##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 21, 2003

Commission File Number 0-1532

MARSH SUPERMARKETS, INC.

(Exact name of registrant as specified in its charter)


|                                |  |                    
|------------------------------- |  | -------------------
|INDIANA                         |  | 35-0918179         
|(State or other jurisdiction of |  | (IRS Employer      
|incorporation or organization)  |  | Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|9800 CROSSPOINT BOULEVARD                |  |           
|INDIANAPOLIS, INDIANA                    |  | 46256-3350
|(Address of principal executive offices) |  | (Zip Code)

(317) 594-2100
(Registrants telephone number, including area code)

Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding twelve months
and (2) has been subject to such filing requirements for at least the past 90
days.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes o No x

Number of shares outstanding of each class of the registrants common
stock as of July 18, 2003:

|                                          |  |  |                     |  |  |              
|----------------------------------------- |  |  | ------------------- |  |  | -------------
|Class A Common Stock
Class B Common Stock |  |  | 3,817,138
4,132,896 |  |  | shares
shares
|                                          |  |  |                     |  |  |              
|                                          |  |  | 7,950,034           |  |  | shares       
|                                          |  |  |                     |  |  |              





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TABLE OF CONTENTS



|                                                     |  |  |  |  |  |  |  | 
|---------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                      
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME         
|CONDENSED CONSOLIDATED BALANCE SHEETS               
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|PART II  OTHER INFORMATION                         
|SIGNATURES                                          
|EX-31.1 RULE CERTIFICATION OF THE CEO               
|EX-31.2 RULE CERTIFICATION OF THE CFO               
|EX-32.1 SECTION 1350 CERTIFICATION OF THE CEO       
|EX-32.2 SECTION 1350 CERTIFICATION OF THE CFO       



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INTRODUCTORY NOTE
Form 10-Q/A for the quarter ended June 21, 2003

Subsequent to the date of filing of the original Form 10-Q for the quarter
ended June 21, 2003, the Company reconsidered its methodology of recognizing
slotting allowances and similar consideration received from vendors in
accordance with EITF 02-16.

This Amendment No. 1 on Form 10-Q/A is being filed to restate certain amounts
(see Note F, Recent Accounting Pronouncements, and Managements Discussion and
Analysis of Financial Condition and Results of Operations) and to revise
certain related disclosure in the Companys Consolidated Financial Statements
for the quarter ended June 21, 2003.

Except as set forth herein, this
Amendment No. 1 does not reflect any events
occurring after the date of filing of the original Form 10-Q for the quarter
ended June 21, 2003, or otherwise modify or update any of the information
contained therein.

2



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##### Table of Contents






PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

MARSH SUPERMARKETS, INC.




CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(in thousands except per share amounts)
(Unaudited)


|                                                                                           |  |                |         |          |  |   |         |  
|------------------------------------------------------------------------------------------ |  | -------------- | ------- | -------- |  | - | ------- | -
|                                                                                           |  | 12 Weeks Ended
|                                                                                           |  |               
|                                                                                           |  | Restated*      |         |          |  |  
|                                                                                           |  | June 21,       |         | June 22,
|                                                                                           |  | 2003           |         | 2002    
|                                                                                           |  |                |         |         
|Sales and other revenues                                                                   |  | $              | 378,010 |          |  | $ | 383,495 |  
|Gains from sales of property                                                               |  |                |        |          |  |   | 1,671   |  
|                                                                                           |  |                |         |          |  |   |         |  
|Total revenues                                                                             |  |                | 378,010 |          |  |   | 385,166 |  
|Cost of merchandise sold, including
warehousing and transportation,
excluding depreciation |  |                | 264,079 |          |  |   | 266,231 |  
|                                                                                           |  |                |         |          |  |   |         |  
|Gross profit                                                                               |  |                | 113,931 |          |  |   | 118,935 |  
|Selling, general and administrative                                                        |  |                | 102,119 |          |  |   | 102,914 |  
|Depreciation                                                                               |  |                | 5,762   |          |  |   | 5,590   |  
|                                                                                           |  |                |         |          |  |   |         |  
|Operating income                                                                           |  |                | 6,050   |          |  |   | 10,431  |  
|Interest                                                                                   |  |                | 4,570   |          |  |   | 5,423   |  
|Other non-operating income                                                                 |  |                | (634    | )        |  |   |        |  
|                                                                                           |  |                |         |          |  |   |         |  
|Income from continuing operations
before income taxes                                      |  |                | 2,114   |          |  |   | 5,008   |  
|Income taxes                                                                               |  |                | 856     |          |  |   | 1,847   |  
|                                                                                           |  |                |         |          |  |   |         |  
|Income from continuing operations                                                          |  |                | 1,258   |          |  |   | 3,161   |  
|Loss on disposal of discontinued
operation, net of tax                                     |  |                |        |          |  |   | (181    | )
|                                                                                           |  |                |         |          |  |   |         |  
|Net income                                                                                 |  | $              | 1,258   |          |  | $ | 2,980   |  
|                                                                                           |  |                |         |          |  |   |         |  
|Basic earnings per common share:                                                           |  |                |         |          |  |   |         |  
|Continuing operations                                                                      |  | $              | .16     |          |  | $ | .40     |  
|Loss on disposal of discontinued operation                                                 |  |                |        |          |  |   | (.02    | )
|                                                                                           |  |                |         |          |  |   |         |  
|Net income                                                                                 |  | $              | .16     |          |  | $ | .38     |  
|                                                                                           |  |                |         |          |  |   |         |  
|Diluted earnings per common share:                                                         |  |                |         |          |  |   |         |  
|Continuing operations                                                                      |  | $              | .16     |          |  | $ | .35     |  
|Loss on disposal of discontinued operation                                                 |  |                |        |          |  |   | (.02    | )
|                                                                                           |  |                |         |          |  |   |         |  
|Net income                                                                                 |  | $              | .16     |          |  | $ | .33     |  
|                                                                                           |  |                |         |          |  |   |         |  
|Dividends per share                                                                        |  | $              | .13     |          |  | $ | .11     |  
|                                                                                           |  |                |         |          |  |   |         |  



|* |  | Certain amounts have been restated in conjunction with the Companys
reconsideration of the application of EITF 02-16.
See Note F.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------

See notes to condensed consolidated financial statements.

3



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MARSH SUPERMARKETS, INC.




CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands)


|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |         |         |         |         | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | ------------------------- | -------------------------- | ------- | ----------- | ------- | --------- | ------- | ----------- | ------- | ------- | ------- | ------- | ------- | 
|                                                         |                                             |                             |                           |                            |         | Restated*   |         | Restated* |         |             |         |        
|                                                         |                                             |                             |                           |                            |         | June 21,    |         | March 29, |         | June 22,   
|                                                         |                                             |                             |                           |                            |         | 2003        |         | 2003      |         | 2002       
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |            
|                                                         |                                             |                             |                           |                            |         | (Unaudited) |         | (Note A)  |         | (Unaudited)
|Assets                                                   |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|Current assets:                                          |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         | Cash and equivalents                        |                             | $                         | 25,947                     |         |             | $       | 28,313    |         |             | $       | 30,686  |        
|                                                         | Accounts receivable                         |                             |                           | 28,704                     |         |             |         | 27,203    |         |             |         | 38,334  |        
|                                                         | Inventories                                 |                             |                           | 125,917                    |         |             |         | 130,297   |         |             |         | 132,417 |        
|                                                         | Prepaid expenses                            |                             |                           | 4,019                      |         |             |         | 5,731     |         |             |         | 7,013   |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|Total current assets                                     |                                             |                             | 184,587                   |                            |         |             | 191,544 |           |         |             | 208,450 |        
|Property and equipment, less allowances
for depreciation |                                             |                             | 311,417                   |                            |         |             | 311,469 |           |         |             | 313,554 |        
|Other assets                                             |                                             |                             | 44,998                    |                            |         |             | 46,309  |           |         |             | 48,758  |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             | $                           | 541,002                   |                            |         | $           | 549,322 |           |         | $           | 570,762 |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|Current liabilities:                                     |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         | Notes payable to bank                       |                             | $                         |                           |         |             | $       | 1,700     |         |             | $       |        |        
|                                                         | Accounts payable                            |                             |                           | 70,842                     |         |             |         | 71,883    |         |             |         | 71,752  |        
|                                                         | Accrued liabilities                         |                             |                           | 49,287                     |         |             |         | 49,665    |         |             |         | 49,553  |        
|                                                         | Current maturities of long-term liabilities |                             |                           | 3,177                      |         |             |         | 3,452     |         |             |         | 3,243   |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             |                             | Total current liabilities |                            |         | 123,306     |         |           |         | 126,700     |         |         |         | 124,548 |        
|Long-term liabilities:                                   |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         | Long-term debt                              |                             |                           | 191,312                    |         |             |         | 198,148   |         |             |         | 221,168 |        
|                                                         | Capital lease obligations                   |                             |                           | 28,787                     |         |             |         | 29,009    |         |             |         | 29,704  |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             | Total long-term liabilities |                           |                            | 220,099 |             |         |           | 227,157 |             |         |         | 250,872 |        
|Deferred items:                                          |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         | Income taxes                                |                             |                           | 9,840                      |         |             |         | 9,606     |         |             |         | 16,543  |        
|                                                         | Pension and post-retirement benefits        |                             |                           | 41,684                     |         |             |         | 40,824    |         |             |         | 22,002  |        
|                                                         | Other                                       |                             |                           | 18,010                     |         |             |         | 17,226    |         |             |         | 13,822  |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             |                             | Total deferred items      |                            |         | 69,534      |         |           |         | 67,656      |         |         |         | 52,367  |        
|Shareholders Equity:                                    |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         | Common stock, Classes A and B               |                             |                           | 26,443                     |         |             |         | 26,439    |         |             |         | 26,407  |        
|                                                         | Retained earnings                           |                             |                           | 132,137                    |         |             |         | 131,911   |         |             |         | 137,640 |        
|                                                         | Cost of common stock in treasury            |                             |                           | (14,917                    | )       |             |         | (14,928   | )       |             |         | (14,419 | )      
|                                                         | Deferred cost  restricted stock            |                             |                           | (39                        | )       |             |         | (54       | )       |             |         | (280    | )      
|                                                         | Notes receivable  stock options            |                             |                           | (177                       | )       |             |         | (175      | )       |             |         | (1,049  | )      
|                                                         | Accumulated other comprehensive loss        |                             |                           | (15,384                    | )       |             |         | (15,384   | )       |             |         | (5,324  | )      
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             |                             |                           | Total shareholders equity |         |             | 128,063 |           |         |             | 127,809 |         |         |         | 142,975 | 
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        
|                                                         |                                             | $                           | 541,002                   |                            |         | $           | 549,322 |           |         | $           | 570,762 |        
|                                                         |                                             |                             |                           |                            |         |             |         |           |         |             |         |        



|* |  | Certain amounts have been restated in conjunction with the Companys
reconsideration of the application of EITF 02-16. See Note F.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------

See notes to condensed consolidated financial statements.

4



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MARSH SUPERMARKETS, INC.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)
(Unaudited)


|                                                                                  |                                             |   |                |       |          |   |         |        |  
|--------------------------------------------------------------------------------- | ------------------------------------------- | - | -------------- | ----- | -------- | - | ------- | ------ | -
|                                                                                  |                                             |   | 12 Weeks Ended
|                                                                                  |                                             |   |               
|                                                                                  |                                             |   | Restated*      |       |          |   |        
|                                                                                  |                                             |   | June 21,       |       | June 22,
|                                                                                  |                                             |   | 2003           |       | 2002    
|                                                                                  |                                             |   |                |       |         
|Operating activities                                                              |                                             |   |                |       |          |   |         |       
|Net income                                                                        |                                             | $ | 1,258          |       |          | $ | 2,980   |       
|Adjustments to reconcile net income to net
cash provided by operating activities: |                                             |   |                |       |          |   |         |       
|                                                                                  | Depreciation                                |   |                | 5,762 |          |   |         | 5,590  |  
|                                                                                  | Amortization of other assets                |   |                | 297   |          |   |         | 534    |  
|                                                                                  | Changes in operating assets and liabilities |   |                | 5,655 |          |   |         | (110   | )
|                                                                                  | Other operating activities                  |   |                | 1,629 |          |   |         | (1,128 | )
|                                                                                  |                                             |   |                |       |          |   |         |       
|Net cash provided by operating activities                                         |                                             |   | 14,601         |       |          |   | 7,866   |       
|Investing activities                                                              |                                             |   |                |       |          |   |         |       
|Net acquisition of property, equipment and land                                   |                                             |   | (6,154         | )     |          |   | (13,045 | )     
|Other investing activities                                                        |                                             |   | (727           | )     |          |   | 462     |       
|                                                                                  |                                             |   |                |       |          |   |         |       
|Net cash used for investing activities                                            |                                             |   | (6,881         | )     |          |   | (12,583 | )     
|Financing activities                                                              |                                             |   |                |       |          |   |         |       
|Repayments of short-term borrowings                                               |                                             |   | (1,700         | )     |          |   | (1,300  | )     
|Proceeds of long-term borrowings                                                  |                                             |   | 5,000          |       |          |   |        |       
|Proceeds of sale/leasebacks                                                       |                                             |   |               |       |          |   | 16,477  |       
|Payments of long-term debt and capital leases                                     |                                             |   | (12,333        | )     |          |   | (16,506 | )     
|Cash dividends paid                                                               |                                             |   | (1,034         | )     |          |   | (878    | )     
|Other financing activities                                                        |                                             |   | (19            | )     |          |   | 94      |       
|                                                                                  |                                             |   |                |       |          |   |         |       
|Net cash used for financing activities                                            |                                             |   | (10,086        | )     |          |   | (2,113  | )     
|                                                                                  |                                             |   |                |       |          |   |         |       
|Net decrease in cash and equivalents                                              |                                             |   | (2,366         | )     |          |   | (6,830  | )     
|Cash and equivalents at beginning of period                                       |                                             |   | 28,313         |       |          |   | 37,516  |       
|                                                                                  |                                             |   |                |       |          |   |         |       
|Cash and equivalents at end of period                                             |                                             | $ | 25,947         |       |          | $ | 30,686  |       
|                                                                                  |                                             |   |                |       |          |   |         |       



|* |  | Certain amounts have been restated in conjunction with the Companys
reconsideration of the application of EITF 02-16. See Note F.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------

See notes to condensed consolidated financial statements.

