<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarter Ended Commission File Number
May 2, 1998 1-5287
Pathmark Stores, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2879612
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Milik Street 07008
Carteret, New Jersey (Zip Code)
(Address of principal executive offices)
(732) 499-3000
(Registrant's telephone number, including area code)
-------------------
Securities registered pursuant to Section 12(b) of the Act:
Junior Subordinated Deferred Coupon Notes due 2003
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
As of May 2, 1998, there were outstanding 100 shares of Common Stock, $0.10
par value, all of which are privately owned and not traded on a public market.
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<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
PATHMARK STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
13 Weeks Ended
--------------
May 2, May 3,
1998 1997
----------- ----------
<S> <C> <C>
Sales...................................................................... $ 916,015 $ 922,319
Cost of sales (exclusive of depreciation and amortization
shown separately below)................................................. 651,862 663,057
----------- ----------
Gross profit............................................................... 264,153 259,262
Selling, general and administrative expenses............................... 211,065 212,341
Depreciation and amortization.............................................. 19,648 20,174
----------- ----------
Operating earnings......................................................... 33,440 26,747
Interest expense........................................................... (40,874) (41,290)
----------- ----------
Loss before income tax (provision) benefit................................. (7,434) (14,543)
Income tax (provision) benefit............................................. (27) 5,701
----------- ----------
Net loss................................................................... $ (7,461) $ (8,842)
----------- ----------
----------- ----------
</TABLE>
See notes to consolidated financial statements (unaudited).
1
<PAGE>
PATHMARK STORES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands except share amounts)
<TABLE>
<CAPTION>
May 2, January 31,
1998 1998
----------- ----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents........................................ $ 7,437 $ 60,076
Accounts receivable, net......................................... 12,905 10,928
Merchandise inventories.......................................... 156,180 148,775
Deferred income taxes, net....................................... 10,483 10,621
Prepaid expenses................................................. 22,391 21,449
Due from suppliers............................................... 41,227 13,027
Other current assets............................................. 14,800 11,331
----------- ----------
Total Current Assets............................................. 265,423 276,207
Property and Equipment, Net....................................... 521,028 529,542
Deferred Financing Costs, Net..................................... 17,537 18,547
Deferred Income Taxes, Net........................................ 44,163 43,389
Other Assets...................................................... 32,040 32,687
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$ 880,191 $ 900,372
----------- ----------
----------- ----------
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current Liabilities
Accounts payable and book overdrafts............................. $ 97,348 $ 154,814
Current maturities of long-term debt............................. 39,538 43,478
Income taxes payable............................................. 2,856 1,771
Accrued payroll and payroll taxes................................ 46,356 49,533
Current portion of lease obligations............................. 24,406 24,337
Accrued interest payable......................................... 18,942 18,300
Accrued expenses and other current liabilities................... 91,102 93,297
----------- ----------
Total Current Liabilities...................................... 320,548 385,530
----------- ----------
Long-Term Debt.................................................... 1,227,826 1,177,898
----------- ----------
Lease Obligations, Long-Term...................................... 174,433 170,273
----------- ----------
Other Noncurrent Liabilities...................................... 242,185 244,011
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Commitments and Contingencies (Note 4)
Stockholder's Deficiency
Common Stock, $.10 par value..................................... -- --
Authorized, issued and outstanding: 100 shares
Paid-in Capital.................................................. 68,703 68,703
Accumulated Deficit.............................................. (1,153,504) (1,146,043)
------------ -----------
Total Stockholder's Deficiency................................. (1,084,801) (1,077,340)
------------ -----------
$ 880,191 $ 900,372
------------ -----------
------------ -----------
</TABLE>
See notes to consolidated financial statements (unaudited).
