-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, guogkqGOvxjYj/JMFujCvK+Aq3Pw2+cwwma38WhNrg+m8OuctnFQK5Kq2rz2euy4 Uvji0FR8XQme3WMxH17zAQ== 0000912057-95-004565.txt : 19950614 0000912057-95-004565.hdr.sgml : 19950614 ACCESSION NUMBER: 0000912057-95-004565 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950429 FILED AS OF DATE: 19950613 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENN TRAFFIC CO CENTRAL INDEX KEY: 0000077155 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 250716800 STATE OF INCORPORATION: PA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09930 FILM NUMBER: 95546697 BUSINESS ADDRESS: STREET 1: 319 WASHINGTON STREET CITY: JOHNSTOWN STATE: PA ZIP: 15901 BUSINESS PHONE: 8145369900 MAIL ADDRESS: STREET 1: 1200 STATE FAIR BLVD CITY: SYRACUSE STATE: NY ZIP: 13221-4737 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended April 29, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ________ to ________ Commission file number 1-9930 THE PENN TRAFFIC COMPANY (Exact name of registrant as specified in its charter) Delaware 25-0716800 (State of incorporation) (IRS Employer Identification No.) 1200 State Fair Boulevard, Syracuse, NY 13209 (Address of principal executive offices) (Zip code) (315) 453-7284 (Telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X . NO . --- --- Common stock, par value $1.25 per share: 10,859,793 shares outstanding as of June 1, 1995 1 of 13 PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE PENN TRAFFIC COMPANY CONSOLIDATED STATEMENT OF OPERATIONS UNAUDITED (All dollar amounts in thousands, except per share data)
THIRTEEN THIRTEEN WEEKS ENDED WEEKS ENDED APRIL 29, APRIL 30, 1995 1994 ------------ ------------ TOTAL REVENUES $ 860,028 $ 809,961 COST AND OPERATING EXPENSES: Cost of sales (including buying and occupancy costs) 662,449 631,458 Selling and administrative expenses 164,222 145,112 ------------ ------------ OPERATING INCOME 33,357 33,391 Interest expense 33,034 29,024 ------------ ------------ INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 323 4,367 Provision for income taxes 194 2,111 ------------ ------------ INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 129 2,256 Extraordinary item (net of tax benefit) (Note 4) (2,276) ------------ ------------ INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 129 (20) Cumulative effect of change in accounting principle (net of tax benefit) (Note 6) (5,790) ------------ ------------ NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ 129 $ (5,810) ============ ============ PER SHARE DATA: Income before extraordinary item and cumulative effect of change in accounting principle $ .01 $ .20 Extraordinary item (.20) Cumulative effect of change in accounting principle (.52) ------------ ------------ Net income (loss) $ .01 $ (.52) ============ ============ Average number of common shares outstanding 11,149,486 11,171,258 ============ ============
See Notes to Interim Consolidated Financial Statements. - 2 - THE PENN TRAFFIC COMPANY CONSOLIDATED BALANCE SHEET
(All dollar amounts in thousands) UNAUDITED APRIL 29, JANUARY 28, 1995 1995 ----------- ----------- ASSETS CURRENT ASSETS: Cash and short-term investments $ 47,108 $ 46,519 Accounts and notes receivable (less allowance for doubtful accounts of $2,061 and $1,374, respectively) 76,351 81,967 Inventories (Note 3) 393,161 385,968 Prepaid expenses and other current assets 12,542 10,913 ----------- ----------- Total Current Assets 529,162 525,367 NONCURRENT ASSETS: Capital leases - net 125,451 127,748 Property, plant and equipment - net 604,367 600,797 Intangible assets - net 449,202 451,897 Other assets and deferred charges - net 86,834 88,157 ----------- ----------- $ 1,795,016 $ 1,793,966 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 4,146 $ 4,118 Current portion of obligations under capital leases 10,129 9,962 Trade accounts and drafts payable 221,426 209,890 Payroll and other accrued liabilities 71,548 79,434 Accrued interest expense 19,245 30,686 Payroll taxes and other taxes payable 20,518 19,582 Deferred income taxes 27,384 27,384 ----------- ----------- Total Current Liabilities 374,396 381,056 NONCURRENT LIABILITIES: Long-term debt 1,149,635 1,136,302 Obligations under capital leases 125,157 126,894 Deferred income taxes 73,598 73,598 Other noncurrent liabilities 39,074 43,189 ----------- ----------- Total Liabilities 1,761,860 1,761,039 ----------- ----------- SHAREHOLDERS' EQUITY: Preferred stock - authorized 10,000,000 shares at $1.00 par value; none issued Common stock - authorized 30,000,000 shares at $1.25 par value; 10,855,701 shares and 10,846,701 shares issued and outstanding, respectively 13,568 13,558 Capital in excess of par value 179,255 179,165 Retained deficit (150,162) (149,681) Minimum pension liability adjustment (356) (356) Unearned compensation (9,149) (9,759) ----------- ----------- Total Shareholders' Equity 33,156 32,927 ----------- ----------- $ 1,795,016 $ 1,793,966 =========== ===========
See Notes to Interim Consolidated Financial Statements. - 3 - THE PENN TRAFFIC COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED
