Reaffirms Fiscal 2024 Profitability Guidance
Transformational Programs Continue to Drive Results
GRAND RAPIDS, Mich., May 30, 2024 /PRNewswire/ — Food solutions company SpartanNash (the “Company”) (Nasdaq: SPTN) today reported financial results for its 16-week first quarter ended April 20, 2024.
“SpartanNash continues to prove that we can deliver despite the challenging market dynamics, and we remain on target to reach the $125 to $150 million of gross benefits set out in our strategic plan by the end of 2024 – a year earlier than initially communicated. Thanks to the operational excellence and dedication of our Associates, along with our investments in supply chain and merchandising transformations, we continued to expand our adjusted EBITDA margin in the first quarter,” said SpartanNash CEO Tony Sarsam.
First Quarter Fiscal 2024 Highlights(1)
- Net sales decreased 3.5% to $2.81 billion, driven by lower volumes in both the Wholesale and Retail segments.
- Wholesale segment net sales decreased 3.4% to $2.01 billion due to reduced revenue in the national accounts customer channel.
- Retail segment net sales decreased 3.6% to $792.2 million, with comparable store sales down 2.5%. The net sales decrease included a reduction in food assistance program benefits and lower fuel sales.
- Net earnings of $0.37 per diluted share, compared to $0.32 per diluted share.
- The increase was primarily due to a higher gross profit rate, which included lower LIFO expense of $9.2 million and benefits from the merchandising transformation, as well as decreased incentive compensation. This favorability was partially offset by lower unit volumes, changes in customer mix within the Wholesale segment, as well as higher interest, tax, and asset impairment expenses.
- Adjusted EPS(2) of $0.53, compared to $0.64. Adjusted EBITDA(3) of $74.9 million, compared to $76.8 million. These measures exclude, among other items, restructuring and asset impairment charges and the impact of the LIFO provision.
- Cash generated from operating activities of $36.5 million increased from the cash flows used in operations of $2.7 million.
- Net long-term debt(4) to adjusted EBITDA(3) ratio of 2.4x increased sequentially compared to 2.3x at the end of the fourth quarter.
- Capital expenditures and IT capital(5) of $44.1 million increased compared to $39.8 million.
- Returned $10.7 million to shareholders through $2.6 million in share repurchases and $8.1 million in dividends.
- Transformational programs on track to deliver $50 million to $60 million of annual run rate savings from supply chain transformation, merchandising transformation, and go-to-market strategy.
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(1)
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All comparisons are for the first quarter of 2024 compared with the first quarter of 2023, unless otherwise noted.
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(2)
|
A reconciliation of net earnings to adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), a non-GAAP financial measure, is provided in Table 3.
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(3)
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A reconciliation of net earnings to adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2.
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(4)
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A reconciliation of long-term debt and finance lease obligations to net long-term debt, a non-GAAP financial measure, is provided in Table 4.
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(5)
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A reconciliation of purchases of property and equipment to capital expenditures and IT capital, a non-GAAP financial measure, is provided in Table 5.
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Fiscal 2024 Outlook
The Company has reaffirmed its previous profitability guidance provided on February 15, 2024, with respect to adjusted EBITDA, adjusted EPS, and capital expenditures and IT capital, and is updating its total net sales guidance to reflect current trends and market conditions. The following table provides the Company’s updated guidance for fiscal 2024:
|
Fiscal 2023
|
|
|
Previous Fiscal 2024 Outlook
|
|
|
Updated Fiscal 2024 Outlook
|
|
|
(In millions, except adjusted EPS(2))
|
Actual
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Total net sales
|
$
|
|
9,729
|
|
|
$
|
|
9,700
|
|
|
$
|
|
9,900
|
|
|
$
|
|
9,500
|
|
|
$
|
|
9,700
|
|
|
Adjusted EBITDA(3)
|
$
|
|
257
|
|
|
$
|
|
255
|
|
|
$
|
|
270
|
|
|
$
|
|
255
|
|
|
$
|
|
270
|
|
|
Adjusted EPS(2)
|
$
|
|
2.18
|
|
|
$
|
|
1.85
|
|
|
$
|
|
2.10
|
|
|
$
|
|
1.85
|
|
|
$
|
|
2.10
|
|
|
Capital expenditures and IT capital(5)
|
$
|
|
127
|
|
|
$
|
|
135
|
|
|
$
|
|
145
|
|
|
$
|
|
135
|
|
|
$
|
|
145
|
|
Guidance incorporates the Company’s long-term strategic initiatives, including all transformational programs and tuck-in acquisitions.
