0000950112-95-002366.txt : 19950914 0000950112-95-002366.hdr.sgml : 19950914 ACCESSION NUMBER: 0000950112-95-002366 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950729 FILED AS OF DATE: 19950912 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERMARKETS GENERAL HOLDINGS CORP CENTRAL INDEX KEY: 0000821139 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 133408704 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16404 FILM NUMBER: 95573111 BUSINESS ADDRESS: STREET 1: 301 BLAIR RD STREET 2: P.O. BOX 5301 CITY: WOODBRIDGE STATE: NJ ZIP: 07095-0915 BUSINESS PHONE: 9084993000 MAIL ADDRESS: STREET 1: 301 BLAIR RD STREET 2: P.O. BOX 5301 CITY: WOODBRIDGE STATE: NJ ZIP: 07095-0915 10-Q 1 SUPERMARKETS GENERAL HOLDINGS CORPORATION -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------- FOR THE QUARTER ENDED COMMISSION FILE NUMBER JULY 29, 1995 0-16404 SUPERMARKETS GENERAL HOLDINGS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 13-3408704 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 301 BLAIR ROAD, P. O. BOX 5301 07095-0915 WOODBRIDGE, NEW JERSEY (Zip Code) (Address of principal executive office) 908-499-3000 (Registrant's telephone number, including area code) ------------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: $3.52 CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK (Title of Class) ------------------- 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 -- -- As of July 29, 1995, there were outstanding 650,675 shares of $0.01 par value Class A Common Stock (voting) and 320,000 shares of $0.01 par value Class B Common Stock (non-voting), all of which are privately owned and not traded on a public market. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. SUPERMARKETS GENERAL HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS)
13 WEEKS ENDED 26 WEEKS ENDED ------------------------ ------------------------ JULY 29, JULY 30, JULY 29, JULY 30, 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Sales...................................... $1,024,677 $1,040,645 $2,064,045 $2,073,736 Cost of sales (exclusive of depreciation and amortization shown separately below)................................... 730,222 748,588 1,472,267 1,493,943 ---------- ---------- ---------- ---------- Gross profit............................... 294,455 292,057 591,778 579,793 Selling, general and administrative expenses................................. 233,342 228,683 466,835 464,074 Depreciation and amortization.............. 20,117 18,499 40,096 36,802 ---------- ---------- ---------- ---------- Operating earnings......................... 40,996 44,875 84,847 78,917 Gain on disposition of freestanding drug stores................................... 15,535 -- 15,535 -- Interest expense........................... (43,750) (42,971) (86,920) (84,291) Interest charged to discontinued operations............................... -- 3,680 -- 7,357 ---------- ---------- ---------- ---------- Earnings from continuing operations before income taxes and extraordinary item...... 12,781 5,584 13,462 1,983 Income tax benefit (provision)............. 19,941 (1,450) 19,840 (1,492) ---------- ---------- ---------- ---------- Earnings from continuing operations before extraordinary item....................... 32,722 4,134 33,302 491 Earnings (loss) from discontinued operations............................... -- 2,802 -- (1,903) ---------- ---------- ---------- ---------- Earnings (loss) before extraordinary item..................................... 32,722 6,936 33,302 (1,412) Extraordinary item......................... (675) -- (927) -- ---------- ---------- ---------- ---------- Net earnings (loss)........................ 32,047 6,936 32,375 (1,412) Less: non-cash preferred stock accretion and dividend requirements................ (4,721) (4,705) (9,437) (9,407) ---------- ---------- ---------- ---------- Net earnings (loss) attributable to common stockholder.............................. $ 27,326 $ 2,231 $ 22,938 $ (10,819) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
See notes to consolidated financial statements. 1 SUPERMARKETS GENERAL HOLDINGS CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS EXCEPT SHARE AMOUNTS)
JULY 29, JANUARY 28, 1995 1995 ----------- ----------- ASSETS Current Assets Cash and marketable securities..................................... $ 11,121 $ 23,247 Accounts receivable, net........................................... 12,653 13,380 Merchandise inventories............................................ 232,816 255,631 Income taxes receivable............................................ -- 7,756 Prepaid expenses................................................... 25,229 26,580 Due from suppliers................................................. 16,684 18,256 Other current assets............................................... 20,481 29,541 ----------- ----------- Total Current Assets........................................... 318,984 374,391 Property and Equipment, Net......................................... 588,751 598,801 Deferred Financing Costs, Net....................................... 37,114 40,446 Deferred Income Taxes............................................... 38,996 5,969 Investment in Purity Supreme, Inc. (net of valuation allowance of $24,700 at July 29, 1995 and $24,100 at January 28, 1995).................. -- -- Other Assets........................................................ 25,619 23,951 ----------- ----------- $ 1,009,464 $ 1,043,558 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDER'S DEFICIT Current Liabilities Accounts payable................................................... $ 234,645 $ 239,752 Current maturities of long-term debt............................... 48,303 46,310 Accrued payroll and payroll taxes.................................. 50,551 53,638 Income taxes payable............................................... 9,407 -- Current portion of obligations under capital leases................ 18,681 18,298 Accrued interest payable........................................... 20,855 19,672 Accrued expenses and other current liabilities..................... 97,138 94,630 ----------- ----------- Total Current Liabilities...................................... 479,580 472,300 ----------- ----------- Long-Term Debt...................................................... 1,271,938 1,365,571 ----------- ----------- Obligations Under Capital Leases, Long-Term......................... 127,058 127,122 ----------- ----------- Other Noncurrent Liabilities........................................ 285,467 256,911 ----------- ----------- Redeemable Securities Exchangeable Preferred Stock, $.01 par value....................... 102,788 101,959 Authorized: 9,000,000 shares Issued and outstanding: 4,890,671 shares at July 29, 1995 and January 28, 1995 Liquidation preference, $25 per share: $122,267 at July 29, 1995 and January 28, 1995 ----------- ----------- Total Redeemable Securities.................................... 102,788 101,959 ----------- ----------- Commitments and Contingencies (Note 13) Stockholder's Deficit Class A Common Stock, $.01 par value............................... 7 7 Authorized: 1,075,000 shares Issued and outstanding: 650,675 shares at July 29, 1995 and January 28, 1995 Class B Common Stock, $.01 par value............................... 3 3 Authorized: 1,000,000 shares Issued and outstanding: 320,000 shares at July 29, 1995 and January 28, 1995 Paid-in Capital.................................................... 198,306 199,135 Accumulated Deficit................................................ (1,455,683) (1,479,450) ----------- ----------- Total Stockholder's Deficit.................................... (1,257,367) (1,280,305) ----------- ----------- $ 1,009,464 $ 1,043,558 ----------- ----------- ----------- -----------