(All dollar amounts in thousands) THIRTEEN THIRTEEN WEEKS ENDED WEEKS ENDED APRIL 29, 1995 APRIL 30, 1994 -------------- -------------- OPERATING ACTIVITIES: Net income (loss) $ 129 $ (5,810) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Cumulative effect of change in accounting principle 5,790 Depreciation and amortization 18,892 17,983 Amortization of intangibles 4,253 3,723 Other - net (1,037) (3,954) Net change in assets and liabilities: Accounts receivable and prepaid expenses 3,300 (2,015) Inventories (7,193) (2,244) Accounts payable and accrued expenses (6,855) (35,820) Deferred charges and other assets 358 1,915 --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 11,847 (20,432) --------- --------- INVESTING ACTIVITIES: Capital expenditures (22,467) (15,424) Other - net 2 (226) --------- --------- NET CASH (USED IN) INVESTING ACTIVITIES (22,465) (15,650) --------- --------- FINANCING ACTIVITIES: Payments to settle long-term debt (839) (39,392) Borrowing of revolver debt 173,600 107,400 Repayment of revolver debt (159,400) (68,500) Reduction of capital lease obligations (2,254) (1,904) Payment of debt issuance costs (263) Other - net 100 114 --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 11,207 (2,545) --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 589 (38,627) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 46,519 82,467 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 47,108 $ 43,840 ========= =========
See Notes to Interim Consolidated Financial Statements. - 4 - THE PENN TRAFFIC COMPANY NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The results of operations for the interim periods are not necessarily an indication of results to be expected for the year. In the opinion of management, all adjustments necessary for a fair presentation of the results are included for the interim periods, and all such adjustments are normal and recurring. These unaudited interim financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Annual Report on Form 10-K for the fiscal year ended January 28, 1995. Net income (loss) per share of common stock is based on the average number of shares of common stock outstanding during each period, after giving effect to preferred stock dividends. Fully diluted income per share is not presented for each of the periods since the reduction from primary income per share is less than three percent. In January 1995, the Company acquired 45 supermarkets from American Stores Company formerly operating under the Acme trade name. Results for the quarter ended April 29, 1995 include results for 34 of these acquired Acme stores that the Company intends to continue to operate. - 5 - NOTE 2 - SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands of dollars) First Quarter, Fiscal 1996 - -------------------------- Operating Income $ 33,357 Depreciation and Amortization 23,145 LIFO Provision 0 Cash Interest Expense 31,964 First Quarter, Fiscal 1995 - -------------------------- Operating Income $ 33,391 Depreciation and Amortization 21,706 LIFO Provision 25 Cash Interest Expense 28,013
NOTE 3 - INVENTORIES If the first-in, first-out (FIFO) method had been used by the Company, inventories would have been $17,145,000 higher than reported at both April 29, 1995 and January 28, 1995, respectively. NOTE 4 - EXTRAORDINARY ITEM During the first quarter of fiscal 1995, the Company had an extraordinary charge of $2.3 million (net of $1.6 million income tax benefit) related to the early retirement of debt. - 6 - NOTE 5 - INVESTMENT EQUITY INTEREST IN THE GRAND UNION COMPANY In July 1989, Penn Traffic through its limited partnership investment in Grand Acquisition Company, L.P. ("GAC, L.P."), acquired an indirect ownership interest in approximately 24.3% of the currently outstanding common stock of Grand Union Holdings Corporation (formerly named GND Holdings Corporation) ("Grand Union Holdings"), the corporate parent of The Grand Union Company ("Grand Union"). GAC, L.P. owns approximately 39% of the currently outstanding common equity of Holdings on a fully diluted basis. As of January 28, 1995, Penn Traffic's indirect ownership interest was 17.8% on a fully diluted basis. The Company accounted for its investment in Grand Union under the equity method. The investment was recorded originally at a cost of $18,250,000. The carrying value of the investment was reduced to zero as of February 2, 1991. On January 25, 1995, Grand Union filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court, District of Delaware (the "Bankruptcy Court"). On February 16, 1995, Grand Union Holdings filed a voluntary Chapter 11 petition in the Bankruptcy Court. Penn Traffic's equity interest in Grand Union Holdings became worthless as a result of these bankruptcy proceedings and, on March 24, 1995 Penn Traffic's limited partnership interest in GAC, L.P. was redeemed for nominal consideration. NOTE 6 - CHANGE IN ACCOUNTING PRINCIPLE Effective January 30, 1994, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" ("SFAS 112"). SFAS 112 requires employers to recognize the obligation to provide postemployment benefits on an accrual basis if certain conditions are met. The Company's postemployment benefits covered by SFAS 112 are primarily disability related claims covering indemnity and medical payments. The obligation for these claims is measured using actuarial techniques and assumptions including appropriate discount rates. The cumulative effect of the change in accounting principle determined as of January 30, 1994 reduced net income by $5.8 million (net of $4.1 million income tax benefit) in the fiscal year ended January 28, 1995. - 7 - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THIRTEEN WEEKS ENDED APRIL 29, 1995 ("FIRST QUARTER FISCAL 1996") COMPARED TO THIRTEEN WEEKS ENDED APRIL 30, 1994 ("FIRST QUARTER FISCAL 1995") The following table sets forth statement of operations components expressed as a percentage of total revenues for First Quarter Fiscal 1996 and First Quarter Fiscal 1995:
First Quarter Ended ---------------------- April 29, April 30, 1995 1994 -------- --------- Total revenues 100.0% 100.0% Gross profit (1) 23.0 22.0 Selling and administrative expenses 19.1 17.9 Operating income 3.9 4.1 Interest expense 3.8 3.6 Income before income taxes, extraordinary item and cumulative effect of change in accounting principles 0.1 0.5 Net income (loss) 0.0 (0.7) (1) Total revenues less cost of sales.
