Exhibit 99.1
|
NEWS RELEASE |
For more information contact:
Rick Mills, SVP & Chief Financial Officer
Phone: (716) 635-5000
Email: wmills@topsmarkets.com
Rick Mills, SVP & Chief Financial Officer
Phone: (716) 635-5000
Email: wmills@topsmarkets.com
FOR IMMEDIATE RELEASE
Tops Holding Corporation Reports Increases in Sales and Operating Profit
in Second Quarter 2011
in Second Quarter 2011
| • | Inside sales (supermarket excluding gasoline) remained stable despite challenging operating environment |
| • | Net income for the quarter was $0.3 million, compared with net loss of $8.9 million in prior-year period |
| • | EBITDA increased 28.9% from the prior year period to $30.3 million in fiscal 2011 second quarter |
| • | Cash from operations of $35.1 million generated for the 28-week period ended July 16, 2011 |
WILLIAMSVILLE, NY, August 29, 2011 — Tops Holding Corporation (“Tops” or the “Company”), the
parent of Tops Markets, LLC, a leading supermarket retailer with 125 corporate and 5 franchise
locations serving the Upstate New York and Northern Pennsylvania regions, today reported financial
results for the Company’s second quarter (12-week period) and fiscal 2011 first-half (28-week
period) ended July 16, 2011.
Frank Curci, Tops’ President and CEO, commented, “We had a strong quarter, with sales growth and
sharply higher profitability, in spite of a difficult and volatile operating environment. We
continue to grow in the markets we serve in Upstate New York and Northern Pennsylvania by
attracting new customers with our merchandising, while actively taking steps to build loyalty and
basket size with our existing customers. We have successfully integrated the acquired Penn Traffic
stores under the Tops banner and are enjoying a continued rebound in traffic in those newly
renovated stores. Lastly, we are pleased with the growth from the new fuel stations added to our
network.”
Fiscal 2011 Second Quarter Financial Results
Net sales of $559.5 million in the second quarter of fiscal 2011 increased by $17.7 million, or
3.3%, from $541.8 million in the fiscal 2010 second quarter.
Inside sales were $507.4 million in the fiscal 2011 second quarter, up $0.4 million, or 0.1%,
compared with the same period in the prior year. The increase in inside sales was due to the
contribution of new supermarkets opened since August 2010. This contribution was largely offset by
a 1.0% decrease in same store sales, which was largely attributable to the timing of the Easter
holiday. The week following Easter, historically a very poor sales week, occurred during the first
week of the 2011 period, versus the week prior to the beginning of the 2010 period. Additionally,
we experienced an increased trend of customers trading down to lower-priced merchandise, including
private label products, during the 2011 period.
Gasoline sales increased $17.3 million, or 49.6%, to $52.1 million in the fiscal 2011 second
quarter, reflecting a 35.4% increase in the retail price per gallon. Additionally, there was a
10.5% increase in the number of gallons sold, primarily attributable to the addition of three new
fuel stations since June 2010.
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The fluctuation in sales compared with last year’s quarter is summarized as follows, in thousands:
Inside sales: |
||||||||
Increase from incremental stores, net |
$ | 5,588 | 1.1 | % | ||||
Decrease in same store sales |
(5,200 | ) | (1.0 | )% | ||||
Gasoline sales: |
||||||||
Pricing increase |
12,331 | 2.3 | % | |||||
Volume increase |
4,962 | 0.9 | % | |||||
TOTAL |
$ | 17,681 | 3.3 | % | ||||
Gross profit for the quarter increased 2.9% to $155.0 million from $150.6 million in the prior-year
period, reflecting the increase in sales and lower distribution costs. As a percentage of net
sales, gross profit declined 10 basis points to 27.7%. This decline was due to an increase in LIFO
expense from $1.0 million during the fiscal 2010 second quarter to $2.8 million during the current
year quarter, resulting from continuing significant commodity cost inflation experienced during the
2011 second quarter. Excluding the impact of non-cash LIFO expense, cost of goods sold as a
percentage of net sales was relatively consistent year-over-year. This reflects a lower margin
rate on inside sales during the 2010 period due to promotional activities associated with the
rebannering and grand re-openings of the retained Penn Traffic supermarkets, as well as an
increased penetration of private label merchandise sales during the 2011 period. This was offset
by the higher proportion of gasoline sales versus inside sales, as gasoline sales occur at lower
margin rates.
