Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 08, 2016 | Nov. 08, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 8, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | TOPS HOLDING II CORP | |
Entity Central Index Key | 1,584,701 | |
Current Fiscal Year End Date | --01-02 | |
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. 08, 2016 | Jan. 02, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 31,377 | $ 35,557 |
Accounts receivable, net | 69,836 | 68,198 |
Inventory, net | 163,628 | 141,223 |
Prepaid expenses and other current assets | 16,700 | 16,857 |
Total current assets | 281,541 | 261,835 |
Property and equipment, net | 350,117 | 369,446 |
Goodwill | 219,828 | 213,096 |
Intangible assets, net | 170,237 | 173,730 |
Other assets (Note 10) | 17,321 | 11,547 |
Total assets | 1,039,044 | 1,029,654 |
Current liabilities: | ||
Accounts payable | 88,223 | 81,812 |
Accrued expenses and other current liabilities | 105,541 | 96,757 |
Current portion of capital lease obligations | 9,447 | 8,566 |
Current portion of long-term debt | 2,126 | 2,075 |
Total current liabilities | 205,337 | 189,210 |
Capital lease obligations | 137,086 | 143,122 |
Long-term debt, net | 705,756 | 681,372 |
Other long-term liabilities | 50,594 | 44,680 |
Non-current deferred tax liabilities | 45,057 | 43,694 |
Total liabilities | 1,143,830 | 1,102,078 |
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 8, 2016 and January 2, 2016) | 0 | 0 |
Treasury stock (at cost; 1 share as of October 8, 2016 and January 2, 2016) | (1) | (1) |
Paid-in capital | 6,367 | 7,974 |
Accumulated deficit | (109,547) | (78,792) |
Accumulated other comprehensive loss, net of tax | (1,605) | (1,605) |
Total shareholders' deficit | (104,786) | (72,424) |
Total liabilities and shareholders' deficit | $ 1,039,044 | $ 1,029,654 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Oct. 08, 2016 | Jan. 02, 2016 |
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 | 126,559 |
Treasury stock, shares | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 568,753 | $ 560,744 | $ 1,872,078 | $ 1,869,505 |
Cost of goods sold | (388,758) | (386,195) | (1,279,910) | (1,284,579) |
Distribution costs | (11,586) | (9,125) | (33,046) | (34,948) |
Gross profit | 168,409 | 165,424 | 559,122 | 549,978 |
Operating expenses: | ||||
Wages, salaries and benefits | (84,725) | (80,354) | (277,117) | (272,581) |
Selling and general expenses | (28,352) | (27,459) | (92,088) | (91,809) |
Administrative expenses (inclusive of share-based compensation expense of $(39), $53, $88 and $177) | (21,923) | (17,842) | (65,971) | (58,844) |
Rent expense, net | (7,004) | (6,292) | (22,110) | (20,863) |
Depreciation and amortization | (14,968) | (14,719) | (49,601) | (47,891) |
Advertising | (5,140) | (4,901) | (17,158) | (16,590) |
Impairment (Note 11) | (2,076) | |||
Gain on sale of assets (Note 8) | 11,014 | |||
Total operating expenses | (162,112) | (151,567) | (526,121) | (497,564) |
Operating income | 6,297 | 13,857 | 33,001 | 52,414 |
Loss on debt extinguishment | (34,503) | |||
Interest expense, net | (18,581) | (18,619) | (62,035) | (63,404) |
Loss before income taxes | (12,284) | (4,762) | (29,034) | (45,493) |
Income tax expense | (449) | (400) | (1,721) | (1,342) |
Net loss | (12,733) | (5,162) | (30,755) | (46,835) |
Comprehensive loss | $ (12,733) | $ (5,162) | $ (30,755) | $ (46,835) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | |
Income Statement [Abstract] | ||||
Share-based compensation expense (benefit) included in administrative expenses | $ (39) | $ 53 | $ 88 | $ 177 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 08, 2016 | Oct. 03, 2015 | |
Cash flows provided by operating activities: | ||
Net loss | $ (30,755) | $ (46,835) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 58,850 | 57,179 |
Impairment | 2,076 | |
Amortization of deferred financing costs | 1,770 | 2,618 |
Deferred income taxes | 1,363 | 1,334 |
Straight-line rent adjustment | 759 | 775 |
LIFO inventory valuation adjustments | 241 | 661 |
Share-based compensation expense | 88 | 177 |
Loss on debt extinguishment | 34,503 | |
Gain on sale of assets | (11,014) | |
Other | 75 | 490 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (1,638) | (6,234) |
Increase in inventory, net | (17,640) | (1,341) |
Decrease (increase) in prepaid expenses and other current assets | 236 | (2,382) |
Increase in other assets | (5,774) | |
Increase (decrease) in accounts payable | 8,535 | (537) |
Increase in accrued expenses and other current liabilities | 7,509 | 22,684 |
Increase in other long-term liabilities | 2,905 | 1,846 |
Net cash provided by operating activities | 28,600 | 53,924 |
Cash flows used in investing activities: | ||
Cash paid for property and equipment | (25,035) | (30,692) |
Acquisition of supermarkets | (17,409) | |
Cash proceeds from sale of assets | 413 | 11,255 |
Net cash used in investing activities | (42,031) | (19,437) |
Cash flows provided by (used in) financing activities: | ||
Principal payments on capital leases | (7,052) | (6,680) |
Repayments of long-term debt borrowings | (2,990) | (521,480) |
Dividends to Tops MBO Corporation (Note 9) | (2,015) | (775) |
Change in bank overdraft position | (1,818) | (223) |
Capital contribution | 326 | |
Proceeds from long-term debt borrowings | 560,000 | |
Debt extinguishment costs paid | (24,290) | |
Deferred financing costs paid | (10,593) | |
Purchase of treasury stock | (1) | |
Net cash provided by (used in) financing activities | 9,251 | (24,542) |
Net (decrease) increase in cash and cash equivalents | (4,180) | 9,945 |
Cash and cash equivalents-beginning of period | 35,557 | 26,316 |
Cash and cash equivalents-end of period | 31,377 | 36,261 |
2017 ABL Facility [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Borrowings on ABL Facility | 695,600 | 353,966 |
Repayments on ABL Facility | $ (672,800) | $ (374,466) |
The Company, Basis of Presentat
The Company, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 08, 2016 | |