See notes to consolidated financial statements. 2 SUPERMARKETS GENERAL HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT (UNAUDITED) (IN THOUSANDS EXCEPT SHARE AMOUNTS)
CLASS A CLASS B TOTAL COMMON COMMON PAID-IN ACCUMULATED STOCKHOLDER'S STOCK STOCK CAPITAL DEFICIT DEFICIT ------- ------- -------- ----------- ------------- Balance at January 28, 1995................. $ 7 $ 3 $199,135 $(1,479,450) $ (1,280,305) Net income................................ -- -- -- 32,375 32,375 Accrued dividends on preferred stock ($.88 per share per quarter).................. -- -- -- (8,608) (8,608) Accretion on preferred stock.............. -- -- (829) -- (829) ------- ------- -------- ----------- ------------- Balance July 29, 1995....................... $ 7 $ 3 $198,306 $(1,455,683) $ (1,257,367) ------- ------- -------- ----------- ------------- ------- ------- -------- ----------- ------------- Balance, January 29, 1994................... $ 7 $ 3 $200,748 $(1,485,468) $ (1,284,710) Net loss.................................. -- -- -- (1,412) (1,412) Accrued dividends on preferred stock ($.88 per share per quarter).................. -- -- -- (8,608) (8,608) Accretion on preferred stock.............. -- -- (799) -- (799) ------- ------- -------- ----------- ------------- Balance July 30, 1994....................... $ 7 $ 3 $199,949 $(1,495,488) $ (1,295,529) ------- ------- -------- ----------- ------------- ------- ------- -------- ----------- -------------
See notes to consolidated financial statements. 3 SUPERMARKETS GENERAL HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
26 WEEKS ENDED -------------------- JULY 29, JULY 30, 1995 1994 -------- -------- Operating Activities Net earnings (loss).................................................. $ 32,375 $ (1,412) Adjustments to reconcile net earnings (loss) to net cash provided by operating activities Depreciation and amortization.................................... 41,396 38,096 Deferred income tax benefit...................................... (36,538) (893) Gain on disposition of freestanding drug stores.................. (15,535) -- Extraordinary item............................................... 927 -- Interest accrued but not payable................................. 7,318 6,594 Amortization of original issue discount.......................... 4,192 6,987 Amortization of debt issuance costs.............................. 3,558 3,434 Gain on disposal of property and equipment....................... (42) (130) Loss from discontinued operations................................ -- 1,903 Cash provided by (used for) operating assets and liabilities Accounts receivable, net....................................... 727 1,300 Merchandise inventories........................................ 8,393 (4,773) Income taxes................................................... 17,629 22,716 Prepaid expenses............................................... 51 (4,942) Due from suppliers............................................. 1,572 3,457 Other current assets........................................... 4,353 (2,763) Other assets................................................... (1,849) 6,490 Accounts payable............................................... (5,107) (21,520) Accrued payroll and payroll taxes.............................. (3,087) (7,727) Accrued interest payable....................................... 1,183 404 Accrued expenses and other current liabilities................. (4,681) 21,530 Other noncurrent liabilities................................... 4,932 (8,345) -------- -------- Cash provided by operating activities........................ 61,767 60,406 -------- -------- Investing Activities Property and equipment expenditures.................................. (26,430) (31,233) Proceeds from disposition of property and equipment.................. 717 668 Proceeds from disposition of home centers segment.................... 4,706 -- Proceeds from disposition of freestanding drug stores................ 60,521 -- -------- -------- Cash provided by (used for) investing activities............. 39,514 (30,565) -------- -------- Financing Activities Increase (decrease) in Working Capital Facilities borrowings......... (34,000) 500 Decrease in Pathmark Term Loan....................................... (42,500) (17,500) Repayment of PTK Exchangeable Guaranteed Debentures.................. (25,113) -- Premiums incurred in redemption of PTK Exchangeable Guaranteed Debentures......................................................... (1,392) -- Increase in other borrowings......................................... 808 898 Repayment of other long-term borrowings.............................. (2,346) (2,004) Reduction in obligations under capital leases........................ (8,864) (8,763) -------- -------- Cash used for financing activities........................... (113,407) (26,869) -------- -------- Increase (decrease) in cash and marketable securities.................. (12,126) 2,972 Cash and marketable securities at beginning of period.................. 23,247 6,168 -------- -------- Cash and marketable securities at end of period........................ $ 11,121 $ 9,140 -------- -------- -------- --------
See notes to consolidated financial statements. 4 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1--ORGANIZATION AND BASIS OF PRESENTATION On February 4, 1991, Supermarkets General Holdings Corporation (the "Company" or "Holdings"), through the consummation of an exchange offer (the "Exchange Offer") pursuant to which the then existing common stockholders exchanged on a one-for-one basis shares of the Company's common stock for shares of common stock of SMG-II Holdings Corporation ("SMG-II"), became a wholly owned subsidiary of SMG-II. As a result of the Exchange Offer, SMG-II owns all of the Company's common stock and is effectively a holding company for the operations of the Company. The holders of SMG-II's common stock include certain limited partnerships controlled directly or indirectly by Merrill Lynch Capital Partners, Inc., together with certain indirectly wholly owned subsidiaries of Merrill Lynch & Co., Inc., certain members of the Company's management, CBC Capital Partners, Inc. and the Equitable Life Assurance Society of the United States and certain of its affiliates. Pathmark Stores, Inc. ("Pathmark") and Plainbridge, Inc. ("Plainbridge") are wholly owned subsidiaries of PTK Holdings, Inc. ("PTK"), which is a wholly owned subsidiary of the Company. The results from discontinued operations represent the operations of the Company's home centers segment which was sold during Fiscal 1994 (see Note 2). At the time of a recapitalization in Fiscal 1993, Holdings intended to further spin off Plainbridge to Holdings' common