OKLAHOMA CITY -- Fleming Cos. here reported an after-tax loss of $24.2 million for the first quarter but said earnings before charges exceeded expectations.
64 cents a share, resulted from pre-tax charges of $45.5 million, or 84 cents a share after-tax, related to the company's strategic plan, launched recently.
Reasons for the charges include costs associated with the consolidation of food wholesaling divisions, the divestiture of two retail chains and corporate overhead staff reductions.
Earnings were also negatively affected by lower operating profits in the retail food and food-distribution segments, higher corporate expenses and lower interest income.
The company said after-tax earnings in the first quarter ended April 17 would have been $7.6 million, or 20 cents a share, excluding these charges. That compares with after-tax earnings of $15.3 million in the year-ago period.
Net sales for the first quarter were $4.5 billion, compared with $4.6 billion in the same period a year ago.
Mark Hansen, chairman and chief executive officer, said "six important accomplishments" stand out in the first quarter. They include:
First-quarter results were significantly above those of the fourth quarter 1998 and outdid expectations, he said.
Fleming's food-distribution sales rose $39 million, or 1.2%, when adjusted for previously announced losses of customer business and the closing of a distribution center.
A total of $350 million of annualized new wholesale business was signed and only partially reflected in first-quarter results.
The same-store sales picture improved in the first quarter in company-owned retail chains. While the company posted a decline of 0.8%, it was an improvement over the 3.9% decrease in the fourth quarter of 1998.
Fleming began developing plans to reduce the cost of operations by as much as $100 million annually by the end of 2000.
The company is ahead of schedule on a number of strategic plan initiatives to "strengthen our selling proposition" for customers and consumers.