Conference Call & Supplemental Earnings Presentation
The Company will host a conference call to discuss its quarterly results with additional comments and details on Thursday, May 30, 2024, at 8:30 a.m. ET. There will also be a simultaneous, live webcast made available at SpartanNash’s website at www.spartannash.com/webcasts under the “Investor Relations” section and will remain archived on the Company’s website through Thursday, June 13, 2024.
A supplemental quarterly earnings presentation will also be available on the Company’s website at www.spartannash.com/investor-presentations.
About SpartanNash
SpartanNash (Nasdaq: SPTN) is a food solutions company that delivers the ingredients for a better life. Committed to fostering a People First culture, the SpartanNash family of Associates is 17,000 strong. SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products. On the retail side, SpartanNash operates 147 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin’s Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for independent grocers. For more information, visit spartannash.com.
Forward-Looking Statements
The matters discussed in this press release and in the Company’s website-accessible conference calls with analysts and investor presentations include “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 (“Exchange Act”), about the plans, strategies, objectives, goals or expectations of the Company. These forward-looking statements may be identifiable by words or phrases indicating that the Company or management “expects,” “projects,” “anticipates,” “plans,” “believes,” “intends,” or “estimates,” or that a particular occurrence or event “may,” “could,” “should,” “will” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook,” “trend,” “guidance” or “target” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. These risks and uncertainties include the Company’s ability to compete in an extremely competitive industry; the Company’s dependence on certain major customers; the Company’s ability to implement its growth strategy and transformation initiatives; the Company’s ability to implement its growth strategy through acquisitions and successfully integrate acquired businesses; disruptions to the Company’s information security network, including security breaches and cyber-attacks; impacts to the availability and performance of the Company’s information technology systems; changes in relationships with the Company’s vendor base; changes in product availability and product pricing from vendors; macroeconomic uncertainty, including rising inflation, potential economic recession, and increasing interest rates; difficulty attracting and retaining well-qualified Associates and effectively managing increased labor costs; failure to successfully retain or manage transitions with executive leaders and other key personnel; impacts to the Company’s business and reputation due to an increasing focus on environmental, social and governance matters; customers to whom the Company extends credit or for whom the Company guarantees loans may fail to repay the Company; changes in the geopolitical conditions; disruptions associated with severe weather conditions and natural disasters, including effects from climate change; disruptions associated with disease outbreaks; the Company’s ability to manage its private brand program for U.S. military commissaries, including the termination of the program or not achieving the desired results; impairment charges for goodwill or other long-lived assets; the Company’s level of indebtedness; interest rate fluctuations; the Company’s ability to service its debt and to comply with debt covenants; changes in government regulations; labor relations issues; changes in the military commissary system, including its supply chain, or in the level of governmental funding; product recalls and other product-related safety concerns; cost increases related to multi-employer pension plans; and other risks and uncertainties listed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission. Additional risks and uncertainties not currently known to the Company or that the Company currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this press release.
