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8-K - FORM 8-K - NASH FINCH COnafc8k_2013.htm

Exhibit 99.1

 

 

                  

 

Nash Finch Reports Second Quarter 2013 Results

Total Company Sales Increased 9.1%

Adjusted EPS1 of $0.64

             

MINNEAPOLIS (July 25, 2013) — Nash Finch Company (NASDAQ: NAFC), one of the leading food distribution companies in the United States, today announced financial results for the twelve weeks (second quarter) ended June 15, 2013.

Financial Results

            Total Company sales for the second quarter 2013 were $1.20 billion compared to $1.10 billion in the prior-year quarter, an increase of 9.1%. The acquisition of twelve Bag ‘N Save and eighteen No Frills stores last year contributed to a net increase in total Company sales of $23.1 million, which is comprised of a $50.9 million increase in Retail segment sales being partially offset by a $27.8 million decrease in Food Distribution segment sales that are now reported in the Retail segment. 

            Adjusted Consolidated EBITDA2, was $26.9 million, or 2.2% of sales in the second quarter of 2013 as compared to $27.8 million, or 2.5% of sales in the second quarter of 2012.  Consolidated EBITDA3 was adjusted to exclude the impact of significant items that net to zero and a charge of $1.6 million in the second quarter of 2013 and 2012, respectively.  Including the impact of significant items, Consolidated EBITDA for the second quarter 2013 was $26.9 million, or 2.2% of sales, as compared to $26.2 million, or 2.4% of sales, in the prior year quarter. 

"We are pleased to report strong sales growth across all three of our business segments in the second quarter. The strategic investments made last year are now becoming evident in our top-line”, said Alec Covington, President and CEO of Nash Finch. “Consolidated EBITDA came in relatively flat as expected compared to the prior year.  We will continue to see pressure on the military segment gross margin until the fourth quarter when we cycle the reductions made to contractual margin rates.”

 

1


 
 

            Adjusted Net Earnings4 were $8.4 million or $0.64 per diluted share in the second quarter 2013 compared to $9.0 million or $0.69 per diluted share in the second quarter 2012. Net earnings were adjusted to exclude the impact of significant items totaling a benefit of $0.5 million or $0.04 per diluted share in 2013 and a charge of $94.0 million or $7.24 per diluted share in 2012. Including the impact of significant items, our reported net earnings for the second quarter of 2013 were $8.9 million or $0.68 per diluted share, as compared to a net loss of $85.0 million or $6.55 per diluted share in 2012. 

The following table identifies the significant items affecting our Consolidated EBITDA, net earnings and diluted earnings per share for the second quarter 2013 and prior year results:

 

 

 

 

 

 

 

 

(dollars in millions except per share amounts)

2nd Quarter

Fiscal

 

2013

2012

2013

2012

Significant items

 

 

 

 

Transaction costs related to mergers and acquisitions

$

 (0.3)

(0.9)

(0.3)

(1.2)

Restructuring costs

(0.2)

-

(1.1)

-

Military distribution center conversion and transition costs

-

(0.7)

-

(1.4)

Casualty insurance claim losses

(2.1)

-

(2.1)

-

Gain on early termination of supply agreement

2.6

-

2.6

-

Significant charges impacting Consolidated EBITDA

$

 -

(1.6)

(0.9)

(2.6)

 

 

 

 

 

LIFO charges (credits)

0.8

(0.4)

0.8

(0.6)

Gain on acquisition of business

-

6.6

-

6.6

Military distribution center non-cash pre-opening expense

-

-

-

(0.1)

Goodwill impairment

-

(132.0)

-

(132.0)

Total significant charges impacting earnings before tax

$

 0.8

(127.4)

(0.1)

(128.7)

Income tax on significant net charges

(0.3)

0.8

-

1.3

Tax on goodwill impairment and acquisition gain

-

32.6

-

32.6

 

 

 

 

 

Total significant charges impacting net earnings

$

 0.5

(94.0)

(0.1)

(94.8)

 

 

 

 

 

Diluted earnings per share impact from significant items

0.04

(7.24)

-

(7.31)

Diluted earnings per share, as reported

0.68

(6.55)

0.84

(6.14)

Diluted earnings per share, as adjusted

$

 0.64

0.69

0.84

1.17

 

 

 

 

 

