Adjusted Fourth Quarter EPS from Continuing Operations Improved to
$0.52 per Diluted Share, Exceeding Expectations; Reported EPS from
Continuing Operations was $0.46 per Diluted Share
Operating Cash Flow Increased $67.9 Million in the Fourth Quarter
Long-Term Debt Decreased $75.3 Million during the Fiscal Year
SpartanNash Company (the “Company”) (Nasdaq: SPTN) today reported
financial results for the 12-week fourth quarter and 52-week year ended
January 2, 2016. The fourth quarter and full year of fiscal 2014 include
13 weeks and 53 weeks, respectively.
Fourth Quarter Results
Consolidated net sales for the 12-week fourth quarter were $1.77 billion
compared to $1.83 billion for the prior year quarter when excluding the
53rd week, which accounted for $135.2 million of consolidated
net sales. As reported, including the 13th week, consolidated
net sales in the prior year quarter were $1.96 billion.
Reported operating earnings for the fiscal 2015 fourth quarter increased
to $33.0 million from $21.0 million for the 13-week prior year quarter
primarily due to lower: restructuring and asset impairment charges, LIFO
expense, merger integration and acquisition expenses, and expenses
resulting from merger synergies and supply chain optimization efforts;
partially offset by the impact from lower inflation related gains and
the extra week of operations in the fourth quarter of fiscal 2014.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA) is a non-Generally Accepted Accounting Principles
(GAAP) financial measure. Please see the financial tables at the end of
this press release for a reconciliation of Adjusted EBITDA to operating
earnings, and a reconciliation of each non-GAAP financial measure to the
most directly comparable measure prepared and presented in accordance
with GAAP. Adjusted EBITDA was $49.9 million compared to $51.7 million
for the prior year quarter when excluding the 53rd week,
representing 2.8 percent of net sales in each year. Adjusted EBITDA in
the fourth quarter of fiscal 2014 was $55.3 million, or 2.8 percent of
net sales, when including the 53rd week.
Adjusted earnings from continuing operations for the fourth quarter
increased to $19.6 million, or $0.52 per diluted share, from $16.5
million, or $0.44 per diluted share, in the fourth quarter last year
when excluding the 53rd week, and $18.5 million, or $0.49 per
diluted share, when including the 53rd week. For the current
year fourth quarter, adjusted earnings from continuing operations
exclude net after-tax charges of $0.06 per diluted share primarily
related to ongoing merger integration, acquisition, debt extinguishment
and restructuring activities. For the prior year fourth quarter,
adjusted earnings from continuing operations excluded net after-tax
charges of $0.17 per diluted share related to: asset impairment and
restructuring, merger integration, pension settlement and the net
benefit associated with a favorable settlement of an unrecognized tax
liability established in previous years. Adjusted earnings from
continuing operations is a non-GAAP operating financial measure.
Reported earnings from continuing operations for the fourth quarter
increased to $17.2 million, or $0.46 per diluted share, compared to
$12.0 million, or $0.32 per diluted share, in the prior year quarter,
primarily due to the factors previously mentioned.
“In the fourth quarter, we continued our focus on strengthening
SpartanNash’s foundation and building on our core competencies,” stated
Dennis Eidson, SpartanNash's President and Chief Executive Officer. “We
continued to invest in our retail business and expand our
consumer-centric merchandising and marketing programs. On the
distribution side of the business, our value-added approach is gaining
traction and providing access to new areas of opportunity, including a
new wholesale agreement with Gordy's Market, the largest locally owned
and operated grocer in the Western Wisconsin area. We continue to
benefit from merger integration, as well as improved operational
efficiencies in both our distribution networks and retail operations.
Additionally, we are pleased to have further strengthened our balance
sheet as we reduced net long-term debt by $67.1 million during the
quarter to $472.3 million at the end of fiscal 2015.”
Gross profit margin for the fourth quarter improved to 14.6 percent
compared to 14.4 percent in the prior year quarter primarily due to the
impact that low inflation had on LIFO expense, net of its impact on
other inflation related gains and the mix of the business operations.
Fourth quarter operating expenses would have been $222.9 million, or
12.6 percent of net sales, compared to $232.5 million, or 12.7 percent
of net sales, if last year’s 53rd week and the above noted
charges were excluded from both periods. The lower expenses as a
percentage of sales were primarily due to expense control initiatives.
Reported operating expenses for the fourth quarter were $225.3 million,
or 12.7 percent of sales, compared to $261.2 million, or 13.3 percent of
sales, in the same quarter last year.
Food Distribution Segment
Net sales for the food distribution segment were $773.7 million compared
to $796.6 million in the prior year quarter when excluding the 53rd
week, which accounted for $56.5 million of net sales. The decrease in
sales was primarily driven by increased deflation in certain fresh
categories, as well as unseasonably warm weather in some of our larger
northern geographic areas.
Fourth quarter adjusted operating earnings for the food distribution
segment increased to $23.4 million from $19.5 million in the prior year
quarter when excluding the 53rd week, and $20.7 million when
including the 53rd week. In the current year fourth quarter,
adjusted operating earnings exclude $0.8 million of net pre-tax charges
consisting primarily of merger integration and acquisition costs. The
prior year fourth quarter excludes $4.6 million of pre-tax merger
integration expenses, asset impairment and restructuring gains, and
other adjusted and non-cash charges. The increase in adjusted operating
earnings was due to merger synergies, continued cost improvements due to
productivity and efficiency initiatives, and lower LIFO expense,
partially offset by a lower level of inflation-related gains. Adjusted
operating earnings is a non-GAAP operating financial measure. Reported
operating earnings for the current year fourth quarter increased to
$22.6 million from $16.1 million in the prior year fourth quarter.
