Losses Grow in Q2 for Pathmark

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Losses Grow in Q2 for Pathmark

CARTERET, N.J. - Expenses related to the proposed merger with A&P piled up the net losses for the second quarter performance at Pathmark Stores Inc. here, the chain said yesterday.

Pathmark posted a net loss of $18.8 million, or 36 cents per diluted share, in the second quarter, vs. a loss of $8.8 million, or 17 cents in the year ago period. The chain said the extra $10.0 million in losses was mainly attributable to pre-tax expenses of $7.2 million related to the proposed merger with A&P, pre-tax charges of $7.0 million connected with Pathmark's withdrawal from a multiemployer pension plan, and a pre-tax charge of $2.2 million related to the impairment of a long-lived asset. The losses were partly offset by a gain of $5.5 million on the sale of real estate and higher adjusted EBITDA, Pathmark said.

Net sales for the quarter ended Aug. 4 were $998.5 million, a dip of 0.4 percent from the sales of slightly more than $1 billion for the quarter in fiscal 2006. The grocer's same-store sales for the quarter slipped 0.2 percent.

Capital expenditures at Pathmark came to $36.1 million during the first six months of fiscal 2007, compared with $34.7 million. The chain said it expects expenditures to rise to about $70 million in the course of the year.

Pathmark said it completed two store renovations during the first half, and intends to complete 11 before the fiscal year is over.

In connection with the proposed acquisition of Pathmark by A&P, both companies have filed with the SEC relevant materials, among them a preliminary joint proxy statement/prospectus, and plan to file additional materials as the merger progresses.

Pathmark operates 141 supermarkets primarily in the New York-New Jersey and Philadelphia metro areas.