Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

SpartanNash Announces Third Quarter Fiscal 2021 Financial Results


SpartanNash Company (the "Company") (Nasdaq: SPTN) today reported financial results for its 12-week third quarter ended Oct. 9, 2021.

Third Quarter Fiscal 2021 Highlights

"We are proud of these solid third-quarter results, and we are appreciative of our frontline associates who continue to execute on a daily basis through industry-wide labor, inflation and supply chain challenges," said SpartanNash President and CEO Tony Sarsam. "Across our organization, we have shown great resolve and discipline, helping to deliver strong performance and allowing for us to once again raise our full-year earnings outlook."

Sarsam continued, "To position ourselves for continued success, we are doubling down on our People First culture and remaining keenly focused on operational excellence. With the upfront investments we are making with our supply chain transformation initiative, we will become better positioned for sustainable and profitable growth over the long term."

Consolidated Financial Results

Consolidated net sales for the third quarter increased $12.4 million, or 0.6%, to $2.07 billion from $2.06 billion in the prior year quarter. The increase was due to continued growth with certain existing Food Distribution customers and an increase in comparable store sales within the Retail segment, partially offset by lower sales within the Military segment.

Gross profit for the third quarter was $329.5 million, or 15.9% of net sales, compared to $324.8 million, or 15.8% of net sales, in the prior year quarter. Gross profit rate growth was driven by inflation within the Food Distribution and Military segments, partially offset by LIFO expense, as well as an increase in the proportion of margin accretive Retail and Food Distribution segment sales.

Reported operating expenses for the third quarter were $306.8 million, or 14.8% of net sales, compared to $295.8 million, or 14.4% of net sales, in the prior year quarter. The increase in expenses as a rate of sales compared to the prior year quarter was due primarily to higher labor and transportation costs across the supply chain network, related to the ongoing tight labor conditions, and higher corporate administrative costs. These increases in expense rates were partially offset by lower restructuring and asset impairment charges compared to the prior year quarter.

The Company reported operating earnings of $22.7 million, compared to $29.0 million in the prior year quarter, due to the changes in net sales, gross profit and operating expenses discussed above. Adjusted operating earnings(1) were $22.9 million compared to $35.8 million in the prior year quarter, and were adjusted for the items detailed in Table 3.

Interest expense decreased $0.5 million from the prior year quarter due to the Company's paydown of long-term debt resulting from free cash flow(4) over the past year.

The Company reported net earnings of $15.2 million, or $0.42 per diluted share, compared to $20.0 million, or $0.56 per diluted share in the prior year quarter. The decline reflects the operating earnings and non-operating expense changes noted above. Adjusted earnings from continuing operations(2) for the third quarter were $15.3 million, or $0.43 per diluted share, compared to $25.1 million, or $0.70 per diluted share in the prior year quarter. A reconciliation of net earnings to adjusted earnings from continuing operations is included in Table 4.

Adjusted EBITDA(3) decreased $5.5 million to $51.5 million, compared to $57.0 million in the prior year quarter, due to the changes in adjusted operating earnings mentioned above. In addition, the increase in LIFO expense impacted the relationship between adjusted operating earnings and adjusted EBITDA(3) for the quarter.

Please see the financial tables at the end of this press release for a reconciliation of each non-GAAP financial measure to the most directly comparable measure, prepared and presented in accordance with GAAP.

Segment Financial Results

Food Distribution

Net sales for Food Distribution increased $19.1 million, or 1.9%, to $1.03 billion from $1.01 billion in the prior year quarter. The increase in net sales was due to continued growth with certain existing Food Distribution customers and the favorable impact of inflation. Net sales increased $92.3 million, or 9.8%, over the third quarter of 2019.

Reported operating earnings for Food Distribution were $10.0 million, compared to $9.2 million in the prior year quarter. During the prior year quarter, the Company made the decision to abandon a tradename within this segment, resulting in an impairment of the associated indefinite-lived tradename asset. The increase in reported operating earnings for Food Distribution compared to the prior year was due to cycling this asset impairment charge, as well as increased earnings due to the growth in net sales and gross profit rate, mostly offset by increases in supply chain expenses. The growth in the gross profit rate was driven primarily by an increase in average sales price due to inflation, partially offset by an increase in LIFO expense. Adjusted operating earnings(1) were $10.1 million, compared to $15.7 million in the prior year quarter. Adjusted operating earnings exclude asset impairment and restructuring charges in both the current and prior year quarters.

