Document and Entity Information
Document and Entity Information - shares | 4 Months Ended | |
Apr. 22, 2017 | Jun. 06, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 22, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TOPS HOLDING II CORP | |
Entity Central Index Key | 1,584,701 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 126,559 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Apr. 22, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 24,414 | $ 24,994 |
Accounts receivable, net | 68,905 | 76,874 |
Inventory, net | 153,452 | 153,306 |
Prepaid expenses and other current assets | 17,011 | 15,889 |
Total current assets | 263,782 | 271,063 |
Property and equipment, net | 335,340 | 348,299 |
Goodwill | 219,886 | 219,886 |
Intangible assets, net | 166,035 | 168,385 |
Other assets | 21,170 | 19,245 |
Total assets | 1,006,213 | 1,026,878 |
Current liabilities: | ||
Accounts payable | 75,050 | 76,930 |
Accrued expenses and other current liabilities | 97,274 | 106,266 |
Current portion of capital lease obligations | 10,576 | 10,490 |
Current portion of long-term debt | 1,916 | 3,120 |
Total current liabilities | 184,816 | 196,806 |
Capital lease obligations | 136,711 | 139,240 |
Long-term debt, net | 722,867 | 709,206 |
Other long-term liabilities | 56,929 | 54,494 |
Deferred tax liabilities, net | 46,089 | 45,509 |
Total liabilities | 1,147,412 | 1,145,255 |
Commitments and contingencies | ||
Common stock ($0.001 par value; 300,000 authorized shares, 126,560 shares issued and 126,559 shares outstanding as of April 22, 2017 and December 31, 2016) | 0 | 0 |
Treasury stock (at cost; 1 share as of April 22, 2017 and December 31, 2016) | (1) | (1) |
Paid-in capital | 6,399 | 6,381 |
Accumulated deficit | (146,195) | (123,355) |
Accumulated other comprehensive loss, net of tax | (1,402) | (1,402) |
Total shareholders' deficit | (141,199) | (118,377) |
Total liabilities and shareholders' deficit | $ 1,006,213 | $ 1,026,878 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Apr. 22, 2017 | Dec. 30, 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 | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 740,828 | $ 713,736 |
Cost of goods sold | (509,450) | (486,866) |
Distribution costs | (14,603) | (11,814) |
Gross profit | 216,775 | 215,056 |
Operating expenses: | ||
Wages, salaries and benefits | (115,868) | (107,833) |
Selling and general expenses | (38,063) | (36,505) |
Administrative expenses (inclusive of share-based compensation expense of $18 and $89) | (23,517) | (25,470) |
Rent expense, net | (9,931) | (8,601) |
Depreciation and amortization | (19,993) | (19,915) |
Advertising | (6,422) | (6,424) |
Total operating expenses | (213,794) | (204,748) |
Operating income | 2,981 | 10,308 |
Interest expense, net | (25,148) | (24,887) |
Loss before income taxes | (22,167) | (14,579) |
Income tax expense | (673) | (571) |
Net loss | (22,840) | (15,150) |
Comprehensive loss | $ (22,840) | $ (15,150) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Income Statement [Abstract] | ||
Share-based compensation expense included in administrative expenses | $ 18 | $ 89 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Cash flows provided by operating activities: | ||
Net loss | $ (22,840) | $ (15,150) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 23,409 | 23,614 |
LIFO inventory valuation adjustments | 1,132 | 369 |
Amortization of deferred financing costs | 701 | 731 |
Deferred income taxes | 580 | 545 |
Straight-line rent adjustment | 294 | 266 |
Share-based compensation expense | 18 | 89 |
Other | 186 | 153 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 7,969 | 7,689 |
Increase in inventory, net | (1,278) | (3,849) |
(Increase) decrease in prepaid expenses and other current assets | (1,122) | 2,682 |
Increase in other assets | (1,925) | (1,925) |
Decrease in accounts payable | (1,527) | (7,427) |
(Decrease) increase in accrued expenses and other current liabilities | (8,332) | 863 |
Increase in other long-term liabilities | 2,299 | 1,799 |
Net cash (used in) provided by operating activities | (436) | 10,449 |
Cash flows used in investing activities: | ||
Cash paid for property and equipment | (8,512) | (8,685) |
Cash proceeds from sale of assets | 413 | |
Net cash used in investing activities | (8,512) | (8,272) |
Cash flows provided by (used in) financing activities: | ||
Principal payments on capital leases | (3,243) | (2,644) |
Repayments of long-term debt borrowings | (1,421) | (2,043) |
Deferred financing costs paid | (44) | |
Change in bank overdraft position | (24) | (551) |
Dividends to Tops MBO Corporation (Note 8) | (2,015) | |
Capital contribution | 326 | |
Net cash provided by (used in) financing activities | 8,368 | (4,727) |
Net decrease in cash and cash equivalents | (580) | (2,550) |
Cash and cash equivalents-beginning of period | 24,994 | 35,557 |
Cash and cash equivalents-end of period | 24,414 | 33,007 |
2021 ABL Facility [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Borrowings on ABL Facility | 244,100 | |
Repayments on ABL Facility | $ (231,000) | |
2017 ABL Facility [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Borrowings on ABL Facility | 293,000 | |
Repayments on ABL Facility | $ (290,800) |
The Company, Basis of Presentat
The Company, Basis of Presentation and Summary of Significant Accounting Policies | 4 Months Ended |
Apr. 22, 2017 | |
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, Western Vermont and North Central Massachusetts. As of April 22, 2017, 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). 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 31, 2016, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2017. 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 16-week periods ended April 22, 2017 and April 23, 2016 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 (“ Accounting Standards Codification In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date” (“ASU No. 2015-14”), 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. ASU No. 2015-14 allows for both retrospective and modified retrospective methods of adoption of ASU No. 2014-09. The Company plans to adopt ASU No. 2014-09 in the first quarter of the fiscal year ending December 29, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606), 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 plans to adopt ASU No. 2016-08 in the first quarter of the fiscal year ending December 29, 2018 and does not believe there will be a material impact to revenues upon adoption. For principal versus agent considerations, the Company has evaluated its significant arrangements and has determined that revenue recognition on a gross reporting basis will remain relatively unchanged, with the exception of a group of small contracts that could be reported on a net basis depending on the nature of the arrangements and management’s final assessment. The Company expects to complete its evaluation and implementation of the new revenue recognition standard in mid-2017 and is currently in the process of developing changes to its existing accounting policies as well as implementing processes and controls to address the relevant changes that will result from adopting the new standard. In March 2016, the FASB issued ASU No. 2016-04, “Liabilities - Extinguishment of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products” (“ASU No. 2016-04”), which specifies how prepaid stored-value product liabilities within the scope of ASU No. 2016-04 should be derecognized. ASU No. 2016-04 will be effective for the Company beginning in the fiscal year ending December 29, 2018, including interim periods therein, and allows for both retrospective and modified retrospective methods of adoption. Early adoption is permitted. Preliminarily, the Company plans to adopt ASU No. 2016-04 in the first quarter of the fiscal year ended December 29, 2018. The Company expects there to be only immaterial changes to revenue recognition based on how the Company currently records prepaid stored-value cards breakage. 