Exhibit 99.1
For more information, contact:
Albertsons Investor Relations
208/395-6622
Albertsons Public Affairs
208/395-4024
ALBERTSONS ANNOUNCES
FIRST QUARTER 2006 RESULTS
Boise, Idaho (May 30, 2006) – Albertson’s, Inc. (NYSE:ABS) reported financial results today
for its 2006 first quarter, which ended May 4, 2006.
Reported net earnings from continuing operations totaled $166 million or $0.44 per diluted share
compared to reported net earnings of $107 million or $0.29 in the first quarter of 2005. 2006
first quarter results were positively impacted by higher gross margins and lower expenses,
including a pre-tax gain of $47 million or $0.08 per diluted share, net of tax, for planned pension
curtailments approved during the quarter.
Total sales were $9.9 billion, essentially flat with the first quarter of 2005. Total comparable
store sales decreased 0.1% and total identical store sales decreased 0.2%. Comparable store sales
were positive in the core operating areas and the drug division while comparable store sales in the
non-core operating areas were negative.
Gross profit reached $2.843 billion or 28.61% of sales versus $2.810 billion, an increase of $33
million or 49 basis points as a percent of sales from last year’s first quarter. This increase was
driven by successes achieved in the use of new pricing optimization software, retail shrink
reduction and supply chain expense reduction initiatives.
Selling general and administrative expenses were 24.77% as a percent of sales, down 40 basis points
from last year’s first quarter. This reduction was primarily the result of the
positive impact of
the previously mentioned pension curtailments, gains on the sale of fixed assets and lower workers’
compensation expenses, partially offset by costs associated with the pending sale of the company
and the expensing of stock options.
During the quarter eight new stores were opened, 18 were closed and 20 remodels were completed. A
total of 2,461 stores were open at the end of the quarter.
As previously announced on January 23, 2006, the Company has entered into definitive agreements to
sell the entire company to a consortium of investors including SUPERVALU Inc., CVS Corporation and
an investor group led by Cerberus Capital Management, L.P. that also includes Kimco Realty,
Schottenstein Realty, Lubert-Adler Partners and Klaff Realty, LP. The transaction is subject to
the approval of Albertsons and SUPERVALU shareholders as well as customary closing conditions.
Shareholder meetings of Albertsons and SUPERVALU to authorize the transactions will occur on May
30, 2006. The parties expect the transaction to close in early June 2006.
Albertsons is one of the world’s largest food and drug retailers. The Company’s divisions and
subsidiaries operate approximately 2,500 stores in 37 states across the U.S. and employ
approximately 240,000 associates. Its banners include Albertsons, Acme, Shaw’s, Jewel-Osco, Sav-on
Drugs, Osco Drug, and Star Market, as well as Super Saver and Bristol Farms, which are operated
independently. For more information about Albertsons, please visit our website at
www.albertsons.com.
Certain statements made in this press release are forward-looking information as defined in the
Private Securities Litigation Reform Act of 1995. In reviewing such information about the future
performance of the Company, it should be kept in mind that actual results may differ materially
from those projected or suggested in such forward-looking information since predictions regarding
future events are subject to inherent uncertainties. These statements relate to, among other
things, the pending sale of the Company. These statements are indicated by words or phrases such as
“expects,” “plans,” “believes,” “estimate,” and “goal”.
Important assumptions and other important factors that could cause actual results to differ
materially from those set forth in the forward-looking information include the Company’s ability to
complete the pending sale of the Company; the factors listed in “Item 1A – Risk Factors” in the
Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2006; and other factors
affecting the Company’s business in or beyond the Company’s control. Other factors and assumptions
not identified above could also cause the actual results to differ materially from those projected
or suggested in the forward-looking information. The Company does not undertake to update
forward-looking information contained herein or elsewhere to reflect actual results, changes in
predictions,
assumptions, estimates or changes in other factors affecting such forward-looking information.
