SpartanNash Company (the “Company”) (Nasdaq: SPTN) today reported
financial results for the 16-week first quarter ended April 19, 2014.
The Company’s fiscal year end was changed from the last Saturday in
March to the Saturday nearest to December 31, effective beginning with
the transition period ended December 28, 2013. Beginning with fiscal
2014, the Company’s interim quarters consist of 12 weeks except for the
first quarter which consists of 16 weeks. As a result of this change,
financial results for the current quarter ended April 19, 2014 are for
16 weeks. In addition, the Company’s Consolidated Statements of Earnings
and Consolidated Statements of Cash Flows for the prior year include an
unaudited 16-week period ended April 27, 2013. The prior year financial
statements were recast to the new fiscal year format based upon the
original fiscal period end dates. As a result, the period end date for
the prior year financial statements differs with the current year by one
week and the comparable prior year will consist of 51 weeks with the
fourth quarter comprised of 11 weeks.
First Quarter Results
Consolidated net sales for first quarter increased 199.1 percent to $2.3
billion compared to $780.3 million last year, primarily due to $1.5
billion in sales generated as a result of the November 2013 merger with
Nash Finch Company (“Nash Finch”), as well as a comparable store sales
increase of 2.5 percent and new business gains in the food distribution
segment. In addition, first quarter sales benefited from the later
timing of the Easter holiday, which resulted in the post-Easter week of
low volume sales moving out of the first quarter and into the second
quarter this year accounting for an estimated 70 basis points in
comparable store sales.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA) for the quarter increased 82.6 percent to $64.9
million, or 2.8 percent of net sales, compared to $35.6 million, or 4.6
percent of net sales last year. Adjusted EBITDA is a non-GAAP financial
measure. Please see the financial tables at the end of this press
release for a reconciliation of Adjusted EBITDA to net earnings, and a
reconciliation of each non-GAAP financial measure to the most directly
comparable measure prepared and presented in accordance with GAAP.
Reported operating earnings were $27.6 million compared to $21.1 million
for the prior year quarter. The increase was primarily due to
contributions from the merger with Nash Finch, partially offset by
merger integration costs of $4.2 million, higher LIFO and stock
compensation expense and the impact of low inflation.
Adjusted earnings from continuing operations for the first quarter were
$15.2 million, or $0.40 per diluted share on approximately 37.7 million
shares outstanding, compared to $11.4 million, or $0.52 per diluted
share on approximately 21.8 million shares outstanding last year. For
the first quarter of fiscal 2014, adjusted earnings from continuing
operations excludes net after-tax charges of $2.7 million, or $0.07 per
diluted share, related to merger integration expenses and asset
impairment and restructuring costs, partially offset by gains on sales
of assets. For the prior year first quarter, adjusted earnings from
continuing operations excludes net after-tax charges of $2.4 million, or
$0.11 per diluted share, related to debt extinguishment and asset
impairment charges. Adjusted earnings from continuing operations is a
non-GAAP operating financial measure. Earnings from continuing
operations on a GAAP basis were $12.5 million compared to $8.9 million
in the prior year quarter. The increase was primarily due to the factors
previously mentioned and the debt extinguishment charge in the prior
year quarter.
“We are pleased to deliver a quarter of very strong earnings growth,”
stated Dennis Eidson, SpartanNash’s President and Chief Executive
Officer. “Our results were driven by our merger with Nash Finch,
favorable weather events early in the quarter and the timing of the
Easter holiday this year. We continue to be pleased with the retail
sales trends in our Michigan stores and generated a 2.5 percent increase
in comparable store sales for the quarter, representing our third
consecutive quarter of positive comparable store sales. While we are
early in the integration process, we are highly encouraged by our
progress to-date on the integration plan and ability to achieve our $52
million synergy target. We look forward to continuing to leverage our
combined retail, food distribution and military operations to realize
our long term growth opportunities.”
Gross profit margin for the first quarter was 15.0 percent compared to
22.0 percent in the prior year. The change in gross profit margin rate
primarily reflects the change in mix of sales due to the merger, the
impact of low inflation and a LIFO charge of $2.0 million compared to a
LIFO credit of $0.4 million in the year-ago period.