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 plans to adopt ASU No. 2016-02 in the first quarter of the fiscal year ending December 28, 2019. The adoption of ASU No. 2016-02 will result in a significant increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the accounting for supermarket leases. 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 April 22, 2017, 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 collectively 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): 16-week periods ended April 22, 2017 April 23, 2016 % of % of Amount Total Amount Total Non-perishables (1) $ 424,831 57.3 % $ 412,931 57.9 % Perishables (2) 220,636 29.8 % 212,428 29.8 % Pharmacy 47,145 6.4 % 45,863 6.4 % Fuel 41,661 5.6 % 35,612 5.0 % Other (3) 6,555 0.9 % 6,902 0.9 % $ 740,828 100.0 % $ 713,736 100.0 % (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 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 April 22, 2017 and December 31, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): April 22, 2017 December 31, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 1,916 $ 3,120 Long-term debt 722,867 709,206 Total carrying value of debt instruments 724,783 712,326 Fair value of debt instruments 638,288 642,829 Excess of carrying value over fair value $ 86,495 $ 69,497 The fair values of the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of April 22, 2017 and December 31, 2016, were based on Level 2 inputs. The fair values for Level 2 inputs are based on quoted market prices and taking into consideration the underlying terms of the debt. 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 | 4 Months Ended |
Apr. 22, 2017 | |
Business Combinations [Abstract] | |
Business Acquisitions | 2. BUSINESS ACQUISITIONS 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 North Central Massachusetts. The aggregate purchase price for this acquisition of $16.4 million, including acquired inventory of $4.7 million, was funded using cash on hand and available borrowings under the 2017 ABL Facility. The Company engaged a third party valuation specialist to assist with the valuation of assets acquired. For purposes of an allocation of the assets acquired and liabilities assumed, the excess of the purchase price over the fair value of tangible and intangible net assets has been assigned to goodwill. The fair value of inventory was determined based upon the Company’s estimated replacement cost. The fair values of equipment and leasehold improvements were determined using the cost approach. The fair values of customer lists were primarily determined using the replacement cost method, which measures the value of an asset by considering the cost to reconstruct or replace it with another of like utility. The fair values of pharmacy scripts were primarily determined using the excess earnings method, which reflects the present value of the projected cash flows that are expected to be generated by the existing script relationships less charges representing the contribution of other assets to those cash flows, and an appropriate discount rate to reflect the time value and risk associated with the cash flows. The fair values of the unfavorable lease rights were calculated using market rates and a discounted differential cash flows analysis. The following table summarizes the final allocation of the purchase price to the assets acquired and liabilities assumed as of the transaction dates (dollars in thousands): Assets acquired: Inventory $ 4,749 Prepaid expenses 79 Equipment 5,840 Goodwill 5,809 Pharmacy scripts 3,340 Customer lists 230 Total assets acquired 20,047 Liabilities assumed: Accrued expenses and other current liabilities 1,265 Unfavorable lease rights 2,370 Total liabilities assumed 3,635 Acquisition price $ 16,412 The goodwill of $5.8 million resulted from the Company’s expectation that the acquisition will create 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. The results of operations of the acquired supermarkets have been included in the 16-week period ended April 22, 2017 condensed consolidated statement of comprehensive loss following the closing of the acquisition. The acquired supermarkets contributed net sales and operating loss of $39.7 million and $1.2 million, respectively, during the 16-week period ended April 22, 2017. The following table summarizes the Company’s unaudited pro forma operating results for the 16-week periods ended April 22, 2017 and April 23, 2016, giving effect to the acquisition as if it occurred as of the beginning of Fiscal 2016 (dollars in thousands): 16-week periods ended April 22, 2017 April 23, 2016 Net sales $ 740,828 $ 764,813 Operating income 2,981 14,168 Net loss (22,840 ) (11,290 ) The pro forma financial information includes actual and estimated depreciation and amortization of $0.8 million and $0.4 million during the 16-week periods ended April 22, 2017 and April 23, 2016, respectively. 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 Fiscal 2016, the Company purchased one additional supermarket for $2.0 million of which $0.5 million was paid during Fiscal 2016, with the remainder to be paid over the next three years. Resulting goodwill of $1.0 million was recorded within the Company’s consolidated balance sheet. Of the total goodwill of $6.8 million resulting from the two acquisitions above, $4.4 million is expected to be deductible for tax purposes. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 4 Months Ended |
Apr. 22, 2017 | |
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 16-week period ended April 22, 2017 (dollars in thousands): Balance - December 31, 2016 $ 219,886 Adjustments — Balance - April 22, 2017 $ 219,886 Goodwill is reviewed annually for impairment on December 1, or more frequently upon the occurrence of trigger events. The Company applies significant judgment when determining the estimated fair value of its reporting unit. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only the Company’s reasonable expectation regarding future developments. These estimates and the and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair value of the Company’s reporting unit could result in goodwill impairment in future periods which could materially adversely affect the results of operations or financial position. Intangible assets, net of accumulated amortization, consist of the following (dollars in thousands): Gross Net Average Carrying Accumulated Carrying Amortization April 22, 2017 Amount Amortization Amount Period Tradename – indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,430 (19,024 ) 10,406 14.0 Favorable lease rights 19,050 (7,346 ) 11,704 9.6 Franchise agreements 13,300 (5,810 ) 7,490 14.0 Pharmacy scripts 7,319 (2,299 ) 5,020 16.5 Non-compete agreement 250 (35 ) 215 5.0 $ 200,549 $ (34,514 ) $ 166,035 13.1 Gross Net Carrying Accumulated Carrying December 31, 2016 Amount Amortization Amount Tradename – indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,430 (18,092 ) 11,338 Favorable lease rights 19,050 (6,680 ) 12,370 Franchise agreements 13,300 (5,392 ) 7,908 Pharmacy scripts 7,319 (1,981 ) 5,338 Non-compete agreement 250 (19 ) 231 $ 200,549 $ (32,164 ) $ 168,385 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 16-week periods ended April 22, 2017 and April 23, 2016. During the 16-week periods ended April 22, 2017 and April 23, 2016, amortization expense related to intangible assets was $2.3 million and $3.3 million, respectively. This amortization is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss. During the 16-week periods ended April 22, 2017 and April 23, 2016, depreciation and amortization in the condensed consolidated statements of comprehensive loss includes $0.2 million and $0.1 million, respectively, 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. Expected future amortization of these unfavorable lease rights is contra-expense of $0.4 million in the remaining period of Fiscal 2017, $0.5 million in Fiscal 2018, $0.5 million in Fiscal 2019, $0.5 million in Fiscal 2020, $0.5 million in Fiscal 2021 and $1.5 million thereafter. As of April 22, 2017, expected future amortization of intangible assets is as follows (dollars in thousands): 2017 (remaining period) $ 5,255 2018 6,405 2019 5,345 2020 4,487 2021 3,524 Thereafter 9,819 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 4 Months Ended |
Apr. 22, 2017 | |
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): April 22, 2017 December 31, 2016 Interest payable $ 18,631 $ 2,750 Wages, taxes and benefits 16,657 21,334 Lottery 14,231 13,934 Professional and legal fees 8,162 9,942 Self-insurance reserves 6,841 6,841 Union medical, pension and 401(k) 4,655 8,005 Gift cards 4,345 15,835 Sales and use tax 3,455 1,913 Utilities 2,574 2,409 Repairs and maintenance 1,841 1,973 Property and equipment expenditures 1,378 2,014 Money orders 892 2,294 Other 13,612 17,022 $ 97,274 $ 106,266 |
Capital Lease Obligations
Capital Lease Obligations | 4 Months Ended |
Apr. 22, 2017 | |
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 2037, 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 April 22, 2017, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2017 (remaining period) $ 22,159 2018 29,550 2019 26,813 2020 22,791 2021 19,312 Thereafter 106,185 Total minimum lease payments 226,810 Less amounts representing interest (142,868 ) Present value of net minimum lease payments 83,942 Less current obligations (10,576 ) Long-term cash obligations 73,366 Non-cash obligations 63,345 Total long-term capital lease obligations $ 136,711 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 2018 to 2037, 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 | 4 Months Ended |
Apr. 22, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 6. DEBT Long-term debt, net is comprised of the following (dollars in thousands): April 22, 2017 December 31, 2016 2022 Notes $ 560,000 $ 560,000 2018 Notes 85,514 85,514 Discount on 2018 Notes (230 ) (288 ) Deferred financing fees (10,178 ) (10,860 ) 2021 ABL Facility 86,000 72,900 Other loans 3,677 5,060 Total debt 724,783 712,326 Current portion (1,916 ) (3,120 ) Total long-term debt, net $ 722,867 $ 709,206 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. The proceeds were also used to pay accrued and unpaid interest related to the tendered and redeemed 2017 Notes and 2018 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 “2021 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 2021 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, additional 2018 Notes were repurchased in “open market” transactions in the amounts of $1.2 million and $3.3 million, respectively, resulting in a remaining outstanding principal amount of $85.5 million as of April 22, 2017. 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. For the 16-week periods ended April 22, 2017 and April 23, 2016, such conditions did not exist. 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 2021 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, including at 100.000% beginning on June 15, 2017 and thereafter. On December 30, 2016, Tops Markets entered into the Second Amended and Restated Credit Agreement (the “2021 ABL Facility”) with Bank of America, N.A., as collateral agent and administrative agent, which amended and restated the Company’s 2017 ABL Facility. The 2021 ABL Facility allows a maximum borrowing capacity of $150.0 million, consisting of: (i) a $140.0 million revolving credit facility, subject to a borrowing base calculation (the “Revolver”) and (ii) a $10.0 million first-in, last-out term loan (the “FILO Loan”). The borrowing base for the 2021 ABL Facility includes certain inventory, pharmacy prescription files, credit card receivables, trade receivables and other reserves. The 2021 ABL Facility also contains an option for the Company to upsize the Revolver by up to, in the aggregate, an additional $50.0 million, to $190.0 million, if certain conditions are met, including an increase in the borrowing base and the existence of no events of default. The 2021 ABL Facility will mature on December 30, 2021. Costs associated with the 2022 Notes and the 2018 Notes of $10.7 million and $2.7 million, respectively, were capitalized and are being amortized over the terms of the 2022 Notes and the 2018 Notes, respectively, using the effective interest method. Costs associated with the 2021 ABL Facility of $0.5 million were capitalized and are being amortized on a straight-line basis over the term of the 2021 ABL Facility. During each of the 16-week periods ended April 22, 2017 and April 23, 2016, amortization expense related to the deferred financing costs was $0.7 million, respectively. This amortization expense is included in interest expense in the condensed consolidated statements of comprehensive loss. At April 22, 2017, long-term debt, net included deferred financing costs, net of accumulated amortization of $4.7 million, totaling $10.2 million. At December 31, 2016, long-term debt, net included deferred financing costs, net of accumulated amortization of $4.1 million, totaling $10.9 million. As of April 22, 2017, the unused availability under the 2021 ABL Facility was $18.2 million, after giving effect to the borrowing base calculation, $25.1 million of letters of credit outstanding and $86.0 million of borrowings outstanding. As of December 31, 2016, $22.8 million of letters of credit were outstanding under the 2021 ABL Facility. Revolving loans under the 2021 ABL Facility, at the Company’s option, bear interest at either LIBOR plus a margin of 125 to 175 basis points, determined based on levels of borrowing availability, or the prime rate plus a margin of 25 to 75 basis points, determined based on levels of borrowing availability. The FILO Loan under the 2021 ABL Facility, at the Company’s option, bears interest at either LIBOR plus a margin of 275 to 325 basis points, determined based on levels of the Revolver borrowing availability, or the prime rate plus a margin of 175 to 225 basis points, determined