Total operating expenses for the quarter improved to $140.1 million, compared with $145.3 million
in the prior-year period. Last year’s second quarter was impacted by $5.9 million in costs
associated with the Penn Traffic acquisition and integration. Depreciation and amortization
declined $3.2 million, largely due to certain assets that became fully depreciated during the
latter part of 2010.
Operating income for the quarter was $14.9 million, or 2.7% of net sales, up sharply from $5.4
million, or 1.0% of net sales, in the prior-year period.
Rick Mills, Senior Vice President and Chief Financial Officer, noted, “We generated a significant
improvement in our operating income on modest sales growth, clear evidence of the progress we have
made gaining synergies from the Penn Traffic acquisition, lowering our cost structure, and
improving productivity. We continue to identify additional opportunities to improve operating
efficiencies that will enhance our cash-generating capability, which will strengthen our balance
sheet and better position the Company for future growth.”
Net interest expense of $14.3 million in the fiscal 2011 second quarter was relatively consistent
with $14.1 million in the prior-year period.
Net income in the quarter was $0.3 million, compared with a net loss of $8.9 million in the
prior-year period, due to the factors described above.
Year-to-date Results
For the first half of 2011, net sales were $1.28 billion, an increase of $69.9 million, or 5.8%,
from $1.21 billion in the prior-year period. Inside sales increased 3.1% due to a 1.4% increase in
same store sales, the operation of the acquired Penn Traffic supermarkets for four additional
weeks, and two new supermarkets opened since August 2010. Gasoline sales increased 45.6% in the
first half of 2011 compared to the prior-year period.
Gross profit increased 3.8% to $357.3 million in the first half of 2011, and was 28.0% as a
percentage of net sales, down 50 basis points compared to the first half of fiscal 2010. Excluding
the impact of non-cash LIFO adjustments, cost of goods sold as a percentage of net sales was 70.0%
and 69.5% during the first halves of 2011 and 2010, respectively. This reflects the higher
proportion of gasoline sales versus inside sales, as gasoline sales occur at lower margin rates.
Total operating expenses in the first half of 2011 decreased by 5.0% to $324.9 million. The first
half of fiscal 2010 was impacted by $21.2 million in costs associated with the Penn Traffic
acquisition and integration.
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August 29, 2011
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Operating income in the first half of fiscal 2011 increased to $32.5 million, up from $2.5 million
in the prior-year period.
FTC Update
In August 2010, the FTC issued a Proposed Order that would require us to sell seven of the retained
supermarkets that were acquired from Penn Traffic. On June 30, 2011, the FTC approved a modified
Final Order requiring the sale of the seven supermarkets and the retention of a divestiture trustee
to market the supermarkets subject to the Final Order. Also on June 30, 2011, the FTC approved our
application to sell three of these supermarkets to Hometown Markets. The sale of these
supermarkets closed in late July and early August 2011. We currently operate 52 of the 79 acquired
supermarkets under the banners of Tops, P&C and Quality Markets. Net sales and operating loss for
the seven supermarkets subject to the Final Order were $13.7 million and $1.6 million,
respectively, during the second quarter of fiscal 2011, and $30.9 million and $1.7 million,
respectively, during the first half of fiscal 2011.
Supplemental Reporting on EBITDA and Adjusted EBITDA
To provide investors with greater understanding of its operating performance, in addition to the
results measured in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), Tops
provides supplemental reporting on EBITDA and Adjusted EBITDA.
Fiscal 2011 second-quarter EBITDA was $30.3 million, up $6.8 million, or 28.9%, from $23.5 million
in the fiscal 2010 second quarter. Fiscal 2011 second-quarter Adjusted EBITDA was $35.7 million,
an increase from $33.8 million in the fiscal 2010 second quarter, which included $5.9 million in
one-time acquisition-related expenses for Penn Traffic.
See “Non-GAAP Financial Measures” below for a discussion of EBITDA and Adjusted EBITDA, and the
attached table for a reconciliation to GAAP.
