SpartanNash Announces First Quarter Fiscal 2022 Financial Results
SpartanNash announced its first-quarter results for fiscal 2022, reporting net sales of $2.76 billion, up 4.0% from last year. Net earnings were $19.3 million, slightly down from $19.5 million. Adjusted EBITDA reached a record $76.6 million, a substantial 18.2% increase year-over-year. The company reaffirmed its fiscal 2022 guidance, raising expected net sales to between $9.0 billion and $9.3 billion. SpartanNash also updated long-term targets, aiming for over $10 billion in net sales by 2025.
- Record first-quarter adjusted EBITDA of $76.6 million, up 18.2% year-over-year.
- Raised fiscal 2022 net sales guidance to $9.0-$9.3 billion from $8.9-$9.1 billion.
- Achieved over $15 million in run-rate cost savings through supply chain transformation ahead of schedule.
- Net earnings decreased to $19.3 million, down from $19.5 million in the prior year quarter.
- Reported operating expenses increased to $422.4 million, up from $387.8 million, driven by higher retail and supply chain labor costs.
Reiterates Recently Announced Fiscal 2022 Guidance Raise and Long-Term Financial Targets
First Quarter Fiscal 2022 Highlights
-
Net sales of
$2.76 billion 4.0% from the prior year quarter’s net sales of$2.66 billion -
Net earnings of
$19.3 million $19.5 million -
Record first quarter adjusted EBITDA(1) of
$76.6 million 18.2% from$64.8 million -
EPS of
$0.53 $0.54 $0.83 41% increase compared to$0.59 -
Military segment operating margin of
0.24% and Military adjusted EBITDA margin(3) of1.58% , surpassing the Company’s original turnaround target of1% . -
The Company made significant progress on its supply chain transformation initiative, securing more than
$15 million $15 million $30 million 7% improvement in throughput rate year-over-year. -
Comparable store sales increased to
7.2% , continuing the Company’s strong momentum in its Retail segment.
“Our first quarter results reflect the significant momentum underway at
First Quarter Consolidated Financial Results
Consolidated net sales increased
Gross profit was
Reported operating expenses were
The Company reported operating earnings of
Interest expense decreased by
The Company reported net earnings of
Adjusted EBITDA(1) increased
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.
First Quarter Segment Financial Results
Food Distribution
Net sales for Food Distribution increased
Reported operating earnings for Food Distribution were
Retail
Net sales for Retail increased
Reported operating earnings for Retail were
Military
Net sales for Military increased
Reported operating earnings for Military were
Balance Sheet and Cash Flow
Cash flows provided by operating activities were
Purchases of property and equipment were
During the first quarter, the Company declared
Fiscal Year 2022 Guidance Update
As announced on
-
Net sales to a range of
$9.0 billion $9.3 billion $8.9 billion $9.1 billion -
Adjusted EBITDA to a range of
$224 million $239 million $214 million $229 million
In addition, the Company has updated its guidance with respect to certain other items, as noted in the table below.
|
Previous Full Year 2022 Outlook |
|
|
Updated Full Year 2022 Outlook |
|
||||||||||||||
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
||||||||
Total net sales (millions) |
$ |
|
8,900 |
|
|
$ |
|
9,100 |
|
|
$ |
|
9,000 |
|
|
$ |
|
9,300 |
|
Segment sales % increase (decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail comp sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Food Distribution sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Military sales |
|
( |
|
|
|
( |
|
|
|
( |
|
|
|
|
|
||||
Adjusted EBITDA(1) (millions) |
$ |
|
214 |
|
|
$ |
|
229 |
|
|
$ |
|
224 |
|
|
$ |
|
239 |
|
Adjusted EPS(2) |
$ |
|
2.10 |
|
|
$ |
|
2.25 |
|
|
$ |
|
2.17 |
|
|
$ |
|
2.32 |
|
Capital expenditures and IT capital(7) (thousands) |
$ |
|
100,000 |
|
|
$ |
|
110,000 |
|
|
$ |
|
100,000 |
|
|
$ |
|
110,000 |
|
Depreciation and amortization (thousands) |
$ |
|
90,000 |
|
|
$ |
|
100,000 |
|
|
$ |
|
90,000 |
|
|
$ |
|
100,000 |
|
Interest expense (thousands) |
$ |
|
15,000 |
|
|
$ |
|
17,000 |
|
|
$ |
|
17,500 |
|
|
$ |
|
19,500 |
|
Income tax rate |
|
|
24.0 |
% |
|
|
|
|
|
|
|
24.0 |
% |
|
|
|
|
||
The Company also expects a steady earnings pace across the remaining three quarters in fiscal 2022.