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 New York, Northern Pennsylvania, Western Vermont and North Central Massachusetts. As of October 8, 2016, the Company operated 172 supermarkets; 171 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 January 2, 2016, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2016. 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 8, 2016 and October 3, 2015 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 – Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently assessing the potential impact of ASU No. 2014-09 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” (“ASU No. 2016-02”), which stipulates that lessees recognize a right-of-use asset and a lease liability for substantially all leases. ASU No. 2016-02 is effective on a modified retrospective basis for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations” (Reporting Revenue Gross versus Net) (“ASU No. 2016-08”). ASU No. 2016-08 does not change the core principle of the guidance stated in ASU No. 2014-09, instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU No. 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU No. 2014-09. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2016-08 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 8, 2016, 56 corporate supermarkets offered pharmacy services and 52 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 and the Company’s President, who act as the Company’s chief operating decision makers, assess 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 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 330,202 58.1 % $ 321,794 57.4 % $ 1,074,377 57.4 % $ 1,060,122 56.7 % Perishables (2) 167,092 29.4 % 162,354 29.0 % 563,975 30.1 % 555,260 29.7 % Fuel 31,005 5.5 % 38,275 6.8 % 101,217 5.4 % 125,764 6.7 % Pharmacy 35,316 6.2 % 33,302 5.9 % 115,292 6.2 % 111,429 6.0 % Other (3) 5,138 0.8 % 5,019 0.9 % 17,217 0.9 % 16,930 0.9 % $ 568,753 100.0 % $ 560,744 100.0 % $ 1,872,078 100.0 % $ 1,869,505 100.0 % (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, 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 Accounting Standards Codification (“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 8, 2016 and January 2, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 8, 2016 January 2, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 2,126 $ 2,075 Long-term debt 705,756 681,372 Total carrying value of debt instruments 707,882 683,447 Fair value of debt instruments 650,765 677,450 Excess of carrying value over fair value $ 57,117 $ 5,997 The fair values of the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of October 8, 2016 and January 2, 2016, 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 Acquisition
Business Acquisition | 9 Months Ended |
Oct. 08, 2016 | |
Business Combinations [Abstract] | |
Business Acquisition | 2. BUSINESS ACQUISITION In August 2016, the Company acquired four supermarkets from The Stop & Shop Supermarket Company LLC, which operated these stores under the Stop & Shop banner, and two supermarkets from Hannaford Bros. Co., LLC and Martin’s Foods of South Burlington, LLC, which operated these stores under the Hannaford banner, in eastern New York and Massachusetts. The aggregate purchase price for this acquisition of $16.4 million, including acquired inventory of $5.0 million, was funded using cash on hand and available borrowings under the 2017 ABL Facility. The Company believes the acquisition creates significant strategic value due to the expansion it provides to the Company’s supermarket base as well as the minimal incremental general and administrative expenses expected to be incurred. Based upon a preliminary allocation of the aggregate purchase price, the assets acquired and liabilities assumed were recorded at their respective estimated fair values as of the acquisition dates. The preliminary allocation of the aggregate purchase price is based on management’s best estimates of fair values as of the acquisition dates using information available as of the date of this Quarterly Report on Form 10-Q and is subject to adjustments. The valuations are expected to be finalized within 12 months of the closing of the acquisitions. As the valuations are finalized, any changes to the preliminary valuation of assets acquired and liabilities assumed may result in material adjustments to the fair value of inventory, equipment, goodwill and identifiable intangible assets acquired, and accrued expenses and other current liabilities assumed and will be adjusted in the quarter identified, as required by ASU No. 2015-16 “Business Combinations (Topic 805).” The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the transaction dates, and adjustments made to the estimated fair values of these assets (dollars in thousands): Initial Revised Assets acquired: Estimate Adjustments Estimate Inventory $ 5,939 $ (933 ) $ 5,006 Prepaid expenses — 79 79 Equipment 5,888 (624 ) 5,264 Goodwill 1,839 3,911 5,750 Pharmacy scripts 3,950 (698 ) 3,252 Customer lists 323 (93 ) 230 Total assets acquired 17,939 1,642 19,581 Liabilities assumed: Accrued expenses and other current liabilities — 799 799 Unfavorable lease rights — 2,370 2,370 Total liabilities assumed — 3,169 3,169 Acquisition price $ 17,939 $ (1,527 ) $ 16,412 The following table summarizes the Company’s unaudited pro forma operating results for the 12-week and 40-week periods ended October 8, 2016 and October 3, 2015, giving effect to the acquisition as if it occurred as of the beginning of fiscal year 2015 (dollars in thousands): 12-week periods ended 40-week periods ended October 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 Net sales $ 604,868 $ 599,052 $ 1,997,577 $ 1,997,197 Operating income 9,364 16,829 44,424 60,214 Net loss (9,666 ) (2,190 ) (19,332 ) (39,035 ) The pro forma financial information above reflects the $2.1 million of transaction costs incurred by the Company during the 40-week period ended October 8, 2016 within the operating results for the 40-week period ended October 3, 2015. Additionally, the pro forma financial information includes estimated depreciation and amortization of $0.3 million during each of the 12-week periods ended October 8, 2016 and October 3, 2015, and estimated depreciation and amortization of $0.9 million during each of the 40-week periods ended October 8, 2016 and October 3, 2015. This pro forma financial information is not intended to represent or be indicative of what would have occurred if the acquisition had taken place as of the beginning of the periods presented and should not be taken as representative of the Company’s future consolidated results of operations. In addition to the acquisition discussed above, during the 12-week period ended October 8, 2016, the Company purchased one additional store for $2.0 million of which $0.5 million was paid during the 12-week period ended October 8, 2016, with the remainder to be paid over the next three years. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Oct. 08, 2016 | |
