The Great Atlantic & Pacific Tea Company, Inc. Announces Results for Its Fourth Quarter and Fiscal Year Ended February 23, 2008

Business Wire,  May 6, 2008  

Tags: Great Atlantic & Pacific Tea Company Inc.

• E-mail
• Print
• Link

Company Reports 3.0% Increase in Comparable Store Sales and Improved Operating Results

Pathmark Integration and Synergy Realization on Track

MONTVALE, N.J. -- The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced improved fiscal 2007 fourth quarter and full year results for the 12 and 52 weeks ended February 23, 2008, which include for the first time the results of Pathmark Stores Inc.

Eric Claus, President and Chief Executive Officer, said, "The results in our retail operations have steadily improved during the last three years. This past year has seen the strongest top line sales trend in many years. The Pathmark integration is progressing smoothly with early assessments of potential synergies consistent with supporting the attainment of $150 million of projected synergies.

Another momentous milestone has been the signing of the new logistics contract with C&S Wholesale Grocers in March. This innovative ten-year agreement fully aligns distribution, procurement and warehousing goals which creates increased efficiencies across our distribution network improving service levels to all stores, and enabling both the Company and C&S to achieve substantial cost savings in the future."

Sales for the fourth quarter were $2.2 billion versus $1.3 billion last year. Comparable store sales increased 3.0%, which excludes sales for Pathmark stores acquired at the beginning of the fourth quarter. Comparable store sales for Pathmark, measured during the same period, increased 1.5%.

For the fourth quarter, excluding non-operating items, adjusted income from operations and EBITDA were $8.0 million and $72.2 million, respectively, and include $7 million of integration synergies. This compares to an adjusted loss from operations of $11.5 million and EBITDA of $24.0 million in last year's fourth quarter. The non-operating items excluded from adjusted income from operations are listed on Schedule 3 of the press release and adjusted EBITDA is reconciled to net cash from operating activities on Schedule 4.

For the fourth quarter, net loss from continuing operations was $44.6 million or $1.40 per diluted share versus a loss of $11.0 million or $0.26 per diluted share in the same period last year. These results are not adjusted for non-operating items.

Sales for the full year were $6.4 billion versus $5.4 billion in 2006. Comparable store sales increased 2.4%, which excludes sales for Pathmark stores. Comparable store sales for Pathmark increased 0.2% in the last twelve months.

Excluding non-operating items, fiscal 2007 adjusted loss from operations and EBITDA were $18.7 million and $159.4 million, respectively, and include $7 million of integration synergies. This compares to an adjusted loss from operations of $46.0 million and EBITDA of $102.7 million in fiscal 2006. The non-operating items excluded from adjusted income from operations are listed on Schedule 3 of the press release and adjusted EBITDA is reconciled to net cash from operating activities on Schedule 4.

Net income from continuing operations for fiscal 2007 was $87.0 million or $1.37 per diluted share compared to income of $12.8 million or $0.30 per diluted share for fiscal 2006. These results are not adjusted for non-operating items.

Eric Claus, President and Chief Executive Officer, stated, "This has been a year of substantial progress which has positioned the Company well to continue capturing leadership share. We remain intent on our targeted plans and strategic mission, with increased momentum from Pathmark's integration. The Company has realized numerous accomplishments that were diligently planned and efficiently executed. These achievements represent our continuous progression toward sustainable profitability and include:

* The acquisition of Pathmark

* Strategic market divestitures for realignment of the business in the Northeast core

* Consistent progress on fundamental retail key performance indicators

* Successful renovations in our Fresh, Discount, and Gourmet stores

* Aggressive private label penetration growth rate

* The strongest comparable store sales increases for one year, in over 8 years

Thanks to the hard work and dedication of our associates and management, we successfully completed the close of the Pathmark transaction with each milestone set thus far achieved, without any major obstacles. The collective energy garnered from this coming together has further fueled the drive to build our business."

Christian Haub, Executive Chairman of the Board, said, "I am pleased with the overall progress we made during the 4th quarter; results in our retail operations continued to improve despite a more uncertain economic environment. The first several months of integrating the Pathmark acquisition have gone very well. Our operating progress is directly attributable to the implementation of our strategy in the last three years including our format strategy built on proven and successful concepts that have generated positive sales and earnings, outsourcing distribution and gaining significant cost advantages and supply chain efficiencies as well as centralizing administration and reducing overhead costs dramatically.