Retail Segment
Net sales for the retail segment were $489.6 million in the fourth
quarter compared to $502.3 million in the prior year quarter when
excluding the 53rd week, which accounted for $41.8 million of
net sales. The decrease was primarily due to a 4.6 percent decrease in
comparable store sales, excluding fuel; lower sales resulting from the
closure of retail stores and fuel centers; and significantly lower
retail fuel prices compared to the prior year; partially offset by
contributions from stores acquired in the second quarter. Comparable
store sales reflect the deflationary environment in certain fresh
categories, competitive impacts primarily in the western geographic
areas, as well as the impact of unseasonably warm weather.
Fourth quarter adjusted operating earnings for the retail segment
increased to $8.4 million from $5.7 million in the prior year quarter
when excluding the 53rd week, and $7.7 million when including
the 53rd week. In the current year fourth quarter, adjusted
operating earnings exclude $1.6 million of pre-tax restructuring and
merger integration and acquisition costs. The prior year fourth quarter
excludes $8.5 million of non-cash pre-tax asset impairment and
restructuring charges, and other adjusted and non-cash charges. The
increase in adjusted operating earnings was primarily due to favorable
margin rates, lower occupancy costs, improved fuel margins and the
impact of store closures in the prior periods, partially offset by the
impact of lower sales. Reported operating earnings in the retail segment
increased to $6.8 million compared to an operating loss of $0.8 million
in the prior year quarter.
Military Segment
Net sales for the Company's military segment were $504.7 million
compared to $528.5 million in the prior year quarter when excluding the
53rd week, which accounted for $36.9 million of net sales.
The decrease was primarily due to lower sales at the Defense Commissary
Agency (DeCA) operated commissaries.
Fourth quarter adjusted operating earnings for the military segment were
$3.7 million compared to $5.3 million in the prior year quarter when
excluding the 53rd week, and $5.9 million when including the
53rd week. The decrease in adjusted operating earnings was
due to lower sales volume and inflation-related gains, partially offset
by lower transportation costs. Reported operating earnings for the
military segment were $3.6 million compared to $5.8 million in the prior
year quarter.
Balance Sheet and Cash Flow
Cash flow provided by operating activities for fiscal 2015 was $219.5
million compared to $139.1 million in fiscal 2014. The increase was
primarily due to improvements in working capital, which was largely the
result of inventory management initiatives in the current year and the
timing of payments in the prior year.
On December 15, 2015, the Company redeemed the outstanding $50.0 million
aggregate principal amount of the 6.625% Senior Notes due December 2016
for cash, using borrowings under its revolving credit facility. A loss
on debt extinguishment of $1.2 million was incurred in the fourth
quarter consisting of the redemption premium and the write-off of
unamortized debt issuance costs. As a result of the redemption, the
Company expects to reduce ongoing annual interest expense by
approximately $2.0 million, assuming no future interest rate increases.
Net long-term debt (including current maturities and capital lease
obligations and subtracting cash) for the Company decreased $91.5
million to $472.3 million as of January 2, 2016, from $563.8 million at
January 3, 2015. The Company's total net long-term debt-to-capital ratio
is 0.37-to-1.0 and net long-term debt to Adjusted EBITDA is 2.06-to-1.0
as of January 2, 2016. Net long-term debt is a non-GAAP financial
measure. Long-term debt (including capital lease obligations and current
maturities), was $495.0 million at January 2, 2016 compared to $570.3
million at January 3, 2015, a decrease of $75.3 million.
Fiscal Year 2015 Results
For the 52-week current fiscal year, consolidated net sales were $7.65
billion compared to $7.78 billion for the 2014 fiscal year when
excluding the 53rd week. As reported, including the 53rd
week, prior year consolidated net sales were $7.92 billion. The decrease
in net sales was primarily due to decreases in comparable retail store
sales, excluding fuel; lower sales resulting from retail store and fuel
center closures; lower retail fuel prices; and lower sales at the
DeCA-operated commissaries.
Adjusted EBITDA for fiscal 2015 was $229.5 million, or 3.0 percent of
net sales, compared to $230.8 million, or 3.0 percent of net sales last
year, when excluding the 53rd week, and $234.4 million, or
3.0 percent of net sales last year, when including the 53rd
week.
Adjusted earnings from continuing operations for fiscal 2015 increased
to $74.6 million, or $1.98 per diluted share, and exclude $11.4 million
of net after-tax charges primarily related to restructuring and asset
impairment charges, merger expenses and other adjusted charges. Adjusted
earnings from continuing operations for fiscal 2014 were $67.9 million,
or $1.80 per diluted share, excluding the 53rd week, and
$69.9 million, or $1.85 per diluted share, including the 53rd week.
Adjusted earnings from continuing operations for fiscal 2014 exclude net
after-tax charges of $10.8 million, primarily related to merger
integration expenses and asset impairment, restructuring, and other
non-cash charges. Reported earnings from continuing operations for
fiscal 2015 increased to $63.2 million, or $1.67 per diluted share,
compared to $59.1 million, or $1.57 per diluted share, in the prior
year, primarily due to the factors previously mentioned. The 53rd
week in fiscal 2014 contributed $2.0 million in reported earnings from
continuing operations, or $0.05 per diluted share.