2
<PAGE>
PATHMARK STORES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Total
Common Paid-in Accumulated Stockholder's
Stock Capital Deficit Deficiency
------ ------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, January 31, 1998................. $ -- $ 68,703 $ (1,146,043) $ (1,077,340)
Net loss................................ -- -- (7,461) (7,461)
------ -------- -------------- -------------
Balance, May 2, 1998...................... $ -- $ 68,703 $ (1,153,504) $ (1,084,801)
------ -------- -------------- -------------
------ -------- -------------- -------------
Balance, February 1, 1997................. $ -- $ 68,703 $ (1,110,369) $ (1,041,666)
Net loss................................ -- -- (8,842) (8,842)
------ -------- -------------- -------------
Balance, May 3, 1997...................... $ -- $ 68,703 $ (1,119,211) $ (1,050,508)
------ -------- -------------- -------------
------ -------- -------------- -------------
</TABLE>
See notes to consolidated financial statements (unaudited)
3
<PAGE>
PATHMARK STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
13 Weeks Ended
--------------
May 2, May 3,
1998 1997
----------- ----------
<S> <C> <C>
Operating Activities
Net loss......................................................................$ (7,461) $ (8,842)
Adjustments to reconcile net loss to net cash provided by (used for)
operating activities:
Depreciation and amortization............................................... 20,552 21,130
Deferred income tax benefit................................................. (636) (5,246)
Interest accruable but not payable.......................................... 4,937 4,448
Amortization of original issue discount..................................... 89 88
Amortization of debt issuance costs......................................... 1,031 1,901
Loss on disposal of property and equipment.................................. 533 33
Cash provided by (used for) operating assets and liabilities:
Accounts receivable, net................................................... (1,977) 161
Merchandise inventories.................................................... (7,405) 1,216
Income taxes............................................................... 1,085 (1,649)
Other current assets....................................................... (33,180) 665
Other assets............................................................... 2,815 (1,808)
Accounts payable........................................................... (33,711) 5,625
Accrued interest payable................................................... 674 (1,798)
Accrued expenses and other current liabilities............................. (5,372) (2,706)
Other noncurrent liabilities............................................... (6,146) (8,079)
----------- ----------
Cash provided by (used for) operating activities.......................... (64,172) 5,139
----------- ----------
Investing Activities
Property and equipment expenditures........................................... (9,076) (5,035)
Proceeds from disposition of property and equipment........................... 8,926 1,243
----------- ----------
Cash used for investing activities.......................................... (150) (3,792)
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Financing Activities
Increase in working capital facilities borrowings............................. 45,200 33,000
Repayment of term loans....................................................... (1,891) (12,627)
Decrease in book overdrafts................................................... (23,755) (11,798)
Increase in other borrowings.................................................. 2,000 214
Repayment of other long-term borrowings....................................... (4,347) (642)
Reduction in lease obligations................................................ (5,503) (5,168)
Deferred financing fees....................................................... (21) (268)
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Cash provided by financing activities....................................... 11,683 2,711
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Increase (decrease) in cash and cash equivalents............................... (52,639) 4,058
Cash and cash equivalents at beginning of period............................... 60,076 9,880
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Cash and cash equivalents at end of period.....................................$ 7,437 $ 13,938
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Supplemental Disclosures of Cash Flow Information
Interest paid.................................................................$ 34,097 $ 36,502
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----------- ----------
Income taxes paid.............................................................$ 72 $ 1,650
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----------- ----------
Noncash Investing and Financing Activities
Capital lease obligations.....................................................$ 10,425 $ 6,807
----------- ----------
----------- ----------
</TABLE>
See notes to consolidated financial statements (unaudited).
4
<PAGE>
PATHMARK STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1--Organization and Basis of Presentation
Pathmark Stores, Inc. (the "Company") operated 135 supermarkets as of May 2,
1998, primarily in the New York-New Jersey and Philadelphia metropolitan areas
and is a wholly owned subsidiary of PTK Holdings, Inc. ("PTK") and an indirect
wholly owned subsidiary of Supermarkets General Holdings Corporation
("Holdings").
The unaudited consolidated financial statements included herein have been
prepared by the Company in accordance with the same accounting principles
followed in the presentation of the Company's annual financial statements for
the year ended January 31, 1998, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
consolidated financial statements included herein reflect all adjustments which
are of a normal and recurring nature and are necessary to present fairly the
results of operations and financial position of the Company. This report should
be read in conjunction with the financial statements and notes thereto included
in the Company's Form 10-K Annual Report for the year ended January 31, 1998.