Strong Cash Generation
Cash provided by operating activities during the first half of fiscal 2011 was $35.1 million,
compared with $25.3 million for the fiscal 2010 first half. The increase was due to a $28.8
million increase in earnings, adjusted for non-cash income and expenses. Operating cash flows for
the 2010 period included $21.0 million of integration costs and one-time legal and professional fee
cash expenditures related to the Penn Traffic acquisition. Changes in operating assets and
liabilities represented a use of cash from operating activities of $5.9 million during the first
half of fiscal 2011, compared to a source of cash of $13.1 million during the fiscal 2010 first
half. This period-over-period change was primarily attributable to the timing of vendor payments
and the resulting changes in accounts payable during the respective periods.
Capital expenditures for the first half of fiscal 2011 were $25.9 million, compared with $19.1
million for the prior- year period, and were primarily related to store remodels. The Company
expects to invest approximately $40 million in capital expenditures over the next 12 months.
Mr. Curci concluded, “Keeping our stores fresh and new for our customers is an integral part of our
strategy, and we will remodel and refresh about 15 stores this year. We are also opening a new
location later in the year. Even though we are operating in a difficult economic environment, we
continue to invest in our stores and people to solidify our position in each of our markets.”
As of July 16, 2011, the unused commitment under the Company’s ABL facility was $60.3 million,
after giving effect to $14.2 million in use for letters of credit. The Company believes that cash
generated from operations and the ABL facility will be sufficient to meet cash requirements for at
least the next twelve months.
Conference Call Details
Tops will host a conference call on Tuesday, August 30, 2011 beginning at 11:00 a.m. Eastern Time.
During the call, Frank Curci, President and Chief Executive Officer, Rick Mills, Senior Vice
President and Chief Financial Officer, and Kevin Darrington, Chief Operating Officer, will review
the financial and operating results for the fiscal 2011
second-quarter and first-half ended July 16, 2011, and discuss Tops’ corporate strategy and
outlook. A question-and-answer session will follow. The conference call can be accessed by
dialing (201) 689-8471.
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August 29, 2011
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To listen to a replay of the call, dial (858) 384-5517, and enter replay pin number 375501. The
replay will be available from 2:00 p.m. Eastern Time the day of the teleconference until 11:59 p.m.
Eastern Time, Tuesday, September 13, 2011.
About Tops Holding Corporation
Tops is the parent of Tops Markets, LLC, which is headquartered in Williamsville, NY, and operates
125 corporate full-service supermarkets and an additional 5 franchise supermarkets. With
approximately 12,600 associates, Tops is widely recognized as a strong retail supermarket brand
name in Upstate New York and Northern Pennsylvania. The Company’s strategy is to build on its
solid market share in the areas it operates by continuing to differentiate itself from competitors
by offering quality products at affordable prices with superior customer service and by remaining
an integral part of the community.
For more information about Tops Markets, visit the company’s website at
www.topsmarkets.com.
Safe Harbor Statement
The information made available in this news release contains certain forward-looking statements,
which are generally statements that reflect Tops and its wholly-owned subsidiaries’ current view
of future events, results of operations, cash flows, performance, business prospects and
opportunities. Wherever used, the words “anticipate,” “believe,” “expect,” “intend,” “plan,”
“project,” “will continue,” “will likely result,” “may,” and similar expressions identify
forward-looking statements as such term is defined in the Securities Exchange Act of 1934. Any
such forward-looking statements are subject to risks and uncertainties and the Company’s actual
growth, results of operations, financial condition, cash flows, performance, business prospects and
opportunities could differ materially from historical results or current expectations. Some of
these risks include, without limitation, undischarged bankruptcy claims relating to the Penn
Traffic acquisition, the impact of economic and industry conditions, competition, food and drug
safety issues, store expansion and remodeling, liquidity, motor fuel operations, labor relations
issues, costs of providing employee benefits, regulatory matters, legal and administrative
proceedings, information technology, security, severe weather, natural disasters and adverse
climate changes, accounting matters, other risk factors relating to our business or industry and
other risks detailed from time to time in the Securities and Exchange Commission filings of Tops.