based on levels of the Revolver borrowing availability. As of April 22, 2017 and December 31, 2016, the weighted average interest rates on borrowings under the 2021 ABL Facility were 3.07% and 2.53%, respectively. The 2021 ABL Facility is collateralized primarily by (i) first priority security interests, subject to certain exceptions and permitted liens, in the ABL Priority Collateral, and (ii) second priority security interests, subject to certain exceptions and permitted liens, in the stock held by the Company, and equipment, intellectual property, and substantially all other assets of the Company that are not subject to a first priority security interest. These assets that are subject to a second priority security interest serve to collateralize the 2022 Notes on a first priority basis. In connection with entry into the 2021 ABL Facility, the lenders released, as of December 30, 2016, from among the assets collateralizing the 2021 ABL Facility their second priority mortgages previously held on the Company’s warehouse and distribution facility in Lancaster, New York and retail facility located in Fayetteville, New York. The Company’s warehouse and distribution facility in Lancaster, New York and retail facility located in Fayetteville, New York continue to be subject to a mortgage for purposes of collateralizing the 2022 Notes. The instruments governing the 2022 Notes, 2018 Notes and the 2021 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. As of April 22, 2017, the Company was in compliance with these covenants. |
Income Taxes
Income Taxes | 4 Months Ended |
Apr. 22, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES Income tax expense was as follows (dollars in thousands): 16-week periods ended April 22, 2017 April 23, 2016 Current $ (93 ) $ (26 ) Deferred (580 ) (545 ) Total income tax expense $ (673 ) $ (571 ) 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 16-week periods ended April 22, 2017 and April 23, 2016. The income tax expense recognized for the 16-week periods ended April 22, 2017 and April 23, 2016 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 impact of the valuation allowance resulted in effective tax rates of (3.0)% and (3.9)% during the 16-week periods ended April 22, 2017 and April 23, 2016, respectively. As of the beginning of fiscal year 2017, the Company had U.S. federal and state net operating loss carryforwards of $80.4 million and $72.0 million, respectively, which expire beginning in 2031. In addition, the Company had federal tax credits of $5.3 million, which expire beginning in 2027. |
Dividends Paid
Dividends Paid | 4 Months Ended |
Apr. 22, 2017 | |
Equity [Abstract] | |
Dividends Paid | 8. DIVIDENDS PAID On January 14, 2016, the Company paid a dividend to Tops MBO Corporation (“Tops MBO Co”) totaling $2.0 million. |
Commitments and Contingencies
Commitments and Contingencies | 4 Months Ended |
Apr. 22, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. 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 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 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 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, except for the April 2017 contribution which, as described below, the Fund has to date retained. During the 16-week periods ended April 22, 2017 and April 23, 2016, these rejected contributions totaled $1.9 million and $1.7 million, respectively. On May 27, 2014, the Fund provided Erie Logistics and C&S with notice of the fund’s 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. On May 22, 2017 the Fund commenced an action in federal court purporting to request the court to determine whether the April 2017 contribution should be returned to Erie Logistics or paid to Teamsters Local 264. The Company is currently evaluating an appropriate response to this action. 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 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 16-week periods ended April 22, 2017 and April 23, 2016, the monthly conditional payments of withdrawal liability totaled $1.9 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 $21.2 million as of April 22, 2017, have been recorded in other assets, while the aggregate contributions that we have elected to make and the fund has refused to accept, totaling $15.8 million as of April 22, 2017, 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 failure to participate in the Fund. On July 4, 2016, the arbitrator denied this grievance. Following the arbitrator’s decision, Teamsters Local 264 has taken the position that its collective bargaining agreements with Erie Logistics expired in August 2016, in accordance with the expiration date stated therein. Erie Logistics maintains these collective bargaining agreements remain in effect until August 2019 as a result of the memorandum of understanding agreed to by the parties in August 2013, as modified by a side letter agreement, dated October 30, 2013, which extended the term of these agreements until August 2019. Erie Logistics believes that its position is in accordance with the findings expressed by the arbitrator. Erie Logistics and Teamsters Local 264 have subsequently negotiated short-term standstill agreements while they attempt to resolve the matter. On January 5, 2017, Erie Logistics also filed an unfair labor practice charge with the National Labor Relations Board (“NLRB”) as a result of Teamsters Local 264’s refusal to recognize the extension of the collective bargaining agreements to August 2019. This charge still remains under investigation by the NLRB. However, the NLRB has preliminarily determined that these collective bargaining agreements were extended until at least August 14, 2017. Although Local 264 has denied the unfair labor practice charge, it has advised the NLRB, its members and Erie Logistics that it will recognize that these collective bargaining agreements are valid through August 14, 2017. The parties are continuing to attempt to reach a resolution on the matter. If Erie Logistics and Teamsters Local 264 are unable to resolve the matter, including by negotiating additional standstill agreements, Teamsters Local 264 and its members may seek to strike, participate in a work stoppage or slowdown or engage in other forms of labor disruption. Any such strike, work stoppage or slowdown or other form of labor disruption could cause an interruption to the Company’s operations at its WNY warehouse and distribution facilities and could have a material adverse effect on the Company’s results of operations, financial condition and business. The Company continues to believe that it has binding collective bargaining agreements with Local 264 that preclude any threatened labor disruption prior to August 10, 2019. 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 WNY 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 WNY 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. On December 1, 2016, Tops Markets amended and restated its member participation agreement with Topco, a procurement cooperative for food retailers and wholesalers, for the purchase and supply of substantially all of the Company’s prescription drugs. Pursuant to the terms of this agreement, Tops Markets must purchase 95% of its branded prescription drugs and 95% of its generic pharmaceutical products through Topco. This agreement expires February 28, 2022. 