For fiscal 2015, depreciation and amortization expense totaled $83.3
million, interest expense totaled $21.8 million, and capital
expenditures totaled $79.4 million.
Outlook
Mr. Eidson continued, “Fiscal 2016 has started in-line with management’s
expectations, and we are encouraged by the strong pipeline of sales
opportunities in our distribution and military channels and some
improvement in our retail segment sales trends. In our food distribution
segment, we have won a significant new account that will start during
the first quarter. Additionally, we are continuing to gain access to new
types of customers and are securing incremental fresh business from
existing accounts. Our military segment is currently piloting the
distribution of fresh products to commissaries, and we are encouraged by
the initial results of the test phase and the potential opportunity to
win new business. Our military team continues to be extremely focused on
expanding the use of our distribution and logistics capabilities to
drive new business into the organization. We also expect to continue to
benefit from the ongoing supply chain optimization efforts in our food
distribution and military channels. On the retail front, we continue to
invest in our operations and plan to remodel and rebanner to Family Fare
eight stores in the Western geographic area while closing three stores
that do not fit our vision for the Omaha area, allowing us to offer even
greater value to our customers. In connection with the remodeling and
rebannering efforts, we will continue the rollout of our loyalty cards
to those stores and look to further develop our marketing program to
improve personalization of our offer to targeted customer segments as we
seek to continually improve the overall customer experience. Along with
intensifying our focus on sales, we will continue to focus on efficiency
as low inflation and a competitive sales environment are expected for
fiscal 2016. We believe that the strong foundation we have already
built, supplemented by targeted investments will support yet another
year of earnings growth.”
For fiscal 2016, the Company expects to see growth in year-over-year
sales in the food distribution segment and anticipates comparable retail
store sales to be in the range of slightly negative to flat as the
Company’s second half of fiscal 2016 trends are expected to show
continued improvement due to capital investments and merchandising
initiatives. From a profitability perspective, the Company expects
favorable results versus the prior year through the third quarter of
fiscal 2016 as certain favorable rebate programs and contributions from
the recently acquired Dan’s stores are cycled in the third quarter.
Additionally, the Company anticipates that earnings in the fourth
quarter of fiscal 2016 will fall slightly below fiscal 2015’s as the
Company does not expect a similar inflation-related impact on LIFO to
recur. The Company anticipates adjusted earnings per share from
continuing operations of approximately $2.07 to $2.18, excluding merger
integration costs and other adjusted charges and gains. Additionally,
the Company will continue efforts to reduce its leverage ratio to below
2.0x.
The Company expects capital expenditures for fiscal year 2016 to be in
the range of $72.0 million to $75.0 million, with depreciation and
amortization expense of approximately $76.0 million to $78.0 million and
total interest expense of approximately $20.0 million to $22.0 million.
Conference Call
A telephone conference call to discuss the Company’s fourth quarter of
fiscal 2015 financial results is scheduled for 9:00 a.m. Eastern Time,
Thursday, February 25, 2016. A live webcast of this conference call will
be available on the Company’s website, www.spartannash.com/webcasts.
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
SpartanNash (SPTN) is a Fortune 400 company and the largest grocery
distributor serving U.S. military commissaries in the United States, in
terms of revenue. The Company's core businesses include distributing
grocery products to military commissaries and exchanges and independent
and corporate-owned retail stores located in 47 states and the District
of Columbia, Europe, Cuba, Puerto Rico, Bahrain and Egypt. SpartanNash
currently operates 163 supermarkets, primarily under the banners of
Family Fare Supermarkets, Family Fresh Markets, D&W Fresh Markets, and
Sun Mart.
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," "optimistic,"
"committed," "anticipates," "appears," "believe," "continue," "expects,"
"look forward," "guidance," "target," "opportunities," “design,”
“focus,” "confident," "position," "taking steps," "intend," "seek," or
"plan" or similar expressions or that an event or trend "may," "will,"
or is "likely to" occur, or is "beginning." 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
SpartanNash’s most recently filed Annual Report on Form 10-K, 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.
