INDIANAPOLIS -- Marsh Supermarkets here last week said it amended its 10-K report for the fiscal year ended March 29, 2003, to reflect a non-cash charge of $5.6 million related to the timing of the recognition of vendor allowances.
Marsh also adjusted its net income for the first and second quarters of the current fiscal year to reflect additional income of $700,000 and $500,000, respectively. The company said it had believed it was in compliance with new accounting rules, but decided to change its policy after a routine review.
"We engaged in discussions with the corporate finance staff of the U.S. Securities and Exchange Commission and our independent auditors regarding our policy of recognizing slotting allowances and similar vendor consideration when the company had fulfilled its contractual obligations and collection was probable," the company said in a prepared statement. "As a result of those discussions, we changed our policy to include these allowances as a reduction of inventory value."
The changes reflect the adoption of the Financial Accounting Standards Board rule for recognizing vendor allowances, known as EITF 02-16, which became effective Jan. 1, 2003.
Also, Marsh last week reported a third-quarter net income of $2.3 million, up 89% from year-ago results, on $388.8 million in revenues, up 1.6% over the year-ago figure. Comparable-store sales were up 0.04%, including gasoline sales, and down 0.8%, excluding gasoline sales.
"Indiana has lost a number of jobs, and competition remains intense," said Don E. Marsh, chairman and chief executive officer, in a conference call discussing the third-quarter results.
He also said the company's selling, general and administrative expenses, which totaled $103.9 million in the third quarter, up 2.3% from year-ago levels, were higher in part due to pre-opening costs for the company's new prototype stores. The first two "new lifestyle" stores recently opened in Noblesville and Fort Wayne, Ind. (See SN, Jan. 26, 2004, Page 12.)