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 8, 2016 (dollars in thousands): Balance - January 2, 2016 $ 213,096 Acquisitions 6,732 Balance - October 8, 2016 $ 219,828 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 8, 2016 and October 3, 2015. Intangible assets, net of accumulated amortization, consist of the following (dollars in thousands): Gross Net Average Carrying Accumulated Carrying Amortization October 8, 2016 Amount Amortization Amount Period Tradename – indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,430 (17,194 ) 12,236 14.0 Favorable lease rights 19,050 (6,193 ) 12,857 9.6 Franchise agreements 13,300 (5,048 ) 8,252 14.0 Pharmacy scripts 7,231 (1,781 ) 5,450 16.5 Non-compete agreement 250 (8 ) 242 5.0 $ 200,461 $ (30,224 ) $ 170,237 13.1 Gross Net Carrying Accumulated Carrying January 2, 2016 Amount Amortization Amount Tradename – indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,200 (14,117 ) 15,083 Favorable lease rights 21,550 (6,328 ) 15,222 Franchise agreements 13,300 (3,872 ) 9,428 Pharmacy scripts 3,979 (1,182 ) 2,797 $ 199,229 $ (25,499 ) $ 173,730 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 8, 2016 and October 3, 2015. During the 12-week periods ended October 8, 2016 and October 3, 2015, amortization expense related to intangible assets was $2.0 million and $2.6 million, respectively. During the 40-week periods ended October 8, 2016 and October 3, 2015, amortization expense related to intangible assets was $7.2 million and $8.8 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 8, 2016 and October 3, 2015 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 8, 2016 and October 3, 2015, 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 $0.2 million in the remaining period of Fiscal 2016, $0.8 million in Fiscal 2017, $0.8 million in Fiscal 2018, $0.8 million in Fiscal 2019, $0.8 million in Fiscal 2020 and $2.1 million thereafter. As of October 8, 2016, expected future amortization of intangible assets is as follows (dollars in thousands): 2016 (remaining period) $ 1,936 2017 7,592 2018 6,394 2019 5,332 2020 4,482 Thereafter 13,301 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Oct. 08, 2016 | |
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 8, 2016 January 2, 2016 Interest payable $ 16,610 $ 3,177 Wages, taxes and benefits 19,917 28,623 Lottery 12,099 13,127 Union medical, pension and 401(k) 9,138 5,817 Professional and legal fees 8,210 5,773 Self-insurance reserves 6,452 6,502 Gift cards 4,003 9,467 Property and equipment expenditures 3,282 2,525 Sales and use tax 3,244 1,431 Utilities 2,723 2,346 Repairs and maintenance 1,876 2,050 Money orders 1,289 2,682 Other 16,698 13,237 $ 105,541 $ 96,757 |
Capital Lease Obligations
Capital Lease Obligations | 9 Months Ended |
Oct. 08, 2016 | |
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 2036, 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 8, 2016, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2016 (remaining period) $ 7,286 2017 30,997 2018 27,358 2019 24,646 2020 21,363 Thereafter 112,665 Total minimum lease payments 224,315 Less amounts representing interest (142,578 ) Present value of net minimum lease payments 81,737 Less current obligations (9,447 ) Long-term cash obligations 72,290 Non-cash obligations 64,796 Total long-term capital lease obligations $ 137,086 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. As a result, the transactions have been classified as financing transactions in accordance with ASC Topic 840, “Leases.” Under the financing method, the assets remain on the consolidated balance sheet 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 2017 to 2036, 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. 08, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 6. DEBT Long-term debt is comprised of the following (dollars in thousands): October 8, 2016 January 2, 2016 2022 Notes $ 560,000 $ 560,000 2018 Notes 85,514 86,704 Discount on 2018 Notes (330 ) (470 ) Deferred financing fees (10,917 ) (12,716 ) 2017 ABL Facility 69,500 46,700 Other loans 4,115 3,229 Total debt 707,882 683,447 Current portion (2,126 ) (2,075 ) Total long-term debt $ 705,756 $ 681,372 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 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. 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. 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. On January 20, 2016 and December 18, 2015, $1.2 million and $3.3 million, respectively, of 2018 Notes were repurchased in “open market” transactions, resulting in a remaining outstanding principal amount of $85.5 million as of October 8, 2016. 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 2018 Notes mature on June 15, 2018 and require semi-annual interest payments on June 15 and December 15. To the extent permitted by the indenture governing the 2022 Notes and the 2017 ABL Facility (see below), Holding I may make dividend payments to Holding II to fund additional repurchases and 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 the required conditions are met. The borrowing base includes inventory, pharmacy prescription files and certain receivables. The 2017 ABL Facility matures on December 14, 2017. Costs associated with the 2022 Notes and 2018 Notes of $10.7 million and $2.7 million, respectively, were capitalized and are being amortized over the respective terms of the 2022 Notes and 2018 Notes using the effective interest method. Costs associated with the 2017 ABL Facility of $1.1 million were capitalized and are being amortized on a straight-line basis over the term of the 2017 ABL Facility. During each of the 12-week periods ended October 8, 2016 and October 3, 2015, amortization expense related to the deferred financing costs was $0.5 million. During the 40-week periods ended October 8, 2016 and October 3, 2015, amortization expense related to the deferred financing costs was $1.8 million and $2.6 million, respectively. This amortization expense is included in interest expense in the condensed consolidated statements of comprehensive loss. At October 8, 2016, long-term debt included deferred financing costs, net of accumulated amortization of $3.5 million, totaling $10.9 million. At January 2, 2016, long-term debt included deferred financing costs, net of accumulated amortization of $1.8 million, totaling $12.7 million. As of October 8, 2016, the unused availability under the 2017 ABL Facility was $32.7 million, after giving effect to the borrowing base calculation, $22.8 million of letters of credit outstanding and $69.5 million of borrowings outstanding. As of January 2, 2016, $23.8 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 8, 2016 and January 2, 2016, the weighted average interest rates on borrowings under the 2017 ABL Facility were 2.62% and 3.20%, 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 restricted payments, including dividends. As of October 8, 2016, the Company was in compliance with its covenants under these agreements. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 08, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES Income tax expense was as follows (dollars in thousands): 12-week periods ended 40-week periods ended October 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 Current $ (40 ) $ — $ (358 ) $ (8 ) Deferred (409 ) (400 ) (1,363 ) (1,334 ) Total income tax expense $ (449 ) $ (400 ) $ (1,721 ) $ (1,342 ) 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 8, 2016 and October 3, 2015. The income tax expense recognized for the 12-week and 40-week periods ended October 8, 2016 and 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. The effective tax rates would have been 39.1%, without the establishment of valuation allowance, during each of the 12-week and 40-week periods ended October 8, 2016. The effective tax rates during the 12-week and 40-week periods ended October 3, 2015 would have been 39.3% and 39.1%, respectively, without the establishment of valuation allowance. As of the beginning of fiscal year 2016, the Company had U.S. federal and state net operating loss carryforwards of $70.9 million and $71.5 million, respectively, which expire beginning in 2029. In addition, the Company had federal tax credits of $5.4 million, which expire beginning in 2027. |