Retail

Net sales for Retail increased $12.1 million, or 2.0%, to $608.7 million from $596.6 million in the prior year quarter, primarily due to increases in comparable store sales and fuel sales in the current year, partially offset by store closures. Retail comparable store sales grew by 3.1% for the quarter and grew by 13.5% on a two-year comparable basis.

Reported operating earnings for Retail were $16.8 million, compared to $22.3 million in the prior year quarter. The decrease in reported operating earnings was due to lower gross margin rates driven by lower fuel margins, cycling favorable prior year inventory shrink, and reduced vendor promotional activity in the current year. These unfavorable variances were partially offset by the increase in net sales. Adjusted operating earnings(1) were $17.1 million, compared to $22.6 million in the prior year quarter. Adjusted operating earnings exclude asset impairment and restructuring charges and acquisition and integration charges in both the current and prior year quarters.

Military

Net sales for Military decreased $18.8 million, or 4.1%, to $433.2 million from $452.0 million in the prior year quarter. The decrease was primarily related to a reduction in export sales as a result of cycling the prior year quarter's increased consumer demand, coupled with supply chain challenges at international shipping ports in the current year quarter, in addition to the continuation of lower volumes at domestic commissaries. Net sales decreased $66.0 million, or 13.2% from the third quarter of 2019.

The reported operating loss for Military was $4.0 million, compared to $2.5 million in the prior year quarter. The increase in the reported operating loss was due to the decrease in net sales and higher rate of supply chain expense, partially offset by improvements in gross margin rates. Gross margin rates increased due to inflation and were partially offset by higher LIFO expense. The adjusted operating loss(1) in the Military segment was $4.4 million compared to a $2.5 million loss in the prior year. Adjusted operating earnings exclude asset impairment and restructuring gains in the current year quarter.

Balance Sheet and Cash Flow

Cash flows provided by operating activities for the year-to-date period were $144.0 million compared to $223.8 million in the prior year. In the prior year, significant increases in sales volume related to the COVID-19 pandemic resulted in a reduction in working capital and incremental earnings, which benefited operating cash flows. The Company reduced net long-term debt(5) by $87.0 million for the year-to-date period, which resulted in an improvement in the Company's net long-term debt to adjusted EBITDA ratio over this period from 2.0x to 1.7x.

Capital expenditures and IT capital(6) totaled $61.9 million in the year-to-date period compared to $53.5 million in the prior year.

Through the third quarter, the Company declared $21.6 million in cash dividends, equal to $0.20 per common share.

Outlook

Based on year-to-date performance and our expectations for the remainder of the year, the Company is updating its full-year guidance for 2021, initially provided on Feb. 24, 2021, and last updated on Aug. 18, 2021:

 

Previous Full Year 2021 Outlook

 

Updated Full Year 2021 Outlook

 

Low

 

High

 

Low

 

High

Total net sales (millions)

$

8,800

 

$

9,000

 

$

8,800

 

$

9,000

Segment sales % decline

 

 

 

 

 

 

 

 

 

 

 

Retail comp sales

 

(5.0%)

 

 

(2.0%)

 

 

(2.0%)

 

 

(1.0%)

Food Distribution sales

 

(3.0%)

 

 

(1.0%)

 

 

(3.0%)

 

 

(1.0%)

Military sales

 

(13.0%)

 

 

(9.0%)

 

 

(13.0%)

 

 

(9.0%)

Adjusted EBITDA(3) (millions)

$

200

 

$

210

 

$

205

 

$

210

Adjusted EPS(7)

$

1.70

 

$

1.80

 

$

1.70

 

$

1.80

Reported EPS

$

1.56

 

$

1.69

 

$

1.61

 

$

1.71

Capital expenditures and IT capital(6) (thousands)

$

80,000

 

$

90,000

 

$

80,000

 

$

90,000

Depreciation and amortization (thousands)

$

90,000

 

$

100,000

 

$

90,000

 

$

100,000

Interest expense (thousands)

$

14,000

 

$

15,000

 

$

14,000

 

$

15,000

Income tax rate

 

24.5%

 

 

25.5%

 

 

24.5%

 

 

25.5%

Conference Call

A telephone conference call to discuss the Company's third quarter financial results is scheduled for Thursday, Nov. 11, 2021, at 8 a.m. ET. A live webcast of this conference call will be available on the Company's website, www.spartannash.com/webcasts. Simply click on "For Investors" and follow the links to the live webcast. The webcast will remain available for replay on the Company's website for approximately 10 days.

