EX-99.1 2 c50006exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(NASH FINCH COMPANY LOGO)
Nash Finch Reports Fourth Quarter and Fiscal 2008 Results
Comparable Fourth Quarter Sales Increased 5.3%
Fiscal 2008 Sales and EBITDA Reach Record Levels
     MINNEAPOLIS (March 12, 2009) — Nash Finch Company (NASDAQ: NAFC), one of the leading food distribution companies in the United States, today announced financial results for the 53 weeks (fiscal 2008) ended January 3, 2009.
Financial Results
     Sales for fiscal 2008 were a record $4.704 billion compared to $4.533 billion in the prior-year, an increase of 3.8%. Excluding the extra sales from the 53rd week in fiscal 2008 of $77.1 million and the impact of the sales decrease attributable to a large customer who transitioned to another supplier in mid-2007 of $72.8 million, total company sales for fiscal 2008 were up 3.7%. Sales for the 13 week fourth quarter 2008 were $1.203 billion compared to $1.069 billion in the 12 week prior-year quarter, an increase of 12.5%. Excluding the extra sales from the 53rd week, the comparable fourth quarter 2008 sales would have been $1.126 billion, or up 5.3%.
     Net earnings for fiscal 2008 were $36.2 million, or $2.75 per diluted share, as compared to net earnings of $38.8 million, or $2.84 per diluted share, in fiscal 2007. Net earnings for fiscal 2008 were negatively affected by significant items, which are presented in a table below, totaling $6.1 million (net of tax), or $0.46 per diluted share, while net earnings for fiscal 2007 benefited by significant items totaling $4.3 million, or $0.31 per diluted share.
     Net earnings for the fourth quarter 2008 were $6.2 million, or $0.47 per diluted share, as compared to net earnings of $8.5 million, or $0.62 per diluted share, in the prior year quarter. Net earnings for the fourth quarter 2008 were negatively impacted by significant items presented below, totaling $3.5 million, or $0.26 per diluted share, while earnings for the fourth quarter 2007 were negatively affected by significant items totaling $0.2 million, or $0.01 per diluted share.
     Consolidated EBITDA1 for fiscal 2008 increased 11.6% to a record $143.7 million, or 3.1% of sales, as
 
1   Consolidated EBITDA, and segment EBITDA is calculated as earnings before interest, income tax, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non-cash charges (such as LIFO, asset impairments, closed store lease costs and share-based compensation), less cash payments made during the current period on non-cash charges recorded in prior periods. Consolidated EBITDA should not be considered an alternative measure of our net income, operating performance, cash flows or liquidity. Consolidated EBITDA is provided as additional information as a key metric used to determine payout pursuant to our Short-Term and Long-Term Incentive Plans.

1


 

compared to $128.8 million, or 2.8% of sales, for the prior year period. For the fourth quarter 2008, Consolidated EBITDA increased 17.5% to $35.5 million, or 3.0% of sales, compared to $30.2 million, or 2.8% of sales, in the same prior-year period. Consolidated EBITDA is a non-GAAP financial measure that is reconciled to the most directly comparable GAAP financial results in the attached financial statements.
     “I am pleased with our Company’s fourth quarter sales and EBITDA performance as we strengthened our financial position during one of the most difficult business environments in history. Each of our business units achieved positive sales and EBITDA performance over the prior year, resulting in a strong second half and full year for 2008,” said Alec Covington, President and CEO of Nash Finch. “Our sales of $4.7 billion and EBITDA of $143.7 million are new Company records and confirm we are on the right path implementing our strategies. I want to personally thank our associates throughout the organization for their dedicated efforts, without which we would not have posted these results.”
     The following table identifies the significant net credits (charges) affecting our Consolidated EBITDA, net earnings and diluted earnings per share for the fourth quarter and fiscal 2008 and prior year results:
                                   
    4th Quarter     YTD
(dollars in millions except per share amounts)   2008   2007     2008   2007
           
Significant credits (charges)
                                 
Gain on sale of intangible asset
  $               0.6       0.7  
Inventory markdown & closed retail stores
          (2.6 )       (0.3 )     (3.1 )
Acquisition costs
    (0.5 )             (0.5 )      
           
