10-Q

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes x No

As of May 2, 2015, there were 49,391,425 shares of the registrant’s common stock, par value $0.01 per share, issued and outstanding.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and do not include all of the information and footnotes required for complete, audited financial statements. For further information, refer to the consolidated financial statements and footnotes included in the consolidated financial statements included in the Annual Report on Form 10-K for the year ended January 3, 2015.

The accompanying unaudited consolidated financial statements as of April 4, 2015, and for the thirteen weeks ended March 29, 2014 and April 4, 2015 reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results of Roundy’s, Inc. and its subsidiaries. All material intercompany accounts and transactions have been eliminated in the unaudited consolidated financial statements. The results of operations for the thirteen weeks ended April 4, 2015 may not necessarily be indicative of the results that may be expected for the entire fiscal year ending January 2, 2016.

Unless the context otherwise indicates, all references in these financial statements to the “Company,” or “Roundy’s,” or similar words are to Roundy’s, Inc.

In May 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 changed the criteria for reporting discontinued operations and requires additional disclosures about discontinued operations. ASU No. 2014-08 is effective on a prospective basis for all disposals of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. The Company chose not to adopt ASU 2014-08 early for the Rainbow Store Sale transaction and the closure of the remaining nine Rainbow stores, and as such, this standard did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”). ASU No. 2014-09 provides guidance for revenue recognition for companies that either enter into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the new guidance is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently assessing the potential impact of ASU No. 2014-09 on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest’ (“ASU No. 2015-03”). ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Debt issuance costs are currently required to be capitalized and presented in the balance sheet as deferred charges or assets. The recognition and measurement for debt issuance costs are not affected by ASU No. 2015-03. The new guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company has recognized these types of costs related to its 2014 Credit Facilities which will be reclassified from other assets to long-term debt liabilities when the Company adopts ASU No. 2015-03.

On February 12, 2014, the Company completed a public offering of 10,170,989 shares of its common stock at a price of $7.00 per share, which included 2,948,113 shares sold by Roundy’s and 7,222,876 shares sold by existing shareholders. The Company received approximately $20.6 million in gross proceeds from the offering, or approximately $19.3 million in net proceeds after deducting the underwriting discount and expenses related to the offering. The net proceeds were used for general corporate purposes, including funding working capital and operating expenses as well as capital expenditures related to the eleven Dominick’s stores acquired from Safeway during the fourth quarter of 2013.

On December 20, 2013, the Company acquired eleven Dominick’s stores from Safeway in a $36 million cash transaction (the “Chicago Stores Acquisition”). As a result of the transaction, the Company assumed the operating leases for ten of the stores and a capital lease liability for one store. The Company re-opened all of these stores under the Company’s Mariano’s banner during Fiscal 2014. The transaction enabled the Company to expand its presence in the Chicago market and accelerate the number of Mariano’s locations, the Company’s growth banner. The Company paid an amount in excess of the fair value of the assets acquired and recorded goodwill of approximately $4.3 million. The amount of goodwill recorded in connection with the transaction is deductible for tax purposes over a 15-year period.

The transaction was accounted for as a business combination under Accounting Standards Codification 805. As such, the purchase price was allocated based on a fair value appraisal by a third party valuation firm. The fair value calculations of property under capital lease and the favorable lease rights were based on estimated market rents for those leased properties, which the Company considers to be Level 2 within the fair value hierarchy. The fair value calculations of the customer lists were based on the estimated profitability of the sales associated with the acquired customers. The fair value calculations of the equipment and leasehold improvements were based on the estimated replacement cost. The Company considers the inputs used in the fair value calculations of the equipment, leasehold improvements and customer lists to be Level 3 within the fair value hierarchy.

The favorable lease rights will be amortized over the lease term of the acquired stores. The customer lists will be amortized over an expected life of 5 years. Other than the capital lease liability assumed, there were no other liabilities assumed in the transaction.

During the third quarter of Fiscal 2014, the Company recognized a net of tax loss of $0.3 million related to the write-off of certain Dominick’s equipment which the Company did not deploy.

During the second quarter of Fiscal 2014, the Company entered into definitive agreements to sell 18 Rainbow stores in the Minneapolis / St. Paul market to a group of local grocery retailers (“Buyers”), including SUPERVALU INC. (“Rainbow Store Sale”). The aggregate sale price for the 18 Rainbow stores was $65 million in cash plus the proceeds from inventory that was sold to the Buyers at the closing of the Rainbow Store Sale. In addition, as part of the transaction, the Buyers assumed the lease obligations and certain multi-employer pension liabilities related to the acquired stores. The total proceeds received from the Rainbow Store Sale were $76.9 million, resulting in a gain of $1.7 million, which was recognized in the third quarter of Fiscal 2014.

As a condition to the sale agreement, the Company entered into sublease agreements for four of the 18 Rainbow stores for a five year period. The amount of the sublease rent payments that will be received from the Buyers are less than the minimum lease payments for these stores. The sublease payments are not considered significant to the operations of these stores, and as such, the Company does not have significant continuing cash flows.

In addition, during the second quarter of Fiscal 2014, the Company announced its intention to exit the Minneapolis / St. Paul market entirely. The remaining nine Rainbow stores not included in the Rainbow Store Sale were closed during the third quarter of Fiscal

2014. The Company recorded a non-cash impairment charge of $11.1 million in the third quarter of Fiscal 2014 related to the assets of the nine Rainbow stores that were closed. The Company also recorded a $10.0 million closed facility charge during the third quarter of Fiscal 2014 related principally to the lease agreements for the nine closed store locations. During the first quarter of Fiscal 2015, the Company paid $7.9 million to terminate the obligations related to the capital leases of two Rainbow stores that were closed during the third quarter of Fiscal 2014, resulting in a pre-tax gain of $2.7 million.

The Company incurred severance expense of approximately $2.2 million to the employees of the Rainbow stores that were sold or closed during the third quarter of Fiscal 2014.

As a result of the Rainbow Store Sale and the exit from the Minneapolis / St. Paul market, the Company expects to incur a withdrawal liability related to the multi-employer pension plans in which the affected employees participate. During Fiscal 2014, the Company recorded a charge of $49.7 million for the estimated multi-employer pension withdrawal liability, which represents the Company’s best estimate absent demand letters from the multi-employer plans. Demand letters from the impacted multi-employer pension plans may be received in 2015, or later and the ultimate withdrawal liability may change from the currently estimated amount. Any future charge will be recorded in the period when the change is identified. The Company expects the liability will be paid out in quarterly installments, which vary by plan, over a period of up to 20 years. The net present value of the liability was determined using a risk free interest rate. During the fourth quarter of Fiscal 2014, the Company received a preliminary notice from one of the plans, which required the Company to make the first quarterly installment during the fourth quarter of 2014, and these quarterly installments will continue for 20 years. The amount of the payment was consistent with the Company’s estimates when the initial charge was recorded. The present value of the payments expected to be made within the next twelve months is included within current liabilities of discontinued operations, and the remainder of the liability for the estimated multi-employer pension withdrawal is included within long-term liabilities of discontinued operations as presented in the table below.

Also in connection with the sale of the 18 Rainbow stores, the Company has assigned leases and subleases for these stores which expire at various dates through 2026. A remaining potential obligation exists in the event of a default under the assigned leases and subleases by the assignee. The potential obligations would include rent, real estate taxes, common area costs and other sundry expenses. As of April 4, 2015, the future minimum lease payments are approximately $37.3 million. The Company believes the likelihood of a liability related to these assigned leases and subleases is remote.