First quarter operating expenses would have been $317.1 million, or 13.6
percent of net sales, compared to $149.4 million, or 19.1 percent of net
sales, in the same quarter last year, if this year’s charges related to
merger integration expenses, asset impairment and restructuring charges
and gains on sales of assets and last year’s asset impairment charges
were excluded. The higher expenses were due to the inclusion of Nash
Finch’s operations and the decrease in the rate to sales was due
primarily to the change in mix of the Company’s segments as a result of
the merger. First quarter operating expenses as reported were $321.4
million, or 13.8 percent of sales, compared to $150.6 million, or 19.3
percent of sales, in the same quarter last year.
Food Distribution Segment
Net sales for the food distribution segment increased 188.4 percent to
$971.0 million in the first quarter from $336.7 million for the first
quarter last year. The increase in sales was due to $619.6 million in
sales from Nash Finch and new business gains, as well as the timing of
the Easter holiday.
First quarter adjusted operating earnings for the distribution segment
were $19.3 million, excluding $4.9 million of pre-tax merger integration
expenses and restructuring charges, compared to adjusted operating
earnings of $19.3 million in the same period last year. The benefit from
the sales volume of Nash Finch’s distribution operations was offset by
accelerated compensation expense due to modifications to the Company’s
stock compensation plan, step-up depreciation expense resulting from the
revaluation of assets acquired in the merger, higher LIFO expense and
lower inflation-related gains. Adjusted operating earnings is a non-GAAP
operating financial measure. Operating earnings as reported were $14.4
million compared to operating earnings of $19.3 million in the prior
year first quarter.
Retail Segment
Net sales for the retail segment increased 53.0 percent to $678.6
million in the first quarter from $443.6 million for the first quarter
last year. The increase in sales was primarily due to $241.4 million in
sales generated as a result of the merger and a 2.5 percent increase in
comparable store sales, excluding fuel, as well as the benefit from the
later timing of Easter. These gains were partially offset by $15.6
million in fewer sales due to the closure of certain stores and lower
retail fuel prices compared to the prior year.
First quarter adjusted operating earnings for the retail segment were
$7.1 million, excluding $0.6 million of net pre-tax gains on asset
dispositions and impairments, compared to adjusted operating earnings of
$3.0 million in the same period last year, excluding non-cash, pre-tax
asset impairment charges of $1.2 million. The improvement in adjusted
operating earnings was due to the merger with Nash Finch’s retail
operations. Operating earnings in the retail segment on a GAAP basis
were $7.7 million compared to $1.8 million in the prior year quarter.
During the first quarter, the Company completed three major remodels and
store re-banners and closed three underperforming supermarkets, one of
which was subsequently sold during the second quarter. SpartanNash ended
the quarter with 169 corporate owned stores and 32 fuel centers.
Military Segment
Net sales for the Company’s military segment were $684.2 million and
operating earnings were $5.6 million for the first quarter of fiscal
2014.
Balance Sheet and Cash Flow
Cash flow provided by operating activities for the first quarter was
$32.6 million compared to $35.4 million for the comparable period last
year. The decline in cash provided was primarily the result of the
change in timing of incentive compensation payments due to the change in
fiscal year end and payments related to merger integration activities,
partially offset by other working capital changes.
Net long-term debt (including current maturities and capital lease
obligations and subtracting cash) for the Company was $590.0 million as
of April 19, 2014 compared to $142.4 million at the end of the first
quarter last year, due primarily to the incurrence of $436.1 million in
debt as a result of the Nash Finch merger. The Company’s total net
long-term debt-to-capital ratio is 0.45-to-1.0 as of April 19, 2014. Net
long-term debt is a non-GAAP financial measure. Long-term debt and
capital lease obligations, including current maturities, were $605.1
million at April 19, 2014 compared to $147.9 million at April 27, 2013.