Significant net credits (charges) impacting Consolidated EBITDA
  $ (0.5 )     (2.6 )       (0.2 )     (2.4 )
           
 
                                 
Increase in year-over-year LIFO charges
  $ (5.5 )             (14.6 )      
Deferred financing charges
                  (1.0 )      
2004 special charge
                        1.3  
Asset & lease impairments
    0.3               1.9       (2.2 )
Other
                  0.2        
           
Total significant net charges impacting earnings before tax
  $ (5.7 )     (2.6 )       (13.7 )     (3.3 )
           
Income tax on significant net charges
    2.2       1.0         5.3       1.3  
Tax refunds & changes in income tax reserves
          0.6         2.3       5.1  
Prior year tax true-ups
          0.8               1.2  
           
Total significant net credits (charges) impacting net earnings
  $ (3.5 )     (0.2 )       (6.1 )     4.3  
           
Diluted earnings per share impact
  $ (0.26 )     (0.01 )       (0.46 )     0.31  
           
Food Distribution Results
                                                   
    4th Quarter   %     YTD   %
(dollars in millions)   2008   2007   Change     2008   2007   Change
           
Sales
  $ 706.4       635.2       11.2 %       2,740.5       2,693.3       1.8 %
Segment EBITDA1
    26.6       26.1       1.6 %       109.6       102.2       7.3 %
Percentage of Sales
    3.8 %     4.1 %               4.0 %     3.8 %        
           
     The food distribution segment sales increased by 1.8% to $2.741 billion in fiscal 2008 versus fiscal 2007. Excluding the extra sales from the 53rd week in fiscal 2008 of $45.3 million and the impact of the sales decrease attributable to a large customer who transitioned to another supplier in mid-2007 of $72.8 million, total

2


 

food distribution sales for fiscal 2008 were up 2.8%. The food distribution segment sales in the fourth quarter 2008 increased by 11.2% to $706.4 million versus the fourth quarter of 2007. Excluding the extra sales generated in the 53rd week, comparable sales increased 4.1% in the fourth quarter 2008 and were due to increases in sales to new customers as well as to existing customers.
     The food distribution segment EBITDA increased by 7.3% in fiscal 2008 and increased 1.6% in the fourth quarter 2008 as compared to the same periods last year. EBITDA as a percentage of sales increased to 4.0% in fiscal 2008 as compared to 3.8% in fiscal 2007. EBITDA as a percentage of sales declined slightly to 3.8% in the fourth quarter 2008 from 4.1% in 2007.
Military Distribution Results
                                                   
    4th Quarter   %     YTD   %
(dollars in millions)   2008   2007   Change     2008   2007   Change
Sales
  $ 348.5       299.2       16.5 %       1,360.7       1,247.6       9.1 %
Segment EBITDA1
    12.7       10.5       20.4 %       51.2       44.0       16.2 %
Percentage of Sales
    3.6 %     3.5 %               3.8 %     3.5 %        
     The military segment sales increased $113.1 million, or 9.1%, to $1.361 billion in fiscal 2008 as compared to fiscal 2007. Excluding the extra sales from the 53rd week in fiscal 2008 of $20.5 million, sales increased 7.4% in fiscal 2008. Military segment sales increased $49.2 million, or 16.5%, to $348.4 million in the fourth quarter 2008. Excluding the extra sales from the 53rd week, sales increased 9.6% in the fourth quarter of 2008. This reflects a significant increase in sales to both domestic and European commissaries during the year.
     Military EBITDA increased by 16.2% in fiscal 2008 and 20.4% in the fourth quarter 2008 as compared to the same periods last year. EBITDA as a percentage of sales increased to 3.8% in fiscal 2008 and 3.6% in the fourth quarter 2008 as compared to 3.5% in the same comparable periods in 2007. The improvement in EBITDA margin as a percent of sales relative to the prior year periods benefited as a result of improved inventory management as well as a reduction in expenses.
Retail Results
                                                   