Consolidated EBITDA, as reported

26.9

26.2

44.6

49.0

Consolidated EBITDA impact from significant items

-

(1.6)

(0.9)

(2.6)

Consolidated EBITDA, as adjusted

$

 26.9

$      27.8

$      45.5

$      51.6

 

 

 

 

 

 

Military Distribution Results

 

(dollars in millions)

2nd Quarter

% Change

Fiscal

% Change

 

2013

2012

 

2013

2012

 

Net Sales

$

 537.5

526.2

2.2%

1,069.6

1,060.5

0.9%

Segment EBITDA3

6.9

11.8

(41.5%)

14.8

25.2

(41.2%)

Percentage of Sales

1.3%

2.2%

 

1.4%

2.4%

 

 

 

2


 
 

The Military segment net sales increased 2.2% to $537.5 million in the second quarter compared to the prior year. The Military segment EBITDA was $6.9 million or 1.3% of sales, in the second quarter 2013 as compared to $11.8 million, or 2.2% of sales, in the second quarter 2012. The decrease in Military EBITDA was primarily due to declines in margins related to lower inflation year-over-year and reduced contractual margin rates as well as from incurring several large casualty insurance claims related to transportation accidents.     

“We were pleased to see military sales increase a solid 2.2% during the second quarter,” said Covington. “The military management team has worked diligently to attract new business to utilize our world-wide military distribution network, and we look forward to the addition of perishable and frozen capacity in our new Landover facility early next year, which is the final milestone in the completion of our world-wide network,” continued Covington.

Food Distribution & Retail Results 

 
 

(dollars in millions)

2nd Quarter

% Change

Fiscal

% Change

 

2013

2012

 

2013

2012

 

Sales

 

 

 

 

 

 

Food Distribution

$

 487.2

441.6

10.3%

872.5

874.3

(0.2%)

Retail

180.1

136.5

32.0%

356.9

239.2

49.2%

Total

$

 667.3

578.1

15.4%

1,229.4

1,113.5

10.4%

Segment EBITDA3

 

 

 

 

 

 

Food Distribution

$

 11.9

9.4

26.2%

15.1

16.0

(5.3%)

Retail

8.1

5.0

63.3%

14.7

7.9

86.8%

Total

$

 20.0

14.4

39.0%

29.8

23.9

25.1%

 

 

 

 

 

 

 

Percentage of Sales

 

 

 

 

 

 

Food Distribution

2.4%

2.1%

 

1.7%

1.8%

 

Retail

4.5%

3.6%

 

4.1%

3.3%

 

Total

3.0%

2.5%

 

2.4%

2.1%

 

 

The combined Food Distribution and Retail segment sales increased 15.4% to $667.3 million in the second quarter of 2013 as compared to the prior year period. The increase in Retail sales was primarily attributable to the Bag ‘N Save and No Frills acquisitions, which were responsible for a $50.9 million year-over-year increase in sales in the second quarter of 2013. Because Bag ‘N Save and No Frills were Food Distribution customers, these acquisitions were also responsible for a $27.8 million decrease in Food Distribution sales in the second quarter of 2013. Retail same store sales declined 4.1% in 2013 as compared to the prior year quarter.   

The combined Food Distribution and Retail segment EBITDA was $20.0 million, or 3.0% of sales, in the second quarter 2013 as compared to $14.4 million, or 2.5% of sales, in the second quarter 2012. The increase in second quarter EBITDA was primarily due to increased retail sales from the acquisitions and a gain on early termination of a long-term supply agreement with a food distribution customer.

“Sales showed strong growth in both of the Food Distribution and Retail segments during the second quarter. The increases were driven by the addition of new Food Distribution customers as well as in Retail due to the Omaha store acquisitions last year,” said Covington. “We recently realigned the Food Distribution organizational structure to place more focus on sales, new business development and customer service. We are already beginning to see the benefits of this change”.

3


 

Liquidity

Total debt at the end of the second quarter 2013 was $433.0 million as compared to $373.3 million at the end of fiscal 2012. The Company continues to focus on effectively managing its balance sheet and is currently in compliance with all of its debt covenants.  The Total Debt Leverage Ratio5 as of the end of the second quarter 2013 was 4.05. Availability on the Company’s revolving credit facility at the end of the quarter was $184.3 million.

