SpartanNash Announces Third Quarter 2019 Financial Results

Nov 6th, 2019

Third Quarter Net Sales Increased 6.0%, Including Positive Retail Comparable Store Sales

Profitability Consistent with Company Guidance

SpartanNash Company (the "Company") (Nasdaq: SPTN) today reported financial results for the 12-week third quarter and 40-week period ended October 5, 2019.

Third Quarter Fiscal 2019 Highlights

  • Net sales growth of 6.0%, to $2.00 billion from $1.89 billion in the prior year quarter
  • Retail comparable store sales increased 0.1%
  • EPS of $(0.01) per share; Adjusted EPS of $0.30, including $0.08 in CEO transition and supplemental incentive program costs ("Transition Costs"), which were specifically excluded from August 14, 2019 guidance
  • The Company reaffirms full year guidance; quantifies previously excluded Transition Costs

"We are encouraged to have delivered third quarter profitability and sales growth in-line with the guidance we provided in August," said Dennis Eidson, Interim President and Chief Executive Officer. "Our results were driven by a solid increase in net sales, representing our fourteenth consecutive quarter of growth and we are pleased with the return to positive retail comparable store sales. Our team is focused on driving improvements in operational execution and positioning the Company to realize profitable growth as we deliver value to our shareholders."

Consolidated Financial Results

Consolidated net sales for the third quarter increased $113.1 million, or 6.0%, to $2.00 billion from $1.89 billion in the prior year quarter. The increase in net sales was generated through incremental volume resulting from the acquisition of Martin's Super Markets ("Martins") as well as higher sales within the Food Distribution segment, prior to the elimination of the intercompany sales for the acquired business.

Gross profit for the third quarter of fiscal 2019 was $290.4 million, or 14.5% of net sales, compared to $256.1 million, or 13.6% of net sales, in the prior year quarter. The growth in gross profit and improvement as a percent of net sales was primarily driven by the acquisition of Martin's and the resulting higher mix of Retail sales.

Reported operating expenses for the third quarter were $274.6 million, or 13.7% of net sales, compared to $229.3 million, or 12.2% 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 to additional Retail segment business associated with Martin's and, to a lesser extent, an increase in administrative expenses, primarily related to Transition Costs, and incremental supply chain costs. Third quarter operating expenses would have been $272.3 million, or 13.6% of net sales, compared to $228.3 million, or 12.1% of net sales, in the prior year quarter, excluding the asset impairment charges and other adjustments detailed in Table 3.

The Company reported operating earnings of $15.8 million compared to $26.8 million in the prior year quarter. The decrease was primarily attributable to higher administrative expenses and supply chain costs, partially offset by incremental earnings from the newly acquired Martin's business and growth in the Food Distribution segment. Adjusted operating earnings(1) were $20.3 million compared to $27.8 million in the prior year and were adjusted for Fresh Kitchen operating losses subsequent to the decision to exit the business at the end of the second quarter. The decrease in adjusted operating earnings was due to the factors mentioned above, partially offset by the adjustment of Fresh Kitchen operating losses. 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.

The Company reported a third quarter loss from continuing operations of $0.3 million, or $0.01 per share, compared to earnings of $17.5 million, or $0.49 per diluted share, in the prior year quarter. The decrease reflects $7.7 million in expense associated with the previously announced termination of the Company's corporate pension plan as well as the operating earnings changes noted above.

Adjusted earnings from continuing operations(3) for the third quarter were $10.9 million, or $0.30 per diluted share, and include $2.9 million, or $0.08 per diluted share, in Transition Costs which were specifically excluded from the guidance provided on August 14, 2019. Adjusted earnings from continuing operations in the prior year quarter were $17.9 million, or $0.50 per diluted share. A reconciliation of reported earnings from continuing operations to adjusted earnings from continuing operations is included at Table 4.

Adjusted EBITDA(2) was $41.6 million compared to $48.3 million in the prior year quarter due to the factors mentioned above.

Segment Financial Results

Food Distribution

Net sales for Food Distribution decreased $1.2 million, or 0.1%, to $939.0 million from $940.2 million in the prior year quarter. Excluding the impact of the elimination of intercompany sales to Martin's subsequent to the acquisition, sales increased 3.6%, primarily due to sales growth with existing customers.

Reported operating earnings for Food Distribution were $11.7 million compared to $19.8 million in the prior year quarter. The decrease in reported operating earnings was due to higher corporate administrative expenses, including Transition Costs, as well as supply chain costs, partially offset by contributions from sales growth. Third quarter adjusted operating earnings(1) were $15.5 million compared to $20.4 million in the prior year quarter primarily due to the same items. Adjusted operating earnings exclude Fresh Kitchen operating losses subsequent to the decision to exit the business and asset impairment charges in the current year quarter, and merger/acquisition and integration expenses in the prior year quarter.

