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PENN TRAFFIC RECORDS 14.0 PERCENT INCREASE IN OPERATING INCOME

 PENN TRAFFIC RECORDS 14.0 PERCENT INCREASE IN OPERATING INCOME
 JOHNSTOWN, Pa., May 21 /PRNewswire/ -- The Penn Traffic Company (AMEX: PNF), the multi-billion dollar Pennsylvania, Ohio and New York supermarket company, has announced a significant improvement in first quarter results.
 For the 13 weeks ended May 2, 1992, Penn Traffic achieved record first quarter operating income of $28,632,000 and cash flow of $45,523,000. These amounts are 14.0 percent and 8.6 percent greater than the prior year's results.
 During the 13 weeks ended May 2, 1992, net loss before extraordinary charge and preferred dividends decreased to $2,010,000 from $3,833,000 in the first quarter of the prior year. Preferred dividends were reduced to $248,000 in the current quarter from $822,000 in the first quarter of the prior year, primarily due to the retirement of P&C preferred stock in October 1991. In addition, first quarter results include a $6,224,000 extraordinary charge related to the early retirement of debt. Details of quarterly results follow this release.
 Claude J. Incaudo, Penn Traffic president and chief executive officer, said, "Our improved performance over the prior year resulted mainly from lower product procurement costs and innovations in store merchandising and operations. The recessionary environment continues to be an extremely challenging one with both deflationary food price pressures and the consumer shift to lower priced items continuing. Nevertheless, we were encouraged by a modest improvement in same store sales, which were up 1.0 percent for the quarter."
 Incaudo added, "During this first quarter, we began the rolling- out of our new private label packaging at P&C. Combined with a significantly increased variety of private label products to be introduced over the balance of the year, this program will further enhance the profitability and customer satisfaction at P&C in 1993 and beyond."
 Gary D. Hirsch, chairman of the board of Penn Traffic, said, "Our new 77,000-square-foot frozen food distribution center in Columbus, Ohio, is now fully operational and is supplying over 1,500 products to our Big Bear supermarkets. Over the past three months we opened replacement stores in Canton, N.Y. (31,000 square feet) and Chillicothe, Ohio (38,000 square feet) and completed the conversion of stores in Newark, Ohio, and Ceredo, W.Va., into our Big Bear Plus format. In addition, we completed a major renovation of one of our Columbus supermarkets and an expansion of our Camillus, N.Y. store. Each of these capital projects is meeting or exceeding our plans and should provide further support for the continued growth of our company. Seven new stores and nine major remodels are currently under construction."
 The Penn Traffic Company is one of the leading food retailers in the United States, operating 189 supermarkets in upstate New York, western Pennsylvania, central Ohio and northern West Virginia, under the names of P&C Foods, Quality Markets, Riverside Markets, Bi-Lo Foods, Big Bear and Big Bear Plus. Additionally, the company operates wholesale food distribution businesses serving 122 licensed franchises and 124 independent operators and a discount general merchandise business with 18 stores. Grand Union, in which Penn Traffic holds a 24 percent equity interest, operates 304 supermarkets and food stores under the Grand Union and Big Star trade names in the eastern United States.
 THE PENN TRAFFIC COMPANY
 First Quarter Earnings Report(A)
 Unaudited
 Period ended 13 Weeks
 5/2/92 5/4/91
 Net sales(B) $673,591 $663,775
 Operating cash flow
 (EBDIAT)(C) 45,523 41,932
 Operating income 28,632 25,106
 Net loss before
 extraordinary item and
 preferred dividends (2,010) (3,833)
 Extraordinary charge (net
 of tax benefit)(D) (6,224) --
 Preferred Dividends $(248) $(822)
 Net loss applicable to
 common stock (8,482) (4,655)
 Primary loss per common
 share:
 Loss before extraordinary
 item (after preferred
 dividends) $(0.28) $(0.84)
 Extraordinary charge $(0.75) --
 Net loss applicable to
 common stock $(1.03) $(0.84)
 Average number of common
 shares outstanding 8,258,113 5,555,733
 (A) In thousands of dollars, except for per share data and average common shares outstanding.
 (B) "Same store sales" for the company's supermarkets increased 1.0 percent during the first quarter.
 (C) EBDIAT or operating cash flow is earnings before interest, depreciation, amortization, LIFO provision and taxes.
 (D) The $6,224,000 extraordinary charge (net of $4,119,000 income tax benefit) for the first quarter resulted from purchases of subordinated notes at prices higher than face value and the write-off of related deferred financing costs.
 Consolidating Statement of Operations
 Unaudited
 13 weeks 13 weeks
 ended ended
 5/2/92 5/4/91
 Big Elim-
 RDQ P&C Bear inations Consol. Consol.
 Sales
 Rev-
 enues:
 Net
 sales
 & ser-
 vice
 fees(A) $190,432 $226,403 $262,306$(5,550) $673,591 $663,775
 Other
 revenues 2,732 6,211 2,023 -- 10,966 10,364
 Total
 revenues 193,164 232,614 264,329 (5,550) 684,557 674,139
 Cost
 & Oper.
 Expenses:
 Cost of
 sales
 (inc.
 buying &
 occupancy
 costs) 155,253 185,523 205,153 (5,550) 540,379 539,319
 Selling
 & admin.
 expenses 28,792 37,585 49,208 (39) 115,546 109,714
 Oper.
 Income 9,119 9,506 9,968 39 28,632 25,106
 Interest
 expense 6,899 10,062 12,222 -- 29,183 29,073
 Income
 (loss)
 before
 inc. taxes
 & extraord.
 item 2,220 (556) (2,254) 39 (551) (3,967)
 Provision
 (benefit)
 for inc.
 taxes 914 452 93 -- 1,459 (134)
 Income
 (loss)
 before
 extraord.
 item 1,306 (1,008) (2,347) 39 (2,010) (3,833)
 Extraord
 charge
 (net of
 tax
 benefit(B) (6,021) -- (203) -- (6,224) --
 Net (loss)
 income (4,715) (1,008) (2,550) 39 (8,234) (3,833)
 Preffered
 dividends -- -- (304) 56 (248) (822)
 Net (loss)
 inc. applic.
 to common
 stock $(4,715)$(1,008) $(2,854) $95 $(8,482) $(4,655)
 Supplemental
 Data:
 EBDIAT(C) $13,163 $15,277 $16,983 $100 $45,523 $41,932
 Deprec. &
 amort. 4,044 5,671 6,715 61 16,491 15,432
 LIFO prov. -- 100 300 -- 400 1,394
 (A) "Same store sales" for RDQ and Big Bear supermarkets increased .4 percent and 2.6 percent, respectively during the first quarter. "Same store sales" for P&C decreased .7 percent during the first quarter.
 (B) The $6,224,000 extraordinary charge (net of $4,119,000 income tax benefit) for the first quarter resulted from purchases of subordinated notes at prices higher than face value and the write-off of related deferred financing costs.
 (C) EBDIAT or operating cash flow is earnings before interest, depreciation, amortization, LIFO provision and taxes.
 -0- 5/21/92
 /CONTACT: Gary D. Hirsch, chairman of the board, 212-370-0040, or Claude J. Incaudo, president & chief executive officer, 315-457-9460, both of Penn Traffic Company/
 (PNF) CO: The Penn Traffic Company ST: Pennsylvania, New York, Ohio IN: REA SU: ERN


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Date:May 21, 1992
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