-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I7bCM4mgys0AtzH3T0oxDjLt9uw9Hx7Uiq+t2E73Ug7nX9D7GABPjvegBHNphAmo InhsLVgyx2w9f9sQrYJF6A== 0000950123-08-000170.txt : 20080108 0000950123-08-000170.hdr.sgml : 20080108 20080108083946 ACCESSION NUMBER: 0000950123-08-000170 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080108 DATE AS OF CHANGE: 20080108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT ATLANTIC & PACIFIC TEA CO INC CENTRAL INDEX KEY: 0000043300 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 131890974 STATE OF INCORPORATION: MD FISCAL YEAR END: 0225 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04141 FILM NUMBER: 08516617 BUSINESS ADDRESS: STREET 1: 2 PARAGON DR CITY: MONTVALE STATE: NJ ZIP: 07645 BUSINESS PHONE: 2015739700 MAIL ADDRESS: STREET 1: 2 PARAGON DRIVE CITY: MONTVALE STATE: NJ ZIP: 07645 8-K 1 y46097e8vk.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 JANUARY 8, 2008 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 1-4141 13-1890974 (STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
TWO PARAGON DRIVE MONTVALE, NEW JERSEY 07645 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (201) 573 - 9700 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) NOT APPLICABLE (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS & FINANCIAL CONDITIONS On January 8, 2008, The Great Atlantic & Pacific Tea Company, Inc. announced fiscal 2007 third quarter and year to date results for the 12 and 40 weeks ended December 1, 2007. A copy of the press release is attached as Exhibit 99.1 to this Current Report. In accordance with General Instruction B.2 of Form 8-K, the information furnished in this Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. To supplement the consolidated financial results as determined in accordance with generally accepted accounting principles ("GAAP"), the press release presents non-GAAP financial measures for "EBITDA." EBITDA is defined as earnings before interest, taxes, depreciation, amortization, minority interest, equity in earnings of Metro, Inc., discontinued operations and the (loss) gain on the sale of A&P Canada. Ongoing, operating EBITDA is defined as EBITDA adjusted for items the Company considers non-operating in nature that management excludes when evaluating the results of the U.S. ongoing business. The Company believes 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 the Company's management and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these measures are also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other companies in its industry. Adjusted EBITDA is reconciled to Net Cash provided from Operating Activities on Schedule 4 of this release. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c). Exhibits. Exhibit 99.1 Press Release of The Great Atlantic & Pacific Tea Company, Inc., dated January 8, 2008. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. By: /s/ Brenda Galgano Name: Senior Vice President Title: And Chief Financial Officer Dated: January 8, 2008 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 PRESS RELEASE DATED JANUARY 8, 2008 EX-99.1 2 y46097exv99w1.txt EX-99.1: PRESS RELEASE EXHIBIT 99.1 News [A&P LOGO] The Great Atlantic & Pacific Tea Company, Inc. 2 Paragon Drive Montvale, NJ 07645 INVESTOR CONTACT: William J. Moss Vice President, Treasurer (201) 571-4019 PRESS CONTACT: Richard P. De Santa Senior Director, Communications (201) 571-4495 THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. ANNOUNCES RESULTS FOR ITS THIRD QUARTER ENDED DECEMBER 1, 2007 --------- COMPANY REPORTS 3.1% INCREASE IN COMPARABLE STORE SALES --------- OPERATING RESULTS CONTINUE TO IMPROVE MONTVALE, NJ - JANUARY 8, 2008 - The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced fiscal 2007 third quarter and year to date results for the 12 and 40 weeks ended December 1, 2007. Sales for the third quarter were $1.3 billion versus $1.2 billion last year. Comparable store sales increased 3.1%. For the third quarter, net income from continuing operations was $73.1 million or $1.73 per diluted share versus income of $32.3 million or $0.77 per diluted share in the same period last year. The results for the third quarter of fiscal years 2007 and 2006 include items the Company considers non-operating in nature that management excludes when evaluating the results of the ongoing business. These items are listed on Schedule 3 of the press release. Excluding these items, adjusted loss from operations was $12.1 million, compared to a loss of $17.7 million in last year's third quarter. Adjusted EBITDA, which is reconciled to net cash from operating activities on Schedule 4, was $20.5 million this year versus $16.3 million in last year's third quarter. Last year's adjusted EBITDA excludes income of $4.1 million from the recently expired IT services agreement with Metro Inc. Sales for the 40 weeks year to date were $4.2 billion versus $4.1 billion in 