-----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, MjMAm7b14YPG9olirlZf/FOkoHZdd+EZkkDMzo+bWVpCXCnFXYY3AcCU+7P4L+2q bLN7uEq8mv12XvH4W7FN/Q== 0001125282-04-003441.txt : 20040727 0001125282-04-003441.hdr.sgml : 20040727 20040723100327 ACCESSION NUMBER: 0001125282-04-003441 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040723 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040723 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: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04141 FILM NUMBER: 04927914 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 b333187_8k.txt CURRENT REPORT 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 JULY 23, 2004 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) - ------------------------------------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c). Exhibits. Exhibit 99.1 Press Release of The Great Atlantic & Pacific Tea Company, dated July 23, 2004. ITEM 9. REGULATION FD DISCLOSURE In accordance with SEC Release No. 33-8216, the information contained herein and in the accompanying exhibit is being furnished under Item 12, "Results of Operations and Financial Condition." This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On July 23, 2004, The Great Atlantic & Pacific Tea Company, Inc. issued a press release announcing its financial results for the fiscal 2004 first quarter ended June 19, 2004. A copy of the press release is attached as Exhibit 99.1 to this Current Report. 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." Management believes that the use of such non-GAAP financial measures enables the Company to convey a useful and informative financial picture to investors. The non-GAAP measure "EBITDA" reflects a measure that the Company believes is of interest to investors. As required by the Securities and Exchange Commission, the EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 1 of the release. 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/ WILLIAM P. COSTANTINI --------------------------------------------- Name: William P. Costantini Title: Senior Vice President, General Counsel & Secretary Dated: July 23, 2004 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release dated July 23, 2004 EX-99.1 2 b333187_ex99-1.txt PRESS RELEASE [A&P LOGO] News 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 Vice President, Corporate Affairs (201) 571-4495 THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. ANNOUNCES RESULTS FOR FIRST QUARTER 2004 COMPANY REPORTS POSITIVE COMPARABLE STORE SALES OF 1.0% IN THE FIRST QUARTER, ADOPTS NEW ACCOUNTING PRONOUNCEMENTS FIN 46-R AND EITF 03-10 MONTVALE, NJ - July 23, 2004 - The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced unaudited fiscal 2004 first quarter results for the 16 weeks ended June 19, 2004. Sales for the first quarter were $3.29 billion, compared with $3.23 billion in the first quarter of fiscal 2003. Comparable store sales increased 1.0% vs. year-ago for company-operated stores, including 0.5% in the U.S. and 2.7% in Canada. The loss for the quarter was $1.11 per share this year versus earnings of $0.31 per share last year. Results from continuing operations, as shown on Schedule 1, were a loss of $41.5 million or $1.08 per share this quarter versus a loss of $20.6 million or $0.53 per share in last year's first quarter. The prior year's results include a tax benefit of $23 million, or $0.59 per share. Excluding this tax benefit, the loss from continuing operations would have been $1.12 per share last year, which we believe is more comparable to this year's loss of $1.08 per share. EBITDA was $73 million for first quarter of fiscal 2004 versus $75 million for the same period of fiscal 2003. During the quarter, the Company made three accounting changes, including adoption of two recent accounting pronouncements, FIN 46-R and EITF 03-10, and changing its method of accounting for certain inventories from LIFO to FIFO. FIN 46-R relates to Variable Interest Entities and, as a result of the adoption of this standard, the Company has now consolidated the financial results of its franchisees in Canada. EITF 03-10 relates to the accounting for certain vendor-supported promotions that requires a reclassification between sales and cost of goods sold, but has no impact on income. The