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MARSH SUPERMARKETS, INC.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(amounts in thousands except per share amounts, or as otherwise noted)


June 21, 2003

Note A  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Marsh
Supermarkets, Inc. and subsidiaries were prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions to Form 10-Q. Accordingly, they do not include all the information
and footnotes necessary for a fair presentation of financial position, results
of operations, and cash flows in conformity with accounting principles
generally accepted in the United States. This report should be read in
conjunction with the Companys Consolidated Financial Statements for the year
ended March 29, 2003. The balance sheet at March 29, 2003, has been derived
from the audited financial statements at that date.

The Companys fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references herein to 2004 and 2003 relate to the fiscal
years ending March 27, 2004 and March 29, 2003, respectively.

The condensed consolidated financial statements for the twelve-week periods
ended June 21, 2003 and
June 22, 2002, respectively, were not audited by independent auditors.
Preparation of the financial statements requires management to make estimates
that affect the reported amounts of assets, liabilities, revenues and expenses
for the reporting periods. In the opinion of management, the statements reflect
all adjustments (consisting of normal recurring accruals) considered necessary
to present fairly, on a consolidated basis, the financial position, results of
operations and cash flows for the periods presented.

Operating results for the twelve week period ended June 21, 2003, are not
necessarily indicative of the results that may be expected for the full fiscal
year ending March 27, 2004.

Note B  Discontinued Operation

In October 2001, the Company sold certain assets of its wholesale division. The
loss on disposal of discontinued operation reported in the condensed
consolidated statements of income relates primarily to adjustments to accounts
receivable of that division. The remaining assets and liabilities from the
discontinued operation included in the condensed consolidated balance sheet at
June 21, 2003, are not material.

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Note C  Earnings Per Share

The following table sets forth the computation of the numerators and
denominators used in the computation of basic and diluted earnings per share:

|                                                                              |                              |   |                |    |          |   |       |       |  
|----------------------------------------------------------------------------- | ---------------------------- | - | -------------- | -- | -------- | - | ----- | ----- | -
|                                                                              |                              |   | 12 Weeks Ended
|                                                                              |                              |   |               
|                                                                              |                              |   | June 21,       |    | June 22,
|                                                                              |                              |   | 2003           |    | 2002    
|                                                                              |                              |   |                |    |         
|Income from continuing operations                                             |                              | $ | 1,258          |    |          | $ | 3,161 |      
|Loss on disposal of discontinued operation                                    |                              |   |               |    |          |   | (181  | )    
|                                                                              |                              |   |                |    |          |   |       |      
|Numerator for basic earnings per share                                        |                              |   | 1,258          |    |          |   | 2,980 |      
|Effect of convertible debentures                                              |                              |   |               |    |          |   | 202   |      
|                                                                              |                              |   |                |    |          |   |       |      
|Numerator for diluted earnings per share 
income after assumed conversions   |                              | $ | 1,258          |    |          | $ | 3,182 |      
|                                                                              |                              |   |                |    |          |   |       |      
|Weighted average shares outstanding                                           |                              |   | 7,949          |    |          |   | 7,977 |      
|                                                                              | Non-vested restricted shares |   |                | (6 | )        |   |       | (27   | )
|                                                                              |                              |   |                |    |          |   |       |      
|Denominator for basic earnings per share                                      |                              |   | 7,943          |    |          |   | 7,950 |      
|Effect of dilutive securities:                                                |                              |   |                |    |          |   |       |      
|                                                                              | Non-vested restricted shares |   |                | 6  |          |   |       | 27    |  
|                                                                              | Stock options                |   |                | 61 |          |   |       | 267   |  
|                                                                              | Convertible debentures       |   |                |   |          |   |       | 1,284 |  
|                                                                              |                              |   |                |    |          |   |       |      
|Denominator for diluted earnings per share 
adjusted weighted average shares |                              |   | 8,010          |    |          |   | 9,528 |      
|                                                                              |                              |   |                |    |          |   |       |      

Note D  Stock Option Plans

The Companys stock option plans are accounted for under the intrinsic value
method of APB Opinion 25 and related interpretations. Since the exercise price
of options granted under the plans is equal to the market price of the
underlying common stock on the grant date, no stock-based compensation cost is
recognized in net income.

The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of FAS 123:

|                                                                  |         |   |                |     |          |   |       |     | 
|----------------------------------------------------------------- | ------- | - | -------------- | --- | -------- | - | ----- | --- | 
|                                                                  |         |   | 12 Weeks Ended
|                                                                  |         |   |               
|                                                                  |         |   | June 21,       |     | June 22,
|                                                                  |         |   | 2003           |     | 2002    
|                                                                  |         |   |                |     |         
|Net income, as reported                                           |         | $ | 1,258          |     |          | $ | 2,980 |    
|Plus compensation expense reflected in net income                 |         |   | 7              |     |          |   | 28    |    
|Less compensation expense using
the fair value method, net of tax |         |   | 215            |     |          |   | 274   |    
|                                                                  |         |   |                |     |          |   |       |    
|Pro-forma net income                                              |         | $ | 1,050          |     |          | $ | 2,734 |    
|                                                                  |         |   |                |     |          |   |       |    
|Earnings per share, as reported:                                  |         |   |                |     |          |   |       |    
|                                                                  | Basic   |   | $              | .16 |          |   | $     | .38 | 
|                                                                  | Diluted |   |                | .16 |          |   |       | .33 | 
|Pro-forma earnings per share:                                     |         |   |                |     |          |   |       |    
|                                                                  | Basic   |   |                | .13 |          |   |       | .34 | 
|                                                                  | Diluted |   |                | .13 |          |   |       | .31 | 

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Note E  Long-Term Debt and Guarantor Subsidiaries

Other than three minor subsidiaries, all of the Companys subsidiaries (the
Guarantors) have fully and unconditionally guaranteed on a joint and several
basis the Companys obligations under the 8 7/8% senior subordinated notes. The
Guarantors are wholly owned subsidiaries of the Company.

