METRO-RICHELIEU EARNINGS INCREASE

MONTREAL -- Metro-Richelieu here said sales and earnings increased for the third quarter and 40 weeks ended July 1. Net income for the 16-week quarter rose 107.5% to $19.3 million (U.S.) and 72.8% to $34.9 million for the year-to-date. Quarterly results included a pretax gain of $10.5 million ($7.8 million after taxes) from disposal of the company's investment in the Quebec Nordiques hockey team. Excluding that gain, earnings rose 24% to $11.5 million for the quarter and 34.6% to $27.1 million for the 40 weeks. Sales increased 6.7% for the quarter to $690.8 million and 6.8% for the year-to-date to $1.7 billion. The company said the improvement in net earnings resulted from "strong sales growth and our constant efforts to be more efficient." According to Pierre H. Lessard, president and chief executive officer, "We will continue to focus on store renovation and enlargement and on opening new stores, enabling the company to always offer more to the consumers and to pursue its growth." Patricia Baker, a securities analyst with Midland Walwyn Capital here, termed the company's results "awesome" and said they are a result of "a very concerted effort to improve operations and become more efficient at the wholesale and retail levels." The strong results are also due to Metro-Richelieu's ability to use increased cash flow to pay down debt and lower its interest rate, Baker said. During the year debt has been reduced from $42.3 million to $21.9 million. Since the beginning of the fiscal year, Metro-Richelieu said it has repurchased 2 million first preferred shares, Series 2, and 711,400 Class A subordinate shares, at a total cost of approximately $25 million.