Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 03, 2015 | Nov. 09, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 3, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | TOPS HOLDING II CORP | |
Entity Central Index Key | 1,584,701 | |
Current Fiscal Year End Date | --12-27 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 126,559 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Oct. 03, 2015 | Dec. 27, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 36,261 | $ 26,316 |
Accounts receivable, net | 70,364 | 64,130 |
Inventory, net | 149,723 | 149,284 |
Prepaid expenses and other current assets | 13,554 | 11,172 |
Income taxes refundable | 43 | 43 |
Current deferred tax assets | 3,456 | 3,456 |
Total current assets | 273,401 | 254,401 |
Property and equipment, net | 373,639 | 385,889 |
Goodwill | 212,901 | 212,901 |
Intangible assets, net | 175,355 | 184,159 |
Total assets | 1,035,296 | 1,037,350 |
Current liabilities: | ||
Accounts payable | 85,225 | 85,985 |
Accrued expenses and other current liabilities | 104,232 | 82,110 |
Current portion of capital lease obligations | 8,524 | 8,653 |
Current portion of long-term debt | 2,052 | 1,983 |
Total current liabilities | 200,033 | 178,731 |
Capital lease obligations | 140,465 | 140,315 |
Long-term debt, net | 669,303 | 649,097 |
Other long-term liabilities | 35,980 | 33,591 |
Non-current deferred tax liabilities | 46,716 | 45,383 |
Total liabilities | $ 1,092,497 | $ 1,047,117 |
Commitments and contingencies | ||
Common stock ($0.001 par value; 300,000 authorized shares, 126,560 shares issued and 126,559 shares outstanding as of October 3, 2015 and 126,560 shares issued and outstanding as of December 27, 2014) | $ 0 | $ 0 |
Treasury stock (at cost; 1 share as of October 3, 2015) | (1) | |
Paid-in capital | 7,856 | 8,454 |
Accumulated deficit | (63,384) | (16,549) |
Accumulated other comprehensive loss, net of tax | (1,672) | (1,672) |
Total shareholders' deficit | (57,201) | (9,767) |
Total liabilities and shareholders' deficit | $ 1,035,296 | $ 1,037,350 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Oct. 03, 2015 | Dec. 27, 2014 |
Statement Of Financial Position [Abstract] | ||
Common shares, par value | $ 0.001 | $ 0.001 |
Common shares, authorized | 300,000 | 300,000 |
Common shares, issued | 126,560 | 126,560 |
Common shares, outstanding | 126,559 | 126,560 |
Treasury stock, shares | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 560,744 | $ 580,741 | $ 1,869,505 | $ 1,933,480 |
Cost of goods sold | (386,195) | (404,739) | (1,284,579) | (1,349,355) |
Distribution costs | (9,125) | (10,969) | (34,948) | (37,801) |
Gross profit | 165,424 | 165,033 | 549,978 | 546,324 |
Operating expenses: | ||||
Wages, salaries and benefits | (80,354) | (80,305) | (272,581) | (267,505) |
Selling and general expenses | (27,459) | (27,471) | (91,809) | (96,938) |
Administrative expenses (inclusive of share-based compensation expense of $53, $52, $177 and $113) | (17,842) | (16,302) | (58,844) | (51,285) |
Rent expense, net | (6,292) | (6,233) | (20,863) | (20,506) |
Depreciation and amortization | (14,719) | (14,045) | (47,891) | (45,512) |
Advertising | (4,901) | (4,280) | (16,590) | (16,042) |
Gain on sale of assets (Note 8) | 11,014 | |||
Total operating expenses | (151,567) | (148,636) | (497,564) | (497,788) |
Operating income | 13,857 | 16,397 | 52,414 | 48,536 |
Loss on debt extinguishment | (34,503) | |||
Interest expense, net | (18,619) | (18,625) | (63,404) | (63,023) |
Loss before income taxes | (4,762) | (2,228) | (45,493) | (14,487) |
Income tax (expense) benefit | (400) | 795 | (1,342) | 4,461 |
Net loss | (5,162) | (1,433) | (46,835) | (10,026) |
Other comprehensive (loss) income | (13) | 435 | ||
Comprehensive loss | $ (5,162) | $ (1,446) | $ (46,835) | $ (9,591) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | |
Income Statement [Abstract] | ||||
Share-based compensation expense included in administrative expenses | $ 53 | $ 52 | $ 177 | $ 113 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 03, 2015 | Oct. 04, 2014 | |
Cash flows provided by operating activities: | ||
Net loss | $ (46,835) | $ (10,026) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 57,179 | 53,322 |
Loss on debt extinguishment | 34,503 | |
Gain on sale of assets | (11,014) | |
Amortization of deferred financing costs | 2,618 | 3,031 |
Deferred income taxes | 1,334 | (4,502) |
Straight-line rent adjustment | 775 | 1,754 |
LIFO inventory valuation adjustments | 661 | 2,848 |
Share-based compensation expense included in administrative expenses | 177 | 113 |
Other | 490 | 692 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (6,234) | 2,661 |
Increase in inventory, net | (1,341) | (13,614) |
Increase in prepaid expenses and other current assets | (2,382) | (4,701) |
Decrease in income taxes refundable | 41 | |
(Decrease) increase in accounts payable | (537) | 7,383 |
Increase (decrease) in accrued expenses and other current liabilities | 22,684 | (5,097) |
Increase in other long-term liabilities | 1,846 | 1,761 |
Net cash provided by operating activities | 53,924 | 35,666 |
Cash flows used in investing activities: | ||
Cash paid for property and equipment | (30,692) | (30,422) |
Cash proceeds from sale of assets | 11,255 | |
Net cash used in investing activities | (19,437) | (30,422) |
Cash flows used in financing activities: | ||
Proceeds from long-term debt borrowings | 560,000 | |
Repayments of long-term debt borrowings | (521,480) | (3,307) |
Borrowings on 2017 ABL Facility | 353,966 | 315,600 |
Repayments on 2017 ABL Facility | (374,466) | (323,800) |
Debt extinguishment costs paid | (24,290) | |
Deferred financing costs paid | (10,593) | (637) |
Principal payments on capital leases | (6,680) | (6,947) |
Dividends to Tops MBO Corporation | (775) | (12,571) |
Change in bank overdraft position | (223) | 98 |
Purchase of treasury stock | (1) | |
Proceeds from sale leaseback financing transactions | 25,436 | |
Net cash used in financing activities | (24,542) | (6,128) |
Net increase (decrease) in cash and cash equivalents | 9,945 | (884) |
Cash and cash equivalents-beginning of period | 26,316 | 29,913 |
Cash and cash equivalents-end of period | $ 36,261 | $ 29,029 |
The Company, Basis of Presentat
The Company, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 03, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company, Basis of Presentation and Summary of Significant Accounting Policies | 1. THE COMPANY, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Tops Holding II Corporation (“Holding II,” or collectively with its subsidiaries, the “Company”), the parent of Tops Holding LLC (“Holding I”), formerly Tops Holding Corporation, was incorporated on May 7, 2013. Holding I is the parent of Tops Markets, LLC (“Tops Markets”), a supermarket retailer with supermarkets in Upstate New York, Northern Pennsylvania and Vermont. As of October 3, 2015, the Company operated 161 supermarkets, 160 under the Tops banner and one under the Orchard Fresh banner, with an additional five supermarkets operated by franchisees under the Tops banner. Holding II has no business operations other than the ownership of Holding I and as the issuer of the 2018 Notes (see Note 6) and a guarantor of the 2022 Notes (see Note 6). Holding II is the reporting entity for the 2018 Notes and 2022 Notes. Tops MBO Corporation (“Tops MBO Co”), the parent company of Holding II, is neither a co-issuer nor guarantor of these notes. Accordingly, the condensed consolidated financial statements have been prepared for Holding II and exclude the assets and results of operations of Tops MBO Co. Tops MBO Co’s assets consist solely of its investment in Holding II. Tops MBO Co has no operations other than as the equity owner of Holding II. Accounting Policies A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of Holding II for the fiscal year ended December 27, 2014, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2015. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions have been eliminated. The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 30. Fiscal years include 13 four-week reporting periods, with an additional week in the thirteenth reporting period for 53-week fiscal years. The first quarter of each fiscal year includes four reporting periods, while the remaining quarters include three reporting periods. The Company’s condensed consolidated financial statements for the 12-week and 40-week periods ended October 3, 2015 and October 4, 2014 are unaudited, and in the opinion of management, contain all adjustments that are of a normal and recurring nature necessary for a fair statement of financial position and results of operations for such periods. Recently Issued Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 changes the criteria for reporting discontinued operations and modifies related disclosure requirements. The new guidance is effective on a prospective basis for fiscal years beginning after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015, with early adoption permitted. The Company elected early adoption, and there was no material impact to its consolidated financial statements as of October 3, 2015 or December 27, 2014. In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”), which provides guidance regarding revenue recognition. ASU No. 