About SpartanNash

SpartanNash (Nasdaq: SPTN) is a food solutions company that delivers the ingredients for a better life through customer-focused innovation. Its core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges; as well as operating a premier fresh produce distribution network and the Our Family® private label brand. SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar and Djibouti. The company owns 146 supermarkets-primarily under the banners of Family Fare, Martin's Super Markets, D&W Fresh Market, VG's Grocery and Dan's Supermarket-and shares its operational insights to drive solutions for SpartanNash food retail customers. Committed to fostering a People First culture, the SpartanNash family of Associates is 19,000 strong and growing. For more information, visit spartannash.com.

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 preceded by, followed by or that otherwise include the words "outlook," "believe," "anticipates," "continue," "expects," "guidance," "trend," "on track," "encouraged" or "plan" or similar expressions. The statements in the "Outlook" section of this press release are inherently forward looking. 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 Company, and actual results may vary materially from the results and expectations discussed. Additional risks and uncertainties include, but are not limited to, disruption associated with the COVID-19 pandemic and the Company's ability to compete in the highly competitive grocery distribution, retail grocery, and military distribution industries. Additional information concerning these and other risks is contained in SpartanNash's most recently filed Annual Report on Form 10-K, recent Current Reports on Form 8-K and other SEC filings. All subsequent written and oral forward-looking statements concerning SpartanNash, 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.

(1) A reconciliation of operating earnings to adjusted operating earnings, a non-GAAP financial measure, is provided in Table 3 below.

(2) A reconciliation of net earnings to adjusted earnings from continuing operations, a non-GAAP financial measure, is provided in Table 4 below.

(3) A reconciliation of net earnings to Adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2 below.

(4) A reconciliation of net cash provided by operating activities to free cash flow, a non-GAAP financial measure, is provided in Table 6 below.

(5) A reconciliation of long-term debt and finance lease obligations to net long-term debt, a non-GAAP financial measure, is provided in Table 5 below.

(6) A reconciliation of purchases of property and equipment to capital expenditures and IT capital, a non-GAAP financial measure, is provided in Table 7 below.

(7) A reconciliation of projected earnings per share from continuing operations to adjusted earnings per share from continuing operations, a non-GAAP financial measure, is provided in Table 8 below.

SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

 

October 9,

 

 

October 3,

 

 

October 9,

 

 

October 3,

 

(In thousands, except per share amounts)

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales

$

2,073,253

 

 

$

2,060,816

 

 

$

6,837,612

 

 

$

7,101,373

 

Cost of sales

 

1,743,769

 

 

 

1,735,994

 

 

 

5,756,471

 

 

 

6,014,610

 

Gross profit

 

329,484

 

 

 

324,822

 

 

 

1,081,141

 

 

 

1,086,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and (income)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

306,847

 

 

 

289,039

 

 

 

999,032

 

 

 

981,066

 

Acquisition and integration

 

101

 

 

 

242

 

 

 

281

 

 

 

242

 

Restructuring and asset impairment, net

 

(195

)

 

 

6,543

 

 

 

2,981

 

 

 

20,455

 

Total operating expenses, net

 

306,753

 

 

 

295,824

 

 

 

1,002,294

 

 

 

1,001,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

22,731

 

 

 

28,998

 

 

 

78,847

 

 

 

85,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses and (income)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

3,020

 

 

 

3,522

 

 

 

10,877

 

 

 

14,810

 

Other, net

 

(16

)

 

 

(40

)

 

 

(293

)

 

 

(1,144

)

Total other expenses, net

 

3,004

 

 

 

3,482

 

 

 

10,584

 

 

 

13,666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

19,727

 

 

 

25,516

 

 

 

68,263

 

 

 

71,334

 

Income tax expense

 

4,551

 

 

 

5,564

 

 

 

16,757

 

 

 

7,513

 

Net earnings

$

15,176

 

 

$

19,952

 

 

$

51,506

 

 

$

63,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net earnings per share:

$

0.43

 

 

$

0.56

 

 

$

1.44

 

 

$

1.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net earnings per share:

$

0.42

 

 

$

0.56

 

 

$

1.44

 

 

$

1.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

35,525

 

 

 

35,730

 

 

 

35,671

 

 

 

35,900

 

Diluted

 

35,816

 

 

 

35,732

 

 

 

35,871

 

 

 

35,900

 

SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

 

 

October 9,

 

 

January 2,

 

(In thousands)

2021

 

 

2021

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

24,645

 

 

$

19,903

 

Accounts and notes receivable, net

 

372,029

 

 

 

357,564

 

Inventories, net

 

550,240

 

 

 

541,785

 

Prepaid expenses and other current assets

 

60,316

 

 

 

72,229

 

Property and equipment held for sale

 

?