Long-Term Financial Targets
On
-
Net sales to more than
$10 billion 12% from net sales in fiscal 2021. -
Adjusted EBITDA to more than
$300 million 40% from adjusted EBITDA in fiscal 2021. -
Adjusted EBITDA margin to
3% of net sales, an increase of25% from adjusted EBITDA margin in fiscal 2021.
Conference Call
The Company will host a conference call to discuss its quarterly results with additional comments and details today,
A supplemental earnings presentation is available at the Company’s website at www.spartannash.com/investor-presentations.
About
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" about the plans, strategies, objectives, goals or expectations of the Company. These forward-looking statements are identifiable by words or phrases indicating that the Company or management "expects," "anticipates," "plans," "believes," 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. There are many important factors that could cause actual results to differ materially. These risks and uncertainties include the Company's ability to compete in the highly competitive grocery distribution, retail grocery and military distribution industries; disruptions associated with the COVID-19 pandemic; the Company's ability to manage its private brand program for
Non-GAAP Financial Measures
This press release includes information regarding adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), adjusted EBITDA margin, and military adjusted EBITDA margin. 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. These 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. Certain of 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.
The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures used in the fiscal 2022 outlook and long-term targets disclosed in 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 routine activities. These adjustments may include, among other items, restructuring and asset impairment activity, acquisition and integration costs, severance and organizational realignment costs, and the impact of adjustments to the last-in-first-out (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 2022 or fiscal 2025, respectively.
(1) |
A reconciliation of net earnings to Adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2 below. | ||
(2) |
A reconciliation of net earnings per share (“EPS”) to adjusted earnings per share from continuing operations ("Adjusted EPS"), a non-GAAP financial measure, is provided in Table 4 below. | ||
(3) |
A reconciliation of Military adjusted EBITDA, a non-GAAP financial measure, to Military operating earnings (loss) is provided in Table 2 below. Military operating margin and Military adjusted EBITDA margin are calculated by dividing Military operating earnings (loss) and Military adjusted EBITDA into Military net sales, respectively. | ||
(4) |
A reconciliation of operating earnings to adjusted operating earnings, a non-GAAP financial measure, is provided in Table 3 below. | ||
(5) |
A reconciliation of net earnings to adjusted earnings from continuing operations, a non-GAAP financial measure, is provided in Table 4 below. | ||
(6) |
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. | ||
(7) |
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. |
SPARTANNASH COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) |
|||||||||
|
16 Weeks Ended |