Gain on Sale of Assets
Gain on Sale of Assets | 9 Months Ended |
Oct. 08, 2016 | |
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. |
Dividends Paid
Dividends Paid | 9 Months Ended |
Oct. 08, 2016 | |
Equity [Abstract] | |
Dividends Paid | 9. DIVIDENDS PAID On January 14, 2016, the Company paid a dividend to Tops MBO Co totaling $2.0 million. 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. 08, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES Multiemployer Pension Plans 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 West Seneca, 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 the Company’s warehouse and distribution 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 elected to continue to make contributions to the Fund in accordance with the terms set forth in the collective bargaining agreements with Teamsters Local 264. The Fund has rejected and returned these contributions. During the 12-week periods ended October 8, 2016 and October 3, 2015, these rejected contributions totaled $0.8 million and $1.2 million respectively. During the 40-week periods ended October 8, 2016 and October 3, 2015, these rejected contributions totaled $3.7 million and $3.6 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 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 its 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 40-week periods ended October 8, 2016 and October 3, 2015, the conditional payments of withdrawal liability totaled $5.8 million. These monthly conditional payments are in addition to pension contributions the Company has elected 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 $17.3 million as of October 8, 2016, have been recorded in other assets, while the aggregate rejected contributions that the Company has elected to make, totaling $12.7 million as of October 8, 2016, have been recorded in other long-term liabilities and cash within its 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. On July 4, 2016, the arbitrator denied this grievance. The Company is in active discussions with Teamsters Local 264 regarding certain aspects of the grievance and the arbitrator’s decision. 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 agreement with C&S whereby the Company resumed warehousing and transportation functions for the Lancaster and West Seneca, New York warehouses, while C&S continues to provide procurement and purchasing services in support of the majority of the Company’s supply chain. This modified agreement sets out the parties' respective responsibilities for the procurement and purchase of merchandise intended for use or resale in a majority of the Company’s supermarkets. In consideration for the services it provides under this agreement, C&S is paid a fee based on all merchandise purchased by the Company from C&S through the Lancaster and West Seneca, New York warehouses, with C&S also having incentive income opportunities under the agreement. As of April 1, 2015, the Company and C&S agreed in principle to amend certain operating terms of this agreement and extend the term through April 1, 2020. On September 24, 2012, the Company entered into a separate agreement with C&S to provide warehousing, transportation, procurement and purchasing 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 March 1, 2016, the Company extended its existing IT outsourcing agreement with HP Enterprise Services, LLC (“HPE”) through February 29, 2024. Under this agreement, HPE provides data center operations, mainframe processing, business applications and systems development, which are expected to enhance the Company’s customer service and efficiency. The amounts payable to HP under this agreement are based upon the services requested by the Company 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 8, 2016 or January 2, 2016. Collective Bargaining Agreements The Company employs approximately 15,000 associates. Approximately 81% of these associates are members of United Food and Commercial Workers, or UFCW, District Union Local One, or Local One, or six other UFCW unions. Approximately 4% of these associates are members of Teamsters Local 264, who work in the Company’s 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 also is a party to seven other non-Local One UFCW collective bargaining agreements expiring between April 2017 and October 2019. The Company is a party to three collective bargaining agreements with Teamsters Local 264 that expire 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 contingent liabilities due to legal proceedings were accrued as of October 8, 2016 or January 2, 2016. |
Impairment
Impairment | 9 Months Ended |
Oct. 08, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment | 11. IMPAIRMENT During the 40-week period ended October 8, 2016, the Company determined that the expected future cash flows associated with one supermarket location were insufficient to recover that location’s aggregate net book value of long-lived assets. As a result, the net book values of leasehold improvements and equipment assets were written down to their estimated fair values, a Level 3 fair value source. A corresponding non-cash impairment of $2.1 million was recognized in the condensed consolidated statement of comprehensive loss for the 40-week period ended October 8, 2016. |
The Company, Basis of Present18
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 08, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
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 January 2, 2016, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2016. |