2006. Comparable store sales increased 2.3%. Net income from continuing operations for year to date 2007 was $131.5 million or $3.11 per diluted share compared to income of $23.7 million or $0.57 per diluted share for 2006. Fiscal 2007 and fiscal 2006 year to date results include the non-operating items listed on Schedule 3 of the press release. Excluding these items, adjusted U.S. loss from operations was $26.8 million for year to date 2007 versus a loss of $34.6 million for 2006. Adjusted EBITDA, which is reconciled to net cash from operating activities on Schedule 4, was $87.2 million for year to date 2007 versus $78.7 million in 2006. Adjusted EBITDA excludes income of $5.8 million and $13.7 million respectively, from the recently expired IT services agreement with Metro Inc. CHRISTIAN HAUB, EXECUTIVE CHAIRMAN OF THE BOARD, said, "A&P's transformation and operating improvement moved forward driven by ongoing strategic and business strategies in the 3rd quarter, highlighted by another solid sales performance; the completion of our non-core business divestitures, and just after the quarter closed, our acquisition of Pathmark Stores Inc. "With operations focused exclusively in the Northeast, and the addition of Pathmark establishing our market leadership in metropolitan New York and improving our Mid-Atlantic presence, our strategic transformation is now completed, and our comprehensive plan for the integration of the Pathmark business over the next 18 to 24 months is well underway. The achievement of all financial synergies through that process, the addition of Pathmark's substantial sales and customer base, and the ongoing positive momentum of the A&P business now positions our Company to achieve breakthrough performance and sustainable profitability. "We are proud of the forward motion we have achieved over the past three years, and excited about the prospects of our combined Company in the months and years ahead," Mr. Haub said. ERIC CLAUS, PRESIDENT AND CHIEF EXECUTIVE OFFICER, said, "I'm pleased with the growing vitality of our business that continued in the 3rd quarter, as evidenced by our continued sales improvement, Fresh store development and fundamental merchandising and operating improvements. Maintaining our momentum, while also completing the acquisition of Pathmark and the detailed plans for its integration into our Company, was a monumental task accomplished successfully by our leadership team with the excellent support of our associates. "Those efforts will continue as we drive further improvement and execute the integration of the Pathmark business within the established timetable. The consolidation of all backstage operations, while we preserve the Pathmark banner and its powerful retail format and customer franchise, will produce a financially strong, diversified and innovative retail food entity, poised for profitability and further growth across our Northeast territory. "We're excited to move forward and deliver the tremendous potential of our combined Company. My thanks go to all at A&P for their part in our continuing improvement, as does my welcome to our many field and corporate colleagues from Pathmark. I look forward to working with all as we usher in a dynamic and successful era for the New A&P," Mr. Claus said. Founded in 1859, A&P is one of the nation's first supermarket chains. The Company operates 455 stores in 8 states and the District of Columbia under the following trade names: A&P, Pathmark, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. The Company invites investors and other interested parties to listen to a live audio Webcast to be held at 11:00 AM Eastern Time today, at which members of the Company's senior management team will discuss the Company's second quarter financial results. The Webcast may be accessed through a link on the "Investors" page of the Company's Website, www.aptea.com. Listeners who cannot participate in the live broadcast will be able to hear a recorded replay of the broadcast beginning this afternoon and available until February 5, 2008. Effective March 28, 2003, the Securities and Exchange Commission ("SEC") adopted new rules related to disclosure of certain financial measures not calculated in accordance with Generally Accepted Accounting Principles ("GAAP"). Such new rules require all public companies to provide certain disclosures in press release and SEC filings related to non-GAAP financial measures. We use the non-GAAP measures "Adjusted (loss) income from operations" and "EBITDA" to evaluate the Company's liquidity and it is among the primary measures used by management for planning and forecasting of future periods. Adjusted (loss) income from operations is defined as (loss) income from operations adjusted for items the Company considers non-operating in nature that management excludes when evaluating the results of the ongoing business. EBITDA is defined as earnings before interest