SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 29, 1998
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SUPERMARKETS GENERAL HOLDINGS CORPORATION
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(Exact name of registrant as specified in charter)
DELAWARE 0-16404 13-3408704
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
200 MILIK STREET, CARTERET, NEW JERSEY 07008
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (732) 499-3000
301 BLAIR ROAD, P.O. BOX 5301, WOODBRIDGE, NJ 07095-0915
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(Former Address)
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The Exhibit Index Appears On Page 8
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 29, 1998, Pathmark Stores, Inc. ("Pathmark"), an indirect,
wholly-owned subsidiary of the Registrant, completed the sale of its fee
interest in its Woodbridge, New Jersey warehouse complex, its leasehold
interest in two other distribution center facilities in North Brunswick, NJ
and Dayton, NJ, and its banana ripening facility in Avenel, NJ, all to C&S
Wholesale Grocers, Inc. ("C&S"), including the fixtures, equipment and
inventory in each facility (the "Purchase Agreement"). The selling price for
the aforementioned assets was approximately $103.9 million. Simultaneously,
Pathmark and C&S commenced a fifteen year supply agreement (the "Supply
Agreement") pursuant to which C&S will supply Pathmark with substantially all
of its grocery and perishable merchandise requirements. Pathmark used $32.5
million to retire a portion of the term loan under its Credit Agreement dated
as of June 30, 1997 among Pathmark and the institutions referred to therein
and the remainder will be utilized primarily to repay the Company's
borrowings under the working capital facility and trade payables.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Pro forma financial information.
The attached condensed consolidated pro forma information includes the
statements of operations for the 39 weeks ended November 1, 1997 and for the 52
weeks ended February 1, 1997 and the balance sheet as of November 1, 1997,
giving effect to the aforementioned Purchase Agreement and Supply Agreement (the
"Transaction").
(c) EXHIBITS
DESIGNATION DESCRIPTION METHOD OF FILING
Exhibit 2.1 Amended and Restated Asset Purchase Filed with this Report.
Agreement among Pathmark and
Plainbridge, Inc. and C&S, CSWG LLC
and Woodbridge Logistics LLC
Exhibit 99 News release of Pathmark dated Filed with this Report.
January 30, 1998 announcing the
sale of Pathmark's distribution assets
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SUPERMARKETS GENERAL HOLDINGS CORPORATION
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION
The following pro forma consolidated financial information of Holdings
consists of a Pro Forma Consolidated Balance Sheet as of November 1, 1997 and
Pro Forma Consolidated Statements of Operations for the 39 weeks ended
November 1, 1997 and the 52 weeks ended February 1, 1997 (collectively, the
"Pro Forma Statements"). The Pro Forma Consolidated Balance Sheet was
prepared to give effect to (i) the Purchase Agreement consisting of the sale
of Pathmark's warehouse complex in Woodbridge, NJ, its leasehold interest in
two other distribution facilities in North Brunswick, NJ and Dayton, NJ, and
its banana ripening facility in Avenel, NJ, all to C&S, including the
fixtures, equipment and inventory in each facility at a selling price of
approximately $103.9 million, (ii) the prepayment of term loan borrowings of
$32.5 million, the repayment of borrowings under the working capital facility
of $25.2 million and the payment of trade accounts payable and other
liabilities of $66.5 million, (iii) the recording of a deferred gain of $34.7
million related to the sale of the distribution facilities; since the fair
value of the assets sold approximates the Company's carrying costs, the sale
proceeds in excess of the net book value have been deferred and will be
amortized over the life of the Supply Agreement, and (iv) the recording of a
$25.0 million payment received for trade discounts and rebates by the Company
upon the execution of the Supply Agreement; such payment will be amortized by
the Company as it is earned. The pro forma adjustments for purposes of the
Pro Forma Consolidated Balance Sheet presentation give effect to the Transaction
as though it had occurred at November 1, 1997.
The Pro Forma Consolidated Statements of Operations were prepared to
give effect to both the Transaction. The pro forma adjustments for purposes
of the Pro Forma Consolidated Statements of Operations presentation give
effect to the Transaction as though it had occurred at the beginning of the
earliest period for which the information is presented. The pro forma
adjustments have only been included to the extent they are factually
supportable, directly related to the Transaction and are expected to have a
continuing impact on the Company's Consolidated Statements of Operations.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management believes are reasonable under
the circumstances. The Pro Forma Statements do not purport to represent what
Holdings financial position or results of operations would actually have been
if the Transaction in fact had occurred on such date or at the beginning of
the earliest period indicated or to project Holdings financial position or
results of operations at any future date or for any future period.
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SUPERMARKETS GENERAL HOLDINGS CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
39 WEEKS ENDED NOVEMBER 1, 1997
(in millions)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
Sales............................................................ $ 2,755.3 $ -- $ 2,755.3
Cost of sales.................................................... 1,984.9 (65.8) (a) 1,967.6
48.7 (b)
(0.2) (c)
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Gross profit..................................................... 770.4 17.3 787.7
Selling, general and administrative expenses..................... 630.8 (0.7) (a) 630.1
Depreciation and amortization.................................... 61.6 (2.2) (d) 59.4
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Operating earnings............................................... 78.0 20.2 98.2
Interest expense................................................. 124.8 (3.7) (e) 121.1
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Income (loss) before income taxes and extraordinary items........ (46.8) 23.9 (22.9)
Income tax benefit (provision)................................... 18.7 (9.6) (f) 9.1
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Income (loss) before extraordinary items......................... $ (28.1) $ 14.3 $ (13.8)
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(a) To reverse the operating costs of the distribution centers sold in the
Transaction.
(b) To reflect the impact on the cost of sales of the Supply Agreement,
including the amortization of the deferred gain, trade discounts and
rebates.
(c) To adjust the LIFO charge resulting from the sale of the inventory.
(d) To adjust depreciation and amortization expense resulting from the sale
of the fixed assets.
(e) To adjust interest expense resulting from the prepayment on the term loan
and the repayment of the borrowings under the working capital facility.
(f) To record the tax impact of the pro forma adjustments.
Note: EBITDA-FIFO was $141.9 million on an historical basis compared to
$159.7 million on a pro forma basis. EBITDA-FIFO represents net earnings
before interest expense, income taxes, depreciation, amortization, the LIFO
charge (credit) and unusual transactions. EBITDA-FIFO is a widely accepted
financial indicator of a company's ability to service and/or incur debt and
should not be construed as an alternative to, or a better indicator of,
operating income or cash flows from operating activities, as determined in
accordance with generally accepted accounting principles.
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SUPERMARKETS GENERAL HOLDINGS CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
52 WEEKS ENDED FEBRUARY 1, 1997
(in millions)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
Sales............................................................ $ 3,711.0 $ -- $ 3,711.0
Cost of sales.................................................... 2,619.3 (84.1) (a) 2,600.1
64.0 (b)
0.9 (d)
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Gross profit..................................................... 1,091.7 19.2 1,110.9
Selling, general and administrative expenses..................... 857.4 (0.9) (a) 856.5
Depreciation and amortization.................................... 89.1 (3.2) (d) 85.9
Restructuring charge............................................. 9.1 -- 9.1
Lease commitment charge.......................................... 8.8 -- 8.8
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Operating earnings............................................... 127.3 23.3 150.6
Interest expense................................................. 164.1 (5.0) (e) 159.1
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Income (loss) before income taxes and extraordinary items........ (36.8) 28.3 (8.5)
Income tax benefit (provision)................................... 17.7 (11.9) (f) 5.8
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Income (loss) before extraordinary items......................... $ (19.1) $ 16.4 $ (2.7)
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(a) To reverse the operating costs of the distribution centers sold in the
Transaction.
(b) To reflect the impact on the cost of sales of the Supply Agreement,
including the amortization of the deferred gain, trade discounts and
rebates.
(c) To adjust the LIFO credit resulting from the sale of the inventory.
(d) To adjust depreciation and amortization expense resulting from the sale
of the fixed assets.
(e) To adjust interest expense resulting from the prepayment on the term loan
and the repayment of the borrowings under the working capital facility.
(f) To record the tax impact of the pro forma adjustments.
Note: EBITDA-FIFO was $236.7 million on an historical basis compared to
$257.7 million on a pro forma basis. EBITDA-FIFO represents net earnings
before interest expense, income taxes, depreciation, amortization, the LIFO
charge (credit) and unusual transactions. EBITDA-FIFO is a widely accepted
financial indicator of a company's ability to service and/or incur debt and
should not be construed as an alternative to, or a better indicator of,
operating income or cash flows from operating activities, as determined in
accordance with generally accepted accounting principles.
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SUPERMARKETS GENERAL HOLDINGS CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET(UNAUDITED)
AS OF NOVEMBER 1, 1997
(in millions)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
ASSETS
Current Assets
Cash and cash equivalents..................................... $ 9.4 $ 99.8 (a) $ 9.4
25.0 (b)
(124.8) (c)
Merchandise inventories....................................... 203.2 (42.3) (a) 161.7
0.8 (d)
Other current assets.......................................... 71.0 (0.6) (a) 70.4
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Total Current Assets........................................ 283.6 (42.1) 241.5
Property and Equipment, Net...................................... 551.6 (22.2) (a) 529.4
Deferred Financing Costs, Net.................................... 19.7 -- 19.7
Deferred Income Taxes............................................ 64.7 17.8 (e) 82.5
Other Assets..................................................... 37.4 -- 37.4
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$ 957.0 $(46.5) $ 910.5
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LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities
Accounts payable.............................................. $ 174.0 $(64.4) (c) $ 109.6
Other current liabilities..................................... 222.2 (2.1) (c) 220.1
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Total Current Liabilities................................... 396.2 (66.5) 329.7
Long-Term Debt................................................... 1,289.3 (57.7) (c) 1,231.6
Lease Obligations, Long-Term..................................... 167.5 (0.6) (c) 166.9
Other Noncurrent Liabilities..................................... 305.3 34.7 (a) 365.0
25.0 (b)
Redeemable Securities............................................ 106.7 -- 106.7
Stockholder's Deficit............................................ (1,308.0) 0.8 (d) (1,289.4)
17.8 (e)
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$ 957.0 $(46.5) $ 910.5
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(a) To record the net proceeds, asset disposition and the deferred gain related
to the Transaction. (b) To record payment related to trade discounts and
rebates received upon execution of the Supply Agreement.
(c) To reflect the use of proceeds related to the Transaction.
(d) To reflect the non-recurring LIFO liquidation gain resulting from the sale
of inventory related to the Transaction.
(e) The sale of the assets related to the Transaction generated capital gains
and as such, the adjustment to stockholder's deficit reflects the reversal
of a portion of the income tax valuation allowance related to the capital
tax loss carryforward.
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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 hereunto duly authorized on the date indicated.
SUPERMARKETS GENERAL HOLDINGS
CORPORATION
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(Registrant)
Date: February 13, 1998 By: /s/Ron Marshall
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Ron Marshall
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
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EXHIBIT INDEX
FINANCIAL STATEMENTS AND EXHIBITS
DESIGNATION DESCRIPTION
Exhibit 2.1 Purchase Agreement
Exhibit 99 News Release of Pathmark dated
January 30, 1998 announcing the
sale of Pathmark's distribution
assets
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