Income taxes for the interim period are based on the estimated effective tax
rate expected to be applicable for the full fiscal year. The Company has
recorded a valuation allowance related to the income tax benefit for the first
quarter of Fiscal 1998; therefore, no income tax benefit has been recognized.
Note 2--Long-Term Debt
Long-term debt is comprised of the following (dollars in thousands):
<TABLE>
<CAPTION>
May 2, January 31,
1998 1998
----------- ----------
<S> <C> <C>
Term loan ("Term Loan")....................................................... $ 261,359 $ 263,250
Working capital facility ("Working Capital Facility")......................... 45,200 --
9.625% Senior Subordinated Notes due 2003 ("Senior Subordinated Notes")....... 438,223 438,134
11.625% Subordinated Notes due 2002 ("Subordinated Notes").................... 199,017 199,017
12.625% Subordinated Debentures due 2002 ("Subordinated Debentures").......... 95,750 95,750
10.75% Deferred Coupon Notes due 2003 ("Deferred Coupon Notes")............... 192,005 187,068
Debt payable to Holdings...................................................... 983 983
Industrial revenue bonds...................................................... 8,362 6,375
Other debt (primarily mortgages).............................................. 26,465 30,799
----------- -----------
Total debt.................................................................... 1,267,364 1,221,376
Less: current maturities...................................................... 39,538 43,478
----------- -----------
Long-term portion............................................................. $ 1,227,826 $ 1,177,898
----------- -----------
----------- -----------
</TABLE>
Note 3--Interest Expense
Interest expense is comprised of the following (dollars in thousands):
<TABLE>
<CAPTION>
13 Weeks Ended
--------------
May 2, May 3,
1998 1997
----------- ----------
<S> <C> <C>
Term loans.....................................................................$ 5,304 $ 5,130
Working capital facilities..................................................... 540 1,767
Senior Subordinated Notes
Amortization of original issue discount.................................... 89 88
Currently payable.......................................................... 10,588 10,588
Subordinated Notes............................................................. 5,813 5,813
Subordinated Debentures........................................................ 3,022 3,022
Deferred Coupon Notes
Accrued but not payable.................................................... 4,937 4,448
Amortization of debt issuance costs............................................ 1,031 1,901
Lease obligations.............................................................. 5,489 5,481
Other, net..................................................................... 4,061 3,052
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Interest expense...............................................................$ 40,874 $ 41,290
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</TABLE>
5
<PAGE>
PATHMARK STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)--(Continued)
Note 3--Interest Expense--(Continued)
The majority of the cash interest payments are scheduled in the second and
fourth quarters. However, the May 1 semi-annual interest payment of $21.2
million on the Senior Subordinated Notes was paid in the first quarters of
Fiscal 1998 and Fiscal 1997 due to the timing of the quarter end dates.
Note 4--Contingencies
Rickel:
In connection with the sale of its home centers segment in Fiscal 1994, the
Company, as lessor, entered into nine leases for certain of the Company's owned
real estate properties with Rickel Home Centers, Inc. ("Rickel"), as tenant. In
addition, the Company assigned to Rickel 26 third party leases.
In 1996, Rickel filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code. Subsequent to the filing, of the 35 locations
leased to Rickel, Rickel entered into an agreement in 1998 to assign the
leases of 16 locations to Staples, Inc., nine leases have either been
terminated or assigned to third parties, and ten rejected leases are being
actively marketed by the Company to other prospective tenants.
Management has assessed its exposure with respect to this matter and has
concluded that it has sufficient reserves to cover any resulting liability which
may occur, including the future rent and real estate taxes, net of expected
sublease recoveries.
Other:
The Company is also a party to a number of legal proceedings in the ordinary
course of business. Management believes that the ultimate resolution of these
proceedings will not, in the aggregate, have a material adverse impact on the
financial condition, results of operations or business of the Company.