Merger

On July 22, 2013, we announced that we had entered into a definitive merger agreement under which Nash Finch and Spartan Stores will combine in an all-stock merger valued at approximately $1.3 billion, including existing net debt at each company. The Merger Agreement was unanimously approved by the board of directors of the Company.  Upon closing, which is expected by the end of calendar 2013, each share of the Company’s common stock will be converted into 1.2 shares of Spartan’s common stock.   Spartan Stores shareholders will own approximately 57.7% of the equity of the combined company and Nash Finch shareholders will own approximately 42.3% of the Company’s common stock.

 

1 Adjusted EPS is defined as earnings per share adjusted for any significant items.

 

2 Adjusted Consolidated EBITDA is defined as EBITDA adjusted for any significant items.

 

3 References to EBITDA, Consolidated EBITDA, and segment EBITDA are calculated as earnings (loss) before interest, income tax, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non-cash charges (such as LIFO, asset impairments, closed store lease costs and share-based compensation), less cash payments made during the current period on non-cash charges recorded in prior periods.  Consolidated EBITDA should not be considered an alternative measure of our net income (loss), operating performance, cash flows or liquidity.  Consolidated EBITDA is provided as additional information as a key metric used to determine payout pursuant to our Short-Term and Long-Term Incentive Plans.  The Company also believes investors find the information useful because it reflects the resources available for strategic investments including, for example, capital needs of the business, strategic acquisitions and debt service.

 

4 Adjusted Net Earnings is defined as net earnings adjusted for any significant items.

 

5 Total Leverage Ratio is defined as total debt (current portion of long-term debt and capital leases, long-term debt and capitalized lease obligations) divided by the trailing four quarters Consolidated EBITDA.      

                 

************************************************************************************************************************************************

A conference call to review the second quarter 2013 results is scheduled at 9:30 a.m. CT (10:30 a.m. ET) on July 25, 2013.  Interested participants can listen to the conference call over the Internet by logging onto the “Investor Relations” portion of Nash Finch's website at http://www.nashfinch.com.  A replay of the webcast will be available and the transcript of the call will be archived on the “Investor Relations” portion of Nash Finch's website under the heading “Audio Archives.” A copy of this press release and the other financial and statistical information about the periods to be discussed in the conference call will be available at the time of the call on the “Investor Relations” portion of the Nash Finch website under the caption “Press Releases.”

4

 


 

            Nash-Finch is a Fortune 500 company and the largest food distributor serving military commissaries and exchanges in the United States. Nash-Finch's core businesses include distributing food to military commissaries and retailers located in 44 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt. The Company also owns and operates a base of retail stores, primarily supermarkets under the Family Fresh Market®, Econofoods®, Family Thrift Center®, No Frills®, Bag 'n Save®, AVANZA®, and Sun Mart® trade names. Further information is available on the Company's website, www.nashfinch.com.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements relate to trends and events that may affect our future financial position and operating results.  Any statement contained in this release that is not statements of historical fact may be deemed forward-looking statements.  For example, words such as “may,” “will,” “should,” “likely,” “expect,” “anticipate,” “estimate,” “believe,” “intend, ” “potential” or “plan,” or comparable terminology, are intended to identify forward‑looking statements.  Such statements are based upon current expectations, estimates and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward‑looking statements.  Important factors known to us that could cause or contribute to material differences include, but are not limited to, the following:

 

•   the effect of traditional and alternative competition on our food distribution, military and retail businesses;

•   general sensitivity to economic conditions, including the uncertainty related to the current state of the economy in the U.S. and worldwide economic slowdown; disruptions to the credit and financial markets in the U.S. and worldwide; changes in market interest rates; continued volatility in energy prices and food commodities;

   macroeconomic and geopolitical events affecting commerce generally;

•   changes in consumer buying and spending patterns including a shift to non-traditional retail channels;

•   our ability to identify and execute plans to expand our food distribution, military and retail operations;

•   possible changes in the military commissary system, including those stemming from the redeployment of forces, congressional action, changes  in  funding levels or the effect of mandated reductions or sequestration of government expenditures;

•   our ability to identify and execute plans to improve the competitive position of our retail operations;

•   the success or failure of strategic plans, new business ventures or initiatives;

•   our ability to successfully integrate and manage current or future businesses we acquire, including the ability to manage credit risks and retain the customers of those operations;

   changes in credit risk from financial accommodations extended to new or existing customers;

   significant changes in the nature of vendor promotional programs and the allocation of funds among the programs;