2014-09’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. The Company is currently assessing the potential impact of ASU No. 2014-09 on its consolidated financial statements. In April 2015, FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU No. 2015-03”), which amended Accounting Standards Codification (“ASC”) 835 Subtopic 30 - Interest - Imputation of Interest to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU No. 2015-03. This guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted. During the Company’s second fiscal quarter the Company elected early adoption of ASU No. 2015-03, and reclassified debt issuance costs of $15.0 million from the line item “other assets” to the line item “long-term debt, net” in its condensed consolidated balance sheet as of December 27, 2014. In April 2015, FASB issued ASU No. 2015-04, “Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets” (“ASU No. 2015-04”), which amended ASC 715 - Compensation - Retirement Benefits to permit entities with a fiscal year-end that does not coincide with a calendar month-end the ability to measure defined benefit plan assets and obligations as of the calendar month-end that is closest to the entity’s fiscal year-end and apply that measurement date consistently from year to year. This guidance is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2015-04 on its consolidated financial statements. Segments The Company’s supermarkets offer grocery, produce, frozen, dairy, meat, floral, seafood, health and beauty care, general merchandise, deli and bakery goods. The Company operates one supermarket format where each supermarket offers the same general mix of products with similar pricing to similar categories of customers. As of October 3, 2015, 50 corporate supermarkets offered pharmacy services and 51 corporate fuel centers were in operation. As of October 4, 2014, 76 corporate supermarkets offered pharmacy services and 51 corporate fuel centers were in operation. The Company’s retail operations, which represent substantially all of the Company’s consolidated sales, earnings and total assets, are its only operating segment and reportable segment. The Company’s retail operations as a whole reflect the level at which the business is managed and how the Company’s Chief Executive Officer, who acts as the Company’s chief operating decision maker, assesses performance internally. The following table presents sales revenue by type of similar product (dollars in thousands): 12-week periods ended 40-week periods ended October 3, 2015 October 4, 2014 October 3, 2015 October 4, 2014 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 321,794 57.4 % $ 322,403 55.5 % $ 1,060,122 56.7 % $ 1,067,793 55.2 % Perishables (2) 162,354 29.0 % 159,968 27.5 % 555,260 29.7 % 540,835 28.0 % Fuel 38,275 6.8 % 54,559 9.4 % 125,764 6.7 % 180,846 9.3 % Pharmacy 33,302 5.9 % 38,707 6.7 % 111,429 6.0 % 126,986 6.6 % Other (3) 5,019 0.9 % 5,104 0.9 % 16,930 0.9 % 17,020 0.9 % $ 560,744 100.0 % $ 580,741 100.0 % $ 1,869,505 100.0 % $ 1,933,480 100.0 % (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. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and notes thereto. The most significant estimates used by management are related to the accounting for vendor allowances, valuation of long-lived assets including goodwill and intangible assets, acquisition accounting, lease classification, self-insurance reserves, inventory valuation and income taxes. Actual results could differ from these estimates. Fair Value of Financial Instruments The provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” establish a framework for measuring fair value and a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value as follows: Level 1 – observable inputs such as quoted prices in active markets; Level 2 – inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and Level 3 – unobservable inputs that reflect the Company’s determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including the Company’s own data. Financial instruments include cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these financial instruments. At October 3, 2015 and December 27, 2014, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 3, 2015 December 27, Carrying value of long-term debt: Current portion of long-term debt $ 2,052 $ 1,983 Long-term debt 669,303 649,097 Total carrying value of debt instruments 671,355 651,080 Fair value of debt instruments 672,386 656,305 Excess of fair value over book value $ 1,031 $ 5,225 The fair values of the 2017 Notes and 2018 Notes, which are included in long-term debt as of December 27, 2014, and the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of October 3, 2015, were based on quoted market prices, a Level 2 source. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. Goodwill and the Tops tradename are reviewed annually for impairment on December 1, or more frequently if impairment indicators arise. |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Oct. 03, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions | 2. BUSINESS ACQUISITIONS On December 1, 2013, Tops MBO Co consummated the purchase of substantially all of the common stock of Holding II (the “Management Purchase”) from Morgan Stanley Private Equity and other stockholders of Holdings II (the “Sellers”). As a result of the Management Purchase, primarily through their ownership of Tops MBO Co, members of management now beneficially own all of the outstanding common stock of Holding II. Accordingly, the Company was required to apply “push down” accounting, with the results of the Management Purchase reflected in Holding II’s condensed consolidated financial statements. The application of “push down” accounting has resulted in a new basis of accounting in which the total purchase price paid by Tops MBO Co has been allocated to the assets acquired and liabilities assumed using estimates of their fair values under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” In addition to the cash consideration of $20.9 million paid to the Sellers, the Company incurred $15.8 million of transaction fees during late 2013 in connection with the Management Purchase, of which $0.6 million and $15.2 million were paid during the 4-week period ended December 28, 2013 and 40-week period ended October 4, 2014, respectively. As disclosed in the Company’s audited consolidated financial statements for the fiscal year ended December 27, 2014, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2015, the purchase price allocation for the Management Purchase was finalized during the fourth quarter of 2014. Previously reported results have been retroactively adjusted to reflect the finalization of the acquisition date fair values of property, equipment and intangible assets. This finalization resulted in the increase of depreciation and amortization expense of $0.1 million and the decrease of income tax benefit of $0.4 million during the 12-week period ended October 4, 2014. The combined impact of the depreciation and amortization expense and income tax benefit adjustments resulted in a $0.5 million increase in the Company’s net loss during the 12-week period ended October 4, 2014. In addition, this finalization resulted in the increase of depreciation and amortization expense of $0.5 million and the increase of income tax benefit of $0.3 million during the 40-week period ended October 4, 2014. The combined impact of the depreciation and amortization expense and income tax benefit adjustments resulted in a $0.2 million increase in the Company’s net loss during the 40-week period ended October 4, 2014. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Oct. 03, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 3. GOODWILL AND INTANGIBLE ASSETS, NET The following table summarizes the change in the Company’s goodwill balance during the 40-week period ended October 3, 2015 (dollars in thousands): Balance - December 27, 2014 $ 212,901 Adjustments — Balance - October 3, 2015 $ 212,901 Goodwill is reviewed annually for impairment on December 1, or more frequently upon the occurrence of trigger events. Based on the Company’s assessment, no goodwill impairment was recorded during the 12-week and 40-week periods ended October 3, 2015 and October 4, 2014. Intangible assets, net of accumulated amortization, consist of the following (dollars in thousands): Gross Net Average Carrying Accumulated Carrying Amortization October 3, 2015 Amount Amortization Amount Period Tradename - indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,200 (12,607 ) 16,593 14.0 Favorable lease rights 21,550 (5,592 ) 15,958 9.0 Franchise agreements 13,300 (3,445 ) 9,855 14.0 Pharmacy scripts 2,800 (1,051 ) 1,749 14.0 $ 198,050 $ (22,695 ) $ 175,355 11.9 Gross Net Carrying Accumulated Carrying December 27, 2014 Amount Amortization Amount Tradename - indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,200 (7,913 ) 21,287 Favorable lease rights 21,600 (3,269 ) 18,331 Franchise agreements 13,300 (2,115 ) 11,185 Pharmacy scripts 2,800 (644 ) 2,156 $ 198,100 $ (13,941 ) $ 184,159 The Tops tradename is reviewed annually for impairment on December 1, or more frequently, if impairment indicators arise. Based on the Company’s assessment, no impairment was recorded during the 12-week and 40-week periods ended October 3, 2015 and October 4, 2014. During the 12-week periods ended October 