Total revenues for First Quarter Fiscal 1996 increased to $860.0 million from $810.0 million in First Quarter Fiscal 1995. The increase in total revenues is the result of the increase in retail supermarket sales resulting from the acquisition of 45 former Acme stores in January 1995. Results for First Quarter Fiscal 1996 include results for the 34 former Acme stores that the Company intends to continue to operate. Wholesale supermarket sales decreased in First Quarter Fiscal 1996 to $101.4 million from First Quarter Fiscal 1995 results of $109.2 million. Sales from retail supermarkets existing in both periods, "same store sales," decreased 1.6% in First Quarter Fiscal 1996. In First Quarter Fiscal 1996, gross profit was $197.6 million compared to First Quarter Fiscal 1995 gross profit of $178.5 million, representing 23.0% and 22.0% of total revenues, respectively. The increase is due to lower product procurement costs combined with the relative increase in retail revenues as compared to wholesale revenues. - 8 - RESULTS OF OPERATIONS (CONTINUED) Selling and administrative expenses for First Quarter Fiscal 1996 were $164.2 million compared with $145.1 million in First Quarter Fiscal 1995 representing 19.1% and 17.9% of total revenues, respectively. The increase in selling and administrative expenses as a percentage of total revenues primarily resulted from the relative increase in retail revenues compared to wholesale revenues and an increase in fixed and semi-variable expenses as a percentage of total revenues during a period of reduced same store sales. Depreciation and amortization of $23.1 million in First Quarter Fiscal 1996 and $21.7 million in First Quarter Fiscal 1995 represented 2.7% of total revenues in both periods. Operating income was $33.4 million in both periods representing 3.9% and 4.1% of total revenues in First Quarter Fiscal 1996 and First Quarter Fiscal 1995, respectively. Interest expense for First Quarter Fiscal 1996 and First Quarter Fiscal 1995 was $33.0 million and $29.0 million, respectively. The increase is primarily the result of higher debt levels outstanding during First Quarter Fiscal 1996 as compared to First Quarter Fiscal 1995. The higher debt levels outstanding during First Quarter Fiscal 1996 are primarily the result of the acquisition of 45 stores from American Stores Company in January 1995. Income before income taxes, extraordinary item, and the cumulative effect of a change in accounting principle was $.3 million for First Quarter Fiscal 1996, compared to $4.4 million for First Quarter Fiscal 1995. This decrease resulted from a combination of unchanged operating income and an increase in interest expense. The income tax provision was $.2 million for First Quarter Fiscal 1996 compared to $2.1 million in First Quarter Fiscal 1995. The effective tax rates vary from the statutory rate due to differences between income for financial reporting and tax reporting purposes, primarily related to goodwill amortization resulting from prior acquisitions. The $2.3 million extraordinary item (net of $1.6 million income tax benefit) in First Quarter Fiscal 1995 related to the early retirement of debt. The Company adopted SFAS 112 in First Quarter Fiscal 1995. The cumulative effect of this change in accounting principle was a charge of $5.8 million (net of $4.1 million income tax benefit) (Note 6). - 9 - LIQUIDITY AND CAPITAL RESOURCES Operating income was $33.4 million for both First Quarter Fiscal 1996 and First Quarter Fiscal 1995. Interest expense for First Quarter Fiscal 1996 was $33.0 million as compared to $29.0 million during First Quarter Fiscal 1995. Income before extraordinary item and the cumulative effect of a change in accounting principle for First Quarter Fiscal 1996 was $.1 million as compared to $2.3 million for First Quarter Fiscal 1995. Payments of principal and interest on the Company's $1,154 million of long-term debt (excluding capital leases) will materially restrict Company funds available to finance capital expenditures and working capital. Principal payments of long-term debt of $3.3 million, $2.7 million and $2.2 million are due during the remainder of Fiscal 1996, Fiscal 1997 and Fiscal 1998, respectively. As of April 29, 1995, the Company had a revolving credit facility (the "Revolving Credit Facility") which provided for borrowings of up to $225 million, subject to a borrowing base limitation measured by eligible inventory and accounts receivable of the Company. The Revolving Credit Facility matures in April 2000 and is secured by a pledge of the Company's inventory, accounts receivable and related assets. Total availability under the Revolving Credit Facility was $105.1 million at April 29, 1995. Effective May 10, 1995, the Revolving Credit Facility was amended to