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8-K - FORM 8-K - NASH FINCH COform8k.htm

Exhibit 99.1

             

              


Nash Finch Reports Third Quarter 2013 Results

Total Company Sales Increased 3.5%

Adjusted EBITDA1 of $31.9 million and Adjusted EPS2 of $0.66 are in line with Company’s Expectations


MINNEAPOLIS (November 12, 2013) — Nash Finch Company (NASDAQ: NAFC), one of the leading food distribution companies in the United States, today announced financial results for the sixteen weeks (third quarter) ended October 5, 2013.


Financial Results

Total Company sales for the third quarter 2013 were $1.56 billion compared to $1.51 billion in the prior-year quarter, an increase of 3.5%.  The increase was primarily attributable to sales to new customers in our Food Distribution segment.  The increase in Food Distribution sales was partially offset by a reduction in Military segment sales resulting from the impacts of sequestration and the government shutdown which occurred during our third quarter.  The closure of commissaries caused by the government sequestration and shutdown reduced Military segment sales by approximately $60.2 million in the third quarter.  


Adjusted Consolidated EBITDA1 was $31.9 million or 2.0% of sales in the third quarter of 2013 as compared to $43.7 million or 2.9% of sales in the third quarter of 2012.  Consolidated EBITDA3 was adjusted to exclude the impact of significant items of $0.4 million and $4.0 million in the third quarters of 2013 and 2012, respectively.  Including the impact of significant items, Consolidated EBITDA for the third quarter 2013 was $31.5 million or 2.0% of sales as compared to $39.7 million or 2.6% of sales in the prior year quarter. The year over year comparisons were negatively impacted by $8.6 million due to the reversal of year-to-date incentive compensation accruals that occurred in the third quarter of 2012.


"We continued to experience solid sales performance across all of our business segments in the third quarter. Excluding the impact of the government sequestration and shutdown, our total company sales growth would have been over 7%”, said Alec Covington, President and CEO of Nash Finch. “The third quarter Consolidated EBITDA and EPS comparisons to the prior year came in right where we expected; the comparisons were negatively skewed by the reversal of year-to-date incentive compensation accruals last year.”


Adjusted Net Earnings4 were $8.7 million or $0.66 per diluted share in the third quarter 2013 as compared to $18.0 million or $1.38 per diluted share in the third quarter 2012.  Net earnings were adjusted to exclude the impact of significant items totaling $2.7 million or $0.20 per diluted share in 2013 and $3.3 million or $0.26 per diluted share in 2012.  Including the impact of significant items, our reported net earnings for the third quarter of 2013 were $6.0 million or $0.46 per diluted share as compared to $14.6 million or $1.12 per diluted share in 2012.  




1




 


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


 

 

 

 

 

(dollars in millions except per share amounts)

3rd Quarter

Fiscal

 

2013

2012

2013

2012

Significant items

 

 

 

 

Transaction costs related to acquisitions

 $           -   

           (0.6)

              -   

           (1.9)

Restructuring costs

           (0.2)

              -   

           (1.3)

              -   

Military distribution center conversion and transition costs

              -   

           (3.4)

              -   

           (4.8)

Casualty insurance claim losses

              -   

              -   

           (2.1)

              -   

Retail store closing costs

           (0.2)

              -   

           (0.2)

              -   

Gain on early termination of supply agreement

              -   

              -   

            2.6 

              -   

Significant charges impacting Consolidated EBITDA

 $       (0.4)

          (4.0)

          (1.0)

          (6.7)

 

 

 

 

 

LIFO charges

            1.3 

           (1.4)

            2.3 

           (2.0)

Gain on acquisition of business

              -   

              -   

              -   

            6.6 

Merger related costs

           (2.5)

              -   

           (2.8)

              -   

Military distribution center non-cash pre-opening expense

              -   

              -   

              -   

           (0.1)

Losses due to governemnt shutdown and sequestration

           (2.8)

              -   

           (2.8)

              -   

Goodwill impairment

              -   

              -   

              -   

       (132.0)

Total significant charges impacting earnings before tax

 $       (4.4)

          (5.4)

          (4.3)

     (134.2)

Income tax on significant net charges

            1.7 

            2.1 

            1.7 

            3.5 

Tax on goodwill impairment and acquisition gain

              -   

              -   

              -   

          32.6 

Total significant charges impacting net earnings

 $       (2.7)

          (3.3)

          (2.6)

        (98.1)

