LOS ANGELES -- Smart & Final here said it would restate its earnings for the past several years to reflect $5.8 million less in profits than it previously reported.
Accordingly, the company said it would postpone its annual meeting, which was originally scheduled for last week, until July 2.
The company, which operates 235 warehouse stores and which also has food-service distribution operations, said the restatement of its earnings was the result of a previously announced investigation into the accounting practices at its food-service subsidiary in Stockton, Calif. Smart & Final said profits would be reduced by $2.4 million for 2001, by $1.5 million for 2000 and by a cumulative $2.6 million for 1998 and years prior. Earnings for 1999 will be restated to reflect an increase in profits of $700,000.
As a result of the earnings restatements, the company said it would not be in compliance with certain covenants of its principal credit agreements. The company said it would petition its creditors for a waiver of non-compliance, and that it believes that such a waiver will be "promptly granted."
Smart & Final posted first-quarter profit for the 12 weeks ended March 24 of $587,000, an increase of 6% over year-ago earnings of $554,000. Sales increased about 5% to $444.8 million, vs. $424.2 million in the year-ago period. Sales at the company's warehouse stores increased 7.8% to $350 million. Same-store sales increased 4.7% for the quarter. Food-service distribution sales decreased 4.8% to $94.9 million, vs. $99.6 million in the year-ago period.