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CARTERET, N.J. -- In its first financial disclosure since it agreed to merge with market rival A&P last month, Pathmark Stores, Inc. here yesterday reported sales in fourth quarter of fiscal 2006 of $1,078.5 million, vs. $993.3 million last year, an increase of 0.6 percent. Same-store sales for the quarter rose 1.2 percent.
The company also reported net earnings of $1.7 million, or three cents per share, for the fourth quarter, compared with a net loss of $14.6 million, or 28 cents, in the year-ago period.
Pathmark attributed the earnings improvement primarily to an increase in adjusted EBITDA, which was $50.0 million in the fourth quarter vs. $25.9 million last year. According to the grocer, this increase was due to a rise in gross profit of $12.0 million, generated primarily from its merchandising initiatives, in addition to lower inventory shrink and lower SG&A expenses.
Sales for full fiscal 2006 were flat, coming to $4.06 billion, compared with $3.98 billion in fiscal 2005; but same-store sales edged up 0.4 percent. Pathmark reported a net loss of $18.3 million, or 35 cents per share, in fiscal 2006, vs. a net loss of $40.1 million, or 92 cents, in 2005, again mainly because of an increase in adjusted EBITDA to $138.6 million from $111.2 million, the company said.
Pathmark noted that the increase was the result of a gross profit boost of $29.6 million generated largely by merchandising initiatives and lower inventory shrink, but partially offset by higher SG&A expenses, which were mainly due to higher utility expenses, higher self-insured workers' compensation and general liability claims, and higher rent and real estate taxes, though somewhat mitigated by gift card income.
Capital expenditures were $71.8 million during the year, are expected to be about $80 million during fiscal 2007, according to the grocer. Pathmark completed 14 store renovations during 2006 and plans to complete 13 store renovations in the current year.
Pathmark operates 141 supermarkets, mostly in the New York-New Jersey and Philadelphia metropolitan areas.
A&P is expected acquire Pathmark for $1.3 billion in cash, stock, and debt assumption or retirement during the second half of fiscal 2007.