Outlook
Mr. Eidson continued, “While we remain very optimistic about the
opportunities created by the merger with Nash Finch, the overall food
retail environment remains challenging in the short term given the lack
of center store inflation and a continued cautious consumer. During the
second quarter, we will continue to benefit significantly from the newly
merged business, but will be facing difficult sales comparisons in our
legacy business due to the cycling of a retail store acquisition and a
new distribution customer and our recent store closures. We will
continue to take steps to drive our top and bottom line, including
investing in all three of our segments, refining our promotional
efforts, and strengthening our private brand offerings and loyalty
programs. During the second quarter, we plan to complete three major
remodels and re-banners and to begin major remodeling efforts on four
more stores. Additionally, we plan to begin construction on two new
stores, one of which is scheduled to open in the third quarter and the
other is scheduled to open in early 2015.”
For the second quarter of fiscal 2014, the Company anticipates that the
weather and Easter timing induced sales benefits from the first quarter
will not be replicated, resulting in a softer sales environment. While
the Company continues to expect retail comparable sales to remain
positive, it believes the rate will be in the 0.5 percent to 1.0 percent
range. Due to these factors and the expectation that LIFO will continue
to negatively impact results, the Company anticipates that net earnings
from continuing operations per diluted share will be at or slightly
below last year’s comparable second quarter results of $0.46 per diluted
share, excluding merger integration costs and any other one-time
expenses.
For fiscal 2014, the Company is maintaining its previously issued
guidance of consolidated net sales in the range of $7.90 billion to
$8.04 billion, Adjusted EBITDA in the range of $230.0 million to $239.0
million and earnings per share from continuing operations of
approximately $1.65 to $1.75, excluding integration costs of
approximately $7.4 million after tax and any other one-time expenses.
The Company continues to expect capital expenditures for fiscal year
2014 to be in the range of $77.0 million to $82.0 million, with
depreciation and amortization in the range of $89 million to $93 million
and total interest expense in the range of $26.0 million to $28.0
million.
Conference Call
A telephone conference call to discuss the Company’s first quarter of
fiscal 2014 financial results is scheduled for 9:00 a.m. Eastern Time,
Thursday, May 22, 2014. A live webcast of this conference call will be
available on the Company’s website, www.spartannash.com.
Simply click on “For Investors” and follow the links to the live
webcast. The webcast will remain available for replay on the Company’s
website for approximately ten days.
About SpartanNash
Spartan Stores, Inc. d/b/a SpartanNash Company (SPTN) is a Fortune 500
company and the largest food distributor serving military commissaries
and exchanges in the United States, in terms of revenue. The Company's
core businesses include distributing food to military commissaries and
exchanges and independent and corporate-owned retail stores located in
44 states and the District of Columbia, Europe, Cuba, Puerto Rico, the
Azores, Bahrain and Egypt. SpartanNash currently operates 169
supermarkets, primarily under the banners of Family Fare Supermarkets,
D&W Fresh Markets, No Frills, Bag 'n Save, Sun Mart and Econofoods.
Forward-Looking Statements
This press release contains “forward-looking” statements within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934. These include statements regarding
the expected benefits of the merger and statements preceded by, followed
by or that otherwise include the words “outlook,” “trend,” “optimistic,”
“guidance,” “opportunity,” “anticipate,” “believe,” “continue,”
“maintain,” “expect,” “look forward to,” “repeat,” “progress” or “plan”
or similar expressions or that an event or trend “may,” or “will” occur.
Forward-looking statements relating to expectations about future results
or events are based upon information available to SpartanNash as of
today's date, and are not guarantees of the future performance of the
combined company, and actual results may vary materially from the
results and expectations discussed. Additional risks and uncertainties
related to the merger include, but are not limited to, the successful
integration of Spartan Stores' and Nash Finch's business and the
combined company's ability to compete in the highly competitive grocery
distribution and retail grocery industry. Additional information
concerning these and other risks is contained in Spartan Stores' and
Nash Finch's most recently filed Annual Reports on Form 10-K, subsequent
Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and
other SEC filings. All subsequent written and oral forward-looking
statements concerning SpartanNash, the merger, or other matters and
attributable to SpartanNash or any person acting on its behalf are
expressly qualified in their entirety by the cautionary statements
above. SpartanNash does not undertake any obligation to publicly update
any of these forward-looking statements to reflect events or
circumstances that may arise after the date hereof.