stockholder. Such further spin-off would have required the satisfaction of dividend restrictions with respect to Holdings' Exchangeable Preferred Stock, as well as, obtaining consents from various lenders to Plainbridge and PTK. During the fourth quarter of Fiscal 1994, as a result of the aforementioned dividend restrictions, Holdings concluded that a further spin-off of Plainbridge to Holdings' common stockholder is not likely to occur. Accordingly, prior year financial statements which had included the results of Plainbridge's warehouse, transportation and real estate operations as discontinued operations have been reclassified to include such results in continuing operations. The consolidated financial statements included herein reflect all adjustments which, in the opinion of management, are of a normal and recurring nature and are necessary to present fairly the results of operations and financial position of the Company and have been prepared in accordance with the same accounting principles followed in the presentation of the Company's annual financial statements for the year ended January 28, 1995. The report should be read in conjunction with the Company's Form 10-K Annual Report for the year ended January 28, 1995, Notes to Consolidated Financial Statements. The accompanying consolidated financial statements of the Company indicate that at July 29, 1995 current liabilities exceed its current assets by $160.6 million and the Company's stockholder's deficit approximates $1.3 billion. Management believes that cash flows generated from operations supplemented by the unused borrowing capacity under the Pathmark and Plainbridge Working Capital Facilities and the availability of capital lease financing will be sufficient to pay the Company's debts as they come due, provide for its capital expenditure program and meet its seasonal cash requirements. Further, the Company believes it will continue to be in compliance with its various debt covenants. Since the Company is a wholly owned subsidiary, earnings (loss) per share information is not presented. NOTE 2--DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEM On November 4, 1994, the Company's Plainbridge subsidiary completed the sale of its home centers segment for approximately $88.7 million in cash, plus the assumption of certain indebtedness. The Company used net cash proceeds of $66.6 million in Fiscal 1994 and $4.7 million in the first quarter 5 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 2--DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEM--(CONTINUED) of Fiscal 1995 to pay down the PTK DIBs, including accrued interest and debt premium. The debt premium paid, including original issue discount, resulted in a net loss on early extinguishment of debt of $0.3 million in the first quarter of Fiscal 1995. As of the date of sale, the net assets of the home centers segment were as follows (dollars in thousands): Current assets................................................................... $ 67,713 Property and equipment........................................................... 60,062 Other assets..................................................................... 3,244 -------- Total assets..................................................................... 131,019 -------- Current liabilities.............................................................. 39,841 Noncurrent liabilities........................................................... 22,219 -------- Total liabilities................................................................ 62,060 -------- Net assets....................................................................... $ 68,959 -------- --------
Through the date of sale, the Company reported the home center segment as discontinued operations. Operating results of such discontinued operations were as follows (dollars in thousands):
13 WEEKS 26 WEEKS ENDED ENDED JULY 30, JULY 30, 1994 1994 -------- -------- Sales.................................................................. $107,118 $182,577 -------- -------- -------- -------- Earnings (Loss) before income taxes(a)................................. $ 2,802 $ (1,903) Income tax provision................................................... -- -- -------- -------- Net earnings (loss) from discontinued operations....................... $ 2,802 $ (1,903) -------- -------- -------- --------
------------ (a) The Company charged the home centers segment interest expense relating to a proportionate share of certain borrowings. These charges amounted to $3.7 million and $7.4 million for the second quarter and the first six-month period of Fiscal 1994, respectively and are included in the results of the discontinued operations.
NOTE 3--DISPOSITION OF FREESTANDING DRUG STORES During the second quarter of Fiscal 1995, the Company made a decision to dispose of its 36 freestanding drug stores. On July 28, 1995, the Company, through its Pathmark subsidiary, completed the sale of 30 of its freestanding drug stores to Rite Aid Corporation for $60.5 million, subject to any final purchase price adjustments. Pathmark used $25.0 million of the proceeds to repay a portion of its existing Term Loan and paid a dividend of $21.8 million to PTK, as permitted by the indentures governing its debt instruments, in order for PTK to repay a portion of its outstanding debt. The remaining proceeds, which were applied against the Pathmark Working Capital Facility, will be used to pay income taxes and expenses related to the sale. The Company recorded a pretax gain on the disposition of its freestanding drug stores of $15.5 million, net of a $19.0 million charge related to the estimated exit costs of the remaining six freestanding drug stores. Pathmark expects to dispose of the remaining six freestanding drug stores during the year. 6 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 4--MERCHANDISE INVENTORIES Merchandise inventories are comprised of the following (dollars in thousands):
JULY 29, JANUARY 28, 1995 1995 -------- ----------- Merchandise inventories at FIFO cost............................... $276,237 $ 298,812 Less LIFO reserve.................................................. 43,421 43,181 -------- ----------- Merchandise inventories at LIFO cost............................... $232,816 $ 255,631 -------- ----------- -------- -----------
The reduction in merchandise inventory at July 29, 1995 compared to January 28, 1995 is due primarily to the sale of the freestanding drug stores. NOTE 5--OTHER CURRENT ASSETS The reduction in other current assets at July 29, 1995 compared to January 28, 1995 is primarily due to a reduction in assets held for sale in the normal course of business. NOTE 6--PROPERTY AND EQUIPMENT Property and equipment are comprised of the following (dollars in thousands):