Military Distribution

Net sales for Military Distribution decreased $1.0 million, or 0.2%, to $499.2 million from $500.2 million in the prior year quarter. The decrease was due to lower comparable sales at DeCA operated locations partially offset by incremental volume from new business with an existing customer that commenced late in the fourth quarter of 2018 and the continued expansion of DeCA's private brand program.

Reported operating loss for Military Distribution was $2.6 million compared to operating earnings of $1.5 million in the prior year quarter. The decrease was primarily attributable to higher supply chain costs and corporate administrative expenses. The third quarter adjusted operating loss(1) was $2.5 million compared to earnings of $1.6 million in the prior year quarter.

Retail

Net sales for Retail increased $115.3 million, or 25.8%, to $561.6 million from $446.3 million in the prior year quarter. Comparable store sales were positive at 0.1%, however were offset by a decrease in fuel sales primarily due to a lower price per gallon.

Reported operating earnings for Retail were $6.7 million compared to operating earnings of $5.5 million in the prior year quarter. The increase in reported operating earnings was primarily attributable to the contribution of the acquired Martin's stores, the favorable impact of closing underperforming stores and improvements in margin rates, partially offset by higher corporate administrative expenses, including Transition Costs. Adjusted operating earnings(1) were $7.3 million compared to $5.9 million in the prior year quarter and exclude restructuring charges in both periods.

Cash Flow

Cash flows provided by operating activities for the 40 weeks ended October 5, 2019 were $140.0 million, materially consistent with the 40 weeks ended October 6, 2018 at $142.5 million. The Company generated $93.1 million in free cash flow(5) over the same period in the current year and $89.9 million in the prior year.

During the first three quarters of fiscal 2019, the Company returned $20.7 million to shareholders in the form of cash dividends equal to $0.57 per common share.

Strategic Business Objectives

The following are key updates to the Company's progress towards its strategic business objectives during the third quarter of 2019:

  • Sustained mid-single digit sales growth in the third quarter, realizing 6.0% net sales growth from the same quarter in the prior year and delivering its 14th consecutive quarter of net sales growth.
  • Continued to implement Project One Team initiatives and remains on track to achieve a run rate of over $20.0 million in annual cost savings by April 20, 2021.
  • Continued to reduce both working capital and debt compared to the prior year, despite sustaining net sales growth and the acquisition of Martin's in early 2019.

Outlook

The Company is reaffirming its net sales and profitability outlook previously provided on August 14, 2019, and has now estimated Transition Costs which were not previously quantified. These costs are expected to range from $9.0 to $9.7 million in adjusted EBITDA(2) and $6.6 to $7.1 million in adjusted earnings from continuing operations(3), or $0.18 to $0.20 per diluted share.

 

August 14, 2019

Guidance

 

 

 

Guidance Including

Transition Costs

 

52 Weeks Ending

December 28, 2019

Transition costs

 

52 Weeks Ending

December 28, 2019

Net Sales Growth

Mid-single digits

-

 

Mid-single digits

Adjusted EBITDA(2)

$183.0 - $195.0 million

$9.0 - $9.7 million

 

$173.3 - $186.0 million

Adjusted EPS from Continuing Operations(4)

$1.20 - $1.35

$0.18 - $0.20

 

$1.00 - $1.17

Reported EPS from Continuing Operations

$0.21 - $0.47

$0.18 - $0.20

 

$0.01 - $0.29

The Company's fiscal 2019 reported earnings guidance reflects an effective tax rate benefit of 17.0% to 20.0% and the adjusted earnings guidance reflects an effective tax rate expense of 18.0% to 18.5%. The Company expects capital expenditures for fiscal year 2019 to be in the range of $80.0 million to $89.0 million, with depreciation and amortization of $88.0 million to $89.0 million. Interest expense is expected to range from $34.5 million to $35.0 million.

The Fresh Kitchen will cease production during the fourth quarter of fiscal 2019 and the Company anticipates a disposition of the facility and related assets as early as the first quarter of fiscal 2020.

The Board of Directors has begun a formal process to identify the Company's next Chief Executive Officer. Spencer Stuart, a leading executive search and leadership consulting firm, has been retained as an advisor in the process.

Conference Call

A telephone conference call to discuss the Company's third quarter 2019 financial results is scheduled for Thursday, November 7, 2019 at 8:00 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 ten days.