Forward-looking statements contained herein speak only as of the date made and, thus, Tops and its
wholly-owned subsidiaries undertake no obligation to update or publicly announce the revision of
any of the forward-looking statements contained herein to reflect new information, future events,
developments or changed circumstances or for any other reason, except as required by law.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting
principles, or GAAP, we provide information regarding EBITDA and Adjusted EBITDA. We define EBITDA
as earnings before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as
EBITDA adjusted to exclude certain items that we believe are non-recurring in nature and are not
indicative of future performance. We use EBITDA and Adjusted EBITDA to evaluate our operating
performance and liquidity and they are among the primary measures used by management for planning
and forecasting for future periods. We believe the presentation of these measures is relevant and
useful for investors because it allows investors to view results in a manner similar to the method
used by management and makes it easier to compare our results with other companies that have
different financing and capital structures. See the last page of this release for a quantitative
reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial
performance measure, which we believe is net income (loss).
FINANCIAL TABLES FOLLOW
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August 29, 2011
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TOPS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
| 12-week periods ended | 28-week periods ended | |||||||||||||||
| July 16, 2011 | July 17, 2010 | July 16, 2011 | July 17, 2010 | |||||||||||||
Net sales |
$ | 559,514 | $ | 541,833 | $ | 1,276,773 | $ | 1,206,848 | ||||||||
Cost of goods sold |
(395,139 | ) | (380,778 | ) | (895,883 | ) | (838,946 | ) | ||||||||
Distribution costs |
(9,393 | ) | (10,422 | ) | (23,556 | ) | (23,510 | ) | ||||||||
Gross profit |
154,982 | 150,633 | 357,334 | 344,392 | ||||||||||||
Operating expenses: |
||||||||||||||||
Wages, salaries and benefits |
(76,356 | ) | (73,227 | ) | (175,338 | ) | (167,506 | ) | ||||||||
Selling and general expenses |
(23,438 | ) | (24,039 | ) | (56,821 | ) | (55,802 | ) | ||||||||
Administrative expenses (inclusive of
share-based compensation expense
of $264, $182, $612 and $426) |
(18,019 | ) | (22,528 | ) | (43,502 | ) | (62,507 | ) | ||||||||
Rent expense, net |
(4,212 | ) | (4,180 | ) | (10,115 | ) | (10,017 | ) | ||||||||
Depreciation and amortization |
(11,746 | ) | (14,984 | ) | (26,787 | ) | (33,714 | ) | ||||||||
Advertising |
(4,412 | ) | (6,302 | ) | (10,402 | ) | (12,355 | ) | ||||||||
Impairment |
(1,891 | ) | — | (1,891 | ) | — | ||||||||||
Total operating expenses |
(140,074 | ) | (145,260 | ) | (324,856 | ) | (341,901 | ) | ||||||||
Operating income |
14,908 | 5,373 | 32,478 | 2,491 | ||||||||||||
Bargain purchase |
— | — | — | 15,681 | ||||||||||||
Loss on debt extinguishment |
— | — | — | (1,008 | ) | |||||||||||
Interest expense, net |
(14,297 | ) | (14,074 | ) | (33,588 | ) | (32,484 | ) | ||||||||
Income (loss) before income taxes |
611 | (8,701 | ) | (1,110 | ) | (15,320 | ) | |||||||||
Income tax (expense) benefit |
(318 | ) | (214 | ) | (685 | ) | 9,699 | |||||||||
Net income (loss) |
$ | 293 | $ | (8,915 | ) | $ | (1,795 | ) | $ | (5,621 | ) | |||||
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TOPS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
(Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
(Unaudited)
| July 16, 2011 | January 1, 2011 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 18,636 | $ | 17,419 | ||||
Accounts receivable, net |
55,577 | 57,044 | ||||||
Inventory, net |
118,880 | 117,328 | ||||||