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 April 22, 2017 or December 31, 2016. Collective Bargaining Agreements As of April 22, 2017, the Company employed approximately 14,400 associates. Approximately 80% 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 5% of these associates are members of Teamsters Local 264, who work in the Company’s western New York warehouse and distribution facilities. All other associates are non-union. The Company has three Local One collective bargaining agreements that expired in April 2017 and are currently in the process of being negotiated. The Company is also a party to two collective bargaining agreements with Local One expiring between July 2017 and October 2018. The Company has a non-Local One UFCW collective bargaining agreement that expired in April 2017, which is currently in process of being negotiated. The Company is also a party to six other non-Local One UFCW collective bargaining agreements expiring between December 2017 and October 2019 and three collective bargaining agreements with Teamsters Local 264 expiring in August 2019. Refer to the discussion under “Multiemployer Pension Plans” above for more information regarding the Teamsters Local 264 collective bargaining agreements. 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 April 22, 2017 or December 31, 2016. |
The Company, Basis of Present16
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 4 Months Ended |
Apr. 22, 2017 | |
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 December 31, 2016, which appear in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2017. |
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 16-week periods ended April 22, 2017 and April 23, 2016 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 (“ Accounting Standards Codification In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date” (“ASU No. 2015-14”), 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. ASU No. 2015-14 allows for both retrospective and modified retrospective methods of adoption of ASU No. 2014-09. The Company plans to adopt ASU No. 2014-09 in the first quarter of the fiscal year ending December 29, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606), 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 plans to adopt ASU No. 2016-08 in the first quarter of the fiscal year ending December 29, 2018 and does not believe there will be a material impact to revenues upon adoption. For principal versus agent considerations, the Company has evaluated its significant arrangements and has determined that revenue recognition on a gross reporting basis will remain relatively unchanged, with the exception of a group of small contracts that could be reported on a net basis depending on the nature of the arrangements and management’s final assessment. The Company expects to complete its evaluation and implementation of the new revenue recognition standard in mid-2017 and is currently in the process of developing changes to its existing accounting policies as well as implementing processes and controls to address the relevant changes that will result from adopting the new standard. In March 2016, the FASB issued ASU No. 2016-04, “Liabilities - Extinguishment of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products” (“ASU No. 2016-04”), which specifies how prepaid stored-value product liabilities within the scope of ASU No. 2016-04 should be derecognized. ASU No. 2016-04 will be effective for the Company beginning in the fiscal year ending December 29, 2018, including interim periods therein, and allows for both retrospective and modified retrospective methods of adoption. Early adoption is permitted. Preliminarily, the Company plans to adopt ASU No. 2016-04 in the first quarter of the fiscal year ended December 29, 2018. The Company expects there to be only immaterial changes to revenue recognition based on how the Company currently records prepaid stored-value cards breakage. 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 plans to adopt ASU No. 2016-02 in the first quarter of the fiscal year ending December 28, 2019. The adoption of ASU No. 2016-02 will result in a significant increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the accounting for supermarket leases. |
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 April 22, 2017, 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 collectively 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): 16-week periods ended April 22, 2017 April 23, 2016 % of % of Amount Total Amount Total Non-perishables (1) $ 424,831 57.3 % $ 412,931 57.9 % Perishables (2) 220,636 29.8 % 212,428 29.8 % Pharmacy 47,145 6.4 % 45,863 6.4 % Fuel 41,661 5.6 % 35,612 5.0 % Other (3) 6,555 0.9 % 6,902 0.9 % $ 740,828 100.0 % $ 713,736 100.0 % (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 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 April 22, 2017 and December 31, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): April 22, 2017 December 31, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 1,916 $ 3,120 Long-term debt 722,867 709,206 Total carrying value of debt instruments 724,783 712,326 Fair value of debt instruments 638,288 642,829 Excess of carrying value over fair value $ 86,495 $ 69,497 The fair values of the 2018 Notes and 2022 Notes (see Note 6), which are included in long-term debt as of April 22, 2017 and December 31, 2016, were based on Level 2 inputs. The fair values for Level 2 inputs are based on quoted market prices and taking into consideration the underlying terms of the debt. 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 Present17
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
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): 16-week periods ended April 22, 2017 April 23, 2016 % of % of Amount Total Amount Total Non-perishables (1) $ 424,831 57.3 % $ 412,931 57.9 % Perishables (2) 220,636 29.8 % 212,428 29.8 % Pharmacy 47,145 6.4 % 45,863 6.4 % Fuel 41,661 5.6 % 35,612 5.0 % Other (3) 6,555 0.9 % 6,902 0.9 % $ 740,828 100.0 % $ 713,736 100.0 % (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 April 22, 2017 and December 31, 2016, the carrying value and the estimated fair value of the Company’s debt instruments were as follows (dollars in thousands): April 22, 2017 December 31, 2016 Carrying value of long-term debt: Current portion of long-term debt $ 1,916 $ 3,120 Long-term debt 722,867 709,206 Total carrying value of debt instruments 724,783 712,326 Fair value of debt instruments 638,288 642,829 Excess of carrying value over fair value $ 86,495 $ 69,497 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) - The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | 4 Months Ended |
Apr. 22, 2017 | |
Business Acquisition [Line Items] | |
Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table summarizes the final allocation of the purchase price to the assets acquired and liabilities assumed as of the transaction dates (dollars in thousands): Assets acquired: Inventory $ 4,749 Prepaid expenses 79 Equipment 5,840 Goodwill 5,809 Pharmacy scripts 3,340 Customer lists 230 Total assets acquired 20,047 Liabilities assumed: Accrued expenses and other current liabilities 1,265 Unfavorable lease rights 2,370 Total liabilities assumed 3,635 Acquisition price $ 16,412 |