provide for borrowings of up to $250 million subject to the borrowing base limitation. During First Quarter Fiscal 1996, the Company's internally generated funds from operations and amounts available under the Revolving Credit Facility provided sufficient liquidity to meet the Company's operating, capital expenditure and debt service needs. The Company has entered into four interest rate swap agreements, each of which expires within the next three fiscal years, that effectively convert $155 million of its fixed rate borrowings into variable rate obligations. Under the terms of these agreements, the Company makes payments at variable rates which are based on LIBOR and receives payments at fixed interest rates. The net amount paid or received is included in interest expense. Cash flows to meet the Company's requirements for operating, investing and financing activities in First Quarter Fiscal 1996 are reported in the Consolidated Statement of Cash Flows. For the 13-week period ended April 29, 1995, the Company experienced a positive cash flow from operating activities of $11.8 million. Working capital increased by $10.5 million from January 28, 1995 to April 29, 1995. - 10 - LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) The Company is in compliance with all terms and restrictive covenants of its long-term debt agreements. The Company's debt agreements provide restrictive covenants on the payment of dividends to its shareholders. As of April 29, 1995, no dividend payments to its shareholders could have been made under the most restrictive of these limitations. The Company expects to spend approximately $150 million on capital expenditures, including capital leases, during Fiscal 1996. The Company expects to finance such capital expenditures through internally generated cash flow, borrowings under the Revolving Credit Facility and new capital leases. Capital expenditures will be principally for new stores, replacement stores, remodels and a new distribution facility in Scranton, Pennsylvania. During First Quarter Fiscal 1996, the Company opened two replacement stores and completed four remodels. Eight replacement stores and four remodels were under construction or in progress as of April 29, 1995. Capital expenditures, including capital leases, were approximately $23.2 million for First Quarter Fiscal 1996. - 11 - PART II. OTHER INFORMATION All items which are not applicable or to which the answer is negative have been omitted from this report. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company's Annual Meeting of Stockholders was held on June 7, 1995. At the Annual Meeting, three directors were elected to serve for three-year terms on the Company's Board of Directors by the following votes:
FOR WITHHELD --- -------- John T. Dixon 9,776,890 38,235 Gary D. Hirsch 9,776,767 38,359 Richard D. Segal 9,777,366 37,760
At the Annual Meeting, the selection of Price Waterhouse as auditors for the Company for Fiscal 1996 was ratified by a vote of 9,806,155 shares in favor and 8,362 shares opposed. A total of 609 shares abstained from voting. ITEM 5. OTHER INFORMATION Mr. Joseph J. McCaig, President and Chief Executive Officer of The Grand Union Company ("Grand Union"), has resigned from the Board of Directors of the Company, effective May 31, 1995. Until March 1995, Penn Traffic held an indirect minority ownership interest in Grand Union. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits
Exhibit Number Description -------------- ----------- 10.9 I Amendment No. 8, dated as of November 4, 1994, to the Loan and Security Agreement. 10.9 J Amendment No. 9, dated as of May 10, 1995, to the Loan and Security Agreement. 27.1 Financial Data Schedule
(b) Reports on Form 8-K No reports on Form 8-K were filed during the fiscal quarter ended April 29, 1995. - 12 - 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 thereunto duly authorized. THE PENN TRAFFIC COMPANY June 13, 1995 /s/- John T. Dixon ---------------------------- By: John T. Dixon (President and Chief Executive Officer, and Director) June 13, 1995 /s/- Eugene R. Sunderhaft ---------------------------- By: Eugene R. Sunderhaft (Senior Vice President and Secretary - Principal Financial Officer and Principal Accounting Officer) - 13 - EX-10.9I 2 EXHIBIT 10.9I AMENDMENT NO. 8 TO LOAN AND SECURITY AGREEMENT AMENDMENT NO. 8, dated as of November 4, 1994 (this "AMENDMENT") to that certain Loan and Security Agreement dated as of March 5, 1993, as amended by Amendment Nos. 1, 2, 3, 4, 5, 6 and as further amended by a certain Consent and Amendment to Loan and Security Agreement dated September 29, 1994 (hereinafter "Amendment No. 7") (collectively the "LOAN AGREEMENT") among THE PENN TRAFFIC COMPANY ("PENN TRAFFIC"), DAIRY DELL, BIG M SUPERMARKETS, INC., and PENNY CURTISS