SPARTAN STORES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
16 Weeks Ended
|
|
|
April 19, 2014
|
|
April 27, 2013
|
|
|
|
|
|
Net sales
|
|
$
|
2,333,727
|
|
|
$
|
780,278
|
|
Cost of sales
|
|
|
1,984,707
|
|
|
|
608,555
|
|
Gross profit
|
|
|
349,020
|
|
|
|
171,723
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
Selling, general and administrative
|
|
|
289,594
|
|
|
|
136,672
|
|
Merger transaction and integration
|
|
|
4,168
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
27,553
|
|
|
|
12,726
|
|
Restructuring and asset impairment charges
|
|
|
127
|
|
|
|
1,233
|
|
Total operating expenses
|
|
|
321,442
|
|
|
|
150,631
|
|
|
|
|
|
|
Operating earnings
|
|
|
27,578
|
|
|
|
21,092
|
|
|
|
|
|
|
Non-operating expense (income)
|
|
|
|
|
Interest expense
|
|
|
7,474
|
|
|
|
3,388
|
|
Non-cash convertible debt interest
|
|
|
-
|
|
|
|
379
|
|
Debt extinguishment
|
|
|
-
|
|
|
|
2,762
|
|
Other, net
|
|
|
5
|
|
|
|
(7
|
)
|
Total non-operating expense, net
|
|
|
7,479
|
|
|
|
6,522
|
|
|
|
|
|
|
Earnings before income taxes and discontinued operations
|
|
|
20,099
|
|
|
|
14,570
|
|
Income taxes
|
|
|
7,580
|
|
|
|
5,658
|
|
Earnings from continuing operations
|
|
|
12,519
|
|
|
|
8,912
|
|
|
|
|
|
|
Loss from discontinued operations, net of taxes
|
|
|
(209
|
)
|
|
|
(276
|
)
|
Net earnings
|
|
$
|
12,310
|
|
|
$
|
8,636
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.41
|
|
Loss from discontinued operations
|
|
|
-
|
*
|
|
|
(0.01
|
)
|
Net earnings
|
|
$
|
0.33
|
|
|
$
|
0.40
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.41
|
|
Loss from discontinued operations
|
|
|
-
|
*
|
|
|
(0.01
|
)
|
Net earnings
|
|
$
|
0.33
|
|
|
$
|
0.40
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
Basic
|
|
|
37,600
|
|
|
|
21,750
|
|
Diluted
|
|
|
37,718
|
|
|
|
21,827
|
|
|
*Includes rounding
|
|
SPARTAN STORES, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
December 28,
|
|
|
Assets
|
|
April 19, 2014
|
|
2013
|
|
April 27, 2013
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,064
|
|
|
$
|
9,216
|
|
|
$
|
5,455
|
|
Accounts and notes receivable, net
|
|
|
311,188
|
|
|
|
286,903
|
|
|
|
58,060
|
|
Inventories, net
|
|
|
557,760
|
|
|
|
590,248
|
|
|
|
130,228
|
|
Prepaid expenses and other current assets
|
|
|
34,710
|
|
|
|
39,028
|
|
|
|
13,451
|
|
Deferred taxes on income
|
|
|
-
|
|
|
|
-
|
|
|
|
2,310
|
|
Property held for sale
|
|
|
189
|
|
|
|
440
|
|
|
|
-
|
|
Total current assets
|
|
|
918,911
|
|
|
|
925,835
|
|
|
|
209,504
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
631,513
|
|
|
|
651,477
|
|
|
|
270,789
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
308,968
|
|
|
|
306,148
|
|
|
|
246,840
|
|
|
|
|
|
|
|
|
Other assets, net
|
|
|
113,055
|
|
|
|
115,214
|
|
|
|
64,117
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,972,447
|
|
|
$
|
1,998,674
|
|
|
$
|
791,250
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