Unaudited Pro forma Financial Information | The following table summarizes the Company’s unaudited pro forma operating results for the 16-week periods ended April 22, 2017 and April 23, 2016, giving effect to the acquisition as if it occurred as of the beginning of Fiscal 2016 (dollars in thousands): 16-week periods ended April 22, 2017 April 23, 2016 Net sales $ 740,828 $ 764,813 Operating income 2,981 14,168 Net loss (22,840 ) (11,290 ) |
Goodwill and Intangible Asset19
Goodwill and Intangible Assets, Net (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
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 16-week period ended April 22, 2017 (dollars in thousands): Balance - December 31, 2016 $ 219,886 Adjustments — Balance - April 22, 2017 $ 219,886 |
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 April 22, 2017 Amount Amortization Amount Period Tradename – indefinite $ 131,200 $ — $ 131,200 Indefinite Customer relationships 29,430 (19,024 ) 10,406 14.0 Favorable lease rights 19,050 (7,346 ) 11,704 9.6 Franchise agreements 13,300 (5,810 ) 7,490 14.0 Pharmacy scripts 7,319 (2,299 ) 5,020 16.5 Non-compete agreement 250 (35 ) 215 5.0 $ 200,549 $ (34,514 ) $ 166,035 13.1 Gross Net Carrying Accumulated Carrying December 31, 2016 Amount Amortization Amount Tradename – indefinite $ 131,200 $ — $ 131,200 Customer relationships 29,430 (18,092 ) 11,338 Favorable lease rights 19,050 (6,680 ) 12,370 Franchise agreements 13,300 (5,392 ) 7,908 Pharmacy scripts 7,319 (1,981 ) 5,338 Non-compete agreement 250 (19 ) 231 $ 200,549 $ (32,164 ) $ 168,385 |
Summary of Expected Future Amortization of Intangible Assets | As of April 22, 2017, expected future amortization of intangible assets is as follows (dollars in thousands): 2017 (remaining period) $ 5,255 2018 6,405 2019 5,345 2020 4,487 2021 3,524 Thereafter 9,819 |
Accrued Expenses and Other Cu20
Accrued Expenses and Other Current Liabilities (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
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): April 22, 2017 December 31, 2016 Interest payable $ 18,631 $ 2,750 Wages, taxes and benefits 16,657 21,334 Lottery 14,231 13,934 Professional and legal fees 8,162 9,942 Self-insurance reserves 6,841 6,841 Union medical, pension and 401(k) 4,655 8,005 Gift cards 4,345 15,835 Sales and use tax 3,455 1,913 Utilities 2,574 2,409 Repairs and maintenance 1,841 1,973 Property and equipment expenditures 1,378 2,014 Money orders 892 2,294 Other 13,612 17,022 $ 97,274 $ 106,266 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations | As of April 22, 2017, future minimum lease rental payments applicable to non-cancelable capital lease obligations were as follows (dollars in thousands): 2017 (remaining period) $ 22,159 2018 29,550 2019 26,813 2020 22,791 2021 19,312 Thereafter 106,185 Total minimum lease payments 226,810 Less amounts representing interest (142,868 ) Present value of net minimum lease payments 83,942 Less current obligations (10,576 ) Long-term cash obligations 73,366 Non-cash obligations 63,345 Total long-term capital lease obligations $ 136,711 |
Debt (Tables)
Debt (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt, Net | Long-term debt, net is comprised of the following (dollars in thousands): April 22, 2017 December 31, 2016 2022 Notes $ 560,000 $ 560,000 2018 Notes 85,514 85,514 Discount on 2018 Notes (230 ) (288 ) Deferred financing fees (10,178 ) (10,860 ) 2021 ABL Facility 86,000 72,900 Other loans 3,677 5,060 Total debt 724,783 712,326 Current portion (1,916 ) (3,120 ) Total long-term debt, net $ 722,867 $ 709,206 |
Income Taxes (Tables)
Income Taxes (Tables) | 4 Months Ended |
Apr. 22, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | Income tax expense was as follows (dollars in thousands): 16-week periods ended April 22, 2017 April 23, 2016 Current $ (93 ) $ (26 ) Deferred (580 ) (545 ) Total income tax expense $ (673 ) $ (571 ) |
The Company, Basis of Present24
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) | 4 Months Ended |
Apr. 22, 2017StoreSegment | |
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 Present25
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Sales Revenue by Type of Product (Detail) - USD ($) $ in Thousands | 4 Months Ended | ||
Apr. 22, 2017 | Apr. 23, 2016 | ||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | $ 740,828 | $ 713,736 | |
Sale revenue percentage | 100.00% | 100.00% | |
Non-perishables [Member] | |||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | [1] | $ 424,831 | $ 412,931 |
Sale revenue percentage | [1] | 57.30% | 57.90% |
Perishables [Member] | |||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | [2] | $ 220,636 | $ 212,428 |
Sale revenue percentage | [2] | 29.80% | 29.80% |
Pharmacy [Member] | |||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | $ 47,145 | $ 45,863 | |
Sale revenue percentage | 6.40% | 6.40% | |
Other [Member] | |||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | [3] | $ 6,555 | $ 6,902 |
Sale revenue percentage | [3] | 0.90% | 0.90% |
Fuel [Member] | |||
Sales Revenue, Goods, Net [Abstract] | |||
Sales revenue | $ 41,661 | $ 35,612 | |
Sale revenue percentage | 5.60% | 5.00% | |
[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 | Apr. 22, 2017 | Dec. 31, 2016 |
Carrying value of long-term debt: | ||
Current portion of long-term debt | $ 1,916 | $ 3,120 |
Long-term debt | 722,867 | 709,206 |
Total carrying value of debt instruments | 724,783 | 712,326 |
Fair value of debt instruments | 638,288 | 642,829 |
Excess of carrying value over fair value | $ 86,495 | $ 69,497 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) $ in Thousands | Sep. 24, 2012Store | Aug. 31, 2016USD ($)Supermarket | Apr. 22, 2017USD ($) | Apr. 23, 2016USD ($) | Dec. 31, 2016USD ($)Supermarket |
Business Acquisition [Line Items] | |||||
Number of supermarkets acquired | Store | 21 | ||||
Goodwill | $ 219,886 | $ 219,886 | |||
Sales revenue | 740,828 | $ 713,736 | |||
Business acquisition, operating loss | (2,981) | (10,308) | |||
Goodwill expected to be deductible for tax purposes | $ 4,400 | ||||
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 | 4,749 | ||||
Goodwill | $ 5,809 | ||||
Business acquisition pro forma actual and estimated depreciation and amortization | $ 800 | $ 400 | |||
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 | ||||
Supermarkets [Member] | |||||
Business Acquisition [Line Items] | |||||
Sales revenue | 39,700 | ||||
Business acquisition, operating loss | 1,200 | ||||
Additional Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of supermarkets acquired | Supermarket | 1 | ||||
Aggregate purchase price | $ 2,000 | ||||
Goodwill | 1,000 | ||||
Payment for acquisition | $ 500 | ||||
Two Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,800 |
Business Acquisitions - Allocat
Business Acquisitions - Allocation of Purchase Price to Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Apr. 22, 2017 | Dec. 31, 2016 | Aug. 31, 2016 |
Assets acquired: | |||
Goodwill | $ 219,886 | $ 219,886 | |
The Stop & Shop Supermarket Company LLC and Hannaford Bros. Co., LLC and Martin's Foods of South Burlington, LLC [Member] | |||
Assets acquired: | |||
Inventory | $ 4,749 | ||
Prepaid expenses | 79 | ||
Equipment | 5,840 | ||
Goodwill | 5,809 | ||
Total assets acquired | 20,047 | ||
Liabilities assumed: | |||