The Company has accounted for the 27 Rainbow stores that were either included in the Rainbow Store Sale or closed during the third quarter of Fiscal 2014 as discontinued operations. The Consolidated Statement of Comprehensive Loss for the thirteen weeks ended March 29, 2014 has been reclassified to conform with this presentation.

The Company has included all direct costs and an amount of allocated interest expense (including amortization of deferred financing costs and loss on debt extinguishment charges) for the 27 Rainbow stores within net income (loss) from discontinued operations. Interest was allocated based on the ratio of the net assets of the 27 Rainbow stores as of the end of the period to the net assets of the total Company. The Company recorded $1.7 million and $0.5 million of interest in discontinued operations for the thirteen weeks ended March 29, 2014 and April 4, 2015, respectively.

Net income (loss) from discontinued operations, net of tax, as presented in the Consolidated Statements of Comprehensive Loss for the thirteen weeks ending March 29, 2014 and April 4, 2015 is as follows (in thousands):

The assets and liabilities of discontinued operations as of January 3, 2015 and April 4, 2015 include the following:

On July 1, 2014 the Company announced the closure of its Stevens Point distribution facility (“Stevens Point Warehouse”). As a result of these actions, the Company evaluated the recoverability of this long-lived asset group and recorded a non-cash impairment charge of $5.1 million for the assets at the Stevens Point Warehouse during the second quarter of Fiscal 2014. The fair value of the long-lived asset group was calculated using level 2 market data inputs. At that time, the Stevens Point Warehouse did not meet the criteria of assets held for sale.

The Company consolidated its supply chain operations previously performed at the Stevens Point Warehouse into its Oconomowoc distribution facility and closed the Stevens Point Warehouse during the third quarter of Fiscal 2014. During the fourth quarter of Fiscal 2014, the Company sold the Stevens Point Warehouse, which resulted in a gain of approximately $10.1 million ($6.5 million, net of income taxes).

The Company recorded severance and other one-time charges of $2.0 million related to the closure of the Stevens Point Warehouse during the Fiscal 2014. Other one-time charges included costs to transfer inventory and equipment from the Stevens Point Warehouse to the Oconomowoc warehouse, as well as miscellaneous expenses required to prepare the Steven’s Point Warehouse for sale.

Fair value measurements are categorized into one of three levels as defined by US GAAP. The three levels are defined as follows:

Level 1 – Unadjusted quoted prices are available in active markets for identical assets or liabilities that can be accessed at the measurement date;

Level 2 – Inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability;

The Company has one item carried at (or adjusted to) fair value in the consolidated financial statements as of April 4, 2015, which is an interest rate swap liability of $0.6 million, compared to a liability of $0.6 million as of January 3, 2015. Interest rate derivatives are valued using forward curves and volatility levels as determined on the basis of observable market inputs when available and on the basis of estimates when observable market inputs are not available. These forward curves are classified as Level 2 within the fair value hierarchy.

The carrying values of the Company’s cash and cash equivalents, notes and accounts receivable, accounts payable and revolving credit facility debt approximated fair value as of April 4, 2015.

Based on estimated market rents for those leased properties which are recorded as capital leases, the fair value of capital lease obligations is approximately $24.3 million and $16.3 million, as of January 3, 2015 and April 4, 2015, respectively. Included in the fair value of capital lease obligations is $11.3 million and $4.0 million as of January 3, 2015 and April 4, 2015, respectively, related to the capital lease obligations for the nine Rainbow stores that were closed during the third quarter of 2014 and are included in liabilities of discontinued operations on the Consolidated Balance Sheet. The Company considers the fiscal fair value of the capital leases to be Level 2 within the fair value hierarchy.

Based on recent open market transactions of the Company’s 2014 Credit Facilities and the 10.250% Senior Secured Notes due in 2020 (the “2020 Notes”), the fair value of long-term debt, including current maturities, is approximately $600.9 million and $620.9 million as of January 3, 2015 and April 4, 2015, respectively. The Company considers the fair value of the New Term Facility and 2020 Notes to be Level 2 within the fair value hierarchy.

The Company uses the LIFO method of valuation for a portion of its inventories. If the FIFO method had been used, inventories would have been approximately $21.2 million higher on January 3, 2015 and $21.3 million higher on April 4, 2015.

An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Because these estimates are subject to many factors beyond management’s control, interim results are subject to the final year-end LIFO inventory valuation.

On March 3, 2014, Roundy’s Supermarkets, Inc. (“RSI”), the wholly owned operating subsidiary of the Company, refinanced its existing credit facilities (the “2014 Refinancing”), and entered into two new credit facilities, a $460 million term loan (the “New Term Facility”) and a $220 million asset-based revolving credit facility (the “New Revolving Facility”, together with the New Term Facility, the “2014 Credit Facilities”). The Company used the proceeds from the New Term Facility, together with existing cash, to repay the Company’s existing term loan, including all accrued interest thereon and related costs, fees and expenses. The New Term Facility was issued with a 2.0% discount, which will be amortized over the seven year term of the New Term Facility. The New Term Facility has a maturity date of March 3, 2021 that will accelerate to September 15, 2020 if the 10.250% Senior Secured Notes due in 2020 (the “2020 Notes”) are not refinanced in full prior to September 15, 2020. The New Revolving Facility has a maturity date of March 3, 2019.

The New Term Facility bears an interest rate, at the Company’s option, at (i) adjusted LIBOR (subject to a minimum floor of 1.00%) plus 4.75% or (ii) a base rate plus 3.75%.

Mandatory prepayments under the New Term Facility are required with (i) 50% of adjusted excess cash flow (which percentage shall be reduced to 25% and to 0% upon achievement of certain leverage ratios); (ii) 100% of the net cash proceeds of assets sales or other non-ordinary course dispositions of certain property by RSI and its restricted subsidiaries (subject to certain exceptions and reinvestment provisions); and (iii) 100% of the net cash proceeds of issuances, offerings or placements of certain indebtedness not otherwise permitted to be incurred under the New Term Facility credit agreement.

During the fourth quarter of Fiscal 2014, the Company made a $13.0 million prepayment of the New Term Facility with the net cash proceeds of the sale of its Stevens Point Warehouse.

Borrowings under the New Term Facility are guaranteed, subject to certain exceptions, by the Company and certain of the Company’s direct and indirect, wholly owned domestic restricted subsidiaries and are secured by substantially all the RSI’s and such guarantors’ assets (subject to certain exceptions) on a first-priority basis, except that with respect to New Revolving Facility Priority Collateral (defined below) such assets are secured on a second-priority basis, in each case subject to certain exceptions and to the terms of the First Lien Intercreditor Agreement described below.

The New Revolving Facility bears an interest rate, at the Company’s option, of (i) adjusted LIBOR plus a margin of 1.50%-2.00% per annum or (ii) base rate plus a margin of 0.50% - 1.00% per annum. In either case, the margin is based on RSI’s utilization of the New Revolving Facility. In addition, there is a quarterly fee payable in an amount equal to either 0.25% or 0.375% per annum of the undrawn portion of the New Revolving Facility. The Company may use borrowings under the New Revolving Facility for ongoing working capital and general corporate purposes and any other use not prohibited by the revolving credit agreement. Borrowing availability under the New Revolving Facility at any time is based on the value of certain eligible inventory, accounts receivable and pharmacy prescription files and is subject to additional reserves and other adjustments.

Borrowings under the New Revolving Facility are guaranteed, subject to certain exceptions, by the Company and certain of the Company’s direct and indirect, wholly owned domestic restricted subsidiaries and are secured by substantially all the RSI’s and such guarantors’ assets (subject to certain exceptions), in the case of certain assets designated as New Revolving Facility priority collateral including accounts, inventory, cash, deposit accounts, certain payment intangibles and other related assets (“New Revolving Facility Priority Collateral”) on a first-priority basis, and on a second-priority basis with respect to other assets, in each case subject to certain exceptions and to the terms of the First Lien Intercreditor Agreement described below.