 

 

 

23,259

 

Total current assets

 

1,007,230

 

 

 

1,014,740

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

559,239

 

 

 

577,059

 

Goodwill

 

181,035

 

 

 

181,035

 

Intangible assets, net

 

112,132

 

 

 

116,142

 

Operating lease assets

 

285,580

 

 

 

289,173

 

Other assets, net

 

97,464

 

 

 

99,242

 

 

 

 

 

 

 

 

 

Total assets

$

2,242,680

 

 

$

2,277,391

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

$

490,604

 

 

$

464,784

 

Accrued payroll and benefits

 

98,897

 

 

 

113,789

 

Other accrued expenses

 

59,817

 

 

 

60,060

 

Current portion of operating lease liabilities

 

47,047

 

 

 

45,786

 

Current portion of long-term debt and finance lease liabilities

 

5,680

 

 

 

5,135

 

Total current liabilities

 

702,045

 

 

 

689,554

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

Deferred income taxes

 

53,699

 

 

 

45,728

 

Operating lease liabilities

 

271,969

 

 

 

278,859

 

Other long-term liabilities

 

50,936

 

 

 

46,892

 

Long-term debt and finance lease liabilities

 

398,465

 

 

 

481,309

 

Total long-term liabilities

 

775,069

 

 

 

852,788

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

Common stock, voting, no par value; 100,000 shares authorized; 35,944 and 35,851 shares outstanding

 

492,306

 

 

 

491,819

 

Preferred stock, no par value, 10,000 shares authorized; no shares outstanding

 

?

 

 

 

?

 

Accumulated other comprehensive loss

 

(2,132

)

 

 

(2,276

)

Retained earnings

 

275,392

 

 

 

245,506

 

Total shareholders' equity

 

765,566

 

 

 

735,049

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

2,242,680

 

 

$

2,277,391

 

SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

Cash flow activities

 

 

 

 

 

 

 

Net cash provided by operating activities

$

143,953

 

 

$

223,832

 

Net cash used in investing activities

 

(24,051

)

 

 

(35,536

)

Net cash used in financing activities

 

(115,160

)

 

 

(185,565

)

Net increase in cash and cash equivalents

 

4,742

 

 

 

2,731

 

Cash and cash equivalents at beginning of the period

 

19,903

 

 

 

24,172

 

Cash and cash equivalents at end of the period

$

24,645

 

 

$

26,903

 

SPARTANNASH COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
Table 1: Net Sales and Operating Earnings (Loss) by Segment
(Unaudited)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

 

October 9, 2021

 

 

October 3, 2020

 

Food Distribution Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

1,031,315

 

 

49.7

%

 

$

1,012,204

 

 

49.1

%

 

$

3,421,923

 

 

50.0

%

 

$

3,471,561

 

 

48.9

%

Operating earnings

 

9,969

 

 

 

 

 

 

9,191

 

 

 

 

 

 

47,793

 

 

 

 

 

 

34,990

 

 

 

 

Retail Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

608,737

 

 

29.4

%

 

 

596,659

 

 

29.0

%

 

 

1,968,158

 

 

28.8

%

 

 

2,010,483

 

 

28.3

%

Operating earnings

 

16,802

 

 

 

 

 

 

22,318

 

 

 

 

 

 

43,705

 

 

 

 

 

 

59,416

 

 

 

 

Military Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

433,201

 

 

20.9

%

 

 

451,953

 

 

21.9

%

 

 

1,447,531

 

 

21.2

%

 

 

1,619,329

 

 

22.8

%

Operating loss

 

(4,040

)

 

 

 

 

 

(2,511

)

 

 

 

 

 

(12,651

)

 

 

 

 

 

(9,406

)

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

2,073,253

 

 

100.0

%

 

$

2,060,816

 

 

100.0

%

 

$

6,837,612

 

 

100.0

%

 

$

7,101,373

 