SPARTANNASH COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
12 Weeks and 13 Weeks Ended
|
|
|
52 Weeks and 53 Weeks Ended
|
|
|
|
January 2,
|
|
|
January 3,
|
|
|
January 2,
|
|
|
January 3,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Net sales
|
$
|
|
1,768,025
|
|
|
$
|
|
1,962,589
|
|
|
$
|
|
7,651,973
|
|
|
$
|
|
7,916,062
|
|
|
Cost of sales
|
|
|
1,509,680
|
|
|
|
|
1,680,376
|
|
|
|
|
6,536,291
|
|
|
|
|
6,759,988
|
|
|
Gross profit
|
|
|
258,345
|
|
|
|
|
282,213
|
|
|
|
|
1,115,682
|
|
|
|
|
1,156,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
223,120
|
|
|
|
|
250,426
|
|
|
|
|
975,572
|
|
|
|
|
1,022,387
|
|
|
Merger integration and acquisition
|
|
|
1,181
|
|
|
|
|
4,547
|
|
|
|
|
8,433
|
|
|
|
|
12,675
|
|
|
Restructuring charges and asset impairment
|
|
|
1,040
|
|
|
|
|
6,233
|
|
|
|
|
8,802
|
|
|
|
|
6,166
|
|
|
Total operating expenses
|
|
|
225,341
|
|
|
|
|
261,206
|
|
|
|
|
992,807
|
|
|
|
|
1,041,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
|
33,004
|
|
|
|
|
21,007
|
|
|
|
|
122,875
|
|
|
|
|
114,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
5,193
|
|
|
|
|
5,998
|
|
|
|
|
21,820
|
|
|
|
|
24,414
|
|
|
Loss on debt extinguishment
|
|
|
1,171
|
|
|
|
|
—
|
|
|
|
|
1,171
|
|
|
|
|
—
|
|
|
Other, net
|
|
|
(173
|
)
|
|
|
|
(21
|
)
|
|
|
|
(375
|
)
|
|
|
|
(17
|
)
|
|
Total other expenses, net
|
|
|
6,191
|
|
|
|
|
5,977
|
|
|
|
|
22,616
|
|
|
|
|
24,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and discontinued operations
|
|
|
26,813
|
|
|
|
|
15,030
|
|
|
|
|
100,259
|
|
|
|
|
90,449
|
|
|
Income taxes
|
|
|
9,649
|
|
|
|
|
2,993
|
|
|
|
|
37,093
|
|
|
|
|
31,329
|
|
|
Earnings from continuing operations
|
|
|
17,164
|
|
|
|
|
12,037
|
|
|
|
|
63,166
|
|
|
|
|
59,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of taxes
|
|
|
(435
|
)
|
|
|
|
(166
|
)
|
|
|
|
(456
|
)
|
|
|
|
(524
|
)
|
|
Net earnings
|
$
|
|
16,729
|
|
|
$
|
|
11,871
|
|
|
$
|
|
62,710
|
|
|
$
|
|
58,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
$
|
|
0.46
|
|
|
$
|
|
0.32
|
|
|
$
|
|
1.68
|
|
|
$
|
|
1.57
|
|
|
Loss from discontinued operations
|
|
|
(0.02
|
)
|
*
|
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
(0.01
|
)
|
|
Net earnings
|
$
|
|
0.44
|
|
|
$
|
|
0.32
|
|
|
$
|
|
1.67
|
|
|
$
|
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
$
|
|
0.46
|
|
|
$
|
|
0.32
|
|
|
$
|
|
1.67
|
|
|
$
|
|
1.57
|
|
|
Loss from discontinued operations
|
|
|
(0.02
|
)
|
*
|
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
(0.02
|
)
|
*
|
Net earnings
|
$
|
|
0.44
|
|
|
$
|
|
0.32
|
|
|
$
|
|
1.66
|
|
|
$
|
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
37,596
|
|
|
|
|
37,528
|
|
|
|
|
37,612
|
|
|
|
|
37,641
|
|
|
Diluted
|
|
|
37,656
|
|
|
|
|
37,628
|
|
|
|
|
37,718
|
|
|
|
|
37,710
|
|
|
* Includes rounding
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
|
22,719
|
|
|
$
|
|
6,443
|
|
Accounts and notes receivable, net
|
|
|
317,183
|
|
|
|
|
282,697
|
|
Inventories, net
|
|
|
521,164
|
|
|
|
|
577,197
|
|
Prepaid expenses and other current assets
|
|
|
22,521
|
|
|
|
|
31,882
|
|
Property and equipment held for sale
|
|
|
—
|
|
|
|
|
15,180
|
|
Total current assets
|
|
|
883,587
|
|
|
|
|
913,399
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
583,698
|
|
|
|
|
597,150
|
|
Goodwill
|
|
|
322,902
|
|
|
|
|
297,280
|
|
Other assets, net
|
|
|
135,261
|
|
|
|
|
124,453
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
|
1,925,448
|
|
|
$
|
|
1,932,282
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
|
353,688
|
|
|
$
|
|
320,037
|
|
Accrued payroll and benefits
|
|
|
71,973
|
|
|
|
|
73,220
|
|
Other accrued expenses
|
|
|
42,660
|
|
|
|
|
44,690
|
|
Current maturities of long-term debt and capital lease obligations
|
|
|
19,003
|
|
|
|
|
19,758
|
|
Total current liabilities
|
|
|
487,324
|
|
|
|
|
457,705
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
116,600
|
|
|
|
|
113,726
|
|
Postretirement benefits
|
|
|
16,008
|
|
|
|
|
23,701
|
|
Other long-term liabilities
|
|
|
38,759
|
|
|
|
|
39,387
|
|
Long-term debt and capital lease obligations
|
|
|
475,978
|
|
|
|
|
550,510
|
|
Total long-term liabilities
|
|
|
647,345
|
|
|
|
|
727,324
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Common stock, voting, no par value; 100,000 shares