On March 3, 2014, RSI and the Company entered into a First Lien Intercreditor Agreement (the “First Lien Intercreditor Agreement”), which establishes the relative lien priorities and rights of the secured parties under the New Revolving Facility and the New Term Facility. Pursuant to the First Lien Intercreditor Agreement, the obligations under the New Revolving Facility are secured with a first priority lien on the New Revolving Facility Priority Collateral and a second priority lien on the other assets constituting collateral, and the obligations under the New Term Facility are secured with a second priority lien on the New Revolving Facility Priority Collateral and a first priority lien on all other collateral (in each case, subject to certain exceptions and limitations).

In connection with the 2014 Refinancing, the Company recognized a loss on debt extinguishment of $9.0 million (of which $8.6 million is related to continuing operations), which consisted primarily of the write-off of $4.8 million of previously capitalized financing costs, the $3.6 million write-off of a portion of the unamortized discount on the 2012 Term Loan, and certain fees and expenses of $0.6 million related to the New Term Facility. The Company capitalized $4.1 million and $0.9 million of financing costs related to the New Revolving Facility and New Term Facility, respectively, both of which will be amortized over the term of the respective term of each credit facility.

The terms of the 2014 Credit Facilities contain customary affirmative covenants and are also secured by substantially all of RSI’s tangible and intangible assets. The terms of the 2014 Credit Facilities also contain customary negative covenants, including restrictions on (i) dividends on, and redemptions of, equity interest and other restricted payment; (ii) liens and sale-leaseback transactions; (iii) loans and investments; (iv) guarantees and hedging agreements; (v) the sale, transfer or disposition of assets and businesses; (vi) transactions with affiliates; (vii) negative pledges and restrictions on subsidiary distributions; and (viii) optional payments and modifications of certain debt instruments.

At April 4, 2015, the Company was in compliance with all covenants relating to its indebtedness.

On April 4, 2015, there were outstanding letters of credit, totaling $33.6 million under the New Revolving Facility, which reduce borrowing availability.

Prior to the 2014 Refinancing, the Company’s long-term debt included a senior credit facility consisting of a $675 million term loan (the ‘‘2012 Term Loan’’) and a $125 million revolving credit facility (the ‘‘2012 Revolving Facility’’ and together with the 2012 Term Loan, the ‘‘2012 Credit Facilities”). Borrowings under the 2012 Credit Facilities bore interest, at the Company’s option, at (i) adjusted LIBOR (subject to a 1.25% floor) plus 4.5% or (ii) an alternate base rate plus 3.5%.

On December 20, 2013, RSI completed the private placement of $200 million of the 2020 Notes that mature on December 15, 2020. The Company will pay interest at a rate of 10.25% on the 2020 Notes semiannually, commencing on June 15, 2014. The 2020 Notes were issued with a 3.01% discount, which will be amortized over the seven year term of the 2020 Notes. The Company capitalized $4.6 million of financing costs related to the issuance of the 2020 Notes which will be also amortized over the seven year term of the 2020 Notes.

The 2020 Notes are unconditionally guaranteed, jointly and severally, on a senior basis, by (i) RSI’s indirect parent company Roundy’s, Inc., (ii) RSI’s direct parent company Roundy’s Acquisition Corp. and (iii) each of RSI’s domestic restricted subsidiaries owned on the date of original issuance of the 2020 Notes, and are secured by a second priority security interest in substantially all of our and the Guarantors’ assets, which security interests rank junior to the security interests in such assets that secure our 2014 Credit Facilities. The 2020 Notes and the guarantees thereof are secured by a second priority lien on substantially all the assets owned by RSI and the guarantors, subject to permitted liens and certain exceptions. These liens are junior in priority to the first-priority liens on the same collateral securing the 2014 Credit Facilities (as well as certain hedging and cash management obligations owed to lenders thereunder or their affiliates) and to certain other permitted liens under the indenture.

At any time prior to December 15, 2016, the Company may redeem up to 35% of the 2020 Notes with the net cash proceeds received by the Company from any equity offering at a price of 110.250% of the principal amount of the 2020 Notes, plus accrued and unpaid interest.

At any time and from time to time on or after December 15, 2016, the Company may redeem the 2020 Notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount) plus accrued and unpaid interest:

The Company accounts for derivatives in accordance with the provisions of FASB ASC Topic 815 “Derivatives and Hedging” (“ASC 815”). ASC 815 requires companies to recognize all of its derivative instruments as either an asset or liability in the balance sheet at fair value. Changes in the fair value of derivative instruments designated as cash flow hedges, to the extent the hedges are highly effective, are recorded in other comprehensive income, net of tax effects, and are reclassified into earnings in the period in which the hedged transaction affects earnings. Ineffective portions of cash flow hedges, if any, are recognized in current period earnings.

The Company is exposed to market risk from interest rate fluctuations. In order to manage this risk from interest rate fluctuations, on August 27, 2013, the Company entered into two one-year forward starting interest rate swaps, which will mature on August 27, 2016, to hedge cash flows related to interest payments on $75 million notional amount related to its 2012 Term Loan (the “Swap”). The Swap involves the receipt of floating interest rate amounts in exchange for fixed rate interest payments over the duration of the Swap without an exchange of the underlying principal amount. In accordance with ASC 815, the Company has designated the Swap as a cash flow hedge. The Company has not entered into any other hedging instruments.

As of April 4, 2015, the Company has recorded $0.6 million in other liabilities in the Company’s Consolidated Balance Sheet, which represents the fair value of the Swap on that date. As of April 4, 2015, the Company has $0.3 million in accumulated other comprehensive loss recorded on the Company’s Consolidated Balance Sheet, which represents a loss on the effective portion of the Swap, net of tax. The Company reclassifies interest payments on the Swap to earnings as the interest payments are made. The Company does not expect the amount of losses that will be reclassified into earnings over the next twelve months to be material. During the thirteen weeks ended April 4, 2015, amounts reclassified into current period earnings were not material. The fair value of the Swap as of January 3, 2015 was a liability of $0.6 million.

On March 3, 2014, the Company completed the 2014 Refinancing. Due to a change in certain of the critical terms of the New Term Facility, specifically the change in the interest rate floor, a certain portion of the Swap was deemed ineffective for the thirteen weeks ended March 29, 2014 and April 4, 2015. The amount is considered immaterial.

Net pension income from continuing operations in the thirteen weeks ended March 29, 2014 and April 4, 2015 included the following components (in thousands):

As of April 4, 2015, the Company had a letter of credit posted in favor of the Pension Benefit Guaranty Corporation in the amount of $10 million.

The Company expects its pension plan contributions for the year ending January 2, 2016 to be approximately $0.2 million.

The Company’s effective tax rate for continuing operations for the thirteen weeks ended April 4, 2015 is a tax benefit of (64.6%). The provision for income taxes and effective tax rate for the thirteen weeks ended April 4, 2015 reflects the reduction of amounts due for federal income taxes as a result of the filing of the Company’s 2014 federal income tax return.

Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against the Company. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the consolidated financial position, operating results or liquidity of the Company.

The Company contributes to one multi-employer pension plan based on obligations arising from its collective bargaining agreement covering certain supply chain employees. This plan is underfunded as of April 4, 2015. This plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by employers and unions. The trustees are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plan.