 

100.0

%

Operating earnings

 

22,731

 

 

 

 

 

 

28,998

 

 

 

 

 

 

78,847

 

 

 

 

 

 

85,000

 

 

 

 

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding adjusted operating earnings, adjusted earnings from continuing operations, and adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company's performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude organizational realignment and severance associated with cost reduction initiatives. Organizational realignment includes benefits for associates terminated as part of a leadership transition plan which do not meet the definition of a reduction-in-force. Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude "Fresh Cut operating losses" subsequent to the decision to exit these operations, severance associated with cost reduction initiatives, and fees paid to a third-party advisory firm associated with Project One Team, the Company's initiative to drive growth while increasing efficiency and reducing costs. Pension termination income related to a refund from the annuity provider associated with the final reconciliation of participant data is excluded from adjusted earnings from continuing operations. Each of these items are considered "non-operational" or "non-core" in nature.

Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

 

October 9, 2021

 

 

October 3, 2020

 

Net earnings

$

15,176

 

 

$

19,952

 

 

$

51,506

 

 

$

63,821

 

Income tax expense

 

4,551

 

 

 

5,564

 

 

 

16,757

 

 

 

7,513

 

Other expenses, net

 

3,004

 

 

 

3,482

 

 

 

10,584

 

 

 

13,666

 

Operating earnings

 

22,731

 

 

 

28,998

 

 

 

78,847

 

 

 

85,000

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

5,887

 

 

 

387

 

 

 

10,444

 

 

 

3,158

 

Depreciation and amortization

 

21,763

 

 

 

20,858

 

 

 

71,260

 

 

 

68,611

 

Acquisition and integration

 

101

 

 

 

242

 

 

 

281

 

 

 

242

 

Restructuring and asset impairment, net

 

(195

)

 

 

6,543

 

 

 

2,981

 

 

 

20,455

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

493

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

589

 

 

 

?

 

Severance associated with cost reduction initiatives

 

239

 

 

 

40

 

 

 

377

 

 

 

5,121

 

Stock-based compensation

 

920

 

 

 

1,033

 

 

 

6,084

 

 

 

5,181

 

Stock warrant

 

403

 

 

 

?

 

 

 

1,478

 

 

 

?

 

Non-cash rent

 

(994

)

 

 

(1,188

)

 

 

(2,980

)

 

 

(3,981

)

Fresh Cut operating losses

 

?

 

 

 

?

 

 

 

?

 

 

 

2,262

 

Loss (gain) on disposal of assets

 

49

 

 

 

35

 

 

 

(213

)

 

 

3,462

 

Other non-cash charges

 

570

 

 

 

94

 

 

 

1,528

 

 

 

193

 

Adjusted EBITDA

$

51,474

 

 

$

57,042

 

 

$

170,676

 

 

$

190,197

 

Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, continued
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

 

October 9, 2021

 

 

October 3, 2020

 

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

9,969

 

 

$

9,191

 

 

$

47,793

 

 

$

34,990

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

3,760

 

 

 

295

 

 

 

6,180

 

 

 

1,684

 

Depreciation and amortization

 

7,954

 

 

 

7,413

 

 

 

25,348

 

 

 

24,561

 

Restructuring and asset impairment, net

 

36

 

 

 

6,538

 

 

 

799

 

 

 

19,222

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

265

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

287

 

 

 

?

 

Severance associated with cost reduction initiatives

 

143

 

 

 

?

 

 

 

246

 

 

 

3,143

 

Stock-based compensation

 

407

 

 

 

522

 

 

 

2,772

 

 

 

2,524

 

Stock warrant

 

403

 

 

 

?

 

 

 

1,478

 

 

 

?

 

Non-cash rent

 

208

 

 

 

31

 

 

 

1,125

 

 

 

125

 

Fresh Cut operating losses

 

?

 

 

 

?

 

 

 

?

 

 

 

2,262

 

Loss (gain) on disposal of assets

 

4

 

 

 

(6

)

 

 

(95

)

 

 

1,613

 

Other non-cash charges

 

364

 

 

 

52

 

 

 

881

 

 

 

103

 

Adjusted EBITDA

$

23,248

 

 

$

24,036

 

 

$

86,814

 

 

$

90,492

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

16,802

 

 

$

22,318

 

 

$

43,705

 

 

$

59,416

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

690

 

 

 

(15

)

 

 

1,582

 

 

 

586

 

Depreciation and amortization

 

10,633

 

 

 

10,489

 

 

 

35,559

 

 

 

34,570

 

Acquisition and integration

 

101

 

 

 

242

 

 

 

281

 

 

 

242

 

Restructuring and asset impairment, net

 

137

 

 

 

5

 

 

 

2,550

 

 

 

1,233

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

164

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

215

 

 

 

?