JULY 29, JANUARY 28, 1995 1995 -------- ----------- Land.................................................................. $ 65,274 $ 65,142 Buildings and building improvements................................... 208,464 201,553 Fixtures and equipment................................................ 203,051 200,015 Leasehold costs and improvements...................................... 269,747 268,165 Transportation equipment.............................................. 19,078 19,828 -------- ----------- Property and equipment, owned......................................... 765,614 754,703 Property and equipment under capital leases........................... 172,284 173,175 -------- ----------- Property and equipment, at cost....................................... 937,898 927,878 Less accumulated depreciation and amortization........................ 349,147 329,077 -------- ----------- Property and equipment, net........................................... $588,751 $ 598,801 -------- ----------- -------- -----------
NOTE 7--LONG-TERM DEBT Long-term debt is comprised of the following (dollars in thousands):
JULY 29, JANUARY 28, 1995 1995 ---------- ----------- Pathmark Term Loan................................................. $ 305,750 $ 348,250 Pathmark Working Capital Facility.................................. 29,000 63,000 10.25% PTK Exchangeable Guaranteed Debentures due 2003............. 58,160 79,257 9.625% Pathmark Senior Subordinated Notes due 2003................. 437,249 437,072 10.75% Pathmark Deferred Coupon Notes due 2003..................... 144,171 136,853 12.625% Pathmark Subordinated Debentures due 2002.................. 95,750 95,750 11.625% Pathmark Subordinated Notes due 2002....................... 199,017 199,017 11.625% Holdings Subordinated Notes due 2002....................... 983 983 Industrial Revenue Bonds........................................... 6,375 6,375 Other Debt (primarily mortgages)................................... 43,786 45,324 ---------- ----------- Total debt......................................................... 1,320,241 1,411,881 Less current maturities............................................ 48,303 46,310 ---------- ----------- Long-term portion.................................................. $1,271,938 $ 1,365,571 ---------- ----------- ---------- -----------
7 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 8--INTEREST EXPENSE Interest expense is comprised of the following (dollars in thousands):
13 WEEKS ENDED 26 WEEKS ENDED -------------------- -------------------- JULY 29, JULY 30, JULY 29, JULY 30, 1995 1994 1995 1994 -------- -------- -------- -------- Pathmark Term Loan.................................... $ 7,730 $ 6,654 $ 15,655 $ 12,550 Pathmark Working Capital Facility..................... 1,669 1,378 2,938 1,908 Plainbridge Working Capital Facility.................. 21 97 42 371 Pathmark Senior Subordinated Notes Amortization of original issue discount............. 88 88 176 176 Currently payable................................... 10,588 10,588 21,176 21,176 Pathmark Deferred Coupon Notes Accrued but not payable............................. 3,707 3,340 7,318 6,594 Pathmark Subordinated Debentures...................... 3,022 3,022 6,044 6,044 Pathmark Subordinated Notes........................... 5,812 5,812 11,625 11,625 Amortization of PTK DIBs original issue discount...... 1,940 3,412 4,016 6,811 Amortization of debt issuance costs................... 1,779 1,717 3,558 3,434 Obligations under capital leases...................... 4,037 3,865 8,084 7,759 Other, net............................................ 3,357 2,998 6,288 5,843 -------- -------- -------- -------- Interest expense...................................... $ 43,750 $ 42,971 $ 86,920 $ 84,291 -------- -------- -------- -------- -------- -------- -------- --------
The Company made cash interest payments of $53.0 million and $52.0 million during the second quarters of Fiscal 1995 and Fiscal 1994, respectively, and $67.0 million and $64.0 million during the first six-month periods of Fiscal 1995 and 1994, respectively. The majority of the cash interest payments are scheduled in the second and fourth quarters. NOTE 9--LEASES The Company incurred capital lease obligations of $10.6 million and $4.5 million during the first six-month periods of Fiscal 1995 and Fiscal 1994, respectively, in connection with lease agreements to acquire property and equipment. NOTE 10--RELATED PARTY TRANSACTIONS During Fiscal 1993, Pathmark and Plainbridge entered into related party agreements and transactions. Refer to the Company's Form 10-K Annual Report for the year ended January 28, 1995, Notes to the Consolidated Financial Statements, for a more detailed description of such agreements. These related party agreements and transactions are summarized as follows: 1) Spin-Off A) Services Agreements: Pathmark, Plainbridge and the Company are parties to agreements pursuant to which Pathmark continues to provide certain administrative services relating to the warehouse and distribution operations of Plainbridge and certain administrative services to Chefmark. Such services include, among other things, legal, human resources, data processing, insurance, accounting, tax, treasury and property management services. Each of the agreements have an initial term of five years, with renewal options at the end of such term. The cost of the services charged to Plainbridge and Chefmark under these agreements in the aggregate was approximately $3.0 million and $6.0 million during the second quarter and the first six-month period of Fiscal 1995, respectively, and $3.6 million and $7.0 million during the second quarter and the first six-month period of Fiscal 1994, respectively. 8 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 10--RELATED PARTY TRANSACTIONS--(CONTINUED) B) The Logistical Services Agreements: Under the Logistical Services Agreement, Plainbridge supplies Pathmark most of the merchandise sold in Pathmark's retail stores and for the provision of warehousing, distribution and other logistical services relating to the supply of such merchandise. The cost of fees paid by Pathmark to Plainbridge related to the Logistical Services Agreement in the aggregate was approximately $31.9 million and $65.4 million during the second quarter and first six-month period of Fiscal 1995, respectively, and $33.9 million and $69.1 million during the second quarter and first six-month period of Fiscal 1994, respectively. Pathmark also received an allowance of approximately $5.9 million and $12.0 million during the second quarter and first six-month period of Fiscal 1995, respectively, and $6.3 million and $12.6 million during the second quarter and first six-month period of Fiscal 1994, respectively, based on the amount of merchandise purchased by Plainbridge at Pathmark's direction. Pursuant to the Logistical Services Agreement, Pathmark directs the purchase of the merchandise to be provided to it by Plainbridge. Pathmark negotiates directly with vendors regarding the types of merchandise required, the quantities needed, the delivery schedules, the pricing, and all the other terms and conditions of sale. All merchandise is ordered by Pathmark for the account of Plainbridge, which will pay for and will retain title to such merchandise until it has been delivered to Pathmark. If requested by a vendor, Pathmark in its sole discretion, may guarantee payment of such orders by Plainbridge. Pathmark guaranteed approximately $27.8 million of such merchandise purchases by Plainbridge at July 29, 1995. 