|
|||||||
|
|
|
|
|
|
||||
(In thousands, except per share amounts) |
2022 |
|
|
2021 |
|
||||
Net sales |
$ |
|
2,763,658 |
|
|
$ |
|
2,657,799 |
|
Cost of sales |
|
|
2,313,075 |
|
|
|
|
2,239,769 |
|
Gross profit |
|
|
450,583 |
|
|
|
|
418,030 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
422,182 |
|
|
|
|
387,937 |
|
Acquisition and integration |
|
|
239 |
|
|
|
|
59 |
|
Restructuring and asset impairment, net |
|
|
13 |
|
|
|
|
(161 |
) |
Total operating expenses |
|
|
422,434 |
|
|
|
|
387,835 |
|
|
|
|
|
|
|
|
|
|
|
Operating earnings |
|
|
28,149 |
|
|
|
|
30,195 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses and (income) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
4,185 |
|
|
|
|
4,589 |
|
Other, net |
|
|
(216 |
) |
|
|
|
(266 |
) |
Total other expenses, net |
|
|
3,969 |
|
|
|
|
4,323 |
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
24,180 |
|
|
|
|
25,872 |
|
Income tax expense |
|
|
4,891 |
|
|
|
|
6,356 |
|
Net earnings |
$ |
|
19,289 |
|
|
$ |
|
19,516 |
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings per share: |
$ |
|
0.54 |
|
|
$ |
|
0.55 |
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share: |
$ |
|
0.53 |
|
|
$ |
|
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
35,566 |
|
|
|
|
35,765 |
|
Diluted |
|
|
36,381 |
|
|
|
|
35,876 |
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||||
|
|
|
|
|
|
||||
(In thousands) |
2022 |
|
|
2022 |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
|
16,330 |
|
|
$ |
|
10,666 |
|
Accounts and notes receivable, net |
|
|
395,467 |
|
|
|
|
361,686 |
|
Inventories, net |
|
|
556,322 |
|
|
|
|
522,324 |
|
Prepaid expenses and other current assets |
|
|
63,772 |
|
|
|
|
62,517 |
|
Total current assets |
|
|
1,031,891 |
|
|
|
|
957,193 |
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
575,666 |
|
|
|
|
577,359 |
|
|
|
|
181,035 |
|
|
|
|
181,035 |
|
Intangible assets, net |
|
|
109,400 |
|
|
|
|
110,960 |
|
Operating lease assets |
|
|
269,278 |
|
|
|
|
283,040 |
|
Other assets, net |
|
|
96,963 |
|
|
|
|
97,195 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
|
2,264,233 |
|
|
$ |
|
2,206,782 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
|
478,964 |
|
|
$ |
|
447,451 |
|
Accrued payroll and benefits |
|
|
66,316 |
|
|
|
|
86,315 |
|
Other accrued expenses |
|
|
63,164 |
|
|
|
|
67,893 |
|
Current portion of operating lease liabilities |
|
|
47,375 |
|
|
|
|
47,845 |
|
Current portion of long-term debt and finance lease liabilities |
|
|
5,806 |
|
|
|
|
6,334 |
|
Total current liabilities |
|
|
661,625 |
|
|
|
|
655,838 |
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
74,396 |
|
|
|
|
63,692 |
|
Operating lease liabilities |
|
|
252,126 |
|
|
|
|
266,701 |
|
Other long-term liabilities |
|
|
36,483 |
|
|
|
|
38,292 |
|
Long-term debt and finance lease liabilities |
|
|
444,299 |
|
|
|
|
399,390 |
|
Total long-term liabilities |
|
|
807,304 |
|
|
|
|
768,075 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
Common stock, voting, no par value; 100,000 shares authorized; 36,140 and 35,948 shares outstanding |
|
|
494,571 |
|
|
|
|
493,783 |
|
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding |
|
|
— |
|
|
|
|
— |
|
Accumulated other comprehensive loss |
|
|
(1,432 |
) |
|
|
|
(1,455 |
) |
Retained earnings |
|
|
302,165 |
|
|
|
|
290,541 |
|