change from LIFO to FIFO accounting for certain inventories was made so that all inventory accounting in the Company is on a FIFO basis. Previously, two divisions acquired over a decade ago had inventories valued on a LIFO basis. The Company has restated its 2003 results for the effects of these changes, which are shown on Schedule 3 of this press release. Christian Haub, Chairman of the Board, President and Chief Executive Officer, said, "Our first quarter results were consistent with our recent trend, with positive comparable store sales and a third consecutive quarter of improved sequential operating earnings. I am encouraged by the improved operating and merchandising execution in all of our U.S. banners, and by A&P Canada's strong sales and continued, solid profitability during the quarter. "From the strategic platform established last year, we moved forward with significant growth initiatives in the first quarter. We expanded our discount Food Basics operations to our Midwest markets, opening 13 stores in Detroit and Toledo, Ohio. In addition, we acquired four stores in New Orleans, enhancing our Sav-A-Center operation in that market. We're pleased that our improved liquidity and operating results have enabled us to begin growing our business once again. "Our results show that the turnaround of A&P is underway, thanks to the combined efforts of our Corporate, U.S. and Canadian management and associates. Despite the challenges ahead, I am encouraged that the elements are in place for recovery and profitable growth in the future," Mr. Haub said. The Company also announced that, on July 9, the U.S. Court of Appeals for the Third Circuit unanimously upheld a district court decision to dismiss the shareholder class action lawsuit filed against the Company in June 2002. Founded in 1859, A&P, one of the nation's first supermarket chains, is today among North America's largest. The Company operates 628 stores in 10 states, the District of Columbia and Ontario, Canada under the following trade names: A&P, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug. The Company invites investors to listen to an audio Webcast of its quarterly discussion of earnings by accessing a link on the "Investor Relations" page of its Website, www.aptea.com. The live broadcast is on Friday, July 23, 2004 at 11:00 AM Eastern Time, with replays available from the afternoon of July 23 through August 20. 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 measure "EBITDA" to reflect a measure that we believe is of interest to investors. EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 1 of this release. We have also adjusted earnings per share for the one time tax benefit reported last year, which is reconciled in the narrative within the body of this press 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 GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 1 - GAAP EARNINGS FOR THE 16 WEEKS ENDED JUNE 19, 2004 AND JUNE 14, 2003 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND STORE DATA)
16 Weeks Ended ----------------------------- June 19, 2004 June 14, 2003 ------------- ------------- AS RESTATED (4) Sales (1) $ 3,286,223 $ 3,228,523 Cost of merchandise sold (2) (2,356,569) (2,305,349) ------------ ------------ Gross margin 929,654 923,174 Store operating, general and administrative expense (2) (938,274) (933,784) ------------ ------------ Loss from operations (8,620) (10,610) Interest expense (26,850) (24,884) Interest income 841 780 Minority interest in earnings of consolidated franchisees (1,376) (274) ------------ ------------ Loss from continuing operations before income taxes (2) (36,005) (34,988) (Provision for) benefit from income taxes (5,458) 14,358 ------------ ------------ Loss from continuing operations (2) (41,463) (20,630) Discontinued operations: (3) Loss from operations of discontinued businesses, net of tax (1,383) (11,459) Gain on disposal of discontinued operations, net of tax - 52,081 ------------ ------------ (Loss) income from discontinued operations (1,383) 40,622 ------------ ------------ Cumulative effect of change in accounting principle - FIN46R, net of tax - (8,047) ------------ ------------ Net (loss) income $ (42,846) $ 11,945 ============ ============ Net (loss) income per share - basic and diluted: (2) Continuing operations $ (1.08) $ (0.53) Discontinued operations (0.03) 1.05 Cumulative effect of change in accounting principle - FIN 46R - (0.21) ------------ ------------ Net (loss) income per share - basic and diluted $ (1.11) $ 0.31 ============ ============ Weighted average common shares outstanding: Basic 38,520,018 38,515,806 ============ ============ Diluted 38,890,932 38,701,217 ============ ============ Gross margin rate 28.29% 28.59% ============ ============ Store operating, general and administrative expense rate 28.55% 28.92% ============ ============ Depreciation and amortization $ 81,122 $ 85,776 ============ ============ Reconciliation of GAAP cash flow measure to EBITDA: Net cash provided by operating activities $ 37,088 $ 24,200 Net interest expense 26,009 24,104 Deferred income tax (provision) benefit (1,012) 6,314 Working capital changes (8,008) (4,687) Other non-current liabilities 11,024 13,775 Other, net 7,401 11,460 ------------ ------------ EBITDA $ 72,502 $ 75,166 ============ ============ Number of stores operated at end of quarter 628 667 ============ ============ Number of franchised stores served at end of quarter 66 64 ============ ============
(1) Included in sales for the 16 weeks ended June 19, 2004 and June 14, 2003, were franchisee sales of $297.2 million and $289.9 million, respectively. (2) Cost of merchandise sold and store operating, general and administrative expense for the 16 weeks ended June 19, 2004 include amounts of $0.3 million and $0.8 million, respectively, related to the Company's asset disposition initiatives announced during the third quarter of fiscal 2001 and the fourth quarter of fiscal 2003. (3) In February and March 2003, the Company decided to sell its operations located in northern New England, Madison and Milwaukee, Wisconsin as well as its Eight O'Clock Coffee business. In April 2003, the Company completed the sale of its stores in northern New England and Madison, Wisconsin, generating proceeds of $137.6 million and resulting in a gain of $81.4 million ($52.1 million after tax). (4) Prior year results have been restated for (i.) revised Interpretation No. 46, "Consolidation of Variable Interest Entities - and interpretation of 'Accounting Research Bulletin No. 51,'" which relates to variable interest entities and, as a result of the adoption of this standard, the Company has now consolidated the financial results of its franchisees in Canada; (ii.) EITF Issue 03-10, "Application of EITF Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor, by Resellers to Sales Incentives Offered to Consumers by Manufacturers," which relates to the accounting for vendor supported promotions that requires a reclassificaton between sales and cost of goods sold, but has no impact on net loss; and (iii.) a change from LIFO to FIFO accounting for certain inventories so that all inventory accounting in the Company is on a FIFO basis. Refer to Schedule 3 for impact of changes. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 2 - CONDENSED BALANCE SHEET DATA (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AND STORE DATA)
AS RESTATED June 19, 2004 February 28, 2004 ------------- ----------------- Cash and short-term investments $ 279 $ 297 Other current assets 896 891 ------- ------- Total current assets 1,175 1,188 Property-net 1,444 1,472 Other assets 110 115 ------- ------- Total assets $ 2,729 $ 2,775 ======= ======= Total current liabilities $ 1,090 $ 1,083 Total non-current liabilities 1,295 1,299 Stockholders' equity 344 393 ------- ------- Total liabilities and stockholders' equity $ 2,729 $ 2,775 ======= ======= Other Statistical Data Total Debt and Capital Leases $ 917 $ 916 Temporary Investments 121 158 ------- ------- Net Debt $ 796 $ 758 Total Retail Square Footage (in thousands) 24,746 24,724 Book Value Per Share $ 8.93 $ 10.20 For the 16 For the 16 weeks ended weeks ended June 19, 2004 June 14, 2003 -------------- -------------- Capital Expenditures $55 $57
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 3 - SUPPLEMENTAL INFORMATION RELATING TO ADOPTION OF FIN 46R, EITF 03-10 AND THE CHANGE FROM LIFO TO FIFO UNAUDITED (IN MILLIONS) PAGE 1 OF 2 - -------------------------------------------------------------------------------