    4th Quarter   %     YTD   %
(dollars in millions)   2008   2007   Change     2008   2007   Change
Sales
  $ 148.1       134.9       9.8 %       602.5       591.7       1.8 %
Segment EBITDA1
    8.3       4.0       107.3 %       31.4       27.5       13.9 %
Percentage of Sales
    5.6 %     3.0 %               5.2 %     4.6 %        
     The fiscal 2008 retail segment sales increase of 1.8% to $602.5 million was primarily attributable to the acquisition of the two new stores, an additional week of sales, and offset by the closure of four retail stores. Excluding the extra sales from the 53rd week in fiscal 2008 of $11.3 million, sales were flat to fiscal 2007. The retail segment sales increase of 9.8% in the fourth quarter 2008 to $148.1 million was primarily attributable to

3


 

the acquisition of two retail stores in the second quarter 2008 and the additional week of sales. Excluding the extra sales from the 53rd week in the fourth quarter of 2008, sales increased by 1.4%.
     Same store sales compared to the prior year were down 0.2% and 0.8% in the fourth quarter and fiscal 2008, respectively.
     The comparisons in the retail segment EBITDA for fiscal 2008 and the fourth quarter 2008 to the prior year periods included a $2.6 million unfavorable adjustment to retail promotional markdowns in the fourth quarter of 2007.
     “During the fourth quarter the Company added new customers and we implemented supply chain and working capital initiatives that resulted in significant progress in achieving our long-term financial targets. As we continue to invest in our businesses, our focus will be on providing sustainable growth while maintaining our position as a low cost supplier in a competitive marketplace.”
     “We enter 2009 cautiously due to the uncertainty of the breadth and depth of the current economic downturn,” said Alec Covington. “It is clear that changes in consumer behavior, as well as deflation within certain key commodities, will create a challenging business environment for us. In spite of these challenges, we remain committed to our core businesses and are particularly pleased with the accomplishments of our military segment last year, both in terms of sales and EBITDA growth. We proudly serve our American heroes and their families, and are excited about the new opportunities provided by our acquisition of the three GSC distribution centers.”
Liquidity
     Total debt decreased by $42.6 million during the fourth quarter 2008 to $275.7 million. The Company continues to focus on effectively managing its balance sheet and is currently in compliance with all of its debt covenants. The debt leverage ratio as of the end of the fourth quarter 2008 was 1.92x, an improvement from the ratio of 2.42x at the end of fiscal 2007. Availability on the Company’s revolving credit facility at the end of the quarter was $190.9 million.
Financial Target Progress
     Substantial improvement on all financial targets has been achieved since the targets were announced as part of the Company’s strategic plan in November 2006. In particular, from Fiscal 2006 to the end of Fiscal 2008, Consolidated EBITDA margin improved from 2.2% to 3.1% of sales and the debt leverage ratio has improved by one and one-half turns of EBITDA from 3.42x to 1.92x. The organic revenue growth metric continues to gather momentum and increased this year to 3.1% as we have continue to benefit from the initiatives associated with our strategic plan. The ratio of free cash flow to net assets metric improved to 12.0% in fiscal 2008. The following table charts the Company’s progress towards its long-term financial targets that are anticipated to be attained through successful execution of the strategic plan.

4


 

                                 
    Long-term   Fiscal   Fiscal   Fiscal
Financial Targets   Target   2008   2007   2006
Organic Revenue Growth
    2.0 %     3.1 %     (2.1 %)     (2.9 %)
Consolidated EBITDA Margin
    4.0 %     3.1 %     2.8 %     2.2 %
Trailing Four Quarter Free Cash Flow2 / Net Assets
          12.0 %     9.2 %     8.7 %
Trailing Four Quarter Free Cash Flow2 / Net Assets Excluding Impact of Strategic Projects
    10.0 %     14.0 %            
Total Leverage Ratio (Total Debt / Trailing Four Quarter Consolidated EBITDA)
    2.5 — 3.0 x     1.92 x     2.42 x     3.42 x
 
