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Exhibit 99.1

 

LOGO

 

For Immediate Release   
Investor Contact: Dave Staples    Media Contact: Meredith Gremel
Executive Vice President & CFO    Director Corporate Affairs
(616) 878-8793    (616) 878-2830

SpartanNash Announces First Quarter Fiscal Year 2014 Financial Results

Consolidated Net Sales of $2.3 Billion

Comparable Store Sales Increased 2.5%

GRAND RAPIDS, MICHIGAN – May 21, 2014 – 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.

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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)

 

     April 19,
2014
    December 28,
2013
    April 27,
2013
 

Assets

      

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,
2014
    April 27,
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,
2014
    April 27,
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
from
continuing
operations
     Earnings
per
diluted
share
     Earnings
from
continuing
operations
     Earnings
per
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)

 

     April 19, 2014     December 28, 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.