 

 

 

 

 

Diluted earnings per share impact from significant items

         (0.20)

         (0.26)

         (0.20)

         (7.55)

Diluted earnings per share, as reported

          0.46 

          1.12 

          1.30 

         (5.01)

Diluted earnings per share, as adjusted

 $       0.66 

          1.38 

          1.50 

          2.54 

 

 

 

 

 

Consolidated EBITDA, as reported

          31.5 

          39.7 

          76.4 

          88.7 

Consolidated EBITDA impact from significant items

           (0.4)

           (4.0)

           (1.0)

           (6.7)

Consolidated EBITDA, as adjusted

 $      31.9 

 $      43.7 

 $      77.4 

 $      95.4 

 

 

 

 

 




2




 



Military Distribution Results

(dollars in millions)

3rd Quarter

% Change

Fiscal

% Change

 

2013

2012

2013

2012

Net Sales

$  

665.5

712.1

(6.5%)

       1,735.1

       1,772.6

(2.1%)

Segment EBITDA3

 

             10.5

             13.7

(22.8%)

             25.5

             38.9

(34.4%)

Percentage of Sales

 

1.6%

1.9%

 

1.5%

2.2%

 


The Military segment net sales decreased 6.5% to $665.5 million in the third quarter compared to the prior year.  The Military segment EBITDA was $10.5 million or 1.6% of sales in the third quarter 2013 as compared to $13.7 million or 1.9% of sales in the third quarter 2012.  The decrease in Military sales was due to the effects of the government sequestration and shutdown which directly impacted the operation of the military commissaries.  The decrease in third quarter EBITDA relative to 2012 was partially due to the reversal of year-to-date incentive compensation accruals in the third quarter of 2012.

“Excluding the $60 million sales impact from the government shut down and sequestration, our third quarter Military sales would have been above the prior year by approximately 1.9%,” said Covington. “We are pleased that the commissaries are all back open for business and delivering the important commissary benefit upon which our military  heroes and their families have come to rely.  We look forward to being able to serve even more of our military heroes and their families once our perishable and frozen addition at our Landover facility is open early next year.   The combination of the expanded operations in Landover and leveraging our world-wide military distribution network should lead to additional growth in the military segment."

 

Food Distribution & Retail Results

 

(dollars in millions)

3rd Quarter

% Change

Fiscal

% Change

 

 

2013

2012

2013

2012

 

Sales

 

 

 

 

 

 

 

  Food Distribution

 $        656.4

           556.8

17.9%

        1,528.8

        1,431.2

6.8%

 

  Retail

           241.6

           242.2

(0.3%)

           598.5

           481.4

24.3%

 

     Total

 $        898.0

           799.0

12.4%

        2,127.3

        1,912.6

11.2%

 

Segment EBITDA3

 

 

 

 

 

 

 

  Food Distribution

 $          12.8

             14.8

(13.3%)

             28.0

             30.7

(8.8%)

 

  Retail

               8.1

             11.3

(28.1%)

             22.9

             19.2

19.3%

 

     Total

 $          20.9

             26.1

(19.7%)

             50.9

             49.9

2.0%

 

 

 

 

 

 

 

 

 

Percentage of Sales

 

 

 

 

 

 

 

  Food Distribution

2.0%

2.7%

 

1.8%

2.1%

 

 

  Retail

3.4%

4.7%

 

3.8%

4.0%

 

 

    Total

2.3%

3.3%

 

2.4%

2.6%

 

 

 

 

 

 

 

 

 


The combined Food Distribution and Retail segment sales increased 12.4% to $898.0 million in the third quarter of 2013 as compared to the prior year period.  The increase in Food Distribution sales was primarily attributable to shipments to new customers.

The combined Food Distribution and Retail segment EBITDA was $20.9 million or 2.3% of sales in the third quarter 2013 as compared to $26.1 million or 3.3% of sales in the third quarter 2012.   The decrease in third quarter EBITDA relative to 2012 was entirely due to the reversal of year-to-date incentive compensation accruals in the third quarter of 2012.

“I am extremely pleased with the sales performance of the Food Distribution and Retail segments during the third quarter,” said Covington. “We continue to look for creative ways to expand our portfolio of business and to work with new and existing retailers in the growth of their businesses.  We also added two new stores to our Retail store base during the third quarter with the acquisition of two very successful stores from existing customers.”  