2
ADDITIONAL INFORMATION
SUPERVALU and Albertsons have filed a joint proxy statement/prospectus with the Securities and
Exchange Commission (SEC). INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE
IT CONTAINS IMPORTANT INFORMATION. You can obtain the joint proxy statement/prospectus, as well as
other filings containing information about SUPERVALU and Albertson’s, free of charge, at the
website maintained by the SEC at www.sec.gov. Copies of the joint proxy statement/prospectus and
the filings with the SEC that are incorporated by reference in the joint proxy statement/prospectus
can also be obtained, free of charge, by directing a request to SUPERVALU INC., 11840 Valley View
Road, Eden Prairie, Minnesota, 55344, Attention: Corporate Secretary, or to Albertson’s, Inc., 250
East Parkcenter Boulevard, Boise, Idaho, 83706-3940, Attention: Corporate Secretary. The respective
directors and executive officers of SUPERVALU and Albertson’s and other persons may be deemed to be
participants in the solicitation of proxies in respect of the proposed transaction. Information
regarding SUPERVALU’s directors and executive officers is available in its proxy statement filed
with the SEC by SUPERVALU on May 12, 2005, and information regarding Albertson’s directors and
executive officers is available in its Annual Report on Form 10-K filed with the SEC by Albertson’s
on March 29, 2006. Other information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or otherwise, are
contained the joint proxy statement/prospectus and other relevant materials filed with the SEC.
Investors should read the joint proxy statement/prospectus carefully before making any voting or
investment decisions.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
3
ALBERTSON’S, INC.
(Unaudited — Dollars in millions, except per share amounts)
Consolidated Earnings Statements
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
13 Weeks Ended |
|
13 Weeks Ended |
| |
|
May 4, 2006 |
|
May 5, 2005 |
| |
Sales |
|
$ |
9,940 |
|
|
|
100.00 |
% |
|
$ |
9,993 |
|
|
|
100.00 |
% |
Cost of sales |
|
|
7,097 |
|
|
|
71.39 |
|
|
|
7,183 |
|
|
|
71.89 |
|
| |
Gross profit |
|
|
2,843 |
|
|
|
28.61 |
|
|
|
2,810 |
|
|
|
28.11 |
|
Selling, general and administrative expenses |
|
|
2,462 |
|
|
|
24.77 |
|
|
|
2,517 |
|
|
|
25.18 |
|
| |
Operating profit |
|
|
381 |
|
|
|
3.83 |
|
|
|
293 |
|
|
|
2.93 |
|
Interest expense, net |
|
|
119 |
|
|
|
1.20 |
|
|
|
132 |
|
|
|
1.33 |
|
Other income, net |
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
(1 |
) |
|
|
(0.01 |
) |
| |
Earnings from continuing operations before income taxes |
|
|
263 |
|
|
|
2.64 |
|
|
|
162 |
|
|
|
1.62 |
|
Income tax expense |
|
|
97 |
|
|
|
0.97 |
|
|
|
55 |
|
|
|
0.55 |
|
| |
Earnings from continuing operations |
|
|
166 |
|
|
|
1.67 |
|
|
|
107 |
|
|
|
1.07 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
(1 |
) |
|
|
(0.01 |
) |
Gain (loss) on disposal |
|
|
3 |
|
|
|
0.03 |
|
|
|
(11 |
) |
|
|
(0.11 |
) |
Income tax (expense) benefit |
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
5 |
|
|
|
0.05 |
|
| |
Gain (loss) from discontinued operations |
|
|
1 |
|
|
|
0.01 |
|
|
|
(7 |
) |
|
|
(0.07 |
) |
| |
Net earnings |
|
$ |
167 |
|
|
|
1.68 |
% |
|
$ |
100 |
|
|
|
1.00 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.45 |
|
|
|
|
|
|
$ |
0.29 |
|
|
|
|
|
Discontinued operations |
|
|
— |
|
|
|
|
|
|
|
(0.02 |
) |
|
|
|
|
Net earnings |
|
|
0.45 |
|
|
|
|
|
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.44 |
|
|
|
|
|
|
$ |
0.29 |
|
|
|
|
|
Discontinued operations |
|
|
— |
|
|
|
|
|
|
|
(0.02 |
) |
|
|
|
|
Net earnings |
|
|
0.45 |
|
|
|
|
|
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
372 |
|
|
|
|
|
|
|
370 |
|
|
|
|
|
Diluted |
|
|
375 |
|
|
|
|
|
|
|
371 |
|
|
|
|
|
Percentages or amounts may not sum due to rounding differences.
ALBERTSON’S, INC.