INVESTOR CONTACT:
Rose & Company
[email protected]
MEDIA CONTACT:
Adrienne Chance
SVP, Communications
[email protected]
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SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
|
|
|
16 Weeks Ended
|
|
|
April 20,
|
|
|
April 22,
|
|
|
(In thousands, except per share amounts)
|
2024
|
|
|
2023
|
|
|
Net sales
|
$
|
|
2,806,263
|
|
|
$
|
|
2,907,394
|
|
|
Cost of sales
|
|
|
2,365,919
|
|
|
|
|
2,460,728
|
|
|
Gross profit
|
|
|
440,344
|
|
|
|
|
446,666
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
403,633
|
|
|
|
|
418,196
|
|
|
Acquisition and integration, net
|
|
|
327
|
|
|
|
|
74
|
|
|
Restructuring and asset impairment, net
|
|
|
5,768
|
|
|
|
|
4,083
|
|
|
Total operating expenses
|
|
|
409,728
|
|
|
|
|
422,353
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
|
30,616
|
|
|
|
|
24,313
|
|
|
|
|
|
|
|
|
|
|
Other expenses and (income)
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
13,487
|
|
|
|
|
11,589
|
|
|
Other, net
|
|
|
(1,048)
|
|
|
|
|
(1,039)
|
|
|
Total other expenses, net
|
|
|
12,439
|
|
|
|
|
10,550
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
18,177
|
|
|
|
|
13,763
|
|
|
Income tax expense
|
|
|
5,206
|
|
|
|
|
2,426
|
|
|
Net earnings
|
$
|
|
12,971
|
|
|
$
|
|
11,337
|
|
|
|
|
|
|
|
|
|
|
Net earnings per basic common share
|
$
|
|
0.38
|
|
|
$
|
|
0.33
|
|
|
|
|
|
|
|
|
|
|
Net earnings per diluted common share
|
$
|
|
0.37
|
|
|
$
|
|
0.32
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
34,139
|
|
|
|
|
34,547
|
|
|
Diluted
|
|
|
34,593
|
|
|
|
|
35,457
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
April 20,
|
|
|
December 30,
|
|
|
(In thousands)
|
2024
|
|
|
2023
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
|
18,968
|
|
|
$
|
|
17,964
|
|
|
Accounts and notes receivable, net
|
|
|
422,161
|
|
|
|
|
421,859
|
|
|
Inventories, net
|
|
|
555,368
|
|
|
|
|
575,226
|
|
|
Prepaid expenses and other current assets
|
|
|
69,608
|
|
|
|
|
62,440
|
|
|
Total current assets
|
|
|
1,066,105
|
|
|
|
|
1,077,489
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
647,536
|
|
|
|
|
649,071
|
|
|
Goodwill
|
|
|
182,160
|
|
|
|
|
182,160
|
|
|
Intangible assets, net
|
|
|
100,132
|
|
|
|
|
101,535
|
|
|
Operating lease assets
|
|
|
245,385
|
|
|
|
|
242,146
|
|
|
Other assets, net
|
|
|
100,483
|
|
|
|
|
103,174
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
|
2,341,801
|
|
|
$
|
|
2,355,575
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
|
447,458
|
|
|
$
|
|
473,419
|
|
|
Accrued payroll and benefits
|
|
|
54,135
|
|
|
|
|
78,076
|
|
|
Other accrued expenses
|
|
|
54,548
|
|
|
|
|
57,609
|
|
|
Current portion of operating lease liabilities
|
|
|
42,162
|
|
|
|
|
41,979
|
|
|
Current portion of long-term debt and finance lease liabilities
|
|
|
9,724
|
|
|
|
|
8,813
|
|
|
Total current liabilities
|
|
|
608,027
|
|
|
|
|
659,896
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
81,315
|
|
|
|
|
73,904
|
|
|
Operating lease liabilities
|
|
|
232,887
|
|
|
|
|
226,118
|
|
|
Other long-term liabilities
|
|
|
20,503
|
|
|
|
|
28,808
|
|
|
Long-term debt and finance lease liabilities
|
|
|
613,864
|
|
|
|
|
588,667
|
|
|
Total long-term liabilities
|
|
|
948,569
|
|
|
|
|
917,497
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
Common stock, voting, no par value; 100,000 shares
authorized; 34,349 and 34,610 shares outstanding
|
|
|
459,204
|
|
|
|
|