Statement of income for the 12 weeks ended June 21, 2003:

|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------ |  | ------ | ----- | ------------ |  | --------- | ------- | ------------- |  | - | ------ | - |  | - | ------- | -
|                                                                                           |  |        |       |              |  | Guarantor |         | Consolidating |  |   |        |  
|                                                                                           |  | Parent |       | subsidiaries |  | entries   |         | Total        
|                                                                                           |  |        |       |              |  |           |         |              
|Total revenues                                                                             |  |        | 1,135 |              |  |           | 378,008 |               |  |   | (1,133 | ) |  |   | 378,010 |  
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |        |      |              |  |           | 264,079 |               |  |   |       |   |  |   | 264,079 |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Gross profit                                                                               |  |        | 1,135 |              |  |           | 113,929 |               |  |   | (1,133 | ) |  |   | 113,931 |  
|Selling, general and administrative                                                        |  |        | 656   |              |  |           | 102,596 |               |  |   | (1,133 | ) |  |   | 102,119 |  
|Depreciation                                                                               |  |        | 411   |              |  |           | 5,351   |               |  |   |       |   |  |   | 5,762   |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Operating income                                                                           |  |        | 68    |              |  |           | 5,982   |               |  |   |       |   |  |   | 6,050   |  
|Interest                                                                                   |  |        | 419   |              |  |           | 4,151   |               |  |   |       |   |  |   | 4,570   |  
|Other non-operating income                                                                 |  |        | (634  | )            |  |           |        |               |  |   |       |   |  |   | (634    | )
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Income from continuing operations
before income taxes                                      |  |        | 283   |              |  |           | 1,831   |               |  |   |       |   |  |   | 2,114   |  
|Income taxes                                                                               |  |        | 119   |              |  |           | 737     |               |  |   |       |   |  |   | 856     |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Income from continuing operations                                                          |  | $      | 164   |              |  | $         | 1,094   |               |  | $ |       |   |  | $ | 1,258   |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  

Statement of income for the 12 weeks ended June 22, 2002:

|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|------------------------------------------------------------------------------------------ |  | ------ | ----- | ------------ |  | --------- | ------- | ------------- |  | - | ------ | - |  | - | ------- | 
|                                                                                           |  |        |       |              |  | Guarantor |         | Consolidating |  |   |        |  
|                                                                                           |  | Parent |       | subsidiaries |  | entries   |         | Total        
|                                                                                           |  |        |       |              |  |           |         |              
|Sales and other revenues                                                                   |  | $      | 1,145 |              |  | $         | 383,483 |               |  | $ | (1,133 | ) |  | $ | 383,495 | 
|Gains from sales of property                                                               |  |        |      |              |  |           | 1,671   |               |  |   |       |   |  |   | 1,671   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Total revenues                                                                             |  |        | 1,145 |              |  |           | 385,154 |               |  |   | (1,133 | ) |  |   | 385,166 | 
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |        |      |              |  |           | 266,231 |               |  |   |       |   |  |   | 266,231 | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Gross profit                                                                               |  |        | 1,145 |              |  |           | 118,923 |               |  |   | (1,133 | ) |  |   | 118,935 | 
|Selling, general and administrative                                                        |  |        | 650   |              |  |           | 103,397 |               |  |   | (1,133 | ) |  |   | 102,914 | 
|Depreciation                                                                               |  |        | 316   |              |  |           | 5,274   |               |  |   |       |   |  |   | 5,590   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Operating income                                                                           |  |        | 179   |              |  |           | 10,252  |               |  |   |       |   |  |   | 10,431  | 
|Interest                                                                                   |  |        | 506   |              |  |           | 4,917   |               |  |   |       |   |  |   | 5,423   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations
before income taxes                               |  |        | (327  | )            |  |           | 5,335   |               |  |   |       |   |  |   | 5,008   | 
|Income taxes (benefit)                                                                     |  |        | (121  | )            |  |           | 1,968   |               |  |   |       |   |  |   | 1,847   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations                                                   |  | $      | (206  | )            |  | $         | 3,367   |               |  | $ |       |   |  | $ | 3,161   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 

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Balance sheet as of June 21, 2003:

|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |         | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | -------- | ------- | ------- | ------------ | ------- | --------- | ------- | - | ------- | ------- | ------- | 
|                                                         |                                             |                             |          |         |         |              |         | Guarantor |         |   |         |        
|                                                         |                                             |                             |          | Parent  |         | subsidiaries |         | Total    
|                                                         |                                             |                             |          |         |         |              |         |          
|Assets                                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current assets:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Cash and equivalents                        |                             | $        |        |         |              | $       | 25,947    |         |   | $       | 25,947  |        
|                                                         | Accounts receivable                         |                             |          |        |         |              |         | 28,704    |         |   |         | 28,704  |        
|                                                         | Inventories                                 |                             |          |        |         |              |         | 125,917   |         |   |         | 125,917 |        
|                                                         | Prepaid expenses                            |                             |          |        |         |              |         | 4,019     |         |   |         | 4,019   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total current assets        |          |         |        |              |         |           | 184,587 |   |         |         | 184,587 | 
|Property and equipment, less allowances for depreciation |                                             |                             | 33,541   |         |         |              | 277,876 |           |         |   | 311,417 |        
|Other assets                                             |                                             |                             | 4,275    |         |         |              | 40,723  |           |         |   | 44,998  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | $                           | 37,816   |         |         | $            | 503,186 |           |         | $ | 541,002 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current liabilities:                                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Accounts payable                            |                             | $        |        |         |              | $       | 70,842    |         |   | $       | 70,842  |        
|                                                         | Accrued liabilities                         |                             |          | 9,700   |         |              |         | 39,587    |         |   |         | 49,287  |        
|                                                         | Current maturities of long-term liabilities |                             |          | 1,460   |         |              |         | 1,717     |         |   |         | 3,177   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total current liabilities   |          |         | 11,160  |              |         |           | 112,146 |   |         |         | 123,306 | 
|Long-term liabilities:                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Long-term debt                              |                             |          | 120,668 |         |              |         | 70,644    |         |   |         | 191,312 |        
|                                                         | Capital lease obligations                   |                             |          |        |         |              |         | 28,787    |         |   |         | 28,787  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total long-term liabilities |          |         | 120,668 |              |         |           | 99,431  |   |         |         | 220,099 | 
|Deferred items:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Income taxes                                |                             |          | 9,840   |         |              |         |          |         |   |         | 9,840   |        
|                                                         | Pension and post-retirement benefits        |                             |          | 37,845  |         |              |         | 3,839     |         |   |         | 41,684  |        
|                                                         | Other                                       |                             |          | 60      |         |              |         | 17,950    |         |   |         | 18,010  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total deferred items        |          |         | 47,745  |              |         |           | 21,789  |   |         |         | 69,534  | 
|Amounts due parent from subsidiaries                     |                                             |                             | (150,861 | )       |         |              | 150,861 |           |         |   |        |        
|Shareholders Equity:                                    |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Common stock, Classes A and B               |                             |          | 26,443  |         |              |         |          |         |   |         | 26,443  |        
|                                                         | Retained earnings                           |                             |          | 13,178  |         |              |         | 118,959   |         |   |         | 132,137 |        
|                                                         | Cost of common stock in treasury            |                             |          | (14,917 | )       |              |         |          |         |   |         | (14,917 | )      
|                                                         | Deferred cost  restricted stock            |                             |          | (39     | )       |              |         |          |         |   |         | (39     | )      
|                                                         | Notes receivable  stock options            |                             |          | (177    | )       |              |         |          |         |   |         | (177    | )      
|                                                         | Accumulated other comprehensive loss        |                             |          | (15,384 | )       |              |         |          |         |   |         | (15,384 | )      
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total shareholders equity  |          |         | 9,104   |              |         |           | 118,959 |   |         |         | 128,063 | 
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | $                           | 37,816   |         |         | $            | 503,186 |           |         | $ | 541,002 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        