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 8, 2016 and October 3, 2015 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 – Not Yet Adopted | Recently Issued Accounting Pronouncements – Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently assessing the potential impact of ASU No. 2014-09 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” (“ASU No. 2016-02”), which stipulates that lessees recognize a right-of-use asset and a lease liability for substantially all leases. ASU No. 2016-02 is effective on a modified retrospective basis for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations” (Reporting Revenue Gross versus Net) (“ASU No. 2016-08”). ASU No. 2016-08 does not change the core principle of the guidance stated in ASU No. 2014-09, instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU No. 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU No. 2014-09. The Company is currently in the process of evaluating the effect of adoption of ASU No. 2016-08 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 8, 2016, 56 corporate supermarkets offered pharmacy services and 52 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 and the Company’s President, who act as the Company’s chief operating decision makers, assess 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 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 330,202 58.1 % $ 321,794 57.4 % $ 1,074,377 57.4 % $ 1,060,122 56.7 % Perishables (2) 167,092 29.4 % 162,354 29.0 % 563,975 30.1 % 555,260 29.7 % Fuel 31,005 5.5 % 38,275 6.8 % 101,217 5.4 % 125,764 6.7 % Pharmacy 35,316 6.2 % 33,302 5.9 % 115,292 6.2 % 111,429 6.0 % Other (3) 5,138 0.8 % 5,019 0.9 % 17,217 0.9 % 16,930 0.9 % $ 568,753 100.0 % $ 560,744 100.0 % $ 1,872,078 100.0 % $ 1,869,505 100.0 % (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, 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 Accounting Standards Codification (“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 8, 2016 and January 2, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 8, 2016 January 2, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 2,126 $ 2,075 Long-term debt 705,756 681,372 Total carrying value of debt instruments 707,882 683,447 Fair value of debt instruments 650,765 677,450 Excess of carrying value over fair value $ 57,117 $ 5,997 The fair values of the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of October 8, 2016 and January 2, 2016, 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 Present19
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Sales Revenue by Type of Product | The following table presents sales revenue by type of similar product (dollars in thousands): 12-week periods ended 40-week periods ended October 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 % of % of % of % of Amount Total Amount Total Amount Total Amount Total Non-perishables (1) $ 330,202 58.1 % $ 321,794 57.4 % $ 1,074,377 57.4 % $ 1,060,122 56.7 % Perishables (2) 167,092 29.4 % 162,354 29.0 % 563,975 30.1 % 555,260 29.7 % Fuel 31,005 5.5 % 38,275 6.8 % 101,217 5.4 % 125,764 6.7 % Pharmacy 35,316 6.2 % 33,302 5.9 % 115,292 6.2 % 111,429 6.0 % Other (3) 5,138 0.8 % 5,019 0.9 % 17,217 0.9 % 16,930 0.9 % $ 568,753 100.0 % $ 560,744 100.0 % $ 1,872,078 100.0 % $ 1,869,505 100.0 % (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. |
Schedule of Carrying and Estimated Values of Debt Instruments | At October 8, 2016 and January 2, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): October 8, 2016 January 2, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 2,126 $ 2,075 Long-term debt 705,756 681,372 Total carrying value of debt instruments 707,882 683,447 Fair value of debt instruments 650,765 677,450 Excess of carrying value over fair value $ 57,117 $ 5,997 |
Business Acquisition (Tables)
Business Acquisition (Tables) - The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | 9 Months Ended |
Oct. 08, 2016 | |
Business Acquisition [Line Items] | |
Allocation of Purchase Price to Assets Acquired and Liabilities Assumed and Adjustments to Estimated Fair Values of Assets | The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the transaction dates, and adjustments made to the estimated fair values of these assets (dollars in thousands): Initial Revised Assets acquired: Estimate Adjustments Estimate Inventory $ 5,939 $ (933 ) $ 5,006 Prepaid expenses — 79 79 Equipment 5,888 (624 ) 5,264 Goodwill 1,839 3,911 5,750 Pharmacy scripts 3,950 (698 ) 3,252 Customer lists 323 (93 ) 230 Total assets acquired 17,939 1,642 19,581 Liabilities assumed: Accrued expenses and other current liabilities — 799 799 Unfavorable lease rights — 2,370 2,370 Total liabilities assumed — 3,169 3,169 Acquisition price $ 17,939 $ (1,527 ) $ 16,412 |
Unaudited Pro forma Financial Information | The following table summarizes the Company’s unaudited pro forma operating results for the 12-week and 40-week periods ended October 8, 2016 and October 3, 2015, giving effect to the acquisition as if it occurred as of the beginning of fiscal year 2015 (dollars in thousands): 12-week periods ended 40-week periods ended October 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 Net sales $ 604,868 $ 599,052 $ 1,997,577 $ 1,997,197 Operating income 9,364 16,829 44,424 60,214 Net loss (9,666 ) (2,190 ) (19,332 ) (39,035 ) |
Goodwill and Intangible Asset21
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Change in Goodwill | The following table summarizes the change in the Company’s goodwill balance during the 40-week period ended October 8, 2016 (dollars in thousands): Balance - January 2, 2016 $ 213,096 Acquisitions 6,732 Balance - October 8, 2016 $ 219,828 |
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 8, 2016 Amount Amortization Amount Period Tradename – indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,430 (17,194 ) 12,236 14.0 Favorable lease rights 19,050 (6,193 ) 12,857 9.6 Franchise agreements 13,300 (5,048 ) 8,252 14.0 Pharmacy scripts 7,231 (1,781 ) 5,450 16.5 Non-compete agreement 250 (8 ) 242 5.0 $ 200,461 $ (30,224 ) $ 170,237 13.1 Gross Net Carrying Accumulated Carrying January 2, 2016 Amount Amortization Amount Tradename – indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,200 (14,117 ) 15,083 Favorable lease rights 21,550 (6,328 ) 15,222 Franchise agreements 13,300 (3,872 ) 9,428 Pharmacy scripts 3,979 (1,182 ) 2,797 $ 199,229 $ (25,499 ) $ 173,730 |
Summary of Expected Future Amortization of Intangible Assets | As of October 8, 2016, expected future amortization of intangible assets is as follows (dollars in thousands): 2016 (remaining period) $ 1,936 2017 7,592 2018 6,394 2019 5,332 2020 4,482 Thereafter 13,301 |
Accrued Expenses and Other Cu22
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