460,299
|
|
|
Preferred stock, no par value, 10,000 shares
authorized; no shares outstanding
|
|
|
–
|
|
|
|
|
–
|
|
|
Accumulated other comprehensive income
|
|
|
3,648
|
|
|
|
|
796
|
|
|
Retained earnings
|
|
|
322,353
|
|
|
|
|
317,087
|
|
|
Total shareholders’ equity
|
|
|
785,205
|
|
|
|
|
778,182
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
$
|
|
2,341,801
|
|
|
$
|
|
2,355,575
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
16 Weeks Ended
|
|
|
(In thousands)
|
|
|
|
April 20, 2024
|
|
|
April 22, 2023
|
|
|
Cash flow activities
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
|
$
|
|
36,463
|
|
|
$
|
|
(2,708)
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
(38,104)
|
|
|
|
|
(39,276)
|
|
|
Net cash provided by financing activities
|
|
|
|
|
|
2,645
|
|
|
|
|
29,863
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
|
1,004
|
|
|
|
|
(12,121)
|
|
|
Cash and cash equivalents at beginning of the period
|
|
|
|
|
|
17,964
|
|
|
|
|
29,086
|
|
|
Cash and cash equivalents at end of the period
|
|
|
|
$
|
|
18,968
|
|
|
$
|
|
16,965
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
Table 1: Sales and Operating Earnings by Segment
(Unaudited)
|
|
|
16 Weeks Ended
|
|
|
(In thousands)
|
April 20, 2024
|
|
|
April 22, 2023
|
|
|
Wholesale Segment:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
2,014,021
|
|
|
71.8
|
%
|
|
$
|
|
2,085,684
|
|
|
71.7
|
%
|
|
Operating earnings
|
|
|
36,002
|
|
|
|
|
|
|
26,325
|
|
|
|
|
Retail Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
792,242
|
|
|
28.2
|
%
|
|
|
|
821,710
|
|
|
28.3
|
%
|
|
Operating loss
|
|
|
(5,386)
|
|
|
|
|
|
|
(2,012)
|
|
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
|
2,806,263
|
|
|
100.0
|
%
|
|
$
|
|
2,907,394
|
|
|
100.0
|
%
|
|
Operating earnings
|
|
|
30,616
|
|
|
|
|
|
|
24,313
|
|
|
|
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), net long-term debt, capital expenditures and IT capital, 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 earnings from continuing operations, and adjusted EBITDA exclude, among other items, LIFO expense, organizational realignment, severance associated with cost reduction initiatives and non-operating costs associated with the postretirement plan amendment and settlement. Current year organizational realignment includes consulting and severance costs associated with the Company’s change in its go-to-market strategy as part of its long-term plan, which relates to the reorganization of certain functions. Costs related to the postretirement plan amendment and settlement include non-operating expenses associated with amortization of the prior service credit related to the amendment of the retiree medical plan, which are adjusted out of adjusted earnings from continuing operations. Prior year adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other items, LIFO expense, operating and non-operating costs associated with the postretirement plan amendment and settlement, organizational realignment, severance associated with cost reduction initiatives and a non-routine settlement related to a legal matter resulting from a previously closed operation that was resolved during the prior year. Postretirement plan amendment and settlement costs also include operating expenses related to payroll taxes which are adjusted out of all non-GAAP financial measures.
Each of these items are considered “non-operational” or “non-core” in nature.