About SpartanNash

SpartanNash (Nasdaq: SPTN) is a Fortune 400 company whose 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 premier fresh produce distribution and fresh food processing. SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain, Djibouti and Egypt. SpartanNash currently operates 158 supermarkets, primarily under the banners of Family Fare, Martin's Super Markets, D&W Fresh Market, VG's Grocery, Dan's Supermarket and Family Fresh Market. Through its MDV military division, SpartanNash is a leading distributor of grocery products to U.S. military commissaries.

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, 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 below.
(2) A reconciliation of net loss to Adjusted EBITDA, a non-GAAP financial measure, is provided below.
(3) A reconciliation of loss from continuing operations to adjusted earnings from continuing operations, a non-GAAP financial measure, is provided below.
(4) 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 below.
(5) A reconciliation of net cash provided by operating activities to free cash flow, a non-GAAP financial measure, is provided below.

SPARTANNASH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

12 Weeks Ended

 

40 Weeks Ended

 

 

October 5,

 

October 6,

 

October 5,

 

October 6,

 

(In thousands, except per share amounts)

2019

 

2018

 

2019

 

2018

 

Net sales

$

 

1,999,808

 

 

$

 

1,886,730

 

 

$

 

6,538,112

 

 

$

 

6,167,756

 

 

Cost of sales

 

 

1,709,447

 

 

 

 

1,630,588

 

 

 

 

5,581,015

 

 

 

 

5,302,740

 

 

Gross profit

 

 

290,361

 

 

 

 

256,142

 

 

 

 

957,097

 

 

 

 

865,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

273,286

 

 

 

 

228,583

 

 

 

 

900,160

 

 

 

 

773,844

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

521

 

 

 

 

1,364

 

 

 

 

3,531

 

 

Restructuring charges and asset impairment

 

 

1,296

 

 

 

 

232

 

 

 

 

10,215

 

 

 

 

5,269

 

 

Total operating expenses

 

 

274,582

 

 

 

 

229,336

 

 

 

 

911,739

 

 

 

 

782,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

 

15,779

 

 

 

 

26,806

 

 

 

 

45,358

 

 

 

 

82,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses and (income)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

7,375

 

 

 

 

7,082

 

 

 

 

27,952

 

 

 

 

22,828

 

 

Loss on debt extinguishment

 

 

329

 

 

 

 

-

 

 

 

 

329

 

 

 

 

-

 

 

Postretirement benefit expense (income)

 

 

10,221

 

 

 

 

(6

)

 

 

 

19,677

 

 

 

 

(20

)

 

Other, net

 

 

(180

)

 

 

 

(189

)

 

 

 

(1,071

)

 

 

 

(635

)

 

Total other expenses, net

 

 

17,745

 

 

 

 

6,887

 

 

 

 

46,887

 

 

 

 

22,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings before income taxes and discontinued operations

 

 

(1,966

)

 

 

 

19,919

 

 

 

 

(1,529

)

 

 

 

60,199

 

 

Income tax (benefit) expense

 

 

(1,656

)

 

 

 

2,374

 

 

 

 

(1,973

)

 

 

 

12,381

 

 

(Loss) earnings from continuing operations

 

 

(310

)

 

 

 

17,545

 

 

 

 

444

 

 

 

 

47,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

 

(27

)

 

 

 

(80

)

 

 

 

(126

)

 

 

 

(238

)

 

Net (loss) earnings

$

 

(337

)

 

$

 

17,465

 

 

$

 

318

 

 

$

 

47,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings from continuing operations

$

 

(0.01

)

 

$

 

0.49

 

 

$

 

0.01

 

 

$

 

1.33

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(0.01

)

 

Net (loss) earnings

$

 

(0.01

)

 

$

 

0.49

 

 

$

 

0.01

 

 

$

 

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings from continuing operations

$

 

(0.01

)

 

$

 

0.49

 

 

$

 

0.01

 

 

$

 

1.33

 

 

Loss from discontinued operations

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(0.01

)

 

Net (loss) earnings

$

 

(0.01

)

 

$

 

0.49

 

 

$

 

0.01

 

 

$

 

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,340

 

 

 

 

35,934

 

 

 

 

36,248

 

 

 

 

36,033

 

 

Diluted

 

 

36,340

 

 

 

 

35,946

 

 

 

 

36,248

 

 

 

 

36,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SPARTANNASH COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

October 5,

 

 

December 29,

 

(In thousands)

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 

23,436

 

 

$

 

18,585

 

Accounts and notes receivable, net

 

 

374,287

 

 

 

 

346,260

 

Inventories, net

 

