UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 1-9930
THE PENN TRAFFIC COMPANY
(Exact name of registrant as specified in its charter)
Delaware 25-0716800
(State of incorporation) (IRS Employer Identification No.)
1200 State Fair Blvd., Syracuse, NY 13209
(Address of principal executive offices) (Zip Code)
(315) 453-7284
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X . NO .
Common stock, par value $1.25 per share: 10,846,701 shares
outstanding as of September 1, 1994
1 of 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE PENN TRAFFIC COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(All dollar amounts in thousands,
except per share data)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
JULY 30, JULY 31, JULY 30, JULY 31,
1994 1993 1994 1993
---------- ---------- ---------- -----------
TOTAL REVENUES $ 835,767 $ 780,996 $1,645,728 $1,543,036
COST AND OPERATING EXPENSES:
Cost of sales (including
buying and occupancy
costs) 642,930 608,894 1,274,388 1,202,651
Selling and administrative
expenses 150,440 135,225 295,552 271,949
Unusual item (Note 3) 6,400 6,400
---------- ---------- ---------- ----------
OPERATING INCOME 42,397 30,477 75,788 62,036
Interest expense 28,767 28,897 57,791 59,656
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES,
EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 13,630 1,580 17,997 2,380
Provision for income taxes 6,762 946 8,873 1,327
---------- ---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY
ITEM AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
PRINCIPLE 6,868 634 9,124 1,053
Extraordinary item (net of
tax benefit) (Note 5) (691) (4,477) (2,967) (22,079)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 6,177 (3,843) 6,157 (21,026)
Cumulative effect of
change in accounting
principle (net of tax
benefit) (Note 7) (5,790)
---------- ---------- ---------- ----------
NET INCOME (LOSS) 6,177 (3,843) 367 (21,026)
Preferred dividends (159)
---------- ---------- ---------- ----------
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK $ 6,177 $ (3,843) $ 367 $ (21,185)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
PER SHARE DATA:
Income before extraordinary
item and cumulative effect
of change in accounting
principle (after preferred
dividends) $ .62 $ .06 $ .82 $ .09
Extraordinary item (.07) (.41) (.27) (2.22)
Cumulative effect of change
in accounting principle (.52)
---------- ---------- ---------- ----------
Net income (loss) $ .55 $ (.35) $ .03 $ (2.13)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average number of common
shares outstanding 11,167,258 10,918,988 11,165,057 9,956,722
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
See Notes to Interim Consolidated Financial Statements.
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THE PENN TRAFFIC COMPANY
CONSOLIDATED BALANCE SHEET
(All dollar amounts in thousands)
UNAUDITED
JULY 30, 1994 JANUARY 29, 1994
------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and short-term investments $ 41,304 $ 82,467
Accounts and notes receivable
(less allowance for doubtful accounts
of $1,136 and $740, respectively) 66,368 60,020
Inventories (Note 4) 348,854 348,455
Prepaid expenses and other current assets 10,428 9,939
---------- ----------
Total Current Assets 466,954 500,881
NONCURRENT ASSETS:
Capital leases - net 131,145 134,101
Property, plant and equipment - net 543,698 535,728
Intangible assets - net 372,530 377,450
Other assets and deferred charges - net 86,479 84,741
---------- ----------
Total Assets $1,600,806 $1,632,901
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,128 $ 4,208
Current portion of obligations
under capital leases 9,302 8,773
Trade accounts and drafts payable 199,339 183,967
Payroll and other accrued liabilities 67,471 74,028
Accrued interest expense 27,701 28,690
Payroll taxes and other taxes payable 26,713 18,901
Deferred income taxes 20,570 24,669
---------- ----------
Total Current Liabilities 355,224 343,236
NONCURRENT LIABILITIES:
Long-term debt 984,445 1,021,896
Obligations under capital leases 129,616 131,148
Deferred income taxes 72,328 72,411
Other noncurrent liabilities 43,717 49,228
---------- ----------
Total Liabilities 1,585,330 1,617,919
---------- ----------
SHAREHOLDERS' EQUITY:
Preferred Stock - authorized 10,000,000
shares at $1.00 par value; none issued
Common Stock - authorized 30,000,000
shares at $1.25 par value; 10,846,701
shares and 10,840,151 shares
issued and outstanding, respectively 13,560 13,550
Capital in excess of par value 179,205 179,087
Retained deficit (162,989) (162,924)
Minimum pension liability adjustment (4,963) (4,963)
Unearned compensation (9,337) (9,768)
---------- ----------
Total Shareholders' Equity 15,476 14,982
---------- ----------
Total Liabilities and Shareholders'
Equity $1,600,806 $1,632,901
---------- ----------
---------- ----------
See Notes to Interim Consolidated Financial Statements.
