SYRACUSE, N.Y. -- Penn Traffic Co. here said last week it is optimistic about its longterm prospects for same-store sales and for operating cash flow for the fiscal year.
2 million, while sales were down 3.6% to $592.6 million following the sale or closure of approximately 30 stores during the prior 12 months.
The company said it had a net loss of $26.7 million after recording a noncash charge of $27.3 million for amortization of excess reorganization value following its financial restructuring and a $400,000 unusual item related to the shift this fall of nonfood distribution to the company's reconfigured Jamestown, N.Y., warehouse and the shutdown of its nonfood facility in Columbus, Ohio.
The company said it will take an additional charge of approximately $1 million in the second quarter when the warehouse project is completed.
As previously disclosed, the company said it anticipates annual cost savings of approximately $2 million once the consolidation is completed.
Penn Traffic said it is in the process of reconfiguring its 267,000-square-foot Jamestown warehouse to service general merchandise and health and beauty care for its 211 stores and 152 wholesale accounts. Once that facility reopens, a 210,000-square-foot leased facility in Columbus will be closed.
The company said the consolidation is designed to reduce transportation costs, improve productivity at three other distribution centers and simplify the procurement process to enable merchandisers to concentrate more on category management.
According to Joseph V. Fisher, president and chief executive officer, "We are making excellent progress implementing our business strategy, which is designed to generate sales and operating-income growth in an evolving competitive environment. We believe we are well positioned to achieve positive same-store sales and solid operating cash-flow growth for our current fiscal year and beyond."
Fisher said the major components of Penn Traffic's strategy are reestablishing a strong capital-investment program, enhancing the company's merchandising and improving store operations.
He said the company's $100 million, 18-month capital-spending program -- which it expects to fund from operations -- is proceeding on schedule, with 10 major remodelings completed during the quarter.
In a filing with the Securities & Exchange Commission, the company indicated it had terminated a consulting agreement with Gary Hirsch, its former chairman, president and CEO, and his partner, Martin Fox, who continues as chief financial officer of Penn Traffic.
The company paid $4.9 million to terminate the contract, with Hirsch receiving $3.35 million and Fox $1.55 million from the company, according to the SEC filing.