Accrued expenses and other current liabilities | 1,265 | ||
Unfavorable lease rights | 2,370 | ||
Total liabilities assumed | 3,635 | ||
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 | 3,340 | ||
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 |
Business Acquisitions - Unaudit
Business Acquisitions - 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 | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Business Acquisition Pro Forma Information [Line Items] | ||
Net sales | $ 740,828 | $ 764,813 |
Operating income | 2,981 | 14,168 |
Net loss | $ (22,840) | $ (11,290) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net - Summary of Change in Goodwill (Detail) $ in Thousands | Apr. 22, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 219,886 |
Goodwill, Ending Balance | $ 219,886 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets Net - Additional Information (Detail) - USD ($) | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill impairment charges | $ 0 | $ 0 |
Amortization expense | 2,300,000 | 3,300,000 |
Contra-expense related to amortization of unfavorable lease rights | 200,000 | 100,000 |
Future amortization expense, 2017 (remaining period) | 400,000 | |
Future amortization expense, 2018 | 500,000 | |
Future amortization expense, 2019 | 500,000 | |
Future amortization expense, 2020 | 500,000 | |
Future amortization expense, 2021 | 500,000 | |
Future amortization expense, Thereafter | 1,500,000 | |
Tradename - Indefinite [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment | $ 0 | $ 0 |
Goodwill and Intangible Asset32
Goodwill and Intangible Assets Net - Summary of Intangible Assets, Net of Accumulated Amortization (Detail) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2017 | Dec. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 200,549 | $ 200,549 |
Accumulated Amortization | (34,514) | (32,164) |
Net Carrying Amount | $ 166,035 | 168,385 |
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 | |
Customer Relationships [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 29,430 | 29,430 |
Accumulated Amortization | (19,024) | (18,092) |
Net Carrying Amount | $ 10,406 | 11,338 |
Average Amortization Period | 14 years | |
Favorable Lease Rights [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 19,050 | 19,050 |
Accumulated Amortization | (7,346) | (6,680) |
Net Carrying Amount | $ 11,704 | 12,370 |
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 | (5,810) | (5,392) |
Net Carrying Amount | $ 7,490 | 7,908 |
Average Amortization Period | 14 years | |
Pharmacy Scripts [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 7,319 | 7,319 |
Accumulated Amortization | (2,299) | (1,981) |
Net Carrying Amount | $ 5,020 | 5,338 |
Average Amortization Period | 16 years 6 months | |
Non-compete Agreement [Member] | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 250 | 250 |
Accumulated Amortization | (35) | (19) |
Net Carrying Amount | $ 215 | $ 231 |
Average Amortization Period | 5 years |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets Net - Summary of Expected Future Amortization of Intangible Assets (Detail) $ in Thousands | Apr. 22, 2017USD ($) |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | |
Future amortization expense, 2017 (remaining period) | $ 5,255 |
Future amortization expense, 2018 | 6,405 |
Future amortization expense, 2019 | 5,345 |
Future amortization expense, 2020 | 4,487 |
Future amortization expense, 2021 | 3,524 |
Future amortization expense, Thereafter | $ 9,819 |
Accrued Expenses and Other Cu34
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Apr. 22, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Interest payable | $ 18,631 | $ 2,750 |
Wages, taxes and benefits | 16,657 | 21,334 |
Lottery | 14,231 | 13,934 |
Professional and legal fees | 8,162 | 9,942 |
Self-insurance reserves | 6,841 | 6,841 |
Union medical, pension and 401(k) | 4,655 | 8,005 |
Gift cards | 4,345 | 15,835 |
Sales and use tax | 3,455 | 1,913 |
Utilities | 2,574 | 2,409 |
Repairs and maintenance | 1,841 | 1,973 |
Property and equipment expenditures | 1,378 | 2,014 |
Money orders | 892 | 2,294 |
Other | 13,612 | 17,022 |
Accrued expenses and other current liabilities, Total | $ 97,274 | $ 106,266 |
Capital Lease Obligations - Add
Capital Lease Obligations - Additional Information (Detail) | 4 Months Ended |
Apr. 22, 2017USD ($) | |
Leases [Line Items] | |
Leases expire year | 2,037 |
Leases term | 25 years |
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 | 2,037 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Future Minimum Lease Rental Payments for Capital Lease Obligations (Detail) - USD ($) $ in Thousands | Apr. 22, 2017 | Dec. 31, 2016 |
Leases [Abstract] | ||
2017 (remaining period) | $ 22,159 | |
2,018 | 29,550 | |
2,019 | 26,813 | |
2,020 | 22,791 | |
2,021 | 19,312 | |
Thereafter | 106,185 | |
Total minimum lease payments | 226,810 | |
Less amounts representing interest | (142,868) | |
Present value of net minimum lease payments | 83,942 | |
Less current obligations | (10,576) | $ (10,490) |
Long-term cash obligations | 73,366 | |
Non-cash obligations | 63,345 | |
Total long-term capital lease obligations | $ 136,711 | $ 139,240 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt, Net (Detail) - USD ($) $ in Thousands | Apr. 22, 2017 | Dec. 31, 2016 | Jun. 10, 2015 | Dec. 27, 2014 |
Secured Debt [Abstract] | ||||
Deferred financing fees | $ (10,178) | $ (10,860) | ||
Other loans | 3,677 | 5,060 | ||
Total carrying value of debt instruments | 724,783 | 712,326 | ||
Current portion | (1,916) | (3,120) | ||
Total long-term debt, net | 722,867 | 709,206 | ||
2021 ABL Facility [Member] | ||||
Secured Debt [Abstract] | ||||
ABL Facility | 86,000 | 72,900 | ||
2022 Notes [Member] | ||||
Secured Debt [Abstract] | ||||
Notes | 560,000 | 560,000 | $ 560,000 | |
2018 Notes [Member] | ||||
Secured Debt [Abstract] | ||||
Notes | 85,514 | 85,514 | $ 150,000 | |
Discount on notes | $ (230) | $ (288) |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jun. 10, 2015 | Apr. 22, 2017 | Apr. 23, 2016 | Dec. 31, 2016 | Dec. 30, 2016 | Jan. 20, 2016 | Dec. 18, 2015 | Dec. 27, 2014 | May 15, 2013 |
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt borrowings | $ 1,421,000 | $ 2,043,000 | |||||||
Amortization of deferred financing costs | 701,000 | $ 731,000 | |||||||
Deferred financing costs, accumulated amortization | 4,700,000 | $ 4,100,000 | |||||||
Deferred financing costs | $ 10,200,000 | 10,900,000 | |||||||
2021 ABL Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity in ABL Facility | $ 150,000,000 | ||||||||
Credit facility maturity date | Dec. 30, 2021 | ||||||||
Capitalized cost | $ 500,000 | ||||||||
Unused availability under the ABL Facility | 18,200,000 | ||||||||
Line of credit facility, amount outstanding | $ 86,000,000 | $ 72,900,000 | |||||||
Weighted average interest rate on borrowings under the ABL Facility | 3.07% | 2.53% | |||||||
2021 ABL Facility [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity in ABL Facility | 140,000,000 | ||||||||
Maximum borrowing capacity in ABL Facility upon met specified condition | 190,000,000 | ||||||||
2021 ABL Facility [Member] | Letter of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit outstanding | $ 25,100,000 | $ 22,800,000 | |||||||
Maximum [Member] | 2021 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 1.75% | ||||||||
