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þ | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
Delaware | 26-1252536 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
6363 Main Street, | (716) 635-5000 | |
Williamsville, New York 14221 | (Telephone Number) | |
(Address of principal executive office, including zip code) |
Large accelerated filero | Accelerated filero | Non-accelerated filerþ | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
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Exhibit 12.1 | ||||||||
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Exhibit 32.2 |
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• | risks of claims relating to the Acquisition (as defined herein) that may not have been properly discharged in the bankruptcy process; | ||
• | the severity of current economic conditions and the impact on consumer demand and spending and our pricing strategy; | ||
• | pricing and market strategies, the expansion, consolidation and other activities of competitors, and our ability to respond to the promotional practices of competitors; | ||
• | our ability to effectively increase or maintain our profit margins; | ||
• | the success of our expansion and renovation plans; | ||
• | fluctuations in utility, fuel and commodity prices which could impact consumer spending and buying habits and the cost of doing business; | ||
• | risks inherent in our motor fuel operations; | ||
• | our exposure to local economies and other adverse conditions due to our geographic concentration; | ||
• | risks of natural disasters and severe weather conditions; | ||
• | supply problems with our suppliers and vendors; | ||
• | our relationships with unions and unionized employees, and the terms of future collective bargaining agreements or labor strikes; | ||
• | increased operating costs resulting from rising employee benefit costs or pension funding obligations; | ||
• | changes in, or the failure or inability to comply with, laws and governmental regulations applicable to the operation of our pharmacy and other businesses; | ||
• | the adequacy of our insurance coverage against claims of our customers in connection with our pharmacy services; | ||
• | estimates of the amount and timing of payments under our self-insurance policies; | ||
• | risks of liability under environmental laws and regulations; | ||
• | our ability to maintain and improve our information technology systems; | ||
• | events that give rise to actual or potential food contamination, drug contamination or food-borne illness or any adverse publicity relating to these types of concerns, whether or not valid; | ||
• | threats or potential threats to security; | ||
• | our ability to retain key personnel; | ||
• | risks of data security breaches or losses of confidential customer information; | ||
• | risks relating to our substantial indebtedness; | ||
• | litigation claims or legal proceedings against us; | ||
• | decisions by our controlling shareholders that may conflict with the interests of the holders of our equity and debt; and | ||
• | other factors discussed under “Risk Factors” and elsewhere in this 10-K. |
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Number | ||||
Market | of Stores | |||
Buffalo, NY | 54 | |||
Syracuse / Mid State, NY | 34 | |||
Rochester, NY | 23 | |||
Northern Pennsylvania | 17 | |||
Total Supermarkets | 128 | |||
Number | ||||
Square Feet | of Stores | |||
75,000 and above | 22 | |||
50,000 to 74,999 | 38 | |||
25,000 to 49,999 | 52 | |||
Under 25,000 | 16 | |||
Total | 128 | |||
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• | make it more difficult for us to satisfy our obligations with respect to our outstanding indebtedness; | ||
• | limit our ability to borrow additional funds, or to sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes; | ||
• | increase our vulnerability to adverse economic and industry conditions; |
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• | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for operations, future business opportunities or other purposes, such as funding our working capital and capital expenditures; | ||
• | limit our flexibility in planning for, or reacting to, changes in the business and industry in which we operate; | ||
• | limit our ability to service our indebtedness; | ||
• | place us at a competitive disadvantage compared to any less leveraged competitors; and | ||
• | prevent us from raising the funds necessary to repurchase outstanding notes tendered to us upon the occurrence of certain changes of control, which would constitute a default under the indenture governing our outstanding notes. |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
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Tops Holding Corporation | Tops Markets, LLC | ||||||||||||||||||||||||
Fiscal | Fiscal | ||||||||||||||||||||||||
2007 | 2007 | ||||||||||||||||||||||||
Fiscal | Fiscal | Fiscal | Successor | Predecessor | Fiscal | ||||||||||||||||||||
2010 | 2009 | 2008 | Period | Period | 2006 | ||||||||||||||||||||
(52 weeks) (3) | (53 weeks) | (52 weeks) | (4 weeks) | (48 weeks) (4) | (52 weeks) (4) | ||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||||||
Inside sales | $ | 2,107,524 | $ | 1,579,448 | $ | 1,542,054 | $ | 126,079 | $ | 1,406,794 | $ | 1,523,063 | |||||||||||||
Gasoline sales | 150,012 | 116,160 | 158,178 | 10,732 | 119,966 | 110,697 | |||||||||||||||||||
Net sales | 2,257,536 | 1,695,608 | 1,700,232 | 136,811 | 1,526,760 | 1,633,760 | |||||||||||||||||||
Operating income (loss) | 10,633 | 34,490 | 28,779 | 4,786 | (6,812 | ) | 8,741 | ||||||||||||||||||
Net (loss) income | (26,954 | ) | (25,693 | ) | (10,844 | ) | 984 | (52,097 | ) | (115,815 | ) | ||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||||||
Total assets | 680,351 | 592,848 | 619,694 | 641,102 | N/A | 673,563 | |||||||||||||||||||
Long-term liabilities; including obligations under capital lease and financing obligations | 561,909 | 486,305 | 400,313 | 407,103 | N/A | 458,418 | |||||||||||||||||||
Total shareholders’ (deficit) equity | (65,511 | ) | (38,801 | ) | 87,729 | 100,581 | N/A | (118,818 | ) | ||||||||||||||||
Supermarket Operating Data: | |||||||||||||||||||||||||
Number of supermarkets at end of fiscal year | 127 | 71 | 71 | 71 | 71 | 72 | |||||||||||||||||||
Average weekly inside ID sales per supermarket (1) | 418,465 | 418,511 | 416,434 | 442,668 | 411,752 | 405,161 | |||||||||||||||||||
Inside ID sales increase (1) (2) | 0.1 | % | 0.5 | % | 1.2 | % | N/A | N/A | N/A | ||||||||||||||||
Number of gas stations at end of fiscal year | 35 | 31 | 28 | 26 | 26 | 26 | |||||||||||||||||||
Motor fuel gallons sold (in thousands) | 57,079 | 52,540 | 50,124 | 3,668 | 45,793 | 29,681 | |||||||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||
Net cash provided by (used in): | |||||||||||||||||||||||||
Operating activities | $ | 49,458 | $ | 66,813 | $ | 81,067 | $ | 24,572 | $ | 21,677 | $ | (3,491 | ) | ||||||||||||
Investing activities | (113,933 | ) | (36,693 | ) | (56,237 | ) | (298,172 | ) | (6,988 | ) | 7,586 | ||||||||||||||
Financing activities | 62,172 | (40,717 | ) | (28,437 | ) | 307,526 | (30,141 | ) | (29,485 | ) | |||||||||||||||
Total depreciation and amortization | 77,315 | 65,285 | 55,530 | 3,760 | 42,368 | 56,048 | |||||||||||||||||||
Capital expenditures | 49,663 | 28,080 | 35,298 | 198 | 7,201 | 41,753 |
(1) | We define “inside ID sales” as the change in year-over-year inside sales (net sales excluding gasoline sales), excluding franchise revenue, for “ID stores.” We include a supermarket in the “inside ID sales” base in its thirteenth full period of operation. | |
(2) | To calculate the “Inside ID sales increase” for Fiscal 2010 and Fiscal 2009, we have used the most comparable 52-week periods. When comparing Fiscal 2009 to Fiscal 2008, we have excluded the 53rd week of Fiscal 2009. When comparing Fiscal 2010 to Fiscal 2009, we have excluded the 1st week of Fiscal 2009. | |
(3) | Fiscal 2010 includes the operating results of the acquired Penn Traffic supermarkets following the January 29, 2010 Acquisition. | |
(4) | The operating results during these periods represent those of Tops Markets, LLC under the ownership of Koninklijke Ahold N.V. |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Fiscal 2010 | Fiscal 2009 | |||||||||||||||
(52 weeks) | (53 weeks) | $ Change | % Change | |||||||||||||
Inside sales | $ | 2,107,524 | $ | 1,579,448 | $ | 528,076 | 33.4 | % | ||||||||
Gasoline sales | 150,012 | 116,160 | 33,852 | 29.1 | % | |||||||||||
Net sales | $ | 2,257,536 | $ | 1,695,608 | $ | 561,928 | 33.1 | % | ||||||||
Fiscal 2010 | % of | Fiscal 2009 | % of | $ | % | |||||||||||||||||||
(52 weeks) | Net Sales | (53 weeks) | Net Sales | Change | Change | |||||||||||||||||||
Cost of goods sold | $ | (1,579,016 | ) | 69.9 | % | $ | (1,185,344 | ) | 69.9 | % | $ | 393,672 | 33.2 | % | ||||||||||
Distribution costs | (44,829 | ) | 2.0 | % | (33,852 | ) | 2.0 | % | 10,977 | 32.4 | % | |||||||||||||
Gross profit | $ | 633,691 | 28.1 | % | $ | 476,412 | 28.1 | % | $ | 157,279 | 33.0 | % | ||||||||||||
Fiscal 2010 | % of | Fiscal 2009 | % of | $ | % | |||||||||||||||||||
(52 weeks) | Net Sales | (53 weeks) | Net Sales | Change | Change | |||||||||||||||||||
Wages, salaries and benefits | $ | 310,800 | 13.8 | % | $ | 224,958 | 13.3 | % | $ | 85,842 | 38.2 | % | ||||||||||||
Selling and general expenses | 104,841 | 4.6 | % | 73,474 | 4.3 | % | 31,367 | 42.7 | % | |||||||||||||||
Administrative expenses | 102,754 | 4.6 | % | 65,013 | 3.8 | % | 37,741 | 58.1 | % | |||||||||||||||
Rent expense | 19,135 | 0.8 | % | 13,219 | 0.8 | % | 5,916 | 44.8 | % | |||||||||||||||
Depreciation and amortization | 62,353 | 2.8 | % | 52,727 | 3.1 | % | 9,626 | 18.3 | % | |||||||||||||||
Advertising | 23,175 | 1.0 | % | 12,531 | 0.7 | % | 10,644 | 84.9 | % | |||||||||||||||
Total | $ | 623,058 | 27.6 | % | $ | 441,922 | 26.0 | % | $ | 181,136 | 41.0 | % | ||||||||||||
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Fiscal 2009 | Fiscal 2008 | |||||||||||||||
(53 weeks) | (52 weeks) | $ Change | % Change | |||||||||||||
Inside sales | $ | 1,579,448 | $ | 1,542,054 | $ | 37,394 | 2.4 | % | ||||||||
Gasoline sales | 116,160 | 158,178 | (42,018 | ) | (26.6 | )% | ||||||||||
Net sales | $ | 1,695,608 | $ | 1,700,232 | $ | (4,624 | ) | (0.3 | )% | |||||||
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Fiscal 2009 | % of | Fiscal 2008 | % of | $ | % | |||||||||||||||||||
(53 weeks) | Net Sales | (52 weeks) | Net Sales | Change | Change | |||||||||||||||||||
Cost of goods sold | $ | (1,185,344 | ) | 69.9 | % | $ | (1,195,850 | ) | 70.3 | % | $ | (10,506 | ) | (0.9 | )% | |||||||||
Distribution costs | (33,852 | ) | 2.0 | % | (32,882 | ) | 1.9 | % | 970 | 2.9 | % | |||||||||||||
Gross profit | $ | 476,412 | 28.1 | % | $ | 471,500 | 27.7 | % | $ | 4,912 | 1.0 | % | ||||||||||||
Fiscal 2009 | % of | Fiscal 2008 | % of | $ | % | |||||||||||||||||||
(53 weeks) | Net Sales | (52 weeks) | Net Sales | Change | Change | |||||||||||||||||||
Wages, salaries and benefits | $ | 224,958 | 13.3 | % | $ | 223,014 | 13.1 | % | $ | 1,944 | 0.9 | % | ||||||||||||
Selling and general expenses | 73,474 | 4.3 | % | 81,587 | 4.8 | % | (8,113 | ) | (9.9 | )% | ||||||||||||||
Administrative expenses | 65,013 | 3.8 | % | 63,575 | 3.7 | % | 1,438 | 2.3 | % | |||||||||||||||
Rent expense | 13,219 | 0.8 | % | 13,114 | 0.8 | % | 105 | 0.8 | % | |||||||||||||||