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Balance sheet as of March 29, 2003:

|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |         | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | -------- | ------- | ------- | ------------ | ------- | --------- | ------- | - | ------- | ------- | ------- | 
|                                                         |                                             |                             |          |         |         |              |         | Guarantor |         |   |         |        
|                                                         |                                             |                             |          | Parent  |         | subsidiaries |         | Total    
|                                                         |                                             |                             |          |         |         |              |         |          
|Assets                                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current assets:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Cash and equivalents                        |                             | $        |        |         |              | $       | 28,313    |         |   | $       | 28,313  |        
|                                                         | Accounts receivable                         |                             |          |        |         |              |         | 27,203    |         |   |         | 27,203  |        
|                                                         | Inventories                                 |                             |          |        |         |              |         | 130,297   |         |   |         | 130,297 |        
|                                                         | Prepaid expenses                            |                             |          |        |         |              |         | 5,731     |         |   |         | 5,731   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Total current assets                                     |                                             |                             |         |         |         |              | 191,544 |           |         |   | 191,544 |        
|Property and equipment, less allowances for depreciation |                                             |                             | 33,777   |         |         |              | 277,692 |           |         |   | 311,469 |        
|Other assets                                             |                                             |                             | 4,484    |         |         |              | 41,825  |           |         |   | 46,309  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | $                           | 38,261   |         |         | $            | 511,061 |           |         | $ | 549,322 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current liabilities:                                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Notes payable to bank                       |                             | $        |        |         |              | $       | 1,700     |         |   | $       | 1,700   |        
|                                                         | Accounts payable                            |                             |          |        |         |              |         | 71,883    |         |   |         | 71,883  |        
|                                                         | Accrued liabilities                         |                             |          | 6,317   |         |              |         | 43,348    |         |   |         | 49,665  |        
|                                                         | Current maturities of long-term liabilities |                             |          | 1,435   |         |              |         | 2,017     |         |   |         | 3,452   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total current liabilities   |          |         | 7,752   |              |         |           | 118,948 |   |         |         | 126,700 | 
|Long-term liabilities:                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Long-term debt                              |                             |          | 130,367 |         |              |         | 67,781    |         |   |         | 198,148 |        
|                                                         | Capital lease obligations                   |                             |          |        |         |              |         | 29,009    |         |   |         | 29,009  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total long-term liabilities |          |         | 130,367 |              |         |           | 96,790  |   |         |         | 227,157 | 
|Deferred items:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Income taxes                                |                             |          | 9,606   |         |              |         |          |         |   |         | 9,606   |        
|                                                         | Pension and post-retirement benefits        |                             |          | 36,700  |         |              |         | 4,124     |         |   |         | 40,824  |        
|                                                         | Other                                       |                             |          | 61      |         |              |         | 17,165    |         |   |         | 17,226  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total deferred items        |          |         | 46,367  |              |         |           | 21,289  |   |         |         | 67,656  | 
|Amounts due parent from subsidiaries                     |                                             |                             | (156,425 | )       |         |              | 156,425 |           |         |   |        |        
|Shareholders Equity:                                    |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Common stock, Classes A and B               |                             |          | 26,439  |         |              |         |          |         |   |         | 26,439  |        
|                                                         | Retained earnings                           |                             |          | 14,302  |         |              |         | 117,609   |         |   |         | 131,911 |        
|                                                         | Cost of common stock in treasury            |                             |          | (14,928 | )       |              |         |          |         |   |         | (14,928 | )      
|                                                         | Deferred cost  restricted stock            |                             |          | (54     | )       |              |         |          |         |   |         | (54     | )      
|                                                         | Notes receivable  stock options            |                             |          | (175    | )       |              |         |          |         |   |         | (175    | )      
|                                                         | Accumulated other comprehensive loss        |                             |          | (15,384 | )       |              |         |          |         |   |         | (15,384 | )      
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | Total shareholders equity  |          |         | 10,200  |              |         |           | 117,609 |   |         |         | 127,809 | 
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         |                                             | $                           | 38,261   |         |         | $            | 511,061 |           |         | $ | 549,322 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |        

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Statement of cash flows for the twelve weeks ended June 21, 2003:

|                                                     |  |        |         |              |  |           |        |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ------------ |  | --------- | ------ | - |  | - | ------- | -
|                                                     |  |        |         |              |  | Guarantor |        |   |  |  
|                                                     |  | Parent |         | subsidiaries |  | Total    
|                                                     |  |        |         |              |  |          
|Net cash provided by operating activities            |  | $      | 10,772  |              |  | $         | 3,829  |   |  | $ | 14,601  |  
|Net cash used for investing activities               |  |        | (79     | )            |  |           | (6,802 | ) |  |   | (6,881  | )
|Financing activities                                 |  |        |         |              |  |           |        |   |  |   |         |  
|Repayments of short-term borrowings                  |  |        |        |              |  |           | (1,700 | ) |  |   | (1,700  | )
|Proceeds of long-term borrowings                     |  |        |        |              |  |           | 5,000  |   |  |   | 5,000   |  
|Repayments of long-term debt and capital leases      |  |        | (9,674  | )            |  |           | (2,659 | ) |  |   | (12,333 | )
|Cash dividends paid                                  |  |        | (1,034  | )            |  |           |       |   |  |   | (1,034  | )
|Other financing activities                           |  |        | 15      |              |  |           | (34    | ) |  |   | (19     | )
|                                                     |  |        |         |              |  |           |        |   |  |   |         |  
|Net cash provided by (used for) financing activities |  |        | (10,693 | )            |  |           | 607    |   |  |   | (10,086 | )
|                                                     |  |        |         |              |  |           |        |   |  |   |         |  
|Net decrease in cash and equivalents                 |  |        |        |              |  |           | (2,366 | ) |  |   | (2,366  | )
|Cash and equivalents at beginning of period          |  |        |        |              |  |           | 28,313 |   |  |   | 28,313  |  
|                                                     |  |        |         |              |  |           |        |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      |        |              |  | $         | 25,947 |   |  | $ | 25,947  |  
|                                                     |  |        |         |              |  |           |        |   |  |   |         |  

Statement of cash flows for the twelve weeks ended June 22, 2002:

|                                                     |  |        |       |              |  |           |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ----- | ------------ |  | --------- | ------- | - |  | - | ------- | -
|                                                     |  |        |       |              |  | Guarantor |         |   |  |  
|                                                     |  | Parent |       | subsidiaries |  | Total    
|                                                     |  |        |       |              |  |          
|Net cash provided by (used for) operating activities |  | $      | (127  | )            |  | $         | 7,993   |   |  | $ | 7,866   |  
|Net cash provided by (used for) investing activities |  |        | 1,089 |              |  |           | (13,672 | ) |  |   | (12,583 | )
|Financing activities                                 |  |        |       |              |  |           |         |   |  |   |         |  
|Repayments of short-term borrowings                  |  |        |      |              |  |           | (1,300  | ) |  |   | (1,300  | )
|Proceeds of sale/leasebacks                          |  |        |      |              |  |           | 16,477  |   |  |   | 16,477  |  
|Repayments of long-term debt and capital leases      |  |        | (178  | )            |  |           | (16,328 | ) |  |   | (16,506 | )
|Cash dividends paid                                  |  |        | (878  | )            |  |           |        |   |  |   | (878    | )
|Other financing activities                           |  |        | 94    |              |  |           |        |   |  |   | 94      |  
|                                                     |  |        |       |              |  |           |         |   |  |   |         |  
|Net cash used for financing activities               |  |        | (962  | )            |  |           | (1,151  | ) |  |   | (2,113  | )
|                                                     |  |        |       |              |  |           |         |   |  |   |         |  
|Net decrease in cash and equivalents                 |  |        |      |              |  |           | (6,830  | ) |  |   | (6,830  | )
|Cash and equivalents at beginning of period          |  |        |      |              |  |           | 37,516  |   |  |   | 37,516  |  
|                                                     |  |        |       |              |  |           |         |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      |      |              |  | $         | 30,686  |   |  | $ | 30,686  |  
|                                                     |  |        |       |              |  |           |         |   |  |   |         |  