2) Other: In conjunction with the Plainbridge Spin-Off, certain real property was transferred to Plainbridge and is being leased to Pathmark at rentals which the Company believes approximate fair value. During each of the second quarters and the first six-month periods of Fiscal 1995 and Fiscal 1994, such rentals amounted to $1.1 million and $2.2 million, respectively. Certain management investors issued recourse notes to the Company related to the purchase of the Company's Class A common stock. These management investors have pledged shares of SMG-II Class A common stock to secure the repayment of the recourse notes. Recourse notes in the amount of $1.7 million were outstanding at July 29, 1995 and January 28, 1995. NOTE 11--CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK Exchangeable Preferred Stock activity during the first six-month period of Fiscal 1995 was as follows (dollars in thousands): NUMBER OF SHARES AMOUNT --------- -------- Balance, January 28, 1995............................... 4,890,671 $101,959 Accretion on preferred stock............................ -- 829 --------- -------- Balance, July 29, 1995.................................. 4,890,671 $102,788 --------- -------- --------- -------- The terms of the Exchangeable Preferred Stock provide for cumulative quarterly dividends at an annual rate of $3.52 per share when, as, and if declared by the Board of Directors of the Company. Dividends for the first 20 quarterly dividend periods (through October 15, 1992) were paid at the Company's option in additional shares of Exchangeable Preferred Stock since the Company did not meet the conditions permitting cash dividend payments on the Exchangeable Preferred Stock. Holdings does not expect to receive cash flow sufficient to permit payments of dividends on the Exchangeable Preferred Stock in the foreseeable future. All dividends not paid in cash will cumulate at the rate of 9 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 11--CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK--(CONTINUED) $3.52 per share per annum, without interest, until declared and paid. As such, at July 29, 1995, the unpaid dividends of $47.3 million were accrued and included in other noncurrent liabilities. Pursuant to the Certificate of Stock Designation for the Exchangeable Preferred Stock (the "Certificate of Designation"), the Company was required to pay cash dividends to the Exchangeable Preferred Stockholders at an annual rate of $3.52 per share beginning on January 15, 1993. The Certificate of Designation provides that the Exchangeable Preferred Stock is non-voting except that if an amount equal to six quarterly dividends is in arrears in whole, or in part, the Exchangeable Preferred Stockholders voting as a class are entitled to elect an additional two members to the Board of Directors of the Company. The Company is currently in arrears on the payment of ten quarterly dividends. Accordingly, the Exchangeable Preferred Stockholders at a stockholders' meeting held on June 8, 1995, elected two members to the Company's Board of Directors. NOTE 12--INCOME TAXES Income taxes for the interim period are based on the estimated effective tax rate expected to be applicable for the full fiscal year. At July 29, 1995, the Company reversed the valuation allowance related to its net deferred income tax assets. This reversal of $20.3 million, along with the benefit recognized during the first six-month period of Fiscal 1995 of $5.5 million related to taxable income generated during such period, have been included as components of the income tax benefit and totalled $25.8 million. The reversal at the end of the period was recorded in conjunction with the Company's continuing evaluation of its deferred income tax assets. In the opinion of management, sufficient evidence now exists, such as the positive trend in earnings for the last seven quarters and the income generated from the disposition of the freestanding drug stores, which indicates that it is more likely than not that the Company will be able to realize its deferred income tax assets. At July 29, 1995, net deferred income tax assets of $39.0 million consisted principally of alternative minimum tax credit carryforwards and temporary book/tax basis differences. The income tax provision for the first six-month period of Fiscal 1994 is net of an increase in deferred income tax assets and related valuation allowance of $1.3 million due to additional net operating loss carryforwards. During the first six-month period of Fiscal 1995, the Company made income tax payments of $1.4 million and received income tax refunds of $8.0 million. During the first six-month period of Fiscal 1994, the Company made income tax payments of $0.5 million and received income tax refunds of $23.2 million. NOTE 13--CONTINGENCIES The Company is contingently liable for certain obligations of Purity Supreme, Inc. ("Purity"), a former subsidiary, primarily consisting of approximately 60 leases for real property, in the event of default thereunder by the purchaser of Purity. As of January 28, 1995, the estimated present value of such lease obligations approximated $109.5 million. The Company is also contingently liable for a loan guarantee of approximately $1.0 million at July 29, 1995. The Company is contingently liable for certain obligations of Rickel Home Centers, Inc. ("Rickel"), a former subsidiary, primarily consisting of 19 leases for real property, in the event of default thereunder by the purchaser of Rickel. As of January 28, 1995, the estimated present value of such lease obligations approximated $27.6 million. The Company is a party to a number of legal proceedings in the ordinary course of business. Management believes that the ultimate resolution of these proceedings will not, in the aggregate, have a material adverse impact on the financial condition, results of operations or business of the Company. 10 SUPERMARKETS GENERAL HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) NOTE 14--INVESTMENT IN PURITY SUPREME, INC. On April 24, 1995, a strategic buyer announced its plans to purchase Purity, subject to completion of regulatory approval and compliance with terms and conditions of the purchase agreement. The sale is expected to close later in 1995, with the Company expecting to receive approximately $16 million based upon the announced price. Until the proposed transaction is consummated, no adjustment will be made to the valuation allowance related to the securities representing the Company's investment in Purity. Further, based on the announced price, if the proposed transaction is consummated, a capital tax loss carryforward of approximately $70 million will be generated. The benefit of such capital tax loss carryforward will only be realized to the extent the Company generates capital gains. 