Total shareholders’ equity |
|
|
795,304 |
|
|
|
|
782,869 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
|
2,264,233 |
|
|
$ |
|
2,206,782 |
|
|
|
|
|
|
|
|
|
|
|
SPARTANNASH COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||||||
|
|
|
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
|
|
|
||||
Cash flow activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
|
$ |
|
9,970 |
|
|
$ |
|
(31,778 |
) |
Net cash (used in) provided by investing activities |
|
|
|
|
|
(26,945 |
) |
|
|
|
4,257 |
|
Net cash provided by financing activities |
|
|
|
|
|
22,639 |
|
|
|
|
30,910 |
|
Net increase in cash and cash equivalents |
|
|
|
|
|
5,664 |
|
|
|
|
3,389 |
|
Cash and cash equivalents at beginning of the period |
|
|
|
|
|
10,666 |
|
|
|
|
19,903 |
|
Cash and cash equivalents at end of the period |
|
|
|
$ |
|
16,330 |
|
|
$ |
|
23,292 |
|
SPARTANNASH COMPANY AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA
(Unaudited) |
|||||||||||||||
|
16 Weeks Ended |
|
|||||||||||||
(In thousands) |
|
|
|
|
|
||||||||||
Food Distribution Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
|
1,370,857 |
|
|
49.6 |
% |
|
$ |
|
1,334,082 |
|
|
50.2 |
% |
Operating earnings |
|
|
26,684 |
|
|
|
|
|
|
|
21,146 |
|
|
|
|
Retail Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
781,279 |
|
|
28.3 |
% |
|
|
|
739,444 |
|
|
27.8 |
% |
Operating earnings |
|
|
27 |
|
|
|
|
|
|
|
14,192 |
|
|
|
|
Military Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
611,522 |
|
|
22.1 |
% |
|
|
|
584,273 |
|
|
22.0 |
% |
Operating earnings (loss) |
|
|
1,438 |
|
|
|
|
|
|
|
(5,143 |
) |
|
|
|
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
|
2,763,658 |
|
|
100.0 |
% |
|
$ |
|
2,657,799 |
|
|
100.0 |
% |
Operating earnings |
|
|
28,149 |
|
|
|
|
|
|
|
30,195 |
|
|
|
|
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, 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.
At the beginning of 2022, the Company made a change to the adjusted operating earnings and adjusted earnings from continuing operations measures to exclude the impact of LIFO expense or benefit. The Company believes the change reduces volatility associated with temporary fluctuations in inflation, enabling investors to best establish a basis for expected performance and the ability to evaluate actual results against that expectation and the industry in which the Company operates. Prior year adjusted operating earnings and adjusted earnings from continuing operations figures have been restated to align with this change in presentation. Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude LIFO expense, costs related to shareholder activism, organizational realignment and severance associated with cost reduction initiatives. Costs related to shareholder activism include consulting, legal, and other expenses incurred in relation to shareholder activism activities. Organizational realignment includes benefits for associates terminated as part of leadership transition plans, 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 LIFO expense, organizational realignment and severance associated with cost reduction initiatives.
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) |
|||||||||
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
||||
Net earnings |
$ |
|
19,289 |
|
|
$ |
|
19,516 |
|
Income tax expense |
|
|
4,891 |
|
|