Because the Company is one of a number of employers contributing to this plan, it is difficult to ascertain what its share of the underfunding would be, although the Company anticipates that its contributions to this plan may increase. If the Company chooses to exit the plan, any adjustment for a withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.

As discussed in Note 5, during Fiscal 2014, the Company exited three multi-employer plans as a result of the Rainbow Store Sale and the exit from the Minneapolis / St. Paul market.

In connection with the exit or sale of its independent distribution business in prior years, the Company has assigned leases and subleases for retail stores which expire at various dates through 2037. A remaining potential obligation exists in the event of a default under the assigned leases and subleases by the assignee. The potential obligations include rent, real estate taxes, common area costs and other sundry expenses. The future minimum lease payments for continuing operations are approximately $23.5 million. The Company believes the likelihood of a liability related to these assigned leases and subleases is remote.

The Company’s accumulated other comprehensive loss is comprised of the adjustments for employee benefit plans and derivatives. During the thirteen weeks ended March 29, 2014, the entire amount reclassified from accumulated other comprehensive loss was comprised of the net amortization of actuarial losses on employee benefit plans. During the thirteen weeks ended April 4, 2015, the amount reclassified from accumulated other comprehensive loss was comprised of the net amortization of actuarial losses on employee benefit plans and the net fair value of derivatives. During the thirteen weeks ended March 29, 2014 and April 4, 2015, pension income is included within operating and administrative expenses in the Company’s Consolidated Statements of Comprehensive Loss. During the thirteen weeks ended April 4, 2015, amounts reclassified from accumulated other comprehensive income related to derivatives is included within interest expense in the Company’s Consolidated Statements of Comprehensive Loss.

The change in accumulated other comprehensive loss by component for the thirteen weeks ended March 29, 2014 consisted of the following (in thousands):

The change in accumulated other comprehensive loss by component for the thirteen weeks ended April 4, 2015 consisted of the following (in thousands):

For the thirteen weeks ended March 29, 2014 and April 4, 2015, respectively, there were restricted shares outstanding of approximately 497,753 and 647,134 shares, respectively, that were excluded from the calculation of diluted earnings per share because their inclusion would have had an anti-dilutive effect on earnings per share.

As of March 29, 2014, there were 602,229 contingently issuable shares excluded because their issuance was not considered probable. As of April 4, 2015, there were 771,008 contingently issuable shares excluded because their issuance was not considered probable.

The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share data):

The Company’s 2012 Incentive Compensation Plan (“Plan”) provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. An aggregate of 5,656,563 shares of common stock was registered for issuance under the Plan. As of April 4, 2015 there were 1,647,467 remaining shares available for issuance, which assumes that all of the 2014 restricted stock unit grants discussed below vest at the maximum amount.

The Company accounts for share-based compensation awards in accordance with the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” which requires companies to estimate the fair value of share-based payment awards on the date of grant. The value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period. The Company recognized total stock-based compensation of $0.9 million for the thirteen weeks ended March 29, 2014 compared to $1.2 million for the thirteen weeks ended April 4, 2015, as operating and administrative expenses in the Company’s Consolidated Statements of Comprehensive Loss. The Company paid dividends of $0.1 million and $0.1 million on restricted stock that vested during the thirteen weeks ended March 29, 2014 and April 4, 2015, respectively.

The Company has granted restricted stock to certain employees, as well as to non-employee directors, under the Plan. The time-based restricted stock that was granted to employees in 2012 vests over five years. The time-based restricted stock granted to non-employee directors in 2014 and 2015 vests over one year.

During the second quarter of 2013, the Company granted 770,366 shares of restricted stock that will vest upon the achievement of certain market performance metrics (the “2013 Market Awards”) and 452,725 shares of stock (the “2013 Time-Based Awards”) that will vest based upon the passage of time, in each case to certain employees and non-employee directors under the Plan. The 2013 Time-Based restricted stock vests ratably over three years for employees from the date of the grant. The 2013 Market Awards will vest after three years if certain specified market conditions are met. The market-based condition is a comparison of the total shareholder return (“TSR”) of the Company’s stock with the TSR of its peer group over the corresponding three year period as determined by the Compensation Committee of the Company’s Board of Directors. These 2013 Market Awards also include a modifier based on the performance of the Company’s operating income as compared to its peer group. The number of shares ultimately vesting will be determined based on the TSR metric and operating income results at the conclusion of the third year. The fair value of the 2013 Market Awards was determined to be $3.02, which was determined using a Monte Carlo simulation model, which utilizes multiple input variables to determine the probability of the Company meeting the market based condition. These inputs include a stock price volatility assumption that is the weighted average between the Company’s volatility since the IPO and the peer group average volatility for the 1.5 year period prior to the Company’s IPO and a 2.7 year risk-free interest rate of 0.33%. The fair value of the 2013 Time-Based Awards was determined based on the stock price as of the date of the grant.

The unvested restricted shares granted under the Plan generally have all the rights of a stockholder, including the right to receive dividends and the right to vote the shares. All of the unvested restricted stock vests upon certain changes of control of the Company.

The change in the number of restricted stock shares outstanding consisted of the following:

During the first quarter of 2014, the Company granted 990,540 restricted stock units that will convert to common stock upon vesting. Of the total units granted, 543,180 units will vest based upon the passage of time (the “2014 Time-Based Awards”), 212,175 units (with a maximum of 424,350 shares of common stock issuable) will vest based upon certain market performance metrics related to TSR (the “2014 Market Awards”) and 235,185 units (with a maximum of 470,370 shares of common stock issuable) will vest based upon certain operating income performance metrics (the “2014 Performance Awards”). The 2014 Time-Based Awards vest over three years for employees and one year for non-employee directors. The 2014 Market Awards will vest after three years if certain specified market conditions are met based on the TSR performance of the Company as compared to a peer group. The number of 2014 Market Awards that will ultimately convert from units to shares will be determined based on the TSR metric at the conclusion of the third year and could be up to 200% of the number of units originally granted. The number of 2014 Performance Awards that will ultimately convert from units to shares is 75.5% of the number of units originally granted based on the operating income performance metrics during Fiscal 2014 and will vest at the conclusion of the third year. The fair value of the 2014 Market Awards was determined to be $6.85 per unit (or $3.43 per share for the maximum 424,350 shares of common stock issuable), which was determined using a Monte Carlo simulation model, which utilizes multiple input variables to determine the probability of the Company meeting the market based condition. These inputs include a stock price volatility assumption that is the weighted average between the Company’s volatility over the 2.1 years following the IPO and the peer group average volatility for the 0.7 year period prior to the IPO and a 2.8 year risk-free interest rate of 0.82%. The fair value of the 2014 Time-Based and 2014 Performance Awards was determined based on the stock price as of the date of the grant.

During the first quarter of 2015, the Company granted 1,665,642 restricted stock units that will convert to common stock upon vesting. All the units granted during the first quarter of 2015 will vest based on the passage of time. The Company granted 891,705 units that will vest over three years for employees and one year for non-employee directors. The Company also granted 773,937 additional units to certain executive level employees, which will vest over four years. The fair value of these awards was determined based on the stock price as of the date of the grant.

The change in the number of restricted stock units outstanding consisted of the following:

During the first quarter of fiscal 2015, the Compensation Committee of the Company’s Board of Directors awarded 760,281 performance-based restricted stock units to certain employees and executive officers that will vest in the first quarter of Fiscal 2018 based on operating income performance metrics (“2015 Performance Awards”). The number of these awards that will ultimately convert from units to shares will be based on the operating income metrics during Fiscal 2015, Fiscal 2016 and Fiscal 2017 and will vest at the conclusion of the third year and could be up to 200% of the number of units originally awarded. The 2015 Performance Awards will be granted under the 2015 Incentive Compensation Plan, which is subject to approval by the Company’s stockholders at the Company’s 2015 Annual Meeting of Stockholders, and are therefore excluded from the table above.