IMPACT OF ADOPTION IMPACT OF ADOPTION IMPACT OF CHANGE OF FIN 46 R OF EITF 03-10 FROM LIFO TO FIFO TOTAL ------------------ ------------------ ----------------- ----- NET SALES - --------- First quarter, fiscal 2003 $ 39.4 ($ 14.7) $ 0.0 $ 24.7 Second quarter, fiscal 2003 31.2 (10.1) 0.0 21.1 Third quarter, fiscal 2003 28.8 (9.4) 0.0 19.3 Fourth quarter, fiscal 2003 34.7 (12.9) 0.0 21.8 FULL YEAR 2003 $ 134.1 ($ 47.2) $ 0.0 $ 86.8 First quarter, fiscal 2004 $ 43.0 ($ 15.3) $ 0.0 $ 27.6 COST OF GOOD SOLD - ----------------- First quarter, fiscal 2003 $ 4.6 $ 14.7 $ 0.0 $ 19.3 Second quarter, fiscal 2003 (0.1) 10.1 1.1 11.1 Third quarter, fiscal 2003 4.1 9.4 0.0 13.5 Fourth quarter, fiscal 2003 (0.2) 12.9 (1.2) 11.5 FULL YEAR 2003 $ 8.4 $ 47.2 ($ 0.2) $ 55.4 First quarter, fiscal 2004 $ 4.3 $ 15.3 $ 0.0 $ 19.6 GROSS MARGIN - ------------ First quarter, fiscal 2003 $ 44.0 $ 0.0 $ 0.0 $ 44.0 Second quarter, fiscal 2003 31.1 0.0 1.1 32.1 Third quarter, fiscal 2003 32.9 0.0 0.0 32.9 Fourth quarter, fiscal 2003 34.5 0.0 (1.2) 33.3 FULL YEAR 2003 $ 142.5 $ 0.0 ($ 0.2) $ 142.3 First quarter, fiscal 2004 $ 47.2 $ 0.0 $ 0.0 $ 47.2 SELLING, GENERAL & ADMINISTRATIVE COSTS - --------------------------------------- First quarter, fiscal 2003 ($ 42.2) $ 0.0 $ 0.0 ($ 42.2) Second quarter, fiscal 2003 (31.3) 0.0 0.0 (31.3) Third quarter, fiscal 2003 (30.9) 0.0 0.0 (30.9) Fourth quarter, fiscal 2003 (33.6) 0.0 0.0 (33.6) FULL YEAR 2003 ($ 137.9) $ 0.0 $ 0.0 ($ 137.9) First quarter, fiscal 2004 ($ 40.8) $ 0.0 $ 0.0 ($ 40.8) DEPRECIATION AND AMORTIZATION - ----------------------------- First quarter, fiscal 2003 $ 1.7 $ 0.0 $ 0.0 $ 1.7 Second quarter, fiscal 2003 1.4 0.0 0.0 1.4 Third quarter, fiscal 2003 1.4 0.0 0.0 1.4 Fourth quarter, fiscal 2003 1.2 0.0 0.0 1.2 FULL YEAR 2003 $ 5.7 $ 0.0 $ 0.0 $ 5.7 First quarter, fiscal 2004 $ 1.4 $ 0.0 $ 0.0 $ 1.4 (LOSS) INCOME FROM OPERATIONS - ----------------------------- First quarter, fiscal 2003 $ 1.8 $ 0.0 $ 0.0 $ 1.8 Second quarter, fiscal 2003 (0.2) 0.0 1.1 0.9 Third quarter, fiscal 2003 2.0 0.0 0.0 2.0 Fourth quarter, fiscal 2003 0.9 0.0 (1.2) (0.3) FULL YEAR 2003 $ 4.5 $ 0.0 ($ 0.2) $ 4.4 First quarter, fiscal 2004 $ 6.5 $ 0.0 $ 0.0 $ 6.5
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 3 - SUPPLEMENTAL INFORMATION RELATING TO ADOPTION OF FIN 46R, EITF 03-10 AND THE CHANGE FROM LIFO TO FIFO, CONT'D. UNAUDITED (IN MILLIONS) PAGE 2 OF 2 - -------------------------------------------------------------------------------
IMPACT OF ADOPTION IMPACT OF ADOPTION IMPACT OF CHANGE OF FIN 46 R OF EITF 03-10 FROM LIFO TO FIFO TOTAL ------------------ ------------------ ----------------- ----- INTEREST INCOME - --------------- First quarter, fiscal 2003 ($ 1.4) $ 0.0 $ 0.0 ($ 1.4) Second quarter, fiscal 2003 (1.2) 0.0 0.0 (1.2) Third quarter, fiscal 2003 (1.3) 0.0 0.0 (1.3) Fourth quarter, fiscal 2003 (1.1) 0.0 0.0 (1.1) FULL YEAR 2003 ($ 5.0) $ 0.0 $ 0.0 ($ 5.0) First quarter, fiscal 2004 ($ 1.5) $ 0.0 $ 0.0 ($ 1.5) MINORITY INTEREST - ----------------- First quarter, fiscal 2003 ($ 0.3) $ 0.0 $ 0.0 ($ 0.3) Second quarter, fiscal 2003 0.4 0.0 0.0 0.4 Third quarter, fiscal 2003 (0.2) 0.0 0.0 (0.2) Fourth quarter, fiscal 2003 (0.1) 0.0 0.0 (0.1) FULL YEAR 2003 ($ 0.1) $ 0.0 $ 0.0 ($ 0.1) First quarter, fiscal 2004 ($ 1.4) $ 0.0 $ 0.0 ($ 1.4) (LOSS) PROFIT BEFORE TAXES - -------------------------- First quarter, fiscal 2003 $ 0.2 $ 0.0 $ 0.0 $ 0.2 Second quarter, fiscal 2003 (0.9) 0.0 1.1 0.1 Third quarter, fiscal 2003 0.5 0.0 0.0 0.5 Fourth quarter, fiscal 2003 (0.4) 0.0 (1.2) (1.6) FULL YEAR 2003 ($ 0.6) $ 0.0 ($ 0.2) ($ 0.8) First quarter, fiscal 2004 $ 3.7 $ 0.0 $ 0.0 $ 3.7 TAXES - ----- First quarter, fiscal 2003 ($ 0.5) $ 0.0 $ 0.0 ($ 0.5) Second quarter, fiscal 2003 (0.1) 0.0 0.0 (0.1) Third quarter, fiscal 2003 (0.6) 0.0 0.0 (0.6) Fourth quarter, fiscal 2003 0.2 0.0 0.0 0.2 FULL YEAR 2003 ($ 1.1) $ 0.0 $ 0.0 ($ 1.1) First quarter, fiscal 2004 ($ 1.0) $ 0.0 $ 0.0 ($ 1.0) (LOSS) PROFIT AFTER TAXES - ------------------------- First quarter, fiscal 2003 ($ 0.3) $ 0.0 $ 0.0 ($ 0.3) Second quarter, fiscal 2003 (1.1) 0.0 1.1 0.0 Third quarter, fiscal 2003 (0.2) 0.0 0.0 (0.2) Fourth quarter, fiscal 2003 (0.2) 0.0 (1.2) (1.4) FULL YEAR 2003 ($ 1.7) $ 0.0 ($ 0.2) ($ 1.9) First quarter, fiscal 2004 $ 2.6 $ 0.0 $ 0.0 $ 2.6
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