2   Defined as cash provided from operations less capital expenditures for property, plant & equipment during the trailing four quarters.
Acquisition Update
As previously announced, the Company completed the acquisition of three GSC distribution centers from GSC Enterprises, Inc., a food distributor headquartered in Sulphur Springs, Texas on January 31, 2009. These distribution centers are located in Pensacola, Florida, Junction City, Kansas, and San Antonio, Texas, each of which services military commissaries and exchanges.
*********************************************************
     A conference call to review the fourth quarter and fiscal 2008 results is scheduled for 10 a.m. CT (11 a.m. ET) on March 12, 2009. Interested participants can listen to the conference call over the Internet by logging onto the “Investor Relations” portion of Nash Finch’s website at http://www.nashfinch.com. A replay of the webcast will be available and the transcript of the call will be archived on the “Investor Relations” portion of Nash Finch’s website under the heading “Audio Archives.” A copy of this press release and the other financial and statistical information about the periods to be discussed in the conference call will be available at the time of the call on the “Investor Relations” portion of the Nash Finch website under the caption “Press Releases.”
     Nash Finch Company is a Fortune 1000 company and one of the leading food distribution companies in the United States. Nash Finch’s core business, food distribution, serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores and Egypt. The Company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods®, Family Thrift Center®, AVANZA® and Sun Mart® trade names. Further information is available on the Company’s website at www.nashfinch.com.
     This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements relate to trends and events that may affect our future financial position and operating results. Any statement contained in this release that is not statements of historical fact may be deemed forward-looking statements. For example, words such as “may,” “will,” “should,” “likely,” “expect,” “anticipate,” “estimate,” “believe,” “intend, “ “potential” or “plan,” or comparable terminology, are intended to identify forward-looking statements. Such statements are based upon current expectations, estimates and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors known to us that could cause or contribute to material differences include, but are not limited to, the following:

5


 

  the effect of competition on our food distribution, military and retail businesses;
 
  general sensitivity to economic conditions, including the uncertainty related to the current recession in the U.S. and worldwide economic slowdown; recent disruptions to the credit and financial markets in the U.S. and worldwide; changes in market interest rates; continued volatility in energy prices and food commodities;
 
  macroeconomic and geopolitical events affecting commerce generally;
 
  changes in consumer buying and spending patterns;
 
  our ability to identify and execute plans to expand our food distribution, military and retail operations;
 
  possible changes in the military commissary system, including those stemming from the redeployment of forces, congressional action and funding levels;
 
  our ability to identify and execute plans to improve the competitive position of our retail operations;
 
  the success or failure of strategic plans, new business ventures or initiatives;
 
  our ability to successfully integrate and manage current or future businesses we acquire, including the ability to manage credit risks and retain the customers of those operations;
 
  changes in credit risk from financial accommodations extended to new or existing customers;
 
  significant changes in the nature of vendor promotional programs and the allocation of funds among the programs;
 
  limitations on financial and operating flexibility due to debt levels and debt instrument covenants;
 
  legal, governmental, legislative or administrative proceedings, disputes, or actions that result in adverse outcomes;
 
  failure of our internal control over financial reporting;
 
  changes in accounting standards;
 
  technology failures that may have a material adverse effect on our business;
 
  severe weather and natural disasters that may impact our supply chain;
 
  unionization of a significant portion of our workforce;
 
  changes in health care, pension and wage costs and labor relations issues;
 
  costs related to multi-employer pension plan;
 
  product liability claims, including claims concerning food and prepared food products;
 
  threats or potential threats to security; and
 
  unanticipated problems with product procurement.
     A more detailed discussion of many of these factors, as well as other factors that could affect the Company’s results, is contained in the Company’s periodic reports filed with the SEC. You should carefully consider each of these factors and all of the other information in this release. We believe that all forward-looking statements are based upon reasonable assumptions when made. However, we caution that it is impossible to predict actual results or outcomes and that accordingly you should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and we undertake no obligation to revise or update these statements in light of subsequent events or developments. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in forward-looking statements. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the Securities and Exchange Commission (SEC).
Contact: Bob Dimond, 952-844-1060

6


 

NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share amounts)
                                 