authorized; 37,600 and 37,524 shares outstanding
|
|
|
521,698
|
|
|
|
|
520,791
|
|
Preferred stock, no par value, 10,000 shares
authorized; no shares outstanding
|
|
|
—
|
|
|
|
|
—
|
|
Accumulated other comprehensive loss
|
|
|
(11,447
|
)
|
|
|
|
(11,655
|
)
|
Retained earnings
|
|
|
280,528
|
|
|
|
|
238,117
|
|
Total shareholders’ equity
|
|
|
790,779
|
|
|
|
|
747,253
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
$
|
|
1,925,448
|
|
|
$
|
|
1,932,282
|
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
|
52 Weeks and 53 Weeks Ended
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
$
|
|
219,489
|
|
|
$
|
|
139,073
|
|
Net cash used in investing activities
|
|
|
(95,300
|
)
|
|
|
|
(81,687
|
)
|
Net cash used in financing activities
|
|
|
(107,696
|
)
|
|
|
|
(59,962
|
)
|
Net cash used in discontinued operations
|
|
|
(217
|
)
|
|
|
|
(197
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
16,276
|
|
|
|
|
(2,773
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
6,443
|
|
|
|
|
9,216
|
|
Cash and cash equivalents at end of period
|
$
|
|
22,719
|
|
|
$
|
|
6,443
|
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
Table 1: Sales and Operating Earnings by Segment
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
12 Weeks and 13 Weeks Ended
|
|
|
52 Weeks and 53 Weeks Ended
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Military Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
504,749
|
|
|
28.5
|
%
|
|
$
|
|
565,390
|
|
|
28.8
|
%
|
|
$
|
|
2,207,161
|
|
|
28.8
|
%
|
|
$
|
|
2,275,512
|
|
|
|
28.7
|
%
|
Operating earnings
|
$
|
|
3,568
|
|
|
|
|
|
$
|
|
5,765
|
|
|
|
|
|
$
|
|
17,059
|
|
|
|
|
|
$
|
|
21,721
|
|
|
|
|
|
Food Distribution Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
773,666
|
|
|
43.8
|
%
|
|
$
|
|
853,115
|
|
|
43.5
|
%
|
|
$
|
|
3,305,094
|
|
|
43.2
|
%
|
|
$
|
|
3,356,331
|
|
|
|
42.4
|
%
|
Operating earnings
|
$
|
|
22,646
|
|
|
|
|
|
$
|
|
16,089
|
|
|
|
|
|
$
|
|
78,841
|
|
|
|
|
|
$
|
|
54,802
|
|
|
|
|
|
Retail Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
489,610
|
|
|
27.7
|
%
|
|
$
|
|
544,084
|
|
|
27.7
|
%
|
|
$
|
|
2,139,718
|
|
|
28.0
|
%
|
|
$
|
|
2,284,219
|
|
|
|
28.9
|
%
|
Operating earnings (loss)
|
$
|
|
6,790
|
|
|
|
|
|
$
|
|
(847
|
)
|
|
|
|
|
$
|
|
26,975
|
|
|
|
|
|
$
|
|
38,323
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
1,768,025
|
|
|
100.0
|
%
|
|
$
|
|
1,962,589
|
|
|
100.0
|
%
|
|
$
|
|
7,651,973
|
|
|
100.0
|
%
|
|
$
|
|
7,916,062
|
|
|
|
100.0
|
%
|
Operating earnings
|
$
|
|
33,004
|
|
|
|
|
|
$
|
|
21,007
|
|
|
|
|
|
$
|
|
122,875
|
|
|
|
|
|
$
|
|
114,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2: Reconciliation of Operating Earnings to Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
12 Weeks and 13 Weeks Ended
|
|
|
52 Weeks and 53 Weeks Ended
|
|
(In thousands)
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Operating earnings
|
|
$
|
|
33,004
|
|
|
$
|
|
21,007
|
|
|
$
|
|
122,875
|
|
|
$
|
|
114,846
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO (income) expense
|
|
|
|
(4,396
|
)
|
|
|
|
527
|
|
|
|
|
(1,201
|
)
|
|
|
|
5,604
|
|
Depreciation and amortization
|
|
|
|
18,374
|
|
|
|
|
20,073
|
|
|
|
|
83,334
|
|
|
|
|
86,994
|
|
Merger integration and acquisition
|
|
|
|
1,181
|
|
|
|
|
4,547
|
|
|
|
|
8,433
|
|
|
|
|
12,675
|
|
Restructuring charges and asset impairment
|
|
|
|
1,040
|
|
|
|
|
6,233
|
|
|
|
|
8,802
|
|
|
|
|
6,166
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
900
|
|
|
|
|
569
|
|
|
|
|
900
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
1,578
|
|
|
|
|
—
|
|
|
|
|
1,578
|
|
Stock-based compensation
|
|
|
|
770
|
|
|
|
|
922
|
|
|
|
|
7,240
|
|
|
|
|
6,939
|
|
Other non-cash gains
|
|
|
|
(121
|
)
|
|
|
|
(448
|
)
|
|
|
|
(530
|
)
|
|
|
|
(1,260
|
)
|
Adjusted EBITDA
|
|
|
|
49,852
|
|
|
|
|
55,339
|
|
|
|
|
229,522
|
|
|
|
|
234,442
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(3,673
|
)
|
|
|
|
—
|
|
|
|
|
(3,673
|
)
|
Adjusted EBITDA, excluding 53rd week
|
|
$
|
|
49,852
|
|
|
$
|
|
51,666
|
|
|
$
|
|
229,522
|
|
|
$
|
|
230,769
|
|
Reconciliation of operating earnings to adjusted EBITDA by
segment:
|
|
Military:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$
|
|
3,568
|
|
|
$
|
|
5,765