and dividend income, taxes, depreciation, amortization, equity in earnings of Metro, Inc., discontinued operations, the gain on the sale of Metro Inc. shares and the (loss) gain on the sale of A&P Canada. Ongoing, operating EBITDA is defined as EBITDA adjusted for items the Company considers non-operating in nature that management excludes when evaluating the results of the ongoing business. The Company believes 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 the Company's management and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these measures are also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other companies in its industry. Ongoing, operating EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 4 of this release. This release contains forward-looking statements about the future performance of the Company, which are based on Management's assumptions and beliefs in light of the information currently available to it. The Company assumes no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: competitive practices and pricing in the food industry generally and particularly in the Company's principal markets; the Company's relationships with its employees and the terms of future collective bargaining agreements; the costs and other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; changes in the financial markets which may affect the Company's cost of capital and the ability of the Company to access capital; supply or quality control problems with the Company's vendors; and changes in economic conditions which affect the buying patterns of the Company's customers; the failure to successfully integrate Pathmark's business and operations and realize synergies in the expected time frame. ### THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 1 - GAAP EARNINGS FOR THE 12 AND 40 WEEKS ENDED DECEMBER 1, 2007 AND DECEMBER 2, 2006 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND STORE DATA)
12 Weeks Ended 40 Weeks Ended ----------------------------- ---------------------------- December 1, December 2, December 1, December 2, 2007 2006 2007 2006 ------------ ------------ ------------ ------------ Sales $ 1,251,123 $ 1,213,476 $ 4,204,630 $ 4,103,430 Cost of merchandise sold (869,448) (837,749) (2,901,336) (2,828,584) ------------ ------------ ------------ ------------ Gross margin 381,675 375,727 1,303,294 1,274,846 Store operating, general and administrative expense (402,808) (381,426) (1,323,411) (1,294,499) ------------ ------------ ------------ ------------ Loss from operations (21,133) (5,699) (20,117) (19,653) Gain (loss) on sale of Canadian operations 495 (599) 209 (890) Gain on disposition of Metro, Inc. 106,063 -- 184,451 -- Interest expense (14,499) (15,342) (48,806) (50,167) Interest and dividend income 3,910 1,697 12,231 7,977 Equity in earnings of Metro, Inc. -- 11,023 7,869 30,840 ------------ ------------ ------------ ------------ Income (loss) from continuing operations before income taxes 74,836 (8,920) 135,837 (31,893) (Provision for) benefit from income taxes (1,754) 41,177 (4,288) 55,632 ------------ ------------ ------------ ------------ Income from continuing operations 73,082 32,257 131,549 23,739 Discontinued operations: (Loss) income from operations of discontinued businesses, net of tax (13,540) 651 (179,667) 2,758 (Loss) gain on disposal of discontinued businesses, net of tax (2,235) 7,799 (51,039) 7,590 ------------ ------------ ------------ ------------ (Loss) income from discontinued operations (15,775) 8,450 (230,706) 10,348 ------------ ------------ ------------ ------------ Net income (loss) $ 57,307 $ 40,707 $ (99,157) $ 34,087 ============ ============ ============ ============ Net income (loss) per share - basic: Continuing operations $ 1.74 $ 0.78 $ 3.14 $ 0.57 Discontinued operations (0.38) 0.20 (5.51) 0.25 ------------ ------------ ------------ ------------ Net income (loss) per share - basic $ 1.36 $ 0.98 $ (2.37) $ 0.82 ============ ============ ============ ============ Net income (loss) per share - diluted: Continuing operations $ 1.73 $ 0.77 $ 3.11 $ 0.57 Discontinued operations (0.38) 0.20 (5.45) 0.24 ------------ ------------ ------------ ------------ Net income (loss) per share - diluted $ 1.35 $ 0.97 $ (2.34) $ 0.81 ============ ============ ============ ============ Weighted average common shares outstanding - basic 41,961,253 41,499,554 41,888,969 41,403,346 ============ ============ ============ ============ Weighted average common shares outstanding - diluted 42,363,903 42,020,446 42,306,348 41,904,766 ============ ============ ============ ============ Gross margin rate 30.51% 30.96% 31.00% 31.07% Store operating, general and administrative expense rate 32.20% 31.43% 31.48% 31.55% A&P depreciation and amortization $ 32,654 $ 40,556 $ 122,614 $ 135,775 ============ ============ ============ ============ Number of stores operated at end of quarter 322 410 322 410 ============ ============ ============ ============