Note 5--Subsequent Event
On May 12, 1998, in conjunction with the pay down of debt by PTK, Pathmark
loaned $26.5 million to PTK in the form of a 14 1/2% discount note, due May 12,
2003, accreting to a maturity value of $53.3 million. PTK is not required to pay
cash interest.
6
<PAGE>
PATHMARK STORES, INC.
Item2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The matters discussed herein, with the exception of historical information,
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but are
not limited to, the competitive environment in which the Company operates and
the general economic conditions in the Company's trading areas.
Results of Operations
Sales:
Sales in the first quarter of Fiscal 1998 were $916.0 million compared to
$922.3 million in the prior year, a decrease of 0.7%. However, same store sales
increased 1.7% for the quarter. Sales in the first quarter of Fiscal 1998
compared to the prior year were impacted by sold and closed stores, partially
offset by new store openings and same store sales increases. The Company
operated 135 and 144 supermarkets at the end of the first quarters of Fiscal
1998 and Fiscal 1997, respectively.
Gross Profit:
Gross profit in the first quarter of Fiscal 1998 was $264.2 million or 28.8%
of sales compared with $259.3 million or 28.1% of sales in the prior year. The
increase in gross profit in both dollars and as a percentage of sales for the
first quarter of Fiscal 1998 compared to the prior year was primarily due to
improvements in the perishables mix and the savings realized from the Company's
outsourcing at the end of Fiscal 1997 of certain of its distribution center
operations to C&S Wholesale Grocers, Inc. ("C&S"). The cost of goods sold
amounts were affected by a pretax LIFO charge of $0.4 million in each of the
first quarters of Fiscal 1998 and Fiscal 1997, respectively.
Selling, General and Administrative Expenses ("SG&A"):
SG&A in the first quarter of Fiscal 1998 decreased $1.3 million or 0.6%
compared to the prior year. The decrease in SG&A in the first quarter of Fiscal
1998 compared to the prior year was primarily due to sold and closed stores. As
a percentage of sales, SG&A were 23.0% in each of the first quarters of Fiscal
1998 and Fiscal 1997, respectively.
Depreciation and Amortization:
Depreciation and amortization of $19.7 million in the first quarter of
Fiscal 1998 was $0.5 million lower than the prior year of $20.2 million. The
decrease in depreciation and amortization expense in the first quarter of Fiscal
1998 compared to the prior year was primarily due to the sale of certain of the
Company's distribution center facilities at the end of Fiscal 1997 as part of
its transaction with C&S, partially offset by capital expenditures. Depreciation
and amortization excludes video tape amortization, which is recorded in cost of
goods sold, of $0.8 million in each of the first quarters of Fiscal 1998 and
Fiscal 1997, respectively.
Operating Earnings:
Operating earnings in the first quarter of Fiscal 1998 were $33.4 million
compared with the prior year of $26.7 million. The increase in operating
earnings in the first quarter of Fiscal 1997 compared to the prior year was due
to higher gross profit and lower SG&A.
7
<PAGE>
Interest Expense:
Interest expense was $40.9 million in the first quarter of Fiscal 1998
compared to $41.3 million in the prior year. The decrease in interest expense in
the first quarter of Fiscal 1998 compared to the prior year was primarily due to
lower levels of borrowings under the working capital facilities and lower
amortization of debt issuance costs, partially offset by the debt accretion on
the Deferred Coupon Notes.
Income Taxes:
Income taxes for the interim period are based on the estimated effective tax
rate expected to be applicable for the full fiscal year. The Company has
recorded a valuation allowance related to the income tax benefit for the first
quarter of Fiscal 1998; therefore, no income tax benefit has been recognized.
The income tax benefit in Fiscal 1997 was $5.7 million.
During the first quarter of Fiscal 1998, the Company made income tax
payments of $0.1 million and received income tax refunds of $0.5 million. During
the first quarter of Fiscal 1997, the Company made income tax payments of $1.7
million and received income tax refunds of $0.5 million.
Summary of Operations:
The Company's net loss in the first quarter of Fiscal 1998 was $7.5 million
compared to a net loss of $8.8 million for the prior year. The decrease in net
loss in the first quarter of Fiscal 1998 compared to the prior year was
primarily due to higher operating earnings and lower interest expense, partially
offset by a reduction in the income tax benefit.