•   limitations on financial and operating flexibility due to debt levels and debt instrument covenants and ability to access capital to support capital spending and growth opportunities;

•   legal, governmental, legislative or administrative proceedings, disputes, or actions that result in adverse outcomes;

•   our ability to identify and remediate any material weakness in our internal controls that could affect our ability to detect and prevent fraud, expose us to litigation, or prepare financial statements and reports in a timely manner;

•   changes in accounting standards;

•   technology failures that may have a material adverse effect on our business;

•   severe weather and natural disasters that may impact our supply chain;

•   unionization of a significant portion of our workforce;

•   costs related to a multi-employer pension plan which has liabilities in excess of plan assets;

•   changes in health care, pension and wage costs and labor relations issues;

   product liability claims, including claims concerning food and prepared food products;

   changes in food safety regulations and other regulations applicable to the products we sell;

   threats or potential threats to security;

•   unanticipated problems with product procurement; and

•   maintaining our reputation and corporate image.

 

A more detailed discussion of many of these factors, as well as other factors that could affect the Company’s results, is contained in the Company’s periodic reports filed with the SEC.  You should carefully consider each of these factors and all of the other information in this release.  We believe that all forward-looking statements are based upon reasonable assumptions when made.  However, we caution that it is impossible to predict actual results or outcomes and that accordingly you should not place undue reliance on these statements.  Forward-looking statements speak only as of the date when made and we undertake no obligation to revise or update these statements in light of subsequent events or developments.  Actual results and outcomes may differ materially from anticipated results or outcomes discussed in forward-looking statements. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the Securities and Exchange Commission (SEC).

Contact: Bob Dimond, Executive VP & CFO, 952-844-1060

5


 
  

 

 

 

NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

 

 

 

 

Consolidated Statements of Income (Loss)

 

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twenty-four

Weeks Ended

 

Twenty-four

Weeks Ended

 

 

 

12 Weeks Ended

 

 

 

 

June 15

2013

 

June 16,

2012

 

June 15

2013

 

June 16,

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,204,752

 

1,104,242

 

2,298,993

 

2,174,087

Cost of sales

 

1,105,217

 

1,015,448

 

2,106,575

 

2,004,570

 

Gross profit

 

99,535

 

88,794

 

192,418

 

169,517

 

Gross profit margin

 

8.3%

 

8.0%

 

8.4%

 

7.8%

 

 

 

 

 

 

 

 

 

 

 

Other costs and expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

72,226

 

62,900

 

147,334

 

121,212

 

Gain on acquisition of a business

 

-

 

(6,639)

 

-

 

(6,639)

 

Goodwill impairment

 

-

 

131,991

 

-

 

131,991

 

Depreciation and amortization

 

8,770

 

8,382

 

17,570

 

16,586

 

Interest expense

 

3,948

 

5,460

 

9,957

 

10,598

 

 

Total other costs and expenses

 

84,944

 

202,094

 

174,861

 

273,748

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

14,591

 

(113,300)

 

17,557

 

(104,231)

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

5,662

 

(28,332)

 

6,568

 

(24,717)

 

Net earnings (loss)

$

8,929

 

(84,968)

 

10,989

 

(79,514)

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.69

 

(6.55)

 

0.85

 

(6.14)

 

Diluted

$

0.68

 

(6.55)

 

0.84

 

(6.14)

 

 

 

 

 

 

 

 

 

 

 

Declared dividends per common share

$

0.18

 

0.18

 

0.36

 

0.36

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

outstanding and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

12,992

 

12,966

 

12,995

 

12,958

 

Diluted

 

13,089

 

12,966

 

13,070

 

12,958

 

6


 

 

 

NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

Consolidated Balance Sheets

 

 

 

 

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

June 15,

2013

 

December 29,

2012

Current assets:

 

 

 

 

 

Cash

 

 

$

1,184

 

1,291

Accounts and notes receivable, net

 

266,483

 

239,925

Inventories

 

 

412,707

 

362,526

Prepaid expenses and other

 

14,303

 

18,569

Deferred tax assets

 

3,914

 

3,724

 

Total current assets

 

698,591

 

626,035

 

 

 

 

 

 

 

Notes receivable, net

 

