-----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, R1amhvTySP8Yg88iGmONcoM4vXwgmdLShr04MM5XbjDVeXigBfNaoqmR0HNH9aUq P1S9IPhwTA4hvO5dVDCsww== 0001125282-05-005336.txt : 20051018 0001125282-05-005336.hdr.sgml : 20051018 20051018091026 ACCESSION NUMBER: 0001125282-05-005336 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051018 DATE AS OF CHANGE: 20051018 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: 051142064 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 b409283_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 OCTOBER 18, 2005 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 REGULATION FD DISCLOSURE On October 18, 2005, The Great Atlantic & Pacific Tea Company, Inc. issued a press release announcing its financial results for the fiscal 2005 second quarter ended September 10, 2005. 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, discontinued operations and cumulative effect of change in accounting principles. 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, EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 1 of the release. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit 99.1 Press Release of The Great Atlantic & Pacific Tea Company, dated October 18, 2005. - -------------------------------------------------------------------------------- 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/ Mitchell P. Goldstein ------------------------------ Name: Mitchell P. Goldstein Title: Executive Vice President, Chief Financial Officer & Secretary Dated: October 18, 2005 INDEX TO EXHIBITS EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------ ------------------- 99.1 Press release of The Great Atlantic & Pacific Tea Company, Inc., dated October 18, 2005 EX-99.1 2 b409283_ex99-1.txt PRESS RELEASE EXHIBIT 99.1 [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 SECOND QUARTER ENDED SEPTEMBER 10, 2005 MONTVALE, NJ - October 18, 2005 - The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced unaudited fiscal 2005 second quarter and year to date results for the 12 and 28 weeks ended September 10, 2005. Sales for the second quarter were $2.2 billion, compared with $2.5 billion in the second quarter of fiscal 2004. Comparable store sales in the U.S. declined 1.1% vs. year-ago. Because of the impact of Hurricane Katrina, comparable store sales for the quarter and year to date exclude the sales of the New Orleans business. Net income for the quarter was $592 million or $14.40 per diluted share this year versus a loss of $1.67 per diluted share last year. The current quarter's results include a gain of $919 million that relates to the sale of A&P Canada less charges totaling $152 million for certain items that the Company believes are of a non-operating nature. These items include $71 million related to Midwest exit costs, $29 million related to early extinguishment of debt, $25 million in restructuring costs including the sale of the distribution operations to C&S, $12 million related to the Canadian hedging agreement, $10 million related to impairment charges on long-lived assets and $5 million related to Hurricane Katrina. Last year's results include a one time charge of $25 million related to the Canadian Food Basics settlement. Excluding these non-operating items and the gain on the sale of A&P Canada, EBITDA for the quarter was $53 million as compared to $48 million for the same period last year. EBITDA for the Company's Canadian business, sold in August 2005, was $17 million for its results for an 8 week period in the current quarter versus $26 million for 12 weeks last year. Sales for the 28 weeks year to date were $5.6 billion versus $5.8 billion in fiscal year 2004. For the first half of the year, U.S. comparable store sales, excluding New Orleans, declined 0.7%. Net income for year to date 2005 was $503 million or $12.47 per diluted share, compared with a loss of $2.78 per diluted share for 2004. Excluding previously announced non-operating items and the gain on the sale of A&P Canada, EBITDA for the first half of fiscal years 2005 and 2004 was $155 million and $129 million, respectively. This includes $74 million of EBITDA for the 24 weeks results of the Company's Canadian business this year versus $70 million for a 28 week period last year. Christian Haub, Executive Chairman of the Board, said, "We made major progress during the quarter in restructuring the company and forming the basis for a new and sustainable A&P. Proceeds from the sale of A&P Canada completed during the quarter are being utilized to strengthen our balance sheet and improve