Prepaid expenses and other current assets |
9,686 | 14,093 | ||||||
Assets held for sale |
600 | 650 | ||||||
Income taxes refundable |
203 | 200 | ||||||
Current deferred tax assets |
2,265 | 2,265 | ||||||
Total current assets |
205,847 | 208,999 | ||||||
Property and equipment, net |
371,049 | 378,575 | ||||||
Intangible assets, net |
74,347 | 79,072 | ||||||
Other assets |
12,351 | 13,705 | ||||||
Total assets |
$ | 663,594 | $ | 680,351 | ||||
Liabilities and Shareholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 89,410 | $ | 93,311 | ||||
Accrued expenses and other current liabilities |
76,182 | 79,123 | ||||||
Current portion of capital lease obligations |
12,092 | 11,095 | ||||||
Current portion of long-term debt |
420 | 402 | ||||||
Total current liabilities |
178,104 | 183,931 | ||||||
Capital lease obligations |
165,571 | 172,216 | ||||||
Long-term debt |
362,731 | 365,262 | ||||||
Other long-term liabilities |
19,863 | 21,099 | ||||||
Non-current deferred tax liabilities |
4,019 | 3,354 | ||||||
Total liabilities |
730,288 | 745,862 | ||||||
Shareholders’ deficit: |
||||||||
Common shares ($0.001 par value; 300,000 authorized shares,
144,776 issued & outstanding) |
— | — | ||||||
Paid-in capital |
(2,056 | ) | (2,668 | ) | ||||
Accumulated deficit |
(64,302 | ) | (62,507 | ) | ||||
Accumulated other comprehensive loss, net of tax |
(336 | ) | (336 | ) | ||||
Total shareholders’ deficit |
(66,694 | ) | (65,511 | ) | ||||
Total liabilities and shareholders’ deficit |
$ | 663,594 | $ | 680,351 | ||||
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TOPS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| 28-week periods ended | ||||||||
| July 16, 2011 | July 17, 2010 | |||||||
Cash flows provided by operating activities: |
||||||||
Net loss |
$ | (1,795 | ) | $ | (5,621 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating
activities: |
||||||||
Depreciation and amortization |
35,729 | 40,710 | ||||||
LIFO inventory valuation adjustments |
2,161 | (84 | ) | |||||
Impairment |
1,891 | — | ||||||
Amortization of deferred financing costs |
1,411 | 1,204 | ||||||
Deferred income taxes |
665 | (10,288 | ) | |||||
Share-based compensation expense |
612 | 426 | ||||||
Bargain purchase |
— | (15,681 | ) | |||||
Loss on debt extinguishment |
— | 1,008 | ||||||
Other |
255 | 499 | ||||||
Changes in operating assets and liabilities: |
||||||||
Decrease (increase) in accounts receivable |
1,467 | (6,347 | ) | |||||
Increase in inventory, net |
(3,713 | ) | (3,239 | ) | ||||
Decrease in prepaid expenses and other current assets |
4,407 | 3,722 | ||||||
(Increase) decrease in income taxes refundable |
(3 | ) | 214 | |||||
(Decrease) increase in accounts payable |
(3,909 | ) | 14,445 | |||||
(Decrease) increase in accrued expenses and other current liabilities |
(2,853 | ) | 1,890 | |||||
(Decrease) increase in other long-term liabilities |
(1,271 | ) | 2,427 | |||||
Net cash provided by operating activities |
35,054 | 25,285 | ||||||
Cash flows used in investing activities: |
||||||||
Cash paid for property and equipment |
(25,908 | ) | (19,059 | ) | ||||
Proceeds from sale of assets |
650 | 17,483 | ||||||
Acquisition of Penn Traffic assets |
— | (85,023 | ) | |||||
Net cash used in investing activities |
(25,258 | ) | (86,599 | ) | ||||
Cash flows (used in) provided by financing activities: |
||||||||
Borrowings on ABL Facility |
356,300 | 58,100 | ||||||
Repayments on ABL Facility |
(358,800 | ) | (72,100 | ) | ||||
Principal payments on capital leases |
(5,803 | ) | (4,586 | ) | ||||
Proceeds from long-term debt borrowings |
— | 112,125 | ||||||
Repayments of long-term debt borrowings |
(227 | ) | (36,199 | ) | ||||
Deferred financing costs incurred |
(57 | ) | (5,328 | ) | ||||
Change in bank overdraft position |