349,121
|
|
|
$
|
364,856
|
|
|
$
|
123,825
|
|
Accrued payroll and benefits
|
|
|
72,097
|
|
|
|
85,102
|
|
|
|
37,643
|
|
Other accrued expenses
|
|
|
47,224
|
|
|
|
54,935
|
|
|
|
30,232
|
|
Deferred taxes on income
|
|
|
22,886
|
|
|
|
23,827
|
|
|
|
-
|
|
Current maturities of long-term debt and capital lease obligations
|
|
|
7,258
|
|
|
|
7,345
|
|
|
|
4,025
|
|
Total current liabilities
|
|
|
498,586
|
|
|
|
536,065
|
|
|
|
195,725
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
Deferred taxes on income
|
|
|
95,811
|
|
|
|
92,319
|
|
|
|
80,578
|
|
Postretirement benefits
|
|
|
19,918
|
|
|
|
22,009
|
|
|
|
14,180
|
|
Other long-term liabilities
|
|
|
40,735
|
|
|
|
43,845
|
|
|
|
20,019
|
|
Long-term debt and capital lease obligations
|
|
|
597,822
|
|
|
|
597,563
|
|
|
|
143,839
|
|
Total long-term liabilities
|
|
|
754,286
|
|
|
|
755,736
|
|
|
|
258,616
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
Common stock, voting, no par value; 100,000 shares authorized;
37,783 and 21,753 shares outstanding
|
|
|
522,813
|
|
|
|
518,056
|
|
|
|
146,884
|
|
Preferred stock, no par value, 10,000 shares authorized; no shares
outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Accumulated other comprehensive loss
|
|
|
(8,626
|
)
|
|
|
(8,794
|
)
|
|
|
(13,687
|
)
|
Retained earnings
|
|
|
205,388
|
|
|
|
197,611
|
|
|
|
203,712
|
|
Total shareholders’ equity
|
|
|
719,575
|
|
|
|
706,873
|
|
|
|
336,909
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
1,972,447
|
|
|
$
|
1,998,674
|
|
|
$
|
791,250
|
|
|
SPARTAN STORES, INC. AND SUBSIDIARIES CONDENSED
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
16 Weeks Ended
|
|
|
|
|
|
|
|
April 19, 2014
|
|
April 27, 2013
|
Cash flows from operating activities
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
32,595
|
|
|
$
|
35,351
|
|
Net cash used in investing activities
|
|
|
(22,063
|
)
|
|
|
(9,795
|
)
|
Net cash used in financing activities
|
|
|
(4,450
|
)
|
|
|
(28,667
|
)
|
Net cash used in discontinued operations
|
|
|
(234
|
)
|
|
|
(394
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
5,848
|
|
|
|
(3,505
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
9,216
|
|
|
|
8,960
|
|
Cash and cash equivalents at end of period
|
|
$
|
15,064
|
|
|
$
|
5,455
|
|
|
SPARTAN STORES, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA
|
|
Table 1: Sales and Operating Earnings by Segment
|
(In thousands)
|
(Unaudited)
|
|
|
|
16 Weeks Ended
|
|
|
April 19, 2014
|
|
April 27, 2013
|
|
|
|
|
|
Military Segment:
|
|
|
|
|
Net sales
|
|
$
|
684,167
|
|
$
|
-
|
Operating earnings
|
|
$
|
5,561
|
|
$
|
-
|
|
|
|
|
|
Food Distribution Segment:
|
|
|
|
|
Net sales
|
|
$
|
971,002
|
|
$
|
336,706
|
Operating earnings
|
|
$
|
14,361
|
|
$
|
19,321
|
|
|
|
|
|
Retail Segment:
|
|
|
|
|
Net sales
|
|
$
|
678,558
|
|
$
|
443,572
|
Operating earnings
|
|
$
|
7,656
|
|
$
|
1,771
|