|
|
|
$
|
|
17,059
|
|
|
$
|
|
21,721
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO (income) expense
|
|
|
|
(512
|
)
|
|
|
|
70
|
|
|
|
|
108
|
|
|
|
|
1,262
|
|
Depreciation and amortization
|
|
|
|
2,700
|
|
|
|
|
2,770
|
|
|
|
|
12,081
|
|
|
|
|
11,350
|
|
Merger integration and acquisition
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
27
|
|
Restructuring charges and asset impairment
|
|
|
|
64
|
|
|
|
|
—
|
|
|
|
|
1,048
|
|
|
|
|
—
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
87
|
|
|
|
|
75
|
|
|
|
|
87
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
67
|
|
|
|
|
—
|
|
|
|
|
67
|
|
Stock-based compensation
|
|
|
|
139
|
|
|
|
|
75
|
|
|
|
|
1,137
|
|
|
|
|
577
|
|
Other non-cash charges (gains)
|
|
|
|
31
|
|
|
|
|
(7
|
)
|
|
|
|
235
|
|
|
|
|
(62
|
)
|
Adjusted EBITDA
|
|
|
|
5,990
|
|
|
|
|
8,827
|
|
|
|
|
31,743
|
|
|
|
|
35,029
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(573
|
)
|
|
|
|
—
|
|
|
|
|
(573
|
)
|
Adjusted EBITDA, excluding 53rd week
|
|
$
|
|
5,990
|
|
|
$
|
|
8,254
|
|
|
$
|
|
31,743
|
|
|
$
|
|
34,456
|
|
Food Distribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$
|
|
22,646
|
|
|
$
|
|
16,089
|
|
|
$
|
|
78,841
|
|
|
$
|
|
54,802
|
|
Adjustments:
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
LIFO (income) expense
|
|
|
|
(3,209
|
)
|
|
|
|
342
|
|
|
|
|
(1,634
|
)
|
|
|
|
2,893
|
|
Depreciation and amortization
|
|
|
|
5,291
|
|
|
|
|
6,711
|
|
|
|
|
26,127
|
|
|
|
|
29,816
|
|
Merger integration and acquisition
|
|
|
|
678
|
|
|
|
|
4,547
|
|
|
|
|
2,037
|
|
|
|
|
12,644
|
|
Restructuring charges (gains) and asset impairment
|
|
|
|
21
|
|
|
|
|
(1,270
|
)
|
|
|
|
(216
|
)
|
|
|
|
(241
|
)
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
485
|
|
|
|
|
282
|
|
|
|
|
485
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
801
|
|
|
|
|
—
|
|
|
|
|
801
|
|
Stock-based compensation
|
|
|
|
345
|
|
|
|
|
419
|
|
|
|
|
3,337
|
|
|
|
|
3,258
|
|
Other non-cash (gains) charges
|
|
|
|
(115
|
)
|
|
|
|
(302
|
)
|
|
|
|
49
|
|
|
|
|
(318
|
)
|
Adjusted EBITDA
|
|
|
|
25,657
|
|
|
|
|
27,822
|
|
|
|
|
108,823
|
|
|
|
|
104,140
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(1,132
|
)
|
|
|
|
—
|
|
|
|
|
(1,132
|
)
|
Adjusted EBITDA, excluding 53rd week
|
|
$
|
|
25,657
|
|
|
$
|
|
26,690
|
|
|
$
|
|
108,823
|
|
|
$
|
|
103,008
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings (loss)
|
|
$
|
|
6,790
|
|
|
$
|
|
(847
|
)
|
|
$
|
|
26,975
|
|
|
$
|
|
38,323
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO (income) expense
|
|
|
|
(675
|
)
|
|
|
|
115
|
|
|
|
|
325
|
|
|
|
|
1,449
|
|
Depreciation and amortization
|
|
|
|
10,383
|
|
|
|
|
10,592
|
|
|
|
|
45,126
|
|
|
|
|
45,828
|
|
Merger integration and acquisition
|
|
|
|
503
|
|
|
|
|
—
|
|
|
|
|
6,396
|
|
|
|
|
4
|
|
Restructuring charges and asset impairment
|
|
|
|
955
|
|
|
|
|
7,503
|
|
|
|
|
7,970
|
|
|
|
|
6,407
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
328
|
|
|
|
|
212
|
|
|
|
|
328
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
710
|
|
|
|
|
—
|
|
|
|
|
710
|
|
Stock-based compensation
|
|
|
|
286
|
|
|
|
|
428
|
|
|
|
|
2,766
|
|
|
|
|
3,104
|
|
Other non-cash gains
|
|
|
|
(37
|
)
|
|
|
|
(139
|
)
|
|
|
|
(814
|
)
|
|
|
|
(880
|
)
|
Adjusted EBITDA
|
|
|
|
18,205
|
|
|
|
|
18,690
|
|
|
|
|
88,956
|
|
|
|
|
95,273
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(1,968
|
)
|
|
|
|
—
|
|
|
|
|
(1,968
|
)
|
Adjusted EBITDA, excluding 53rd week
|
|
$
|
|
18,205
|
|
|
$
|
|
16,722
|
|
|
$
|
|
88,956
|
|
|
$
|
|
93,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: Adjusted EBITDA is a non-GAAP operating financial measure that
the Company defines as operating earnings plus depreciation and
amortization, and other non-cash items including deferred (stock)
compensation, the LIFO provision, as well as 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 EBITDA provides a meaningful
representation of its operating performance for the Company as a whole
and for its operating segments. The Company considers 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
all of its 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, 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 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.
