 cent- to 1.5 cents per share by transition expenses related to the Camellia acquisition.