BAKING COMPANY, INC. (individually a "BORROWER" and collectively the "BORROWERS"), the Lenders listed therein (collectively the "LENDERS") and NATWEST USA CREDIT CORP., as Agent for the Lenders (in such capacity, the "AGENT"), is made by, between and among the Borrowers, the Agent, and the Lenders parties hereto. Capitalized terms used herein, except as otherwise defined herein, shall have the meanings given to such terms in the Loan Agreement. - - - - - - - - - WHEREAS, both the Maximum Revolving Credit Line and the amount of the Total Facility has been further increased from $200,000,000 to $225,000,000 as a result of the Borrowers' compliance with and the satisfaction of the conditions to the effectiveness of sections 1(a)(ii) and (iii) of Amendment No. 6 and WHEREAS, Mitsubishi Trust and Banking Corporation, a current Lender (Mitsubishi), and NWCC, a current Lender, have committed to increase the amount of each of their Commitments and to changes in their Pro-Rata Shares. WHEREAS, as a result of the increase in the Maximum Credit Line and the amount of the Total Facility and certain transfers by current Lenders of all or a portion of their interests as Lenders to other current Lenders, changes are required to be made in the Commitments and Pro-Rata Shares of all of the Lenders. WHEREAS, the Borrowers, the Agent and the current Lenders have agreed to amend the Loan Agreement pursuant to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. COMMITMENTS AND PRO RATA SHARES. Mitsubishi and NWCC hereby increase each of their respective Commitment and consent to the changes in their Pro-Rata Share as Lenders under the Loan Agreement to the extent set forth opposite each of their signatures to this Amendment. On and after the date of this Amendment, the Commitments and Pro Rata Shares of all Lenders (including Mitsubishi and NWCC) shall be as set forth opposite each of their signatures to this Amendment. 2. REPRESENTATIONS AND WARRANTIES. As an inducement to the Agent and the current Lenders to enter into this Amendment, each of the Borrowers hereby represents and warrants to the Agent and such Lenders and agrees with the Agent and such Lenders as follows: (a) It has the power and authority to enter into this Amendment, has taken all corporate action required to authorize its execution, delivery, and performance of this Amendment. This Amendment has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. The execution, delivery, and performance of this Amendment will not violate its certificate of incorporation or by-laws or any agreement or legal requirements binding upon it. (b) As of the date hereof and after giving effect to the terms of this Amendment: (i) the Loan Agreement is in full force and effect and constitutes a binding obligation of the Borrowers, enforceable against the Borrowers and owing in accordance with its terms; (ii) the Obligations are due and owing by the Borrowers in accordance with their terms; and (iii) Borrowers have no defense to or setoff, counterclaim, or claim against payment of the Obligations and enforcement of the Loan Documents based upon a fact or circumstance existing or occurring on or prior to the date hereof. 3. NO IMPLIED AMENDMENTS. Except as expressly provided herein, the Loan Agreement and the other Loan Documents are not amended or otherwise affected in any way by this Amendment. -2- 4. ENTIRE AGREEMENT; MODIFICATIONS; BINDING EFFECT. This Amendment constitutes the entire agreement of the parties with respect to its subject matter and supersedes all prior oral or written understandings about such matter. Each of the Borrowers confirms that, in entering into this Amendment, it did not rely upon any agreement, representation, or warranty by the Agent or any Lender except those expressly set forth herein. No modification, recision, waiver, release, or amendment of any provision of this Amendment may be made except by a written agreement signed by the parties hereto. The provisions of this Amendment are binding upon and inure to the benefit of the representatives, successors, and assigns of the parties hereto; provided, however, that no interest herein or obligation hereunder may be assigned by any Borrower without the prior written consent of the Required Lenders. 5. EFFECTIVE DATE. This Agreement shall become effective when executed by the Borrowers and such number of Lenders as shall constitute the amount of Required Lenders. 6. SEVERABILITY. If any provision of this Amendment is prohibited or invalid, under applicable law, it is ineffective only to such extent, without invalidating the remainder of this Amendment. 7. COUNTERPARTS. This Amendment may be executed in any number of counterparts, and by each party in separate counterparts, each of which is an original, but all of which shall together constitute one and the same agreement. 