|
|
6,356 |
|
Other expenses, net |
|
|
3,969 |
|
|
|
|
4,323 |
|
Operating earnings |
|
|
28,149 |
|
|
|
|
30,195 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
10,187 |
|
|
|
|
1,655 |
|
Depreciation and amortization |
|
|
28,473 |
|
|
|
|
28,091 |
|
Acquisition and integration |
|
|
239 |
|
|
|
|
59 |
|
Restructuring and asset impairment, net |
|
|
13 |
|
|
|
|
(161 |
) |
Cloud computing amortization |
|
|
900 |
|
|
|
|
480 |
|
Organizational realignment, net |
|
|
1,019 |
|
|
|
|
641 |
|
Severance associated with cost reduction initiatives |
|
|
246 |
|
|
|
|
125 |
|
Stock-based compensation |
|
|
4,441 |
|
|
|
|
4,190 |
|
Stock warrant |
|
|
673 |
|
|
|
|
645 |
|
Non-cash rent |
|
|
(1,088 |
) |
|
|
|
(895 |
) |
Gain on disposal of assets |
|
|
(77 |
) |
|
|
|
(182 |
) |
Costs related to shareholder activism |
|
|
3,471 |
|
|
|
|
— |
|
Adjusted EBITDA |
$ |
|
76,646 |
|
|
$ |
|
64,843 |
|
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, continued (Adjusted EBITDA) (A Non-GAAP Financial Measure) (Unaudited) |
|||||||||
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
||||
Food Distribution: |
|
|
|
|
|
|
|
|
|
Operating earnings |
$ |
|
26,684 |
|
|
$ |
|
21,146 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
5,728 |
|
|
|
|
794 |
|
Depreciation and amortization |
|
|
10,092 |
|
|
|
|
9,790 |
|
Restructuring and asset impairment, net |
|
|
11 |
|
|
|
|
(18 |
) |
Cloud computing amortization |
|
|
550 |
|
|
|
|
234 |
|
Organizational realignment, net |
|
|
483 |
|
|
|
|
313 |
|
Severance associated with cost reduction initiatives |
|
|
91 |
|
|
|
|
99 |
|
Stock-based compensation |
|
|
2,123 |
|
|
|
|
1,929 |
|
Stock warrant |
|
|
673 |
|
|
|
|
645 |
|
Non-cash rent |
|
|
25 |
|
|
|
|
774 |
|
Gain on disposal of assets |
|
|
(78 |
) |
|
|
|
(37 |
) |
Costs related to shareholder activism |
|
|
1,642 |
|
|
|
|
— |
|
Adjusted EBITDA |
$ |
|
48,024 |
|
|
$ |
|
35,669 |
|
Retail: |
|
|
|
|
|
|
|
|
|
Operating earnings |
$ |
|
27 |
|
|
$ |
|
14,192 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
1,912 |
|
|
|
|
415 |
|
Depreciation and amortization |
|
|
14,189 |
|
|
|
|
14,241 |
|
Acquisition and integration |
|
|
239 |
|
|
|
|
59 |
|
Restructuring and asset impairment, net |
|
|
2 |
|
|
|
|
(143 |
) |
Cloud computing amortization |
|
|
251 |
|
|
|
|
175 |
|
Organizational realignment, net |
|
|
382 |
|
|
|
|
234 |
|
Severance associated with cost reduction initiatives |
|
|
122 |
|
|
|
|
29 |
|
Stock-based compensation |
|
|
1,495 |
|
|
|
|
1,480 |
|
Non-cash rent |
|
|
(985 |
) |
|
|
|
(1,552 |
) |
Loss (gain) on disposal of assets |
|
|
9 |
|
|
|
|
(123 |
) |
Costs related to shareholder activism |
|
|
1,305 |
|
|
|
|
— |
|
Adjusted EBITDA |
$ |
|
18,948 |
|
|
$ |
|
29,007 |
|
Military: |
|
|
|
|
|
|
|
|
|
Operating earnings (loss) |
$ |
|
1,438 |
|
|
$ |
|
(5,143 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
2,547 |
|
|
|
|
446 |
|
Depreciation and amortization |
|
|
4,192 |
|
|
|
|
4,060 |
|
Cloud computing amortization |
|
|
99 |
|
|
|
|
71 |
|
Organizational realignment, net |
|
|
154 |
|
|
|
|
94 |
|
Severance associated with cost reduction initiatives |
|
|
33 |
|
|
|
|
(3 |
) |
Stock-based compensation |
|
|
823 |
|
|
|
|
781 |
|
Non-cash rent |
|
|
(128 |
) |
|
|
|
(117 |
) |
Gain on disposal of assets |
|
|
(8 |
) |
|
|
|
(22 |
) |