Liquidity

Total debt at the end of the third quarter 2013 was $400.9 million as compared to $433.0 million at the end of the second quarter 2013. 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 third quarter 2013 was 4.05.  Availability on the Company’s revolving credit facility at the end of the quarter was $248.0 million.


Merger Update

On July 22, 2013, the Company announced that it had entered into a definitive merger agreement under which Nash Finch Company and Spartan Stores, Inc. will combine in an all-stock merger valued at approximately $1.3 billion, including existing net debt at each company.  A special meeting of shareholders is scheduled for November 18, 2013.  Upon closing, each share of the Company’s common stock will be converted into 1.2 shares of Spartan Stores 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.



3






  


1 References to Adjusted EBITDA or Adjusted Consolidated EBITDA are defined as EBITDA adjusted for any significant items.


2 Adjusted EPS is defined as earnings per share 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) and other items that management does not utilize in assessing operating performance, 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 Debt 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 third quarter 2013 results is scheduled at 9:00 a.m. CT (10:00 a.m. ET) on November 12, 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.”

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:




4






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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forty

 

Forty

 

 

 

 

Sixteen Weeks Ended

 

Weeks Ended

 

Weeks Ended

 

 

 

 

October 5

 

October 6

 

October 5

 

October 6

 

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

     1,563,428

 

     1,511,090

 

     3,862,421

 

     3,685,177 

Cost of sales

 

     1,436,044

 

     1,383,445

 

     3,542,619

 

     3,388,015 

 

Gross profit

 

        127,384

 

        127,645

 

        319,802

 

        297,162

 

Gross profit margin

 

8.1%

 

8.4%

 

8.3%

 

8.1%

 

 

 

 

 

 

 

 

 

 

 

Other costs and expenses:

 

 

 

 

 

 

 

 

 

 Selling, general and administrative

 

        100,146

 

          84,692

 

        247,480

 

        205,904 

 

 Gain on acquisition of a business

 

                  -   

 

                  -   

 

                  -   

 

           (6,639)

 

 Goodwill impairment

 

                  -   

 

                  -   

 

                  -   

 

        131,991 

 

 Depreciation and amortization

 

          11,910

 

          11,924

 

          29,480

 

          28,510 

 

 Interest expense

 

            5,614

 

            8,074

 

          15,571

 

          18,672 

 

 

Total other costs and expenses

 

        117,670

 

        104,690

 

        292,531

 

        378,438 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

            9,714

 

          22,955

 

          27,271

 

         (81,276)

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

            3,691

 

            8,351

 

          10,259

 

         (16,366)

 

Net earnings (loss)

$

            6,023

 

          14,604

 

          17,012

 

         (64,910)

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

              0.46

 

              1.13

 

              1.31

 

             (5.01)

 

Diluted

$

              0.46

 

              1.12

 

              1.30

 

             (5.01)

 

 

 

 

 

 

 

 

 

 

 

Declared dividends per common share

$

              0.18

 

              0.18

 

              0.54

 

              0.54 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

  outstanding and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

          12,992

 

          12,962

 

          12,996

 

          12,963 

 

Diluted

 

          13,132

 

          13,040

 

          13,093

 

          12,963 

 

 

 

 

 

 

 

 

 

 

 




6







NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

Consolidated Balance Sheets

 

 

 

 

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

October 5, 2013

 

December 29, 2012

Current assets:

 

 

 

 

 

 

Cash

 

$

                     1,203 

 

                      1,291 

 

Accounts and notes receivable, net

 

                 227,379 

 

                  239,925 

 

Inventories

 

 

                 436,140 

 

                  362,526 

 

Prepaid expenses and other

 

                   14,198 

 

                    18,569 

 

Deferred tax assets

 

                     4,378 

 

                      3,724 

 

 

Total current assets

 

                 683,298 

 

                  626,035 

 

 

 

 

 

 

 

 

Notes receivable, net

 

                   27,544 

 

                    21,360 

 

 

 

 

 

 

 

 

Property, plant and equipment:

 

                 752,935 

 

                  738,857 

 

Less accumulated depreciation and amortization

 

                (456,825)

 

                (436,572)

 

 

Net property, plant and equipment

 

                 296,110 

 

                  302,285 

 

 

 

 

 

 

 

 

Goodwill

 

 

                   28,590 

 

                    22,877 

Customer contracts and relationships, net

 

                     5,863 

 

                      6,649 

Investment in direct financing leases

 

                     1,796 

 

                      1,923 

Deferred tax asset, net

 