Depreciation and amortization | 52,727 | 3.1 | % | 50,732 | 3.0 | % | 1,995 | 3.9 | % | |||||||||||||||
Advertising | 12,531 | 0.7 | % | 10,699 | 0.6 | % | 1,832 | 17.1 | % | |||||||||||||||
Total | $ | 441,922 | 26.0 | % | $ | 442,721 | 26.0 | % | $ | (799 | ) | (0.2 | )% | |||||||||||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 49,458 | $ | 66,813 | $ | 81,067 | ||||||
Investing activities | (113,933 | ) | (36,693 | ) | (56,237 | ) | ||||||
Financing activities | 62,172 | (40,717 | ) | (28,437 | ) |
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Payments due by Period | ||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | ||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||
Notes(1) | $ | — | $ | — | $ | — | $ | — | $ | 350,000 | $ | — | $ | 350,000 | ||||||||||||||
Other long-term debt | 402 | 434 | 17,295 | 280 | 167 | — | 18,578 | |||||||||||||||||||||
Interest(2) | 55,647 | 53,612 | 51,481 | 49,361 | 39,213 | 36,329 | 285,643 | |||||||||||||||||||||
Operating leases(3) | 24,921 | 25,570 | 25,740 | 25,853 | 25,822 | 115,161 | 243,067 | |||||||||||||||||||||
Capital leases(3) | 11,095 | 12,908 | 14,045 | 12,562 | 12,099 | 120,602 | 183,311 | |||||||||||||||||||||
Purchase obligations(4) | 160,709 | 160,519 | 111,644 | 15,328 | 15,118 | 29,949 | 493,267 | |||||||||||||||||||||
Other liabilities(5) | 56,459 | 822 | 795 | 764 | 705 | 2,873 | 62,418 | |||||||||||||||||||||
Total | $ | 309,233 | $ | 253,865 | $ | 221,000 | $ | 104,148 | $ | 443,124 | $ | 304,914 | $ | 1,636,284 | ||||||||||||||
(1) | No principal amounts are due on the senior secured notes until October 15, 2015. Assumes aggregate principal amount of $350.0 million of notes are outstanding until maturity. | |
(2) | Amount primarily includes contractual interest payments related to the senior secured notes, capital leases and other long-term debt. | |
(3) | Some of our lease agreements provide us with an option to renew. We have not included renewal options in our future minimum lease amounts for renewals that are not reasonably assured. Our future operating lease obligations will change if we exercise these renewal options and if we enter into additional operating or capital lease agreements. |
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(4) | In addition to the purchase obligations reflected in the table above, we enter into supply contracts to purchase products for resale in the ordinary course of business. This category of contracts covers a broad spectrum of products and sometimes includes specific merchandising obligations relative to those products. These supply contracts typically include either a volume commitment or a fixed expiration date, pricing terms based on the vendor’s published list price, termination provisions, and other standard contractual considerations. Our obligation related to these contracts is typically limited to return of unearned allowances and therefore no amounts have been included above. Purchase obligations above relate to the outsourcing of a major portion of our information system functions and pharmacy inventory procurement through long-term agreements, as noted below: |
• | In July 2010, we extended our existing IT outsourcing agreement with HP through December 31, 2017 to provide a wide range of information systems services. Under the agreement, HP provides data center operations, mainframe processing, business applications and systems development to enhance the our customer service and efficiency. The charges under this agreement are based upon the services requested at predetermined rates. | ||
• | Effective December 1, 2010, we extended the term of our existing supply contract with McKesson through January 1, 2014 for the supply of substantially all of our prescription drugs and other health and beauty care products requirements. We are required to purchase a minimum of $400 million of product during the period from December 1, 2010 to January 1, 2014. |
(5) | Other liabilities include health and welfare benefits and multiemployer pension plan contributions under collective bargaining agreements, as well as other pension and post-retirement benefits. |
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• | significant under-performance of a store in relation to expectations; |
• | significant negative industry or economic trends; and |
• | significant changes or planned changes in our use of the assets. |
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Expected Fiscal Year of Maturity | ||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Fair Value | ||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||
Fixed rate | $ | 402 | $ | 434 | $ | 2,295 | $ | 280 | $ | 350,167 | $ | — | $ | 393,398 | ||||||||||||||
Average interest rate | 10.1 | % | 10.1 | % | 10.1 | % | 10.1 | % | 10.1 | % | N/A | |||||||||||||||||
Variable rate | $ | — | $ | — | $ | 15,000 | $ | — | $ | — | $ | — | $ | 15,000 | ||||||||||||||
Average interest rate | N/A | N/A | 5.1 | % | N/A | N/A | N/A |
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Tops Holding Corporation
Buffalo, New York
March 31, 2011
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January 1, 2011 | January 2, 2010 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 17,419 | $ | 19,722 | ||||
Accounts receivable, net (Note 3) | 57,044 | 49,457 | ||||||
Inventory, net | 117,328 | 82,272 | ||||||
Prepaid expenses and other current assets | 14,093 | 13,535 | ||||||
Assets held for sale | 650 | — | ||||||
Income taxes refundable | 200 | 760 | ||||||
Current deferred tax assets (Note 11) | 2,265 | 5,986 | ||||||
Total current assets | 208,999 | 171,732 | ||||||
Property and equipment, net (Note 4) | 378,575 | 333,416 | ||||||
Intangible assets, net (Note 5) | 79,072 | 76,356 | ||||||
Other assets (Note 6) | 13,705 | 11,344 | ||||||
Total assets | $ | 680,351 | $ | 592,848 | ||||
Liabilities and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 93,311 | $ | 68,462 | ||||
Accrued expenses and other current liabilities (Note 7) | 79,123 | 68,334 | ||||||
Current portion of capital lease obligations (Note 8) | 11,095 | 8,186 | ||||||
Current portion of long-term debt (Note 9) | 402 | 362 | ||||||
Total current liabilities | 183,931 | 145,344 | ||||||
Capital lease obligations (Note 8) | 172,216 | 175,340 | ||||||
Long-term debt (Note 9) | 365,262 | 288,194 | ||||||
Other long-term liabilities | 21,099 | 16,785 | ||||||
Non-current deferred tax liabilities (Note 11) | 3,354 | 5,986 | ||||||
Total liabilities | 745,862 | 631,649 | ||||||
Shareholders’ deficit: | ||||||||
Common shares ($0.001 par value; 300,000 authorized shares at January 1, 2011, 200,000 authorized shares at January 2, 2010, 144,776 shares issued & outstanding at January 1, 2011, 100,000 shares issued & outstanding at January 2, 2010) (Note 12) | — | — | ||||||
Paid-in capital | (2,668 | ) | (3,383 | ) | ||||
Accumulated deficit | (62,507 | ) | (35,553 | ) | ||||
Accumulated other comprehensive (loss) income, net of tax | (336 | ) | 135 | |||||
Total shareholders’ deficit | (65,511 | ) | (38,801 | ) | ||||
Total liabilities and shareholders’ deficit | $ | 680,351 | $ | 592,848 | ||||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Net sales | $ | 2,257,536 | $ | 1,695,608 | $ | 1,700,232 | ||||||
Cost of goods sold | (1,579,016 | ) | (1,185,344 | ) | (1,195,850 | ) | ||||||
Distribution costs | (44,829 | ) | (33,852 | ) | (32,882 | ) | ||||||
Gross profit | 633,691 | 476,412 | 471,500 | |||||||||
Operating expenses: | ||||||||||||
Wages, salaries and benefits | (310,800 | ) | (224,958 | ) | (223,014 | ) | ||||||
Selling and general expenses | (104,841 | ) | (73,474 | ) | (81,587 | ) | ||||||
Administrative expenses (inclusive of stock-based compensation expense of $715, $1,085, and $532) | (102,754 | ) | (65,013 | ) | (63,575 | ) | ||||||
Rent expense, net | (19,135 | ) | (13,219 | ) | (13,114 | ) | ||||||
Depreciation and amortization | (62,353 | ) | (52,727 | ) | (50,732 | ) | ||||||
Advertising | (23,175 | ) | (12,531 | ) | (10,699 | ) | ||||||
Total operating expenses | (623,058 | ) | (441,922 | ) | (442,721 | ) | ||||||
Operating income | 10,633 | 34,490 | 28,779 | |||||||||
Bargain purchase | 15,681 | — | — | |||||||||
Loss on debt extinguishment | (1,041 | ) | (6,770 | ) | (2,228 | ) | ||||||
Interest expense, net | (61,231 | ) | (48,028 | ) | (43,711 | ) | ||||||
Loss before income taxes | (35,958 | ) | (20,308 | ) | (17,160 | ) | ||||||
Income tax benefit (expense) | 9,004 | (5,385 | ) | 6,316 | ||||||||
Net loss | $ | (26,954 | ) | $ | (25,693 | ) | $ | (10,844 | ) | |||
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Additional | Retained | Accumulated | ||||||||||||||||||||||
Paid-In | Earnings | Other | Total | |||||||||||||||||||||
Common Stock | (Deficit) | (Accumulated | Comprehensive | Shareholders’ | ||||||||||||||||||||
Shares | Amount | Capital | Deficit) | (Loss) Income | (Deficit) Equity | |||||||||||||||||||
Balance at December 30, 2007 | 100,000 | $ | — | $ | 100,000 | $ | 984 | $ | (403 | ) | $ | 100,581 | ||||||||||||
Net loss | — | — | — | (10,844 | ) | — | (10,844 | ) | ||||||||||||||||
Change in fair value of interest rate swap through November 16, 2008, net of tax benefit of $1,796 | — | — | — | — | (2,740 | ) | (2,740 | ) | ||||||||||||||||
Reclassification adjustment on interest rate swap, net of tax expense of $200 | — | — | — | — | 305 | 305 | ||||||||||||||||||
Retirement obligations adjustments, net of tax benefit of $69 | — | — | — | — | (105 | ) | (105 | ) | ||||||||||||||||
Comprehensive loss | — | — | — | — | — | (13,384 | ) | |||||||||||||||||
Stock-based compensation | — | — | 532 | — | — | 532 | ||||||||||||||||||
Balance at December 27, 2008 | 100,000 | — | 100,532 | (9,860 | ) | (2,943 | ) | 87,729 | ||||||||||||||||
Net loss | — | — | — | (25,693 | ) | — | (25,693 | ) | ||||||||||||||||
Reclassification adjustment on interest rate swap, net of tax expense of $1,861 | — | — | — | — | 2,838 | 2,838 | ||||||||||||||||||
Retirement obligations adjustments, net of tax expense of $157 | — | — | — | — | 240 | 240 | ||||||||||||||||||
Comprehensive loss | — | — | — | — | — | (22,615 | ) | |||||||||||||||||
Dividend | — | — | (105,000 | ) | — | — | (105,000 | ) | ||||||||||||||||
Stock-based compensation | — | — | 1,085 | — | — | 1,085 | ||||||||||||||||||
Balance at January 2, 2010 | 100,000 | — | (3,383 | ) | (35,553 | ) | 135 | (38,801 | ) | |||||||||||||||
Net loss | — | — | — | (26,954 | ) | — | (26,954 | ) | ||||||||||||||||
Retirement obligations adjustments | — | — | — | — | (471 | ) | (471 | ) | ||||||||||||||||
Comprehensive loss | — | — | — | — | — | (27,425 | ) | |||||||||||||||||
Issuance of common stock | 44,776 | — | 30,000 | — | — | 30,000 | ||||||||||||||||||
Dividend | — | — | (30,000 | ) | — | — | (30,000 | ) | ||||||||||||||||
Stock-based compensation | — | — | 715 | — | — | 715 | ||||||||||||||||||
Balance at January 1, 2011 | 144,776 | $ | — | $ | (2,668 | ) | $ | (62,507 | ) | $ | (336 | ) | $ | (65,511 | ) | |||||||||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Cash flows provided by operating activities: | ||||||||||||
Net loss | $ | (26,954 | ) | $ | (25,693 | ) | $ | (10,844 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 77,315 | 65,285 | 55,530 | |||||||||
Bargain purchase | (15,681 | ) | — | — | ||||||||
Deferred income taxes | (9,199 | ) | 5,351 | (6,968 | ) | |||||||