Maximum [Member] | 2021 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 0.75% | ||||||||
Maximum [Member] | 2021 ABL Facility [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Increase in capacity upon met specified condition | 50,000,000 | ||||||||
Minimum [Member] | 2021 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 1.25% | ||||||||
Minimum [Member] | 2021 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 0.25% | ||||||||
2022 Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument carrying amount | $ 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 | ||||||||
2018 Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument carrying amount | $ 85,514,000 | $ 85,514,000 | $ 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. | ||||||||
Debt instrument redemption price percentage | 100.00% | ||||||||
Debt instrument redemption period start date | Jun. 15, 2017 | ||||||||
Capitalized cost | $ 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 | $ 150,000,000 | |||||||
Interest rate, notes | 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% | ||||||||
FILO Loan [Member] | 2021 ABL Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity in ABL Facility | $ 10,000,000 | ||||||||
FILO Loan [Member] | Maximum [Member] | 2021 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 3.25% | ||||||||
FILO Loan [Member] | Maximum [Member] | 2021 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 2.25% | ||||||||
FILO Loan [Member] | Minimum [Member] | 2021 ABL Facility [Member] | LIBOR Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 2.75% | ||||||||
FILO Loan [Member] | Minimum [Member] | 2021 ABL Facility [Member] | Prime Rate Plus [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, applicable margin rate | 1.75% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Detail) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Income Tax Disclosure [Abstract] | ||
Current | $ (93) | $ (26) |
Deferred | (580) | (545) |
Total income tax expense | $ (673) | $ (571) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 4 Months Ended | |
Apr. 22, 2017 | Apr. 23, 2016 | |
Income Taxes [Line Items] | ||
Impact of valuation allowance resulted in effective tax rates | (3.00%) | (3.90%) |
Expiration dates for operating losses | Jan. 1, 2031 | |
Expiration dates for tax credits | Jan. 1, 2027 | |
United States Federal Tax [Member] | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards net | $ 80.4 | |
Federal tax credits | 5.3 | |
State and Local Jurisdiction [Member] | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards net | $ 72 |
Dividends Paid - Additional Inf
Dividends Paid - Additional Information (Detail) $ in Millions | Jan. 14, 2016USD ($) |
Equity [Abstract] | |
Dividend paid by company to TOPS MBO Corporation | $ 2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Dec. 01, 2016 | May 27, 2014USD ($) | Sep. 24, 2012Store | Apr. 22, 2017USD ($)EMPAgreement | Apr. 23, 2016USD ($) | Dec. 31, 2016USD ($) |
Commitments Contingencies And Litigation [Line Items] | ||||||
Payment of withdrawal liability | $ 1,900,000 | $ 1,900,000 | ||||
Number of supermarkets acquired | Store | 21 | |||||
Agreement expiration date | Sep. 23, 2022 | |||||
Expiration date of purchase and supply agreement | Feb. 28, 2022 | |||||
Accrued environmental liabilities | $ 0 | $ 0 | ||||
Number of employed associates | EMP | 14,400 | |||||
Percentage of associates engaged in various unions | 80.00% | |||||
Pending Litigation [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Accrued amount related to contingent liabilities due to legal proceedings | $ 0 | $ 0 | ||||
Teamster Local 264 [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Percentage of members working in distribution facilities | 5.00% | |||||
Number of collective bargaining agreements | Agreement | 3 | |||||
Expiration date of collective bargaining agreements | 2019-08 | |||||
Local One Collective Bargaining Arrangement [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Number of collective bargaining agreements | Agreement | 2 | |||||
Local One Collective Bargaining Arrangement [Member] | Two Collective Bargaining Agreements [Member] | Minimum [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Expiration date of collective bargaining agreements | 2017-07 | |||||
Local One Collective Bargaining Arrangement [Member] | Two Collective Bargaining Agreements [Member] | Maximum [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Expiration date of collective bargaining agreements | 2018-10 | |||||
Local One Collective Bargaining Arrangement [Member] | Three Collective Bargaining Agreements [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Number of collective bargaining agreements | Agreement | 3 | |||||
Expiration date of collective bargaining agreements | 2017-04 | |||||
Non Local Collective Bargaining Arrangement [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Number of collective bargaining agreements | Agreement | 6 | |||||
Non Local Collective Bargaining Arrangement [Member] | Six Collective Bargaining Agreements [Member] | Minimum [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Expiration date of collective bargaining agreements | 2017-12 | |||||
Non Local Collective Bargaining Arrangement [Member] | Six Collective Bargaining Agreements [Member] | Maximum [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Expiration date of collective bargaining agreements | 2019-10 | |||||
Non Local Collective Bargaining Arrangement [Member] | One Collective Bargaining Agreements [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Number of collective bargaining agreements | Agreement | 1 | |||||
Expiration date of collective bargaining agreements | 2017-04 | |||||
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% | |||||
Teamster Local 264 Plan [Member] | Erie Logistics, LLC [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Multiemployer plans, collective bargaining agreements, description | Following the arbitrator’s decision, Teamsters Local 264 has taken the position that its collective bargaining agreements with Erie Logistics expired in August 2016, in accordance with the expiration date stated therein. Erie Logistics maintains these collective bargaining agreements remain in effect until August 2019 as a result of the memorandum of understanding agreed to by the parties in August 2013, as modified by a side letter agreement, dated October 30, 2013, which extended the term of these agreements until August 2019. Erie Logistics believes that its position is in accordance with the findings expressed by the arbitrator. Erie Logistics and Teamsters Local 264 have subsequently negotiated short-term standstill agreements while they attempt to resolve the matter | |||||
Other Assets [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Payment of withdrawal liability | $ 21,200,000 | |||||
Other Long Term Liabilities [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Aggregate contributions refused to accept | 15,800,000 | |||||
Multiemployer Plans, Pension [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ||||||
Company made contributions | $ 1,900,000 | $ 1,700,000 | ||||
Liability estimate due to withdrawal from fund | $ 183,700,000 | |||||
Contribution payable period | 240 months | |||||
Monthly installment amount | $ 641,514 |