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 8, 2016 January 2, 2016 Interest payable $ 16,610 $ 3,177 Wages, taxes and benefits 19,917 28,623 Lottery 12,099 13,127 Union medical, pension and 401(k) 9,138 5,817 Professional and legal fees 8,210 5,773 Self-insurance reserves 6,452 6,502 Gift cards 4,003 9,467 Property and equipment expenditures 3,282 2,525 Sales and use tax 3,244 1,431 Utilities 2,723 2,346 Repairs and maintenance 1,876 2,050 Money orders 1,289 2,682 Other 16,698 13,237 $ 105,541 $ 96,757 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations | As of October 8, 2016, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2016 (remaining period) $ 7,286 2017 30,997 2018 27,358 2019 24,646 2020 21,363 Thereafter 112,665 Total minimum lease payments 224,315 Less amounts representing interest (142,578 ) Present value of net minimum lease payments 81,737 Less current obligations (9,447 ) Long-term cash obligations 72,290 Non-cash obligations 64,796 Total long-term capital lease obligations $ 137,086 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt is comprised of the following (dollars in thousands): October 8, 2016 January 2, 2016 2022 Notes $ 560,000 $ 560,000 2018 Notes 85,514 86,704 Discount on 2018 Notes (330 ) (470 ) Deferred financing fees (10,917 ) (12,716 ) 2017 ABL Facility 69,500 46,700 Other loans 4,115 3,229 Total debt 707,882 683,447 Current portion (2,126 ) (2,075 ) Total long-term debt $ 705,756 $ 681,372 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Oct. 08, 2016 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | Income tax expense was as follows (dollars in thousands): 12-week periods ended 40-week periods ended October 8, 2016 October 3, 2015 October 8, 2016 October 3, 2015 Current $ (40 ) $ — $ (358 ) $ (8 ) Deferred (409 ) (400 ) (1,363 ) (1,334 ) Total income tax expense $ (449 ) $ (400 ) $ (1,721 ) $ (1,342 ) |
The Company, Basis of Present26
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended |
Oct. 08, 2016StoreSegment | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |
Number of reportable segment | Segment | 1 |
Number of supermarkets offered pharmacy services | 56 |
Number of supermarkets offering fuel filling services | 52 |
Supermarkets [Member] | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |
Number of retail supermarkets | 172 |
Supermarkets [Member] | Tops Markets, LLC [Member] | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |
Number of retail supermarkets | 171 |
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 |
The Company, Basis of Present27
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Sales Revenue by Type of Product (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | ||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | $ 568,753 | $ 560,744 | $ 1,872,078 | $ 1,869,505 | |
Sale revenue percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Non-perishables [Member] | |||||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | [1] | $ 330,202 | $ 321,794 | $ 1,074,377 | $ 1,060,122 |
Sale revenue percentage | [1] | 58.10% | 57.40% | 57.40% | 56.70% |
Perishables [Member] | |||||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | [2] | $ 167,092 | $ 162,354 | $ 563,975 | $ 555,260 |
Sale revenue percentage | [2] | 29.40% | 29.00% | 30.10% | 29.70% |
Pharmacy [Member] | |||||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | $ 35,316 | $ 33,302 | $ 115,292 | $ 111,429 | |
Sale revenue percentage | 6.20% | 5.90% | 6.20% | 6.00% | |
Other Products [Member] | |||||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | [3] | $ 5,138 | $ 5,019 | $ 17,217 | $ 16,930 |
Sale revenue percentage | [3] | 0.80% | 0.90% | 0.90% | 0.90% |
Fuel [Member] | |||||
Sales Revenue, Goods, Net [Abstract] | |||||
Sales revenue | $ 31,005 | $ 38,275 | $ 101,217 | $ 125,764 | |
Sale revenue percentage | 5.50% | 6.80% | 5.40% | 6.70% | |
[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 Present28
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. 08, 2016 | Jan. 02, 2016 |
Carrying value of long-term debt: | ||
Current portion of long-term debt | $ 2,126 | $ 2,075 |
Long-term debt | 705,756 | 681,372 |
Total carrying value of debt instruments | 707,882 | 683,447 |
Fair value of debt instruments | 650,765 | 677,450 |
Excess of carrying value over fair value | $ 57,117 | $ 5,997 |
Business Acquisition - Addition
Business Acquisition - Additional Information (Detail) $ in Thousands | Sep. 24, 2012Store | Aug. 31, 2016USD ($)Supermarket | Oct. 08, 2016USD ($)Store | Oct. 03, 2015USD ($) | Oct. 08, 2016USD ($) | Oct. 03, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Number of supermarkets acquired | Store | 21 | |||||
Payment for acquisition | $ 17,409 | |||||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, acquired month | 2016-08 | |||||
Aggregate purchase price | $ 16,400 | |||||
Purchase price of acquired inventory | $ 5,006 | |||||
Transaction cost | $ 2,100 | $ 2,100 | ||||
Business acquisition pro forma estimated depreciation and amortization | $ 300 | $ 300 | $ 900 | $ 900 | ||
The Stop & Shop Supermarket Company LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of supermarkets acquired | Supermarket | 4 | |||||
Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of supermarkets acquired | Supermarket | 2 | |||||
Additional Acquisition [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of supermarkets acquired | Store | 1 | |||||
Aggregate purchase price | $ 2,000 | |||||
Payment for acquisition | $ 500 |
Business Acquisition - Allocati
Business Acquisition - Allocation of Purchase Price to Assets Acquired and Liabilities Assumed and Adjustments to Estimated Fair Values of Assets (Detail) - USD ($) $ in Thousands | Oct. 08, 2016 | Aug. 31, 2016 | Jan. 02, 2016 |
Assets acquired: | |||
Goodwill | $ 219,828 | $ 213,096 | |
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | |||
Assets acquired: | |||
Inventory | $ 5,006 | ||
Prepaid expenses | 79 | ||
Equipment | 5,264 | ||
Goodwill | 5,750 | ||
Total assets acquired | 19,581 | ||
Liabilities assumed: | |||
Accrued expenses and other current liabilities | 799 | ||
Unfavorable lease rights | 2,370 | ||
Total liabilities assumed | 3,169 | ||
Acquisition price | 16,412 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Pharmacy Scripts [Member] | |||
Assets acquired: | |||
Intangible assets | 3,252 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Customer Lists [Member] | |||
Assets acquired: | |||
Intangible assets | 230 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Initial Estimate [Member] | |||
Assets acquired: | |||
Inventory | 5,939 | ||
Equipment | 5,888 | ||
Goodwill | 1,839 | ||
Total assets acquired | 17,939 | ||
Liabilities assumed: | |||
Acquisition price | 17,939 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Initial Estimate [Member] | Pharmacy Scripts [Member] | |||
Assets acquired: | |||
Intangible assets | 3,950 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Initial Estimate [Member] | Customer Lists [Member] | |||
Assets acquired: | |||
Intangible assets | 323 | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Adjustments [Member] | |||