Amortization of deferred financing costs | 2,367 | 1,304 | 1,247 | |||||||||
LIFO inventory valuation adjustment | 2,055 | 249 | 6,938 | |||||||||
Loss on debt extinguishment | 1,041 | 6,770 | 2,228 | |||||||||
Stock-based compensation expense | 715 | 1,085 | 532 | |||||||||
Interest rate swap settlement | — | 5,613 | — | |||||||||
Interest rate swap interest paid | — | 3,146 | — | |||||||||
Impact of interest rate swap on deferred tax assets | — | 2,070 | — | |||||||||
Change in fair value of interest rate swap | — | (1,256 | ) | 1,666 | ||||||||
Gain on legal settlement | — | — | (2,100 | ) | ||||||||
Other | 988 | 860 | 151 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in accounts receivable | (7,382 | ) | (9,411 | ) | 6,552 | |||||||
(Increase) decrease in inventories | (6,239 | ) | (594 | ) | 1,797 | |||||||
Decrease (increase) in prepaid expenses and other current assets | 1,796 | (4,517 | ) | 1,520 | ||||||||
Decrease (increase) in income taxes refundable | 560 | (760 | ) | — | ||||||||
Increase in accounts payable | 24,267 | 13,482 | 3,092 | |||||||||
Increase in accrued expenses and other current liabilities | 917 | 3,733 | 16,182 | |||||||||
Increase in other long-term liabilities | 2,892 | 96 | 3,544 | |||||||||
Net cash provided by operating activities | 49,458 | 66,813 | 81,067 | |||||||||
Cash flows used in investing activities: | ||||||||||||
Acquisition of Penn Traffic assets (Note 2) | (85,023 | ) | — | — | ||||||||
Cash paid for property and equipment | (49,663 | ) | (28,080 | ) | (35,298 | ) | ||||||
Proceeds from sale of assets | 20,753 | — | — | |||||||||
Interest rate swap settlement | — | (5,613 | ) | — | ||||||||
Interest rate swap interest paid | — | (3,146 | ) | — | ||||||||
Purchase of Member’s interest in Tops Markets, LLC, net of cash acquired | — | — | (20,639 | ) | ||||||||
Other | — | 146 | (300 | ) | ||||||||
Net cash used in investing activities | (113,933 | ) | (36,693 | ) | (56,237 | ) | ||||||
Cash flows provided by (used in) financing activities: | ||||||||||||
Proceeds from long-term debt borrowings | 112,125 | 270,474 | 35,000 | |||||||||
Repayments of long-term debt borrowings | (36,377 | ) | (200,936 | ) | (48,633 | ) | ||||||
Proceeds from issuance of common stock | 30,000 | — | — | |||||||||
Dividend to shareholders | (30,000 | ) | (105,000 | ) | — | |||||||
Borrowings on ABL Facility | 348,737 | 76,600 | — | |||||||||
Repayments on ABL Facility | (347,737 | ) | (62,600 | ) | — | |||||||
Deferred financing costs incurred | (5,769 | ) | (12,011 | ) | (4,871 | ) | ||||||
Principal payments on capital leases | (9,294 | ) | (7,287 | ) | (6,434 | ) | ||||||
Change in bank overdraft position | 487 | 43 | (3,499 | ) | ||||||||
Net cash provided by (used in) financing activities | 62,172 | (40,717 | ) | (28,437 | ) | |||||||
Net decrease in cash and cash equivalents | (2,303 | ) | (10,597 | ) | (3,607 | ) | ||||||
Cash and cash equivalents-beginning of period | 19,722 | 30,319 | 33,926 | |||||||||
Cash and cash equivalents-end of period | $ | 17,419 | $ | 19,722 | $ | 30,319 | ||||||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Cash paid during the year for: | ||||||||||||
Interest, net of amounts capitalized | $ | 56,933 | $ | 37,222 | $ | 40,912 | ||||||
Income taxes | 151 | 435 | 478 | |||||||||
Non-cash items: | ||||||||||||
Assets acquired under capital leases | 5,349 | 5,759 | 936 | |||||||||
Impact of SERP liability adjustment on property and equipment | — | 1,999 | — | |||||||||
Unpaid capital expenditures | 6,107 | 2,349 | 5,968 |
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Asset | Useful Lives | |
Land and land improvements | Indefinite | |
Buildings | 30 – 40 years | |
Leasehold improvements | Lesser of 7 – 20 years or remaining lease term | |
Equipment | 3 – 10 years | |
Automobiles | 3 – 10 years | |
IT software and equipment | 3 – 5 years |
Asset | Weighted Average Amortization Period | |||
Acquired Penn Traffic Intangible Assets: | ||||
Favorable/unfavorable lease rights | 7.9 years | |||
Tradenames | 8.5 years | |||
Customer relationships | 11.0 years | |||
Other Intangible Assets: | ||||
Tradename | Indefinite life | |||
Customer relationships | 8.0 years | |||
Favorable/unfavorable lease rights | 9.3 years | |||
Franchise agreements | 11.0 years | |||
Other | 4.0 years |
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||||||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Amount | Total | Amount | Total | Amount | Total | |||||||||||||||||||
Non-perishables(1) | $ | 1,307,304 | 57.9 | % | $ | 966,297 | 57.0 | % | $ | 944,126 | 55.5 | % | ||||||||||||
Perishables(2) | 605,684 | 26.8 | % | 438,607 | 25.9 | % | 425,224 | 25.0 | % | |||||||||||||||
Pharmacy | 179,518 | 8.0 | % | 160,868 | 9.5 | % | 158,929 | 9.4 | % | |||||||||||||||
Fuel | 150,012 | 6.6 | % | 116,160 | 6.9 | % | 158,178 | 9.3 | % | |||||||||||||||
Other(3) | 15,018 | 0.7 | % | 13,676 | 0.7 | % | 13,775 | 0.8 | % | |||||||||||||||
$ | 2,257,536 | 100.0 | % | $ | 1,695,608 | 100.0 | % | $ | 1,700,232 | 100.0 | % | |||||||||||||
(1) | Non-perishables consist of grocery, dairy, frozen, general merchandise, health and beauty care and other non-perishable related products. | |
(2) | Perishables consist of produce, meat, seafood, bakery, deli, floral, prepared foods and other perishable related products. | |
(3) | Other primarily consists of franchise income and service commission income, such as lottery, money orders and money transfers. |
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Initial | Final | |||||||||||
Estimate | Adjustments | Allocation | ||||||||||
Assets acquired: | ||||||||||||
Inventory | $ | 32,792 | $ | (1,920 | ) | $ | 30,872 | |||||
Accounts receivable | — | 205 | 205 | |||||||||
Prepaid expenses | 2,354 | — | 2,354 | |||||||||
Property and equipment | 63,878 | (10,096 | ) | 53,782 | ||||||||
Favorable/unfavorable lease rights | 6,589 | 434 | 7,023 | |||||||||
Tradenames | 4,200 | — | 4,200 | |||||||||
Customer relationships | 1,100 | 600 | 1,700 | |||||||||
Assets held for sale | 22,791 | (160 | ) | 22,631 | ||||||||
Total assets acquired | 133,704 | (10,937 | ) | 122,767 | ||||||||
Liabilities assumed: | ||||||||||||
Accrued expenses and other current liabilities | 5,891 | 471 | 6,362 | |||||||||
Liabilities held for sale | 1,585 | (135 | ) | 1,450 | ||||||||
Deferred tax liability | 13,717 | (3,429 | ) | 10,288 | ||||||||
Other long-term liabilities | 253 | (22 | ) | 231 | ||||||||
Capital lease obligations | 6,314 | (2,582 | ) | 3,732 | ||||||||
Total liabilities assumed | 27,760 | (5,697 | ) | 22,063 | ||||||||
Bargain purchase | (20,921 | ) | 5,240 | (15,681 | ) | |||||||
Acquisition price | $ | 85,023 | $ | — | $ | 85,023 | ||||||
Fiscal 2010 | Fiscal 2009 | |||||||
(52 weeks) | (53 weeks) | |||||||
Net sales | $ | 2,266,927 | $ | 2,257,232 | ||||
Operating income | 12,814 | 3,097 | ||||||
Net loss | (47,843 | ) | (70,194 | ) |
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January 1, 2011 | January 2, 2010 | |||||||
Vendor receivables | $ | 32,202 | $ | 25,362 | ||||
Credit and debit card receivables | 9,097 | 9,693 | ||||||
Pharmacy receivables | 8,610 | 8,338 | ||||||
Other receivables | 7,788 | 6,454 | ||||||
Allowance for doubtful accounts | (653 | ) | (390 | ) | ||||
Total accounts receivable, net | $ | 57,044 | $ | 49,457 | ||||
January 1, 2011 | January 2, 2010 | |||||||
Land | $ | 10,211 | $ | 6,651 | ||||
Land improvements | 10,913 | 3,541 | ||||||
Buildings | 58,627 | 38,178 | ||||||
Leasehold improvements | 77,016 | 52,058 | ||||||
Equipment | 153,166 | 108,835 | ||||||
IT software and equipment | 34,667 | 33,046 | ||||||
Total at cost | 344,600 | 242,309 | ||||||
Accumulated depreciation | (128,924 | ) | (77,925 | ) | ||||
215,676 | 164,384 | |||||||
Property, equipment and automobiles under capital leases, net of accumulated depreciation | 162,899 | 169,032 | ||||||
Property and equipment, net | $ | 378,575 | $ | 333,416 | ||||
January 1, 2011 | January 2, 2010 | |||||||
Land | $ | 48,829 | $ | 48,517 | ||||
Building | 145,829 | 141,724 | ||||||
Equipment | 7,948 | 5,675 | ||||||
Automobiles | 2,606 | 1,333 | ||||||
Total at cost | 205,212 | 197,249 | ||||||
Accumulated depreciation | (42,313 | ) | (28,217 | ) | ||||
Capital lease assets, net | $ | 162,899 | $ | 169,032 | ||||
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Weighted | ||||||||||||||||
Gross | Net | Average | ||||||||||||||
Carrying | Accumulated | Carrying | Amortization | |||||||||||||
January 1, 2011 | Amount | Amortization | Amount | Period | ||||||||||||
Acquired Penn Traffic intangible assets: | ||||||||||||||||
Favorable/unfavorable lease rights | $ | 7,023 | $ | (899 | ) | $ | 6,124 | 7.9 | ||||||||
Tradename | 4,200 | (700 | ) | 3,500 | 8.5 | |||||||||||
Customer relationships | 1,700 | (300 | ) | 1,400 | 11.0 | |||||||||||
Other intangible assets: | ||||||||||||||||
Tradename | 41,011 | — | 41,011 | Indefinite life | ||||||||||||
Customer relationships | 26,051 | (14,931 | ) | 11,120 | 8.0 | |||||||||||
Favorable/unfavorable lease rights | 14,369 | (7,003 | ) | 7,366 | 9.3 | |||||||||||
Franchise agreements | 11,538 | (3,242 | ) | 8,296 | 11.0 | |||||||||||
Other | 497 | (242 | ) | 255 | 4.0 | |||||||||||
$ | 106,389 | $ | (27,317 | ) | $ | 79,072 | 9.0 | |||||||||
Gross | Net | |||||||||||
Carrying | Accumulated | Carrying | ||||||||||
January 2, 2010 | Amount | Amortization | Amount | |||||||||
Tradename | $ | 41,011 | $ | — | $ | 41,011 | ||||||
Customer relationships | 26,051 | (9,880 | ) | 16,171 | ||||||||
Favorable/unfavorable lease rights | 14,369 | (4,800 | ) | 9,569 | ||||||||
Franchise agreements | 11,538 | (2,196 | ) | 9,342 | ||||||||
Other | 407 | (144 | ) | 263 | ||||||||
$ | 93,376 | $ | (17,020 | ) | $ | 76,356 | ||||||
2011 | $ | 8,579 | ||
2012 | 6,862 | |||
2013 | 6,018 | |||
2014 | 5,218 | |||
2015 | 3,983 | |||
Thereafter | 7,401 |
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January 1, 2011 | January 2, 2010 | |||||||
Wages, taxes and benefits | $ | 18,918 | $ | 15,813 | ||||
Lottery | 10,083 | 7,565 | ||||||
Interest payable | 8,318 | 6,936 | ||||||
Property and equipment expenditures | 6,107 | 2,349 | ||||||
Union medical, pension and 401(k) | 4,598 | 3,029 | ||||||
Gift cards | 4,271 | 3,685 | ||||||
Money orders | 3,651 | 4,855 | ||||||
Professional and legal fees | 3,640 | 2,556 | ||||||
Utilities | 2,980 | 2,378 | ||||||
Sales and use tax | 2,101 | 1,117 | ||||||
Repairs and maintenance | 2,054 | 984 | ||||||
Advertising | 1,920 | 874 | ||||||
Self-insurance reserves | 1,406 | 1,406 | ||||||
Vacation | 1,110 | 4,873 | ||||||
Financed insurance policies | 1,040 | 2,220 | ||||||
Retirement obligations | 869 | 879 | ||||||
Real estate taxes | 705 | 901 | ||||||
Other | 5,352 | 5,914 | ||||||
$ | 79,123 | $ | 68,334 | |||||
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Capital | Operating | Future Expected | ||||||||||
Leases | Leases | Sub-lease Income | ||||||||||
2011 | $ | 31,206 | $ | 24,921 | $ | 4,570 | ||||||
2012 | 31,013 | 25,570 | 4,261 | |||||||||
2013 | 30,047 | 25,740 | 3,046 | |||||||||
2014 | 26,463 | 25,853 | 1,493 | |||||||||
2015 | 24,026 | 25,822 | 1,057 | |||||||||
Thereafter | 156,931 | 115,161 | 1,325 | |||||||||
Total minimum lease payments | 299,686 | $ | 243,067 | $ | 15,752 | |||||||
Less amounts representing interest | (116,375 | ) | ||||||||||
Present value of net minimum lease payments | 183,311 | |||||||||||
Less current obligations | (11,095 | ) | ||||||||||