- 3 -
THE PENN TRAFFIC COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
(All dollar amounts in thousands)
TWENTY-SIX TWENTY-SIX
WEEKS ENDED WEEKS ENDED
JULY 30, 1994 JULY 31, 1993
------------- -------------
OPERATING ACTIVITIES:
Net income (loss) $ 367 $ (21,026)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Cumulative effect of change in
accounting principle 5,790
Depreciation and amortization 35,894 34,788
Amortization of intangibles 7,350 5,449
Other - net (4,491) 3,871
Net change in assets and liabilities:
Accounts receivable and prepaid expenses (7,248) (2,136)
Inventories (399) (10,406)
Accounts payable and accrued expenses (617) (24,575)
Deferred charges and other assets 2,939 2,369
---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 39,585 (11,666)
---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (40,312) (68,964)
Proceeds from sale of assets 1,634 2,312
Other - net (415) (593)
---------- ----------
NET CASH (USED IN) INVESTING ACTIVITIES (39,093) (67,245)
---------- ----------
FINANCING ACTIVITIES:
Net proceeds from equity offering 74,800
Purchase of preferred stock - Big Bear (9,424)
Purchase of common stock - Big Bear (1,390)
Increase in long-term debt 400,000
Payments to settle long-term debt (60,131) (364,073)
Borrowings of revolver debt 229,100 190,977
Payment of revolver debt (206,500) (193,777)
Reduction of capital lease obligations (3,914) (3,672)
Payment of debt issuance costs (338) (14,698)
Preferred dividends and other - net 128 (159)
---------- ----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (41,655) 78,584
---------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (41,163) (327)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 82,467 54,840
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 41,304 $ 54,513
---------- ----------
---------- ----------
See Notes to Interim Consolidated Financial Statements.
- 4 -
THE PENN TRAFFIC COMPANY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements.
The results of operations for the interim periods are not
necessarily an indication of results to be expected for the year. In
the opinion of management, all adjustments necessary for a fair
presentation of the results are included for the interim periods, and
all such adjustments are normal and recurring. These unaudited
interim financial statements should be read in conjunction with the
consolidated financial statements and related notes contained in the
Annual Report on Form 10-K for the fiscal year ended January 29, 1994
("Fiscal 1994").
Net income (loss) per share of common stock is based on the
average number of shares of common stock outstanding during each
period, after giving effect to preferred stock dividends. Fully
diluted income per share is not presented for each of the periods
since the reduction from primary income per share is less than three
percent.
During the first quarter of the fiscal year ending January 28,
1995 ("Fiscal 1995"), the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits" (Note 7).
- 5 -
NOTE 2 - SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands of dollars)
Second Quarter Twenty-six Weeks
-------------- ----------------
FISCAL 1995
Operating Income $ 42,397 $ 75,788
Depreciation and Amortization 21,539 43,245
LIFO Provision 425 450
Cash Interest Expense 27,796 55,809
FISCAL 1994
Operating Income $ 30,477 $ 62,036
Unusual Item 6,400 6,400
Depreciation and Amortization 20,366 40,237
LIFO Provision 430 990
Cash Interest Expense 28,608 58,874
NOTE 3 - UNUSUAL ITEM
During the second quarter of Fiscal 1994, the Company recorded certain
expenses totalling $6.4 million classified as an unusual item. This unusual
item is comprised of $4.0 million related to a voluntary employee separation
program at the Company's P & C division and $2.4 million related to the
realignment of certain operations.