The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures used in the Fiscal 2024 Outlook section of this press release without unreasonable effort because it is not possible to predict certain adjustment items with a reasonable degree of certainty since they are not yet known or quantifiable, and do not relate to the Company’s normal operating activities. These adjustments may include, among other items, restructuring and asset impairment activity, acquisition and integration costs, severance, costs related to the postretirement plan amendment and settlement, and organizational realignment costs, and the impact of adjustments to the LIFO inventory reserve. This information is dependent upon future events, which may be outside of the Company’s control and could have a significant impact on its GAAP financial results for fiscal 2024.
|
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
16 Weeks Ended
|
|
|
(In thousands)
|
April 20, 2024
|
|
|
April 22, 2023
|
|
|
Net earnings
|
$
|
|
12,971
|
|
|
$
|
|
11,337
|
|
|
Income tax expense
|
|
|
5,206
|
|
|
|
|
2,426
|
|
|
Other expenses, net
|
|
|
12,439
|
|
|
|
|
10,550
|
|
|
Operating earnings
|
|
|
30,616
|
|
|
|
|
24,313
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
2,020
|
|
|
|
|
11,172
|
|
|
Depreciation and amortization
|
|
|
30,646
|
|
|
|
|
29,745
|
|
|
Acquisition and integration, net
|
|
|
327
|
|
|
|
|
74
|
|
|
Restructuring and asset impairment, net
|
|
|
5,768
|
|
|
|
|
4,083
|
|
|
Cloud computing amortization
|
|
|
2,018
|
|
|
|
|
1,350
|
|
|
Organizational realignment, net
|
|
|
306
|
|
|
|
|
–
|
|
|
Severance associated with cost reduction initiatives
|
|
|
69
|
|
|
|
|
284
|
|
|
Stock-based compensation
|
|
|
3,720
|
|
|
|
|
5,147
|
|
|
Stock warrant
|
|
|
326
|
|
|
|
|
607
|
|
|
Non-cash rent
|
|
|
(901)
|
|
|
|
|
(928)
|
|
|
(Gain) loss on disposal of assets
|
|
|
(20)
|
|
|
|
|
22
|
|
|
Legal settlement
|
|
|
–
|
|
|
|
|
900
|
|
|
Adjusted EBITDA
|
$
|
|
74,895
|
|
|
$
|
|
76,769
|
|
|
Wholesale:
|
|
|
|
|
|
|
|
|
Operating earnings
|
$
|
|
36,002
|
|
|
$
|
|
26,325
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
1,555
|
|
|
|
|
8,733
|
|
|
Depreciation and amortization
|
|
|
16,078
|
|
|
|
|
15,370
|
|
|
Acquisition and integration, net
|
|
|
–
|
|
|
|
|
69
|
|
|
Restructuring and asset impairment, net
|
|
|
(150)
|
|
|
|
|
980
|
|
|
Cloud computing amortization
|
|
|
1,369
|
|
|
|
|
940
|
|
|
Organizational realignment, net
|
|
|
191
|
|
|
|
|
–
|
|
|
Severance associated with cost reduction initiatives
|
|
|
69
|
|
|
|
|
264
|
|
|
Stock-based compensation
|
|
|
2,504
|
|
|
|
|
3,383
|
|
|
Stock warrant
|
|
|
326
|
|
|
|
|
607
|
|
|
Non-cash rent
|
|
|
(300)
|
|
|
|
|
(75)
|
|
|
(Gain) loss on disposal of assets
|
|
|
(18)
|
|
|
|
|
10
|
|
|
Legal settlement
|
|
|
–
|
|
|
|
|
900
|
|
|
Adjusted EBITDA
|
$
|
|
57,626
|
|
|
$
|
|
57,506
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
Operating loss
|
$
|
|
(5,386)
|
|
|
$
|
|
(2,012)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
465
|
|
|
|
|
2,439
|
|
|
Depreciation and amortization
|
|
|
14,568
|
|
|
|
|
14,375
|
|
|
Acquisition and integration, net
|
|
|
327
|
|
|
|
|
5
|
|
|
Restructuring and asset impairment, net