Note F  Recent Accounting Pronouncements

In April 2002, the FASB issued Statement No. 145 (FAS 145), Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
Corrections. Certain provisions of FAS 145 were effective for the Company in
fiscal year 2003. The remaining provisions became effective for the Companys
current fiscal year and had no effect on the Companys results of operations or
financial position for the current quarter.

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In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities which was effective for new entities created after January 31, 2003
and for interim periods beginning after June 15, 2003 for variable interest
entities created or acquired before February 1, 2003. The interpretation had no
effect on the Companys results of operations or financial position for the
current quarter and is not expected to have an effect on the Companys fiscal
year financial statements.

EITF (Emerging Issues Task Force) Issue No. 02-16, Accounting by a Customer
(Including a Reseller) for Certain Consideration Received from a Vendor, became
effective as to the Company on January 1, 2003. This issue addresses the
appropriate accounting for consideration received from a vendor. As a result of
this guidance, the Company has adopted a new policy for recognizing slotting
allowances and similar consideration received from vendors. Allowances that are
related to a specific purchase quantity will continue to be recorded as a
component of the item cost of inventory and recognized in merchandise costs
when the item is sold. Due to system constraints and the nature of certain
allowances, it is sometimes not practicable to apply allowances to the item
cost of inventory. In those instances, the allowances are applied as a
reduction of merchandise costs using a systematic and rational methodology,
which results in the recognition of these incentives when the related
merchandise is sold. Under the Companys previous accounting policy for vendor
allowances, those credits were recognized as a reduction to cost of goods sold
when the Company had fulfilled its obligations under the related contract. In
connection with the implementation of this new accounting policy, the Company
applied the provisions of EITF No. 02-16 prospectively which resulted in
deferring the recognition of $5.6 million of allowances at March 29, 2003 and
$4.9 million at June 21, 2003. The deferral reflects an adjustment of the
Companys inventory balance. The resulting increase in gross
profit of $0.7 million, or
$0.4 million after tax, was recorded in the Companys Condensed Consolidated
Statement of Income for the quarter ended June 21, 2003. The impact of adopting
EITF 02-16 on the quarter ended June 21, 2003 is summarized below:

|                             |  |               |         |             |  |   |         | 
|---------------------------- |  | ------------- | ------- | ----------- |  | - | ------- | 
|                             |  | As Previously |         |             |  |  
|                             |  | Reported      |         | As Restated
|                             |  |               |         |            
|Gross profit                 |  | $             | 113,253 |             |  | $ | 113,931 | 
|Operating income             |  |               | 5,372   |             |  |   | 6,050   | 
|Net income                   |  |               | 813     |             |  |   | 1,258   | 
|Basic net income per share   |  |               | .10     |             |  |   | .16     | 
|Diluted net income per share |  |               | .10     |             |  |   | .16     | 
|Inventories                  |  |               | 130,797 |             |  |   | 125,917 | 

Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This report includes certain forward-looking statements (all statements other
than those made solely with respect to historical fact). Actual results could
differ materially and adversely from those contemplated by the forward-looking
statements due to known and unknown risks and uncertainties, many of which are
beyond the Companys control. The forward-looking statements and the Companys
future results, liquidity and capital resources are subject to risks and
uncertainties including, but not limited to, the following: the entry of new
competitive stores and their impact on the Company; softness in the local and
national economies and the general retail food industry; the level of
discounting and promotional spending by competitors; the Companys ability to
improve comparable store sales; the Companys ability to implement its
improvement initiatives; the ability of the Company to predict and respond to
changes in customer preferences and lifestyles; food price deflation;
uncertainties regarding future real estate gains due to limited real estate
holdings available for sale; stability and timing of distribution incentives
from suppliers; the Companys ability to control cost including labor, medical,
rent, credit card, and workers compensation and general liability expense; the
impact of any acquisitions and dispositions; the level of margins achievable in
the Companys operating divisions; uncertainties regarding gasoline prices and
margins; the success of the Companys new and remodeled stores,

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including image and rebranding programs; the successful economic implementation
of new technology; uncertainties associated with pension and other retirement
obligations; uncertainties related to state and federal taxation and tobacco
and environmental legislation; the successful integration of acquisitions;
potential interest rate increases on variable rate debt, as well as terms,
costs, availability of capital; the timely and on budget completion of store
construction, expansion, conversion and remodeling; the ability to complete
share repurchases, and other known and unknown risks and uncertainties. The
Company undertakes no obligation to update or revise any forward-looking
statements to reflect subsequent events or circumstances.

General

At June 21, 2003, Marsh Supermarkets, Inc. (the Company or Marsh) operated
through wholly-owned subsidiaries 111 supermarkets and 167 Village Pantry
convenience stores in central Indiana and western Ohio. The Company believes
that Marsh supermarkets has one of the largest market shares of supermarket
chains operating in its market area and Village Pantry has one of the largest
market shares of convenience stores in its market area. Marsh also owns and
operates a food services division, which provides upscale catering, vending,
coffee roasting, concession and business cafeteria management services, and a
floral division, which operates six upscale retail floral shops under the name
of McNamara and one business florist under the name Enflora.

Results of Operations

Results of operations for interim periods do not necessarily reflect the
results that may be expected for the fiscal year.

The following table sets forth certain income statement components, expressed
as a percentage of total revenues, and the percentage change in such
components:

|                                    |  |                        |       |            |  |        |       |   |  |  |       |   
|----------------------------------- |  | ---------------------- | ----- | ---------- |  | ------ | ----- | - |  |  | ----- | --
|                                    |  | First Quarter         
|                                    |  |                       
|                                    |  | Percentage of Revenues |       |            |  |       
|                                    |  |                        |       | Percentage
|                                    |  | 2004                   |       | 2003       |  | Change
|                                    |  |                        |       |            |  |       
|Total revenues                      |  |                        | 100.0 | %          |  |        | 100.0 | % |  |  | (1.9  | %)
|Gross profit                        |  |                        | 30.1  | %          |  |        | 30.9  | % |  |  | (4.2  | %)
|Selling, general and administrative |  |                        | 27.0  | %          |  |        | 26.7  | % |  |  | (0.8  | %)
|Depreciation                        |  |                        | 1.5   | %          |  |        | 1.5   | % |  |  | 3.1   | % 
|Operating income                    |  |                        | 1.6   | %          |  |        | 2.7   | % |  |  | (42.0 | %)
|Interest                            |  |                        | 1.2   | %          |  |        | 1.4   | % |  |  | (15.7 | %)
|Other non-operating income          |  |                        | 0.2   | %          |  |        |      |   |  |  |      |   
|Income taxes                        |  |                        | 0.2   | %          |  |        | 0.5   | % |  |  | (53.7 | %)
|Income from continuing operations   |  |                        | 0.3   | %          |  |        | 0.8   | % |  |  | (60.2 | %)