                   31,246 

 

                      2,780 

Other assets

 

 

                   19,237 

 

                    19,708 

 

 

Total assets

 

$

              1,093,684 

 

               1,003,617 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current maturities of long-term debt and capital lease obligations

$

                     4,550 

 

                      2,265 

 

Accounts payable

 

                 274,255 

 

                  247,392 

 

Accrued expenses

 

                   63,606 

 

                    52,326 

 

Income taxes payable

 

                     7,661 

 

                         429 

 

 

  Total current liabilities

 

                 350,072 

 

                  302,412 

 

 

 

 

 

 

 

 

Long-term debt

 

 

                 383,015 

 

                  356,251 

Capital lease obligations

 

                   13,328 

 

                    14,807 

Other liabilities

 

 

                   38,956 

 

                    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

 

                   23,026 

 

                    22,998 

 

Additional paid-in capital

 

                 114,762 

 

                  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

 

                 237,091 

 

                  227,161 

 

Treasury stock at cost; 1,500 and 1,525 shares, respectively

 

                  (50,861)

 

                  (51,706)

 

 

  Total stockholders' equity

 

                 308,313 

 

296,389 

 

 

  Total liabilities and stockholders' equity

$

              1,093,684 

 

1,003,617 

 

 

 

 

 

 

 

 



7







NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

 

Consolidated Statements of Cash Flows

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

40 Weeks Ended

 

 

 

 

 

 

October 5

 

October 6

 

 

 

 

 

 

2013

 

2012

Operating activities:

 

 

 

 

 

 

 Net earnings (loss)

 

$

           17,012 

 

         (64,910)

 

 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 Gain on acquisition of a business

 

 

                   -   

 

           (6,639)

 

 

 Depreciation and amortization

 

 

           29,480 

 

           28,510 

 

 

 Amortization of deferred financing costs

 

 

                844 

 

                962 

 

 

 Non-cash convertible debt interest

 

 

             1,363 

 

             4,736 

 

 

 Rebateable loans

 

 

             1,964 

 

             3,111 

 

 

 Provision for (recovery of) bad debts

 

 

                487 

 

              (274)

 

 

 Provision for (recovery of) lease reserves

 

 

                327 

 

                (33)

 

 

 Deferred income tax benefit

 

 

         (29,119)

 

         (32,783)

 

 

 Gain on sale of property, plant and equipment

 

 

              (111)

 

           (1,506)

 

 

 LIFO charge (credit)

 

 

           (2,265)

 

             2,040 

 

 

 Asset impairments

 

 

                   -   

 

                  62 

 

 

 Impairments of goodwill

 

 

                   -   

 

         131,991 

 

 

 Share-based compensation expense (reversal of)

 

 

             1,887 

 

           (1,295)

 

 

 Deferred compensation

 

 

                908 

 

                984 

 

 

 Other

 

 

              (149)

 

              (187)

 

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

 

 

 

 

 

 

 

 Accounts and notes receivable

 

 

           11,579 

 

         (10,541)

 

 

 Inventories

 

 

         (70,487)

 

         (70,609)

 

 

 Prepaid expenses

 

 

           (3,512)

 

           (1,051)

 

 

 Accounts payable

 

 

           11,984 

 

           33,450 

 

 

 Accrued expenses

 

 

           11,707 

 

         (14,182)

 

 

 Income taxes payable

 

 

           15,146 

 

             6,975 

 

 

 Other assets and liabilities

 

 

             3,203 

 

           (3,542)

 

 

 

Net cash provided by operating activities

 

 

             2,248 

 

             5,269 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 Proceeds from sale of assets

 

 

                589 

 

             8,690 

 

 

 Additions to property, plant and equipment

 

 

         (19,485)

 

         (23,736)

 

 

 Businesses acquired, net of cash

 

 

           (7,040)

 

         (78,259)

 

 

 Loans to customers

 

 

         (12,983)

 

           (8,715)

 

 

 Payments from customers on loans

 

 

             5,450 

 

             7,765 

 

 

 Corporate-owned life insurance, net

 

 

              (972)

 

              (837)

 

 

 Other

 

 

                   -   

 

              (151)

 

 

 

Net cash used in investing activities

 

 

         (34,441)

 

         (95,243)

Financing activities:

 

 

 

 

 

 

 

 Proceeds from revolving debt

 

 

         139,457 

 

           69,800 

 

 

 Dividends paid

 

