FILED BY SUPERVALU INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: SUPERVALU INC., FILE #1-5418
REGISTRATION NO. 333-132397
FOR IMMEDIATE RELEASE
SUPERVALU PROVIDES PRELIMINARY FISCAL 2007 EARNINGS GUIDANCE
FOR COMBINED OPERATIONS
MINNEAPOLIS, MAY 22, 2006 - SUPERVALU INC. (NYSE: SVU) announced today
preliminary Fiscal 2007 earnings guidance reflecting the combined operations
of SUPERVALU and the soon to be acquired premier properties of Albertsons.
The acquisition is expected to close in early June pending successful
shareholder votes by both Albertsons and SUPERVALU shareholders. The
special shareholder meetings are scheduled for May 30.
Assuming the close of the acquisition in early June, Fiscal 2007 total sales
are estimated in a range of approximately $37.4 billion to $ 38.0 billion.
Diluted earnings per share guidance for Fiscal 2007 is estimated in a range
of $2.17 to $2.44. Shares outstanding for the purposes of guidance assumes
early settlement of the outstanding Hybrid Income Term Security units
(HITS). Fiscal 2007 guidance includes estimates of pre-tax one-time
transaction costs of approximately $99 to $116 million, or $0.30 to $0.35
per diluted share and the adoption of FAS 123R related to the stock option
expensing of $0.06 to $0.08 per diluted share. Excluding the impact of
one-time transaction costs and the adoption of FAS 123R, the estimated
Fiscal 2007 earnings guidance range is $2.60 to $2.80 per diluted share. In
addition, Fiscal 2007 guidance includes a charge of approximately $0.03 per
diluted share related to the final disposals of the Pittsburgh
corporate-owned stores. For purposes of guidance, upon closure of the
acquisition that is expected to occur late in the first quarter, shares
outstanding will increase to approximately 223 million shares, resulting in
weighted average shares outstanding for the full fiscal year of
approximately 202 million shares.
Fiscal 2007, which began February 26, 2006, will include the results of
the acquired properties as of the acquisition date. With the anticipated
early June close and the need to align fiscal calendars of the two
companies, the first quarter of Fiscal 2007, which ends June 17, 2006,
will not include any operating results from the acquired operations. However,
first quarter results will include incurred one-time transaction costs,
and for the time period from the date of the acquisition through the quarter
end, will include interest expense on the approximately $2.3 billion of the new
credit facility, and the impact of shares issued to effect the acquisition.
First quarter results will be released July 26.
Jeff Noddle, SUPERVALU chairman and CEO said, "Fiscal 2007 is a
transformational year, where we will begin to see strength in the New
SUPERVALU as our model reflects the power of our new retail organization and
the benefit of a more profitable retail business mix. We anticipate a
successful close of this acquisition in early June and the beginning of an
exciting chapter for SUPERVALU. The newly named executive leadership is
already engaged in the planning process across the company to ensure a great
start. We look forward to sharing our progress as we move through the year.
Our estimated one-time transaction costs remain at approximately $145
million pre-tax, heavily weighted to the first 2 years, and I remain
confident we can deliver the $150 to $175 million in pretax synergies by the
end of the third year."
Total one-time transaction costs of $145 million pretax which are heavily
weighted in the first two years will be comprised of approximately $60 to
$70 million for costs to implement synergy initiatives including consultant
fees, $50 to $60 million for retention and severance costs, and $23 to $28
million for transfer taxes, filing fees and contract administration.
ABOUT SUPERVALU
Celebrating its 135th year of fresh thinking, SUPERVALU INC., a Fortune 500
company, is one of the largest companies in the United States grocery
channel. With annual revenues of approximately $20 billion, SUPERVALU holds
leading market share positions across the U.S. with its 1,381 retail grocery
locations, including licensed Save-A-Lot locations. Through SUPERVALU's
geographically diverse supply chain network, the company provides
distribution and related logistics support services to grocery retailers
across the nation. In addition, SUPERVALU's third-party logistics business
provides end-to-end supply chain management solutions that deliver value for
manufacturers, consumer products retailers and food service customers.