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 2 - CONDENSED BALANCE SHEET DATA (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AND STORE DATA)
December 1, 2007 February 24, 2007 ---------------- ----------------- Cash and short-term investments $ 69 $ 86 Other current assets 1,044 663 ---------------- ---------------- Total current assets 1,113 749 Property-net 758 940 Equity investment in Metro, Inc. -- 369 Other assets 192 54 ---------------- ---------------- Total assets $ 2,063 $ 2,112 ================ ================ Total current liabilities $ 464 $ 558 Total non-current liabilities 1,239 1,123 Stockholders' equity 360 431 ---------------- ---------------- Total liabilities and stockholders' equity $ 2,063 $ 2,112 ================ ================ Other Statistical Data Total Debt and Capital Leases $ 255 $ 348 Total Long Term Real Estate Liabilities 283 301 Temporary Investments and Marketable Securities (545) (77) ---------------- ---------------- Net Debt $ (7) $ 572 Total Retail Square Footage (in thousands) 12,086 16,538 Book Value Per Share $ 8.59 $ 10.36
For the 40 For the 40 weeks ended weeks ended December 1, 2007 December 2, 2006 ---------------- ---------------- Capital Expenditures $ 98 $ 184
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 3 - RECONCILIATION OF GAAP (LOSS) INCOME FROM OPERATIONS TO ADJUSTED (LOSS) INCOME FROM OPERATIONS FOR THE 12 AND 40 WEEKS ENDED DECEMBER 1, 2007 AND DECEMBER 2, 2006 (UNAUDITED) (IN THOUSANDS)
12 Weeks Ended 40 Weeks Ended ------------------------ ------------------------ December 1, December 2, December 1, December 2, 2007 2006 2007 2006 ----------- ----------- ----------- ----------- As reported loss from operations $ (21,133) $ (5,699) $ (20,117) $ (19,653) --------- --------- --------- --------- Adjustments: Net restructuring costs 168 403 4,420 7,562 Pathmark acquisition 4,392 -- 6,761 -- Real estate related activity 4,449 (8,228) (12,037) (8,819) IT services agreement with Metro, Inc. (16) (4,128) (5,792) (13,672) --------- --------- --------- --------- Total adjustments 8,993 (11,953) (6,648) (14,929) --------- --------- --------- --------- Adjusted Northeast loss from operations $ (12,140) $ (17,652) $ (26,765) $ (34,582) ========= ========= ========= ========= Northeast depreciation and amortization $ 32,654 $ 33,930 $ 113,977 $ 113,314 Discontinued operations depreciation and amortization -- 6,626 8,637 22,461 --------- --------- --------- --------- Total A&P depreciation and amortization $ 32,654 $ 40,556 $ 122,614 $ 135,775 ========= ========= ========= =========
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 4 - RECONCILIATION OF GAAP NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED EBITDA FOR THE 12 AND 40 WEEKS ENDED DECEMBER 1, 2007 AND DECEMBER 2, 2006 (UNAUDITED) (IN THOUSANDS)
12 Weeks Ended 40 Weeks Ended ------------------------ ------------------------ December 1, December 2, December 1, December 2, 2007 2006 2007 2006 ----------- ----------- ----------- ----------- Net cash used in operating activities $ (26,470) $ (59,730) $ (22,807) $ (42,864) Adjustments to calculate EBITDA: Depreciation and amortization on discontinued operations -- (6,626) (8,637) (22,461) Net interest expense 10,589 13,645 36,575 42,190 Asset disposition initiatives (141,407) 1,259 (120,422) (3,673) Long lived asset impairment charges (2,437) (987) (3,551) (3,552) Gain on disposal of owned property (1,293) 6,903 (2,514) 17,844 Loss (income) from operations of discontinued operations 13,540 (651) 179,667 (2,758) Provision for (benefit from) income taxes 1,754 (41,177) 4,288 (55,632) Income tax benefit -- 44,276 -- 61,545 Other share based awards (1,978) (808) (7,282) (6,652) Proceeds from dividends from Metro, Inc. -- (1,659) -- (5,067) Working capital changes Accounts receivable 1,089 19,635 (31,915) (49,780) Inventories (1,181) 37,662 (72,741) 32,401 Prepaid expenses and other current assets 3,435 4,695 14,230 16,486 Accounts payable (2,304) (8,313) 27,285 10,221 Accrued salaries, wages, benefits and taxes 40,217 15,166 56,368 30,508 Other accruals 10,974 7,300 2,012 57,063 Other assets (5,893) 86 3,131 2,897 Other non-current liabilities 112,568 948 42,559 20,381 Other, net 318 (3,393) (2,386) (5,436) --------- --------- --------- --------- Total A&P EBITDA 11,521 28,231 93,860 93,661 --------- --------- --------- --------- Adjustments: Net restructuring costs 168 403 4,420 7,562 Pathmark acquisition 4,392 -- 6,761 -- Real estate related activity 4,449 (8,228) (12,037) (8,819) IT services agreement with Metro, Inc. (16) (4,128) (5,792) (13,672) --------- --------- --------- --------- Total adjustments 8,993 (11,953) (6,648) (14,929) --------- --------- --------- --------- Adjusted A&P ongoing operating EBITDA $ 20,514 $ 16,278 $ 87,212 $ 78,732 ========= ========= ========= =========
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