Long-term obligations | $ | 172,216 | ||||||||||
January 1, 2011 | January 2, 2010 | |||||||
Senior Notes | $ | 350,000 | $ | 275,000 | ||||
Discount on Senior Notes, net | (2,914 | ) | (4,399 | ) | ||||
ABL Facility | 15,000 | 14,000 | ||||||
Other loans | 2,400 | 2,565 | ||||||
Mortgage note payable | 1,178 | 1,390 | ||||||
Total debt | 365,664 | 288,556 | ||||||
Current portion | (402 | ) | (362 | ) | ||||
Total long-term debt | $ | 365,262 | $ | 288,194 | ||||
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2011 | $ | 402 | ||
2012 | 434 | |||
2013 | 17,295 | |||
2014 | 280 | |||
2015 | 350,167 | |||
Thereafter | — | |||
Total debt | $ | 368,578 | ||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Current: | ||||||||||||
Federal | $ | 192 | $ | — | $ | 531 | ||||||
State | 3 | 34 | 121 | |||||||||
Total current | 195 | 34 | 652 | |||||||||
Deferred: | ||||||||||||
Federal | (19,476 | ) | (7,068 | ) | (5,757 | ) | ||||||
State | (1,624 | ) | (1,477 | ) | (1,211 | ) | ||||||
Change in valuation allowance | 11,901 | 13,896 | — | |||||||||
Total deferred | (9,199 | ) | 5,351 | (6,968 | ) | |||||||
Total income tax (benefit) expense | $ | (9,004 | ) | $ | 5,385 | $ | (6,316 | ) | ||||
Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Statutory federal income tax benefit | $ | (12,585 | ) | $ | (7,108 | ) | (6,006 | ) | ||||
State income tax benefit, net of federal benefit | (1,622 | ) | (938 | ) | (709 | ) | ||||||
Valuation allowance | 11,901 | 13,896 | — | |||||||||
Non-taxable gain on bargain purchase | (5,489 | ) | — | — | ||||||||
Benefit of federal tax credits | (1,182 | ) | (889 | ) | — | |||||||
ASC 740 adjustment | 192 | 81 | 71 | |||||||||
Non-deductible expenses | 170 | 338 | 328 | |||||||||
Other | (389 | ) | 5 | — | ||||||||
$ | (9,004 | ) | $ | 5,385 | $ | (6,316 | ) | |||||
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January 1, 2011 | January 2, 2010 | |||||||
Current deferred tax assets: | ||||||||
Inventory and other reserves | $ | 104 | $ | 622 | ||||
Prepaid taxes, insurance and service contracts | 1,096 | 1,761 | ||||||
Accrued vacation and bonus compensation | 442 | 4,820 | ||||||
Other assets | 2,828 | 2,552 | ||||||
Valuation allowance | (2,205 | ) | (3,769 | ) | ||||
Current net deferred tax assets | 2,265 | 5,986 | ||||||
Non-current deferred tax (liabilities) assets: | ||||||||
Capital leases | 8,567 | 8,359 | ||||||
Property and equipment depreciation | (11,231 | ) | (7,653 | ) | ||||
Intangible assets | (16,078 | ) | (14,416 | ) | ||||
Federal and state net operating loss carryforwards and federal credits | 38,472 | 17,267 | ||||||
Valuation allowance | (23,592 | ) | (10,127 | ) | ||||
Other | 508 | 584 | ||||||
Non-current net deferred tax liabilities | (3,354 | ) | (5,986 | ) | ||||
Net deferred tax liabilities | $ | (1,089 | ) | $ | — | |||
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Beginning balance | $ | 947 | $ | 947 | $ | 947 | ||||||
Additions based on tax positions related to the current year | — | — | — | |||||||||
Reductions based on tax positions related to the current year | (755 | ) | — | — | ||||||||
Settlements | (192 | ) | — | — | ||||||||
Reductions due to lapse of statute of limitations | — | — | — | |||||||||
Ending balance | $ | — | $ | 947 | $ | 947 | ||||||
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Weighted | Average | |||||||||||||||
Average | Remaining | |||||||||||||||
Exercise | Contractual | Aggregate | ||||||||||||||
Number of | Price Per | Term | Intrinsic | |||||||||||||
Shares | Share | (In Years) | Value | |||||||||||||
Outstanding — December 30, 2007 | — | $ | — | |||||||||||||
Granted | 7,250 | 1,000 | ||||||||||||||
Outstanding — December 27, 2008 | 7,250 | 1,000 | ||||||||||||||
Granted | 300 | 1,333 | ||||||||||||||
Outstanding — January 2, 2010 | 7,550 | 413 | ||||||||||||||
Granted | 4,470 | 1,040 | ||||||||||||||
Forfeited | (555 | ) | 400 | |||||||||||||
Outstanding — January 1, 2011 | 11,465 | 658 | 4.9 | $ | 4,377 | |||||||||||
Expected to vest — January 1, 2011 | 11,465 | 658 | 4.9 | $ | 4,377 | |||||||||||
Options exercisable — January 1, 2011 | — | $ | — | |||||||||||||
Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
Estimated life in years | 6.2 | 5.0 | 7.0 | |||||||||
Expected volatility | 37.6 | % | 38.5 | % | 38.8 | % | ||||||
Expected dividends | — | — | — | |||||||||
Risk-free rate | 1.6 | % | 1.8 | % | 3.1 | % |
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Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
SERP: | ||||||||||||
Interest cost | $ | 234 | $ | 276 | $ | 59 | ||||||
Net pension cost | $ | 234 | $ | 276 | $ | 59 | ||||||
Other Post-Retirement Plans: | ||||||||||||
Interest cost | $ | 112 | $ | 181 | $ | 160 | ||||||
Service cost | 3 | 3 | 3 | |||||||||
Net pension cost | $ | 115 | $ | 184 | $ | 163 | ||||||
Other | ||||||||
Post-Retirement | ||||||||
SERP | Plans | |||||||
2011 | $ | 623 | $ | 246 | ||||
2012 | 579 | 243 | ||||||
2013 | 555 | 240 | ||||||
2014 | 528 | 236 | ||||||
2015 | 497 | 208 | ||||||
Subsequent five years | 1,966 | 907 |
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Other Post- | ||||||||
SERP | Retirement Plans | |||||||
Benefit obligation — December 28, 2008 | $ | 1,861 | $ | 3,126 | ||||
Interest cost | 276 | 181 | ||||||
Service cost | — | 3 | ||||||
Actuarial loss (gain) | 546 | (881 | ) | |||||
Total disbursements | (734 | ) | (102 | ) | ||||
Liability adjustment | 3,145 | — | ||||||
Benefit obligation — January 2, 2010 | 5,094 | 2,327 | ||||||
Interest cost | 234 | 112 | ||||||
Service cost | — | 3 | ||||||
Actuarial loss | 207 | 194 | ||||||
Total disbursements | (667 | ) | (146 | ) | ||||
Benefit obligation — January 1, 2011 | $ | 4,868 | $ | 2,490 | ||||
SERP | Other Post-Retirement Plans | |||||||||||||||
January 1, 2011 | January 2, 2010 | January 1, 2011 | January 2, 2010 | |||||||||||||
Accrued expenses and other current liabilities | $ | 623 | $ | 641 | $ | 246 | $ | 238 | ||||||||
Other long-term liabilities | 4,245 | 4,453 | 2,244 | 2,089 | ||||||||||||
Recognized liability | $ | 4,868 | $ | 5,094 | $ | 2,490 | $ | 2,327 | ||||||||
SERP | Other Post-Retirement Plans | |||||
January 1, 2011 | January 2, 2010 | January 1, 2011 | January 2, 2010 | |||
4.70% | 4.90% | 4.70% | 5.20% |
Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
SERP | 4.90 | % | 5.90 | % | 5.80 | % | ||||||
Other post-retirement plans | 5.20 | % | 6.00 | % | 6.10 | % |
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January 1, 2011 | January 2, 2010 | |||||||
Initial health care cost trend rate. | 7.50 | % | 8.00 | % | ||||
Ultimate health care cost trend rate | 5.00 | % | 5.00 | % | ||||
Year to reach ultimate trend rate | 2016 | 2015 |
Increase | Decrease | |||||||
Effect on SERP | N/A | N/A | ||||||
Effect on other post-retirement plans | $ | — | $ | — |
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Balance — December 27, 2008 | $ | 1,533 | ||
Accretion of liability | 156 | |||
Incremental obligations incurred | 45 | |||
Balance — January 2, 2010 | 1,734 | |||
Obligations of acquired Penn Traffic stores | 231 | |||
Accretion of liability | 183 | |||
Incremental obligations incurred | 188 | |||
Balance — January 1, 2011 | $ | 2,336 | ||
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CONSOLIDATED BALANCE SHEET
JANUARY 1, 2011
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 16,689 | $ | 730 | $ | — | $ | 17,419 | ||||||||||
Accounts receivable, net | — | 43,696 | 13,348 | — | 57,044 | |||||||||||||||
Intercompany receivables | — | 2,850 | 13,091 | (15,941 | ) | — | ||||||||||||||
Inventory, net | 80,060 | 37,268 | — | 117,328 | ||||||||||||||||
Prepaid expenses and other current assets | — | 11,445 | 2,648 | — | 14,093 | |||||||||||||||
Assets held for sale | — | 650 | — | 650 | ||||||||||||||||
Income taxes refundable | — | 200 | — | — | 200 | |||||||||||||||
Current deferred tax assets | — | 1,657 | — | 608 | 2,265 | |||||||||||||||
Total current assets | — | 156,597 | 67,735 | (15,333 | ) | 208,999 | ||||||||||||||
Property and equipment, net | — | 309,856 | 68,719 | — | 378,575 | |||||||||||||||
Intangible assets, net | — | 68,048 | 11,024 | — | 79,072 | |||||||||||||||
Other assets | — | 13,705 | 3,041 | (3,041 | ) | 13,705 | ||||||||||||||
Investment in subsidiaries | (75,094 | ) | 104,799 | — | (29,705 | ) | — | |||||||||||||
Total assets | $ | (75,094 | ) | $ | 653,005 | $ | 150,519 | $ | (48,079 | ) | $ | 680,351 | ||||||||
Liabilities and Shareholders’ (Deficit) Equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 69,881 | $ | 23,430 | $ | — | $ | 93,311 | ||||||||||
Intercompany payables | 2,850 | 13,091 | — | (15,941 | ) | — | ||||||||||||||
Accrued expenses and other current liabilities | 544 | 62,099 | 17,224 | (744 | ) | 79,123 | ||||||||||||||
Current portion of capital lease obligations | — | 10,754 | 341 | — | 11,095 | |||||||||||||||
Current portion of long-term debt | — | 402 | — | — | 402 | |||||||||||||||
Current deferred tax liabilities | — | — | 11 | (11 | ) | — | ||||||||||||||
Total current liabilities | 3,394 | 156,227 | 41,006 | (16,696 | ) | 183,931 | ||||||||||||||
Capital lease obligations | — | 168,743 | 3,473 | — | 172,216 | |||||||||||||||
Long-term debt | — | 368,303 | — | (3,041 | ) | 365,262 | ||||||||||||||
Other long-term liabilities | — | 17,941 | 3,158 | — | 21,099 | |||||||||||||||
Non-current deferred tax liabilities tax liabilities | — | 16,078 | (1,917 | ) | (10,807 | ) | 3,354 | |||||||||||||
Total liabilities | 3,394 | 727,292 | 45,720 | (30,544 | ) | 745,862 | ||||||||||||||
Total shareholders’ (deficit) equity | (78,488 | ) | (74,287 | ) | 104,799 | (17,535 | ) | (65,511 | ) | |||||||||||
Total liabilities and shareholders’ (deficit) equity | $ | (75,094 | ) | $ | 653,005 | $ | 150,519 | $ | (48,079 | ) | $ | 680,351 | ||||||||
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CONSOLIDATED BALANCE SHEET
JANUARY 2, 2010
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiary | Eliminations | Consolidated | ||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 19,712 | $ | 10 | $ | — | $ | 19,722 | ||||||||||
Accounts receivable, net | — | 49,457 | — | — | 49,457 | |||||||||||||||
Intercompany receivables | — | 1,900 | 2,306 | (4,206 | ) | — | ||||||||||||||
Inventory, net | — | 82,272 | — | — | 82,272 | |||||||||||||||
Prepaid expenses | — | 13,535 | — | — | 13,535 | |||||||||||||||
Income taxes refundable | — | 760 | — | — | 760 | |||||||||||||||
Current deferred tax assets | 751 | 5,805 | — | (570 | ) | 5,986 | ||||||||||||||
Total current assets | 751 | 173,441 | 2,316 | (4,776 | ) | 171,732 | ||||||||||||||
Property and equipment, net | — | 333,416 | — | — | 333,416 | |||||||||||||||
Intangible assets, net | — | 76,356 | — | — | 76,356 | |||||||||||||||
Other assets | — | 11,344 | 3,041 | (3,041 | ) | 11,344 | ||||||||||||||
Investment in subsidiaries | (37,652 | ) | 1,145 | — | 36,507 | — | ||||||||||||||
Total assets | $ | (36,901 | ) | $ | 595,702 | $ | 5,357 | $ | 28,690 | $ | 592,848 | |||||||||
Liabilities and Shareholders’ (Deficit) Equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 68,462 | $ | — | $ | — | $ | 68,462 | ||||||||||
Intercompany payables. | 1,900 | 2,306 | — | (4,206 | ) | — | ||||||||||||||
Accrued expenses and other current liabilities | — | 64,866 | 4,212 | (744 | ) | 68,334 | ||||||||||||||
Current portion of Capital lease obligations | — | 8,186 | — | — | 8,186 | |||||||||||||||