The Company has determined that it has one reportable segment. The Company’s revenues are derived predominantly from the sale of food and non-food products at its stores. Non-perishable categories consist of traditional grocery, frozen and dairy products. Perishable food categories include meat, seafood, produce, deli, bakery and floral. Non-food categories include general merchandise, health and beauty supplies, pharmacy, alcohol and tobacco.

The following is a summary of the percentage of sales from continuing operations of non-perishable, perishable, and non-food items for the thirteen weeks ended March 29, 2014 and April 4, 2015:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We are a leading Midwest supermarket chain founded in 1872. As of April 4, 2015, we operated 149 grocery stores in Wisconsin and Illinois under the Pick ’n Save, Mariano’s, Copps and Metro Market retail banners, which are served by our two distribution facilities and our food processing and preparation commissary. The following table represents our store network as of the end of each of the periods below:

In this section, we refer to the thirteen weeks ended April 4, 2015 as the “first quarter 2015” and we refer to the thirteen weeks ended March 29, 2014 as the “first quarter 2014.”

For the first quarter 2015, net sales from continuing operations were $981.9 million, compared to net sales from continuing operations of $862.7 million for the first quarter 2014. The increase in net sales was primarily due to the impact of new stores, partially offset by a decrease in same-store sales.

Net loss per basic and diluted share from continuing operations was $0.01 for the first quarter 2015, compared to net loss per basic and diluted share of $0.12 in the first quarter 2014.

Going forward, we plan to continue to maintain our market leadership and focus on growing same-store sales, opening new stores and increasing our cash flow. We intend to pursue same-store sales growth by continuing to focus on price competitiveness, improving our marketing efforts, selectively remodeling and relocating existing stores and enhancing and expanding our own brand, perishable and prepared food offerings. In addition, we intend to continue our expansion into the Chicago market. During the first quarter of 2015, we opened one additional Mariano’s store in the Chicago market. As of April 4, 2015, we had 30 stores open in the Chicago market.

Unless otherwise noted, the disclosures in this Management’s Discussion and Analysis of Financial Condition and Results of Operations relate to our continuing operations.

Thirteen Weeks Ended April 4, 2015 Compared With Thirteen Weeks Ended March 29, 2014

Net Sales. Net sales represent product sales less returns and allowances and sales promotions. We derive our net sales primarily from the operation of retail grocery stores and to a much lesser extent from the independent distribution of food and non-food products to an independently-owned grocery store. We recognize retail sales at the point of sale. We do not record sales taxes as a component of retail revenues as we consider ourselves a pass-through conduit for collecting and remitting sales taxes.

Net sales were $981.9 million for the first quarter 2015, an increase of $119.2 million, or 13.8% from $862.7 million for the first quarter 2014. Same-store sales decreased 1.6%, due to a 1.9% decrease in the number of customer transactions, partially offset by a 0.3% increase in the average transaction size. Same-store sales comparisons were positively impacted by the Easter holiday calendar shift from the second quarter of 2014 into the first quarter of 2015. Adjusted for the effect of the 2015 Easter holiday calendar shift, same-store sales declined 2.9%.

Net sales for the Wisconsin markets were $646.7 million for the first quarter 2015, a decrease of $16.8 million, or 2.5% from $663.5 million for the first quarter 2014. The decrease primarily reflects the closure of three stores during the fourth quarter of 2014. Same-store sales decreased 0.1%, due to a 0.8% decrease in the number of customer transactions, partially offset by a 0.7% increase in the average transaction size. Same-store sales comparisons were positively impacted by the Easter holiday calendar shift from the second quarter of 2014 into the first quarter of 2015. Adjusted for the effect of the 2015 Easter holiday calendar shift, same-store sales declined 1.4%. Same-store sales in our Wisconsin markets continue to be negatively impacted by competitive store openings.

Net sales for the Illinois market were $335.2 million for the first quarter 2015, an increase of $136.0 million, or 68.2% from $199.2 million for the first quarter 2014. The increase primarily reflects the benefit of new and acquired stores in Illinois, partially offset by a 6.4% decrease in same-store sales. The decrease in same-store sales was due to a 5.5% decrease in the number of customer transactions and a 0.9% decrease in the average transaction size. Same-store sales comparisons were positively impacted by the Easter holiday calendar shift from the second quarter of 2014 into the first quarter of 2015. Adjusted for the effect of the 2015 Easter holiday calendar shift, same-store sales declined 7.7%. Same-store sales were negatively impacted by the cannibalization effect of new and acquired store openings in the Illinois market. In addition, same-store sales have been negatively impacted by the reopening of a significant number of Dominick’s stores that were initially closed in early 2014 and are now operated by other competitors.

Gross Profit. We calculate gross profit as net sales less cost of sales. Cost of sales includes product costs, inbound freight, warehousing costs, receiving and inspection costs, distribution costs, and depreciation and amortization expenses associated with our supply chain operations.

Gross profit was $261.6 million for the first quarter 2015, an increase of $31.1 million, or 13.5%, from $230.5 million for the first quarter 2014. Gross profit, as a percentage of net sales, was 26.6% and 26.7% for the first quarter 2015 and 2014, respectively. The decrease in gross profit as a percentage of net sales primarily reflects increased shrink, partially offset by an increased perishable sales mix.

Operating and Administrative Expenses. Operating and administrative expenses consist primarily of personnel costs, sales and marketing expenses, depreciation and amortization expenses as well as other expenses associated with facilities unrelated to our supply chain network, internal management expenses and expenses for accounting, information systems, legal, business development, human resources, purchasing and other administrative departments.

Operating and administrative expenses were $248.8 million for the first quarter 2015, an increase of $30.7 million, or 14.1%, from $218.1 million for the first quarter 2014. Operating and administrative expenses, as a percentage of net sales were 25.3% for the first quarter 2015 and 2014, respectively.

Interest Expense. Interest expense (including the amortization of deferred financing costs) was $13.9 million for the first quarter 2015, compared to $13.7 million for the first quarter 2014.

Loss on Debt Extinguishment. In connection with our debt refinancing in the first quarter of Fiscal 2014, we recognized a loss on debt extinguishment of $9.0 million, of which $8.6 million is related to continuing operations.

Income Taxes. Income tax benefit was $0.7 million for the first quarter 2015, a decrease of $3.7 million from a benefit of $4.4 million for the first quarter 2014. The effective income tax rate was a benefit of (64.6%) for the first quarter 2015 and a benefit of (44.6%) for the first quarter 2014. The provision for income taxes and effective tax rate for the first quarter 2015 reflects the reduction of amounts due for federal income taxes as a result of the filing of our 2014 federal income tax return.

We have accounted for the 27 Rainbow stores that were either sold or closed during the third quarter of Fiscal 2014 as discontinued operations. The Consolidated Statement of Comprehensive Loss for the thirteen weeks ended March 29, 2014 has been reclassified to conform with this presentation. See Note 5 to our unaudited consolidated financial statements for further discussion of our discontinued operations.

We have included all direct costs and an amount of allocated interest expense (including amortization of deferred financing costs and loss on debt extinguishment charges) for the 27 Rainbow stores within net income (loss) from discontinued operations. Interest was allocated based on the ratio of the net assets of the 27 Rainbow stores as of the end of the period to the net assets of the total Company. We recorded $1.7 million and $0.5 million of interest in discontinued operations for the thirteen weeks ended March 29, 2014 and April 4, 2015, respectively. During the first quarter of Fiscal 2015, we paid $7.9 million to terminate the obligations related to the capital leases of two Rainbow stores that were closed during the third quarter of Fiscal 2014, resulting in a gain of $2.7 million.