Assets acquired: | |||
Inventory | (933) | ||
Prepaid expenses | 79 | ||
Equipment | (624) | ||
Goodwill | 3,911 | ||
Total assets acquired | 1,642 | ||
Liabilities assumed: | |||
Accrued expenses and other current liabilities | 799 | ||
Unfavorable lease rights | 2,370 | ||
Total liabilities assumed | 3,169 | ||
Acquisition price | (1,527) | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Adjustments [Member] | Pharmacy Scripts [Member] | |||
Assets acquired: | |||
Intangible assets | (698) | ||
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | Adjustments [Member] | Customer Lists [Member] | |||
Assets acquired: | |||
Intangible assets | $ (93) |
Business Acquisition - Unaudite
Business Acquisition - Unaudited Pro forma Financial Information (Detail) - The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | |
Business Acquisition Pro Forma Information [Line Items] | ||||
Net sales | $ 604,868 | $ 599,052 | $ 1,997,577 | $ 1,997,197 |
Operating income | 9,364 | 16,829 | 44,424 | 60,214 |
Net loss | $ (9,666) | $ (2,190) | $ (19,332) | $ (39,035) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net - Summary of Change in Goodwill (Detail) $ in Thousands | 9 Months Ended |
Oct. 08, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 213,096 |
Acquisitions | 6,732 |
Goodwill, Ending Balance | $ 219,828 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
Impairment | 2,076,000 | |||
Amortization expense | 2,000,000 | 2,600,000 | 7,200,000 | 8,800,000 |
Contra-expense related to amortization of unfavorable lease rights | 100,000 | 100,000 | 300,000 | 300,000 |
Future amortization expense, 2016 (remaining period) | 200,000 | 200,000 | ||
Future amortization expense, 2017 | 800,000 | 800,000 | ||
Future amortization expense, 2018 | 800,000 | 800,000 | ||
Future amortization expense, 2019 | 800,000 | 800,000 | ||
Future amortization expense, 2020 | 800,000 | 800,000 | ||
Future amortization expense, Thereafter | 2,100,000 | 2,100,000 | ||
Tradename - Indefinite [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets Net - Summary of Intangible Assets, Net of Accumulated Amortization (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 08, 2016 | Jan. 02, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 200,461 | $ 199,229 |
Accumulated Amortization | (30,224) | (25,499) |
Net Carrying Amount | $ 170,237 | 173,730 |
Average Amortization Period | 13 years 1 month 6 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 | $ 29,430 | 29,200 |
Accumulated Amortization | (17,194) | (14,117) |
Net Carrying Amount | $ 12,236 | 15,083 |
Average Amortization Period | 14 years | |
Favorable Lease Rights [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 19,050 | 21,550 |
Accumulated Amortization | (6,193) | (6,328) |
Net Carrying Amount | $ 12,857 | 15,222 |
Average Amortization Period | 9 years 7 months 6 days | |
Franchise Agreements [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 13,300 | 13,300 |
Accumulated Amortization | (5,048) | (3,872) |
Net Carrying Amount | $ 8,252 | 9,428 |
Average Amortization Period | 14 years | |
Pharmacy Scripts [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 7,231 | 3,979 |
Accumulated Amortization | (1,781) | (1,182) |
Net Carrying Amount | $ 5,450 | $ 2,797 |
Average Amortization Period | 16 years 6 months | |
Non-compete Agreement [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 250 | |
Accumulated Amortization | (8) | |
Net Carrying Amount | $ 242 | |
Average Amortization Period | 5 years |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets Net - Summary of Expected Future Amortization of Intangible Assets (Detail) $ in Thousands | Oct. 08, 2016USD ($) |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | |
Future amortization expense, 2016 (remaining period) | $ 1,936 |
Future amortization expense, 2017 | 7,592 |
Future amortization expense, 2018 | 6,394 |
Future amortization expense, 2019 | 5,332 |
Future amortization expense, 2020 | 4,482 |
Future amortization expense, Thereafter | $ 13,301 |
Accrued Expenses and Other Cu36
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Oct. 08, 2016 | Jan. 02, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Interest payable | $ 16,610 | $ 3,177 |
Wages, taxes and benefits | 19,917 | 28,623 |
Lottery | 12,099 | 13,127 |
Union medical, pension and 401(k) | 9,138 | 5,817 |
Professional and legal fees | 8,210 | 5,773 |
Self-insurance reserves | 6,452 | 6,502 |
Gift cards | 4,003 | 9,467 |
Property and equipment expenditures | 3,282 | 2,525 |
Sales and use tax | 3,244 | 1,431 |
Utilities | 2,723 | 2,346 |
Repairs and maintenance | 1,876 | 2,050 |
Money orders | 1,289 | 2,682 |
Other | 16,698 | 13,237 |
Accrued expenses and other current liabilities, Total | $ 105,541 | $ 96,757 |
Capital Lease Obligations - Add
Capital Lease Obligations - Additional Information (Detail) | 9 Months Ended |
Oct. 08, 2016 | |
Leases [Line Items] | |
Leases expire year | 2,036 |
Leases term | 25 years |
Minimum [Member] | |
Leases [Line Items] | |
Capital lease expiration year | 2,017 |
Maximum [Member] | |
Leases [Line Items] | |
Capital lease expiration year | 2,036 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations (Detail) - USD ($) $ in Thousands | Oct. 08, 2016 | Jan. 02, 2016 |
Leases [Abstract] | ||
2016 (remaining period) | $ 7,286 | |
2,017 | 30,997 | |
2,018 | 27,358 | |
2,019 | 24,646 | |
2,020 | 21,363 | |
Thereafter | 112,665 | |
Total minimum lease payments | 224,315 | |
Less amounts representing interest | (142,578) | |
Present value of net minimum lease payments | 81,737 | |
Less current obligations | (9,447) | $ (8,566) |
Long-term cash obligations | 72,290 | |
Non-cash obligations | 64,796 | |
Total long-term capital lease obligations | $ 137,086 | $ 143,122 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Detail) - USD ($) $ in Thousands | Oct. 08, 2016 | Jan. 02, 2016 | Jun. 10, 2015 | Dec. 27, 2014 |
Secured Debt [Abstract] | ||||
Deferred financing fees | $ (10,917) | $ (12,716) | ||
Other loans | 4,115 | 3,229 | ||
Total carrying value of debt instruments | 707,882 | 683,447 | ||
Current portion | (2,126) | (2,075) | ||
Total long-term debt | 705,756 | 681,372 | ||
2017 ABL Facility [Member] | ||||
Secured Debt [Abstract] | ||||
ABL Facility | 69,500 | 46,700 | ||
2022 Notes [Member] | ||||
Secured Debt [Abstract] | ||||
Notes | 560,000 | 560,000 | $ 560,000 | |
2018 Notes [Member] | ||||
Secured Debt [Abstract] | ||||
Notes | 85,514 | 86,704 | $ 150,000 | |
Discount on notes | $ (330) | $ (470) |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jun. 10, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | Jan. 02, 2016 | Jan. 20, 2016 | Dec. 18, 2015 | Dec. 27, 2014 | Dec. 14, 2014 | May 15, 2013 |
Debt Instrument [Line Items] | |||||||||||