 

           (6,637)

 

           (6,607)

 

 

 Proceeds from long-term debt

 

 

           39,533 

 

           18,702 

 

 

 Payments of long-term debt

 

 

       (151,365)

 

           (1,260)

 

 

 Payments of capitalized lease obligations

 

 

           (1,418)

 

           (1,924)

 

 

 Increase in outstanding checks

 

 

           13,126 

 

           13,204 

 

 

 Payments of deferred financing costs

 

 

              (253)

 

              (211)

 

 

 Tax benefit from share-based compensation

 

 

                   -   

 

                  66 

 

 

 Other

 

 

              (338)

 

           (1,373)

 

 

 

Net cash provided by financing activities

 

 

           32,105 

 

           90,397 

 

 

 

Net increase (decrease) in cash

 

 

                (88)

 

                423 

 

 

 

Cash at beginning of year

 

$

             1,291 

 

                773 

 

 

 

Cash at end of period

 

 

             1,203 

 

             1,196 

 

 

 

 

 

 

 

 

 



8







 

NASH FINCH COMPANY AND SUBSIDIARIES

 

 

 

 

Supplemental Data (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 5

 

October 6

 

Other Data (In thousands)

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 $           400,893  

 

             388,880  

 

 

Stockholders' equity

 $           308,313  

 

             329,709  

 

 

Capitalization

 $           709,206  

 

             718,589  

 

 

Debt to total capitalization

56.5% 

 

54.1% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Data

 

 

 

 

 

Consolidated EBITDA (a)

 $             98,955  

 

             122,154  

 

 

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

 4.05x  

 

 3.18x  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable GAAP Data

 

 

 

 

 

Debt to earnings before income taxes (b)

                 (30.49)

 

                 (5.67)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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) and other items that management does not utilize in assessing operating performance, 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, amount of Consolidated operating performance, cash flows or liquidity. The 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 October 5, 2013 and October 6, 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

 

2013

 

2013

 

2013

 

Rolling

 

 

 

 

 

 

 Qtr  4

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

$

       (40,418)

 

           2,966 

 

         14,591 

 

           9,714 

 

       (13,147)

 

Add/(deduct)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 LIFO charge

 

 

 

           1,285 

 

            (187)

 

            (827)

 

         (1,251)

 

            (980)

 

 

 Depreciation and amortization

 

 

           9,324 

 

           8,800 

 

           8,770 

 

         11,910 

 

         38,804

 

 

 Interest expense

 

 

 

           6,272 

 

           6,009 

 

           3,948 

 

           5,614 

 

         21,843

 

 

 Merger costs

 

 

 

 

 

                -   

 

              302 

 

           2,475 

 

           2,777

 

 

 Goodwill impairment

 

 

 

         34,639 

 

                -   

 

                -   

 

                -   

 

         34,639

 

 

 Closed store lease costs

 

 

 

              193 

 

                -   

 

              246 

 

                81 

 

              520

 

 

 Asset impairment

 

 

 

         13,066 

 

                -   

 

 

 

 

 

         13,066

 

 

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

 

 

              (16)

 

                80 

 

            (123)

 

              (68)

 

            (127)

 

 

 Stock compensation expense (reversal of)

 

 

         (1,151)

 

              499 

 

              663 

 

              725 

 

              736

 

 

 Losses associated with government shutdown/sequestration

                -   

 

                -   

 

 

 

           2,759 

 

           2,759

 

 

 Subsequent cash payments on non-cash charges

 

 

            (610)

 

            (472)

 

            (361)

 

            (492)

 

         (1,935)

 

Total Consolidated EBITDA

 

 

$

         22,584 

 

         17,695 

 

         27,209 

 

         31,467 

 

         98,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2013

 

2013

 

2013

 

 Rolling

 

Segment Consolidated EBITDA

 

 

 

 Qtr  4

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

 

Military

 

 

$

           8,783 

 

           7,909 

 

           7,037 

 

         10,542 

 

         34,271

 

 

Food Distribution

 

 

 

           6,159 

 

           3,216 

 

         12,006 

 

         12,802 

 

         34,183

 

 

Retail

 

 

 

           7,642 

 

           6,570 

 

           8,166 

 

           8,123 

 

         30,501

 

 

 

 

 

$

         22,584 

 

         17,695 

 

         27,209 

 

         31,467 

 

         98,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012 

 

2013 

 

2013

 

2013

 

 Rolling

 