26,690

 

21,360

 

 

 

 

 

 

 

Property, plant and equipment:

 

740,465

 

738,857

Less accumulated depreciation and amortization

 

(446,567)

 

(436,572)

 

Net property, plant and equipment

 

293,898

 

302,285

 

 

 

 

 

 

 

Goodwill

 

 

 

22,877

 

22,877

Customer contracts and relationships, net

 

6,177

 

6,649

Investment in direct financing leases

 

1,849

 

1,923

Deferred tax asset, net

 

29,864

 

2,780

Other assets

 

 

19,198

 

19,708

 

Total assets

$

1,099,144

 

1,003,617

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt and capital lease obligations

$

3,034

 

2,265

Accounts payable

 

 

254,141

 

247,392

Accrued expenses

 

 

59,144

 

52,326

Income taxes payable

 

13,787

 

429

 

Total current liabilities

 

330,106

 

302,412

 

 

 

 

 

 

 

Long-term debt

 

 

416,050

 

356,251

Capital lease obligations

 

13,938

 

14,807

Other liabilities

 

 

35,018

 

33,758

Commitments and contingencies

 

-

 

-

Stockholders' equity:

 

 

 

 

Preferred stock - no par value.

 

 

 

 

 

Authorized 500 shares; none issued

 

-

 

-

Common stock of $1.66 2/3 par value

 

 

 

 

 

Authorized 50,000 shares; 13,815 and 13,799 shares issued, respectively

 

23,025

 

22,998

Additional paid-in capital

 

114,937

 

113,641

Common stock held in trust

 

(1,317)

 

(1,295)

Deferred compensation obligations

 

1,317

 

1,295

Accumulated other comprehensive loss

 

(15,705)

 

(15,705)

Retained earnings

 

233,448

 

227,161

Treasury stock at cost; 1,524 and 1,525 shares, respectively

 

(51,673)

 

(51,706)

 

Total stockholders' equity

 

304,032

 

296,389

 

Total liabilities and stockholders' equity

$

1,099,144

 

1,003,617

             

 

7


 

 

 

NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

Consolidated Statements of Cash Flows

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

24 Weeks Ended

 

 

 

 

June 15

2013

 

June 16,

2012

Operating activities:

 

 

 

 

 

Net earnings (loss)

$

10,989

 

(79,514)

 

Adjustments to reconcile net earnings (loss) to net cash used in operating activities:

 

 

 

 

 

 

Gain on acquisition of a business

 

-

 

(6,639)

 

 

Depreciation and amortization

 

17,570

 

16,586

 

 

Amortization of deferred financing costs

 

535

 

576

 

 

Non-cash convertible debt interest

 

1,363

 

2,815

 

 

Rebateable loans

 

1,569

 

1,942

 

 

Provision for (recovery of) bad debts

 

180

 

(634)

 

 

Provision for (recovery of) lease reserves

 

246

 

(33)

 

 

Deferred income tax benefit

 

(27,273)

 

(33,657)

 

 

Gain on sale of property, plant and equipment

 

(43)

 

(387)

 

 

LIFO charge (credit)

 

(1,014)

 

602

 

 

Asset impairments

 

-

 

62

 

 

Impairments of goodwill

 

-

 

131,991

 

 

Share-based compensation expense

 

1,162

 

1,641

 

 

Deferred compensation

 

551

 

507

 

 

Other

 

(89)

 

(126)

 

Changes in operating assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

 

Accounts and notes receivable

 

(27,967)

 

(3,396)

 

 

Inventories

 

(49,168)

 

(33,196)

 

 

Prepaid expenses

 

(3,647)

 

(1,284)

 

 

Accounts payable

 

(1,830)

 

(4,590)

 

 

Accrued expenses

 

7,321

 

(6,275)

 

 

Income taxes payable

 

21,271

 

2,688

 

 

Other assets and liabilities

 

767

 

(3,058)

 

 

 

Net cash used in operating activities

 

(47,507)

 

(13,379)

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Proceeds from sale of assets

 

512

 

5,551

 

 

Additions to property, plant and equipment

 

(8,819)

 

(9,903)

 

 

Business acquired, net of cash

 

-

 

(29,700)

 

 

Loans to customers

 

(10,853)

 

(7,766)

 

 

Payments from customers on loans

 

5,257

 

