-----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, EdHtKCaOQcgXz2XrMgpsuWh9oKqpUYl/CE+xGt83MFQPCUehiE/ft+cOIVSQcha3 1Qgrp6z0LNNjC45PPoxRTQ== 0001125282-06-000080.txt : 20060106 0001125282-06-000080.hdr.sgml : 20060106 20060106090111 ACCESSION NUMBER: 0001125282-06-000080 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060106 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060106 DATE AS OF CHANGE: 20060106 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: 06515064 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 b410969_8k.txt 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 6, 2006 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 (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER JURISDICTION OF IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 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 2.0 REGULATION FD DISCLOSURE On January 6, 2006, The Great Atlantic & Pacific Tea Company, Inc. issued a press release announcing its financial results for the fiscal 2005 third quarter and year to date results for the 12 and 40 weeks ended December 3, 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, equity earnings of Metro, Inc., 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 January 6, 2006. - -------------------------------------------------------------------------------- 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: Brenda Galgano Title: Senior Vice President & Chief Financial Officer Dated: January 6, 2006 INDEX TO EXHIBITS EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------ ------------------- 99.1 Press release of The Great Atlantic & Pacific Tea Company, Inc., dated January 6, 2006 EX-99.1 2 b410969_ex99-1.txt PRESS RELEASE 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 Vice President, Corporate Affairs (201) 571-4495 THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. ANNOUNCES RESULTS FOR THIRD QUARTER ENDED DECEMBER 3, 2005 MONTVALE, NJ - January 6, 2006 - The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced unaudited fiscal 2005 third quarter and year to date results for the 12 and 40 weeks ended December 3, 2005. For the third quarter, U.S. sales were $1.58 billion, compared with $1.67 billion in the third quarter of fiscal 2004. Fiscal 2004 third quarter total sales of $2.52 billion include $850 million related to A&P Canada which was sold in August 2005. U.S. total comparable store sales increased 1.8% vs. year-ago. Excluding New Orleans, U.S. comparable store sales decreased 0.3% vs. year-ago. Net loss for the quarter was $71 million or $1.74 per diluted share this year versus a loss of $75 million or $1.96 per diluted share last year. Reported EBITDA for the third quarter was negative $35 million this year versus a positive $16 million for the third quarter of fiscal 2004. EBITDA for both quarters includes items the Company considers non-operating in nature that management excludes when evaluating the results of the U.S. on-going business. The current quarter includes a $2 million benefit related to the Visa/Mastercard lawsuit settlement, charges of $19 million related to Midwest operations exit costs, net charges of $15 million in restructuring costs relating to the cost reduction initiatives within administration and supply and logistics, charges of $8 million related to impairment charges on long-lived assets, charges of $13 million related to store closures in New Orleans as a result of Hurricane Katrina, charges of $3 million related to early extinguishment of debt and write off of deferred financing fees for the prior credit facility and $4 million of real estate related losses. Fiscal 2004 third quarter results include $27 million from A&P Canada, $9 million in one-time savings in employee benefit costs, charges of $35 million related to impairment on long-lived assets, $1 million in net restructuring costs and $2 million of real estate related losses. For the 40 weeks year to date, U.S. sales were $5.41 billion versus $5.61 billion in fiscal 2004. Total sales of $7.13 billion for the 40 weeks year to date and $8.29 billion in fiscal 2004 include $1.72 billion and $2.68 billion in sales, respectively, related to A&P Canada which was sold in August 2005. U.S. total comparable store sales were unchanged from last year. Excluding New Orleans, U.S. comparable store sales decreased 0.6% vs. year-ago. Net income for the 40 weeks year to date was $432 million or $10.62 per diluted share which included the gain on the sale of Canada, compared with a loss of $182 million or $4.74 per diluted share for fiscal 2004. Reported EBITDA for the 40 weeks year to date and fiscal 2004 was negative $101 million and positive $120 million, respectively. EBITDA for the 40 weeks year to date includes $68 million from A&P Canada, a $2 million benefit related to the Visa/Mastercard settlement, $22 million of real estate related gains, charges of $105 million related to Midwest operations exit costs, $89 million in net restructuring costs, charges of $18 million related to impairment charges on long-lived assets, charges of $18 million related to Hurricane Katrina, charges of $15 million related to the Canadian hedging agreement and charges of $33 million for early extinguishment of debt and write off of deferred financing fees related to the prior credit facility. EBITDA for fiscal 2004 includes $64 million from A&P Canada, $9 million in one-time