Prepared and filed by St Ives Financial

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

January 9, 2007
Date of Report (Date of earliest event reported)


THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.
(Exact name of registrant as specified in its charter)

Maryland 1-4141 13-1890974
(State or other jurisdiction of
incorporation or organization)
(Commission file number) (I.R.S. Employer
Identification No.)

Two Paragon Drive
Montvale, New Jersey 07645
(Address of principal executive offices)

(201) 573–9700
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


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Item 2.02 Regulation FD Disclosure

On January 9, 2007, The Great Atlantic & Pacific Tea Company, Inc. issued a press release announcing its unaudited fiscal 2006 third quarter and year to date results for the 12 and 40 weeks ended December 2, 2006. A copy of the press release is attached as Exhibit 99.1 to this Current Report.

In accordance with General Instruction B.2 of Form 8-K, the information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

To supplement the consolidated financial results as determined in accordance with generally accepted accounting principles (“GAAP”), the press release presents non-GAAP financial measures for “EBITDA.” EBITDA is defined as earnings before interest, taxes, depreciation, amortization, minority interest, equity in earnings of Metro, Inc., discontinued operations and the gain on the sale of A&P Canada. Ongoing, operating EBITDA is defined as EBITDA adjusted for items the Company considers non-operating in nature that management excludes when evaluating the results of the U.S. ongoing business. The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by the Company’s management and makes it easier to compare the Company’s results with other companies that have different financing and capital structures or tax rates. In addition, these measures are also among the primary measures used externally by the Company’s investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other companies in its industry. Ongoing, operating EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 4 of this release.

Item 9.01 Financial Statements and Exhibits

 

   (c). Exhibits.
     
  Exhibit 99.1 Press Release of The Great Atlantic & Pacific Tea Company, Inc., dated  January 9, 2007.
     

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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.

  THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
     
  By:  
  Name: Brenda Galgano
  Title: Senior Vice President
And Chief Financial Officer
     
Dated: January 9, 2007    


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EXHIBIT INDEX

Exhibit No. Description
   
99.1 Press Release dated January 9, 2007.
   

    


The Great Atlantic & Pacific Tea Company, Inc.
Schedule 1 - GAAP Earnings for the 12 and 40 weeks ended December 2, 2006 and December 3, 2005
(Unaudited)
(In thousands, except share amounts and store data)

    12 Weeks Ended           40 Weeks Ended        
   

 
   

 
 
    December 2, 2006     December 3, 2005     December 2, 2006     December 3, 2005  
   
   
   
   
 
                         
Sales $ 1,543,004   $ 1,580,942   $ 5,242,149   $ 7,132,824  
Cost of merchandise sold   (1,078,439 )   (1,116,399 )   (3,658,042 )   (5,113,659 )
   
   
   
   
 
Gross margin
  464,565     464,543     1,584,107     2,019,165  
Store operating, general and administrative expense   (463,413 )   (546,100 )   (1,591,162 )   (2,283,928  )
   
   
   
   
 
Income (loss) from operations
  1,152     (81,557)     (7,055)     (264,763)  
(Loss) gain on sale of Canadian operations   (599 )   (6,083 )   (890 )   912,468  
Interest expense   (17,171 )   (15,398 )   (56,221 )   (76,783 )
Interest income   1,845     4,803     8,472     9,146  
Minority interest in earnings of consolidated franchisees               (1,131 )
Equity in earnings of Metro, Inc.   11,023     3,397     30,840     3,397  
   
   
   
   
 
(Loss) income from continuing operations before income taxes 
  (3,750 )   (94,838 )   (24,854 )   582,334  
Benefit from (provision for) income taxes   43,702     21,279     58,584     (152,885 )
   
   
   
   
 
Income (loss) from continuing operations
  39,952     (73,559 )   33,730     429,449  
Discontinued operations:                        
Income from operations of discontinued businesses,  net of tax
  755     1,972     357     1,704  
Gain on disposal of discontinued businesses, net of tax
      577         577  
   
   
   
   
 
Income from discontinued operations
  755     2,549     357     2,281  
   
   
   
   
 