506

 

 

Corporate-owned life insurance, net

 

(583)

 

(80)

 

 

Other

 

-

 

(151)

 

 

 

Net cash used in investing activities

 

(14,486)

 

(41,543)

Financing activities:

 

 

 

 

 

 

Proceeds from revolving debt

 

202,551

 

39,800

 

 

Dividends paid

 

(4,420)

 

(4,398)

 

 

Proceeds from long-term debt

 

7,283

 

16,890

 

 

Payments of long-term debt

 

(150,567)

 

(1,260)

 

 

Payments of capitalized lease obligations

 

(930)

 

(1,194)

 

 

Increase in outstanding checks

 

8,063

 

5,949

 

 

Payments of deferred financing costs

 

(6)

 

(125)

 

 

Tax benefit from share-based compensation

 

-

 

66

 

 

Other

 

(88)

 

(722)

 

 

 

Net cash provided by financing activities

 

61,886

 

55,006

 

 

 

Net increase (decrease) in cash

 

(107)

 

84

 

 

 

Cash at beginning of year

$

1,291

 

773

 

 

 

Cash at end of period

 

1,184

 

857

               

 

 

 

 

8


 

 

 

NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

Supplemental Data (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


June 15

2013

 

June 16,

2012

Other Data (In thousands)

 

 

 

 

 

 

 

 

 

Total debt

$

 433,022

 

354,398

 

Stockholders' equity

$

 304,032

 

320,901

 

Capitalization

$

737,054

 

675,299

 

Debt to total capitalization

 

58.8%

 

52.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Data

 

 

 

 

 

Consolidated EBITDA (a)

$

 106,907

 

125,049

 

Leverage ratio - trailing 4 qtrs. (debt to consolidated EBITDA) (b)

 

4.05x

 

2.83x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable GAAP Data

 

 

 

 

 

Debt to earnings before income taxes (b)

 

4,606.62

 

(4.74)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Consolidated EBITDA, as defined in our credit agreement, is earnings before interest, income tax, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non-cash charges (such as LIFO, asset impairments, closed store lease costs and share-based compensation), less cash payments made during the current period on non-cash charges recorded in prior periods. Consolidated EBITDA should not be considered an alternative measure of our net income, operating performance, cash flows or liquidity.The amount of Consolidated EBITDA is provided as a metric used to determine payout of performance units pursuant to our Long-Term Incentive Plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

Leverage ratio is defined as the Company's total debt at June 15, 2013 and June 16, 2012, divided by Consolidated EBITDA for the respective four trailing quarters.The most comparable GAAP ratio is debt at the same date divided by earnings from continuing operations before income taxes for the respective four trailing quarters.

 

 

 

9


 

 

 

 

Derivation of Consolidated EBITDA; Segment Consolidated EBITDA and Segment Profit (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 FY 2013

 

 

 

 

 

 

 

 

 

 

 

 

2012

Qtr 3

 

2012

Qtr 4

 

2013

Qtr 1

 

2013

Qtr 2

 

Rolling

4 Qtrs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

$

22,955

 

(40,418)

 

2,966

 

14,591

 

94

Add/(deduct)

 

 

 

 

 

 

 

 

 

 

 

LIFO charge

 

1,438

 

1,285

 

(187)

 

(827)

 

1,709

 

Depreciation and amortization

 

11,924

 

9,324

 

8,800

 

8,770

 

38,818

 

Interest expense

 

8,074

 

6,272

 

6,009

 

3,948

 

24,303

 

Goodwill impairment

 

-

 

34,639

 

-

 

-

 

34,639

 

Closed store lease costs

 

-

 

193

 

-

 

246

 

439

 

Asset impairment

 

-

 

13,066

 

-

 

 

13,066

 

Net loss (gain) on sale of real estate and other assets

 

(1,119)

 

(16)

 

80

 

(123)

 

(1,178)

 

Stock compensation

 

(2,935)

 

(1,151)

 

499

 

663

 

(2,924)

 

Subsequent cash payments on non-cash charges

 

(616)

 

(610)

 

(472)

 

(361)

 

(2,059)

Total Consolidated EBITDA

$

39,721

 

22,584

 

17,695

 

26,907

 

106,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2012

 

2013

 

2013

 

Rolling

Segment Consolidated EBITDA

 

 Qtr 3

 