Current portion of long- term debt | — | 362 | — | — | 362 | |||||||||||||||
Total current liabilities | 1,900 | 144,182 | 4,212 | (4,950 | ) | 145,344 | ||||||||||||||
Capital lease obligations | — | 175,340 | — | — | 175,340 | |||||||||||||||
Long-term debt | — | 291,235 | — | (3,041 | ) | 288,194 | ||||||||||||||
Other long-term liabilities | — | 16,785 | — | — | 16,785 | |||||||||||||||
Noncurrent deferred tax liabilities | — | 5,986 | — | — | 5,986 | |||||||||||||||
Total liabilities | 1,900 | 633,528 | 4,212 | (7,991 | ) | 631,649 | ||||||||||||||
Total shareholders’ (deficit) equity | (38,801 | ) | (37,826 | ) | 1,145 | 36,681 | (38,801 | ) | ||||||||||||
Total liabilities and shareholders’ (deficit) equity | $ | (36,901 | ) | $ | 595,702 | $ | 5,357 | $ | 28,690 | $ | 592,848 | |||||||||
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CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL 2010
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 1,704,977 | $ | 553,742 | $ | (1,183 | ) | $ | 2,257,536 | |||||||||
Cost of goods sold | — | (1,208,582 | ) | (370,434 | ) | — | (1,579,016 | ) | ||||||||||||
Distribution costs | — | (31,899 | ) | (12,930 | ) | — | (44,829 | ) | ||||||||||||
Gross profit | — | 464,496 | 170,378 | (1,183 | ) | 633,691 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Wages, salaries and benefits | — | (223,276 | ) | (87,524 | ) | — | (310,800 | ) | ||||||||||||
Selling and general expenses | — | (71,629 | ) | (34,395 | ) | 1,183 | (104,841 | ) | ||||||||||||
Administrative expenses | (2,208 | ) | (81,425 | ) | (19,121 | ) | — | (102,754 | ) | |||||||||||
Rent expense, net | — | (9,493 | ) | (9,642 | ) | — | (19,135 | ) | ||||||||||||
Depreciation and amortization | — | (55,005 | ) | (7,348 | ) | — | (62,353 | ) | ||||||||||||
Advertising | — | (15,819 | ) | (7,356 | ) | — | (23,175 | ) | ||||||||||||
Total operating expenses | (2,208 | ) | (456,647 | ) | (165,386 | ) | 1,183 | (623,058 | ) | |||||||||||
Operating (loss) income | (2,208 | ) | 7,849 | 4,992 | — | 10,633 | ||||||||||||||
Bargain purchase | — | — | 15,681 | — | 15,681 | |||||||||||||||
Loss on debt extinguishment | — | (1,041 | ) | — | — | (1,041 | ) | |||||||||||||
Interest expense, net | — | (61,125 | ) | (106 | ) | — | (61,231 | ) | ||||||||||||
Equity (loss) income from subsidiaries | (36,970 | ) | 18,631 | — | 18,339 | — | ||||||||||||||
(Loss) income before income taxes | (39,178 | ) | (35,686 | ) | 20,567 | 18,339 | (35,958 | ) | ||||||||||||
Income tax expense | (751 | ) | (1,284 | ) | (1,936 | ) | 12,975 | 9,004 | ||||||||||||
Net (loss) income | $ | (39,929 | ) | $ | (36,970 | ) | $ | 18,631 | $ | 31,314 | $ | (26,954 | ) | |||||||
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CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL 2009
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiary | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 1,696,015 | $ | 546 | $ | (953 | ) | $ | 1,695,608 | |||||||||
Cost of goods sold | — | (1,185,344 | ) | — | — | (1,185,344 | ) | |||||||||||||
Distribution costs | — | (33,852 | ) | — | — | (33,852 | ) | |||||||||||||
Gross profit | — | 476,819 | 546 | (953 | ) | 476,412 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Wages, salaries and benefits | — | (224,958 | ) | — | — | (224,958 | ) | |||||||||||||
Selling and general expenses | — | (74,176 | ) | (251 | ) | 953 | (73,474 | ) | ||||||||||||
Administrative expenses | (2,036 | ) | (62,923 | ) | (54 | ) | — | (65,013 | ) | |||||||||||
Rent expense, net | — | (13,219 | ) | — | — | (13,219 | ) | |||||||||||||
Depreciation and amortization | — | (52,727 | ) | — | — | (52,727 | ) | |||||||||||||
Advertising | — | (12,531 | ) | — | — | (12,531 | ) | |||||||||||||
Total operating expenses | (2,036 | ) | (440,534 | ) | (305 | ) | 953 | (441,922 | ) | |||||||||||
Operating (loss) income | (2,036 | ) | 36,285 | 241 | — | 34,490 | ||||||||||||||
Loss on debt extinguishment | — | (6,770 | ) | — | — | (6,770 | ) | |||||||||||||
Interest (expense) income, net | — | (48,279 | ) | 251 | — | (48,028 | ) | |||||||||||||
Equity (loss) income from subsidiaries | (24,033 | ) | 297 | — | 23,736 | — | ||||||||||||||
(Loss) income before income taxes | (26,069 | ) | (18,467 | ) | 492 | 23,736 | (20,308 | ) | ||||||||||||
Income tax benefit (expense) | 376 | (5,566 | ) | (195 | ) | — | (5,385 | ) | ||||||||||||
Net (loss) income | $ | (25,693 | ) | $ | (24,033 | ) | $ | 297 | $ | 23,736 | $ | (25,693 | ) | |||||||
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CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL 2008
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiary | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 1,700,432 | $ | 315 | $ | (515 | ) | $ | 1,700,232 | |||||||||
Cost of goods sold | — | (1,195,850 | ) | — | — | (1,195,850 | ) | |||||||||||||
Distribution costs | — | (32,882 | ) | — | — | (32,882 | ) | |||||||||||||
Gross profit | — | 471,700 | 315 | (515 | ) | 471,500 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Wages, salaries and benefits | — | (223,014 | ) | — | — | (223,014 | ) | |||||||||||||
Selling and general expenses | — | (83,162 | ) | 1,060 | 515 | (81,587 | ) | |||||||||||||
Administrative expenses | (1,482 | ) | (62,048 | ) | (45 | ) | — | (63,575 | ) | |||||||||||
Rent expense, net | — | (13,114 | ) | — | — | (13,114 | ) | |||||||||||||
Depreciation and amortization | — | (50,732 | ) | — | — | (50,732 | ) | |||||||||||||
Advertising | — | (10,699 | ) | — | — | (10,699 | ) | |||||||||||||
Total operating expenses | (1,482 | ) | (442,769 | ) | 1,015 | 515 | (442,721 | ) | ||||||||||||
Operating (loss) income | (1,482 | ) | 28,931 | 1,330 | — | 28,779 | ||||||||||||||
Loss on debt extinguishment | — | (2,228 | ) | — | — | (2,228 | ) | |||||||||||||
Interest (expense) income, net | — | (43,768 | ) | 57 | — | (43,711 | ) | |||||||||||||
Equity (loss) income from subsidiaries | (9,738 | ) | 838 | — | 8,900 | — | ||||||||||||||
(Loss) income before income taxes | (11,220 | ) | (16,227 | ) | 1,387 | 8,900 | (17,160 | ) | ||||||||||||
Income tax benefit (expense) | 376 | (6,489 | ) | (549 | ) | — | 6,316 | |||||||||||||
Net (loss) income | $ | (10,844 | ) | $ | (9,738 | ) | $ | 838 | $ | 8,900 | $ | (10,844 | ) | |||||||
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CONSOLIDATED STATEMENT OF CASH FLOWS
Fiscal 2010
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (950 | ) | $ | 37,783 | $ | 12,625 | $ | — | $ | 49,458 | |||||||||
Cash flows used in investing activities: | ||||||||||||||||||||
Acquisition of the Penn Traffic Company | — | — | (85,023 | ) | — | (85,023 | ) | |||||||||||||
Cash paid for property and equipment | — | (28,081 | ) | (21,582 | ) | — | (49,663 | ) | ||||||||||||
Proceeds from sale of assets | — | — | 20,753 | — | 20,753 | |||||||||||||||
Investment in subsidiaries | — | (85,023 | ) | — | 85,023 | — | ||||||||||||||
Change in intercompany receivables position | — | (950 | ) | (10,786 | ) | 11,736 | — | |||||||||||||
Net cash used in investing activities | — | (114,054 | ) | (96,638 | ) | 96,759 | (113,933 | ) | ||||||||||||
Cash flows provided by financing activities: | ||||||||||||||||||||
Proceeds from long-term debt borrowings | — | 112,125 | — | — | 112,125 | |||||||||||||||
Repayments of long-term debt borrowings | — | (36,377 | ) | — | — | (36,377 | ) | |||||||||||||
Borrowings on ABL Facility | — | 348,737 | — | — | 348,737 | |||||||||||||||
Repayments on ABL Facility | — | (347,737 | ) | — | — | (347,737 | ) | |||||||||||||
Proceeds from issuance of common stock | 30,000 | 30,000 | — | (30,000 | ) | 30,000 | ||||||||||||||
Dividend | (30,000 | ) | (30,000 | ) | — | 30,000 | (30,000 | ) | ||||||||||||
Principal payments on capital leases | — | (9,004 | ) | (290 | ) | — | (9,294 | ) | ||||||||||||
Deferred financing costs incurred | — | (5,769 | ) | — | — | (5,769 | ) | |||||||||||||
Capital contribution | — | — | 85,023 | (85,023 | ) | — | ||||||||||||||
Change in intercompany payables position | 950 | 10,786 | — | (11,736 | ) | — | ||||||||||||||
Change in bank overdraft position | — | 487 | — | — | 487 | |||||||||||||||
Net cash provided by financing activities | 950 | 73,248 | 84,733 | (96,759 | ) | 62,172 | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (3,023 | ) | 720 | — | (2,303 | ) | |||||||||||||
Cash and cash equivalents — beginning of year | — | 19,712 | 10 | — | 19,722 | |||||||||||||||
Cash and cash equivalents — end of year | $ | — | $ | 16,689 | $ | 730 | $ | — | $ | 17,419 | ||||||||||
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CONSOLIDATED STATEMENT OF CASH FLOWS
Fiscal 2009
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiary | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (950 | ) | $ | 67,881 | $ | (118 | ) | $ | — | $ | 66,813 | ||||||||
Cash flows provided by (used in) investing activities: | ||||||||||||||||||||
Cash paid for property and equipment | — | (28,080 | ) | — | — | (28,080 | ) | |||||||||||||
Interest rate swap settlement | — | (5,613 | ) | — | — | (5,613 | ) | |||||||||||||
Interest rate swap interest paid | — | (3,146 | ) | — | — | (3,146 | ) | |||||||||||||
Change in intercompany receivables position | — | (950 | ) | 118 | 832 | — | ||||||||||||||
Dividend | 105,000 | — | — | (105,000 | ) | — | ||||||||||||||
Other | — | 146 | — | — | 146 | |||||||||||||||
Net cash provided by (used in) investing activities | 105,000 | (37,643 | ) | 118 | (104,168 | ) | (36,693 | ) | ||||||||||||
Cash flows (used in) provided by financing activities: | ||||||||||||||||||||
Proceeds from long-term debt borrowings | — | 270,474 | — | — | 270,474 | |||||||||||||||
Repayments of long-term debt borrowings | — | (200,936 | ) | — | — | (200,936 | ) | |||||||||||||
Dividend | (105,000 | ) | (105,000 | ) | — | 105,000 | (105,000 | ) | ||||||||||||
Borrowings on ABL Facility | — | 76,600 | — | — | 76,600 | |||||||||||||||
Repayments on ABL Facility | — | (62,600 | ) | — | — | (62,600 | ) | |||||||||||||
Deferred financing costs incurred | — | (12,011 | ) | — | — | (12,011 | ) | |||||||||||||
Principal payments on capital leases | — | (7,287 | ) | — | — | (7,287 | ) | |||||||||||||
Change in intercompany payables position | 950 | (118 | ) | — | (832 | ) | — | |||||||||||||
Change in bank overdraft position | — | 43 | — | — | 43 | |||||||||||||||
Net cash (used in) provided by financing activities | (104,050 | ) | (40,835 | ) | — | 104,168 | (40,717 | ) | ||||||||||||
Net decrease in cash and cash equivalents | — | (10,597 | ) | — | — | (10,597 | ) | |||||||||||||
Cash and cash equivalents — beginning of year | — | 30,309 | 10 | — | 30,319 | |||||||||||||||
Cash and cash equivalents — end of year | $ | — | $ | 19,712 | $ | 10 | $ | — | $ | 19,722 | ||||||||||
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CONSOLIDATED STATEMENT OF CASH FLOWS
Fiscal 2008
(Dollars in thousands)
Tops Holding | Guarantor | |||||||||||||||||||
Corporation | Tops Markets, LLC | Subsidiary | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (950 | ) | $ | 76,552 | 5,465 | — | 81,067 | ||||||||||||
Cash flows used in investing activities: | ||||||||||||||||||||
Cash paid for property and equipment | — | (35,298 | ) | — | — | (35,298 | ) | |||||||||||||
Purchase in Members’ interest in Tops Markets, LLC | — | (20,639 | ) | — | — | (20,639 | ) | |||||||||||||
Intercompany loan | — | — | (3,041 | ) | 3,041 | — | ||||||||||||||
Change in intercompany receivables position | — | (950 | ) | (2,424 | ) | 3,374 | — | |||||||||||||