The Company’s 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)
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
12 Weeks and 13 Weeks Ended
|
|
|
52 Weeks and 53 Weeks Ended
|
|
(In thousands)
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Operating earnings
|
|
$
|
|
33,004
|
|
|
$
|
|
21,007
|
|
|
$
|
|
122,875
|
|
|
$
|
|
114,846
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
1,181
|
|
|
|
|
4,547
|
|
|
|
|
8,433
|
|
|
|
|
12,675
|
|
Restructuring charges and asset impairment
|
|
|
|
1,040
|
|
|
|
|
6,233
|
|
|
|
|
8,802
|
|
|
|
|
6,166
|
|
Adjustable items related to cost reduction initiatives
|
|
|
|
178
|
|
|
|
|
—
|
|
|
|
|
549
|
|
|
|
|
—
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
900
|
|
|
|
|
569
|
|
|
|
|
900
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
1,578
|
|
|
|
|
—
|
|
|
|
|
1,578
|
|
Adjusted operating earnings
|
|
|
|
35,403
|
|
|
|
|
34,265
|
|
|
|
|
141,228
|
|
|
|
|
136,165
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(3,673
|
)
|
|
|
|
—
|
|
|
|
|
(3,673
|
)
|
Adjusted operating earnings, excluding 53rd week
|
|
$
|
|
35,403
|
|
|
$
|
|
30,592
|
|
|
$
|
|
141,228
|
|
|
$
|
|
132,492
|
|
Reconciliation of operating earnings to adjusted operating
earnings by segment:
|
|
Military:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$
|
|
3,568
|
|
|
$
|
|
5,765
|
|
|
$
|
|
17,059
|
|
|
$
|
|
21,721
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
27
|
|
Restructuring charges and asset impairment
|
|
|
|
64
|
|
|
|
|
—
|
|
|
|
|
1,048
|
|
|
|
|
—
|
|
Adjustable items related to cost reduction initiatives
|
|
|
|
30
|
|
|
|
|
—
|
|
|
|
|
125
|
|
|
|
|
—
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
87
|
|
|
|
|
75
|
|
|
|
|
87
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
67
|
|
|
|
|
—
|
|
|
|
|
67
|
|
Adjusted operating earnings
|
|
|
|
3,662
|
|
|
|
|
5,919
|
|
|
|
|
18,307
|
|
|
|
|
21,902
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(573
|
)
|
|
|
|
—
|
|
|
|
|
(573
|
)
|
Adjusted operating earnings, excluding 53rd week
|
|
$
|
|
3,662
|
|
|
$
|
|
5,346
|
|
|
$
|
|
18,307
|
|
|
$
|
|
21,329
|
|
Food Distribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$
|
|
22,646
|
|
|
$
|
|
16,089
|
|
|
$
|
|
78,841
|
|
|
$
|
|
54,802
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
678
|
|
|
|
|
4,547
|
|
|
|
|
2,037
|
|
|
|
|
12,644
|
|
Restructuring charges (gains) and asset impairment
|
|
|
|
21
|
|
|
|
|
(1,270
|
)
|
|
|
|
(216
|
)
|
|
|
|
(241
|
)
|
Adjustable items related to cost reduction initiatives
|
|
|
|
34
|
|
|
|
|
—
|
|
|
|
|
150
|
|
|
|
|
—
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
485
|
|
|
|
|
282
|
|
|
|
|
485
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
801
|
|
|
|
|
—
|
|
|
|
|
801
|
|
Adjusted operating earnings
|
|
|
|
23,379
|
|
|
|
|
20,652
|
|
|
|
|
81,094
|
|
|
|
|
68,491
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(1,132
|
)
|
|
|
|
—
|
|
|
|
|
(1,132
|
)
|
Adjusted operating earnings, excluding 53rd week
|
|
$
|
|
23,379
|
|
|
$
|
|
19,520
|
|
|
$
|
|
81,094
|
|
|
$
|
|
67,359
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings (loss)
|
|
$
|
|
6,790
|
|
|
$
|
|
(847
|
)
|
|
$
|
|
26,975
|
|
|
$
|
|
38,323
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
503
|
|
|
|
|
—
|
|
|
|
|
6,396
|
|
|
|
|
4
|
|
Restructuring charges and asset impairment
|
|
|
|
955
|
|
|
|
|
7,503
|
|
|
|
|
7,970
|
|
|
|
|
6,407
|
|
Adjustable items related to cost reduction initiatives
|
|
|
|
114
|
|
|
|
|
—
|
|
|
|
|
274
|
|
|
|
|
—
|
|
Fees and expenses related to tax planning strategies
|
|
|
|
—
|
|
|
|
|
328
|
|
|
|
|
212
|
|
|
|
|
328
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
710
|
|
|
|
|
—
|
|
|
|
|
710
|
|
Adjusted operating earnings
|
|
|
|
8,362
|
|
|
|
|
7,694
|
|
|
|
|
41,827
|
|
|
|
|
45,772
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
(1,968
|
)
|
|
|
|
—
|
|
|
|
|
(1,968
|
)
|
Adjusted operating earnings, excluding 53rd week
|
|
$
|
|
8,362
|
|
|
$
|
|
5,726
|
|
|
$
|
|
41,827
|
|
|
$
|
|
43,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
as a whole and for its operating segments. 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 all of its 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 and adjusted operating
earnings by segment are performance measures 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)
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
12 Weeks and 13 Weeks Ended
|
|
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
|
|
|
|
|
|
|
|
Earnings from
|
|
|
|
|
|
|
|
Earnings from
|
|
|
|
|
Earnings
|
|
|
continuing
|
|
|
Earnings
|
|
|
continuing
|
|
|
|
|
from
|
|
|
operations
|
|
|
from
|
|
|
operations
|
|
|
(Unaudited)
|
|
continuing
|
|
|
per diluted
|
|
|
continuing
|
|
|
per diluted
|
|
|
(In thousands, except per share data)
|
|