    13     12     53     52  
    Weeks Ended     Weeks Ended     Weeks Ended     Weeks Ended  
    January 3     December 29     January 3     December 29  
    2009     2007     2009     2007  
Sales
  $ 1,202,872       1,069,302       4,703,660       4,532,635  
Cost of sales
    1,104,990       979,836       4,296,711       4,134,981  
 
                       
Gross profit
    97,882       89,466       406,949       397,654  
Gross profit margin
    8.1 %     8.4 %     8.7 %     8.8 %
 
                               
Other costs and expenses:
                               
Selling, general and administrative
    72,154       64,326       288,263       280,818  
Losses (gains) on sale of real estate
          (1,720 )           (1,867 )
Special charges
                      (1,282 )
Depreciation and amortization
    9,051       8,997       38,429       38,882  
Interest expense
    4,773       5,367       21,523       23,581  
 
                       
Total other costs and expenses
    85,978       76,970       348,215       340,132  
 
                               
Earnings before income taxes
    11,904       12,496       58,734       57,522  
 
                               
Income tax expense
    5,723       4,016       22,574       18,742  
 
                       
Net earnings
  $ 6,181       8,480       36,160       38,780  
 
                       
 
                               
Net earnings per share:
                               
 
                               
Basic
  $ 0.48       0.63       2.81       2.88  
Diluted
  $ 0.47       0.62       2.75       2.84  
 
                               
Cash dividends per common share
  $ 0.180       0.180       0.720       0.720  
 
                               
Weighted average number of common shares outstanding and common equivalent shares outstanding:
                               
Basic
    12,864       13,442       12,886       13,479  
Diluted
    13,114       13,701       13,161       13,642  

7


 

NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share amounts)
                 
    January 3, 2009     December 29, 2007  
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 824       862  
Accounts and notes receivable, net
    185,943       197,807  
Inventories
    261,491       246,762  
Prepaid expenses and other
    13,909       27,882  
Deferred tax assets
    5,784       4,621  
 
           
Total current assets
    467,951       477,934  
 
               
Notes receivable, net
    28,353       12,429  
 
               
Property, plant and equipment:
    590,894       617,241  
Less accumulated depreciation and amortization
    (392,807 )     (414,704 )
 
           
Net property, plant and equipment
    198,087       202,537  
 
               
Goodwill
    218,414       215,174  
Customer contracts and relationships, net
    24,762       28,368  
Investment in direct financing leases
    3,388       4,969  
Other assets
    13,997       9,971  
 
           
Total assets
  $ 954,952       951,382  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Current maturities of long-term debt and capitalized lease obligations
  $ 4,032       3,842  
Accounts payable
    220,610       209,402  
Accrued expenses
    73,087       69,113  
 
           
Total current liabilities
    297,729       282,357  
 
               
Long-term debt
    246,441       278,443  
Capitalized lease obligations
    25,252       29,885  
Deferred tax liability, net
    13,940       7,227  
Other liabilities
    35,540       37,854  
Commitments and contingencies
           
Stockholders’ equity:
               
Preferred stock — no par value
 
Authorized 500 shares; none issued
           
Common stock of $1.66 2/3 par value
 
Authorized 50,000 shares, issued 13,665 and 13,559 shares respectively
    22,776       22,599  
Additional paid-in capital
    74,836       61,446  
Common stock held in trust
    (2,243 )     (2,122 )
Deferred compensation obligations
    2,243       2,122  
Accumulated other comprehensive income (loss)
    (10,876 )     (5,092 )
Retained earnings
    278,804       252,142  
Treasury stock at cost, 848 and 434 shares, respectively
    (29,490 )     (15,479 )
 
           
Total stockholders’ equity
    336,050       315,616  
 
           
Total liabilities and stockholders’ equity
  $ 954,952       951,382  
 
           

8


 

NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
                 
    53 Weeks Ended     52 Weeks Ended  
    January 3     December 29  
    2009     2007  
Operating activities:
               
Net earnings
  $ 36,160       38,780  
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
 