8. GOVERNING LAW. This Amendment is deemed to have been made in the State of New York and is governed by and interpreted in accordance with the laws of such state, provided that no doctrine of choice of law (except as may be applicable under the UCC with respect to the Security Interest) shall be used to apply the laws of any other state or jurisdiction. IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written. -3- BORROWERS: THE PENN TRAFFIC COMPANY By:/s/ --------------------------- Title: DAIRY DELL By:/s/ --------------------------- Title: BIG M SUPERMARKETS, INC. By:/s/ --------------------------- Title: PENNY CURTISS BAKING COMPANY, INC. By:/s/ --------------------------- Title: -4- LENDERS: Commitment: $50,000,000 NATWEST USA CREDIT CORP. Pro-Rata Share: 22.222224% Lending Office: 175 Water Street By:/s/ New York, NY 10038 --------------------------- Title: Commitment: $20,000,000 NATIONAL BANK OF CANADA Pro-Rata Share: 8.888889% Lending Office: Empire Tower-Suite 1540 By:/s/ 350 Main Street --------------------------- Buffalo, NY 14202 Title: Commitment: $20,000,000 FUJI BANK, LTD. Pro-Rata Share: 8.888889% Lending Office: Two World Trade Center By:/s/ 79th Fl. --------------------------- New York, NY 10048 Title: Commitment: $30,000,000 SANWA BUSINESS CREDIT Pro-Rata Share: 13.333333% CORPORATION Lending Office: One South Wacker Drive Suite 2800 By:/s/ Chicago, IL 60606 --------------------------- Title: Commitment: $30,000,000 BANKAMERICA BUSINESS CREDIT, Pro-Rata Share: 13.333333% INC. Lending Office: 40 East 52nd Street Second Fl. By:/s/ New York, NY 10022 --------------------------- Title: Commitment: $25,000,000 HELLER FINANCIAL, INC. Pro-Rata Share: 11.111111% Lending Office: 101 Park Avenue By:/s/ 12th Fl. --------------------------- New York, NY 10178 Title: -5- Commitment: $10,000,000 IBJ SCHRODER Pro-Rata Share: 4.444444% Lending Office: One State Street By:/s/ 9th Fl. --------------------------- New York, NY 10004 Title: Commitment: $10,000,000 MIDLANTIC NATIONAL BANK Pro-Rata Share: 4.444444% Lending Office: 499 Thornalle Street By:/s/ 9th Fl. --------------------------- Edison, NJ 08837 Title: Commitment: $30,000,000 MITSUBISHI TRUST AND BANKING Pro-Rata Share: 13.333333% CORPORATION Lending Office: 520 Madison Avenue 25th Fl. By:/s/ New York, NY 10022 --------------------------- Title: AGENT: NATWEST USA CREDIT CORP., As Agent By:/s/ --------------------------- Title: -6- EX-10.9J 3 EXHIBIT 10.9J AMENDMENT NO. 9 TO LOAN AND SECURITY AGREEMENT AMENDMENT NO. 9, dated as of May 10, 1995 (this "AMENDMENT") to that certain Loan and Security Agreement dated as of March 5, 1993, as amended by Amendment Nos. 1, 2, 3, 4, 5, 6, 7 and 8 (collectively, the "LOAN AGREEMENT") among THE PENN TRAFFIC COMPANY ("Penn Traffic"), DAIRY DELL, BIG M SUPERMARKETS, INC. and PENNY CURTISS BAKING COMPANY, INC. (individually, each a "BORROWER" and collectively, the "BORROWERS"), the Lenders listed therein (collectively, the "LENDERS") and NATWEST USA CREDIT CORP., as Agent for the Lenders (in such capacity, the "AGENT"), is made by, between and among the Borrowers, the Agent, and the Lenders. Capitalized terms used herein, except as otherwise defined herein, shall have the meanings given to such terms in the Loan Agreement. WHEREAS, the Borrowers have requested that the Agent and the Lenders: (1) increase the Maximum Revolving Credit Line; (2) change the advance rate with respect to advances against Inventory and (3) make certain other amendments to the Loan Agreement. WHEREAS, the Borrowers, the Agent and the Lenders have agreed to amend the Loan Agreement pursuant to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby amended as of the effective date hereof as follows: (a) The definition of "BORROWING CAPACITY" in Section 1 of the Loan Agreement is hereby amended by deleting the words "sixty percent (60%)" and by substituting, in lieu thereof, the words "sixty-five percent (65%)." (b) The definition of "MAXIMUM REVOLVING CREDIT LINE" in Section 1 of the Loan Agreement is hereby amended to read as follows: "MAXIMUM REVOLVING CREDIT LINE: means $250,000,000, or the lesser amount to which the Borrowers have reduced the Maximum Revolving Credit Line in accordance with Section 2.2(b)." (c) The definition of "PENN TRAFFIC SUBORDINATED NOTES" in Section 1 of the Loan Agreement is hereby amended to read as follows: "Penn Traffic Subordinated Notes" means the 9-5/8% Senior Subordinated Notes of Penn Traffic due 2005 issued in connection with the Merger." (d) The definition of "SENIOR NOTES" in Section 1 of the Loan Agreement is hereby amended to read as follows: "Senior Notes" means, collectively, the 11-1/2% Senior Notes of Penn Traffic due 2001, the 10-1/4% Senior Notes