3, 2015 and October 4, 2014, amortization expense related to intangible assets was $2.6 million and $3.0 million, respectively. During the 40-week periods ended October 3, 2015 and October 4, 2014, amortization expense related to intangible assets was $8.8 million and $10.1 million, respectively. This amortization is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss. Depreciation and amortization in the condensed consolidated statements of comprehensive loss during each of the 12-week periods ended October 3, 2015 and October 4, 2014 includes $0.1 million of contra-expense related to the amortization of unfavorable lease rights, which are classified in other long-term liabilities in the condensed consolidated balance sheets. During each of the 40-week periods ended October 3, 2015 and October 4, 2014, depreciation and amortization in the condensed consolidated statements of comprehensive loss includes $0.3 million of contra-expense related to the amortization of unfavorable lease rights. Expected future amortization of these unfavorable lease rights is contra-expense of $0.1 million in the remaining period of Fiscal 2015, $0.3 million in Fiscal 2016, $0.3 million in Fiscal 2017, $0.3 million in Fiscal 2018, $0.3 million in Fiscal 2019 and $0.8 million thereafter. As of October 3, 2015, expected future amortization of intangible assets is as follows (dollars in thousands): 2015 (remaining period) $ 2,666 2016 8,181 2017 6,946 2018 5,907 2019 4,952 Thereafter 15,503 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Oct. 03, 2015 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | 4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (dollars in thousands): October 3, 2015 December 27, 2014 Wages, taxes and benefits $ 21,641 $ 18,951 Interest payable 16,624 2,269 Union medical, pension and 401(k) 14,116 8,985 Lottery 11,563 10,954 Self-insurance reserves 6,491 6,130 Professional and legal fees 4,238 3,170 Gift cards 3,238 8,974 Sales and use tax 2,726 596 Property and equipment expenditures 2,661 3,383 Utilities 2,520 3,383 Money orders 2,366 887 Repairs and maintenance 2,014 2,212 Other 14,034 12,216 $ 104,232 $ 82,110 |
Capital Lease Obligations
Capital Lease Obligations | 9 Months Ended |
Oct. 03, 2015 | |
Leases [Abstract] | |
Capital Lease Obligations | 5. CAPITAL LEASE OBLIGATIONS The Company has a number of capital leases in effect for supermarket properties and equipment. The initial lease terms generally range up to twenty-five years and will expire at various times through 2034, with options to renew for additional periods. The majority of the supermarket leases provide for base rental, plus real estate taxes, insurance, common area maintenance and other operating expenses applicable to the leased premises. Some leases contain escalation clauses for future rents and contingent rents based on sales volume. As of October 3, 2015, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2015 (remaining period) $ 7,279 2016 31,155 2017 29,194 2018 25,416 2019 22,646 Thereafter 119,228 Total minimum lease payments 234,918 Less amounts representing interest (153,299 ) Present value of net minimum lease payments 81,619 Less current obligations (8,524 ) Long-term cash obligations 73,095 Non-cash obligations 67,370 Total long-term capital lease obligations $ 140,465 The Company entered into build-to-suit and sale-leaseback transactions in various years involving certain properties that did not qualify for sale-leaseback accounting as the lease agreements included various forms of continuing involvement. These transactions include the sale-leaseback of nine properties for cash proceeds of $12.6 million and $25.4 million during the 12-week and 40-week periods ended October 4, 2014, respectively. These transactions have been classified as financing transactions in accordance with ASC Topic 840, “Leases,” due to the existence of prohibited forms of continuing involvement. Under the financing method, the assets remain on the consolidated balance sheet of the Company and proceeds received by the Company from these transactions are recorded as capital lease obligations, allocated between land, as applicable, and building. Payments under these leases are applied as payments of imputed interest and deemed principal on the underlying building obligations, with no underlying cash payments deemed attributable to the land obligations and the estimated net book value of the buildings at the conclusion of the lease terms. The related land assets are not depreciated, and at the end of the lease terms, the remaining capital lease obligations will equal the combined net book values of the land and buildings. At the expiration of the lease terms, which range from 2018 to 2068, or when the Company’s continuing involvement under the lease agreements ends, the related land, buildings and capital lease obligations will be removed from the consolidated balance sheet, with no underlying cash payments. These capital lease obligations are reflected as non-cash obligations in the preceding table. |
Debt
Debt | 9 Months Ended |
Oct. 03, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 6. DEBT Long-term debt is comprised of the following (dollars in thousands): October 3, 2015 December 27, 2022 Notes $ 560,000 $ — 2018 Notes 90,000 150,000 2017 Notes — 460,000 Discount on 2018 Notes (532 ) (1,100 ) Deferred financing fees (13,347 ) (15,033 ) 2017 ABL Facility 31,500 52,000 Other loans 3,734 5,213 Total debt 671,355 651,080 Current portion (2,052 ) (1,983 ) Total long-term debt $ 669,303 $ 649,097 On June 10, 2015, Holding I and Tops Markets II Corporation (collectively, the “Issuers”) issued $560.0 million in aggregate principal amount of senior secured notes due in 2022, bearing annual interest at a rate of 8.00% (the “2022 Notes”). The proceeds from the 2022 Notes were used to fund a tender offer for, and redeem the balance of, the previously outstanding $460.0 million of senior secured notes issued by Holding I, Tops Markets and Tops Markets II Corporation (the “2017 Notes”) and to fund a partial tender offer for $60.0 million of the $150.0 million outstanding 8.75%/9.50% senior unsecured notes issued by Tops Holding II (the “2018 Notes”), including tender and redemption premiums of $23.0 million and $1.2 million, respectively, which have been recorded within loss on debt extinguishment in the condensed consolidated statement of comprehensive loss during the 40-week period ended October 3, 2015. The proceeds were also used to pay accrued and unpaid interest related to the tendered and redeemed notes and fees and expenses related to the issuance of the 2022 Notes. The 2022 Notes mature on June 15, 2022 and require semi-annual interest payments on June 15 and December 15, beginning December 15, 2015. The 2022 Notes are redeemable, in whole or in part, at any time on or after June 15, 2018 at specified redemption prices. Prior to June 15, 2018, the Company may redeem the 2022 Notes in whole or in part, at a specified “make-whole” premium. The 2022 Notes are collateralized by (i) first priority security interests, subject to certain exceptions and permitted liens, in the stock held by the Issuers and the guarantor subsidiaries, Tops Markets, Tops PT, LLC, Tops Gift Card Company, LLC and Erie Logistics LLC (collectively, the “Guarantors”), the Company’s warehouse and distribution facility in Lancaster, New York, the Company’s retail facility located in Fayetteville, New York and certain owned real property acquired by the Issuers and the Guarantors following the issue date of the 2022 Notes, equipment, intellectual property, and substantially all other assets of the Issuers and the Guarantors, other than those assets securing the Company’s asset-based revolving credit facility (the “2017 ABL Facility”) on a first priority basis (collectively, the “2022 Notes Priority Collateral”), and (ii) second priority security interests, subject to certain exceptions and permitted liens, in the assets of Holding II, the Issuers and the Guarantors that secure the 2017 ABL Facility on a first priority basis, including present and future receivables, deposit accounts, inventory, prescription lists, and certain rights and proceeds relating thereto (collectively, the “ABL Priority Collateral”). The 2022 Notes are guaranteed on a senior secured basis, jointly and severally, by each of the Guarantors and will in the future be guaranteed by certain of Holding I’s future domestic subsidiaries. The 2022 Notes are also guaranteed on a senior unsecured basis by Holding II. As discussed in Note 1, the Company adopted ASU No. 2015-03 and as a result now nets deferred financing costs against long-term debt in the Company’s condensed consolidated balance sheets. This adoption resulted in the reclassification of unamortized deferred financing costs of $15.0 million from the line item “other assets” to the line item “long-term debt, net” in the Company’s condensed consolidated balance sheet as of December 27, 2014. Costs associated with the 2022 Notes of $10.8 million were capitalized and are being amortized over the term of the 2022 Notes using the effective interest method. Unamortized deferred financing costs of $8.0 million related to the 2017 Notes and $1.9 million related to the redeemed portion of the 2018 Notes and $0.4 million of the unamortized discount on the 2018 Notes were