Net income (loss) from discontinued operations, net of tax, as presented in the Consolidated Statements of Comprehensive Loss for the thirteen ending March 29, 2014 and April 4, 2015 is as follows (in thousands):

The following table presents a summary of our net cash provided by (used in) operating, investing and financing activities (in thousands):

Net Cash Used In Operating Activities. Net cash used in operating activities was $5.4 million for the thirteen weeks ended April 4, 2015 compared to $13.7 million for the thirteen weeks ended March 29, 2014. The decrease in cash used in operating activities was due primarily to a decrease in accounts receivable and prepaid expenses and lower payments for interest and taxes.

Net Cash Used in Investing Activities. Net cash used in investing activities for the thirteen weeks ended April 4, 2015 was $15.2 million compared to $16.4 million for the thirteen weeks ended March 29, 2014. The decrease is primarily due to lower capital expenditures. Total capital expenditures for Fiscal 2015, excluding acquisitions, are estimated to be approximately $68-73 million.

Net Cash (Used in) Provided By Financing Activities. Net cash provided by financing activities for the thirteen weeks ended April 4, 2015 was $5.5 million compared to cash used in financing activities of $19.9 million for the thirteen weeks ended March 29, 2014. Net cash provided in the thirteen weeks ended April 4, 2015 primarily consisted of net borrowings on our revolving credit facility of $14.5 million, partially offset by payments of $7.9 million to terminate two leases associated with discontinued operations. Net cash used in the thirteen weeks ended March 29, 2014 primarily consisted of payments of debt and capital lease obligations of $518.0 million primarily to refinance our existing indebtedness and related financing costs of $5.2 million, offset somewhat by the net proceeds from our term loan of $450.8 million, net proceeds from our common stock offering of $19.3 million and net borrowings on our revolving credit facility of $33.8 million.

On February 12, 2014, we completed a public offering of 10,170,989 shares of our common stock at a price of $7.00 per share, which included 2,948,113 shares sold by Roundy’s and 7,222,876 shares sold by existing shareholders. The Company received approximately $20.6 million in gross proceeds from the offering, or approximately $19.3 million in net proceeds after deducting the underwriting discount and expenses related to the offering. The net proceeds were used for general corporate purposes, including funding working capital and operating expenses as well as capital expenditures related to the eleven Dominick’s stores acquired from Safeway during the fourth quarter of 2013 in the Chicago Stores Acquisition.

On March 3, 2014, Roundy’s Supermarkets, Inc. (“RSI”), the wholly owned operating subsidiary of the Company, refinanced its existing credit facilities (the “2014 Refinancing”), and entered into two new credit facilities, a $460 million term loan (the “New Term Facility”) and a $220 million asset-based revolving credit facility (the “New Revolving Facility”, together with the New Term Facility, the “2014 Credit Facilities”). We used the proceeds from the New Term Facility, together with existing cash, to repay our existing term loan, including all accrued interest thereon and related costs, fees and expenses. The New Term Facility has a maturity date of March 3, 2021; provided that the maturity date will accelerate to September 15, 2020 if our 10.250% Senior Secured Notes due in 2020 (the “2020 Notes”) are not refinanced in full prior to such date. The New Revolving Facility has a maturity date of March 3, 2019.

The New Term Facility bears an interest rate, at our option, of (i) adjusted LIBOR (subject to a minimum floor of 1.00%) plus 4.75% or (ii) a base rate plus 3.75%.

The New Revolving Facility bears an interest rate, at our option, of (i) adjusted LIBOR plus a margin of 1.50%-2.00% per annum or (ii) a base rate plus a margin of 0.50%-1.00% per annum. In either case, the margin is based on RSI’s utilization of the New Revolving Facility. In addition, there is a quarterly fee payable in an amount equal to either 0.25% or 0.375% per annum of the undrawn portion of the New Revolving Facility. We may use borrowings under the New Revolving Facility for ongoing working capital and general corporate purposes and any other use not prohibited by the credit agreement governing the New Revolving Facility. Borrowing availability under the New Revolving Facility at any time is based on the value of certain eligible inventory, accounts receivable and pharmacy prescription files and is subject to additional reserves and other adjustments.

The terms of the 2014 Credit Facilities contain customary affirmative covenants. The terms of the 2014 Credit Facilities also contain customary negative covenants, including restrictions on (i) dividends on, and redemptions of, equity interest and other restricted payment; (ii) liens and sale-leaseback transactions; (iii) loans and investments; (iv) guarantees and hedging agreements; (v) the sale, transfer or disposition of assets and businesses; (vi) transactions with affiliates; (vii) negative pledges and restrictions on subsidiary distributions; and (viii) optional payments and modifications of certain debt instruments.

On December 20, 2013, RSI completed the private placement of $200 million of 2020 Notes that mature on December 15, 2020. The Company will pay interest at a rate of 10.25% on the 2020 Notes semiannually, commencing on June 15, 2014. The 2020 Notes were issued with a 3.01% discount, which will be amortized over the seven year term of the 2020 Notes. The Company capitalized $4.6 million of financing costs related to the issuance of the 2020 Notes which will be also amortized over the seven year term of the 2020 Notes.

The indenture governing the 2020 Notes generally provides that RSI can pay dividends and make other distributions to its parent companies in an amount not to exceed (i) 50% of RSI’s consolidated net income for the period beginning September 29, 2013 and ending as of the end of the last fiscal quarter before the proposed payment for which financial statements are available, plus (ii) 100% of the aggregate amount of cash and the fair market value of any assets or property received by RSI after December 20, 2013 from the issuance and sale of equity interests of RSI (subject to certain exceptions), plus (iii) 100% of the aggregate amount of cash and the fair market value of any assets or property contributed to the capital of RSI after December 20, 2013, plus (iv) 100% of the aggregate amount received in cash and the fair market value of assets or property received after December 20, 2013 from the sale of certain investments or the sale of certain subsidiaries, provided that certain conditions are satisfied, including that RSI has a consolidated interest coverage ratio of greater than 2.0 to 1.0. The restrictions on dividends and other distributions contained in the indenture are subject to certain exceptions, including (i) the payment of dividends to permit any of its parent companies to pay taxes, general corporate and operating expenses, customary compensation of officers and employees of such parent companies and costs related to an offering of such parent company’s equity and (ii) dividends and other distributions in an aggregate amount not to exceed $10.0 million in any calendar year, with unused amounts being carried forward to future periods.

Prior to the 2014 Refinancing, our long-term debt included a senior credit facility consisting of a $675 million term loan (the ‘‘2012 Term Loan’’) and a $125 million revolving credit facility (the ‘‘2012 Revolving Facility’’ and together with the 2012 Term Loan, the ‘‘2012 Credit Facilities”). Borrowings under the 2012 Credit Facilities bore an interest rate, at our option, of (i) adjusted LIBOR (subject to a 1.25% floor) plus 4.5% or (ii) an alternate base rate plus 3.5%.