Costs related to shareholder activism |
|
|
524 |
|
|
|
|
— |
|
Adjusted EBITDA |
$ |
|
9,674 |
|
|
$ |
|
167 |
|
|
|
|
|
|
|
|
|
|
|
Military |
$ |
|
611,522 |
|
|
$ |
|
584,273 |
|
|
|
|
|
|
|
|
|
|
|
Military Operating Margin |
|
|
|
|
|
( |
|
||
|
|
|
|
|
|
|
|
|
|
Military Adjusted EBITDA Margin |
|
|
|
|
|
|
|
||
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 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
Table 3: Reconciliation of Operating Earnings to Adjusted Operating Earnings (A Non-GAAP Financial Measure) (Unaudited) |
|||||||||
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
||||
Operating earnings |
$ |
|
28,149 |
|
|
$ |
|
30,195 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
10,187 |
|
|
|
|
1,655 |
|
Acquisition and integration |
|
|
239 |
|
|
|
|
59 |
|
Restructuring and asset impairment, net |
|
|
13 |
|
|
|
|
(161 |
) |
Organizational realignment, net |
|
|
1,019 |
|
|
|
|
641 |
|
Severance associated with cost reduction initiatives |
|
|
246 |
|
|
|
|
125 |
|
Costs related to shareholder activism |
|
|
3,471 |
|
|
|
|
— |
|
Adjusted operating earnings |
$ |
|
43,324 |
|
|
$ |
|
32,514 |
|
Table 3: Reconciliation of Operating Earnings to Adjusted Operating Earnings, continued (A Non-GAAP Financial Measure) (Unaudited) |
|||||||||
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
||||
Food Distribution: |
|
|
|
|
|
|
|
|
|
Operating earnings |
$ |
|
26,684 |
|
|
$ |
|
21,146 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
5,728 |
|
|
|
|
794 |
|
Restructuring and asset impairment, net |
|
|
11 |
|
|
|
|
(18 |
) |
Organizational realignment, net |
|
|
483 |
|
|
|
|
313 |
|
Severance associated with cost reduction initiatives |
|
|
91 |
|
|
|
|
99 |
|
Costs related to shareholder activism |
|
|
1,642 |
|
|
|
|
— |
|
Adjusted operating earnings |
$ |
|
34,639 |
|
|
$ |
|
22,334 |
|
Retail: |
|
|
|
|
|
|
|
|
|
Operating earnings |
$ |
|
27 |
|
|
$ |
|
14,192 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
1,912 |
|
|
|
|
415 |
|
Acquisition and integration |
|
|
239 |
|
|
|
|
59 |
|
Restructuring and asset impairment, net |
|
|
2 |
|
|
|
|
(143 |
) |
Organizational realignment, net |
|
|
382 |
|
|
|
|
234 |
|
Severance associated with cost reduction initiatives |
|
|
122 |
|
|
|
|
29 |
|
Costs related to shareholder activism |
|
|
1,305 |
|
|
|
|
— |
|
Adjusted operating earnings |
$ |
|
3,989 |
|
|
$ |
|
14,786 |
|
Military: |
|
|
|
|
|
|
|
|
|
Operating earnings (loss) |
$ |
|
1,438 |
|
|
$ |
|
(5,143 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
2,547 |
|
|
|
|
446 |
|
Organizational realignment, net |
|
|
154 |
|
|
|
|
94 |
|
Severance associated with cost reduction initiatives |
|
|
33 |
|
|
|
|
(3 |
) |
Costs related to shareholder activism |
|
|
524 |
|
|
|
|
— |
|
Adjusted operating earnings (loss) |
$ |
|
4,696 |
|
|
$ |
|
(4,606 |
) |
|
|
|
|
|
|
|
|
|
|
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 GAAP 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 Earnings from Continuing Operations to Adjusted Earnings from Continuing Operations (A Non-GAAP Financial Measure) (Unaudited) |
|||||||||||||||||||
|
16 Weeks Ended |
|
|||||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
|
|
|
per diluted |
|
|
|
|
|
per diluted |
|
||||||||
(In thousands, except per share amounts) |
Earnings |
|
|
share |
|
|
Earnings |
|
|
share |
|