written off and recorded within loss on debt extinguishment in the condensed consolidated statement of comprehensive loss during the 40-week period ended October 3, 2015. During the 12-week periods ended October 3, 2015 and October 4, 2014, amortization expense related to the deferred financing costs was $0.5 million and $0.9 million, respectively. During the 40-week periods ended October 3, 2015 and October 4, 2014, amortization expense related to deferred financing costs was $2.6 million and $3.0 million, respectively. This amortization expense is included in interest expense in the condensed consolidated statements of comprehensive loss. At October 3, 2015, long-term debt included deferred financing costs, net of accumulated amortization of $1.2 million, totaling $13.3 million. At December 27, 2014, long-term debt included deferred financing costs, net of accumulated amortization of $7.3 million, totaling $15.0 million. On May 15, 2013, Holding II issued $150.0 million of 2018 Notes. As discussed above, on June 10, 2015, Holding II successfully tendered for and repurchased $60.0 million of 2018 Notes, resulting in a remaining outstanding principal amount of $90.0 million as of October 3, 2015. If certain conditions are met, Holding II may be entitled to pay interest on the 2018 Notes by increasing the principal of the notes or by issuing new notes as pay-in-kind interest. This payment in kind interest would accrue at an annual rate of 9.50%. The $148.5 million proceeds from the 2018 Notes issuance, net of a $1.5 million original issue discount, were used to pay a $141.9 million dividend to the Holding II shareholders. In connection with the partial tender offer for the 2018 Notes completed on June 10, 2015, $0.4 million of the unamortized discount was written off and recorded within loss on debt extinguishment in the condensed consolidated statement of comprehensive loss during the 40-week period ended October 3, 2015. The 2018 Notes mature June 15, 2018 and require semi-annual interest payments on June 15 and December 15. To the extent permitted by the agreements governing the 2022 Notes and the 2017 ABL Facility (see below), Holding I may make dividend payments to Holding II to fund the semi-annual interest payments for the 2018 Notes. The 2018 Notes are redeemable, in whole or in part, at specified redemption prices. On December 14, 2012, Tops Markets entered into the 2017 ABL Facility with Bank of America, N.A. as collateral agent and administrative agent. The 2017 ABL Facility allows a maximum borrowing capacity of $125.0 million, subject to a borrowing base calculation, with an option for up to $50.0 million of additional borrowing capacity if certain conditions are met. The borrowing base includes inventory, pharmacy prescription files and certain receivables. The 2017 ABL Facility will mature on December 14, 2017. As of October 3, 2015, the unused availability under the 2017 ABL Facility was $54.9 million, after giving effect to the borrowing base calculation, $23.8 million of letters of credit outstanding and $31.5 million of borrowings outstanding. As of December 27, 2014, $20.7 million of letters of credit were outstanding under the 2017 ABL Facility. Revolving loans under the 2017 ABL Facility, at the Company’s option, bear interest at either LIBOR plus a margin of 150 to 200 basis points, determined based on levels of borrowing availability, or the prime rate plus a margin of 50 to 100 basis points, determined based on levels of borrowing availability. As of October 3, 2015 and December 27, 2014, the weighted average interest rates on borrowings under the 2017 ABL Facility were 2.56% and 2.24%, respectively. The 2017 ABL Facility is collateralized primarily by (i) first priority interests, subject to certain exceptions and permitted liens, in the ABL Priority Collateral, and (ii) second priority interests, subject to certain exceptions and permitted liens, in the 2022 Notes Priority Collateral. The instruments governing the 2022 Notes, 2018 Notes and the 2017 ABL Facility impose customary affirmative and negative covenants on the Company, including restrictions on indebtedness, liens, type of business, acquisitions, investments, sale or transfer of assets, payment of dividends, transactions involving affiliates, and obligations on a change in control. Failure to meet any of these covenants would be an event of default. On August 19, 2014, the 2017 ABL Facility was amended to reduce specified restrictions on the Company’s ability to make certain payments, including dividends. On November 29, 2013, Tops MBO Co entered into a $12.3 million term loan (“MBO Co Loan”) to partially fund the Management Purchase. The MBO Co Loan bore cash interest of LIBOR plus a margin of 300 basis points, with six scheduled quarterly principal and interest payments that began March 31, 2014. Holding II and its subsidiaries were neither co-issuers nor guarantors of the MBO Co Loan, and none of the assets or stock of Holding II were pledged as collateral for the MBO Co Loan. Accordingly, the MBO Co Loan was not pushed down to the consolidated financial statements of Holding II. The remaining principal balance on the MBO Co Loan, along with accrued and unpaid interest, was repaid in full on September 25, 2014. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 03, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES Income tax (expense) benefit was as follows (dollars in thousands): 12-week periods ended 40-week periods ended October 3, October 4, 2014 October 3, 2015 October 4, 2014 Current $ — $ (23 ) $ (8 ) $ (41 ) Deferred (400 ) 818 (1,334 ) 4,502 Total income tax (expense) benefit $ (400 ) $ 795 $ (1,342 ) $ 4,461 Based on an assessment of positive and negative evidence regarding the realization of the Company’s deferred tax assets, the Company continues to maintain a full valuation allowance against total net deferred tax assets, and consequently, the Company recognized no income tax benefit during the 12-week and 40-week periods ended October 3, 2015. The income tax expense recognized for the 12-week and 40-week periods ended October 3, 2015 solely reflects the recognition of additional valuation allowance associated with the tax amortization of the Company’s indefinite-lived tradename and goodwill deferred tax liabilities. During the 12-week and 40-week periods ended October 3, 2015, the effective tax rate would have been 39.3% and 39.1%, respectively, without the establishment of the valuation allowance for both periods. The income tax benefit recognized during the 12-week and 40-week periods ended October 4, 2014 primarily reflects the loss before income taxes, net of the recognition of valuation allowance associated with the Company’s indefinite-lived tradename and goodwill deferred tax liabilities. During the 12-week and 40-week periods ended October 4, 2014, the effective tax rate would have been 42.2% and 41.7%, respectively, without the establishment of the valuation allowance. As of the beginning of Fiscal 2015, the Company had U.S. federal and state net operating loss carryforwards of $45.7 million and $41.9 million, respectively, which expire beginning in 2026. In addition, the Company had federal tax credits of $4.6 million, which expire beginning in 2026. |
Gain on Sale of Assets
Gain on Sale of Assets | 9 Months Ended |
Oct. 03, 2015 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Gain on Sale of Assets | 8. GAIN ON SALE OF ASSETS During January 2015, the Company sold pharmacy scripts and inventory related to 27 of its in-store pharmacy locations for cash proceeds of $14.9 million. These pharmacies were then closed. A resulting gain on sale of assets of $11.0 million, net of the carrying value of sold inventory of $3.2 million and direct selling expenses of $0.7 million, was recognized in the condensed consolidated statement of comprehensive loss for the 40-week period ended October 3, 2015. |
Shareholders' Deficit
Shareholders' Deficit | 9 Months Ended |
Oct. 03, 2015 | |
Equity [Abstract] | |