We present Adjusted EBITDA, a non-GAAP measure, to provide investors with a supplemental measure of our operating performance. We define Adjusted EBITDA as earnings before interest expense, provision for income taxes, depreciation and amortization, LIFO charges, amortization of deferred financing costs, non-cash compensation expenses arising from the issuance of stock, costs incurred in connection with our IPO (or subsequent offerings of our Roundy’s common stock), loss on debt extinguishment, certain non-recurring or unusual employee and pension related costs, costs related to acquisitions, costs related to debt financing activities, goodwill and asset impairment charges, gain or loss on the disposition of assets, one-time costs due to the closing of stores or a distribution facility, nonrecurring gains or losses on lease terminations and Adjusted EBITDA from discontinued operations. Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of companies having different capital structures. Since the levels of indebtedness, tax structures, and methodologies in calculating LIFO expense that other companies have are different from ours, we omit these amounts to facilitate investors’ ability to make these comparisons. Similarly, we omit depreciation and amortization because other companies may employ a greater or lesser amount of owned property, and because in our experience, whether a store is new or one that is fully or mostly depreciated does not necessarily correlate to the contribution that such store makes to operating performance. We believe that investors, analysts and other interested parties consider Adjusted EBITDA an important measure of our operating performance. Adjusted EBITDA should not be considered as an alternative to net income as a measure of our performance. Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. The limitations of Adjusted EBITDA include: (i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect income tax payments we may be required to make; and (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

To properly and prudently evaluate our business, we encourage you to review our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015 and the reconciliation to Adjusted EBITDA from net income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the table below. All of the items included in the reconciliation from net income from continuing operations to Adjusted EBITDA are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance. In the case of the non-cash items, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that affect operating performance. In the case of the other items that management does not consider in assessing our on-going operating performance, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact may not reflect on-going operating performance.

The following is a summary of the calculation of Adjusted EBITDA for the thirteen weeks ended March 29, 2014 and April 4, 2015 (in thousands):

Our principal sources of liquidity are cash flows generated from operations and borrowings under our revolving credit facility. Our principal uses of cash are to meet debt service requirements, finance capital expenditures, make acquisitions and provide for working capital. We expect that current excess cash, cash available from operations and funds available under our revolving credit facility will be sufficient to fund our operations, debt service requirements and capital expenditures for at least the next 12 months.

Our ability to make payments on and to refinance our debt, and to fund planned capital expenditures depends on our ability to generate sufficient cash in the future. This, to some extent, is subject to general economic, financial, competitive and other factors that are beyond our control. We believe that, based upon current levels of operations, we will be able to meet our debt service obligations when due. Significant assumptions underlie this belief, including, among other things, that we will continue to be successful in implementing our business strategy and that there will be no material adverse developments in our business, liquidity or capital requirements. If our future cash flow from operations and other capital resources are insufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, on or before maturity. There can be no assurance that we would be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all. In addition, the terms of our existing and future indebtedness may limit our ability to pursue any of these alternatives.

The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect amounts of assets and liabilities reported in the consolidated financial statements, the disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the year. We believe our estimates and assumptions are reasonable; however, future results could differ from those estimates under different assumptions or conditions.

Critical accounting policies are policies that reflect material judgment and uncertainty and may result in materially different results using different assumptions or conditions. We identified the following critical accounting policies and estimates: inventories, income taxes, discounts and vendor allowances, closed facility lease commitments, reserves for self-insurance, employee benefit plans, goodwill and impairment of long-lived assets. For a detailed discussion of accounting policies, refer to our Annual Report on Form 10-K for the fiscal year ended January 3, 2015.

There have been no material changes in our exposure to market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Annual Report on Form 10-K for the fiscal year ended January 3, 2015.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (“Exchange Act”), the Chief Executive Officer and the Chief Financial Officer, together with a disclosure review committee appointed by the Chief Executive Officer, evaluated Roundy’s disclosure controls and procedures as of April 4, 2015, the end of the period covered by this report. Based on that evaluation, Roundy’s Chief Executive Officer and Chief Financial Officer concluded that Roundy’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In connection with the evaluation described above, there were no changes in our internal control over financial reporting during the quarter ended April 4, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no material changes in risk factors for the Company in the period covered by this report. See the discussion of risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 3, 2015.

On May 13, 2015, the Company issued a press release announcing financial information for its first quarter ended April 4, 2015. A copy of the press release is furnished herewith as Exhibit 99.1. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Reference is made to the separate exhibit index contained on page 28 filed herewith.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Roundy’s, Inc.

By:		/s/ ROBERT A. MARIANO
		Robert A. Mariano
		Chairman, President and Chief Executive Officer and Director

Date: May 13, 2015

By:		/s/ MICHAEL P. TURZENSKI
		Michael P. Turzenski
		Group Vice President and Chief Financial Officer

Date: May 13, 2015


Part I – Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Comprehensive Loss for the thirteen weeks ended March 29, 2014 and April 4, 2015	3
	Consolidated Balance Sheets as of January 3, 2015 and April 4, 2015	4
	Consolidated Statements of Cash Flows for the thirteen weeks ended March 29, 2014 and April 4, 2015	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
Part II – Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
	Signatures	27


	Thirteen Weeks Ended
	March 29, 2014			April 4, 2015
Net Sales	$	862,690		$	981,932
Costs and Expenses:
Cost of sales		632,188			720,326
Operating and administrative		218,108			248,790
Interest:
Interest expense, net		13,148			13,355
Amortization of deferred financing costs		591			554
Loss on debt extinguishment		8,576			—

		872,611			983,025

Loss from Continuing Operations before Income Taxes		(9,921	)		(1,093	)
Benefit for Income Taxes		(4,426	)		(706	)

Net Loss from Continuing Operations		(5,495	)		(387	)
Net Income (Loss) from Discontinued Operations, Net of Tax		978			(1,944	)

Net Loss	$	(4,517	)	$	(2,331	)

Basic net earnings (loss) per common share:
Continuing operations	$	(0.12	)	$	(0.01	)
Discontinued operations	$	0.02		$	(0.04	)
Diluted net earnings (loss) per common share:
Continuing operations	$	(0.12	)	$	(0.01	)
Discontinued operations	$	0.02		$	(0.04	)
Weighted average number of common shares outstanding:
Basic		46,479			48,233
Diluted		46,479			48,233
Comprehensive Loss	$	(4,177	)	$	(1,508	)


	January 3, 2015			April 4, 2015
				(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	58,576		$	43,479
Notes and accounts receivable, less allowance for losses		39,009			35,476
Merchandise inventories		275,457			292,680
Prepaid expenses		21,536			23,624
Income taxes receivable		14,818			10,022
Deferred income taxes		4,439			4,439
Current assets of discontinued operations		6,518			6,172

Total current assets		420,353			415,892

Property and Equipment, net		320,263			320,414
Other Assets:
Other assets, net of amortization of certain intangible assets		53,244			51,813
Long-term assets of discontinued operations		27,971			26,811
Goodwill		297,523			297,523

Total other assets		378,738			376,147

Total assets	$	1,119,354		$	1,112,453

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	234,572		$	222,916
Accrued wages and benefits		37,141			36,165
Other accrued expenses		51,861			58,337
Current maturities of long-term debt and capital lease obligations		1,459			1,489
Current liabilities of discontinued operations		20,135			16,947

Total current liabilities		345,168			335,854

Long-term Debt and Capital Lease Obligations		641,197			655,930
Deferred Income Taxes		40,444			40,075
Other Liabilities		106,940			106,350
Long-term Liabilities of Discontinued Operations		71,993			61,280

Total liabilities		1,205,742			1,199,489

Commitments and Contingencies
Shareholders’ Deficit:
Preferred Stock (5,000 shares authorized at 1/3/15 and 4/4/15, respectively, $0.01 par value, 0 shares at 1/3/15 and 4/4/15, respectively, issued and outstanding)		—			—
Common stock (150,000 shares authorized, $0.01 par value, 49,334 shares and 49,422 shares at 1/3/15 and 4/4/15, respectively, issued and outstanding)		493			494
Additional paid-in-capital		140,004			141,233
Accumulated deficit		(172,804	)		(175,505	)
Accumulated other comprehensive loss		(54,081	)		(53,258	)