Repayments of long-term debt borrowings | $ 2,990,000 | $ 521,480,000 | |||||||||
Redemption premium payment | 24,290,000 | ||||||||||
Amortization of deferred financing costs | $ 500,000 | $ 500,000 | 1,770,000 | $ 2,618,000 | |||||||
Deferred financing costs, accumulated amortization | 3,500,000 | 3,500,000 | $ 1,800,000 | ||||||||
Deferred financing costs | 10,900,000 | $ 10,900,000 | 12,700,000 | ||||||||
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 | 32,700,000 | $ 32,700,000 | |||||||||
Line of credit facility, amount outstanding | 69,500,000 | $ 69,500,000 | $ 46,700,000 | ||||||||
Weighted average interest rate on borrowings under the ABL Facility | 2.62% | 3.20% | |||||||||
2017 ABL Facility [Member] | Letter of Credit [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Letters of credit outstanding | 22,800,000 | $ 22,800,000 | $ 23,800,000 | ||||||||
Maximum [Member] | 2017 ABL Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Increase in capacity upon met specified condition | $ 50,000,000 | ||||||||||
Maximum [Member] | 2017 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, applicable margin rate | 2.00% | ||||||||||
Maximum [Member] | 2017 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, applicable margin rate | 1.00% | ||||||||||
Minimum [Member] | 2017 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, applicable margin rate | 1.50% | ||||||||||
Minimum [Member] | 2017 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, applicable margin rate | 0.50% | ||||||||||
2022 Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument carrying amount | $ 560,000,000 | 560,000,000 | $ 560,000,000 | 560,000,000 | |||||||
Interest rate, notes | 8.00% | ||||||||||
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. | ||||||||||
Capitalized cost | $ 10,700,000 | ||||||||||
2017 Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of long-term debt borrowings | $ 460,000,000 | ||||||||||
Redemption premium payment | 23,000,000 | ||||||||||
Unamortized deferred financing costs | 1,100,000 | 1,100,000 | |||||||||
2018 Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument carrying amount | 85,514,000 | $ 85,514,000 | $ 86,704,000 | $ 150,000,000 | |||||||
Debt instrument repurchased | 60,000,000 | ||||||||||
Redemption premium payment | $ 1,200,000 | ||||||||||
Semi-annual interest payments date | The 2018 Notes mature on June 15, 2018 and require semi-annual interest payments on June 15 and December 15. | ||||||||||
Unamortized deferred financing costs | 2,700,000 | $ 2,700,000 | |||||||||
2018 Notes [Member] | Open Market [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument repurchased | $ 1,200,000 | $ 3,300,000 | |||||||||
2018 Notes [Member] | Holding II [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument carrying amount | $ 85,500,000 | $ 85,500,000 | $ 150,000,000 | ||||||||
Interest rate, notes | 9.50% | 9.50% | |||||||||
Maturity date of senior notes | Jun. 15, 2018 | ||||||||||
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% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ (40) | $ (358) | $ (8) | |
Deferred | (409) | $ (400) | (1,363) | (1,334) |
Total income tax expense | $ (449) | $ (400) | $ (1,721) | $ (1,342) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 08, 2016 | Oct. 03, 2015 | Oct. 08, 2016 | Oct. 03, 2015 | Jan. 03, 2016 | |
Income Taxes [Line Items] | |||||
Effective income tax rates without adjustment valuation allowance | 39.10% | 39.30% | 39.10% | 39.10% | |
Expiration dates for operating losses | Jan. 1, 2029 | ||||
Expiration dates for tax credits | Jan. 1, 2027 | ||||
United States Federal Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards net | $ 70.9 | ||||
Federal tax credits | 5.4 | ||||
State and Local Jurisdiction [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards net | $ 71.5 |
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 |
Dividends Paid - Additional Inf
Dividends Paid - Additional Information (Detail) - USD ($) $ in Millions | Jan. 14, 2016 | Jan. 08, 2015 |
Equity [Abstract] | ||
Dividend paid by company to TOPS MBO Co | $ 2 | |
Dividends paid | $ 0.8 | |
Common shares repurchased | 1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | May 27, 2014USD ($) | Sep. 24, 2012Store | Oct. 08, 2016USD ($)EMP | Oct. 03, 2015USD ($) | Oct. 08, 2016USD ($)EMPAgreement | Oct. 03, 2015USD ($) | Jan. 02, 2016USD ($) |
Commitments Contingencies And Litigation [Line Items] | |||||||
Payment of withdrawal liability | $ 5,800,000 | $ 5,800,000 | $ 5,800,000 | $ 5,800,000 | |||
Number of supermarkets acquired | Store | 21 | ||||||
Agreement expiration date | Sep. 23, 2022 | ||||||
Expiration date of supply agreement | Feb. 28, 2017 | ||||||
Accrued Environmental Liabilities | $ 0 | $ 0 | $ 0 | ||||
Number of employed associates | EMP | 15,000 | 15,000 | |||||
Percentage of associates engaged in various unions | 81.00% | ||||||
Number of collective bargaining agreements | Agreement | 5 | ||||||
Pending Litigation [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Accrued amount related to contingent liabilities due to legal proceedings | $ 0 | $ 0 | $ 0 | ||||
Teamster Local 264 [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Percentage of members working in distribution facilities | 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 [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Number of collective bargaining agreements | Agreement | 7 | ||||||
Non Local Collective Bargaining Arrangement [Member] | Seven Collective Bargaining Agreements [Member] | Minimum [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Expiration date of collective bargaining agreements | 2017-04 | ||||||
Non Local Collective Bargaining Arrangement [Member] | Seven Collective Bargaining Agreements [Member] | Maximum [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Expiration date of collective bargaining agreements | 2019-10 | ||||||
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% | ||||||
Other Assets [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Payment of withdrawal liability | $ 17,300,000 | $ 17,300,000 | |||||
Other Long Term Liabilities [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Aggregate rejected contributions | 12,700,000 | 12,700,000 | |||||
Multiemployer Plans, Pension [Member] | |||||||
Commitments Contingencies And Litigation [Line Items] | |||||||
Company made contributions | $ 800,000 | $ 1,200,000 | $ 3,700,000 | $ 3,600,000 | |||
Liability estimate due to withdrawal from fund | $ 183,700,000 | ||||||
Contribution payable period | 240 months | ||||||
Monthly installment amount | $ 641,514 |
Impairment - Additional Informa
Impairment - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Oct. 08, 2016USD ($) | |
Impairment Charges [Abstract] | |
Impairment | $ 2,076 |