NOTE 4 - INVENTORIES
If the first-in, first-out (FIFO) method had been used by the Company,
inventories would have been $14,803,000 and $14,353,000 higher than reported at
July 30, 1994 and January 29, 1994, respectively.
NOTE 5 - EXTRAORDINARY ITEM
During the second quarter of Fiscal 1995 and the second quarter of Fiscal
1994, the Company had extraordinary charges of $0.7 million (net of $0.5 million
income tax benefit) and $4.5 million (net of $2.9 million income tax benefit),
respectively. Extraordinary charges for the twenty-six weeks ended July 30,
1994 and July 31, 1993 were $3.0 million (net of $2.1 million income tax
benefit) and $22.1 million (net of $14.4 million income tax benefit),
respectively. These extraordinary charges relate to the early retirement of
debt.
- 6 -
NOTE 6 - INVESTMENT
EQUITY INTEREST IN THE GRAND UNION COMPANY
Penn Traffic holds an indirect ownership interest representing
approximately 17.8% of the common stock of Grand Union Holdings Corporation
("GU Holdings"), the indirect corporate parent of The Grand Union Company
("Grand Union"), on a fully diluted basis. Penn Traffic's ownership interest in
GU Holdings was acquired in July 1989 (Fiscal 1990) and is held through GAC
Holdings, whose other investors include Miller Tabak Hirsch + Co. ("MTH") and
individuals affiliated with MTH, certain management employees of Penn Traffic
and other investors.
The Company is accounting for its investment in Grand Union under the
equity method. The investment was recorded originally at cost of $18,250,000.
The carrying value of the investment was totally written off as of February 2,
1991.
NOTE 7 - CHANGE IN ACCOUNTING PRINCIPLE
Effective January 30, 1994, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("SFAS 112"). SFAS 112 requires employers to recognize the obligation
to provide postemployment benefits on an accrual basis if certain conditions are
met. The Company's postemployment benefits covered by SFAS 112 are primarily
disability related claims covering indemnity and medical payments. The
obligation for these claims is measured using actuarial techniques and
assumptions including appropriate discount rates. The cumulative effect of the
change in accounting principle determined as of January 30, 1994 was recorded in
the first quarter of Fiscal 1995, reducing net income by $5.8 million (net of
$4.1 million income tax benefit).
- 7 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THIRTEEN WEEKS ("SECOND QUARTER FISCAL 1995") AND TWENTY-SIX WEEKS ENDED JULY
30, 1994 COMPARED TO THIRTEEN WEEKS ("SECOND QUARTER FISCAL 1994") AND TWENTY-
SIX WEEKS ENDED JULY 31, 1993
Income before cumulative effect of change in accounting principle was $6.2
million for both Second Quarter Fiscal 1995 and for the twenty-six weeks ended
July 30, 1994, compared to a loss of $3.8 million for Second Quarter Fiscal 1994
and a loss of $21.0 million for the twenty-six weeks ended July 31, 1993. The
improvement in Second Quarter Fiscal 1995 was primarily due to an $11.9 million
increase in operating income combined with a $3.8 million decrease in
extraordinary charges related to debt retirement, partially offset by a $5.8
million increase in the provision for income taxes. The improvement for the
twenty-six week period was primarily due to a $13.8 million increase in
operating income combined with a $19.1 million decrease in extraordinary charges
related to debt retirement, partially offset by a $7.5 million increase in the
provision for income taxes.