SUPERVALU currently has approximately 50,000 employees. For more information
about SUPERVALU visit HTTP://WWW.SUPERVALU.COM.
The company will conduct a conference call webcast today at 9:00 Central
time. Participants may access the Web cast by visiting SUPERVALU's Web site
at HTTP://WWW.SUPERVALU.COM. Go to About US, click on Financial
Information, then click on Presentations and Webcasts. Those who are
unable to participate in the live Webcast can access a telephone replay by
dialing (630) 652-3041 with passcode 14732311. In addition, the call will be
archived on SUPERVALU's Web site. To access the Web site replay, go to
Financial Information and click on Presentations and Webcasts.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE
OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
EXCEPT FOR THE HISTORICAL AND FACTUAL INFORMATION CONTAINED HEREIN, THE MATTERS
SET FORTH IN THIS PRESS RELEASE, INCLUDING STATEMENTS AS TO THE EXPECTED
BENEFITS OF THE ACQUISITION SUCH AS EFFICIENCIES, COST SAVINGS, MARKET PROFILE
AND FINANCIAL STRENGTH, AND THE COMPETITIVE ABILITY AND POSITION OF THE
COMBINED COMPANY, AND OTHER STATEMENTS IDENTIFIED BY WORDS SUCH AS "ESTIMATES,"
"EXPECTS," "PROJECTS," "PLANS," "ASSUMES", AND SIMILAR EXPRESSIONS ARE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT MAY CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY, INCLUDING REQUIRED APPROVALS BY SUPERVALU AND ALBERTSONS
STOCKHOLDERS AND REGULATORY AGENCIES, THE TIMING OF SETTLEMENT OF THE
OUTSTANDING HITS WHICH DEPENDS ON THE INDIVIDUAL INVESTMENT DECISION OF HOLDERS
OF HITS, THE POSSIBILITY THAT THE ANTICIPATED BENEFITS FROM THE ACQUISITION
CANNOT BE FULLY REALIZED OR MAY TAKE LONGER TO REALIZE THAN EXPECTED, THE
POSSIBILITY THAT COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF ALBERTSONS
OPERATIONS INTO SUPERVALU WILL BE GREATER THAN EXPECTED, THE IMPACT OF
COMPETITION AND OTHER RISK FACTORS RELATING TO OUR INDUSTRY AS DETAILED FROM
TIME TO TIME IN EACH OF SUPERVALU'S AND ALBERTSONS REPORTS FILED WITH THE SEC.
THERE CAN BE NO ASSURANCE THAT THE PROPOSED ACQUISITION WILL IN FACT BE
CONSUMMATED. YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS PRESS RELEASE. UNLESS
LEGALLY REQUIRED, SUPERVALU UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.
ADDITIONAL INFORMATION
SUPERVALU AND ALBERTSON'S HAVE FILED A DEFINITIVE JOINT PROXY STATEMENT/
PROSPECTUS WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC). INVESTORS ARE
URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT
CONTAINS IMPORTANT INFORMATION. YOU CAN OBTAIN THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS, AS WELL AS OTHER FILINGS CONTAINING INFORMATION ABOUT
SUPERVALU AND ALBERTSONS, FREE OF CHARGE, AT THE WEBSITE MAINTAINED BY THE SEC
AT WWW.SEC.GOV. COPIES OF THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND
THE FILINGS WITH THE SEC THAT WILL BE INCORPORATED BY REFERENCE IN THE
DEFINITIVE 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
PROXY STATEMENT FILED WITH THE SEC BY ALBERTSONS ON MAY 6, 2005. OTHER
INFORMATION REGARDING THE PARTICIPANTS IN THE PROXY SOLICITATION AND A
DESCRIPTION OF THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR
OTHERWISE, IS CONTAINED IN THE JOINT PROXY STATEMENT/PROSPECTUS.
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CONTACTS:
Yolanda Scharton
Vice President Corporate Communications and Investor Relations
952-828-4540
YOLANDA.SCHARTON@SUPERVALU.COM
Haley Meyer - Media
952-828-4786
HALEY.MEYER@SUPERVALU.COM