Shareholders' Deficit | 9. SHAREHOLDERS’ DEFICIT On January 8, 2015, the Company paid a dividend of $0.8 million to Tops MBO Co to repurchase outstanding shares of common stock of Tops MBO Co from a former Company executive. In addition, one outstanding share of common stock of Holding II was repurchased. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 03, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES Multiemployer Pension Plan On December 22, 2013, Tops Markets acquired all of the membership interests of Erie Logistics LLC (“Erie Logistics”) and certain other assets from C&S Wholesale Grocers, Inc. (“C&S”). Erie Logistics operates the Company’s warehouse and distribution facilities located in Lancaster and Cheektowaga, New York and employs the warehouse and driver personnel at these facilities, all of whom are represented by Teamsters Local 264. Under its supply agreement with Tops Markets, C&S, through Erie Logistics, had operated these facilities since 2002. In late January 2014, the Company received notice that the New York State Teamsters Conference Pension and Retirement Fund (the “Fund”) had suspended Erie Logistics as a participating employer in the Fund pending the Fund’s investigation into the acquisition of Erie Logistics from C&S. This suspension was retroactive to the effective date of the acquisition. During this “suspension” and thereafter through the date of this Quarterly Report on Form 10-Q, Erie Logistics has continued to make contributions to the Fund as required by the collective bargaining agreements with Teamsters Local 264. The Fund has rejected and returned these contributions. During the 12-week periods ended October 3, 2015 and October 4, 2014, these rejected contributions totaled $1.2 million and $0.8 million, respectively. During the 40-week periods ended October 3, 2015 and October 4, 2014, these rejected contributions totaled $3.6 million and $3.1 million, respectively. On May 27, 2014, the Fund provided Erie Logistics and C&S with notice of its determination that Erie Logistics incurred employer withdrawal liability as a result of the acquisition. The notice provides that Erie Logistics owes withdrawal liability of $183.7 million, payable in a lump sum or in monthly installments, calculated to give effect to a limit on total withdrawal liability imposed by the Employee Retirement Income Security Act (“ERISA”), of $641,514 for 240 months. The Company believes that the Fund’s determination of a withdrawal violates ERISA, the existing participation agreements between Erie Logistics and the Fund, and the fiduciary duties of the trustees of the Fund. The Company is vigorously contesting this determination, initially through mandatory arbitration under ERISA. The Company has not recorded any reserve for this matter as a loss is not considered probable. If it were ultimately determined that Erie Logistics has incurred a withdrawal liability to the Fund, the Company would bear financial responsibility for this liability. Under the terms of the purchase agreement for the acquisition of Erie Logistics from C&S, and as a continuation of our prior contractual obligations, the Company retains the obligation to indemnify C&S in the event withdrawal liability is imposed on Erie Logistics, the Company or C&S. During the pendency of the proceeding to contest the withdrawal determination, ERISA requires that conditional monthly payments of withdrawal liability be made, which began July 28, 2014. During each of the 12-week periods ended October 3, 2015 and October 4, 2014, the monthly conditional payments of withdrawal liability totaled $1.9 million. During the 40-week periods ended October 3, 2015 and October 4, 2014, the monthly conditional payments of withdrawal liability totaled $5.8 million and $1.9 million, respectively. These monthly conditional payments are in addition to pension contributions the Company is required to make for the benefit of Erie Logistics’ associates under the collective bargaining agreements with Teamsters Local 264 which, as noted, the Fund has refused to accept. The aggregate conditional monthly payments of withdrawal liability, totaling $9.6 million as of October 3, 2015, have been recorded in accounts receivable, while the aggregate rejected contributions, totaling $7.8 million as of October 3, 2015, have been recorded in accrued expenses and other current liabilities within our condensed consolidated balance sheet. On July 28, 2014, Teamsters Local 264 filed a grievance charging a violation of its collective bargaining agreements by reason of the Company’s failing to participate in the Fund. Purchase Commitments Effective December 22, 2013, in connection with its purchase of all the membership interests of Erie Logistics and certain other assets from C&S, the Company modified its existing supply agreement with C&S whereby it resumed warehousing and transportation functions, while C&S continues to provide procurement and purchasing services in support of the majority of the Company’s supply chain. This modified supply agreement sets out the parties' respective responsibilities for the procurement and purchase of merchandise intended for use or resale in our supermarkets. In consideration for the services it provides under the agreement, C&S is paid a fee based on all merchandise procured and also has incentive income opportunities. As of April 1, 2015, the Company and C&S agreed in principal to amend certain operating terms of the supply agreement and extend the term of the agreement through April 1, 2020. On September 24, 2012, the Company entered into a supplemental supply agreement with C&S to provide similar services in support of the 21 supermarkets acquired from GU Markets in October 2012. This agreement expires on September 23, 2022. Effective May 1, 2013, Tops Markets entered into a member participation agreement with Topco, a procurement cooperative for food retailers and wholesalers, for the supply of substantially all of the Company’s prescription drugs. Tops Markets must purchase 95% of its branded prescription drugs and 95% of its generic pharmaceutical products through Topco. This agreement expires February 28, 2017. Effective July 24, 2010, the Company extended its existing IT outsourcing agreement with HP Enterprise Services, LLC (formerly known as Electronic Data Systems, LLC), or HP, through December 31, 2017 to provide a wide range of information systems services. Under this agreement, HP provides data center operations, mainframe processing, business applications and systems development to enhance the Company’s customer service and efficiency. The charges under this agreement are based upon the services requested at predetermined rates. The costs of these purchase commitments are not reflected in the Company’s consolidated balance sheets. Environmental Liabilities The Company is contingently liable for potential environmental issues related to some of its properties. As the Company is unaware of environmental issues that are expected to materially impact the Company’s consolidated financial statements as a whole, no amounts were accrued as of October 3, 2015 or December 27, 2014. Collective Bargaining Agreements The Company employs approximately 14,450 associates. Approximately 83% of these associates are members of United Food and Commercial Workers, or UFCW, District Union Local One, or Local One, or two other UFCW unions. Approximately 4% of these associates are members of Teamsters Local 264, who work in our warehouse and distribution facilities. All other associates are non-union. The Company is a party to five collective bargaining agreements with Local One expiring between April 2017 and October 2018. The Company has two non-Local One UFCW collective bargaining agreements that expire in April 2016 and February 2018. The Company is also a party to three collective bargaining agreements with Teamsters Local 264 expiring in August 2019. Legal Proceedings Except as otherwise disclosed in this note, the Company is unaware of any legal proceedings that are expected to materially impact the Company’s consolidated financial statements as a whole. No amounts related to legal proceedings were accrued as of October 3, 2015 or December 27, 2014. |
The Company, Basis of Present17
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 03, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company | The Company Tops Holding II Corporation (“Holding II,” or collectively with its subsidiaries, the “Company”), the parent of Tops Holding LLC (“Holding I”), formerly Tops Holding Corporation, was incorporated on May 7, 2013. Holding I is the parent of Tops Markets, LLC (“Tops Markets”), a supermarket retailer with supermarkets in Upstate New York, Northern Pennsylvania and Vermont. As of October 3, 2015, the Company operated 161 supermarkets, 160 under the Tops banner and one under the Orchard Fresh banner, with an additional five supermarkets operated by franchisees under the Tops banner. Holding II has no business operations other than the ownership of Holding I and as the issuer of the 2018 Notes (see Note 6) and a guarantor of the 2022 Notes (see Note 6). Holding II is the reporting entity for the 2018 Notes and 2022 Notes. Tops MBO Corporation (“Tops MBO Co”), the parent company of Holding II, is neither a co-issuer nor guarantor of these notes. Accordingly, the condensed consolidated financial statements have been prepared for Holding II and exclude the assets and results of operations of Tops MBO Co. Tops MBO Co’s assets consist solely of its investment in Holding II. Tops MBO Co has no operations other than as the equity owner of Holding II. |