Total Revenues

In the first quarter of 2004, consolidated total revenues were $378.0 million,
compared to $385.2 million in the first quarter of 2003. Supermarket revenues
declined $7.8 million, Crystal Food Service revenues increased $2.3 million,
Village Pantry revenues increased $0.5 million and gains from sales of property
decreased $1.7 million. Retail sales, excluding fuel sales, decreased 2.4%.
Sales in comparable supermarkets and convenience stores, including replacement
stores and format conversions, but excluding fuel, decreased 2.7% from the
first quarter of 2003. The Company excludes fuel from its analysis of
revenues and comparable store sales and believes this information
provides useful information to investors because fuel prices
fluctuate widely and frequently. A store is included in comparable
stores beginning in the four-week period after the store has been in
operation for thirteen full four-week periods. Replacement stores and
format conversions are included in the comparable stores sales
calculation. The decline in comparable store sales continues to
result from new supermarket square footage and increased competitive
promotional levels, a weak economy and food price deflation. Although results
may vary from period to period, future gains from sales of property are not
expected to equal or exceed historic levels due to the limited real estate
holdings available for sale in the normal course of business, which could
materially adversely affect the Companys results of operations.

Gross Profit

Gross profit is calculated net of promotional expenses, and warehousing and
transportation, excluding depreciation. In the first quarter of 2004,
consolidated gross profit decreased $5.0 million, or 4.2%, from the first
quarter of 2003 to $113.9 million. Consolidated gross profit as a percentage of
total revenues was 30.1% in the first quarter of 2004 compared to 30.9% for the
first quarter of 2003. Fuel sales and gross profit

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accounted for 0.5% of the percentage decrease and the decline in the gain from
sales of property accounted for 0.3% of the percentage decrease. The Company
has changed its accounting policy with respect to slotting allowances and
similar consideration received from vendors. As more fully discussed in Note F,
the Company had previously recognized certain vendor allowances when the
Company had fulfilled its obligations under the related contract. Effective
January 1, 2003, the Company now includes those allowances as a reduction in
inventory value. The change in this policy resulted in an increase in gross
profit of $0.7 million for the first quarter of 2004.

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses include store expenses,
administrative and corporate expenses, purchasing personnel costs and
advertising. In the first quarter of 2004, consolidated selling, general and
administrative (SG&A) expenses were $102.1 million compared to $102.9 million
for the first quarter of 2003. As a percentage of revenues, SG&A expenses were
27.0% in the first quarter of 2004 compared to 26.7% in the first quarter of
2003. The increased percentage was partially due to the decline in sales
reducing leverage against fixed costs. Wage expense in stores open both
quarters, excluding replacement stores and supermarket conversions to the
LoBill format, decreased 4.6% primarily reflecting the same store sales decline
and continued efforts on labor efficiency and scheduling. In the first quarter
of 2004, wage and other variable costs savings were largely offset by increased
building and equipment repairs, employee fringe benefits and credit card
processing fees.

Depreciation

Depreciation expense for the first quarter of 2004 was $5.8 million, compared
to $5.6 million for the first quarter of 2003. Depreciation expense as a
percentage of revenues was 1.5% for the first quarter of both 2004 and 2003.

Operating Income

Operating income (income from continuing operations before interest and taxes)
was $6.1 million for the first quarter of 2004 compared to $10.4 million for
the first quarter of 2003 due primarily to the decline in gross profit.
Operating income as a percentage of revenues was 1.6% for the first quarter of
2004 compared to 2.7% for the first quarter of 2003. The effect of the adoption
of EITF 02-16 was an increase in operating income of $0.7 million for the first
quarter of 2004.

Interest Expense

Interest expense for the first quarter of 2004 was $4.6 million, compared to
$5.4 million for the first quarter of 2003 and as a percentage of total
revenues was 1.2% for the first quarter of 2004 compared to 1.4% for the first
quarter of 2003. The decline in interest expense resulted from the retirement
of the Companys 7% convertible debentures and a portion of the Companys 8
7/8% senior subordinated notes subsequent to the first quarter of 2003.

Income Taxes

The effective income tax rate was 40.5% for the first quarter of 2004 compared
to 36.9% for the year earlier quarter. The first quarter effective rate is
based on the overall expected rate for 2004. The increase in the effective rate
for 2004 was due primarily to the decline in pretax income.

Income from Continuing Operations

Income from continuing operations for the first quarter of 2004 was $1.3
million, compared to $3.2 million for the first quarter of 2003. Income from
continuing operations as a percentage of total revenues was 0.3% for the first
quarter of 2004 compared to 0.8% for the first quarter of 2003. The effect of
the adoption of EITF 02-16 was an increase in income from continuing operations
of $0.4 million for the first quarter of 2004.

Discontinued Operation

During fiscal year 2002, the Company sold certain assets of its wholesale
division. and reported a gain from the disposal. In the first quarter of 2003,
the reported gain was decreased by $0.2 million, after tax benefit, primarily
for an increase in provision for doubtful accounts.

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Deferred Pension and Post-retirement Benefits

Deferred pension and post-retirement benefit obligations increased to $41.7
million at June 21, 2003, from $22.0 million at June 22, 2002. The defined
benefit pension plan liability increased $13.8 million due to decline in the
interest rate used for actuarial valuation of the benefit obligation and a
decline in the market value of the assets held by the plan; the plan was frozen
in 1997. The liability for an unfunded supplemental executive retirement plan
increased $5.3 million over the same period due primarily to a decrease in the
interest rate used for actuarial valuation of the benefit obligation.

Other Deferred Items

Other deferred items increased to $18.0 million at June 21, 2003, from $13.8
million at June 22, 2002, due to the deferral of gains on stores sold and
leased back subsequent to June 22, 2002.

Capital Expenditures

The Companys capital requirements have traditionally been financed through
internally generated funds, long-term borrowings and lease financing, including
capital and operating leases.

During the first quarter of 2004, one Marsh supermarket remodel was completed,
one Marsh supermarket was converted to the LoBill format and construction began
on a new Marsh supermarket. Additionally in 2004, the Company plans to
construct a second Marsh supermarket and one new LoBill Foods, remodel four or
five supermarkets, continue the convenience store re-imaging program begun in
the previous year and upgrade certain information systems. The cost of these
projects and other capital commitments is estimated to be $40 million. Of this
amount, the Company plans to fund $20 million through sale/leasebacks, $10
million through equipment leasing and believes it can finance the balance with
internally generated funds. As of June 21, 2003, the Company had expended $6.2
million for capital improvements.