(Unaudited — In millions)
Consolidated Balance Sheet Data
| |
|
|
|
|
|
|
|
|
|
| |
|
May 4, 2006 |
|
|
February 2, 2006 |
| |
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
580 |
|
|
|
$ |
406 |
|
Accounts and notes receivable, net |
|
|
718 |
|
|
|
|
723 |
|
Inventories, net |
|
|
3,069 |
|
|
|
|
3,036 |
|
Assets held for sale |
|
|
15 |
|
|
|
|
22 |
|
Prepaid and other |
|
|
185 |
|
|
|
|
168 |
|
| |
|
|
|
|
|
Total Current Assets |
|
|
4,567 |
|
|
|
|
4,355 |
|
|
|
|
|
|
|
|
|
|
|
Land, Buildings and Equipment, net |
|
|
9,724 |
|
|
|
|
9,903 |
|
Goodwill |
|
|
2,269 |
|
|
|
|
2,269 |
|
Intangibles, net |
|
|
834 |
|
|
|
|
844 |
|
Other assets |
|
|
501 |
|
|
|
|
500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
17,895 |
|
|
|
$ |
17,871 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
2,314 |
|
|
|
$ |
2,203 |
|
Salaries and related liabilities |
|
|
586 |
|
|
|
|
743 |
|
Self-insurance liabilities |
|
|
273 |
|
|
|
|
276 |
|
Current maturities of long-term debt and
capital lease obligations |
|
|
50 |
|
|
|
|
51 |
|
Other current liabilities |
|
|
658 |
|
|
|
|
607 |
|
| |
|
|
|
|
|
Total Current Liabilities |
|
|
3,881 |
|
|
|
|
3,880 |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
5,401 |
|
|
|
|
5,422 |
|
Capital lease obligations |
|
|
853 |
|
|
|
|
856 |
|
Self-insurance liabilities |
|
|
721 |
|
|
|
|
691 |
|
Other long-term liabilities and deferred credits |
|
|
1,155 |
|
|
|
|
1,315 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
371 |
|
|
|
|
370 |
|
Capital in excess of par |
|
|
159 |
|
|
|
|
122 |
|
Retained earnings |
|
|
5,354 |
|
|
|
|
5,215 |
|
| |
|
|
|
|
|
Total Stockholders’ Equity |
|
|
5,884 |
|
|
|
|
5,707 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
17,895 |
|
|
|
$ |
17,871 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares
Outstanding at End of Period |
|
|
371 |
|
|
|
|
370 |
|
Condensed Consolidated Cash Flow Data
| |
|
|
|
|
|
|
|
|
|
| |
|
13 Weeks Ended |
|
|
13 Weeks Ended |
| |
|
May 4, 2006 |
|
|
May 5, 2005 |
| |
|
|
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
167 |
|
|
|
$ |
100 |
|
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
288 |
|
|
|
|
291 |
|
Net deferred income taxes |
|
|
(26 |
) |
|
|
|
(12 |
) |
Gain on curtailment of pension plans |
|
|
(47 |
) |
|
|
|
— |
|
Discontinued operations noncash charges |
|
|
— |
|
|
|
|
13 |
|
Other noncash credits, net |
|
|
(5 |
) |
|
|
|
(5 |
) |
Changes in operating assets and liabilities |
|
|
(39 |
) |
|
|
|
(78 |
) |
| |
|
|
|
Net cash provided by operating activities |
|
|
338 |
|
|
|
|
309 |
|
| |
|
|
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(175 |
) |
|
|
|
(212 |
) |
Proceeds from disposal of land, buildings,
equipment, and assets held for sale |
|
|
58 |
|
|
|
|
90 |
|
Other |
|
|
1 |
|
|
|
|
(1 |
) |
| |
|
|
|
Net cash used in investing activities |
|
|
(116 |
) |
|
|
|
(123 |
) |
| |
|
|
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
|
Commercial paper, net |
|
|
— |
|
|
|
|
(135 |
) |
Proceeds from stock options exercised |
|
|
31 |
|
|
|
|
1 |
|
Payments on long-term borrowings |
|
|
(9 |
) |
|
|
|
(9 |
) |
Dividends paid |
|
|
(70 |
) |
|
|
|
(70 |
) |
| |
|
|
|
Net cash used in financing activities |
|
|
(48 |
) |
|
|
|
(213 |
) |
| |
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
174 |
|
|
|
|
(27 |
) |
Cash and cash equivalents at beginning of period |
|
|
406 |
|
|
|
|
273 |
|
| |
|
|
|
Cash and cash equivalents at end of period |
|
$ |
580 |
|
|
|
$ |
246 |
|
| |
|
|
|
|
|