8 | 657 | ||||||
Proceeds from issuance of common shares |
— | 30,000 | ||||||
Net cash (used in) provided by financing activities |
(8,579 | ) | 82,669 | |||||
Net increase in cash and cash equivalents |
1,217 | 21,355 | ||||||
Cash and cash equivalents—beginning of period |
17,419 | 19,722 | ||||||
Cash and cash equivalents—end of period |
$ | 18,636 | $ | 41,077 | ||||
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TOPS HOLDING CORPORATION
RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(Dollars in thousands)
(Unaudited)
RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(Dollars in thousands)
(Unaudited)
| 12-week periods ended | 28-week periods ended | |||||||||||||||
| July 16, 2011 | July 17, 2010 | July 16, 2011 | July 17, 2010 | |||||||||||||
Net income (loss) |
$ | 293 | $ | (8,915 | ) | $ | (1,795 | ) | $ | (5,621 | ) | |||||
Depreciation and amortization |
15,411 | 18,143 | 35,729 | 40,710 | ||||||||||||
Interest expense |
14,297 | 14,074 | 33,588 | 32,484 | ||||||||||||
Income tax expense (benefit) |
318 | 214 | 685 | (9,699 | ) | |||||||||||
EBITDA |
30,319 | 23,516 | 68,207 | 57,874 | ||||||||||||
Adjustments to EBITDA: |
||||||||||||||||
LIFO inventory valuation
adjustments (a) |
2,824 | 1,022 | 2,161 | (84 | ) | |||||||||||
Impairment (b) |
1,891 | — | 1,891 | — | ||||||||||||
Share-based compensation expense (c) |
408 | 338 | 950 | 790 | ||||||||||||
FTC review costs (d) |
261 | (17 | ) | 537 | 2,047 | |||||||||||
One-time Penn Traffic integration
costs (e) |
— | 5,655 | — | 16,527 | ||||||||||||
Excess IT costs (f) |
— | 1,460 | — | 3,406 | ||||||||||||
Sold/closed stores EBITDA (g) |
— | 1,446 | — | 1,289 | ||||||||||||
One-time Penn Traffic acquisition
costs (h) |
— | 279 | — | 4,710 | ||||||||||||
Bargain purchase (i) |
— | — | — | (15,681 | ) | |||||||||||
Loss on debt extinguishment (j) |
— | — | — | 1,008 | ||||||||||||
Other one-time expenses (k) |
— | 139 | 719 | 384 | ||||||||||||
Total adjustments to EBITDA |
5,384 | 10,322 | 6,258 | 14,396 | ||||||||||||
Adjusted EBITDA |
$ | 35,703 | $ | 33,838 | $ | 74,465 | $ | 72,270 | ||||||||
Notes:
| (a) | Eliminates the non-cash impact of last-in, first-out (“LIFO”) accounting, which represents the difference between certain inventories valued under the first-in, first-out (“FIFO”) inventory method and the LIFO inventory method. | |
| (b) | As a result of the sale of three supermarkets during late July and early August, the Company recorded a $1.9 million impairment, representing the excess of the carrying value of assets over the sale price. | |
| (c) | Non-cash compensation costs related to stock option grants. | |
| (d) | One-time legal and professional fees incurred in connection with the FTC’s review of the acquired Penn Traffic supermarkets. | |
| (e) | Transition expenses associated with integrating the acquired Penn Traffic supermarkets, including excess administrative costs while operating the former Penn Traffic corporate office and warehouse, training costs, consulting services and other one-time expenses. | |
| (f) | Effective July 24, 2010, Tops amended its existing IT outsourcing agreement with HP Enterprise Services, LLC, which resulted in an elimination of annual excess IT costs of $8.1 million. | |
| (g) | Represents EBITDA of the 24 acquired Penn Traffic supermarkets that were sold or closed during 2010. | |
| (h) | One-time legal and professional fees incurred in connection with the Penn Traffic acquisition. | |
| (i) | Represents the excess of net assets acquired over the $85.0 million purchase price of Penn Traffic. | |
| (j) | The write-off of deferred financing fees associated with early repayments related to the Company’s credit facilities. | |
| (k) | Other one-time non-recurring items. |
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