|
Table 2: Reconciliation of Net Earnings to Adjusted Earnings
Before Interest, Taxes, Depreciation and Amortization
|
(Adjusted EBITDA)
|
(A Non-GAAP Financial Measure)
|
(Unaudited)
|
(In thousands)
|
|
|
|
16 Weeks Ended
|
|
|
|
|
|
|
|
April 19,
|
|
April 27,
|
|
|
|
2014
|
|
|
|
2013
|
|
Net earnings
|
|
$
|
12,310
|
|
|
$
|
8,636
|
|
Add:
|
|
|
|
|
Discontinued operations
|
|
|
209
|
|
|
|
276
|
|
Income taxes
|
|
|
7,580
|
|
|
|
5,658
|
|
Interest expense
|
|
|
7,474
|
|
|
|
3,767
|
|
Debt extinguishment
|
|
|
-
|
|
|
|
2,762
|
|
Non-operating expense (income)
|
|
|
5
|
|
|
|
(7
|
)
|
Operating earnings
|
|
|
27,578
|
|
|
|
21,092
|
|
Add:
|
|
|
|
|
Depreciation and amortization
|
|
|
27,553
|
|
|
|
12,726
|
|
LIFO expense (income)
|
|
|
1,972
|
|
|
|
(394
|
)
|
Restructuring and asset impairment charges
|
|
|
127
|
|
|
|
1,233
|
|
Merger transaction and integration expenses
|
|
|
4,168
|
|
|
|
-
|
|
Non-cash stock compensation and other charges
|
|
|
3,514
|
|
|
|
900
|
|
Adjusted EBITDA
|
|
$
|
64,912
|
|
|
$
|
35,557
|
|
|
|
|
|
|
Reconciliation of operating earnings to adjusted EBITDA by
segment:
|
|
|
|
|
|
|
|
|
|
Military:
|
|
|
|
|
Operating earnings
|
|
$
|
5,561
|
|
|
$
|
-
|
|
Add:
|
|
|
|
|
LIFO expense
|
|
|
471
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
4,193
|
|
|
|
-
|
|
Non-cash stock compensation and other charges
|
|
|
5
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
$
|
10,230
|
|
|
$
|
-
|
|
|
|
|
|
|
Food Distribution:
|
|
|
|
|
Operating earnings
|
|
$
|
14,361
|
|
|
$
|
19,321
|
|
Add:
|
|
|
|
|
LIFO expense (income)
|
|
|
962
|
|
|
|
(408
|
)
|
Depreciation and amortization
|
|
|
9,728
|
|
|
|
2,816
|
|
Restructuring and asset impairment charges
|
|
|
722
|
|
|
|
-
|
|
Merger transaction and integration expenses
|
|
|
4,168
|
|
|
|
-
|
|
Non-cash stock compensation and other charges
|
|
|
2,955
|
|
|
|
420
|
|
Adjusted EBITDA
|
|
$
|
32,896
|
|
|
$
|
22,149
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
Operating earnings
|
|
$
|
7,656
|
|
|
$
|
1,771
|
|
Add:
|
|
|
|
|
LIFO expense
|
|
|
539
|
|
|
|
14
|
|
Depreciation and amortization
|
|
|
13,632
|
|
|
|
9,910
|
|
Restructuring and asset impairment charges
|
|
|
(595
|
)
|
|
|
1,233
|
|
Non-cash stock compensation and other charges
|
|
|
554
|
|
|
|
480
|
|
Adjusted EBITDA
|
|
$
|
21,786
|
|
|
$
|
13,408
|
|
|
Notes: Consolidated adjusted EBITDA is a non-GAAP operating
financial measure that we define as net earnings from continuing
operations plus depreciation and amortization, and other non-cash
items including imputed interest, deferred (stock) compensation,
the LIFO provision, as well as adjustments for unusual items that
do not reflect the ongoing operating activities of SpartanNash and
costs associated with the closing of operational locations,
interest expense and the provision for income taxes to the extent
deducted in the computation of net earnings.