 

Severance associated with cost reduction initiatives

 

69

 

 

 

9

 

 

 

98

 

 

 

1,441

 

Stock-based compensation

 

371

 

 

 

364

 

 

 

2,241

 

 

 

1,756

 

Non-cash rent

 

(1,116

)

 

 

(1,134

)

 

 

(3,813

)

 

 

(3,818

)

Loss (gain) on disposal of assets

 

24

 

 

 

34

 

 

 

(101

)

 

 

1,905

 

Other non-cash charges

 

147

 

 

 

30

 

 

 

461

 

 

 

64

 

Adjusted EBITDA

$

27,858

 

 

$

32,342

 

 

$

82,778

 

 

$

97,559

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(4,040

)

 

$

(2,511

)

 

$

(12,651

)

 

$

(9,406

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

1,437

 

 

 

107

 

 

 

2,682

 

 

 

888

 

Depreciation and amortization

 

3,176

 

 

 

2,956

 

 

 

10,353

 

 

 

9,480

 

Restructuring and asset impairment, gain

 

(368

)

 

 

?

 

 

 

(368

)

 

 

?

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

64

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

87

 

 

 

?

 

Severance associated with cost reduction initiatives

 

27

 

 

 

31

 

 

 

33

 

 

 

537

 

Stock-based compensation

 

142

 

 

 

147

 

 

 

1,071

 

 

 

901

 

Non-cash rent

 

(86

)

 

 

(85

)

 

 

(292

)

 

 

(288

)

Loss (gain) on disposal of assets

 

21

 

 

 

7

 

 

 

(17

)

 

 

(56

)

Other non-cash charges

 

59

 

 

 

12

 

 

 

186

 

 

 

26

 

Adjusted EBITDA

$

368

 

 

$

664

 

 

$

1,084

 

 

$

2,146

 

Notes: Adjusted EBITDA is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including share-based payments (equity awards measured in accordance with ASC 718, Stock Compensation, which include both stock-based compensation to employees and stock warrants issued to non-employees) and the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company's definitions of adjusted EBITDA and adjusted EBITDA by segment 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)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

 

October 9, 2021

 

 

October 3, 2020

Operating earnings

$

22,731

 

 

$

28,998

 

 

$

78,847

 

 

$

85,000

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration

 

101

 

 

 

242

 

 

 

281

 

 

 

242

 

Restructuring and asset impairment, net

 

(195

)

 

 

6,543

 

 

 

2,981

 

 

 

20,455

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

493

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

589

 

 

 

?

 

Expenses associated with tax planning

 

?

 

 

 

(15

)

 

 

?

 

 

 

82

 

Severance associated with cost reduction initiatives

 

239

 

 

 

40

 

 

 

377

 

 

 

5,121

 

Fresh Cut operating losses

 

?

 

 

 

?

 

 

 

?

 

 

 

2,262

 

Adjusted operating earnings

$

22,876

 

 

$

35,808

 

 

$

83,075

 

 

$

113,655

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

 

 

October 9, 2021

 

 

October 3, 2020

 

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

9,969

 

 

$

9,191

 

 

$

47,793

 

 

$

34,990

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and asset impairment, net

 

36

 

 

 

6,538

 

 

 

799

 

 

 

19,222

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

265

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

287

 

 

 

?

 

Expenses associated with tax planning

 

?

 

 

 

(8

)

 

 

?

 

 

 

44

 

Severance associated with cost reduction initiatives

 

143

 

 

 

?

 

 

 

246

 

 

 

3,143

 

Fresh Cut operating losses

 

?

 

 

 

?

 

 

 

?

 

 

 

2,262

 

Adjusted operating earnings

$

10,148

 

 

$

15,721

 

 

$

49,125

 

 

$

59,926

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

16,802

 

 

$

22,318

 

 

$

43,705

 

 

$

59,416

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration

 

101

 

 

 

242

 

 

 

281

 

 

 

242

 

Restructuring and asset impairment, net

 

137

 

 

 

5

 

 

 

2,550

 

 

 

1,233

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

164

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

215

 

 

 

?