11 SUPERMARKETS GENERAL HOLDINGS CORPORATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of the Company's financial condition and results from continuing operations. The results from discontinued operations for all periods presented represent the operations of the Company's home centers segment which was sold during Fiscal 1994. At the time of a recapitalization in Fiscal 1993, Holdings intended to further spin off Plainbridge to Holdings' common stockholder. Such further spin-off would have required the satisfaction of dividend restrictions with respect to Holdings' Exchangeable Preferred Stock, as well as, obtaining consents from various lenders to Plainbridge and PTK. During the fourth quarter of Fiscal 1994, as a result of the aforementioned dividend restrictions, Holdings has concluded that a further spin-off of Plainbridge to Holdings' common stockholder is not likely to occur. Accordingly, prior year financial statements which had included the results of Plainbridge's warehouse, transportation and real estate operations as discontinued operations have been reclassified to include such results in continuing operations. RESULTS OF OPERATIONS Sales: Sales for the second quarter of Fiscal 1995 were $1.025 billion compared to $1.041 billion in the prior-year period. Sales from supermarkets open in both second quarter periods, including replacement stores, decreased 1.2%. Sales for the first six-month period of Fiscal 1995 were $2.064 billion compared to $2.074 billion in the prior year period. Sales from supermarkets opened in both six-month periods, including replacement stores, decreased 0.2%. At quarter end, the Company operated 142 supermarkets, including 33 Pathmark 2000 format stores compared with the end of Fiscal 1994 when the Company operated 143 supermarkets, including 29 Pathmark 2000 format stores. The Company also operated six freestanding drug stores at quarter end compared to 36 freestanding drug stores at the end of Fiscal 1994 (see "Disposition of Freestanding Drug Stores"). In order to improve sales and profitability, the Company is continuing to focus on its supermarket enlargement and renovation program. Gross Profit: Gross profit for the second quarter of Fiscal 1995 was $294.5 million or 28.7% of sales compared with $292.1 million or 28.1% of sales for the second quarter of Fiscal 1994 and for the first six-month period of Fiscal 1995 was $591.8 million or 28.7% of sales compared with $579.8 million or 27.9% for the prior year period. This improvement in gross profit as a percentage of sales is primarily due to lower inventory shrink, increased focus on merchandising programs as well as to the Company's continuing emphasis on the Pathmark 2000 format stores which allow expanded variety in all departments, particularly higher margin perishables. The cost of goods sold comparisons were affected by a pretax LIFO charge of $0.5 million for the second quarter of Fiscal 1995, compared with a pretax LIFO charge of $0.8 million for the prior-year period and a pretax LIFO charge of $1.3 million for the first six-month period of Fiscal 1995 compared with a pretax LIFO charge of $1.6 million for the prior year period. Selling, General and Administrative Expenses: Selling, general and administrative expenses for the second quarter of Fiscal 1995 increased $4.7 million or 2.0% compared to the prior-year period and increased $2.8 million or 0.6% for the first six-month period of Fiscal 1995 compared with the prior year period. As a percentage of sales, selling, general and administrative expenses were 22.8% for the second quarter of Fiscal 1995, up from 22.0% in the prior-year period and were 22.6% for the first six-month period of Fiscal 1995 up from 22.4% for the prior year period. The increase as a percentage of sales in the second quarter and first six-month period compared to the prior-year period was due to higher claims expenses, occupancy costs and supplies partially offset by lower promotional costs and labor and labor related expenses along with weather related expenses that adversely affected last year's first quarter. 12 Depreciation and Amortization: Depreciation and amortization of $20.1 million for the second quarter of Fiscal 1995 was $1.6 million higher than the prior-year period of $18.5 million. For the first six-month period of Fiscal 1995, depreciation and amortization of $40.1 million was $3.3 higher than the prior-year period of $36.8 million. The increase in depreciation and amortization expense for the second quarter and six-month period of Fiscal 1995 compared to the prior-year periods was primarily due to capital expenditures. Depreciation and amortization excludes video tape amortization, which is recorded in cost of goods sold, of $0.65 million and $1.3 million in each of the second quarters and first six-month periods of Fiscal 1995 and Fiscal 1994, respectively. Operating Earnings: Operating earnings for the second quarter of Fiscal 1995 were $41.0 million compared with the prior-year period of $44.9 million. For the first six-month period of Fiscal 1995, operating earnings were $84.8 million compared with $78.9 million for the prior-year period. The decrease in operating earnings during the second quarter of Fiscal 1995 compared to the prior year period was primarily due to higher operating expenses partially offset by improved gross profit. The increase in operating earnings for the first six-month period of Fiscal 1995 compared to the prior-year period was due to higher gross profit partially offset by higher operating expenses. Disposition of Freestanding Drug Stores: During the second quarter of Fiscal 1995, the Company made a decision to dispose of its 36 freestanding drug stores. On July 28, 1995, the Company, through its Pathmark subsidiary, completed the sale of 30 of its freestanding drug stores to Rite Aid Corporation for $60.5 million, subject to any final purchase price adjustments. Pathmark used $25.0 million of the proceeds to repay a portion of its existing Term Loan and paid a dividend of $21.8 million to PTK, as permitted by the indentures governing its debt instruments, in order for PTK to repay a portion of its outstanding debt. The remaining proceeds, which were applied against the Pathmark Working Capital Facility, will be used to pay income taxes and expenses related to the sale. The Company recorded a pretax gain on the disposition of its freestanding drug stores of $15.5 million, net of a $19.0 million charge related to the estimated exit costs of the remaining six freestanding drug stores. Pathmark expects to dispose of the remaining six freestanding drug stores during the year. Interest Expense: Interest expense of $43.8 million for the second quarter of Fiscal 1995 was $0.8 million more than the prior-year period of $43.0 million and for the first six-month period of Fiscal 1995 was $2.6 million more than the prior-year period of $84.3 million. The increase was primarily due to the higher interest rates on the Company's floating rate bank debt and higher average borrowings under the Pathmark Working Capital Facility. Income Taxes: Income taxes are based on the estimated effective tax rate expected to be applicable for the full fiscal year. At July 29, 1995, the Company reversed the valuation allowance related to its net deferred income tax assets. This reversal of $20.3 million, along with the benefit recognized during the second quarter of Fiscal 1995 of $5.2 million related to taxable income generated during such period, have been included as components of the income tax benefit and totalled $25.5 million. The reversal at the end of the period was recorded in conjunction with the Company's continuing evaluation of its deferred income tax assets. In the opinion of management, sufficient evidence now exists, such as the positive trend in earnings for the last seven quarters and the income generated from the disposition of the freestanding drug stores, which indicates that it is more