|
|
We believe that adjusted EBITDA provides a meaningful
representation of our operating performance for SpartanNash as a
whole and for our operating segments. We consider adjusted EBITDA
as an additional way to measure operating performance on an
ongoing basis. Adjusted EBITDA is meant to reflect the ongoing
operating performance of our military, food distribution and
retail operations; consequently, it excludes the impact of items
that could be considered “non-operating” or “non-core” in nature,
and also excludes the contributions of activities classified as
discontinued operations. Because adjusted EBITDA and adjusted
EBITDA by segment are performance measures that management uses to
allocate resources, assess performance against its peers, and
evaluate overall performance, we believe it provides useful
information for our investors. In addition, securities analysts,
fund managers and other shareholders and stakeholders that
communicate with us request our operating financial results in
adjusted EBITDA format.
|
|
Adjusted EBITDA is not a measure of performance under accounting
principles generally accepted in the United States of America, and
should not be considered as a substitute for net earnings, cash
flows from operating activities and other income or cash flow
statement data. Our definition of adjusted EBITDA may not be
identical to similarly titled measures reported by other companies.
|
|
Table 3: Reconciliation of Operating Earnings to Adjusted
Operating Earnings
|
(A Non-GAAP Financial Measure)
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
16 Weeks Ended
|
|
|
|
|
|
|
|
April 19,
|
|
April 27,
|
|
|
|
2014
|
|
|
2013
|
Operating earnings
|
|
$
|
27,578
|
|
|
$
|
21,092
|
Add:
|
|
|
|
|
Asset impairment and restructuring charges
|
|
|
127
|
|
|
|
1,233
|
Merger transaction and integration expenses
|
|
|
4,168
|
|
|
|
-
|
Adjusted operating earnings
|
|
$
|
31,873
|
|
|
$
|
22,325
|
|
|
|
|
|
Reconciliation of operating earnings to adjusted operating
earnings by segment:
|
|
|
|
|
|
|
|
|
|
Military:
|
|
|
|
|
Operating earnings
|
|
$
|
5,561
|
|
|
$
|
-
|
Add:
|
|
|
|
|
|
|
|
|
|
Adjusted operating earnings
|
|
$
|
5,561
|
|
|
$
|
-
|
|
|
|
|
|
Food Distribution:
|
|
|
|
|
Operating earnings
|
|
$
|
14,361
|
|
|
$
|
19,321
|
Add:
|
|
|
|
|
Asset impairment and restructuring charges
|
|
|
722
|
|
|
|
-
|
Merger transaction and integration expenses
|
|
|
4,168
|
|
|
|
-
|
Adjusted operating earnings
|
|
$
|
19,251
|
|
|
$
|
19,321
|
|
|
|
|
|
Retail:
|
|
|
|
|
Operating earnings
|
|
$
|
7,656
|
|
|
$
|
1,771
|
Add:
|
|
|
|
|
Asset impairment and restructuring charges
|
|
|
(595
|
)
|
|
|
1,233
|
Adjusted operating earnings
|
|
$
|
7,061
|
|
|
$
|
3,004
|
|
Notes: Adjusted operating earnings is a non-GAAP operating
financial measure that the Company defines as operating earnings
plus or minus adjustments for items that do not reflect the
ongoing operating activities of the Company and costs associated
with the closing of operational locations.
|
|
The Company believes that adjusted operating earnings provide a
meaningful representation of its operating performance for the
Company. The Company considers adjusted operating earnings as an
additional way to measure operating performance on an ongoing
basis. Adjusted operating earnings is meant to reflect the ongoing
operating performance of its military, food distribution and
retail operations; consequently, it excludes the impact of items
that could be considered “non-operating” or “non-core” in nature,
and also excludes the contributions of activities classified as
discontinued operations. Because adjusted operating earnings is a
performance measure that management uses to allocate resources,
assess performance against its peers and evaluate overall
performance, the Company believes it provides useful information
for investors. In addition, securities analysts, fund managers and
other shareholders and stakeholders that communicate with the
Company request its operating financial results in adjusted
operating earnings format.
|
|
Adjusted operating earnings is not a measure of performance under
accounting principles generally accepted in the United States of
America, and should not be considered as a substitute for
operating earnings, cash flows from operating activities and other
income or cash flow statement data. The Company’s definition of
adjusted operating earnings may not be identical to similarly
titled measures reported by other companies.