 

594,676

 

 

 

 

553,799

 

Prepaid expenses and other current assets

 

 

52,176

 

 

 

 

73,798

 

Property and equipment held for sale

 

 

3,968

 

 

 

 

8,654

 

Total current assets

 

 

1,048,543

 

 

 

 

1,001,096

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

618,126

 

 

 

 

579,060

 

Goodwill

 

 

181,035

 

 

 

 

178,648

 

Intangible assets, net

 

 

128,351

 

 

 

 

128,926

 

Operating lease assets

 

 

272,591

 

 

 

 

-

 

Other assets, net

 

 

85,900

 

 

 

 

84,182

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 

2,334,546

 

 

$

 

1,971,912

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Accounts payable

$

 

456,991

 

 

$

 

357,802

 

Accrued payroll and benefits

 

 

59,472

 

 

 

 

57,180

 

Other accrued expenses

 

 

45,667

 

 

 

 

43,206

 

Current portion of operating lease liabilities

 

 

41,795

 

 

 

 

-

 

Current portion of long-term debt and finance lease liabilities

 

 

7,044

 

 

 

 

18,263

 

Total current liabilities

 

 

610,969

 

 

 

 

476,451

 

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

43,734

 

 

 

 

49,254

 

Operating lease liabilities

 

 

273,631

 

 

 

 

-

 

Other long-term liabilities

 

 

30,861

 

 

 

 

50,463

 

Long-term debt and finance lease liabilities

 

 

686,055

 

 

 

 

679,797

 

Total long-term liabilities

 

 

1,034,281

 

 

 

 

779,514

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

 

Common stock, voting, no par value; 100,000 shares

authorized; 36,350 and 35,952 shares outstanding

 

 

489,656

 

 

 

 

484,064

 

Preferred stock, no par value, 10,000 shares

authorized; no shares outstanding

 

 

-

 

 

 

 

-

 

Accumulated other comprehensive loss

 

 

(748

)

 

 

 

(15,759

)

Retained earnings

 

 

200,388

 

 

 

 

247,642

 

Total shareholders' equity

 

 

689,296

 

 

 

 

715,947

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

 

2,334,546

 

 

$

 

1,971,912

 

 

 

 

 

 

 

 

 

 

 

SPARTANNASH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

40 Weeks Ended

(In thousands)

 

October 5, 2019

 

October 6, 2018

Cash flow activities

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

 

140,034

 

 

$

 

142,546

 

Net cash used in investing activities

 

 

 

(117,645

)

 

 

 

(45,533

)

Net cash used in financing activities

 

 

 

(17,385

)

 

 

 

(91,773

)

Net cash used in discontinued operations

 

 

 

(153

)

 

 

 

(234

)

Net increase in cash and cash equivalents

 

 

 

4,851

 

 

 

 

5,006

 

Cash and cash equivalents at beginning of the period

 

 

 

18,585

 

 

 

 

15,667

 

Cash and cash equivalents at end of the period

 

$

 

23,436

 

 

$

 

20,673

 

SPARTANNASH COMPANY AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA

 

Table 1: Sales and Operating Earnings by Segment

(Unaudited)

 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 5, 2019

 

 

October 6, 2018

 

 

October 5, 2019

 

 

October 6, 2018

 

Food Distribution Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

 

939,047

 

 

47.0

%

 

$

 

940,183

 

 

49.8

%

 

$

 

3,043,668

 

 

46.6

%

 

$

 

3,037,096

 

 

49.3

%

Operating earnings

 

 

11,699

 

 

 

 

 

 

 

19,815

 

 

 

 

 

 

 

36,564

 

 

 

 

 

 

 

63,060

 

 

 

 

Military Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

499,156

 

 

24.9

%

 

 

 

500,222

 

 

26.5

%

 

 

 

1,661,097

 

 

25.4

%

 

 

 

1,653,496

 

 

26.8

%

Operating (loss) earnings

 

 

(2,646

)

 

 

 

 

 

 

1,508

 

 

 

 

 

 

 

(5,806

)

 

 

 

 

 

 

6,120

 

 

 

 

Retail Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

561,605

 

 

28.1

%

 

 

 

446,325

 

 

23.7

%

 

 

 

1,833,347

 

 

28.0

%

 

 

 

1,477,164

 

 

23.9

%

Operating earnings

 

 

6,726

 

 

 

 

 

 

 

5,483

 

 

 

 

 

 

 

14,600

 

 

 

 

 

 

 

13,192

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

 

1,999,808

 

 

100.0

%

 

$

 

1,886,730

 

 

100.0

%

 

$

 