EBITDA-FIFO:
EBITDA-FIFO was $54.3 million and $48.3 million in the first quarters of
Fiscal 1998 and Fiscal 1997, respectively. EBITDA-FIFO represents net earnings
before interest expense, income taxes, depreciation, amortization and the LIFO
charge. EBITDA-FIFO is a widely accepted financial indicator of a company's
ability to service and/or incur debt. EBITDA-FIFO should not be construed as an
alternative to, or a better indicator of operating income or to cash flows from
operating activities, as determined in accordance with generally accepted
accounting principles.
Financial Condition
Debt Service:
During the first quarter of Fiscal 1998, total debt increased $46.0 million
from Fiscal 1997 year end due to borrowings under the Working Capital Facility
and debt accretion on the Deferred Coupon Notes, partially offset by a decrease
in certain mortgages. Borrowings under the Working Capital Facility were $45.2
million at May 2, 1998 and have increased to $57.3 million at June 11, 1998. In
addition, during the first quarter of Fiscal 1998, total lease obligations
increased $4.2 million from Fiscal 1997 year end.
During the first quarter of Fiscal 1998, the Company sold a former
supermarket property for $7.6 million. There was no gain or loss recognized on
this transaction. The proceeds were used to pay down the related mortgage and a
portion of the Working Capital Facility.
8
<PAGE>
The indebtedness under the Working Capital Facility and the Term Loan bear
interest at floating rates and, therefore, cash interest payments on that
indebtedness may vary in future years. The Company does not currently maintain
any interest rate hedging arrangements due to the reasonable risk that near term
interest rates will not rise significantly. The Company is continuously
evaluating this risk and will implement interest rate hedging arrangements if
deemed appropriate.
The majority of the cash interest payments are scheduled in the second and
fourth quarters. However, the May 1 semi-annual interest payment of $21.2
million on the Senior Subordinated Notes was paid in the first quarters of
Fiscal 1998 and Fiscal 1997 due to the timing of the quarter end dates.
The amount of principal payments required each year on outstanding long-term
debt (excluding the original issue discount with respect to the Deferred Coupon
Notes) are as follows (dollars in millions):
<TABLE>
<CAPTION>
Principal
Fiscal Years Payments
------------ --------
<S> <C>
1998(a)..........................................$ 39.5
1999............................................. 19.8
2000............................................. 125.9
2001............................................. 256.2
2002............................................. 195.8
2003............................................. 630.2
</TABLE>
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(a) Subsequent to May 2, 1998.
Liquidity:
The consolidated financial statements of the Company indicate that, at May
2, 1998, current liabilities exceeded current assets by $55.1 million and
stockholder's deficiency was $1.08 billion. Management believes that cash flows
generated from operations, supplemented by the unused borrowing capacity under
the Working Capital Facility and the availability of capital lease financing
will be sufficient to pay the Company's debts as they come due, provide for its
capital expenditure program and meets its other cash requirements.
The Company believes that it will be able to make the scheduled payments or
refinance its obligations with respect to its indebtedness through a combination
of operating funds and borrowing facilities. Future refinancing will be
necessary if the Company's cash flow from operations is not sufficient to meet
its debt service requirements related to the maturity of the Term Loan and
Working Capital Facility in Fiscal 2001, and the maturity of the Subordinated
Notes and Subordinated Debentures in Fiscal 2002. The Company expects that it
will be necessary to refinance all or a portion of the Senior Subordinated Notes
and the Deferred Coupon Notes due in Fiscal 2003. The Company may undertake a
refinancing of some or all of such indebtedness sometime prior to its maturity.
The Company was in compliance with its various debt covenants at May 2, 1998
and, based on management's operating projections for Fiscal 1998, the Company
believes that it will continue to be in compliance with its various debt
covenants. The Company's ability to make scheduled payments or to refinance or
otherwise meet its obligations with respect to its indebtedness depends on its
financial and operating performance, which in turn, is subject to prevailing
economic conditions and to financial, business and other factors beyond its
control. Although the Company's cash flow from its operations and borrowings has
been sufficient to meet its debt service obligations, there can be no assurance
that the Company's operating results will continue to be sufficient or that
future borrowing facilities will be available for payment or refinancing of the
Company's indebtedness.
