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Non-Tech : Secret Squirrels hit! -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (8144)	5/25/2002 7:48:16 AM
From: cavan	Respond to of 12872

A & P one to watch on Tuesday!Will take a nice hit!http://nj.com/business/ledger/index.ssf?/base/business-1/1022317801203993.xml A&P latest victim of accounting woes Saturday, May 25, 2002 BY DAVID RESS Star-Ledger Staff The giant supermarket chain, A&P, is the latest company to have problems balancing its books. Information from Our Advertisers The Great Atlantic and Pacific Tea Co. disclosed late yesterday it was investigating the way it accounted for vendor allowances and for its inventory. The company disclosed the news in a filing with the Securities and Exchange Commission a little after 5 p.m., an hour after Wall Street shut down for a long holiday weekend. The Montvale company said it expects to take a charge against income. It also said the probe would delay the filing of its annual financial statement with the SEC. A spokesman for A&P did not return a telephone call. The 143-year-old company is among New Jersey's 15 largest publicly traded employers with more than 10,000 workers here. Shares of the company had closed up 20 cents to $25.10. They won't trade again until Tuesday because of Memorial Day. A&P had been saying its finances were improving, boasting last month of its fifth straight quarter of improved results, as a two- year cost-cutting effort took hold. But its latest disclosure pointed to problems in some regions involving when vendor allowances had been booked. The company did not say what regions were involved or the size of the allowances involved. Vendor allowances are a kind of premium retailers get for such activities as promoting a supplier's product. In effect, they can reduce the cost to the retailer of stocking its shelves. They also gave Kmart trouble earlier this year. The bankrupt retailer had to restate results after reviewing its allowances in response to an anonymous tip. A&P said a "substantial portion" of the charge it expects to take will reverse credits it had prematurely booked. Those credits had reduced the costs it had reported on its income statement. The 143-year-old grocer last month reported a profit of $19.3 million, or 49 cents a share, for its fourth quarter ended Feb. 23, compared with a loss of $10.8 million, or 28 cents, the year before. Sales fell 1.5 percent to $2.51 billion -- but it reported a 2.2 percent drop in the cost of the merchandise it sold, for a fatter gross margin. For the year, A&P said sales rose 3.3 percent, while cost of merchandise sold rose 3 percent. Companies as big as Enron and as small as Suprema Specialties, a now-bankrupt Paterson cheese business, have been tripped in the past year by accounting problems. In Kmart's case, it booked the vendor allowances it expected to get from manufacturers that supply its stores. But some of those allowances were based on how much of those goods Kmart sold, and last year, it didn't sell enough. The result: Kmart really had higher costs than it told investors. Its restated results showed nearly $500 million more worth of red ink for the first nine months of the year. A&P, meanwhile, already expected to incur charges and expenses of up to $125 million, related to its plans to shut 39 stores and cut 1,500 jobs. A&P operates 700 stores under names such as A&P, The Food Emporium, Farmer Jack and Waldbaum's.& also Food Basics Have a nice Weekend!Jerry