likely than not that the Company will be able to realize its deferred income tax assets. The income tax provision of $1.5 million for the second quarter of Fiscal 13 1994 is net of a reduction in the net deferred income tax asset and related valuation allowance of $2.1 million due to utilization of the net operating loss carryforwards. The income tax benefit for the first six-month period of Fiscal 1995 was $19.8 million which includes a reversal of the valuation allowance related to its net deferred income tax assets of $20.0 million, compared to an income tax provision of $1.5 million for the prior-year period. During the first six-month period of Fiscal 1995, the Company made income tax payments of $1.4 million and received income tax refunds of $8.0 million. During the first six-month period of Fiscal 1994, the Company made income tax payments of $.05 million and received income tax refunds of $23.2 million. Summary of Operations: For the second quarter of Fiscal 1995, the Company's earnings from continuing operations before extraordinary items were $32.7 million compared to earnings of $4.1 million for the prior-year period. For the first six-month period of Fiscal 1995, the Company's earnings from continuing operations before extraordinary items were $33.3 million compared to earnings of $0.5 for the prior-year period. The increase in earnings is primarily due to the increased operating earnings, the gain on disposition of freestanding drug stores and the tax benefit due to the reversal of the valuation allowance related to the Company's net deferred income tax assets. Extraordinary Item: During the second quarter of Fiscal 1995 in connection with the proceeds received related to the sale of 30 of its freestanding drug stores, the Company was required to paydown $21.8 million of PTK DIBs; the premium paid, including original issue discount, resulted in a net loss on early extinguishment of debt of $0.7 million. During the first quarter of Fiscal 1995, in connection with the proceeds received related to the disposition of the home centers segment, the Company was required to paydown $4.7 million of PTK DIBs; the premium paid, including original issue discount, resulted in a net loss on early extinguishment of debt of $0.2 million. FINANCIAL CONDITION Debt Service: During the first six-month period of Fiscal 1995, total debt decreased $91.6 million from Fiscal 1994 year end primarily due to the scheduled Term Loan repayments and a required Term Loan repayment in conjunction with the disposition of the freestanding drug stores, a decrease in borrowings under the Pathmark Working Capital Facility as well as the required paydown of the PTK DIB's with the disposition of freestanding drug stores and home center disposal proceeds, partially offset by debt accretion on Pathmark Deferred Coupon Notes and PTK DIBs. Borrowings under the Pathmark Working Capital Facility were $29.0 million at July 29, 1995 and have decreased to $26.0 million at September 6, 1995. There were no outstanding borrowings under the Plainbridge Working Capital Facility at July 29, 1995 and September 6, 1995. Under the Pathmark Working Capital Facility, which expires in Fiscal 1998, Pathmark can borrow or obtain letters of credit in an aggregate amount not to exceed $175.0 million (of which the maximum of $100.0 million can be in letters of credit) subject to an annual cleandown provision. Under the terms of the Pathmark cleandown provision, in each fiscal year loans cannot exceed $50.0 million under the Pathmark Working Capital Facility for a period of 30 consecutive days. Pathmark satisfied the terms of the Fiscal 1995 cleandown provision during the first quarter. Under the Plainbridge Working Capital Facility, which expires in Fiscal 1997, Plainbridge can borrow or obtain letters of credit in an aggregate amount not to exceed $40.0 million (of which the maximum of $30.0 million can be in letters of credit). The indebtedness under the Pathmark and Plainbridge Working Capital Facilities and the Pathmark Term Loan bear interest at floating rates. To the extent that certain indebtedness of the 14 Company bears interest at floating rates, cash interest payments on that indebtedness may vary in future years. The Company does not currently maintain any interest rate hedging arrangements due to the reasonable risk that near term interest rates will not rise significantly. The Company is continuously evaluating this risk and will implement interest rate hedging arrangements if deemed appropriate. The majority of the cash interest payments are scheduled in the second and fourth quarters. The amount of principal payments required each year on outstanding long-term debt (excluding the original issue discount with respect to the Pathmark Deferred Coupon Notes and the PTK DIBs) are as follows (dollars in millions): PRINCIPAL FISCAL YEARS PAYMENTS ---------------------------------------------------------- ------------------ 1995(a)................................................. $ 27.9 1996.................................................... 48.0 1997.................................................... 58.1 1998.................................................... 135.5 1999.................................................... 113.7 2000.................................................... 50.6 2001.................................................... 50.0 2002.................................................... 195.8 2003.................................................... 640.4 ------------ (a) Subsequent to July 29, 1995 Liquidity: The consolidated financial statements of the Company indicate that at July 29, 1995, current liabilities exceed its current assets by $160.6 million and the Company's stockholder's deficit approximates $1.3 billion. Management believes that cash flows generated from operations, supplemented by the unused borrowing capacity under the Pathmark and Plainbridge Working Capital Facilities and the availability of capital lease financing will be sufficient to pay the Company's debts as they come due, provide for its capital expenditure program and meet its seasonal cash requirements. Further, the Company believes it will continue to be in compliance with its various debt covenants, which include certain levels of operating cash flow (as defined), minimum interest coverage and a maximum leverage ratio. Holdings believes that it will be able to make the scheduled payments or refinance its obligations with respect to its indebtedness through a combination of operating funds and the Company's borrowing facilities. Future refinancing may be necessary if cash flow from operations is not sufficient to meet its debt service requirements related to the maturity of the Plainbridge Working Capital Facility in Fiscal 1997, the maturity of the Pathmark Working Capital Facility and certain mortgages in Fiscal 1998, the amortization and subsequent maturity of the Pathmark Term Loan in Fiscal 1999 and the maturity of the Pathmark Subordinated Notes and Pathmark Subordinated Debentures in Fiscal 2002. The Company expects that it will be necessary to refinance all or a portion of the Pathmark Senior Subordinated Notes, the Pathmark Deferred Coupon Notes and the PTK DIBs due in Fiscal 2003. The Company may undertake a refinancing