 Qtr 4

 

 Qtr 1

 

 Qtr 2

 

 4 Qtrs

 

Military

$

13,661

 

8,783

 

7,909

 

6,902

 

37,255

 

Food Distribution

 

14,764

 

6,159

 

3,216

 

11,888

 

36,027

 

Retail

 

11,296

 

7,642

 

6,570

 

8,117

 

33,625

 

 

$

39,721

 

22,584

 

17,695

 

26,907

 

106,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2012

 

2013

 

2013

 

Rolling

Segment profit

 

 Qtr 3

 

 Qtr 4

 

Qtr 1

 

 Qtr 2

 

4 Qtrs

 

Military

$

10,322

 

3,953

 

4,717

 

3,942

 

22,934

 

Food Distribution

 

11,191

 

(8,691)

 

147

 

8,874

 

11,521

 

Retail

 

7,725

 

3,834

 

2,784

 

4,311

 

18,654

 

Unallocated:

 

 

 

 

 

 

 

 

 

 

 

   Interest

 

(6,283)

 

(4,875)

 

(4,682)

 

(2,536)

 

(18,376)

 

   Goodwill Impairment

 

-

 

(34,639)

 

-

 

-

 

(34,639)

 

 

$

22,955

 

(40,418)

 

2,966

 

14,591

 

94

                       

 

10


 

 

 

FY

2012

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2011

 

2012

 

2012

 

Rolling

 

 

Qtr 3

 

Qtr 4

 

Qtr 1

 

Qtr 2

 

4 Qtrs

Earnings before income taxes

$

16,737

 

12,707

 

9,069

 

(113,300)

 

(74,787)

Add/(deduct)

 

 

 

 

 

 

 

 

 

 

 

LIFO charge

 

7,085

 

4,503

 

181

 

420

 

12,189

 

Depreciation and amortization

 

10,738

 

8,016

 

8,204

 

8,382

 

35,340

 

Interest expense

 

7,014

 

7,066

 

5,138

 

5,460

 

24,678

 

Goodwill impairment

 

-

 

-

 

-

 

131,991

 

131,991

 

Gain on the acquisition of a business

 

-

 

-

 

-

 

(6,639)

 

(6,639)

 

Closed store lease costs

 

24

 

124

 

-

 

(33)

 

115

 

Asset impairment

 

13

 

191

 

62

 

-

 

266

 

Net loss (gain) on sale of real estate and other assets

 

(106)

 

41

 

(476)

 

89

 

(452)

 

Stock compensation

 

1,761

 

1,137

 

1,094

 

546

 

4,538

 

Subsequent cash payments on non-cash charges

 

(650)

 

(369)

 

(442)

 

(729)

 

(2,190)

Total Consolidated EBITDA

$

42,616

 

33,416

 

22,830

 

26,187

 

125,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2011

 

2012

 

2012

 

Rolling

Segment Consolidated EBITDA

Qtr 3

 

Qtr 4

 

Qtr 1

 

Qtr 2

 

4 Qtrs

 

Military

$

21,348

 

17,061

 

13,400

 

11,797

 

63,606

 

Food Distribution

 

15,907

 

10,747

 

6,539

 

9,419

 

42,612

 

Retail

 

5,361

 

5,608

 

2,891

 

4,971

 

18,831

 

 

$

42,616

 

33,416

 

22,830

 

26,187

 

125,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2011

 

2012

 

2012

 

Rolling

Segment profit

Qtr 3

 

Qtr 4

 

Qtr 1

 

Qtr 2

 

4 Qtrs

 

Military

$

14,666

 

12,314

 

10,474

 

8,570

 

46,024

 

Food Distribution

 

6,177

 

4,014

 

2,338

 

5,517

 

18,046

 

Retail

 

1,790

 

2,668

 

661

 

2,390

 

7,509

 

Unallocated:

 

 

 

 

 

 

 

 

 

 

 

   Interest

 

(5,896)

 

(6,289)

 

(4,404)

 

(4,425)

 

(21,014)

 

   Gain on the acquisition of a business

 

-

 

-

 

-

 

6,639

 

6,639

 

   Goodwill impairment

 

-

 

-

 

-

 

(131,991)

 

(131,991)

 

 

$

16,737

 

12,707

 

9,069

 

(113,300)

 

(74,787)

                       

 

 

11