operations
|
|
|
share
|
|
|
operations
|
|
|
share
|
|
|
Earnings from continuing operations
|
|
$
|
|
17,164
|
|
|
$
|
|
0.46
|
|
|
$
|
|
12,037
|
|
|
$
|
|
0.32
|
|
|
Adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
906
|
|
|
|
|
0.02
|
|
|
|
|
2,868
|
|
|
|
|
0.08
|
|
|
Restructuring charges and asset impairment
|
|
|
|
658
|
|
|
|
|
0.02
|
|
|
|
|
3,869
|
|
|
|
|
0.10
|
|
|
Adjustable items related to cost reduction initiatives
|
|
|
|
111
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
979
|
|
|
|
|
0.02
|
|
*
|
Debt extinguishment
|
|
|
|
725
|
|
|
|
|
0.02
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Favorable settlement of unrecognized tax liability
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,254
|
)
|
|
|
|
(0.03
|
)
|
|
Adjusted earnings from continuing operations, including 53rd week
|
|
|
|
19,564
|
|
|
|
|
0.52
|
|
|
|
|
18,499
|
|
|
|
|
0.49
|
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,022
|
)
|
|
|
|
(0.05
|
)
|
|
Adjusted earnings from continuing operations, excluding 53rd week
|
|
$
|
|
19,564
|
|
|
$
|
|
0.52
|
|
|
$
|
|
16,477
|
|
|
$
|
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 Weeks and 53 Weeks Ended
|
|
|
|
|
January 2, 2016
|
|
|
January 3, 2015
|
|
|
|
|
|
|
|
|
|
Earnings from
|
|
|
|
|
|
|
|
Earnings from
|
|
|
|
|
Earnings
|
|
|
continuing
|
|
|
Earnings
|
|
|
continuing
|
|
|
|
|
from
|
|
|
operations
|
|
|
from
|
|
|
operations
|
|
|
(Unaudited)
|
|
continuing
|
|
|
per diluted
|
|
|
continuing
|
|
|
per diluted
|
|
|
(In thousands, except per share data)
|
|
operations
|
|
|
share
|
|
|
operations
|
|
|
share
|
|
|
Earnings from continuing operations
|
|
$
|
|
63,166
|
|
|
$
|
|
1.67
|
|
|
$
|
|
59,120
|
|
|
$
|
|
1.57
|
|
|
Adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger integration and acquisition
|
|
|
|
5,286
|
|
|
|
|
0.14
|
|
|
|
|
7,867
|
|
|
|
|
0.21
|
|
|
Restructuring charges and asset impairment
|
|
|
|
5,451
|
|
|
|
|
0.15
|
|
*
|
|
|
3,827
|
|
|
|
|
0.10
|
|
|
Adjustable items related to cost reduction initiatives
|
|
|
|
340
|
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Tax planning strategies, net of fees and expenses
|
|
|
|
(382
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Pension settlement accounting
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
979
|
|
|
|
|
0.02
|
|
*
|
Debt extinguishment
|
|
|
|
725
|
|
|
|
|
0.02
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Favorable settlement of unrecognized tax liability
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,849
|
)
|
|
|
|
(0.05
|
)
|
|
Adjusted earnings from continuing operations, including 53rd week
|
|
|
|
74,586
|
|
|
|
|
1.98
|
|
|
|
|
69,944
|
|
|
|
|
1.85
|
|
|
53rd week
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,022
|
)
|
|
|
|
(0.05
|
)
|
|
Adjusted earnings from continuing operations, excluding 53rd week
|
|
$
|
|
74,586
|
|
|
$
|
|
1.98
|
|
|
$
|
|
67,922
|
|
|
$
|
|
1.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: Adjusted earnings from continuing operations is a non-GAAP
operating financial measure that the Company defines 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.
The Company believes that adjusted earnings from continuing operations
provide a meaningful representation of its operating performance for the
Company. The Company considers 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 all of its 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 earnings from continuing operations 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 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. The Company’s 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)
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
January 2, 2016
|
|
|
January 3, 2015
|
|
Current maturities of long-term debt and capital lease obligations
|
$
|
|
19,003
|
|
|
$
|
|
19,758
|
|
Long-term debt and capital lease obligations
|
|
|
475,978
|
|
|
|
|
550,510
|
|
Total debt
|
|
|
494,981
|
|
|
|
|
570,268
|
|
Cash and cash equivalents
|
|
|
(22,719
|
)
|
|
|
|
(6,443
|
)
|
Total net long-term debt
|
$
|
|
472,262
|
|
|
$
|
|
563,825
|
|
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.
Table 6: Reconciliation of Projected Earnings per Diluted Share
from Continuing Operations to
Projected Adjusted Earnings per Diluted Share from Continuing
Operations
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
|
52 Weeks Ending December 31, 2016
|
|
Low
|
|
|
High
|
Earnings from continuing operations
|
$
|
|
1.82
|
|
|
$
|
|
1.93
|
Adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
Restructuring and asset impairment
|
|
|
0.21
|
|
|
|
|
0.21
|
Merger integration and acquisition
|
|
|
0.04
|
|
|
|
|
0.04
|
Adjusted earnings from continuing operations
|
$
|
|
2.07
|
|
|
$
|
|
2.18
|
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