Accounting Policies | Accounting Policies A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of Holding II for the fiscal year ended December 27, 2014, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2015. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions have been eliminated. The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 30. Fiscal years include 13 four-week reporting periods, with an additional week in the thirteenth reporting period for 53-week fiscal years. The first quarter of each fiscal year includes four reporting periods, while the remaining quarters include three reporting periods. The Company’s condensed consolidated financial statements for the 12-week and 40-week periods ended October 3, 2015 and October 4, 2014 are unaudited, and in the opinion of management, contain all adjustments that are of a normal and recurring nature necessary for a fair statement of financial position and results of operations for such periods. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 changes the criteria for reporting discontinued operations and modifies related disclosure requirements. The new guidance is effective on a prospective basis for fiscal years beginning after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015, with early adoption permitted. The Company elected early adoption, and there was no material impact to its consolidated financial statements as of October 3, 2015 or December 27, 2014. In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”), which provides guidance regarding revenue recognition. ASU No. 2014-09’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. The Company is currently assessing the potential impact of ASU No. 2014-09 on its consolidated financial statements. In April 2015, FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU No. 2015-03”), which amended Accounting Standards Codification (“ASC”) 835 Subtopic 30 - Interest - Imputation of Interest to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU No. 2015-03. This guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted. During the Company’s second fiscal quarter the Company elected early adoption of ASU No. 2015-03, and reclassified debt issuance costs of $15.0 million from the line item “other assets” to the line item “long-term debt, net” in its condensed consolidated balance sheet as of December 27, 2014. In April 2015, FASB issued ASU No. 2015-04, “Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets” (“ASU No. 2015-04”), which amended ASC 715 - Compensation - Retirement Benefits to permit entities with a fiscal year-end that does not coincide with a calendar month-end the ability to measure defined benefit plan assets and obligations as of the calendar month-end that is closest to the entity’s fiscal year-end and apply that measurement date consistently from year to year. This guidance is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2015-04 on its consolidated financial statements. |
Segments | Segments The Company’s supermarkets offer grocery, produce, frozen, dairy, meat, floral, seafood, health and beauty care, general merchandise, deli and bakery goods. The Company operates one supermarket format where each supermarket offers the same general mix of products with similar pricing to similar categories of customers. As of October 3, 2015, 50 corporate supermarkets offered pharmacy services and 51 corporate fuel centers were in operation. As of October 4, 2014, 76 corporate supermarkets offered pharmacy services and 51 corporate fuel centers were in operation. The Company’s retail operations, which represent substantially all of the Company’s consolidated sales, earnings and total assets, are its only operating segment and reportable segment. The Company’s retail operations as a whole reflect the level at which the business is managed and how the Company’s Chief Executive Officer, who acts as the Company’s chief operating decision maker, assesses performance internally. The following table presents sales revenue by type of similar product (dollars in thousands): 12-week periods ended 40-week periods ended October 3, 2015 October 4, 2014 October 3, 2015 October 4, 2014 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 321,794 57.4 % $ 322,403 55.5 % $ 1,060,122 56.7 % $ 1,067,793 55.2 % Perishables (2) 162,354 29.0 % 159,968 27.5 % 555,260 29.7 % 540,835 28.0 % Fuel 38,275 6.8 % 54,559 9.4 % 125,764 6.7 % 180,846 9.3 % Pharmacy 33,302 5.9 % 38,707 6.7 % 111,429 6.0 % 126,986 6.6 % Other (3) 5,019 0.9 % 5,104 0.9 % 16,930 0.9 % 17,020 0.9 % $ 560,744 100.0 % $ 580,741 100.0 % $ 1,869,505 100.0 % $ 1,933,480 100.0 % (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. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and notes thereto. The most significant estimates used by management are related to the accounting for vendor allowances, valuation of long-lived assets including goodwill and intangible assets, acquisition accounting, lease classification, self-insurance reserves, inventory valuation and income taxes. Actual results could differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” establish a framework for measuring fair value and a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value as follows: Level 1 – observable inputs such as quoted prices in active markets; Level 2 – inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and Level 3 – unobservable inputs that reflect the Company’s determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including the Company’s own data. Financial instruments include cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these financial instruments. At October 3, 2015 and December 27, 2014, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 3, 2015 December 27, Carrying value of long-term debt: Current portion of long-term debt $ 2,052 $ 1,983 Long-term debt 669,303 649,097 Total carrying value of debt instruments 671,355 651,080 Fair value of debt instruments 672,386 656,305 Excess of fair value over book value $ 1,031 $ 5,225 The fair values of the 2017 Notes and 2018 Notes, which are included in long-term debt as of December 27, 2014, and the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of October 3, 2015, were based on quoted market prices, a Level 2 source. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. Goodwill and the Tops tradename are reviewed annually for impairment on December 1, or more frequently if impairment indicators arise. |
The Company, Basis of Present18
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Sales Revenue by Type of Similar Product | The following table presents sales revenue by type of similar product (dollars in thousands): 12-week periods ended 40-week periods ended October 3, 2015 October 4, 2014 October 3, 2015 October 4, 2014 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 321,794 57.4 % $ 322,403 55.5 % $ 1,060,122 56.7 % $ 1,067,793 55.2 % Perishables (2) 162,354 29.0 % 159,968 27.5 % 555,260 29.7 % 540,835 28.0 % Fuel 38,275 6.8 % 54,559 9.4 % 125,764 6.7 % 180,846 9.3 % Pharmacy 33,302 5.9 % 38,707 6.7 % 111,429 6.0 % 126,986 6.6 % Other (3) 5,019 0.9 % 5,104 0.9 % 16,930 0.9 % 17,020 0.9 % $ 560,744 100.0 % $ 580,741 100.0 % $ 1,869,505 100.0 % $ 1,933,480 100.0 % (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. |
Fair Value of Financial Instruments | At October 3, 2015 and December 27, 2014, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 3, 2015 December 27, Carrying value of long-term debt: Current portion of long-term debt $ 2,052 $ 1,983 Long-term debt 669,303 649,097 Total carrying value of debt instruments 671,355 651,080 Fair value of debt instruments 672,386 656,305 Excess of fair value over book value $ 1,031 $ 5,225 |
Goodwill and Intangible Asset19
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | The following table summarizes the change in the Company’s goodwill balance during the 40-week period ended October 3, 2015 (dollars in thousands): Balance - December 27, 2014 $ 212,901 Adjustments — Balance - October 3, 2015 $ 212,901 |
Summary of Intangible Assets, Net of Accumulated Amortization | Intangible assets, net of accumulated amortization, consist of the following (dollars in thousands): Gross Net Average Carrying Accumulated Carrying Amortization October 3, 2015 Amount Amortization Amount Period Tradename - indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,200 (12,607 ) 16,593 14.0 Favorable lease rights 21,550 (5,592 ) 15,958 9.0 Franchise agreements 13,300 (3,445 ) 9,855 14.0 Pharmacy scripts 2,800 (1,051 ) 1,749 14.0 $ 198,050 $ (22,695 ) $ 175,355 11.9 Gross Net Carrying Accumulated Carrying December 27, 2014 Amount Amortization Amount Tradename - indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,200 (7,913 ) 21,287 Favorable lease rights 21,600 (3,269 ) 18,331 Franchise agreements 13,300 (2,115 ) 11,185 Pharmacy scripts 2,800 (644 ) 2,156 $ 198,100 $ (13,941 ) $ 184,159 |
Summary of Expected Future Amortization of Intangible Assets | As of October 3, 2015, expected future amortization of intangible assets is as follows (dollars in thousands): 2015 (remaining period) $ 2,666 2016 8,181 2017 6,946 2018 5,907 2019 4,952 Thereafter 15,503 |
Accrued Expenses and Other Cu20
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (dollars in thousands): October 3, 2015 December 27, 2014 Wages, taxes and benefits $ 21,641 $ 18,951 Interest payable 16,624 2,269 Union medical, pension and 401(k) 14,116 8,985 Lottery 11,563 10,954 Self-insurance reserves 6,491 6,130 Professional and legal fees 4,238 3,170 Gift cards 3,238 8,974 Sales and use tax 2,726 596 Property and equipment expenditures 2,661 3,383 Utilities 2,520 3,383 Money orders 2,366 887 Repairs and maintenance 2,014 2,212 Other 14,034 12,216 $ 104,232 $ 82,110 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations | As of October 3, 2015, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2015 (remaining period) $ 7,279 2016 31,155 2017 29,194 2018 25,416 2019 22,646 Thereafter 119,228 Total minimum lease payments 234,918 Less amounts representing interest (153,299 ) Present value of net minimum lease payments 81,619 Less current obligations (8,524 ) Long-term cash obligations 73,095 Non-cash obligations 67,370 Total long-term capital lease obligations $ 140,465 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt is comprised of the following (dollars in thousands): October 3, 2015 December 27, 2022 Notes $ 560,000 $ — 2018 Notes 90,000 150,000 2017 Notes — 460,000 Discount on 2018 Notes (532 ) (1,100 ) Deferred financing fees (13,347 ) (15,033 ) 2017 ABL Facility 31,500 52,000 Other loans 3,734 5,213 Total debt 671,355 651,080 Current portion (2,052 ) (1,983 ) Total long-term debt $ 669,303 $ 649,097 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax (Expense) Benefit | Income tax (expense) benefit was as follows (dollars in thousands): 12-week periods ended 40-week periods ended October 3, October 4, 2014 October 3, 2015 October 4, 2014 Current $ — $ (23 ) $ (8 ) $ (41 ) Deferred (400 ) 818 (1,334 ) 4,502 Total income tax (expense) benefit $ (400 ) $ 795 $ (1,342 ) $ 4,461 |