6,538,112

 

 

100.0

%

 

$

 

6,167,756

 

 

100.0

%

Operating earnings

 

 

15,779

 

 

 

 

 

 

 

26,806

 

 

 

 

 

 

 

45,358

 

 

 

 

 

 

 

82,372

 

 

 

 

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("adjusted EBITDA"), adjusted operating earnings, adjusted earnings from continuing operations, total net long-term debt, free cash flow and projected adjusted earnings per diluted share from continuing operations. 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 "Fresh Kitchen operating losses" subsequent to the decision to exit these operations at the beginning of the third quarter, costs associated with organizational realignment, which include significant changes to the Company's management team, 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 costs, primarily related to non-operating settlement expense associated with the distribution of pension assets, are excluded from adjusted earnings from continuing operations, and to a lesser extent adjusted operating earnings. These items are considered "non-operational" or "non-core" in nature. Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude start-up costs associated with the Fresh Kitchen operation, which concluded during the first quarter of 2018. The Fresh Kitchen represented a new line of business for the Company.

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 5, 2019

 

 

October 6, 2018

 

 

October 5, 2019

 

 

October 6, 2018

 

Net (loss) earnings

$

 

(337

)

 

$

 

17,465

 

 

$

 

318

 

 

$

 

47,580

 

Loss from discontinued operations, net of tax

 

 

27

 

 

 

 

80

 

 

 

 

126

 

 

 

 

238

 

Income tax (benefit) expense

 

 

(1,656

)

 

 

 

2,374

 

 

 

 

(1,973

)

 

 

 

12,381

 

Other expenses, net

 

 

17,745

 

 

 

 

6,887

 

 

 

 

46,887

 

 

 

 

22,173

 

Operating earnings

 

 

15,779

 

 

 

 

26,806

 

 

 

 

45,358

 

 

 

 

82,372

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

1,268

 

 

 

 

654

 

 

 

 

3,761

 

 

 

 

2,349

 

Depreciation and amortization

 

 

20,351

 

 

 

 

19,247

 

 

 

 

67,513

 

 

 

 

63,272

 

Merger/acquisition and integration

 

 

-

 

 

 

 

521

 

 

 

 

1,364

 

 

 

 

3,531

 

Restructuring charges and asset impairment

 

 

1,296

 

 

 

 

232

 

 

 

 

10,215

 

 

 

 

5,269

 

Fresh Kitchen start-up costs

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

1,366

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

-

 

 

 

 

2,204

 

 

 

 

-

 

Stock-based compensation

 

 

638

 

 

 

 

773

 

 

 

 

6,735

 

 

 

 

7,040

 

Non-cash rent

 

 

(1,082

)

 

 

 

(187

)

 

 

 

(4,542

)

 

 

 

(818

)

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

5,428

 

 

 

 

-

 

Organizational realignment costs

 

 

935

 

 

 

 

-

 

 

 

 

1,812

 

 

 

 

-

 

Other non-cash charges

 

 

187

 

 

 

 

258

 

 

 

 

710

 

 

 

 

785

 

Adjusted EBITDA

$

 

41,576

 

 

$

 

48,304

 

 

$

 

140,558

 

 

$

 

165,166

 

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 5, 2019

 

October 6, 2018

 

October 5, 2019

 

October 6, 2018

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

11,699

 

 

$

 

19,815

 

 

$

 

36,564

 

 

$

 

63,060

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

639

 

 

 

 

245

 

 

 

 

1,869

 

 

 

 

929

 

Depreciation and amortization

 

 

7,390

 

 

 

 

7,540

 

 

 

 

25,368

 

 

 

 

24,179

 

Merger/acquisition and integration

 

 

-

 

 

 

 

479

 

 

 

 

(130

)

 

 

 

3,419

 

Restructuring charges (gains) and asset impairment

 

 

1,043

 

 

 

 

(68

)

 

 

 

10,724

 

 

 

 

1,292

 

Fresh Kitchen start-up costs

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

1,366

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

-

 

 

 

 

2,204

 

 

 

 

-

 

Stock-based compensation

 

 

302

 

 

 

 

351

 

 

 

 

3,319

 

 

 

 

3,318

 

Non-cash rent

 

 

147

 

 

 

 

41

 

 

 

 

353

 

 

 

 

115

 

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

2,877

 

 

 

 

-

 

Organizational realignment costs

 

 

495

 

 

 

 

-

 

 

 

 

960

 

 

 

 

-

 

Other non-cash charges

 

 

14

 

 

 

 

119

 

 

 

 

391

 

 

 

 

466

 

Adjusted EBITDA

$

 