of some or all of such indebtedness sometime prior to its maturity. The Company's ability to make scheduled payments or to refinance its obligations with respect to its indebtedness depends on its financial and operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors beyond its control. Although the Company's cash flow from its operations and borrowings has been sufficient to meet its debt service obligations, there can be no assurance that the Company's operating results will continue to be sufficient or that future borrowing facilities will be available for payment or refinancing of Pathmark's and PTK's indebtedness or that future borrowing facilities will be available. While it is the Company's intention to enter into refinancings that it considers advantageous, there can be no assurances that the prevailing market conditions will be favorable to the Company. In the event the Company obtains any future refinancing on less than favorable terms, the holders of outstanding 15 indebtedness could experience increased credit risk and could experience a decrease in the market value of their investment, because the Company might be forced to operate under terms that would restrict its operations and might find its cash flow reduced. Preferred Stock Dividends: The terms of the Exchangeable Preferred Stock provide for cumulative quarterly dividends at an annual rate of $3.52 per share when, as, and if declared by the Board of Directors of the Company. Dividends for the first 20 quarterly dividend periods (through October 15, 1992) were paid at the Company's option in additional shares of Exchangeable Preferred Stock. Since January 15, 1993, all dividends not paid in cash will cumulate at the rate of $3.52 per share per annum, without interest, until declared and paid. As such, at July 29, 1995, the unpaid dividends of $47.3 million were accrued and included in other noncurrent liabilities. Capital Expenditures: Capital expenditures for the second quarter of Fiscal 1995, including property acquired under capital leases, were approximately $20.1 million compared to approximately $17.7 million for the prior-year period and for the first six-month period of Fiscal 1995, including property acquired under capital leases, were approximately $35.7 million compared to $30.9 million for the prior year period. During the first six-month period of Fiscal 1995, the Company completed six major renovations to existing supermarkets. During the remainder of Fiscal 1995, the Company plans to open up to six new Pathmark 2000 format stores, four of which will replace smaller stores, and plans to complete up to 16 major renovations and enlargements. Cash Flows: Net cash provided by operating activities amounted to $61.8 million in the first six-month period of Fiscal 1995 compared to $60.4 million in the prior-year period. The increase in net cash provided by operating activities is primarily due to an increase in net earnings and an improvement in cash provided by operating assets and liabilities, partially offset by the deferred income tax benefit. Cash provided by investing activities in the first six-month period of Fiscal 1995 was $39.5 million, primarily due to the net proceeds from the disposition of the freestanding drug stores and the proceeds of $4.7 million related to the disposition of the home centers segment, partially offset by expenditures of property and equipment, compared to cash used for investing activities of $30.6 million in the first six-month period of Fiscal 1994, primarily reflecting the expenditures for property and equipment. Cash used for financing activities in the first six-month period of Fiscal 1995 was $113.4 million compared to $26.9 million in the prior-year period. The increase in cash used for financing activities is primarily due to a decrease in borrowings under the Working Capital Facilities and a paydown of $25.0 million on the Pathmark Term Loan as well as a paydown of $25.1 million on the PTK DIBs from the net proceeds of the disposition of the freestanding drug stores and from the net proceeds of the disposition of the home centers segment in Fiscal 1995. Investment in Purity Supreme, Inc.: On April 24, 1995, a strategic buyer announced its plans to purchase Purity, subject to completion of regulatory approval and compliance with terms and conditions of the purchase agreement. The sale is expected to close later in 1995, with the Company expecting to receive approximately $16 million based upon the announced price. Until the proposed transaction is consummated, no adjustment will be made to the valuation allowance related to the securities representing the Company's investment in Purity. Further, based on the announced price, if the proposed transaction is consummated, a capital tax loss carryforward of approximately $70 million will be generated. The benefit of such capital tax loss carryforward will only be realized to the extent the Company generates capital gains. 16 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Stockholders of Supermarkets General Holdings Corporation (the "Company") was held on June 8, 1995 for the sole purpose of reelecting eight members and electing two new members of the board of directors. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934 and there was no solicitation in opposition to management's solicitation. Each of management's nominees for directors as listed below and in the proxy statement was elected. The results of the voting were: (a) the sole stockholder of the Company's common stock (the "Common Stock") re-elected James J. Burke, Jr., Anthony Cuti, Jack Futterman, Sunil Khanna, Stephen McLean, Alexis Michas, Susan Penny and Jerry Rubenstein as directors of the Company. Each director received 650,675 votes (100% of the Company's outstanding Common Stock) in favor and none against; and (b) the holders of the company's $3.52 Exchangeable Preferred Stock (the "Preferred Stock") elected James B. Upchurch and Steven Volla as directors of the Company. The vote in connection with the election of each of them was 3,639,394 shares of Preferred Stock in favor and 10,120 shares of Preferred Stock against, with no abstentions. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the quarter for which this report has been filed. SIGNATURE 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. SUPERMARKETS GENERAL HOLDINGS CORPORATION By /s/ RON MARSHALL ................................... (Ron Marshall) Executive Vice President and Chief Financial Officer By /s/ JOSEPH ADELHARDT ................................... (Joseph Adelhardt) Vice President and Controller, Chief Accounting Officer Date: September 12, 1995 17 EX-27 2
5 Supermarkets General Holdings Corporation 301 BLAIR ROAD, WOODBRIDGE, NEW JERSEY 07095 This schedule contains summary financial information extracted from Supermarkets General Holdings Corporation's Consolidated Statements of Operations for the 26 weeks ended July 29, 1995 and Consolidated Balance Sheets as of July 29, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS FEB-03-1996 JUL-29-1995 5,121 6,000 13,136 (483) 232,816 318,984 937,898 (349,147) 1,009,464 479,580 1,271,938 10 102,788 0 (1,257,377) 1,009,464 2,064,045 2,064,045 1,472,267 1,472,267 506,017 914 86,920 13,462 (19,840) 33,302 0 (927) 0 32,375 0 0