The Company, Basis of Present24
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 9 Months Ended | 12 Months Ended | |
Oct. 03, 2015StoreSegment | Oct. 04, 2014Store | Dec. 27, 2014USD ($) | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Debt issuance costs | $ | $ 15 | ||
Number of reportable segment | Segment | 1 | ||
Fuel [Member] | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Services offered by supermarkets | 51 | 51 | |
Supermarkets [Member] | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Number of retail supermarkets | 161 | ||
Supermarkets [Member] | Tops Markets, LLC [Member] | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Number of retail supermarkets | 160 | ||
Additional operated supermarkets by franchisees | 5 | ||
Supermarkets [Member] | Orchard Fresh [Member] | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Number of retail supermarkets | 1 | ||
Pharmacy [Member] | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Services offered by supermarkets | 50 | 76 |
The Company, Basis of Present25
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Sales Revenue by Type of Product (Detail) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | ||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | $ 580,741 | $ 560,744 | $ 580,741 | $ 1,869,505 | $ 1,933,480 | |
Sale revenue percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||
Non-perishables [Member] | ||||||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | [1] | $ 322,403 | $ 321,794 | $ 1,060,122 | $ 1,067,793 | |
Sale revenue percentage | [1] | 55.50% | 57.40% | 56.70% | 55.20% | |
Perishables [Member] | ||||||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | [2] | $ 159,968 | $ 162,354 | $ 555,260 | $ 540,835 | |
Sale revenue percentage | [2] | 27.50% | 29.00% | 29.70% | 28.00% | |
Pharmacy [Member] | ||||||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | $ 38,707 | $ 33,302 | $ 111,429 | $ 126,986 | ||
Sale revenue percentage | 6.70% | 5.90% | 6.00% | 6.60% | ||
Other Products [Member] | ||||||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | [3] | $ 5,104 | $ 5,019 | $ 16,930 | $ 17,020 | |
Sale revenue percentage | [3] | 0.90% | 0.90% | 0.90% | 0.90% | |
Fuel [Member] | ||||||
Sales Revenue, Goods, Net [Abstract] | ||||||
Sales revenue | $ 54,559 | $ 38,275 | $ 125,764 | $ 180,846 | ||
Sale revenue percentage | 9.40% | 6.80% | 6.70% | 9.30% | ||
[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. |
The Company, Basis of Present26
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Carrying and Estimated Values of Debt Instruments (Detail) - USD ($) $ in Thousands | Oct. 03, 2015 | Dec. 27, 2014 |
Carrying value of long-term debt: | ||
Current portion of long-term debt | $ 2,052 | $ 1,983 |
Long-term debt | 669,303 | 649,097 |
Total carrying value of debt instruments | 671,355 | 651,080 |
Fair value of debt instruments | 672,386 | 656,305 |
Excess of fair value over book value | $ 1,031 | $ 5,225 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 01, 2013 | Dec. 28, 2013 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 |
Business Acquisition [Line Items] | |||||
Increases of depreciation and amortization expense | $ 57,179 | $ 53,322 | |||
Change in net loss | $ 500 | 200 | |||
Change in Useful Life of Property and Equipment [Member] | |||||
Business Acquisition [Line Items] | |||||
Increases of depreciation and amortization expense | 100 | 500 | |||
Change of income tax benefit | $ 400 | (300) | |||
Management Purchase [Member] | |||||
Business Acquisition [Line Items] | |||||
Transaction fees | $ 15,800 | $ 600 | $ 15,200 | ||
Cash consideration, businesses acquisition | $ 20,900 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net - Summary of Change in Goodwill (Detail) $ in Thousands | 9 Months Ended |
Oct. 03, 2015USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 212,901 |
Adjustments | 0 |
Goodwill, Ending Balance | $ 212,901 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets Net - Summary of Intangible Assets, Net of Accumulated Amortization (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 03, 2015 | Dec. 27, 2014 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 198,050 | $ 198,100 |
Accumulated Amortization | (22,695) | (13,941) |
Net Carrying Amount | $ 175,355 | 184,159 |
Average Amortization Period | 11 years 10 months 24 days | |
Tradename - Indefinite [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 131,200 | 131,200 |
Net Carrying Amount | $ 131,200 | 131,200 |
Average Amortization Period, Indefinite Life | Indefinite life | |
Customer Relationships [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 29,200 | 29,200 |
Accumulated Amortization | (12,607) | (7,913) |
Net Carrying Amount | $ 16,593 | 21,287 |
Average Amortization Period | 14 years | |
Favorable Lease Rights [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 21,550 | 21,600 |
Accumulated Amortization | (5,592) | (3,269) |
Net Carrying Amount | $ 15,958 | 18,331 |
Average Amortization Period | 9 years | |
Franchise Agreements [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 13,300 | 13,300 |
Accumulated Amortization | (3,445) | (2,115) |
Net Carrying Amount | $ 9,855 | 11,185 |
Average Amortization Period | 14 years | |
Pharmacy Scripts [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 2,800 | 2,800 |
Accumulated Amortization | (1,051) | (644) |
Net Carrying Amount | $ 1,749 | $ 2,156 |
Average Amortization Period | 14 years |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 2,600,000 | $ 3,000,000 | $ 8,800,000 | $ 10,100,000 |
Contra-expense related to amortization of unfavorable lease rights | 100,000 | 100,000 | 300,000 | 300,000 |
Future amortization expense, 2015 (remaining period) | 100,000 | 100,000 | ||
Future amortization expense, 2016 | 300,000 | 300,000 | ||
Future amortization expense, 2017 | 300,000 | 300,000 | ||
Future amortization expense, 2018 | 300,000 | 300,000 | ||
Future amortization expense, 2019 | 300,000 | 300,000 | ||
Future amortization expense, Thereafter | 800,000 | 800,000 | ||
Tradename - Indefinite [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets Net - Summary of Expected Future Amortization of Intangible Assets (Detail) $ in Thousands | Oct. 03, 2015USD ($) |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | |
Future amortization expense, 2015 (remaining period) | $ 2,666 |
Future amortization expense, 2016 | 8,181 |
Future amortization expense, 2017 | 6,946 |
Future amortization expense, 2018 | 5,907 |
Future amortization expense, 2019 | 4,952 |
Future amortization expense, Thereafter | $ 15,503 |
Accrued Expenses and Other Cu32
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Oct. 03, 2015 | Dec. 27, 2014 |
Other Liabilities Disclosure [Abstract] | ||
Wages, taxes and benefits | $ 21,641 | $ 18,951 |
Interest payable | 16,624 | 2,269 |
Union medical, pension and 401(k) | 14,116 | 8,985 |
Lottery | 11,563 | 10,954 |
Self-insurance reserves | 6,491 | 6,130 |
Professional and legal fees | 4,238 | 3,170 |
Gift cards | 3,238 | 8,974 |
Sales and use tax | 2,726 | 596 |
Property and equipment expenditures | 2,661 | 3,383 |
Utilities | 2,520 | 3,383 |
Money orders | 2,366 | 887 |
Repairs and maintenance | 2,014 | 2,212 |
Other | 14,034 | 12,216 |
Accrued expenses and other current liabilities, Total | $ 104,232 | $ 82,110 |
Capital Lease Obligations - Add
Capital Lease Obligations - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | |
Leases [Line Items] | |||
Leases expire year | 2,034 | ||
Leases term | 25 years | ||
Proceeds from sale leaseback financing transactions | $ 12,600,000 | $ 25,436,000 | |
Underlying cash payments to remove the related land and obligations | $ 0 | ||
Minimum [Member] | |||
Leases [Line Items] | |||
Capital lease expiration year | 2,018 | ||
Maximum [Member] | |||
Leases [Line Items] | |||
Capital lease expiration year | 2,068 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations (Detail) - USD ($) $ in Thousands | Oct. 03, 2015 | Dec. 27, 2014 |
Leases [Abstract] | ||
2015 (remaining period) | $ 7,279 | |
2,016 | 31,155 | |
2,017 | 29,194 | |
2,018 | 25,416 | |
2,019 | 22,646 | |
Thereafter | 119,228 | |
Total minimum lease payments | 234,918 | |
Less amounts representing interest | (153,299) | |
Present value of net minimum lease payments | 81,619 | |
Less current obligations | (8,524) | $ (8,653) |
Long-term cash obligations | 73,095 | |
Non-cash obligations | 67,370 | |
Total long-term capital lease obligations | $ 140,465 | $ 140,315 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Detail) - USD ($) $ in Thousands | Oct. 03, 2015 | Dec. 27, 2014 |
Secured Debt [Abstract] | ||