Investment in subsidiaries | — | (10 | ) | — | 10 | — | ||||||||||||||
Other | — | (300 | ) | — | — | (300 | ) | |||||||||||||
Net cash (used in) provided by investing activities | — | (57,197 | ) | (5,465 | ) | 6,425 | (56,237 | ) | ||||||||||||
Cash flows provided by (used in) financing activities: | ||||||||||||||||||||
Proceeds from long-term debt borrowings | — | 38,041 | — | (3,041 | ) | 35,000 | ||||||||||||||
Repayments of long-term debt borrowings | — | (48,633 | ) | — | — | (48,633 | ) | |||||||||||||
Deferred financing costs incurred | — | (4,871 | ) | — | — | (4,871 | ) | |||||||||||||
Principal payments on capital leases | — | (6,434 | ) | — | — | (6,434 | ) | |||||||||||||
Change in bank overdraft position | — | (3,499 | ) | — | — | (3,499 | ) | |||||||||||||
Change in intercompany | — | |||||||||||||||||||
payables position | 950 | 2,424 | — | (3,374 | ) | |||||||||||||||
Capital contribution | — | — | 10 | (10 | ) | — | ||||||||||||||
Net cash provided by (used in) financing activities | 950 | (22,972 | ) | 10 | (6,425 | ) | (28,437 | ) | ||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (3,617 | ) | 10 | — | (3,607 | ) | |||||||||||||
Cash and cash equivalents — beginning of year | — | 33,926 | — | — | 33,926 | |||||||||||||||
Cash and cash equivalents — end of year | $ | — | 30,309 | $ | 10 | — | $ | 30,319 | ||||||||||||
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16-week | 12-week | 12-week | 12-week | |||||||||||||
period ended | period ended | period ended | period ended | |||||||||||||
Fiscal 2010 | April 24, 2010 | July 17, 2010 | October 9, 2010 | January 1, 2011 | ||||||||||||
Net sales | $ | 665,015 | $ | 541,833 | $ | 519,859 | $ | 530,829 | ||||||||
Gross profit | 193,759 | 150,633 | 146,901 | 142,398 | ||||||||||||
Operating (loss) income (1) | (2,882 | ) | 5,373 | 6,448 | 1,694 | |||||||||||
Income tax benefit (expense) (2) | 9,913 | (214 | ) | 397 | (1,092 | ) | ||||||||||
Net income (loss) (3) | 3,294 | (8,915 | ) | (7,556 | ) | (13,777 | ) | |||||||||
16-week | 12-week | 12-week | 13-week | |||||||||||||
period ended | period ended | period ended | period ended | |||||||||||||
Fiscal 2009 | April 18, 2009 | July 11, 2009 | October 3, 2009 | January 2, 2010 | ||||||||||||
Net sales | $ | 505,758 | $ | 392,187 | $ | 373,216 | $ | 424,447 | ||||||||
Gross profit | 145,068 | 110,692 | 105,334 | 115,318 | ||||||||||||
Operating income | 9,082 | 12,730 | 6,960 | 5,718 | ||||||||||||
Income tax benefit (expense) (4) | 720 | (590 | ) | 1,159 | (6,674 | ) | ||||||||||
Net (loss) income (5) | (2,940 | ) | 2,413 | (873 | ) | (24,293 | ) |
(1) | The operating (loss) income for the 16-week period ended April 24, 2010, 12-week period ended July 17, 2010, 12-week period ended October 9, 2010 and 12-week period ended January 1, 2011 include integration costs, legal expenses associated with the FTC’s review of the acquired supermarkets and other one-time legal and professional fees related to the Acquisition totaling $17.4 million, $5.9 million, $5.0 million and $2.4 million, respectively. | |
(2) | The income tax benefit for the 16-week period ended April 24, 2010 includes a $10.3 million reversal of valuation allowance that was established in Fiscal 2009 as a result of the recognition of a deferred tax liability that resulted from the bargain purchase associated with the Acquisition. | |
(3) | The net income for the 16-week period ended April 24, 2010 includes a $15.7 million bargain purchase related to excess of net assets acquired over the purchase | |
(4) | The income tax expense for the 13-week period ended January 2, 2010 includes a $13.7 million dollar charge related to a net deferred tax assets valuation allowance. | |
(5) | The net income (loss) for the 12-week period ended July 11, 2009 and October 3, 2009 include a gain (loss) on debt extinguishment of $0.5 million and $(7.3) million, respectively. |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
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ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Directors and executive officers | Age | Principal occupation or position | ||||
Gary Matthews | 53 | Chairman | ||||
Frank Curci | 59 | President, Chief Executive Officer and Director | ||||
Kevin Darrington | 43 | Chief Operating Officer | ||||
William R. Mills | 54 | Senior Vice President, Chief Financial Officer | ||||
Lynne Burgess | 62 | Senior Vice President, General Counsel and Secretary | ||||
John Persons | 44 | Senior Vice President, Operations | ||||
Jack Barrett | 63 | Senior Vice President, Human Resources, Assistant Secretary | ||||
Eric Fry | 44 | Director | ||||
Eric Kanter | 36 | Director | ||||
Gregory Josefowicz | 59 | Director | ||||
Stacey Rauch | 53 | Director |
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ITEM 11. | EXECUTIVE COMPENSATION |
• | Our Compensation Committee reviews individual and corporate performance, business results and general information related to compensation at other private companies in setting the compensation level for our CEO and CFO. A similar process is used in formulating the recommendations to the Compensation Committee for the compensation levels of the other named executive officers. |
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• | We use both subjective and objective measures of performance in setting the annual incentive compensation levels for named executive officers. The primary objective measure that we use is adjusted EBITDA. We also have the discretion to make adjustments to annual incentive compensation levels based on business considerations or individual performance as described below. | ||
• | We do not provide special retirement arrangements or significant personal benefits for our named executive officers. |
• | Total compensation consisting of: |
• | Base salary; |
• | Annual cash bonus awards; and |
• | Long-term equity incentive awards; |
• | Participation in broad-based retirement, health and welfare benefits; |
• | Severance and change of control protections; and |
• | Limited perquisites. |
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Actual Fiscal | ||||||||
Performance Measure | Target Level ($) | 2010 Results ($) | ||||||
Adjusted EBITDA | 143,244 | 133,384 |
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Eric Kanter
Gregory Josefowicz
Eric Fry
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Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) (1) | ($) | ($) (2) | ($) (3) | ($) | ($) (4) | ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Frank Curci | 2010 | 516,341 | — | — | 282,519 | 389,544 | — | 43,331 | 1,231,735 | |||||||||||||||||||||||||||
President, Chief Executive | 2009 | 500,000 | — | — | — | 400,000 | — | 31,431 | 931,431 | |||||||||||||||||||||||||||
Officer and Director | ||||||||||||||||||||||||||||||||||||
Kevin Darrington | 2010 | 339,423 | — | — | 181,420 | 194,775 | — | 219,125 | 934,743 | |||||||||||||||||||||||||||
Chief Operating Officer (5) | 2009 | 300,000 | 254,916 | — | — | 144,000 | — | 20,489 | 719,405 | |||||||||||||||||||||||||||
William R. Mills | 2010 | 42,308 | — | — | 438,513 | 25,000 | — | 15,473 | 521,294 | |||||||||||||||||||||||||||
Senior Vice President, Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
John Persons | 2010 | 262,882 | — | — | 147,453 | 122,429 | — | 27,498 | 560,262 | |||||||||||||||||||||||||||
Senior Vice President, | 2009 | 240,000 | — | — | — | 115,200 | — | 16,261 | 371,461 | |||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||
Jack Barrett | 2010 | 214,119 | — | — | 43,557 | 96,296 | — | 28,835 | 382,807 | |||||||||||||||||||||||||||
Senior Vice President, | 2009 | 210,000 | — | — | — | 100,800 | — | 20,447 | 331,247 | |||||||||||||||||||||||||||
Human Resources | ||||||||||||||||||||||||||||||||||||
Lynne Burgess | 2010 | 79,327 | 55,000 | — | 248,327 | 37,671 | — | 55,754 | 476,079 | |||||||||||||||||||||||||||
Senior Vice President, General Counsel and Secretary | ||||||||||||||||||||||||||||||||||||
Patrick Curran | 2010 | 243,135 | — | — | — | 108,983 | — | 25,258 | 377,376 | |||||||||||||||||||||||||||
Senior Vice President, | 2009 | 240,000 | — | — | — | 115,200 | — | 16,095 | 371,295 | |||||||||||||||||||||||||||
Sales and Marketing (6) |
(1) | Mr. Darrington’s bonus amount represents the Company’s forgiveness of a five-year loan that the Company made to Mr. Darrington in 2009 in connection with his relocation expenses. The Board of Directors discretionarily decided to forgive this loan and any interest accrued thereon based on Mr. Darrington’s performance and service during 2009. This decision was formalized under a March 2010 board resolution. Ms. Burgess’ bonus represents a signing bonus received by her in connection with her hire. She is required to repay this amount to the extent her employment terminates prior to January 1, 2012. |
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(2) | Amounts reflect the aggregate grant date fair value of stock option awards. The fair value of each option grant is estimated based on the fair market value on the date of grant and using the Black-Scholes option pricing model. For a more detailed discussion on the valuation model and assumptions used to calculate the fair value of our options, refer to Note 12 to the consolidated financial statements. | |
(3) | These amounts represent cash paid in respect of our annual cash bonus plan for performance in the applicable fiscal year. | |
(4) | These amounts represent health and welfare premiums, life insurance premiums, short-term disability premiums, long-term disability premiums, 401(k) matching contributions and the Company’s incremental cost of the named executive officers’ use of a company car, taxable relocation expenses, and certain tax gross up payments. For Mr. Darrington, this includes a payment of $186,879 provided to him in 2010 to compensate him for taxes that he is expected to incur as a result of the loan forgiveness reported in 2009. For Mr. Mills, this includes a relocation tax gross up in the amount of $2,511. For Ms. Burgess, this includes a relocation tax gross up in the amount of $5,003 and a sign on bonus tax gross up in the amount of $32,187. | |
(5) | Mr. Darrington also served as our chief financial officer for most of Fiscal 2010, until Mr. Mills was appointed chief financial officer on December 1, 2010. | |
(6) | Mr. Curran’s employment with us terminated effective December 31, 2010, prior to the end of Fiscal 2010. |
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All Other | Grant Date | |||||||||||||||||||||||
Option Awards: | Fair Value | |||||||||||||||||||||||
Estimated Possible Payouts Under Non- | Number of | Option | of Stock | |||||||||||||||||||||
Equity Incentive Plan Awards | Securities | Exercise | and Option | |||||||||||||||||||||
Threshold | Target | Maximum | Underlying | Price | Awards | |||||||||||||||||||
Name | ($) (1) | ($) (1) | ($) (1) | Options | ($) | ($) (2) | ||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | ||||||||||||||||||
Frank Curci | — | 524,992 | — | 707 | 1,040 | 282,519 | ||||||||||||||||||
Kevin Darrington | — | 262,500 | — | 454 | 1,040 | 181,420 | ||||||||||||||||||
William R. Mills | — | 27,555 | — | 1,000 | 1,040 | 438,513 | ||||||||||||||||||
John Persons | — | 165,000 | — | 369 | 1,040 | 147,453 | ||||||||||||||||||
Jack Barrett | — | 129,780 | — | 109 | 1,040 | 43,557 | ||||||||||||||||||