|
|
|
5,918
|
|
|
|
|
3,103
|
|
|
Cloud computing amortization
|
|
|
649
|
|
|
|
|
410
|
|
|
Organizational realignment, net
|
|
|
115
|
|
|
|
|
–
|
|
|
Severance associated with cost reduction initiatives
|
|
|
–
|
|
|
|
|
20
|
|
|
Stock-based compensation
|
|
|
1,216
|
|
|
|
|
1,764
|
|
|
Non-cash rent
|
|
|
(601)
|
|
|
|
|
(853)
|
|
|
(Gain) loss on disposal of assets
|
|
|
(2)
|
|
|
|
|
12
|
|
|
Adjusted EBITDA
|
$
|
|
17,269
|
|
|
$
|
|
19,263
|
|
|
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, continued
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
52 Weeks Ended
|
|
|
|
|
|
(In thousands)
|
2023
|
|
|
|
|
|
Net earnings
|
$
|
|
52,237
|
|
|
|
|
|
Income tax expense
|
|
|
17,888
|
|
|
|
|
|
Other expenses, net
|
|
|
36,587
|
|
|
|
|
|
Operating earnings
|
|
|
106,712
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
16,104
|
|
|
|
|
|
Depreciation and amortization
|
|
|
98,639
|
|
|
|
|
|
Acquisition and integration, net
|
|
|
3,416
|
|
|
|
|
|
Restructuring and asset impairment, net
|
|
|
9,190
|
|
|
|
|
|
Cloud computing amortization
|
|
|
5,034
|
|
|
|
|
|
Organizational realignment, net
|
|
|
5,239
|
|
|
|
|
|
Severance associated with cost reduction initiatives
|
|
|
318
|
|
|
|
|
|
Stock-based compensation
|
|
|
12,536
|
|
|
|
|
|
Stock warrant
|
|
|
1,559
|
|
|
|
|
|
Non-cash rent
|
|
|
(2,599)
|
|
|
|
|
|
Loss on disposal of assets
|
|
|
259
|
|
|
|
|
|
Legal settlement
|
|
|
900
|
|
|
|
|
|
Postretirement plan amendment and settlement
|
|
|
94
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
|
257,401
|
|
|
|
|
Notes: Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“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.
Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under GAAP 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 Net Earnings to
Adjusted Earnings from Continuing Operations, as well as per diluted share (“adjusted EPS”)
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
16 Weeks Ended
|
|
|
|
April 20, 2024
|
|
|
|
April 22, 2023
|
|
|
|
|
|
|
per diluted
|
|
|
|
|
|
|
per diluted
|
|
|
|
(In thousands, except per share amounts)
|
Earnings
|
|
|
share
|
|
|
|
Earnings
|
|
|
share
|
|
|
|
Net earnings
|
$
|
|
12,971
|
|
|
$
|
|
0.37
|
|
|
|
$
|
|
11,337
|
|
|
$
|
|
0.32
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
2,020
|
|
|
|
|
|
|
|
|
|
11,172
|
|
|
|
|
|
|
|
Acquisition and integration, net
|
|
|
327
|
|
|
|
|
|
|
|
|
|
74
|
|
|
|
|
|
|
|
Restructuring and asset impairment, net
|
|
|
5,768
|
|
|
|
|
|
|
|
|
|
4,083
|
|
|
|
|
|
|
|
Organizational realignment, net
|
|
|
306
|
|
|
|
|
|
|
|
|
|
–
|
|
|
|
|
|
|
|
Severance associated with cost reduction initiatives
|
|
|
69
|
|
|
|
|
|
|
|
|
|
284
|
|
|
|
|
|
|
|
Postretirement plan amendment and settlement
|
|
|
(945)
|
|
|
|
|
|
|
|
|
|
(1,018)
|
|
|
|
|
|
|
|
Legal settlement
|
|
|
–
|
|
|
|
|
|
|
|
|
|
900
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
7,545
|
|
|
|
|
|
|
|
|
|
15,495
|
|
|
|
|
|
|
|
Income tax effect on adjustments (a)
|
|
|
(2,036)
|
|
|
|
|
|
|
|
|
|
(3,970)
|
|
|
|
|
|
|
|
Total adjustments, net of taxes
|
|
|
5,509
|
|
|
|
|
0.16
|
|
|
|
|
|
11,525
|
|
|
|
|
0.32
|
|
*
|
|
Adjusted earnings from continuing operations