Total shareholders’ deficit		(86,388	)		(87,036	)

Total liabilities and shareholders’ deficit	$	1,119,354		$	1,112,453


	Thirteen Weeks Ended
	March 29, 2014			April 4, 2015
Cash Flows From Operating Activities:
Net loss	$	(4,517	)	$	(2,331	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation of property and equipment and amortization of intangible assets		16,859			16,066
Amortization of deferred financing costs		624			554
Gain on lease terminations related to discontinued operations		—			(2,739	)
Gain on sale of property and equipment and other assets		(12	)		(11	)
LIFO charge		491			83
Deferred income taxes		(388	)		2,581
Loss on debt extinguishment		9,048			—
Amortization of debt discount		530			617
Stock-based compensation expense		860			1,232
Changes in operating assets and liabilities:
Notes and accounts receivable		(5,100	)		3,740
Merchandise inventories		(13,185	)		(17,306	)
Prepaid expenses		(2,878	)		2,591
Other assets		(896	)		(33	)
Accounts payable		(18,335	)		(17,293	)
Accrued expenses and other liabilities		7,120			4,301
Income taxes		(3,871	)		2,556

Net cash flows used in operating activities ⁽¹⁾		(13,650	)		(5,392	)

Cash Flows From Investing Activities:
Capital expenditures		(16,443	)		(15,333	)
Proceeds from sale of property and equipment		15			97

Net cash flows used in investing activities ⁽¹⁾		(16,428	)		(15,236	)

Cash Flows From Financing Activities:
Dividends paid to common shareholders		(95	)		(77	)
Payments of withholding taxes for vesting of restricted stock shares		(402	)		(218	)
Borrowings on revolving credit facility		84,500			109,750
Payments made on revolving credit facility		(50,750	)		(95,250	)
Proceeds from long-term borrowings		450,800			—
Payments of debt and capital lease obligations		(518,001	)		(791	)
Payments of lease obligation terminations		—			(7,883	)
Issuance of common stock, net of issuance costs		19,302			—
Debt issuance and refinancing fees and related expenses		(5,224	)		—

Net cash flows (used in) provided by financing activities⁽¹⁾		(19,870	)		5,531

Net decrease in Cash and Cash Equivalents		(49,948	)		(15,097	)
Cash and Cash Equivalents, Beginning of Period⁽²⁾		82,178			58,576

Cash and Cash Equivalents, End of Period ⁽²⁾	$	32,230		$	43,479

Supplemental Cash Flow Information:
Cash paid for interest	$	11,366		$	8,019
Cash paid (refunded) for income taxes		700			(1,755	)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company


Consideration
Purchase price	$	36,000
Capital lease liability assumed		7,765

Total Consideration	$	43,765

Assets Acquired
Equipment	$	9,706
Leasehold improvements		6,859
Property under capital lease		8,608
Intangible assets:
Favorable lease rights		11,216
Customer lists		3,116
Goodwill		4,260

Fair Value of Assets Acquired	$	43,765


	January 3, 2015		April 4, 2015
Assets of discontinued operations:
Notes and accounts receivable	$	374	$	167
Prepaid expenses		914		835
Deferred income taxes, current		4,750		4,750
Deferred income taxes, non-current		27,971		26,811
Property and equipment, net		480		420

Total assets of discontinued operations	$	34,489	$	32,983

Current assets of discontinued operations	$	6,518	$	6,172
Long-term assets of discontinued operations	$	27,971	$	26,811
Liabilities of discontinued operations:
Accounts payable	$	1,060	$	23
Estimated multi-employer liability, current		4,554		4,554
Accrued wages and benefits		30		30
Other accrued expenses		9,006		7,715
Current maturities of capital lease obligations		2,500		1,541
Income taxes payable		2,985		3,084
Long-term capital lease obligations		13,807		4,176
Estimated multi-employer liability, non-current		45,078		45,042
Other long-term liabilities		13,108		12,062

Total liabilities of discontinued operations	$	92,128	$	78,227

Current liabilities of discontinued operations	$	20,135	$	16,947
Long-term liabilities of discontinued operations	$	71,993	$	61,280


	January 3, 2015		April 4, 2015
Term loan	$	444,700	$	444,700
2020 Notes		200,000		200,000
Revolving credit facility		—		14,500
Capital lease obligations, 7.6% to 10%, due 2015 to 2031		11,849		11,550
Other long-term debt		1,042		987

		657,591		671,737
Less: Unamortized discount on term loan		9,815		9,413
Less: Unamortized discount on 2020 Notes		5,120		4,905
Less: Current maturities		1,459		1,489

Long-term debt, net of current maturities	$	641,197	$	655,930


12-month period commencing on December 15 in year
2016	107.688	%
2017	105.125	%
2018	102.563	%
2019 and thereafter	100	%


	Derivatives			Defined Benefit Pension Plans			Total
Balance at December 28, 2013	$	(264	)	$	(28,196	)	$	(28,460	)

Other comprehensive loss before reclassifications		(40	)		—			(40	)
Income tax benefit		16			—			16

Net other comprehensive loss before reclassifications		(24	)		—			(24	)

Amounts reclassified from accumulated other comprehensive loss		—			607			607
Income tax benefit		—			(243	)		(243	)

Net amounts reclassified from accumulated comprehensive loss		—			364			364

Other comprehensive income (loss)		(24	)		364			340

Balance at March 29, 2014	$	(288	)	$	(27,832	)	$	(28,120	)


	Restricted Shares Outstanding (in thousands)			Weighted-average grant-date fair value per share
Outstanding, January 3, 2015		1,165			$5.36
Granted		—			—
Vested		(114	)		8.45
Cancelled or Expired		(15	)		5.24

Outstanding, April 4, 2015		1,036			5.02


	Restricted Units Outstanding (in thousands) ⁽¹⁾			Weighted-average grant-date fair value per unit
Outstanding, January 3, 2015		808			$6.44
Granted		1,666			4.48
Vested		(189	)		6.33
Cancelled or Expired		(53	)		6.33

Outstanding, April 4, 2015		2,232			4.99


	3/29/2014		6/28/2014		9/27/2014		1/3/2015		4/4/2015
Pick ’n Save		93		93		93		90		90
Mariano’s		18		24		27		29		30
Copps		25		25		25		25		25
Metro Market		3		4		4		4		4
Rainbow		27		27		—		—		—

Total Company-owned stores		166		173		149		148		149


(Dollars in thousands)	Thirteen Weeks Ended
	March 29, 2014					April 4, 2015
Net Sales	$	862,690		100.0	%	$	981,932		100.0	%
Costs and Expenses:
Cost of sales		632,188		73.3			720,326		73.4
Operating and administrative		218,108		25.3			248,790		25.3
Interest expense (including amortization of deferred financing costs)		13,739		1.6			13,909		1.4
Loss on debt extinguishment		8,576		1.0			—		—

		872,611		101.2			983,025		100.1

Loss from Continuing Operations before Income Taxes		(9,921	)	(1.2	)		(1,093	)	(0.1	)
Benefit for Income Taxes		(4,426	)	(0.5	)		(706	)	(0.1	)

Net Loss from Continuing Operations	$	(5,495	)	(0.6	%)	$	(387	)	(0.0	%)


Exhibit Number		Description

31.1		Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

99.1		Press Release dated May 13, 2015

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document


	Thirteen Weeks Ended
	March 29, 2014			April 4, 2015
Non-Perishable Food		46.7	%		44.6	%
Perishable Food		36.3	%		38.7	%
Non-Food		17.0	%		16.7	%