Stater Bros. considering bond repurchase, timing uncertain

By Jennifer Lanning Drey

Portland, Ore., Dec. 18 - Stater Bros. Holdings Inc. chief executive officer Jack H. Brown said he is considering buying back a portion of the company's bonds but the timetable for such an action remains under consideration.

Speaking during Stater Bros.' fourth-quarter and year-end conference call, Brown said the company has been carrying more cash than usual due to a price war that has caused it to keep cash available to meet potential increased price activity from competitors.

Additionally, the company is holding cash in case a prime location were to become available in one of its principal market areas, he said.

Other potential uses of cash include building, remodeling or making improvements to its existing store base.

Stater Bros. had $196.9 million of cash and cash equivalents at the Sept. 28 fiscal year-end and was in compliance with all of its debt covenants.

Also during the call, Stater Bros. chief financial officer Phil Smith said the company has been in discussions with its banks and anticipates having a new credit facility in place before its next filing date.

Stater Bros. reported $3.77 billion of sales for fiscal 2009, up from $3.74 billion of sales in the prior fiscal year. Net income was $34.8 million for fiscal 2009, compared with net income of $40.6 million in fiscal 2008.

"Fiscal 2009 was a challenging year for the company, and we anticipate fiscal 2010 will prove even more challenging," Smith said.

Stater Bros. is a Colton, Calif., supermarket chain.

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