9
<PAGE>
While it is the Company's intention to enter into other refinancings that it
considers advantageous, there can be no assurances that the prevailing market
conditions will be favorable to the Company. In the event the Company obtains
any future refinancing on less than favorable terms, the holders of outstanding
indebtedness could experience increased credit risk and could experience a
decrease in the market value of their investment, because the Company might be
forced to operate under terms that would restrict its operations and might find
its cash flow reduced.
Capital Expenditures:
Capital expenditures for the first quarter of Fiscal 1998, including
property acquired under capital leases, were $19.5 million compared to $11.8
million for the prior year. During the first quarter of Fiscal 1998, the Company
completed six renovations to existing supermarkets. During the remainder of
Fiscal 1998, the Company plans to open two new Pathmark stores, close one store
and complete up to an aggregate of 13 renovations and enlargements. Capital
expenditures for Fiscal 1998, including property to be acquired under capital
leases, are estimated to be $70.0 million. Management believes that cash flows
generated from operations, supplemented by the unused borrowing capacity under
the Working Capital Facility and the availability of capital lease financing
will be sufficient to provide for the Company's capital expenditure program.
Cash Flows:
Cash used for operating activities was $64.2 million in the first quarter
of Fiscal 1998 compared to cash provided by operating activities of $5.1
million in the prior year. The change in cash flow from operating activities
was primarily due to cash used for operating assets and liabilities in the
first quarter of Fiscal 1998, resulting from the paydown of trade accounts
payable, utilizing the proceeds received at the end of Fiscal 1997 related
to the C&S transaction, and an increase in due from suppliers related to
the C&S transition. Cash used for investing activities was $0.2 million in
the first quarter of Fiscal 1998 compared to $3.8 million in the prior
year. The decrease in cash used for investing activities was primarily due
to proceeds from property dispositions, partially offset by an increase in
expenditures of property and equipment. Cash provided by financing
activities was $11.7 million in the first quarter of Fiscal 1998 compared
to $2.7 million in the prior year. The increase in cash provided by
financing activities was primarily due to an increase in borrowings
under the working capital facilities and a decrease in repayments of the term
loans, partially offset by a decrease in book overdrafts related to the C&S
transition.
10
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: none
(b) Reports on Form 8-K:
The registrant filed one Form 8-K during the quarter for which this report
is filed.
Date of Report Item
-------------- ----
February 13, 1998 Sale of Pathmark's distribution assets
SIGNATURE
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 thereunto duly authorized.
PATHMARK STORES, INC.
By /s/ Joseph Adelhardt
-------------------------------------
(Joseph Adelhardt)
Senior Vice President and Controller,
Chief Accounting Officer
Date: June 16, 1998
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PATHMARK
STORES, INC. CONSOLDIATED STATEMENT OF OPERATIONS FOR THE 13 WEEKS ENDED MAY 2,
1998 AND CONSOLDIATED BALANCE SHEET AS OF MAY 2, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> MAY-2-1998
<CASH> 7,437
<SECURITIES> 0
<RECEIVABLES> 14,156
<ALLOWANCES> (1,251)
<INVENTORY> 156,180
<CURRENT-ASSETS> 265,423
<PP&E> 910,428
<DEPRECIATION> (389,400)
<TOTAL-ASSETS> 880,191
<CURRENT-LIABILITIES> 320,548
<BONDS> 1,277,826
0
0
<COMMON> 0
<OTHER-SE> (1,084,801)
<TOTAL-LIABILITY-AND-EQUITY> 880,191
<SALES> 916,015
<TOTAL-REVENUES> 916,015
<CGS> 651,862
<TOTAL-COSTS> 651,862
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 15
<INTEREST-EXPENSE> (40,874)
<INCOME-PRETAX> (7,434)
<INCOME-TAX> (27)
<INCOME-CONTINUING> (7,461)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,461)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