 

Expenses associated with tax planning

 

?

 

 

 

(5

)

 

 

?

 

 

 

27

 

Severance associated with cost reduction initiatives

 

69

 

 

 

9

 

 

 

98

 

 

 

1,441

 

Adjusted operating earnings

$

17,109

 

 

$

22,569

 

 

$

46,849

 

 

$

62,523

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(4,040

)

 

$

(2,511

)

 

$

(12,651

)

 

$

(9,406

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and asset impairment, gain

 

(368

)

 

 

?

 

 

 

(368

)

 

 

?

 

Costs associated with Project One Team

 

?

 

 

 

?

 

 

 

?

 

 

 

64

 

Organizational realignment, net

 

?

 

 

 

?

 

 

 

87

 

 

 

?

 

Expenses associated with tax planning

 

?

 

 

 

(2

)

 

 

?

 

 

 

11

 

Severance associated with cost reduction initiatives

 

27

 

 

 

31

 

 

 

33

 

 

 

537

 

Adjusted operating loss

$

(4,381

)

 

$

(2,482

)

 

$

(12,899

)

 

$

(8,794

)

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.

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, and other income 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 Net Earnings to Adjusted Earnings from Continuing Operations
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

12 Weeks Ended

 

 

October 9, 2021

 

 

October 3, 2020

 

 

 

 

 

per diluted

 

 

 

 

 

per diluted

 

(In thousands, except per share amounts)

Earnings

 

 

share

 

 

Earnings

 

 

share

 

Net earnings

$

15,176

 

 

$

0.42

 

 

$

19,952

 

 

$

0.56

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration

 

101

 

 

 

 

 

 

 

242

 

 

 

 

 

Restructuring and asset impairment, net

 

(195

)

 

 

 

 

 

 

6,543

 

 

 

 

 

Expenses associated with tax planning

 

?

 

 

 

 

 

 

 

(15

)

 

 

 

 

Severance associated with cost reduction initiatives

 

239

 

 

 

 

 

 

 

40

 

 

 

 

 

Total adjustments

 

145

 

 

 

 

 

 

 

6,810

 

 

 

 

 

Income tax effect on adjustments (a)

 

(36

)

 

 

 

 

 

 

(1,830

)

 

 

 

 

Impact of CARES Act (b)

 

?

 

 

 

 

 

 

 

212

 

 

 

 

 

Total adjustments, net of taxes

 

109

 

 

 

0.01

 

 

 

5,192

 

 

 

0.14

*

Adjusted earnings from continuing operations

$

15,285

 

 

$

0.43

 

 

$

25,144

 

 

$

0.70

 

 

40 Weeks Ended

 

 

October 9, 2021

 

 

October 3, 2020

 

 

 

 

 

per diluted

 

 

 

 

 

per diluted

(In thousands, except per share amounts)

Earnings

 

 

share

 

 

Earnings

 

 

share

 

Net earnings

$

51,506

 

 

$

1.44

 

 

$

63,821

 

 

$

1.78

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration

 

281

 

 

 

 

 

 

 

242

 

 

 

 

 

Restructuring and asset impairment, net

 

2,981

 

 

 

 

 

 

 

20,455

 

 

 

 

 

Costs associated with Project One Team

 

?

 

 

 

 

 

 

 

493

 

 

 

 

 

Organizational realignment, net

 

589

 

 

 

 

 

 

 

?

 

 

 

 

 

Expenses associated with tax planning

 

?

 

 

 

 

 

 

 

82

 

 

 

 

 

Severance associated with cost reduction initiatives

 

377

 

 

 

 

 

 

 

5,121

 

 

 

 

 

Fresh Cut operating losses

 

?

 

 

 

 

 

 

 

2,262

 

 

 

 

 

Pension termination

 

?

 

 

 

 

 

 

 

(1,004

)

 

 

 

 

Total adjustments

 

4,228

 

 

 

 

 

 

 

27,651

 

 

 

 

 

Income tax effect on adjustments (a)

 

(1,060

)

 

 

 

 

 

 

(6,827

)

 

 

 

 

Impact of CARES Act (b)

 

?