               
Special charges — non cash portion
          (1,282 )
Depreciation and amortization
    38,429       38,882  
Amortization of deferred financing costs
    1,850       817  
Rebatable loans
    2,992       2,200  
Provision for bad debts
    (1,292 )     1,234  
Provision for lease reserves
    (1,832 )     551  
Deferred income tax expense
    5,550       26,830  
Gain on sale of real estate and other
    (187 )     (2,371 )
LIFO charge
    19,740       5,092  
Asset impairments
    2,555       1,869  
Share-based compensation
    8,792       7,786  
Deferred compensation
    244       734  
Other
    (742 )     20  
Changes in operating assets and liabilities:
               
Accounts and notes receivable
    17,430       (11,246 )
Inventories
    (31,489 )     (9,979 )
Prepaid expenses
    839       2,813  
Accounts payable
    (1,037 )     1,924  
Accrued expenses
    3,970       1,782  
Income taxes payable
    13,048       (9,213 )
Other assets and liabilities
    (3,021 )     (13,607 )
 
           
Net cash provided by operating activities
    111,999       83,616  
 
           
 
               
Investing activities:
               
Disposal of property, plant and equipment
    438       4,978  
Additions to property, plant and equipment
    (31,955 )     (21,419 )
Business acquired, net of cash
    (6,566 )      
Loans to customers
    (24,050 )     (3,856 )
Payments from customers on loans
    1,588       1,854  
Sale of marketable securities
          2  
Corporate-owned life insurance, net
    131       (46 )
 
           
Net cash used in investing activities
    (60,414 )     (18,487 )
 
           
Financing activities:
               
Proceeds (payments) of revolving debt
    87,300       (35,000 )
Dividends paid
    (9,229 )     (9,702 )
Proceeds from exercise of stock options
    329       2,002  
Proceeds from employee stock purchase plan
    238       498  
Repurchase of common stock
    (14,348 )     (14,980 )
Payments of long-term debt
    (119,255 )     (626 )
Payments of capitalized lease obligations
    (3,639 )     (3,834 )
Increase (decrease) in outstanding checks
    9,951       (4,441 )
Payments of deferred financing costs
    (3,573 )      
Tax benefit from exercise of stock options
    603       857  
Other
          1  
 
           
Net cash used by financing activities
    (51,623 )     (65,225 )
 
           
Net decrease in cash
    (38 )     (96 )
 
               
Cash at beginning of year
    862       958  
 
           
Cash at end of year
  $ 824       862  
 
           

9


 

NASH FINCH COMPANY AND SUBSIDIARIES
Supplemental Data (Unaudited)
                 
    53   52
    Weeks Ended   Weeks Ended
    January 3   December 29
    2009   2007
Other Data (In thousands)
               
 
               
Total debt
    275,725       312,170  
Stockholders’ equity
    336,050       315,616  
Capitalization
    611,775       627,786  
Debt to total capitalization
    45.1 %     49.7 %
 
               
Non-GAAP Data
               
Consolidated EBITDA (a)
    143,723       128,840  
Leverage ratio — trailing 4 qtrs. (debt to Consolidated EBITDA) (b)
    1.92       2.42  
 
               
Comparable GAAP Data
               
Debt to earnings before income taxes (b)
    4.69       5.43  
 
(a)   Consolidated EBITDA, as defined in our credit agreement, is earnings before interest, income tax, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non-cash charges (such as LIFO, asset impairments, closed store lease costs and share-based compensation), less cash payments made during the current period on non-cash charges recorded in prior periods. Consolidated EBITDA should not be considered an alternative measure of our net income, operating performance, cash flows or liquidity. The amount of consolidated EBITDA is provided as a metric used to determine payout of performance units pursuant to our Long-Term Incentive Plan
 
(b)   Leverage ratio is defined as the Company’s total debt at January 3, 2009 and December 29, 2009, divided by Consolidated EBITDA for the respective four trailing quarters. The most comparable GAAP ratio is debt at the same date divided by earnings from continuing operations before income taxes for the respective four quarters.