|
|
Table 4: Reconciliation of Earnings from Continuing Operations to
|
Adjusted Earnings from Continuing Operations
|
(A Non-GAAP Financial Measure)
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
16 Weeks Ended
|
|
|
April 19, 2014
|
|
April 27, 2013
|
|
|
Earnings
|
|
|
|
Earnings
|
|
|
|
|
from
|
|
|
|
from
|
|
|
|
|
continuing
|
|
Earnings per
|
|
continuing
|
|
Earnings per
|
|
|
operations
|
|
diluted share
|
|
operations
|
|
diluted share
|
Earnings from continuing operations
|
|
$
|
12,519
|
|
$
|
0.33
|
|
$
|
8,912
|
|
$
|
0.41
|
Adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
Asset impairment and restructuring charges
|
|
|
79
|
|
|
0.00
|
|
|
754
|
|
|
0.03
|
Merger transaction and integration expenses
|
|
|
2,596
|
|
|
0.07
|
|
|
-
|
|
|
-
|
Debt extinguishment
|
|
|
-
|
|
|
-
|
|
|
1,689
|
|
|
0.08
|
Adjusted earnings from continuing operations
|
|
$
|
15,194
|
|
$
|
0.40
|
|
$
|
11,355
|
|
$
|
0.52
|
*includes rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
37,718
|
|
|
|
|
21,827
|
|
|
|
Notes: Adjusted earnings from continuing operations is a non-GAAP
operating financial measure that we define as earnings from
continuing operations plus or minus adjustments for items that do
not reflect the ongoing operating activities of the Company and
costs associated with the closing of operational locations.
|
|
We believe that adjusted earnings from continuing operations
provide a meaningful representation of our operating performance
for the Company. We consider adjusted earnings from continuing
operations as an additional way to measure operating performance
on an ongoing basis. Adjusted earnings from continuing operations
is meant to reflect the ongoing operating performance of our
military, food distribution and retail operations; consequently,
it excludes the impact of items that could be considered
“non-operating” or “non-core” in nature, and also excludes the
contributions of activities classified as discontinued operations.
We believe that adjusted earnings from continuing operations
provides useful information for our investors because it is a
performance measure that management uses to allocate resources,
assess performance against its peers and evaluate overall
performance. In addition, securities analysts, fund managers and
other shareholders and stakeholders that communicate with us
request our operating financial results in adjusted earnings from
continuing operations format.
|
|
Adjusted earnings from continuing operations is not a measure of
performance under accounting principles generally accepted in the
United States of America, and should not be considered as a
substitute for net earnings, cash flows from operating activities
and other income or cash flow statement data. Our definition of
adjusted earnings from continuing operations may not be identical
to similarly titled measures reported by other companies.
|
|
Table 5: Reconciliation of Long-Term Debt and Capital Lease
Obligations to Total Net Long-Term Debt and Capital Lease
Obligations
|
(A Non-GAAP Financial Measure)
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
December 28,
|
|
|
|
|
April 19, 2014
|
|
2013
|
|
April 27, 2013
|
|
|
|
|
|
|
|
Current maturities of long-term debt and capital lease obligations
|
|
$
|
7,258
|
|
|
$
|
7,345
|
|
|
$
|
4,025
|
|
Long-term debt and capital lease obligations
|
|
|
597,822
|
|
|
|
597,563
|
|
|
|
143,839
|
|
Total debt
|
|
|
605,080
|
|
|
|
604,908
|
|
|
|
147,864
|
|
Cash and cash equivalents
|
|
|
(15,064
|
)
|
|
|
(9,216
|
)
|
|
|
(5,455
|
)
|
Total net long-term debt
|
|
$
|
590,016
|
|
|
$
|
595,692
|
|
|
$
|
142,409
|
|
|
Notes: Total net debt is a non-GAAP financial measure that is
defined as long term debt and capital lease obligations plus
current maturities of long-term debt and capital lease obligations
less cash and cash equivalents. The Company believes investors
find the information useful because it reflects the amount of long
term debt obligations that are not covered by available cash and
temporary investments.
|
Copyright Business Wire 2014