23,933

 

 

$

 

28,522

 

 

$

 

84,499

 

 

$

 

98,144

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) earnings

$

 

(2,646

)

 

$

 

1,508

 

 

$

 

(5,806

)

 

$

 

6,120

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

372

 

 

 

 

146

 

 

 

 

1,034

 

 

 

 

544

 

Depreciation and amortization

 

 

2,764

 

 

 

 

2,816

 

 

 

 

9,097

 

 

 

 

9,257

 

Merger/acquisition and integration

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4

 

Restructuring charges (gains)

 

 

-

 

 

 

 

29

 

 

 

 

-

 

 

 

 

(801

)

Stock-based compensation

 

 

114

 

 

 

 

155

 

 

 

 

1,091

 

 

 

 

1,181

 

Non-cash rent

 

 

(80

)

 

 

 

(74

)

 

 

 

(283

)

 

 

 

(249

)

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

706

 

 

 

 

-

 

Organizational realignment costs

 

 

122

 

 

 

 

-

 

 

 

 

236

 

 

 

 

-

 

Other non-cash (gains) charges

 

 

(70

)

 

 

 

31

 

 

 

 

(91

)

 

 

 

57

 

Adjusted EBITDA

$

 

576

 

 

$

 

4,611

 

 

$

 

5,984

 

 

$

 

16,113

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

6,726

 

 

$

 

5,483

 

 

$

 

14,600

 

 

$

 

13,192

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

257

 

 

 

 

263

 

 

 

 

858

 

 

 

 

876

 

Depreciation and amortization

 

 

10,197

 

 

 

 

8,891

 

 

 

 

33,048

 

 

 

 

29,836

 

Merger/acquisition and integration

 

 

-

 

 

 

 

42

 

 

 

 

1,494

 

 

 

 

108

 

Restructuring charges (gains) and asset impairment

 

 

253

 

 

 

 

271

 

 

 

 

(509

)

 

 

 

4,778

 

Stock-based compensation

 

 

222

 

 

 

 

267

 

 

 

 

2,325

 

 

 

 

2,541

 

Non-cash rent

 

 

(1,149

)

 

 

 

(154

)

 

 

 

(4,612

)

 

 

 

(684

)

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

1,845

 

 

 

 

-

 

Organizational realignment costs

 

 

318

 

 

 

 

-

 

 

 

 

616

 

 

 

 

-

 

Other non-cash charges

 

 

243

 

 

 

 

108

 

 

 

 

410

 

 

 

 

262

 

Adjusted EBITDA

$

 

17,067

 

 

$

 

15,171

 

 

$

 

50,075

 

 

$

 

50,909

 

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 deferred (stock) compensation, 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 5, 2019

 

October 6, 2018

 

October 5, 2019

 

October 6, 2018

Operating earnings

$

 

15,779

 

 

$

 

26,806

 

 

$

 

45,358

 

 

$

 

82,372

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

521

 

 

 

 

1,364

 

 

 

 

3,531

 

Restructuring charges and asset impairment

 

 

1,296

 

 

 

 

232

 

 

 

 

10,215

 

 

 

 

5,269

 

Fresh Kitchen start-up costs

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

1,366

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

-

 

 

 

 

2,204

 

 

 

 

-

 

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

225

 

 

 

 

-

 

 

 

 

225

 

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

5,428

 

 

 

 

-

 

Organizational realignment costs

 

 

935

 

 

 

 

-

 

 

 

 

1,812

 

 

 

 

-

 

Pension termination

 

 

28

 

 

 

 

-

 

 

 

 

48

 

 

 

 

-

 

Severance associated with cost reduction initiatives

 

 

43

 

 

 

 

50

 

 

 

 

484

 

 

 

 

668

 

Adjusted operating earnings

$

 

20,285

 

 

$

 

27,834

 

 

$

 

66,913

 

 

$

 

93,431

 

Reconciliation of operating earnings (loss) to adjusted operating earnings (loss) by segment:

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

11,699

 

 

$

 

19,815

 

 

$

 

36,564

 

 

$

 

63,060

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

479

 

 

 

 

(130

)

 

 

 

3,419

 

Restructuring charges (gains) and asset impairment

 

 

1,043

 

 

 

 

(68

)

 

 

 

10,724

 

 

 

 

1,292

 

Fresh Kitchen start-up costs

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

1,366

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

-

 

 

 

 

2,204

 

 

 

 

-

 

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

116

 

 

 

 

-

 

 

 

 

116

 

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

2,877

 

 

 

 

-

 

Organizational realignment costs

 

 

495

 

 

 