||||||||
Net earnings |
$ |
|
19,289 |
|
|
$ |
|
0.53 |
|
|
$ |
|
19,516 |
|
|
$ |
|
0.54 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
10,187 |
|
|
|
|
|
|
|
|
|
1,655 |
|
|
|
|
|
|
Acquisition and integration |
|
|
239 |
|
|
|
|
|
|
|
|
|
59 |
|
|
|
|
|
|
Restructuring and asset impairment, net |
|
|
13 |
|
|
|
|
|
|
|
|
|
(161 |
) |
|
|
|
|
|
Organizational realignment, net |
|
|
1,019 |
|
|
|
|
|
|
|
|
|
641 |
|
|
|
|
|
|
Severance associated with cost reduction initiatives |
|
|
246 |
|
|
|
|
|
|
|
|
|
125 |
|
|
|
|
|
|
Pension refund from annuity provider |
|
|
(200 |
) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Costs related to shareholder activism |
|
|
3,471 |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Total adjustments |
|
|
14,975 |
|
|
|
|
|
|
|
|
|
2,319 |
|
|
|
|
|
|
Income tax effect on adjustments(a) |
|
|
(3,933 |
) |
|
|
|
|
|
|
|
|
(565 |
) |
|
|
|
|
|
Total adjustments, net of taxes |
|
|
11,042 |
|
|
|
|
0.30 |
|
|
|
|
1,754 |
|
|
|
|
0.05 |
|
Adjusted earnings from continuing operations |
$ |
|
30,331 |
|
|
$ |
|
0.83 |
|
|
$ |
|
21,270 |
|
|
$ |
|
0.59 |
|
| (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 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 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 5: Reconciliation of Long-Term Debt and Finance Lease Obligations to Net Long-Term Debt (A Non-GAAP Financial Measure) (Unaudited) |
|||||||||
|
|
|
|
|
|
||||
(In thousands) |
2022 |
|
|
2022 |
|
||||
Current portion of long-term debt and finance lease liabilities |
$ |
|
5,806 |
|
|
$ |
|
6,334 |
|
Long-term debt and finance lease liabilities |
|
|
444,299 |
|
|
|
|
399,390 |
|
Total debt |
|
|
450,105 |
|
|
|
|
405,724 |
|
Cash and cash equivalents |
|
|
(16,330 |
) |
|
|
|
(10,666 |
) |
Net long-term debt |
$ |
|
433,775 |
|
|
$ |
|
395,058 |
|
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 6: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (A Non-GAAP Financial Measure) (Unaudited) |
||||||||||||
|
|
|
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
|
|
|
||||
Net cash provided by (used in) operating activities |
|
|
|
$ |
|
9,970 |
|
|
$ |
|
(31,778 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
|
|
|
29,938 |
|
|
|
|
22,124 |
|
Free cash flow |
|
|
|
$ |
|
(19,968 |
) |
|
$ |
|
(53,902 |
) |
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 (A Non-GAAP Financial Measure) (Unaudited) |
||||||||||||
|
|
|
|
16 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment |
|
|
|
$ |
|
29,938 |
|
|
$ |
|
22,124 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
Cloud computing spend |
|
|
|
|
|
354 |
|
|
|
|
1,947 |
|
Capital expenditures and IT capital |
|
|
|
$ |
|
30,292 |
|
|
$ |
|
24,071 |
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220602005216/en/
Investor Relations:
Head of Investor Relations
Kayleigh.Campbell@spartannash.com
SpartanNashIR@icrinc.com
616-878-8354
Media:
Senior Manager, Public Relations
Caitlin.Gardner@spartannash.com
press@spartannash.com
Source:
FAQ
What are SpartanNash's fiscal 2022 guidance updates for net sales?
How did SpartanNash perform in the first quarter of fiscal 2022?
What are SpartanNash's long-term financial targets?
What was the adjusted EPS for SpartanNash in the first quarter of fiscal 2022?
What challenges did SpartanNash face in its retail operations?
