Penn Traffic Takes Hit on Failed Acquisition

SYRACUSE, N.Y. — Penn Traffic here on Friday said it had incurred a cost of $4.8 million during the fiscal year that ended Feb. 2 pursuing an acquisition that did not materialize. The company made the disclosure in reporting financial results for the fourth quarter and year as it seeks to return to a more regular reporting schedule following its 2003 bankruptcy filing. An investor on the conference call asked if the proposed acquisition was related to the Tops chain, which was sold last year by Ahold to Morgan Stanley Private Equity, but Penn Traffic officials declined to comment further. For the fourth quarter, the company posted a loss of $19.8 million, vs. a loss of $15 million in the year-ago period. For the full year, the company posted a loss of $41.7 million, compared with a loss of $28 million in the preceding year. Revenues were down slightly for the year, to $1.22 billion. The company also unveiled a new theme to better position its stores: “Big smiles — Fresh food — Low prices.” The initiative includes adding more store-level workers at peak times to improve service, emphasizing store-made perishables and rolling out an array of price promotions.

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