 

-

 

 

 

 

960

 

 

 

 

-

 

Pension termination

 

 

15

 

 

 

 

-

 

 

 

 

26

 

 

 

 

-

 

Severance associated with cost reduction initiatives

 

 

31

 

 

 

 

66

 

 

 

 

392

 

 

 

 

517

 

Adjusted operating earnings

$

 

15,487

 

 

$

 

20,408

 

 

$

 

53,617

 

 

$

 

69,770

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) earnings

$

 

(2,646

)

 

$

 

1,508

 

 

$

 

(5,806

)

 

$

 

6,120

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4

 

Restructuring charges (gains)

 

 

-

 

 

 

 

29

 

 

 

 

-

 

 

 

 

(801

)

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

28

 

 

 

 

-

 

 

 

 

28

 

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

706

 

 

 

 

-

 

Organizational realignment costs

 

 

122

 

 

 

 

-

 

 

 

 

236

 

 

 

 

-

 

Pension termination

 

 

3

 

 

 

 

-

 

 

 

 

5

 

 

 

 

-

 

Severance associated with cost reduction initiatives

 

 

-

 

 

 

 

(1

)

 

 

 

9

 

 

 

 

69

 

Adjusted operating (loss) earnings

$

 

(2,521

)

 

$

 

1,564

 

 

$

 

(4,850

)

 

$

 

5,420

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

6,726

 

 

$

 

5,483

 

 

$

 

14,600

 

 

$

 

13,192

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

42

 

 

 

 

1,494

 

 

 

 

108

 

Restructuring charges (gains) and asset impairment

 

 

253

 

 

 

 

271

 

 

 

 

(509

)

 

 

 

4,778

 

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

81

 

 

 

 

-

 

 

 

 

81

 

Costs associated with Project One Team

 

 

-

 

 

 

 

-

 

 

 

 

1,845

 

 

 

 

-

 

Organizational realignment costs

 

 

318

 

 

 

 

-

 

 

 

 

616

 

 

 

 

-

 

Pension termination

 

 

10

 

 

 

 

-

 

 

 

 

17

 

 

 

 

-

 

Severance associated with cost reduction initiatives

 

 

12

 

 

 

 

(15

)

 

 

 

83

 

 

 

 

82

 

Adjusted operating earnings

$

 

7,319

 

 

$

 

5,862

 

 

$

 

18,146

 

 

$

 

18,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, cash flows from operating activities and other income or cash flow statement data. The Company's definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies.

Table 4: Reconciliation of Earnings from Continuing Operations to

Adjusted Earnings from Continuing Operations

(A Non-GAAP Financial Measure)

(Unaudited)

 

 

12 Weeks Ended

 

 

October 5, 2019

 

October 6, 2018

 

 

 

 

per diluted

 

 

 

per diluted

 

(In thousands, except per share amounts)

Earnings

 

share

 

Earnings

 

share

 

(Loss) earnings from continuing operations

$

 

(310

)

 

$

 

(0.01

)

 

$

 

17,545

 

 

$

 

0.49

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

-

 

 

 

 

 

 

 

 

521

 

 

 

 

 

 

Restructuring charges and asset impairment

 

 

1,296

 

 

 

 

 

 

 

 

232

 

 

 

 

 

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

 

 

 

 

225

 

 

 

 

 

 

Organizational realignment costs

 

 

935

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Loss on debt extinguishment

 

 

329

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Severance associated with cost reduction initiatives

 

 

43

 

 

 

 

 

 

 

 

50

 

 

 

 

 

 

Pension termination

 

 

10,159

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Total adjustments

 

 

14,966

 

 

 

 

 

 

 

 

1,028

 

 

 

 

 

 

Income tax effect on adjustments (a)

 

 

(3,751

)

 

 

 

 

 

 

 

(176

)

 

 

 

 

 

Impact of Tax Cuts and Jobs Act (b)

 

 

-

 

 

 

 

 

 

 

 

(494

)

 

 

 

 

 

Total adjustments, net of taxes

 

 

11,215

 

 

 

 

0.31

 

 

 

 

358

 

 

 

 

0.01

 

Adjusted earnings from continuing operations

$

 

10,905

 

 

$

 

0.30

 

 

$

 

17,903

 

 

$

 

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40 Weeks Ended

 

 

October 5, 2019

 

October 6, 2018

 

 

 

 

per diluted

 

 

 

per diluted

 

(In thousands, except per share amounts)

Earnings

 

share

 

Earnings

 

share

 

Earnings from continuing operations

$

 

444

 

 

$

 

0.01

 

 

$

 

47,818

 