The following table sets forth statement of operations components expressed
as a percentage of total revenues for Second Quarter Fiscal 1995 and Second
Quarter Fiscal 1994 and for the twenty-six weeks ended July 30, 1994 and July
31, 1993, respectively:
Second Quarter Ended Twenty-six Weeks Ended
JULY 30, July 31, JULY 30, July 31,
1994 1993 1994 1993
-------- ------- -------- --------
Total revenues 100.0% 100.0% 100.0% 100.0%
Gross profit (1) 23.1 22.0 22.6 22.1
Selling and administrative
expenses 18.0 17.3 18.0 17.6
Unusual item .8 .4
Operating income 5.1 3.9 4.6 4.1
Interest expense 3.5 3.7 3.5 3.9
Income before income taxes,
extraordinary item
and cumulative effect of
change in accounting
principle 1.6 .2 1.1 .2
Net income (loss) .7 (.5) --- (1.4)
<FN>
(1) Total revenues less cost of goods sold.
- 8 -
RESULTS OF OPERATIONS (CONTINUED)
Total revenues for Second Quarter Fiscal 1995 increased to $835.8
million from $781.0 million in Second Quarter Fiscal 1994. Total revenues for
the twenty-six week period ended July 30, 1994 increased to $1.65 billion from
$1.54 billion for the twenty-six week period ended July 31, 1993. Sales from
retail supermarkets existing in both periods, "same store sales," increased 1.6%
in Second Quarter Fiscal 1995, and 1.3% for the twenty-six weeks ended July 30,
1994. The increase in total revenues is primarily the result of the increase in
retail supermarket sales resulting from the acquisition of the Insalaco stores
in September 1993, the increase in same store sales, and revenues from new and
enlarged stores resulting from the Company's capital expenditure program.
Wholesale supermarket sales decreased in Second Quarter Fiscal 1995 to $111.1
million from Second Quarter Fiscal 1994 sales of $113.5 million and decreased to
$220.3 million for the twenty-six weeks ended July 30, 1994 from $228.4 million
for the twenty-six weeks ended July 31, 1993.
In Second Quarter Fiscal 1995, gross profit was $192.8 million compared to
Second Quarter Fiscal 1994 gross profit of $172.1 million, representing 23.1%
and 22.0% of total revenues, respectively. Gross profit as a percentage of
total revenues increased to 22.6% for the twenty-six week period ended July 30,
1994 from 22.1% for the twenty-six weeks ended July 31, 1993. The increase in
gross profit as a percentage of total revenues for Second Quarter Fiscal 1995
primarily resulted from a combination of reduced product procurement costs and
the relative increase in retail revenues compared to wholesale revenues.
Selling and administrative expenses for Second Quarter Fiscal 1995 were
$150.4 million compared with $135.2 million in Second Quarter Fiscal 1994.
Selling and administrative expenses as a percentage of total revenues increased
to 18.0% for Second Quarter Fiscal 1995 from 17.3% in Second Quarter Fiscal
1994. Selling and administrative expenses for the twenty-six week period ended
July 30, 1994 were $295.6 million compared to $271.9 million for the twenty-six
week period ended July 31, 1993. Selling and administrative expenses as a
percentage of total revenues increased to 18.0% for the twenty-six week period
ended July 30, 1994 from 17.6% for the twenty-six week period ended July 31,
1993. The increase in selling and administrative expenses as a percentage
of total revenues for Second Quarter Fiscal 1995 primarily resulted from the
relative increase in retail revenues compared to wholesale revenues combined
with an increase in fixed and semi-variable expenses as a percentage of total
revenues during a period without food price inflation and continued consumer
preferences towards lower-priced products.
Depreciation and amortization of $21.5 million in Second Quarter Fiscal
1995 and $20.4 million in Second Quarter Fiscal 1994 represented 2.6% of total
revenues for both periods. Depreciation and amortization of $43.2 million for
the twenty-six weeks ended July 30, 1994 and $40.2 million for the twenty-six
weeks ended July 31, 1993 represented 2.6% of total revenues in both periods.