of Penn Traffic due 2002, the 8-5/8% Senior Notes of Penn Traffic due 2003, the 10-3/8% Senior Notes of Penn Traffic due 2004, and the 10.65% Senior Notes of Penn Traffic due 2004." (e) The definition of "SUBORDINATED NOTES" in Section 1 of the Loan Agreement is hereby amended to read as follows: "Subordinated Notes' means the Penn Traffic Subordinated Notes." (f) The definition of "TOTAL FACILITY" contained in Section 2.1 shall be amended as follows: The first sentence of Section 2.1 is amended by replacing the amount "$225,000,000" appearing in the first sentence thereof with the amount "$250,000,000." (g) Section 8.2(f) shall be amended by deleting the words "Prior to the beginning of each Fiscal Year," and by substituting, in lieu thereof, the words "Within thirty (30) days after the beginning of each Fiscal Year," (h) Section 13.11 shall be amended by deleting the reference to "Anderson Kill Olick & Oshinsky, P.C., 666 Third Avenue, New York, New York 10017, Attention: Melvin S. Slade, Esq." and by substituting, in lieu thereof: -2- "Kaye, Scholer, Fierman, Hays & Handler 425 Park Avenue New York, New York 10022 Attention: Albert M. Fenster, Esq." (i) The Commitments of the Lenders shall reflect the amounts and percentages set forth on Schedule A to this Amendment. 2. INCREASED LINE FEE. In the event that Section 1(ii) becomes effective the Borrowers jointly and severally agree to pay an Increased Line Fee to the New Lender (as defined in Section 6(i) of this Amendment) in such amount as the Borrowers and the New Lender shall agree. 3. REPRESENTATIONS AND WARRANTIES. As an inducement to the Agent and the Lenders to enter into this Amendment, each of the Borrowers hereby represents and warrants to the Agent and the Lenders and agrees with the Agent and the Lenders as follows: (1) It has the power and authority to enter into this Amendment and has taken all corporate action required to authorize its execution, delivery, and performance of this Amendment. This Amendment has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. The execution, delivery, and performance of this Amendment will not violate its certificate of incorporation or by-laws or any agreement or legal requirements binding upon it. (2) As of the date hereof and after giving effect to the terms of this Amendment: (i) the Loan Agreement is in full force and effect and constitutes a binding obligation of the Borrowers, enforceable against the Borrowers and owing in accordance with its terms; (ii) the Obligations are due and owing by the Borrowers in accordance with their terms; and (iii) Borrowers have no defense to or setoff, counterclaim, or claim against payment of the Obligations and enforcement of the Loan Documents based upon a fact or circumstance existing or occurring on or prior to the date hereof. -3- (3) The Obligations under the Loan Agreement as amended by this Amendment constitute "Senior Indebtedness" as defined under the indentures relating to the Senior Notes and to the Subordinated Notes. 4. NO IMPLIED AMENDMENTS. Except as expressly provided herein, the Loan Agreement and the other Loan Documents are not amended or otherwise affected in any way by this Amendment. 5. ENTIRE AGREEMENT; MODIFICATIONS; BINDING EFFECT. This Amendment constitutes the entire agreement of the parties with respect to its subject matter and supersedes all prior oral or written understandings about such matter. Each of the Borrowers confirms that, in entering into this Amendment, it did not rely upon any agreement, representation, or warranty by the Agent or any Lender except those expressly set forth herein. No modification, rescission, waiver, release, or amendment of any provision of this Amendment may be made except by a written agreement signed by the parties hereto. The provisions of this Amendment are binding upon and inure to the benefit of the representatives, successors, and assigns of the parties hereto; provided, however, that no interest herein or obligation hereunder may be assigned by any Borrower without the prior written consent of the Required Lenders. 