 

$

 

1.33

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

1,364

 

 

 

 

 

 

 

 

3,531

 

 

 

 

 

 

Restructuring charges and asset impairment

 

 

10,215

 

 

 

 

 

 

 

 

5,269

 

 

 

 

 

 

Fresh Kitchen start-up costs

 

 

-

 

 

 

 

 

 

 

 

1,366

 

 

 

 

 

 

Fresh Kitchen operating losses

 

 

2,204

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Expenses associated with tax planning strategies

 

 

-

 

 

 

 

 

 

 

 

225

 

 

 

 

 

 

Costs associated with Project One Team

 

 

5,428

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Organizational realignment costs

 

 

1,812

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Loss on debt extinguishment

 

 

329

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Severance associated with cost reduction initiatives

 

 

484

 

 

 

 

 

 

 

 

668

 

 

 

 

 

 

Pension termination

 

 

19,510

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

Total adjustments

 

 

41,346

 

 

 

 

 

 

 

 

11,059

 

 

 

 

 

 

Income tax effect on adjustments (a)

 

 

(10,166

)

 

 

 

 

 

 

 

(2,564

)

 

 

 

 

 

Impact of Tax Cuts and Jobs Act (b)

 

 

-

 

 

 

 

 

 

 

 

(494

)

 

 

 

 

 

Total adjustments, net of taxes

 

 

31,180

 

 

 

 

0.86

 

 

 

 

8,001

 

 

 

 

0.22

 

Adjusted earnings from continuing operations

$

 

31,624

 

 

$

 

0.87

 

 

$

 

55,819

 

 

$

 

1.55

 

(a)

The income tax effect on adjustments is computed by applying the applicable tax rate to the adjustments.

(b)

Includes a $1.1 million tax benefit attributable to tax planning strategies related to the Tax Cuts and Jobs Act.

Notes: Adjusted earnings from continuing operations is a non-GAAP operating financial measure that the Company defines as earnings from continuing operations plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

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 Capital Lease Obligations to Total Net Long-Term Debt and Capital Lease Obligations

(A Non-GAAP Financial Measure)

(Unaudited)

 

 

October 5,

 

December 29,

(In thousands)

2019

 

2018

Current portion of long-term debt and finance lease liabilities

$

 

7,044

 

 

$

 

18,263

 

Long-term debt and finance lease liabilities

 

 

686,055

 

 

 

 

679,797

 

Total debt

 

 

693,099

 

 

 

 

698,060

 

Cash and cash equivalents

 

 

(23,436

)

 

 

 

(18,585

)

Total net long-term debt

$

 

669,663

 

 

$

 

679,475

 

Notes: Total net debt is a non-GAAP financial measure that is defined as long-term debt and capital lease obligations plus current maturities of long-term debt and capital lease obligations less cash and cash equivalents. The Company believes 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. Total net 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 5, 2019

 

 

October 6, 2018

 

Net cash provided by operating activities

 

 

 

$

 

140,034

 

 

$

 

142,546

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

46,905

 

 

 

 

52,600

 

Free cash flow

 

 

 

$

 

93,129

 

 

$

 

89,946

 

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 Projected Earnings per Diluted Share from Continuing Operations to Projected Adjusted Earnings per Diluted Share from Continuing Operations

(A Non-GAAP Financial Measure)

(Unaudited)

 

 

52 Weeks Ending

December 28, 2019

 

 

Low

 

 

High

 

Earnings from continuing operations

$

 

0.01

 

 

$

 

0.29

 

Adjustments, net of taxes:

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration expenses

 

 

0.04

 

 

 

 

0.03

 

Gain on sale of assets

 

 

(0.15

)

 

 

 

(0.15

)

Termination of frozen pension plan

 

 

0.41

 

 

 

 

0.38

 

Costs associated with Project One Team

 

 

0.12

 

 

 

 

0.11

 

Exit of Fresh Kitchen

 

 

0.12

 

 

 

 

0.10

 

Restructuring and asset impairment

 

 

0.38

 

 

 

 

0.36

 

Severance associated with cost reduction initiatives

 

 

0.03

 

 

 

 

0.02

 

Organizational realignment costs

 

 

0.04

 

 

 

 

0.03

 

Adjusted earnings from continuing operations

$

 

1.00

 

 

$

 

1.17

 

 

Investor Contacts:
Mark Shamber
Chief Financial Officer and Executive Vice President
(616) 878-8023

Katie Turner
Partner, ICR
(646) 277-1228

Media Contact:
Meredith Gremel
Vice President Corporate Affairs and Communications
(616) 878-2830