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PENN TRAFFIC REPORTS RECORD THIRD QUARTER OPERATING INCOME AND CASH FLOW

 PENN TRAFFIC REPORTS
 RECORD THIRD QUARTER OPERATING INCOME AND CASH FLOW
 JOHNSTOWN, Pa., Dec. 2 /PRNewswire/ -- The Penn Traffic Company (AMEX: PNF) today reported record third quarter operating income of $28,688,000 or 10.9 percent above the prior year.
 Cash flow for the quarter also increased to a third quarter record $45,197,000, 4.3 percent greater than the prior year's period. The year ago quarter operating income and cash flow included a one-time gain of $2,200,000 related to the sale of the P&C New England Division. After adjusting for this one-time gain, operating income increased 21.3 percent and cash flow increased 9.8 percent. For the 39 weeks ended Nov. 2, 1991, operating income and cash flow increased 16.4 percent and 9.0 percent, respectively, from the comparable period a year ago. After adjusting for the one-time gain, operating income and cash flow were up 20.1 percent and 11.0 percent, respectively, for the 39-week period.
 Claude J. Incaudo, Penn Traffic president and chief executive officer said, "Our strong third quarter results have been achieved despite the difficult economic environment which has seen increased unemployment and little or no inflation. Our momentum from capital projects as well as our position as a value leader in each of our markets contributed to our achieving good quarterly and year-to-date results. During the third quarter, same store sales were up 0.6 percent. Although our sales were below expectation, we have been able to achieve substantial operating income and cash flow improvement through better buying practices, a more favorable merchandising mix and strong cost controls. An important strategic program was initiated during the third quarter when we commenced the consolidation or our three computer centers into one central site. The continued investment in and implementation of technology will contribute to further growth in our cash flow rate which was 6.72 percent of net sales for the quarter and 6.66 percent for the 39 weeks."
 Gary D. Hirsch, chairman of the board of Penn Traffic said, "During the third quarter, we completed several transactions which strengthened our long-term financial position. P&C was merged into a wholly-owned subsidiary of the company, thereby retiring P&C's $25,900,000, 8 percent convertible preferred stock and P&C's common stock minority interests. Concurrently, P&C issued $125,000,000 of new 10-year 11.50 percent senior notes and retired $29,028,000 of higher coupon subordinated debt. These and related transactions resulted in an extraordinary retirement loss of $2,785,000, net of tax."
 Hirsch added, "The improvements in cash flow and operating income resulted in the current quarter net loss before extraordinary item and equity in net loss of affiliate narrowing to $2,140,000 from $3,923,000 last year. Thus, we continue to make significant bottom- line improvements. This progress is expected to continue in future periods from both improved operating results and lower costs for capital."
 The Penn Traffic Company is one of the leading food retailers in the eastern 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 125 licensed franchises and 120 independent operators and a discount general merchandise business with 23 stores. Grand Union operates 307 supermarkets and food stores under the Grand Union and Big Star trade names in eight eastern states.
 Penn Traffic trades on the American Stock Exchange under the symbol PNF.
 THE PENN TRAFFIC COMPANY
 Third Quarter Earnings Report (A)
 Unaudited
 Period ended 13 weeks 39 weeks
 11/2/91 11/3/91 11/2/91 11/3/90
 Net sales (B) $672,108 $664,792 $2,035,273 $2,078,933
 Operating inc. (C) 28,688 25,859 85,279 73,236
 Operating cash
 flow (EBDIAT) (C) 45,197 43,347 135,465 124,246
 Net loss before
 equity in net loss
 of affiliated
 company and
 extraordinary item (2,140) (3,923) (7,164) (14,763)
 Equity in net loss
 of affiliated
 company (D) -- (2,768) -- (10,334)
 Extraordinary charge
 (net of tax
 benefit) (E) (2,785) -- (3,685) --
 Net loss
 applicable to
 common stock (5,747) (7,513) (13,314) (27,562)
 Loss per common
 share:
 Loss before
 extraordinary item $(0.39) $(1.35) $(1.51) $(4.96)
 Extraordinary charge $(0.37) $ -- $(0.58) $ --
 Net loss $(0.76) $(1.35) $(2.09) $(4.96)
 Average number of
 common shares
 outstanding 7,536,151 5,555,733 6,376,897 5,555,733
 (A) In thousands of dollars, except for per share data and average common shares outstanding
 (B) Thirty-nine week sales were impacted by the disposition of the P&C New England Division in July 1990. "Same store sales" for the company's supermarkets increased 0.6 percent during the third quarter and 1.5 percent for the 39 weeks.
 (C) Prior year amounts include one-time gain of $2,200,000 related to disposition of P&C's New England Division.
 (D) As of Feb. 2, 1991, the company had recorded losses in its Grand Union investment which reduced its carrying value to zero. In accordance with generally accepted accounting principles, no further equity loss is being reflected in the company's results.
 (E) The third quarter $2,785,000 extraordinary charge (net of $1,706,000 income tax benefit) resulted from purchases of P&C's subordinated notes at market prices higher than face value and a write-off of deferred debt issue costs.
 THE PENN TRAFFIC COMPANY
 Consolidated Statement of Operations
 Unaudited
 (000's omitted)
 Period ended 13 weeks 39 weeks
 11/2/91 11/3/91 11/2/91 11/3/91
 Net sales $672,108 $664,792 $2,035,273 $2,078,933
 Gross profit (A) 140,266 128,857 420,834 410,678
 Operating and
 administrative
 expense, net of
 other revenues
 (B) (C) 95,069 85,510 285,369 286,432
 Earnings before
 depreciation,
 amortization,
 LIFO provision,
 interest and
 income tax
 provision
 (EBDIAT) (C) 45,197 43,347 135,465 124,246
 Depreciation and
 amortization 16,002 15,718 47,205 45,807
 LIFO provision 507 1,770 2,981 5,203
 Operating income 28,688 25,859 85,279 73,236
 Interest expense,
 net 28,876 29,134 87,880 87,900
 Loss before income
 taxes, equity in
 net loss of
 affiliated company
 and extraordinary
 item (188) (3,275) (2,601) (14,664)
 Income tax provision 1,952 648 4,563 99
 Net loss before
 equity in net loss
 of affiliated
 company and
 extraordinary item (2,140) (3,923) (7,164) (14,763)
 Equity in net loss
 of Grand Union (D) -- (2,768) -- (10,334)
 Extraordinary
 charge (E) (net
 of tax benefit) (2,785) -- (3,685) --
 Preferred dividends (822) (822) (2,465) (2,465)
 Net (loss)
 applicable to
 common stock $(5,747) $(7,513) $(13,314) $(27,562)
 (A) Net sales less cost of goods sold, excluding LIFO provision and depreciation.
 (B) Excludes depreciation and amortization.
 (C) Prior year amounts include one-time gain of $2,200,000 related to disposition of P&C's New England Division.
 (D) As of Feb. 2, 1991, the company had recorded losses on its Grand Union investment which reduced its carrying value to zero. In accordance with generally accepted accounting principles, no further equity loss is being reflected in the company's results.
 (E) The $2,785,000 extraordinary charge (net of $1,706,000 income tax benefit) resulted from purchases of P&C's subordinated notes at market prices higher than face value and a write-off of deferred debt issue costs.
 THE PENN TRAFFIC COMPANY
 Consolidated Statement of Operations Before Equity