Deferred financing fees | $ (13,347) | $ (15,033) |
Other loans | 3,734 | 5,213 |
Total carrying value of debt instruments | 671,355 | 651,080 |
Current portion | (2,052) | (1,983) |
Total long-term debt | 669,303 | 649,097 |
2017 ABL Facility [Member] | ||
Secured Debt [Abstract] | ||
ABL Facility | 31,500 | 52,000 |
2022 Notes [Member] | ||
Secured Debt [Abstract] | ||
Notes | 560,000 | |
2018 Notes [Member] | ||
Secured Debt [Abstract] | ||
Notes | 90,000 | 150,000 |
Discount on notes | $ (532) | (1,100) |
2017 Notes [Member] | ||
Secured Debt [Abstract] | ||
Notes | $ 460,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jun. 10, 2015 | Nov. 29, 2013 | May. 15, 2013 | Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | Dec. 27, 2014 | Dec. 14, 2012 |
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt borrowings | $ 521,480,000 | $ 3,307,000 | |||||||
Redemption premium payment | 24,290,000 | ||||||||
Unamortized deferred financing costs | $ 15,000,000 | ||||||||
Amortization of deferred financing costs | $ 500,000 | $ 900,000 | 2,618,000 | $ 3,031,000 | |||||
Net of accumulated amortization | 1,200,000 | 1,200,000 | 7,300,000 | ||||||
Deferred financing costs | 13,300,000 | 13,300,000 | 15,000,000 | ||||||
Proceeds from long-term debt borrowings | $ 560,000,000 | ||||||||
2017 ABL Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity in ABL Facility | $ 125,000,000 | ||||||||
Credit facility maturity date | Dec. 14, 2017 | ||||||||
Unused availability under the ABL Facility | 54,900,000 | $ 54,900,000 | |||||||
Line of credit facility, amount outstanding | 31,500,000 | $ 31,500,000 | $ 52,000,000 | ||||||
Weighted average interest rate on borrowings under the ABL Facility | 2.56% | 2.24% | |||||||
2017 ABL Facility [Member] | Letter of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit outstanding | 23,800,000 | $ 23,800,000 | $ 20,700,000 | ||||||
2017 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate description | 150 to 200 basis points | ||||||||
2017 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate description | 50 to 100 basis points | ||||||||
Maximum [Member] | 2017 ABL Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Increase in capacity upon met specified condition | $ 50,000,000 | ||||||||
2022 Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior secured notes issued | $ 560,000,000 | ||||||||
Interest rate, notes | 8.00% | ||||||||
Debt instrument carrying amount | 560,000,000 | $ 560,000,000 | |||||||
Maturity date of senior notes | Jun. 15, 2022 | ||||||||
Semi-annual interest payments date | The 2022 Notes mature on June 15, 2022 and require semi-annual interest payments on June 15 and December 15, beginning December 15, 2015. | ||||||||
Capitalized cost | $ 10,800,000 | ||||||||
2017 Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt borrowings | $ 460,000,000 | ||||||||
Debt instrument carrying amount | 460,000,000 | ||||||||
Redemption premium payment | 23,000,000 | ||||||||
Unamortized deferred financing costs | 8,000,000 | ||||||||
2018 Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument repurchased | 60,000,000 | ||||||||
Debt instrument carrying amount | 90,000,000 | $ 90,000,000 | 150,000,000 | ||||||
Redemption premium payment | $ 1,200,000 | ||||||||
Semi-annual interest payments date | The 2018 Notes mature June 15, 2018 and require semi-annual interest payments on June 15 and December 15. | ||||||||
Unamortized deferred financing costs | $ 1,900,000 | ||||||||
Unamortized discount written off | 400,000 | ||||||||
Debt original issue discount | $ 532,000 | $ 532,000 | $ 1,100,000 | ||||||
Dividend to shareholders | $ 141,900,000 | ||||||||
2018 Notes [Member] | Holding II [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior secured notes issued | $ 150,000,000 | ||||||||
Interest rate, notes | 9.50% | 9.50% | |||||||
Debt instrument carrying amount | $ 90,000,000 | $ 90,000,000 | |||||||
Maturity date of senior notes | Jun. 15, 2018 | ||||||||
Proceeds from long-term debt borrowings | $ 148,500,000 | ||||||||
Debt original issue discount | $ 1,500,000 | ||||||||
8.75% Senior Unsecured Notes [Member] | Holding II [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, notes | 8.75% | ||||||||
9.50% Senior Unsecured Notes [Member] | Holding II [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, notes | 9.50% | ||||||||
MBO Co Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument carrying amount | $ 12,300,000 | ||||||||
Debt instrument interest rate description | LIBOR plus a margin of 300 basis points | ||||||||
Interest rate of term loan | 3.00% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax (Expense) Benefit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ (23) | $ (8) | $ (41) | |
Deferred | $ (400) | 818 | (1,334) | 4,502 |
Total income tax (expense) benefit | $ (400) | $ 795 | $ (1,342) | $ 4,461 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2015 | Oct. 03, 2015 | Oct. 04, 2014 | Oct. 03, 2015 | Oct. 04, 2014 |
Income Taxes [Line Items] | |||||
Effective income tax rate without adjustment valuation allowance | 39.30% | 42.20% | 39.10% | 41.70% | |
Expiration dates for operating losses | Jan. 1, 2026 | ||||
United States Federal Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards net | $ 45.7 | ||||
Federal tax credits | 4.6 | ||||
State and Local Jurisdiction [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards net | $ 41.9 |
Gain on Sale of Assets - Additi
Gain on Sale of Assets - Additional Information (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended |
Jan. 31, 2015USD ($)Location | Oct. 03, 2015USD ($) | |
Discontinued Operations And Disposal Groups [Abstract] | ||
Number of locations pharmacy scripts and inventory sold | Location | 27 | |
Proceeds from sale of assets | $ 14,900 | |
Gain on sale of assets | $ 11,014 | |
Carrying value of sold inventory | 3,200 | |
Direct selling expenses on sale of assets | $ 700 |
Shareholders' Deficit - Additio
Shareholders' Deficit - Additional Information (Detail) $ in Millions | Jan. 08, 2015USD ($)shares |
Equity [Abstract] | |
Dividends paid | $ | $ 0.8 |
Common shares repurchased | 1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | May. 27, 2014USD ($) | Sep. 24, 2012Store | Oct. 03, 2015USD ($)EMP | Oct. 04, 2014USD ($) | Oct. 03, 2015USD ($)EMPAgreement | Oct. 04, 2014USD ($) | Oct. 03, 2015USD ($)EMP | Oct. 04, 2014USD ($) | Dec. 27, 2014USD ($) |
Commitments Contingencies And Litigation [Line Items] | |||||||||
Payment of withdrawal liability | $ 1,900,000 | $ 1,900,000 | $ 5,800,000 | $ 1,900,000 | |||||
Number of supermarkets acquired | Store | 21 | ||||||||
Expiration date of supply agreement | Feb. 28, 2017 | ||||||||
Number of employed associates | EMP | 14,450 | 14,450 | 14,450 | ||||||
Percentage of associates engaged in various unions | 83.00% | ||||||||
Number of collective bargaining agreements | Agreement | 5 | ||||||||
Pending Litigation [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Accrued amount related to legal proceedings | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Teamster Local 264 [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Percentage of members working in distribution facilities | 4.00% | 4.00% | 4.00% | ||||||
Number of collective bargaining agreements | Agreement | 3 | ||||||||
Expiration date of collective bargaining agreements | 2019-08 | ||||||||
Local One Collective Bargaining Arrangement [Member] | Five Collective Bargaining Agreements [Member] | Minimum [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Expiration date of collective bargaining agreements | 2017-04 | ||||||||
Local One Collective Bargaining Arrangement [Member] | Five Collective Bargaining Agreements [Member] | Maximum [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Expiration date of collective bargaining agreements | 2018-10 | ||||||||
Non Local Collective Bargaining Arrangement One [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Expiration date of collective bargaining agreements | 2016-04 | ||||||||
Non Local Collective Bargaining Arrangement Two [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Expiration date of collective bargaining agreements | 2018-02 | ||||||||
Supplemental Supply Agreement [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Agreement expiration date | Sep. 23, 2022 | ||||||||
Branded Prescription Drugs [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Minimum purchase requirement | 95.00% | ||||||||
Generic Pharmaceutical Products [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Minimum purchase requirement | 95.00% | ||||||||
Accrued Expenses and Other Current Liabilities [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Multiemployer pension plan rejected contributions | $ 7,800,000 | $ 7,800,000 | $ 7,800,000 | ||||||
Accounts Receivable [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Payment of withdrawal liability | 9,600,000 | 9,600,000 | $ 9,600,000 | ||||||
Multiemployer Plans, Pension [Member] | |||||||||
Commitments Contingencies And Litigation [Line Items] | |||||||||
Multiemployer pension plan rejected contributions | $ 1,200,000 | $ 800,000 | $ 3,600,000 | $ 3,100,000 | |||||
Liability estimate due to withdrawal from fund | $ 183,700,000 | ||||||||
Contribution payable period | 240 months | ||||||||
Monthly installment amount | $ 641,514 |