Segment profit

 

 

 

 Qtr  4 

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

 

Military

 

 

$

           3,953 

 

           4,717 

 

           3,942 

 

           3,063 

 

         15,675

 

 

Food Distribution

 

 

 

         (8,691)

 

              147 

 

           9,048 

 

           8,032 

 

           8,536

 

 

Retail

 

 

 

           3,834 

 

           2,784 

 

           4,137 

 

           2,264 

 

         13,019

 

 

Unallocated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest

 

 

 

         (4,875)

 

         (4,682)

 

         (2,536)

 

         (3,645)

 

       (15,738)

 

 

    Goodwill Impairment

 

 

 

       (34,639)

 

                -   

 

                -   

 

                -   

 

       (34,639)

 

 

 

 

 

$

       (40,418)

 

           2,966 

 

         14,591 

 

           9,714 

 

       (13,147)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




10





 

FY

2012

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

2012

 

2012

 

Rolling

 

 

 

 

 

 

 Qtr  4

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

Earnings before income taxes

 

 

$

         12,707 

 

           9,069 

 

     (113,300)

 

         22,955 

 

       (68,569)

 

Add/(deduct)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 LIFO charge

 

 

 

           4,503 

 

              181 

 

              420 

 

           1,438 

 

           6,542 

 

 

 Depreciation and amortization

 

 

           8,016 

 

           8,204 

 

           8,382 

 

         11,924 

 

         36,526 

 

 

 Interest expense

 

 

 

           7,066 

 

           5,138 

 

           5,460 

 

           8,074 

 

         25,738 

 

 

 Goodwill impairment

 

 

 

                -   

 

                -   

 

       131,991 

 

                -   

 

       131,991 

 

 

 Gain on the acquisition of a business

 

 

                -   

 

                -   

 

         (6,639)

 

                -   

 

         (6,639)

 

 

 Closed store lease costs

 

 

 

              124 

 

                -   

 

              (33)

 

                -   

 

                91 

 

 

 Asset impairment

 

 

 

              191 

 

                62 

 

                -   

 

                -   

 

              253 

 

 

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

 

 

                41 

 

            (476)

 

                89 

 

         (1,119)

 

         (1,465)

 

 

 Stock compensation

 

 

 

           1,137 

 

           1,094 

 

              546 

 

         (2,935)

 

            (158)

 

 

 Subsequent cash payments on non-cash charges

 

 

            (369)

 

            (442)

 

            (729)

 

            (616)

 

         (2,156)

 

Total Consolidated EBITDA

 

 

$

33,416 

 

22,830 

 

26,187 

 

         39,721 

 

122,154 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

2012

 

2012

 

 Rolling

 

Segment Consolidated EBITDA

 

 Qtr  4

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

 

Military

 

 

$

         17,061 

 

         13,400 

 

         11,797 

 

         13,661 

 

55,919 

 

 

Food Distribution

 

 

 

         10,747 

 

           6,539 

 

           9,419 

 

         14,764 

 

41,469 

 

 

Retail

 

 

 

           5,608 

 

           2,891 

 

           4,971 

 

         11,296 

 

24,766 

 

 

 

 

 

$

33,416 

 

22,830 

 

26,187 

 

         39,721 

 

122,154 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

2012

 

2012

 

Rolling

 

Segment profit

 

 Qtr  4

 

 Qtr  1

 

 Qtr  2

 

 Qtr  3

 

 4 Qtrs

 

 

Military

 

 

$

         12,314 

 

         10,474 

 

           8,570 

 

         10,322 

 

41,680 

 

 

Food Distribution

 

 

 

           4,014 

 

           2,338 

 

           5,517 

 

         11,191 

 

23,060 

 

 

Retail

 

 

 

           2,668 

 

              661 

 

           2,390 

 

           7,725 

 

13,444 

 

 

Unallocated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest

 

 

 

         (6,289)

 

         (4,404)

 

         (4,425)

 

         (6,283)

 

(21,401)

 

 

   Gain on the acquisition of a business

 

 

                -   

 

                -   

 

           6,639 

 

                -   

 

           6,639 

 

 

    Goodwill impairment

 

 

 

                -   

 

                -   

 

     (131,991)

 

                -   

 

     (131,991)

 

 

 

 

 

$

12,707 

 

9,069 

 

(113,300)

 

22,955 

 

(68,569)

 

 

 

 

 

 

 

 

 

 

 

 

 

 





11