Investment in Net Loss of Affiliated Company and Extraordinary Item
 For the 13 Weeks Ended Nov. 2, 1991
 (000's omitted)
 RDQ P&C Big Bear Elim. Consol.
 Net sales $192,030 $227,799 $257,443 $(5,164) $672,108
 Gross profit
 (A) 36,442 43,426 60,398 -- 140,266
 Operating
 and admin.
 exp., net
 of other
 rev. (B) 23,760 27,392 44,241 (324) 95,069
 Earn. before
 deprec., amort., LIFO
 prov., int.
 and income
 tax prov.
 (EBDIAT) 12,682 16,034 16,157 324 45,197
 Deprec. and
 amort. 3,927 5,693 6,382 -- 16,002
 LIFO
 provision 389 (182) 300 -- 507
 Operating
 income 8,366 10,523 9,475 324 28,688
 Int. exp.,
 net 6,729 9,783 12,364 -- 28,876
 Income
 (loss)
 before inc.
 taxes 1,637 740 (2,889) 324 (188)
 Income tax
 provision
 (benefit) 1,011 979 (38) -- 1,952
 Net income
 (loss)
 before
 equity in
 net loss of
 affiliated
 company and
 extraordinary
 item 626 (239) (2,851) 324 (2,140)
 (A) Net sales less cost of goods sold, excluding LIFO provision and depreciation
 (B) Excludes depreciation and amortization.
 -0- 12/2/91
 /CONTACT: Gary D. Hirsch, chairman of the board, 212-370-0040, or Claude J. Incaudo, president & chief executive officer, 315-453-0382, both of Penn Traffic Company/
 (PNF) CO: Penn Traffic Company ST: Pennsylvania IN: SU: ERN


CD -- PG007 -- 8485 12/02/91 16:08 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Dec 2, 1991
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