- 9 -
RESULTS OF OPERATIONS (CONTINUED)
Operating income for Second Quarter Fiscal 1995 was $42.4 million or 5.1%
of total revenues compared to $30.5 million or 3.9% of total revenues in Second
Quarter Fiscal 1994. Operating income for the twenty-six week period ended July
30, 1994 was $75.8 million or 4.6% of total revenues compared to $62.0 million
or 4.1% of total revenues for the twenty-six weeks ended July 31, 1993. Second
Quarter Fiscal 1994 operating income excluding the effect of the unusual item
was $36.9 million or 4.7% of total revenues. Operating income excluding the
effect of the unusual item for the twenty-six week period ended July 31, 1993
was $68.4 million or 4.4% of total revenues. Operating income for Second
Quarter Fiscal 1995 increased primarily as a result of an increase in gross
profit combined with the absence of an unusual item (Note 3), partially offset
by an increase in selling and administrative expenses.
Interest expense for Second Quarter Fiscal 1995 and Second Quarter Fiscal
1994 was $28.8 million and $28.9 million, respectively. Interest expense for
the twenty-six weeks ended July 30, 1994 and July 31, 1993 was $57.8 million and
$59.7 million, respectively. The decrease in interest expense was the result of
a decline in the average interest rate on the Company's outstanding debt. This
rate decline is the direct result of the Company's debt refinancing activities.
Income before income taxes, extraordinary item, and the cumulative effect
of a change in accounting principle was $13.6 million for Second Quarter Fiscal
1995, compared to $1.6 million for Second Quarter Fiscal 1994. Income before
income taxes and extraordinary item for the twenty-six weeks ended July 30, 1994
was $18.0 million compared to $2.4 million for the twenty-six weeks ended July
31, 1993. Results for Second Quarter Fiscal 1994 and for the twenty-six week
period ended July 31, 1993 were significantly impacted by the unusual item (Note
3).
The income tax provision was $6.8 million for Second Quarter Fiscal 1995
compared to $0.9 million in Second Quarter Fiscal 1994. The income tax
provision was $8.9 million for the twenty-six week period ended July 30, 1994
compared to $1.3 million in the prior year. The effective tax rates vary from
the statutory rates due to differences between income for financial reporting
and tax reporting purposes, primarily related to goodwill amortization resulting
from prior acquisitions.
The $0.7 million extraordinary item (net of $0.5 million income tax
benefit) and $4.5 million (net of $2.9 million income tax benefit) for Second
Quarter Fiscal 1995 and Second Quarter Fiscal 1994, respectively, and the
extraordinary items of $3.0 million (net of $2.1 million income tax benefit) and
$22.1 million (net of $14.4 million income tax benefit) for the twenty-six week
period ended July 30, 1994 and the twenty-six week period ended July 31, 1993,
respectively, all relate to the early retirement of debt.
The Company adopted SFAS 112 in First Quarter Fiscal 1995. The cumulative
effect of this change in accounting principle was a charge of $5.8 million (net
of $4.1 million income tax benefit) (Note 7).
- 10 -
LIQUIDITY AND CAPITAL RESOURCES
During Second Quarter Fiscal 1995, operating income increased to $42.4
million from $30.5 million for Second Quarter Fiscal 1994. Interest expense for
Second Quarter Fiscal 1995 was $28.8 million as compared to $28.9 million during
Second Quarter Fiscal 1994. Income before extraordinary item and the cumulative
effect of a change in accounting principle for Second Quarter Fiscal 1995 was
$6.9 million as compared to $0.6 million for Second Quarter Fiscal 1994.
Payments of principal and interest on the Company's $988.6 million long-
term debt (excluding capital leases) will materially restrict Company funds
available to finance capital expenditures and working capital. Principal
payments of long-term debt of $2.3 million, $4.1 million and $2.7 million are
due during the remainder of Fiscal 1995, Fiscal 1996 and Fiscal 1997,
respectively.
The Company has a revolving credit facility (the "Revolving Credit
Facility") which provides for borrowings of up to $200 million, subject to a
borrowing base limitation measured by eligible inventory and accounts receivable
of the Company. The Revolving Credit Facility matures in April 2000 and is
secured by a pledge of the Company's inventory, accounts receivable and related
assets. Total availability under the Revolving Credit Facility was $146.7
million at July 30, 1994. Effective August 24, 1994, the Revolving Credit
Facility was amended to provide for certain interest rate reductions on
borrowings made thereunder. Pursuant to the terms of the amendment, based on
the interest coverage ratio which the Company has attained, the interest
rate on borrowings as to which the Company elects a LIBOR-based rate option
is reduced from LIBOR plus 2.25% to LIBOR plus 1.75%, and the interest rate on
borrowings as to which the Company elects a prime-based rate option is reduced
from prime plus .75% to prime plus .50%.
During Second Quarter Fiscal 1995, the Company's internally generated funds
from operations and amounts available under the Revolving Credit Facility
provided sufficient liquidity to meet the Company's operating, capital
expenditure and debt service needs.
During Second Quarter Fiscal 1995, the Company redeemed $19.7 million of 13
3/4% Senior Subordinated Notes due 1999. During the twenty-six week period
ended July 30, 1994, the Company redeemed or repurchased $52.4 million of 13
3/4% Senior Subordinated Notes due 1999 and $5.8 million of 11 1/2% Senior Notes
due 2001.
The Company has entered into four interest rate swap agreements, each of
which expires within the next four years, that effectively convert $155 million
of its fixed rate borrowings into variable rate obligations. Under the terms of
these agreements, the Company makes payments at variable rates which are based
on LIBOR and receives payments at fixed interest rates. The net amount paid or
received is included in interest expense.
Cash flows to meet the Company's requirements for operating, investing and
financing activities in Second Quarter Fiscal 1995 are reported in the
Consolidated Statement of Cash Flows. For the 26-week period ended July 30,
1994, the Company experienced a positive cash flow from operating activities of
$39.6 million.
Working capital decreased by $45.9 million from January 29, 1994 to July
30, 1994.
- 11 -
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company is in compliance with all terms and restrictive covenants of
its long-term debt agreements. The Company's debt agreements provide
restrictive covenants on the payment of dividends to its shareholders. As of
July 30, 1994, no dividend payments to its shareholders could have been made
under the most restrictive of these covenants.
The Company expects to spend approximately $130 million on capital
expenditures, including capital leases, during Fiscal 1995. The Company expects
to finance such capital expenditures through internally generated cash flow,
borrowings under the Revolving Credit Facility and new capital leases. Capital
expenditures will be principally for new stores, replacement stores and
remodels. In Second Quarter Fiscal 1995, two new stores, three replacement
stores and two remodels were completed. In addition, eight new or replacement
stores are under construction and four remodels are in process, all of which
will be completed by the end of Fiscal 1995.
PART II. OTHER INFORMATION
All items which are not applicable or to which the answer is negative have
been omitted from this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
10.9F Amendment No. 5, dated as of August 24, 1994, to
the Loan and Security Agreement among Penn
Traffic, Dairy Dell, Big M Supermarkets, Inc.,
Penny Curtiss Baking Company, Inc., the lenders
party thereto and NatWest USA Credit Corp., as
Agent (the "Loan and Security Agreement").
10.9G Amendment No. 6, dated as of August 24, 1994, to
the Loan and Security Agreement.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fiscal quarter ended
July 30, 1994.
- 12 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PENN TRAFFIC COMPANY
September 12, 1994 /s/ Claude J. Incaudo
---------------------------
By: Claude J. Incaudo
(President and Chief
Executive Officer -
Director)
September 12, 1994 /s/ Eugene R. Sunderhaft
---------------------------
By: Eugene R. Sunderhaft
(Vice President,
Secretary and Treasurer -
Chief Financial Officer)
- 13 -