Lynne Burgess | — | 50,769 | — | 555 | 1,040 | 248,327 | ||||||||||||||||||
Patrick Curran | — | 146,877 | — | — | — | — |
(1) | Represents annual incentive award targets under our annual cash bonus plan. The awards for the named executive officers did not have threshold or maximum amounts. | |
(2) | Amounts reflect the aggregate grant date fair value of stock option awards. The fair value of each option grant is estimated based on the fair market value on the date of grant and using the Black-Scholes option pricing model. For a more detailed discussion on the valuation model and assumptions used to calculate the fair value of our options, refer to Note 12 to the consolidated financial statements. |
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Option Awards | ||||||||||||||||||||
Equity | ||||||||||||||||||||
Incentive Plan | ||||||||||||||||||||
Number of | Number of | Awards: | ||||||||||||||||||
Securities | Securities | Number of | ||||||||||||||||||
Underlying | Underlying | Securities | ||||||||||||||||||
Unexercised | Unexercised | Underlying | Option | Option | ||||||||||||||||
Options | Options | Unexercised | Exercise Price | Expiration | ||||||||||||||||
Name | Exercisable | Unexerciseable | Unearned Options | ($) | Date | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Frank Curci | — | 3,000 | (1) | — | 400 | (8) | 1/24/2018 | |||||||||||||
— | 707 | (2) | — | 1,040 | 10/5/2020 | |||||||||||||||
Kevin Darrington | — | 1,667 | (3) | — | 400 | (8) | 3/3/2018 | |||||||||||||
— | 454 | (2) | — | 1,040 | 10/5/2020 | |||||||||||||||
William R. Mills | — | 1,000 | (4) | — | 1,040 | 11/1/2020 | ||||||||||||||
John Persons | — | 1,111 | (5) | — | 400 | (8) | 2/14/2018 | |||||||||||||
— | 369 | (2) | — | 1,040 | 10/5/2020 | |||||||||||||||
Jack Barrett | — | 389 | (6) | — | 400 | (8) | 11/19/2018 | |||||||||||||
— | 109 | (2) | — | 1,040 | 10/5/2020 | |||||||||||||||
Lynne Burgess | — | 555 | (7) | — | 1,040 | 9/13/2020 |
(1) | Stock options granted on January 24, 2008 that are scheduled to vest in three equal annual installments on January 24, 2011, 2012, and 2013. | |
(2) | Stock options granted on October 5, 2010 that are scheduled to vest in four equal annual installments on October 5, 2011, 2012, 2013, and 2014. | |
(3) | Stock options granted on March 3, 2008 that are scheduled to vest in three equal annual installments on March 3, 2011, 2012, and 2013. | |
(4) | Stock options granted on November 1, 2010 that are scheduled to vest in three equal annual installments on November 1, 2013, 2014, and 2015. | |
(5) | Stock options granted on February 14, 2008 that are scheduled to vest in three equal annual installments on February 14, 2011, 2012, 2013. | |
(6) | Stock options granted on November 19, 2008 that are scheduled to vest in three equal annual installments on November 19, 2011, 2012, and 2013. | |
(7) | Stock options granted on September 13, 2010 that are scheduled to vest in three equal annual installments on September 13, 2013, 2014, and 2015. | |
(8) | The exercise price of these stock option awards was decreased from $1,000 to $400 as of October 27, 2009 in connection with a refinancing and related extraordinary dividend paid by the Company to its shareholders in October 2009. This modification was enacted in order to equitably adjust awards in order to preserve the aggregate intrinsic value of the stock options immediately after the recapitalization transaction. For more information regarding the recapitalization and the adjustment of the stock option grants, please see Note 12 of the consolidated financial statements included elsewhere in this 10-K. |
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Value of | ||||||||||||||||||||||||
Unvested | ||||||||||||||||||||||||
Value of | Special | Present | ||||||||||||||||||||||
Unvested | Cash | Value | Other | |||||||||||||||||||||
Equity- | Retention | of Health / | Compensation | |||||||||||||||||||||
Based | Bonus | Welfare | or | |||||||||||||||||||||
Severance | Awards | Awards | Benefits | Payments | Total | |||||||||||||||||||
($) (1) | ($) (2) | ($) (3) | ($) (4) | ($) (5) | ($) | |||||||||||||||||||
Involuntary without cause | ||||||||||||||||||||||||
Frank Curci | 524,992 | — | — | 6,435 | — | 531,427 | ||||||||||||||||||
Kevin Darrington. | 350,000 | — | — | 9,594 | — | 359,594 | ||||||||||||||||||
William R. Mills | 275,000 | — | — | 10,362 | — | 285,362 | ||||||||||||||||||
John Persons | 274,996 | — | — | 10,696 | — | 285,692 | ||||||||||||||||||
Jack Barrett | 216,299 | — | — | 6,435 | — | 222,734 | ||||||||||||||||||
Lynne Burgess | 275,000 | — | — | 3,219 | — | 278,219 | ||||||||||||||||||
Patrick Curran (7) | 294,795 | — | — | 6,435 | — | 301,230 | ||||||||||||||||||
Death and disability | ||||||||||||||||||||||||
Frank Curci | — | — | 1,350,000 | — | 129,038 | 1,479,038 | ||||||||||||||||||
Kevin Darrington | — | — | 750,150 | — | 85,290 | 835,440 | ||||||||||||||||||
William R. Mills | — | — | — | — | 66,540 | 66,540 | ||||||||||||||||||
John Persons | — | — | 499,950 | — | 66,539 | 566,489 | ||||||||||||||||||
Jack Barrett | — | — | 175,001 | 62,500 | (8) | 51,865 | 289,366 | |||||||||||||||||
Lynne Burgess | — | — | — | — | 66,540 | 66,540 | ||||||||||||||||||
Patrick Curran (7) | — | — | — | — | — | — | ||||||||||||||||||
Termination without cause within one year after a change of control(6) | ||||||||||||||||||||||||
Frank Curci | 524,992 | 1,920,000 | 1,350,000 | 6,435 | — | 3,801,427 | ||||||||||||||||||
Kevin Darrington | 350,000 | 1,066,880 | 750,150 | 9,594 | — | 2,176,624 | ||||||||||||||||||
William R. Mills | 275,000 | — | — | 10,362 | — | 285,362 | ||||||||||||||||||
John Persons | 274,996 | 711,040 | 499,950 | 10,696 | — | 1,496,682 | ||||||||||||||||||
Jack Barrett | 216,299 | 248,890 | 175,001 | 6,435 | — | 646,625 | ||||||||||||||||||
Lynne Burgess | 275,000 | — | — | 3,219 | — | 278,219 | ||||||||||||||||||
Patrick Curran (7) | — | — | — | — | — | — |
(1) | Includes one times the annual base salary. The Company may also, at its discretion, pay a termination-year bonus prorated to correspond with the portion of the year ending at termination. | |
(2) | Unvested equity-based awards are calculated based on the fair market value of our common stock as of January 1, 2011 of $1,040 per share. The treatment upon termination for each type of equity award is further described under the heading “2007 Stock Incentive Plan” following the Grants of Plan-Based Awards table. | |
(3) | Includes the accelerated payment of the unvested portion of the special cash retention bonus awards. | |
(4) | Includes the estimated value of allowing continued participation in our health and welfare plans for a period of one year. These benefits may be terminated within one year if the named executive officer obtains coverage from a new employer. | |
(5) | Represents an arrangement under which, if a named executive officer terminates employment due to disability, the Company will pay the executive an amount equal to the difference between the benefits received by the executive under the Company’s short-term disability program and his or her full salary amount until the Company’s long-term disability insurance coverage begins. Payments listed in this column apply only in the event of the named executive officer’s termination due to disability. |
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(6) | If the named executive officer’s employment is terminated within one year after a change of control, then the unvested special cash retention bonus amount must be paid. On the other hand, the Board of Directors has the discretion to pay unvested bonus amounts upon a change of control to the extent the change of control constitutes a change in the ownership or effective control of the Company or of a sale of substantially all of the assets of the Company and the Board of Directors makes such payments under all similar plans or arrangements. | |
(7) | Mr. Curran’s employment was terminated effective December 31, 2010. The numbers reflected above show what Mr. Curran is entitled to pursuant to his separation agreement. | |
(8) | This amount represents payment under a life insurance policy. |
Fees Earned | ||||||||||||
Or Paid in Cash | Option Awards | Total | ||||||||||
Name | ($) (1) | ($) (2) | ($) | |||||||||
(a) | (b) | (c) | (d) | |||||||||
Gary Matthews | — | — | — | |||||||||
Eric Fry | — | — | — | |||||||||
Gregory Josefowicz | 60,000 | 15,185 | 75,185 | |||||||||
Eric Kanter | — | — | — | |||||||||
Stacey Rauch | 15,000 | 109,968 | 124,968 |
(1) | External Directors receive an annual cash retainer of $60,000. | |
(2) | The fair value of each option grant is estimated based on the fair market value on the date of grant and using the Black-Scholes option pricing model. For a more detailed discussion on the valuation model and assumptions used to calculate the fair value of our options, refer to Note 12 to the consolidated financial statements. |
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ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Number of Shares | Percentage of | |||||||
Name of beneficial owner | Beneficially Owned | Outstanding Shares | ||||||
Various funds affiliated with Morgan Stanley Private Equity | 103,671 | 71.6 | % | |||||
1585 Broadway, 39th Floor New York, NY 10036 | ||||||||
HSBC Equity Partners USA, LP | 23,019 | 15.9 | % | |||||
c/o HSBC Capital (USA) Inc. 452 Fifth Avenue New York, NY 10018 | ||||||||
HSBC Private Equity Partners II USA, LP | 5,791 | 4.0 | % | |||||
c/o HSBC Capital (USA) Inc. 452 Fifth Avenue New York, NY 10018 | ||||||||
Turbic, Inc. | 7,239 | 5.0 | % | |||||
P.O. Box No. 7776 New Providence, Bahamas | ||||||||
Begain Company Limited | 4,477 | 3.1 | % | |||||
46/F, Sun Hung Kai Centre 30 Harbour Road Wanchai, Hong Kong | ||||||||
Gary Matthews(1)(2) | 0 | * | ||||||
Frank Curci(1) | 579 | * | ||||||
Kevin Darrington(1) | 0 | * | ||||||
William R. Mills(1) | 0 | * | ||||||
Lynne Burgess(1) | 0 | * | ||||||
John Persons(1) | 0 | * | ||||||
Jack Barrett(1) | 0 | * | ||||||
Eric Fry(1)(2) | 0 | * | ||||||
Eric Kanter(1)(2) | 0 | * | ||||||
Gregory Josefowicz(1) | 0 | * | ||||||
Stacey Rauch(1) | 0 | * | ||||||
All directors and executive officers as a group (10 persons)(1) | 579 | * |
* | Less than 1% | |
(1) | The address for each of our directors and executive officers is c/o Tops Markets, LLC, 6363 Main Street, Williamsville, New York, 14221. | |
(2) | Mr. Matthews and Mr. Fry are managing directors and Mr. Kanter is an executive director of MSPE. See table above for information on the beneficial ownership of shares of our common stock by Morgan Stanley Private Equity. Messrs. Matthews, Fry and Kanter expressly disclaim beneficial ownership of such shares. |
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Fiscal 2010 | Fiscal 2009 | |||||||
(52 weeks) | (53 weeks) | |||||||
Audit services | $ | 1,120 | $ | 651 | ||||
Audit-related services | 430 | 351 | ||||||
Tax services | 11 | 21 | ||||||
Total | $ | 1,561 | $ | 1,023 | ||||
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(1) | Consolidated Financial Statements: See Item 8 of Part II of this 10-K. | ||
(2) | Financial Statement Schedules. |
a. | Schedule I — Condensed Financial Information of Tops Holding Corporation | ||
b. | Schedule II — Valuation and Qualifying Accounts | ||