|
$
|
|
18,480
|
|
|
$
|
|
0.53
|
|
|
|
$
|
|
22,862
|
|
|
$
|
|
0.64
|
|
|
|
* Includes rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 Weeks Ended
|
|
|
|
December 30, 2023
|
|
|
|
|
|
|
per diluted
|
|
|
|
(In thousands, except per share data)
|
Earnings
|
|
|
share
|
|
|
|
Net earnings
|
$
|
|
52,237
|
|
|
$
|
|
1.50
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
16,104
|
|
|
|
|
|
|
|
Acquisition and integration, net
|
|
|
3,416
|
|
|
|
|
|
|
|
Restructuring and asset impairment, net
|
|
|
9,190
|
|
|
|
|
|
|
|
Organizational realignment, net
|
|
|
5,239
|
|
|
|
|
|
|
|
Severance associated with cost reduction initiatives
|
|
|
318
|
|
|
|
|
|
|
|
Legal settlement
|
|
|
900
|
|
|
|
|
|
|
|
Postretirement plan amendment and settlement
|
|
|
(3,174)
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
31,993
|
|
|
|
|
|
|
|
Income tax effect on adjustments (a)
|
|
|
(8,218)
|
|
|
|
|
|
|
|
Total adjustments, net of taxes
|
|
|
23,775
|
|
|
|
|
0.68
|
|
|
|
Adjusted earnings from continuing operations
|
$
|
|
76,012
|
|
|
$
|
|
2.18
|
|
|
|
(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.
|
Notes: Adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), 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 GAAP 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 4: Reconciliation of Long-Term Debt and Finance Lease Obligations to Net Long-Term Debt
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
(In thousands)
|
April 20, 2024
|
|
|
December 30, 2023
|
|
|
Current portion of long-term debt and finance lease liabilities
|
$
|
|
9,724
|
|
|
$
|
|
8,813
|
|
|
Long-term debt and finance lease liabilities
|
|
|
613,864
|
|
|
|
|
588,667
|
|
|
Total debt
|
|
|
623,588
|
|
|
|
|
597,480
|
|
|
Cash and cash equivalents
|
|
|
(18,968)
|
|
|
|
|
(17,964)
|
|
|
Net long-term debt
|
$
|
|
604,620
|
|
|
$
|
|
579,516
|
|
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 obligations 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 5: Reconciliation of Purchases of Property and Equipment to Capital Expenditures and IT Capital
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
|
|
|
16 Weeks Ended
|
|
|
(In thousands)
|
|
|
|
April 20, 2024
|
|
|
April 22, 2023
|
|
|
Purchases of property and equipment
|
|
|
|
$
|
|
40,163
|
|
|
$
|
|
38,864
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Cloud computing spend
|
|
|
|
|
|
3,898
|
|
|
|
|
942
|
|
|
Capital expenditures and IT capital
|
|
|
|
$
|
|
44,061
|
|
|
$
|
|
39,806
|
|
|
|
|
|
52 Weeks Ended
|
|
|
|
|
|
(In thousands)
|
|
|
|
December 30, 2023
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
$
|
|
120,330
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
Cloud computing spend
|
|
|
|
|
|
7,040
|
|
|
|
|
|
Capital expenditures and IT capital
|
|
|
|
$
|
|
127,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: Capital expenditures and IT capital is a non-GAAP financial measure calculated by adding spending related to the development of cloud computing applications 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.
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SOURCE SpartanNash
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