Net income (loss) $ 40,707   $ (71,010 ) $ 34,087   $ 431,730  
   
   
   
   
 
Net income (loss) per share - basic:                        
Continuing operations
$  0.96   $ (1.80)   $ 0.81   $ 10.71  
Discontinued operations
  0.02     0.06     0.01     0.06  
   
   
   
   
 
Net income (loss) per share - basic $  0.98   $ (1.74)   $ 0.82   $ 10.77  
   
   
   
   
 
                         
                         
Net income (loss) per share - diluted:                        
   Continuing operations $  0.95   $ (1.80 ) $ 0.80   $ 10.56  
   Discontinued operations   0.02     0.06     0.01     0.06  
   
   
   
   
 
Net income (loss) per share - diluted $  0.97   $ (1.74 ) $ 0.81   $ 10.62  
   
   
   
   
 
                         
Weighted average common shares outstanding - basic   41,499,554     40,997,714     41,403,346     40,075,391  
   
   
   
   
 
Weighted average common shares outstanding - diluted   42,020,446     40,997,714     41,904,766     40,634,565  
   
   
   
   
 
                         
Gross margin rate   30.11 %   29.38 %   30.22 %   28.31 %
Store operating, general and administrative expense rate   30.03 %   34.54 %   30.35 %   32.02 %
                         
United States depreciation and amortization $  40,556   $ 46,274   $ 135,775   $ 153,100  
Canada depreciation and amortization               10,942  
   
   
   
   
 
Total A&P depreciation and amortization $  40,556   $ 46,274   $ 135,775   $ 164,042  
   
   
   
   
 
                         
The Number of stores operated at end of quarter   410     407     410     407  
   
   
   
   
 
                         

 


The Great Atlantic & Pacific Tea Company, Inc.
Schedule 2 - Condensed Balance Sheet Data
(Unaudited)
(In millions, except per share and store data)

    December 2, 2006     February 25, 2006  
 


 
             
Cash and short-term investments $ 93   $ 230  
Other current assets   753     980  
 
 
 
Total current assets
  846   1,210  
             
Property-net   949     898  
             
Equity investment in Metro, Inc.   367     339  
Other assets   55     52  
 
 
 
Total assets  
$ 2,217   $ 2,499  
 
 
 
             
Total current liabilities $ 568   $ 610  
Total non-current liabilities   1,227     1,217  
Stockholders' equity   422     672  
 
 
 
 Total liabilities and stockholders' equity
$ 2,217   $ 2,499  
 
 
 
             
Other Statistical Data            
             
             
Total Debt and Capital Leases $ 407   $ 282  
Total Long Term Real Estate Liabilities   301     297  
Temporary Investments and Marketable Securities   (92 ) (465 )
   
 
 
Net Debt
$ 616   $ 114  
             
Total Retail Square Footage (in thousands)   16,737     16,509  
             
Book Value Per Share $ 10.17   $ 16.32  
             
             
    For the 40     For the 40  
    weeks ended     weeks ended  
    December 2, 2006     December 3, 2005  
   
   
 
             
Capital Expenditures $ 184   $ 135  

 


The Great Atlantic & Pacific Tea Company, Inc.
Schedule 3 - Reconciliation of GAAP (Loss) Income from Operations to Adjusted (Loss) Income from Operations
for the 12 and 40 weeks ended December 2, 2006 and December 3, 2005
(Unaudited)
(In thousands, except share amounts and store data)

    12 Weeks Ended     40 Weeks Ended  
   
   
 
    December 2,     December 3,     December 2,     December 3,  
    2006     2005     2006     2005  
   
   
   
   
 
                         
As reported income (loss) from operations $ 1,152   $ (81,557 ) $ (7,055 ) $ (264,763 )
 

 

 

 

 
Adjustments:                        
                         
Midwest exit costs
  4     18,781     77     104,896  
Net restructuring costs, primarily related to the sale of the U.S. distribution operations to C&S
  172     14,812     3,245     89,407  
Labor buyout costs
  230         4,474      
Real estate related activity
  (13,008)     3,688     (15,262)     (22,273)  
Long-lived asset impairment
      8,116         17,728  
Early extinguishment of debt and write-off of deferred financing fees
      3,113         32,570  
Impact of Hurricane Katrina
  (4,348 )   13,217     (4,348 )   18,167  
VISA/Mastercard lawsuit settlement
      (1,547 )       (1,547 )
Canadian dollar hedge
              15,446  
Canada income from operations
              (57,224)  
 

 

 

 

 
Total adjustments
  (16,950 )   60,180     (11,814 )   197,170  
   
   
   
   
 
                         
Adjusted United States loss from operations $ (15,798 ) $ (21,377 ) $ (18,869 ) $ (67,593 )
 

 

 

 

 
                         
As reported United States depreciation and amortization $ 40,556   $ 46,274   $ 135,775   $ 153,100  
 

 

 

 

 

 


The Great Atlantic & Pacific Tea Company, Inc.
Schedule 4 - Reconciliation of GAAP Net Cash (Used In) Provided By Operating Activities to Adjusted EBITDA
for the 12 and 40 weeks ended December 2, 2006 and December 3, 2005
(Unaudited)
(In thousands, except share amounts and store data)

    12 Weeks Ended     40 Weeks Ended  
   
   
 
    December 2,     December 3,     December 2,     December 3,  
    2006     2005     2006     2005  
   
   
   
   
 
                         
Net cash used in operating activities $ (59,730 ) $ (97,581 ) $ (42,864)   $ (157,462 )
Adjustments to calculate EBITDA:                        
Net interest expense   15,326     10,595     47,749     67,637  
Asset disposition initiatives   1,201     (17,388 )   (3,719 )   (163,108 )
Long lived asset impairment charges   (845 )   (17,966 )   (3,410 )   (29,108 )
Loss on extinguishment of debt               (28,623 )
Loss on derivatives               (15,446 )
Gain (loss) on disposal of owned property   12,413     (1,591 )   23,238     25,836  
(Benefit from) provision for income taxes   (43,702 )   (21,279 )   (58,584 )   152,885  
Decrease (increase) in income tax reserve   44,276     17,585     61,545     (119,643 )
Other share based awards   (808 )   (2,043 )   (6,652 )   (6,970 )
Proceeds from dividends from Metro, Inc.   (1,659 )   (1,549 )   (5,067 )   (3,061)  
Working capital changes                        
      Accounts receivable   19,635     (2,333 )   (49,780 )   25,770  
      Inventories   37,662     (4,743 )   32,401     (33,432 )
      Prepaid expenses and other current assets   4,695     8,394     16,486     15,890  
      Accounts payable   (8,313 )   15,297     10,221     89,717  
      Accrued salaries, wages, benefits and taxes   15,166     31,693     30,508     36,152  
      Other accruals   7,300     44,158     57,063     (8,558 )
Other assets   86     117     2,897     44  
Other non-current liabilities   949     4,127     20,381     59,721  
Other, net   (1,944 )   (776 )   (3,693 )   (8,962 )
   
   
   
   
 
         Total A&P EBITDA   41,708     (35,283 )   128,720     (100,721  
   
   
   
   
 
Adjustments:                        
                         
      Midwest exit costs   4     18,781     77     104,896  
      Net restructuring costs, primarily related to the sale of the U.S.                        
         distribution operations to C&S   172     14,812     3,245     89,407  
      Labor buyout costs   230         4,474      
      Real estate related activity   (13,008 )   3,688     (15,262 )   (22,273 )
      Long-lived asset impairment       8,116         17,728  
      Early extinguishment of debt and write-off of deferred financing fees       3,113         32,570  
      Impact of Hurricane Katrina   (4,348 )   13,217     (4,348 )   18,167  
      VISA/Mastercard lawsuit settlement       (1,547 )       (1,547 )
      Canadian dollar hedge               15,446  
      Canada EBITDA               (68,166 )
                     
 
         Total adjustments   (16,950 )   60,180     (11,814 )   186,228  
   
   
   
   
 
                         
   Adjusted United States ongoing operating EBITDA $ 24,758   $ 24,897   $ 116,906   $ 85,507