our stores; and our investment position and relationship with METRO, Inc. in Canada is generating income and other benefits that we believe have significant upside potential going forward. "In addition, the previously announced transfer of distribution operations to C&S Wholesale Grocers proceeded, as we substantially reduce costs, improve supply chain performance, and focus management and other resources strictly on our retail business. "Overall, our substantially improved balance sheet and lower cost structure now positions us to restore profitability to our business, and to consider strategic opportunities that are emerging in our industry," Mr. Haub said. Eric Claus, President & Chief Executive Officer, said, "Our actions in the first half set the stage for a leaner, more efficient and effective company going forward. And we continue to move aggressively to reduce costs and improve productivity. As the second half progresses, these actions will enable a retail strategy that positions our conventional, fresh and discount store formats to not only build our own loyal customer base, but also attract new customers. It is the effective execution of these actions that will continue A&P's turnaround to creating sustained profitability." Founded in 1859, A&P is one of the nation's first supermarket chains. The Company operates 417 stores in 10 states under the following trade names: A&P, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center, and Food Basics. The Company invites investors and other interested parties to listen to a live audio Webcast to be held at 10:00 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 November 15, 2005. 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 evaluate the Company's liquidity and it is among the primary measures used by management for planning and forecasting of future periods. EBITDA is defined as earnings before interest, taxes, depreciation, amortization, minority interest, discontinued operations and the gain on the sale of A&P Canada. The Company believes the presentation of this measure 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, this measure is 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. EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 1 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 GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 1 - GAAP EARNINGS FOR THE 12 AND 28 WEEKS ENDED SEPTEMBER 10, 2005 AND SEPTEMBER 11, 2004 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND STORE DATA)
12 Weeks Ended 28 Weeks Ended ------------------------------ ------------------------------- September 10, September 11, September 10, September 11, 2005 2004 2005 2004 ------------- ------------- ------------- ------------- AS RESTATED (1) AS RESTATED (1) Sales $ 2,168,249 $ 2,490,559 $ 5,551,882 $ 5,770,858 Cost of merchandise sold (1,551,585) (1,795,046) (3,997,260) (4,155,349) ------------ ------------ ------------ ------------ Gross margin 616,664 695,513 1,554,622 1,615,509 Store operating, general and administrative expense (761,730) (734,365) (1,737,828) (1,655,439) ------------ ------------ ------------ ------------ Loss from operations (2) (145,066) (38,852) (183,206) (39,930) Gain on sale of Canadian operations 919,140 -- 918,551 -- Interest expense (25,262) (27,734) (61,385) (62,126) Interest income 3,157 768 4,343 1,609 Minority interest in earnings of consolidated franchisees 405 (342) (1,131) (1,718) ------------ ------------ ------------ ------------ Income (loss) from continuing operations before income taxes 752,374 (66,160) 677,172 (102,165) (Provision for) benefit from income taxes (160,103) 1,614 (173,968) (3,844) ------------ ------------ ------------ ------------ Income (loss) from continuing operations 592,271 (64,546) 503,204 (106,009) Discontinued operations: (Loss) income from operations of discontinued businesses, net of tax (296) 344 (464) (1,039) ------------ ------------ ------------ ------------ (Loss) income from discontinued operations (296) 344 (464) (1,039) ------------ ------------ ------------ ------------ Net income (loss) $ 591,975 $ (64,202) $ 502,740 $ (107,048) ============ ============ ============ ============ Net income (loss) per share - basic: Continuing operations $ 14.65 $ (1.68) $ 12.65 $ (2.75) Discontinued operations (0.01) 0.01 (0.01) (0.03) ------------ ------------ ------------ ------------ Net income (loss) per share - basic $ 14.64 $ (1.67) $ 12.64 $ (2.78) ============ ============ ============ ============ Net income (loss) per share - diluted: Continuing operations $ 14.41 $ (1.68) $ 12.48 $ (2.75) Discontinued operations (0.01) 0.01 (0.01) (0.03) ------------ ------------ ------------ ------------ Net income (loss) per share - diluted $ 14.40 $ (1.67) $ 12.47 $ (2.78) ============ ============ ============ ============ Weighted average common shares outstanding - basic 40,434,194 38,521,685 39,758,780 38,520,732 ============ ============ ============ ============ Weighted average common shares outstanding - diluted 41,107,153 38,521,685 40,325,089 38,520,732 ============ ============ ============ ============ Gross margin rate 28.44% 27.93% 28.00% 27.99% Store operating, general and administrative expense rate 35.13% 29.49% 31.30% 28.69% Depreciation and amortization $ 45,893 $ 62,190 $ 117,768 $ 143,036 ============ ============ ============ ============ Reconciliation of GAAP cash flow measure to EBITDA: Net cash (used in) provided by operating activities $ (69,432) $ 16,167 $ (68,201) $ 55,013 Net interest expense 22,105 26,966 57,042 60,517 Asset disposition initiatives (69,256) 680 (84,681) (381) Restructuring charge (12,490) 0 (61,039) 0 Loss on extinguishment of debt (28,623) 0 (28,623) 0 Loss on derivatives (12,504) 0 (15,446) 0 Provision for (benefit from) income taxes 160,103 (1,614) 173,968 3,844 Other non-current income taxes (137,228) 0 (137,228) 0 Deferred income taxes 5,430 3,248 0 2,236 Working capital changes Accounts receivable 43,520 (6,530) 27,043 (31,370) Inventories (48,232) 5,996 (27,485) 28,818 Prepaid expenses and other current assets 4,742 8,681 7,521 23,568 Accounts payable 77,876 7,718 71,052 (47,917) Accrued salaries, wages, benefits and taxes (14,931) (4,838) 4,123 1,975 Other accruals (60,394) (35,068) (53,117) (7,169) Other assets (136) 10,828 298 10,466 Other non-current liabilities 43,661 (7,648) 55,350 4,767 Other, net (3,384) (1,248) 13,985 (1,261) ------------ ------------ ------------ ------------ EBITDA $ (99,173) $ 23,338 $ (65,438) $ 103,106 ============ ============ ============ ============ Number of stores operated at end of quarter 417 630 417 630 ============ ============ ============ ============ Number of franchised stores served at end of quarter -- 65 -- 65 ============ ============ ============ ============
(1) As previously reported, prior year results have been restated for changes in our accounting for leases primarily to correct the Company's accounting for landlord allowances. (2) Loss from operations included charges totaling $152 million and $220 million for the 12 and 28 weeks ended September 10, 2005, respectively, related to certain items that the Company believes are of a non-operating nature. For the 12 and 28 weeks ended September 10, 2005, these items included $25 million and $75 million in restructuring costs, respectively, primarily related to the sale of the U.S. distribution operations to C&S, $71 million and $86 million, respectively, related to Midwest exit costs, $10 million related to long-lived asset impairment for both periods presented, $12 million and $15 million, respectively, related to the Canadian dollar hedge, $29 million related to the early extinguishment of debt for both periods presented, and $5 million relating to the impact of Hurricane Katrina on our operations for both periods presented. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. Schedule 2 - Condensed Balance Sheet Data (Unaudited) (In millions, except per share and store data)
September 10, 2005 February 26, 2005 ------------------- ------------------ Cash and short-term investments $363 $258 Other current assets 984 907 ------------------- ------------------ Total current assets 1,347 1,165 Property-net 950 1,516 Equity investment in Metro, Inc. 327 0 Other assets 47 121 ------------------- ------------------ Total assets $2,671 $2,802 =================== ================== Total current liabilities $698 $1,078 Total non-current liabilities 1,207 1,490 Stockholders' equity 766 234 ------------------- ------------------ Total liabilities and stockholders' equity $2,671 $2,802 =================== ================== Other Statistical Data Total Debt and Capital Leases $284 $697 Total Long Term Real Estate Liabilities $277 328 Temporary Investments and Marketable Securities (532) (104) ------------------- ------------------ Net Debt $29 $921 Total Retail Square Footage (in thousands) 17,009 25,583 Book Value Per Share $18.77 $6.03 For the 28 For the 28 weeks ended weeks ended September 10, 2005 September 11, 2004 ------------------- ------------------ Capital Expenditures $110 $107
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