6. EFFECTIVE DATE. This Agreement shall become effective upon compliance with the conditions set forth immediately below: (a) The Agent has been able to obtain commitments in writing from one or more Lenders or New Lenders (collectively, the "New Lender"), aggregating $25,000,000 (provided that the minimum commitment of each New Lender shall be no less than $10,000,000) and such New Lender shall agree to be bound as a Lender under the Loan Agreement pursuant to an agreement (the "New Lender Agreement") substantially in the form of Exhibit A attached hereto. (b) No Event or Event of Default shall have occurred and there shall have been no material adverse change in the business or financial condition of any of the Borrowers. (c) The Borrowers shall deliver to the Agent for the benefit of the Lenders an opinion of Borrowers' -4- counsel in form and substance satisfactory to the Agent and its counsel (which opinion shall cover such matters as the Agent may reasonably request, including a statement that the Obligations under the Loan Agreement as amended by this Amendment constitute "Senior Indebtedness" as defined under the indentures relating to the Senior Notes and to the Subordinated Notes). (d) The Borrowers shall deliver to the Agent a certificate of the Borrowers' Chief Executive or Chief Operating Officer with respect to Section (ii) above and such other instruments and documents as the Agent or any Lender shall reasonably request. (e) The execution and delivery of (i) replacement Revolving Credit Notes in the form of Exhibit C to the Loan Agreement in substitution for the existing Revolving Credit Notes of the Lenders and reflecting the Commitments of each Lender as set forth on Schedule A to this Amendment; (ii) additional Revolving Credit Notes in the form of Exhibit C to the Loan Agreement to the committing New Lender in the amount of $25,000,000 and (iii) replacement Revolving Credit Notes from Dairy Dell in favor of each of the Lenders (including the New Lender), such replacement Revolving Credit Notes aggregating $500,000. (f) The Agent shall have received an original counterpart of this Amendment, duly executed and delivered by the Borrowers and all of the Lenders. (g) The Borrowers and the New Lender shall have agreed to an Increased Line Fee as proposed in Section 2 of this Amendment. 7. COUNTERPARTS. This Amendment may be executed in any number of counterparts, and by each party in separate counterparts, each of which is an original, but all of which shall together constitute one and the same agreement. -5- 8. GOVERNING LAW. This Amendment is deemed to have been made in the State of New York and is governed by and interpreted in accordance with the laws of such state, provided that no doctrine of choice of law (except as may be applicable under the UCC with respect to the Security Interest) shall be used to apply the laws of any other state or jurisdiction. IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written. BORROWERS: THE PENN TRAFFIC COMPANY By:/s/ ----------------------- Title: DAIRY DELL By:/s/ ----------------------- Title: BIG M SUPERMARKETS, INC. By:/s/ ----------------------- Title: PENNY CURTISS BAKING COMPANY, INC. By:/s/ ----------------------- Title: -6- LENDERS: Commitment: $35,000,000 NATWEST USA CREDIT CORP. Pro-Rata Share: 14% Lending Office: 175 Water Street New York, New York 10038 By:/s/ ----------------------- Title: Commitment: $20,000,000 NATIONAL BANK OF CANADA Pro-Rata Share: 8% Lending Office: Main Place Tower Suite 2540 350 Main Street Buffalo, New York 14202 By:/s/ ----------------------- Title: Commitment: $20,000,000 FUJI BANK, LTD. Pro-Rata Share: 8% Lending Office: Two World Trade Center 79th Fl. New York, New York 10048 By:/s/ ----------------------- Title: Commitment: $30,000,000 SANWA BUSINESS CREDIT Pro-Rata Share: 12% CORPORATION Lending Office: One South Wacker Drive Suite 2800 Chicago, IL 60606 By:/s/ ----------------------- Title: Commitment: $30,000,000 BANKAMERICA Pro-Rata Share: 12% BUSINESS CREDIT, INC. Lending Office: 40 East 52nd Street Second Fl. New York, New York 10022 By:/s/ ----------------------- Title: -7- Commitment: $25,000,000 HELLER FINANCIAL, INC. Pro-Rata Share: 10% Lending Office: 101 Park Avenue, 12th Fl. New York, New York 10178 By:/s/ ----------------------- Title: Commitment: $10,000,000 IBJ SCHRODER Pro-Rata Share: 4% BANK & TRUST COMPANY Lending Office: One State Street 9th Fl. New York, New York 10004 By:/s/ ----------------------- Title: Commitment: $10,000,000 MIDLANTIC BANK N.A. (formerly Pro-Rata Share: 4% known as Midlantic National Lending Office: Bank) 499 Thornalle Street 9th Fl. Edison, New Jersey 08837 By:/s/ ----------------------- Title: Commitment: $30,000,000 MITSUBISHI TRUST AND Pro-Rata Share: 12% BANKING CORPORATION Lending Office: 520 Madison Avenue 25th Fl. New York, NY 10022 By:/s/ ----------------------- Title: Commitment: $15,000,000 INDUSTRIAL BANK OF JAPAN, Pro-Rata Share: 6% LIMITED, New York Branch Lending Office: One State Street 9th Fl. New York, New York 10004 By:/s/ ----------------------- Title: -8- AGENT NATWEST USA CREDIT CORP., As Agent By:/s/ ----------------------- Title: EX-27.1 4 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-28-1995 JAN-29-1995 APR-29-1995 47,108 0 78,412 2,061 393,161 529,162 891,733 287,366 1,795,016 374,396 1,289,067 13,568 0 0 19,588 1,795,016 844,113 860,028 662,449 662,449 164,222 687 33,034 323 194 129 0 0 0 129 .01 0
-----END PRIVACY-ENHANCED MESSAGE-----