 

 

 

 

 

 

 

(9,298

)

 

 

 

 

Total adjustments, net of taxes

 

3,168

 

 

 

0.08

 

*

 

11,526

 

 

 

0.32

 

Adjusted earnings from continuing operations

$

54,674

 

 

$

1.52

 

 

$

75,347

 

 

$

2.10

 

* Includes rounding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

 

The income tax effect on adjustments is computed by applying the effective tax rate, before discrete tax items, to the total adjustments for the period.

 

(b)

 

Represents tax impacts attributable to the Coronavirus Aid, Relief and Economic Security ("CARES") Act, and related tax planning, primarily related to additional deductions and the utilization of net operating loss carrybacks.

Notes: Adjusted earnings from continuing operations is a non-GAAP operating financial measure that the Company defines as net 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.

Adjusted earnings from continuing operations is not a measure of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company's definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.

Table 5: Reconciliation of Long-Term Debt and Finance Lease Obligations to Net Long-Term Debt
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

October 9,

 

 

January 2,

 

(In thousands)

2021

 

 

2021

 

Current portion of long-term debt and finance lease liabilities

$

5,680

 

 

$

5,135

 

Long-term debt and finance lease liabilities

 

398,465

 

 

 

481,309

 

Total debt

 

404,145

 

 

 

486,444

 

Cash and cash equivalents

 

(24,645

)

 

 

(19,903

)

Net long-term debt

$

379,500

 

 

$

466,541

 

Notes: Net long-term debt is a non-GAAP financial measure that is defined as long-term debt and finance lease obligations plus current maturities of long-term debt and finance lease liabilities, less cash and cash equivalents. The Company believes both management and its 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. Net long-term debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 6: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

Net cash provided by operating activities

$

143,953

 

 

$

223,832

 

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

54,957

 

 

 

45,880

 

Free cash flow

$

88,996

 

 

$

177,952

 

Notes: Free cash flow is a non-GAAP financial measure calculated by subtracting capital expenditures from cash flows provided by operating activities, the most directly comparable GAAP measure. The Company believes it is a useful indicator of liquidity that provides information to both management and investors about the amount of cash generated from operations that, after capital expenditures, can be used for strategic business objectives, including the repayment of long-term debt. Free cash flow is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 7: Reconciliation of Purchases of Property and Equipment to Capital Expenditures and IT Capital
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

40 Weeks Ended

 

(In thousands)

October 9, 2021

 

 

October 3, 2020

Purchases of property and equipment

$

54,957

 

 

$

45,880

 

Plus:

 

 

 

 

 

 

 

Cloud computing spend

 

6,961

 

 

 

7,658

 

Capital expenditures and IT capital

$

61,918

 

 

$

53,538

 

Notes: Capital expenditures and IT capital is a non-GAAP financial measure calculated by adding spending related to the development of cloud computing applications spend to capital expenditures, the most directly comparable GAAP measure. Cloud computing spend only includes costs incurred during the application development phase and does not include ongoing costs of hosting or maintenance associated with these applications, which are expensed as incurred. The Company believes it is a useful indicator of the Company's investment in its facilities and systems as it transitions to more cloud-based IT systems. Capital expenditures and IT capital is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 8: Reconciliation of Projected Net Earnings per Diluted Share to Projected Adjusted Earnings per Diluted Share from Continuing Operations
(A Non-GAAP Financial Measure)
(Unaudited)

 

 

52 Weeks Ending
January 1, 2022

 

 

Low

 

 

High

Net Earnings per Diluted Share

$

1.61

 

 

$

1.71

 

Adjustments, net of taxes:

 

 

 

 

 

 

 

Acquisition and integration expenses

 

0.01

 

 

 

0.01

 

Restructuring and asset impairment, net

 

0.06

 

 

 

0.06

 

Severance associated with cost reduction initiatives

 

0.01

 

 

 

0.01

 

Organizational realignment, net

 

0.01

 

 

 

0.01

 

Projected Adjusted Earnings per Diluted Share from Continuing Operations

$

1.70

 

 

$

1.80

 

 


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As per Zion Market Research study, The global electronic health records market was worth around USD 29,417.2 Million in 2021 and is estimated to grow to about USD 42,203.5 Million by 2028, with a compound annual growth rate (CAGR) of approximately...

at 12:00
(ATS International Conference) -- VIDA Diagnostics, Inc. (VIDA), the leader in lung and respiratory intelligence, has onboarded more than 1,000 sites globally in its VIDA network of imaging sites. This network is connected through the VIDA...



News published on 10 november 2021 at 16:25 and distributed by: