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$1.5 million for the third quarter of 2002, or a loss of 3 cents per share on a diluted basis. The 2002 third-quarter loss compares to income of $16.5 million, or 35 cents per share in the year-earlier period.
Net sales for the quarter were $3.97 billion, a 12.5 percent increase. The 2002 and 2001 third-quarter results include the company's continuing distribution operations but exclude its price-impact retail operations, which the company plans to divest and which are reflected as discontinued operations on the financial statements.
The results also include $7 million related to severance expenses from recent administrative headcount reductions. As a result of the "right-sizing" of the organization, Fleming anticipates generating approximately $40 million in cost reductions in 2003.
"This quarter, we made the decision to solely focus on our core distribution business, further diversify our customer base and set the stage to further strengthen our balance sheet," said c.e.o. Mark Hansen. "We are moving forward with our plan to divest our price-impact retail operations and are pleased with the response we have received from a number of interested parties. Our ongoing discussions with potential buyers continue to encourage us that proceeds from the retail store divestitures will be in excess of $450 million, net of taxes."
Hansen said Fleming intended to use proceeds from the sale to further reduce debt. He added that "by exiting the retail business, we become the only pure-play wholesale distribution company with a national footprint, a business model that we believe will appeal increasingly to a broad category of retailing customers."