10


 

Derivation of Consolidated EBITDA; Segment Consolidated EBITDA; and Segment Profit (in thousands)
     FY 2008
                                         
    2008     2008     2008     2008     Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4     4 Qtrs  
Earnings before income taxes
  $ 17,364       14,946       14,520       11,904       58,734  
Add/(deduct)
LIFO
    1,134       2,397       8,360       7,849       19,740  
Depreciation and amortization
    9,032       8,703       11,643       9,051       38,429  
Interest expense
    5,034       5,651       6,065       4,773       21,523  
Closed store lease costs
    (2,094 )     99       480       (317 )     (1,832 )
Asset Impairment
    395       401       694       1,065       2,555  
Stock Compensation
    1,943       2,022       3,013       1,814       8,792  
Subsequent cash payments on non-cash charges
    (2,184 )     (612 )     (787 )     (635 )     (4,218 )
 
                             
Total Consolidated EBITDA
  $ 30,624       33,607       43,988       35,504       143,723  
 
                             
                                         
    2008     2008     2008     2008     Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4     4 Qtrs  
Segment Consolidated EBITDA
                                       
Food Distribution
  $ 25,270       24,975       32,814       26,568       109,627  
Military
    11,234       11,554       15,678       12,698       51,164  
Retail
    6,645       7,003       9,443       8,291       31,382  
Unallocated Corporate Overhead
    (12,525 )     (9,925 )     (13,947 )     (12,053 )     (48,450 )
 
                             
 
  $ 30,624       33,607       43,988       35,504       143,723  
 
                             
                                         
    2008     2008     2008     2008   Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4   4 Qtrs  
Segment profit
                                       
Food Distribution
  $ 22,940       22,885       30,028       24,422       100,275  
Military
    10,762       11,091       15,072       12,200       49,125  
Retail
    4,543       4,774       6,326       5,692       21,335  
Unallocated Corporate Overhead
    (20,881 )     (23,804 )     (36,906 )     (30,410 )     (112,001 )
 
                             
 
  $ 17,364       14,946       14,520       11,904       58,734  
 
                             
     FY 2007
                                         
    2007     2007     2007     2007     Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4     4 Qtrs  
Earnings (loss) before income taxes
  $ 9,485       17,304       18,237       12,496       57,522  
Add/(deduct)
                                       
LIFO
    808       807       1,077       2,399       5,091  
Depreciation and amortization
    9,082       8,901       11,902       8,997       38,882  
Interest expense
    5,595       5,671       6,948       5,367       23,581  
Special Charge
          (1,282 )                 (1,282 )
Closed store lease costs
    (888 )     825       614             551  
Asset Impairment
    866       275       640       87       1,868  
Stock Compensation
    956       1,584       1,632       3,614       7,786  
Gains on sale of real estate
          (147 )           (1,720 )     (1,867 )
Subsequent cash payments on non-cash charges
    (700 )     (663 )     (918 )     (1,011 )     (3,292 )
 
                             
Total Consolidated EBITDA
  $ 25,204       33,275       40,132       30,229       128,840  
 
                             
                                         
    2007     2007     2007     2007     Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4     4 Qtrs  
Segment Consolidated EBITDA after reclass of bad debt expense
                                       
Food Distribution
  $ 20,637       23,715       31,750       26,143       102,245  
Military
    9,892       10,602       13,000       10,545       44,039  
Retail
    6,784       8,857       7,905       4,000       27,546  
Unallocated Corporate Overhead
    (12,109 )     (9,899 )     (12,523 )     (10,459 )     (44,990 )
 
                             
 
  $ 25,204       33,275       40,132       30,229       128,840  
 
                             
                                         
    2007     2007     2007     2007     Rolling  
    Qtr 1     Qtr 2     Qtr 3     Qtr 4     4 Qtrs  
Segment profit after reclass of bad debt expense
                                       
Food Distribution
  $ 18,180       21,343       28,601       23,796       91,920  
Military
    9,472       10,170       12,406       10,067       42,115  
Retail
    4,821       6,818       5,096       1,902       18,637  
Unallocated Corporate Overhead
    (22,988 )     (21,027 )     (27,866 )     (23,269 )     (95,150 )
 
                             
 
  $ 9,485       17,304       18,237       12,496       57,522  
 
                             
 
                                       

11