The Companys plans with respect to store financing, construction, expansion,
conversion and remodeling are subject to known and unknown risks and
uncertainties and may be revised in light of changing conditions, such as
competitive influences, cost and availability of capital, its ability to
successfully negotiate site acquisitions or leases, zoning limitations and
other governmental regulations. The timing of projects is subject to normal
construction and other delays. It is possible that projects described above may
not commence, others may be added, a portion of planned expenditures with
respect to projects commenced during the current fiscal year may carry over to
the subsequent fiscal year and the Company may use other or different financing
arrangements.

Liquidity and Capital Resources

Net cash provided by operating activities in the first quarter of 2004 was
$14.6 million, compared to $7.9 million in the first quarter of 2003. In the
first quarter of 2004, net cash provided by operating activities increased
primarily due to a decrease in inventory and a smaller decrease in accounts
payable and accrued expenses than in the first quarter of 2003. Working capital
at June 21, 2003 decreased $3.6 million to $61.3 million from March 29, 2003.
Changes in working capital included a $2.4 million decrease in cash and
equivalents, a $1.5 million increase in accounts receivable, a $4.4 million
decrease in inventory, a $1.7 million decrease in prepaid expenses, a $1.7
million decrease in notes payable to bank and a $1.4 million decrease in
accounts payable and accrued expenses.

The Company has a revolving credit facility that permits total borrowings of up
to $95.0 million. Amounts borrowed are for terms selected by the Company at the
time of borrowing. Interest rates are based on LIBOR or floating prime rate,
and principal and interest are payable at maturity. Commitment fees of 0.5% are
paid on unused amounts and the facility matures in February 2006. The Company
had borrowings of $44.0 million under the facility at June 21, 2003. The credit
facility is secured by land and buildings having a net carrying cost of $49.6
million at June 21, 2003 and the facility contains certain debt covenants,
including limits on future indebtedness, such as limitations on the ratio of
long-term debt to EBITDA and on fixed charge coverage, cash dividends,
repurchases of common stock and disposition of assets. As a result of the

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restatement, at June 21, 2003, the Company did not meet the total funded debt
to EBITDA covenant of the revolving credit facility; a waiver was sought from
and granted by the lending bank group.

The Company also has a bank commitment that provides $3.0 million in short-term
borrowing, at rates based upon the then prevailing federal funds rate, none of
which was utilized at June 21, 2003.

During the quarter ended June 21, 2003 the Company purchased and retired $9.5
million of its 8 7/8% senior subordinated notes at 91.625% of face value. The
purchase resulted in a gain of $0.6 million. The balance of senior subordinated
notes outstanding at June 21, 2003 was $110.0 million.

Critical Accounting Policies

The preparation of financial statements requires management to make assumptions
and estimates that could have a material impact on the reported results of
operations. Although management applies its judgment based on assumptions
believed to be reasonable under the circumstances, actual results could vary
from those assumptions and it is possible that materially different amounts
would be reported using different assumptions.

The Company is self-insured for most healthcare claims, workers compensation
claims, and general liability and automotive liability losses. Reported claims
and related loss reserves are estimated by third party administrators. Claims
incurred but not reported are recorded based on historical experience and
industry trends, which are continually monitored, and accruals are adjusted
when warranted by changes in facts and circumstances.

Pension and other retirement benefits are evaluated with the oversight of the
Companys retirement committee. Outside actuaries are consulted to determine
appropriate assumptions and are engaged to calculate estimated future
obligations. In 1997, the Company froze benefit accruals under its qualified
defined benefit pension plan.

Long-lived assets are depreciated over estimated useful lives based on the
Companys historical experience and prevailing industry practice. Estimated
useful lives are periodically reviewed to ensure they remain appropriate.
Long-lived assets are tested for impairment whenever an event occurs that
indicates an impairment may exist.

Income tax assets and liabilities are recognized generally based upon tax
statutes, regulations and case law, but also include estimates. The estimated
amounts are reviewed periodically and adjusted based upon factual changes and
the related impact on managements judgment.

The Company receives allowances and credits from certain of the vendors whose
products the Company purchases for resale. Allowances that are related to a
specific purchase quantity are recorded as a component of item cost inventory
and recognized in merchandise costs when the item is sold. Other allowances
include consideration received for new item introduction, item shelf placement
and temporary retail price reduction. Due to system constraints and the nature
of certain of these allowances, it is sometimes not practicable to apply
allowances to the item cost of inventory. In those instances, the allowances
are applied as a reduction of merchandise costs using a systematic and rational
methodology, which results in the recognition of these incentives when the
related merchandise is sold, for transactions entered into or after January 1,
2003. See Note F to the Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company, as a policy, does not engage in significant speculative or
derivative transactions, nor does it hold or issue financial instruments for
trading purposes. The Company is exposed to changes in interest rates

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primarily as a result of its borrowing activities. Based on interest rates at
June 21, 2003, a 100 basis point change in interest rates would not have had a
material impact on the Company.

Item 4. Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer carried out an
evaluation of the effectiveness of the Companys disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this report. Based on
that evaluation, these officers have concluded that as of the end of the period
covered by this report, the Companys disclosure controls and procedures were
effective and designed to ensure that material information relating to the
Company would be made known to them by others within the Company on a timely
basis.

Internal Control over Financial Reporting

There was no change in the Companys internal control over financial reporting
during the quarter ended June 21, 2003, that materially affected, or is
reasonably likely to materially affect, the Companys internal control over
financial reporting.

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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable.

Item 2. Changes in Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults upon Senior Securities

Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable.

Item 5. Other Information

Not Applicable.

Item 6. Exhibits and Reports on Form 8-K

|    |  |                                                                                                                                                                                                                       |  |                                                                    
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------
|(a) |  | The following exhibits are included herein:                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | 31.1                                                                                                                                                                                                                  |  | Rule 13(a)-14(a)/15(d)-14(a) Certification of Don E. Marsh.        
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | 31.2                                                                                                                                                                                                                  |  | Rule 13(a)-14(a)/15(d)-14(a) Certification of Douglas W. Dougherty.
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | 32.1                                                                                                                                                                                                                  |  | Section 1350 Certification of Don E. Marsh.                        
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | 32.2                                                                                                                                                                                                                  |  | Section 1350 Certification of Douglas W. Dougherty.                
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|(b) |  | Reports on Form 8-K                                                                                                                                                                                                  
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | Current Reports on Form 8-K furnished to the SEC on June 9, 2003  Item 12
Results of Operations and Financial Condition from the Companys Annual
Report to Shareholders for the fiscal year ended March 29, 2003.
|    |  |                                                                                                                                                                                                                       |  |                                                                    
|    |  | Notwithstanding the foregoing, information furnished under Item 12 of our
Current Report on Form 8-K, including the related exhibits, is not incorporated
by reference into this quarterly report on Form 10-Q/A.    

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.

|                  |  |                          |  |                                                                                                          
|----------------- |  | ------------------------ |  | ---------------------------------------------------------------------------------------------------------
|                  |  | MARSH SUPERMARKETS, INC.
|                 
|February 17, 2004 |  | By:                      |  | /s/ Douglas W. DoughertyDouglas W. Dougherty
Senior Vice President, Chief Financial Officer
and Treasurer
|                 
|February 17, 2004 |  | By:                      |  | /s/ Mark A. VarnerMark A. Varner
Chief Accounting Officer
Vice President  Corporate Controller          

19