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SANFORD, N.C. -- Sanford-based The Pantry Inc. has made two minor accounting changes to reclassify revenues and related costs of certain ancillary products and services.
The first is a change in reporting prepaid phone card sales to a net method from a gross method. The gross method included the face value of phone cards in the company's revenues, while the net method includes only gross profit dollars from the sale of cards. This change stems primarily from the company's determination that such sales transactions should be reported net of related costs.
The second change is a reclassification of the company's commission income on sales of a variety of ancillary products and services from a separate revenue category to a component of merchandise sales.
President and CEO Peter J. Sodini said, "These changes are simply reclassifications that make our accounting methods more comparable with those of similar companies, and do not affect previously reported net income or total gross profits."
As shown in greater detail in filings with the Securities and Exchange Commission, the company is applying both changes to all prior periods to ensure consistent treatment. The changes have the effect of reducing total revenues slightly and increasing the merchandise gross margin on a percentage basis.