savings in employee benefit costs, charges of $35 million related to impairment on long-lived assets, $2 million in net restructuring costs and $1 million of real estate related losses. Christian Haub, Executive Chairman, said, "I am very encouraged by the progress generated by our new management team in both reducing costs and improving sales trends, especially through the latter stages of the third quarter. Accordingly, our results, excluding special items, were significantly improved, a positive sign that we are on track to achieve our profitability objectives as planned." Eric Claus, President & Chief Executive Officer, said "I'm very proud of our team's execution of key cost management, operating and selling strategies in the third quarter. Our store level initiatives are clearly resonating with customers, resulting in improved sales. These positive outcomes at such an early stage of our rebuilding process bode well for the achievement of ongoing sales momentum, and progress toward overall profitability by fiscal 2007. "Going forward, we plan to continue to improve operating results by further reducing costs, while marketing aggressively and investing to bring our store facilities to new quality standards both on the fresh and discount sides." Mr. Claus said. Founded in 1859, A&P is one of the nation's first supermarket chains. The Company operates 407 stores in 9 states and the District of Columbia 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 11:00 AM Eastern Time today, at which members of the Company's senior management team will discuss the Company's third 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 3, 2006. 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, equity in earnings of Metro, Inc., 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 40 WEEKS ENDED DECEMBER 3, 2005 AND DECEMBER 4, 2004 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND STORE DATA)
12 Weeks Ended ------------------------------------------- December 3, 2005 December 4, 2004 ---------------- ---------------- AS RESTATED (1) Sales $ 1,580,942 $ 2,523,759 Cost of merchandise sold (1,116,399) (1,827,221) ----------- ----------- Gross margin 464,543 696,538 Store operating, general and administrative expense (546,100) (742,791) ----------- ----------- Loss from operations (2) (81,557) (46,253) (Loss) gain on sale of Canadian operations (6,083) - Interest expense (15,398) (24,874) Interest income 4,803 485 Minority interest in earnings of consolidated franchisees - 2,815 Equity in earnings of Metro, Inc. 3,397 - ----------- ----------- (Loss) income from continuing operations before income taxes (94,838) (67,827) Benefit from (provision for) income taxes 21,083 (4,924) ----------- ----------- (Loss) income from continuing operations (73,755) (72,751) Discontinued operations: Income (loss) from operations of discontinued businesses, net of tax 1,972 110 Gain (loss) on disposal of discontinued operations, net of tax 577 (2,702) ----------- ----------- Income (loss) from discontinued operations 2,549 (2,592) ----------- ----------- Net (loss) income $ (71,206) $ (75,343) =========== =========== Net (loss) income per share - basic: Continuing operations $ (1.80) $ (1.89) Discontinued operations 0.06 (0.07) ----------- ----------- Net (loss) income per share - basic $ (1.74) $ (1.96) =========== =========== Net (loss) income per share - diluted: Continuing operations $ (1.80) $ (1.89) Discontinued operations 0.06 (0.07) ----------- ----------- Net (loss) income per share - diluted $ (1.74) $ (1.96) =========== =========== Weighted average common shares outstanding - basic 40,997,714 38,553,356 =========== =========== Weighted average common shares outstanding - diluted 40,997,714 38,553,356 =========== =========== Gross margin rate 29.38% 27.60% Store operating, general and administrative expense rate 34.54% 29.43% Depreciation and amortization $ 46,274 $ 62,647 =========== =========== Reconciliation of GAAP cash flow measure to EBITDA: Net cash used in operating activities $ (92,322) $ (66,120) Net interest expense 10,595 24,389 Asset disposition initiatives (15,691) 2,090 Restructuring charge (1,697) 0 Long lived asset impairment charges (17,966) (35,498) Loss on extinguishment of debt 0 0 Loss on derivatives 0 0 (Loss) gain on disposal of owned property (1,591) (2,532) (Benefit from) provision for income taxes (21,083) 4,924 Income taxes 17,585 (2,667) Other share based awards (2,043) 0 Working capital changes - ----------------------- Accounts receivable (1,273) (8,157) Inventories (5,947) 69,519 Prepaid expenses and other current assets 8,369 2,842 Accounts payable 18,665 (31,472) Accrued salaries, wages, benefits and taxes 32,029 17,282 Other accruals 44,559 33,004 Other assets (254) 10,213 Other non-current liabilities 4,371 2,073 Other, net (11,589) (3,496) ----------- ----------- EBITDA $ (35,283) $ 16,394 =========== =========== Number of stores operated at end of quarter 407 650 =========== =========== Number of franchised stores served at end of quarter - 42 =========== =========== 40 Weeks Ended ------------------------------------------ December 3, 2005 December 4, 2004 ---------------- ---------------- AS RESTATED (1) Sales $ 7,132,824 $ 8,294,617 Cost of merchandise sold (5,113,659) (5,982,570) ----------- ----------- Gross margin 2,019,165 2,312,047 Store operating, general and administrative expense (2,283,928) (2,398,230) ----------- ----------- Loss from operations (2) (264,763) (86,183) (Loss) gain on sale of Canadian operations 912,468 - Interest expense (76,783) (87,000) Interest income 9,146 2,094 Minority interest in earnings of consolidated franchisees (1,131) 1,097 Equity in earnings of Metro, Inc. 3,397 - ----------- ----------- (Loss) income from continuing operations before income taxes 582,334 (169,992) Benefit from (provision for) income taxes (152,885) (8,768) ----------- ----------- (Loss) income from continuing operations 429,449 (178,760) Discontinued operations: Income (loss) from operations of discontinued businesses, net of tax 1,704 (929) Gain (loss) on disposal of discontinued operations, net of tax 577 (2,702) ----------- ----------- Income (loss) from discontinued operations 2,281 (3,631) ----------- ----------- Net (loss) income $ 431,730 $ (182,391) =========== =========== Net (loss) income per share - basic: Continuing operations $ 10.71 $ (4.64) Discontinued operations 0.06 (0.10) ----------- ----------- Net (loss) income per share - basic $ 10.77 $ (4.74) =========== =========== Net (loss) income per share - diluted: Continuing operations $ 10.56 $ (4.64) Discontinued operations 0.06 (0.10) ----------- ----------- Net (loss) income per share - diluted $ 10.62 $ (4.74) =========== =========== Weighted average common shares outstanding - basic 40,075,391 38,530,519 =========== =========== Weighted average common shares outstanding - diluted 40,634,565 38,530,519 =========== =========== Gross margin rate 28.31% 27.87% Store operating, general and administrative expense rate 32.02% 28.91% Depreciation and amortization $ 164,042 $ 205,683 =========== =========== Reconciliation of GAAP cash flow measure to EBITDA: Net cash used in operating activities $ (160,523) $ (11,107) Net interest expense 67,637 84,906 Asset disposition initiatives (100,372) 1,709 Restructuring charge (62,736) 0 Long lived asset impairment charges (29,108) (38,206) Loss on extinguishment of debt (28,623) 0 Loss on derivatives (15,446) 0 (Loss) gain on disposal of owned property 25,836 (3,381) (Benefit from) provision for income taxes 152,885 8,768 Income taxes (119,643) (431) Other share based awards (6,970) 0 Working capital changes - ----------------------- Accounts receivable 25,770 (39,527) Inventories (33,432) 98,337 Prepaid expenses and other current assets 15,890 26,410 Accounts payable 89,717 (79,389) Accrued salaries, wages, benefits and taxes 36,152 19,257 Other accruals (8,558) 25,835 Other assets 44 20,679 Other non-current liabilities 59,721 6,840 Other, net (8,962) (1,200) ----------- ----------- EBITDA $ (100,721) $ 119,500 =========== =========== Number of stores operated at end of quarter 407 650 =========== =========== Number of franchised stores served at end of quarter - 42 =========== ===========
(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 $60 million and $186 million for the 12 and 40 weeks ended December 3, 2005, respectively, related to certain items that the Company believes are of a non-operating nature. For the 12 and 40 weeks ended December 3, 2005, these items included: - $2 million of income related to the VISA/Mastercard lawsuit settlement during both periods presented, - $15 million and $89 million in restructuring costs, respectively, primarily related to the sale of the U.S. distribution operations to C&S, - $19 million and $105 million, respectively, related to Midwest exit costs, - $8 million and $18 million, respectively, related to long-lived asset impairment, - $3 million and $33 million, respectively, related to the early extinguishment of debt and write-off of deferred financing fees, - $13 million and $18 million, respectively, relating to the impact of Hurricane Katrina on our operations, - $4 million relating to real estate losses and $22 million relating to real estate gains, respectively, - $68 million of income from A&P Canada for the 40 weeks ended December 3, 2005, - $15 million related to the Canadian dollar hedge for for the 40 weeks ended December 3, 2005. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SCHEDULE 2 - CONDENSED BALANCE SHEET DATA (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AND STORE DATA)
December 3, 2005 February 26, 2005 ----------------- ----------------- Cash and short-term investments $128 $258 Other current assets 1,103 907 ----------------- ----------------- Total current assets 1,231 1,165 Property-net 898 1,516 Equity investment in Metro, Inc. 331 0 Other assets 48 121 ----------------- ----------------- Total assets $2,508 $2,802 ================= ================= Total current liabilities $608 $1,078 Total non-current liabilities 1,199 1,490 Stockholders' equity 701 234 ----------------- ----------------- Total liabilities and stockholders' equity $2,508 $2,802 ================= ================= Other Statistical Data - ---------------------- Total Debt and Capital Leases $282 $697 Total Long Term Real Estate Liabilities $277 328 Restricted Cash, Temporary Investments and Marketable Securities (413) (104) ----------------- ----------------- Net Debt $146 $921 Total Retail Square Footage (in thousands) 16,547 25,583 Book Value Per Share $17.10 $6.03
For the 40 For the 40 weeks ended weeks ended December 3, 2005 December 4, 2004 ----------------- ----------------- Capital Expenditures $135 $164
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