c. | All other schedules are omitted because they are not required or do not apply, or the required information is included elsewhere in the consolidated financial statements or notes thereto. |
Exhibit No. | |||
2.1 | (a) | Asset Purchase Agreement, dated as of January 7, 2010, by and between Tops Markets, LLC (or its assignee(s)) and The Penn Traffic Company and its affiliated entities. | |
2.2 | (a) | Amendment, dated as of January 29, 2010, of Asset Purchase Agreement, dated as of January 7, 2010, by and among Tops Markets, LLC (or its assignee(s)) and The Penn Traffic Company and its affiliated entities. | |
3.1 | (a) | Amended and Restated Certificate of Incorporation of Tops Holding Corporation. | |
3.2 | (a) | Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Tops Holding Corporation. | |
3.3 | (a) | By-Laws of Tops Holding Corporation. | |
3.4 | (a) | Articles of Organization of Tops Markets, LLC. | |
3.5 | (a) | Amended and Restated Operating Agreement of Tops Markets, LLC. | |
3.6 | (a) | Articles of Organization of Tops PT, LLC. | |
3.7 | (a) | Operating Agreement of Tops PT, LLC. | |
3.8 | (a) | Articles of Organization of Tops Gift Card Company, LLC. | |
3.9 | (a) | Operating Agreement of Tops Gift Card Company, LLC. | |
4.1 | (a) | Indenture, dated October 9, 2009, between Tops Holding Corporation and Tops Markets, LLC, the guarantors named therein and U.S. Bank National Association, as trustee. |
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Exhibit No. | |||
4.2 | (a) | First Supplemental Indenture, dated January 29, 2010, among Tops Holding Corporation and Tops Markets, LLC, the guarantors named therein, and U.S. Bank National Association, as trustee. | |
4.3 | (a) | Second Supplemental Indenture, dated February 12, 2010, among Tops Holding Corporation and Tops Markets, LLC, the guarantors named therein, and U.S. Bank National Association, as trustee. | |
4.4 | (a) | Registration Rights Agreement, dated October 9, 2009 between Tops Holding Corporation, Tops Markets, LLC, Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and HSBC Securities (USA) Inc. | |
4.5 | (a) | Registration Rights Agreement, dated February 12, 2010 between Tops Holding Corporation, Tops Markets, LLC, Morgan Stanley & Co. Incorporated and Banc of America Securities LLC. | |
4.6 | (a) | Intercreditor Agreement, dated as of October 9, 2009, by and among Bank of America, N.A., as Initial ABL Agent, and U.S. Bank National Association, as Collateral Agent, and acknowledged by Tops Holding Corporation, Tops Markets, LLC, and the other persons signatory thereto. | |
4.7 | (a) | Supplement to the Intercreditor Agreement, dated as of January 29, 2010, by and among Bank of America, N.A., as Initial ABL Agent, and U.S. Bank National Association, as Collateral Agent, and acknowledged by Tops Holding Corporation, Tops Markets, LLC, and the other persons signatory thereto. | |
4.8 | (a) | The Security Agreement, dated as of October 9, 2009 among the Issuers, the Guarantors and U.S. Bank National Association, as collateral agent. | |
4.9 | (a) | Supplement No. 1 to the Security Agreement, dated as of January 29, 2010 among the Issuers, the Guarantors and U.S. Bank National Association, as collateral agent. | |
4.10 | (a) | Trademark Security Agreement, dated as of October 9, 2009, among Tops Markets, LLC, as grantor, and U.S. Bank National Association, as collateral agent. | |
4.11 | (a) | Trademark Security Agreement, dated as of January 29, 2010, among Tops PT, LLC, as grantor, and U.S. Bank National Association, as collateral agent. | |
4.12 | (a) | Amended and Restated Shareholders’ Agreement, dated as of January 29, 2010, among Tops Holding Corporation and the shareholders identified therein. | |
10.1 | (a) | Credit Agreement, dated as of October 9, 2009, among Tops Markets, LLC, as borrower, the guarantors party thereto, the various lenders and agents party thereto and Bank of America N.A., as administrative agent. | |
10.2 | (a) | Amendment to the Credit Agreement, dated as of January 29, 2010, among Tops Markets, LLC, as borrower, the guarantors party thereto, the various lenders and agents party thereto and Bank of America N.A., as administrative agent. | |
10.3 | (a) | Joinder Agreement to the Credit Agreement, dated as of January 29, 2010, between Tops PT, LLC and Bank of America N.A., as administrative agent and collateral agent, swing line lender and L/C issuer under the Credit Agreement. |
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Exhibit No. | ||||
10.4 | †(c) | The Supply Agreement, dated as of November 12, 2009 between Tops Markets, LLC and C&S Wholesale Grocers and the other parties thereto. | ||
10.5 | (a) | Tops Holding Corporation 2007 Stock Incentive Plan, dated as of January 24, 2008. | ||
10.6 | (a) | Amendment No. 1, dated as of October 27, 2009, of Tops Holding Corporation 2007 Stock Incentive Plan, dated as of January 24, 2008. | ||
10.7 | (a) | Form of Stock Option Agreement of Tops Holding Corporation. | ||
10.8 | (a) | Form of Bonus Award Agreement of Tops Holding Corporation. | ||
10.9 | (a) | Independent Director Compensation Policy of Tops Holding Corporation. | ||
10.10 | (a) | Executive Employment Agreement, dated as of November 12, 2007, between Tops Holding Corporation and Frank Curci. | ||
10.11 | (a) | Executive Employment Agreement, dated as of January 24, 2008, between Tops Markets, LLC and Kevin Darrington. | ||
10.12 | (a) | Executive Employment Agreement, dated as of March 25, 2008, between Tops Markets, LLC and Patrick J. Curran. | ||
10.13 | (b) | Executive Employment Agreement, dated as of May 1, 2010, between Tops Markets, LLC and John Persons. | ||
10.14 | (b) | Executive Employment Agreement, dated as of May 1, 2010, between Tops Markets, LLC and Jack Barrett. | ||
10.15 | (b) | Executive Employment Agreement, dated as of August 25, 2010, between Tops Markets, LLC and Lynne Burgess. | ||
10.16 | (d) | Amendment No. 2, dated as of October 5, 2010, of Tops Holding Corporation 2007 Stock Incentive Plan, dated as of January 24, 2008. | ||
10.17 | (e) | Executive Employment Agreement, dated as of October 7, 2010, between Tops Markets, LLC and William R. Mills. | ||
10.18 | (f) | Separation Agreement, Waiver and General Release, dated as of October 21, 2010, by and among Tops Holding Corporation, Tops Markets, LLC and Patrick Curran. | ||
12.1 | Computation of Ratio of Earnings to Fixed Charges. | |||
14.1 | Code of Ethics. | |||
21.1 | (a) | List of Subsidiaries (as of July 9, 2010). | ||
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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† | Portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Securities Act of 1933, as amended. | |
(a) | Incorporated herein by reference to the Company’s Registration Statement on Form S-4 filed on July 12, 2010. | |
(b) | Incorporated herein by reference to the Company’s Registration Statement on Form S-4/A filed on September 3, 2010. | |
(c) | Incorporated herein by reference to the Company’s Registration Statement on Form S-4/A filed on September 30, 2010. | |
(d) | Incorporated herein by reference to the Company’s Form 8-K filed on October 12, 2010. | |
(e) | Incorporated herein by reference to the Company’s Form 8-K filed on October 14, 2010. | |
(f) | Incorporated herein by reference to the Company’s Form 8-K filed on October 27, 2010. |
TOPS HOLDING CORPORATION | ||||
By: | /s/ William R. Mills | |||
Senior Vice President, Chief Financial Officer | ||||
March 31, 2011 |
Signature | Title | |
/s/ Frank Curci | President, Chief Executive Officer and Director | |
/s/ William R. Mills | Senior Vice President, Chief Financial Officer | |
/s/ David Langless | Vice President, Chief Accounting Officer | |
/s/ Gary Matthews | Chairman | |
/s/ Eric Fry | Director | |
/s/ Gregory Josefowicz | Director | |
/s/ Eric Kanter | Director | |
/s/ Stacey Rauch | Director |
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Table of Contents
CONDENSED FINACIAL INFORMATION OF TOPS HOLDING CORPORATION
(PARENT COMPANY ONLY)
CONDENSED BALANCE SHEETS
(Dollars in thousands)
January 1, 2011 | January 2, 2010 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Current deferred tax assets | $ | — | $ | 751 | ||||
Total current assets | — | 751 | ||||||
Investment in subsidiary | (75,094 | ) | (37,652 | ) | ||||
Total assets | $ | (75,094 | ) | $ | (36,901 | ) | ||
Liabilities and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Intercompany payable | $ | 2,850 | $ | 1,900 | ||||
Total current liabilities | 3,394 | 1,900 | ||||||
Total liabilities | 3,394 | 1,900 | ||||||
Total shareholders’ deficit | (78,448 | ) | (38,801 | ) | ||||
Total liabilities and shareholders’ deficit | $ | (75,094 | ) | $ | (36,901 | ) | ||
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CONDENSED FINACIAL INFORMATION OF TOPS HOLDING CORPORATION
(PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Equity loss from subsidiary | $ | (36,970 | ) | $ | (24,033 | ) | $ | (9,738 | ) | |||
Operating expenses: | ||||||||||||
Administrative expenses | (2,208 | ) | (2,036 | ) | (1,482 | ) | ||||||
Total operating expenses | (2,208 | ) | (2,036 | ) | (1,482 | ) | ||||||
Loss before income taxes | (39,178 | ) | (26,069 | ) | (11,220 | ) | ||||||
Income tax (expense) benefit. | (751 | ) | 376 | 376 | ||||||||
Net loss | $ | (39,929 | ) | $ | (25,693 | ) | $ | (10,844 | ) | |||
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CONDENSED FINANCIAL INFORMATION OF TOPS HOLDING CORPORATION
(PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | ||||||||||
(52 weeks) | (53 weeks) | (52 weeks) | ||||||||||
Net cash used in operating activities | $ | (950 | ) | $ | (950 | ) | $ | (950 | ) | |||
Cash flows provided by investing activities: | ||||||||||||
Dividend | — | 105,000 | — | |||||||||
Investment in subsidiary | — | — | — | |||||||||
Net cash provided by investing activities | — | 105,000 | — | |||||||||
Cash flows provided by (used in) financing activities: | ||||||||||||
Proceeds from issuance of common stock | 30,000 | — | — | |||||||||
Dividend | (30,000 | ) | (105,000 | ) | — | |||||||
Change in intercompany payable position | 950 | 950 | 950 | |||||||||
Net cash provided by (used in) financing activities | 950 | (104,050 | ) | 950 | ||||||||
Net change in cash and cash equivalents | — | — | — | |||||||||
Cash and cash equivalents-beginning of period | — | — | — | |||||||||
Cash and cash equivalents-end of period | $ | — | $ | — | $ | — | ||||||
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VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
Balance at | Additions | Balance at | ||||||||||||||
Beginning | Charged to Costs | End of | ||||||||||||||
of Period | and Expenses | Deductions | Period | |||||||||||||
Fiscal 2008 | ||||||||||||||||
Self-insurance reserves | $ | 538 | $ | 5,911 | $ | (550 | ) | $ | 5,899 | |||||||
LIFO inventory valuation reserve | 128 | 6,938 | — | 7,066 | ||||||||||||
Fiscal 2009 | ||||||||||||||||
Self-insurance reserves | 5,899 | 4,712 | (2,308 | ) | 8,303 | |||||||||||
LIFO inventory valuation reserve | 7,066 | 249 | — | 7,315 | ||||||||||||
Valuation allowance for deferred income tax assets | — | 13,896 | — | 13,896 | ||||||||||||
Fiscal 2010 | ||||||||||||||||
Self-insurance reserves | 8,303 | 6,028 | (2,598 | ) | 11,733 | |||||||||||
LIFO inventory valuation reserve | 7,315 | 2,055 | — | 9,370 | ||||||||||||
Valuation allowance for deferred income tax assets | 13,896 | 11,901 | — | 25,797 |
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