8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 13, 2007

Nash-Finch Company

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	0-785 (Commission File Number)	41-0431960 (I.R.S. Employer Identification No.)
7600 France Avenue South, Minneapolis, Minnesota		55435
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code: (952) 832-0534

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 7.01. Regulation FD Disclosure
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
Press Release

Item 2.02. Results of Operations and Financial Condition.

On November 13, 2007, Nash-Finch Company (“Nash Finch”) issued a press release announcing its results for the sixteen and forty weeks ended October 6, 2007. The press release by which these results were announced is furnished herewith as Exhibit 99.1.

     The press release (including the schedules attached thereto) includes four financial measures that are considered “non-GAAP” financial measures for purposes of the SEC’s Regulation G — Consolidated EBITDA, leverage ratio, senior secured leverage ratio and interest coverage ratio. Each of these financial measures is defined in the press release and, as required by Regulation G, Nash Finch has disclosed in the press release information regarding the GAAP financial measures which are most directly comparable to each of these non-GAAP financial measures, and reconciling information between the GAAP and non-GAAP financial measures. Relevant reconciling information is also provided on the “Investor Relations” portion of our website, under the caption “Presentations — Supplemental Financial Information.”

     These non-GAAP financial measures are included in the press release because Nash Finch management believes that these measures provide useful information to investors because of their importance to the Company’s liquidity position. Consolidated EBITDA forms the basis for the most significant financial covenants, namely leverage ratio, senior secured leverage ratio and interest coverage ratio, in the Nash Finch senior secured credit facility, which represents one of Nash Finch’s primary sources of liquidity. Compliance with these financial covenants is essential to continued credit availability under that facility.

Item 7.01. Regulation FD Disclosure

     On November 6, 2007, the Board of Directors authorized a share repurchase program authorizing the Company to purchase up to 1 million shares of the Company’s common stock. The program will take effect on November 19, 2007 and will continue until January 3, 2009. The disclaimer presented under Item 2.02 is incorporated by reference into this Item 7.01.

The information (including disclaimer) presented under Item 2.02 is incorporated by reference into this Item 7.01.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits. The following exhibit is furnished as part of this Current Report on Form 8-K:

Exhibit No.	Description
99.1	Press Release issued by the registrant, dated November 13, 2007.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NASH-FINCH COMPANY
Date: November 13, 2007	By:	/s/ Robert B. Dimond
		Name:	Robert B. Dimond
		Title:	Executive Vice President and Chief Financial Officer

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NASH-FINCH COMPANY
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
DATED NOVEMBER 13, 2007

Exhibit No.	Description	Method of Filing
99.1	Press Release, issued by the Registrant, dated November 13, 2007	Furnished herewith

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EX-99.1

Exhibit 99.1

Nash Finch Reports Third Quarter 2007 Results

     MINNEAPOLIS (November 13, 2007) — Nash Finch Company (NASDAQ: NAFC), one of the leading food distribution companies in the United States, today announced financial results for the third quarter ended October 6, 2007.

Financial Results

     Total company sales for the sixteen week third quarter of 2007 were $1.367 billion compared to $1.427 billion in the prior-year quarter. Sales for the first forty weeks of 2007 were $3.463 billion compared to $3.532 billion in the prior-year period. The third quarter and year-to-date sales declines of 4.2% and 2.0%, respectively, result primarily from the transition of a large customer to another supplier which was announced earlier this year, the closure of unprofitable retail stores, and to a lesser degree customer attrition that occurred in 2006 that has not yet been fully offset by new customer gains in 2007.

     Net earnings for the third quarter 2007 were $15.4 million, or $1.12 per diluted share, as compared to net loss of ($4.6) million, or ($0.34) per diluted share, in the prior year quarter. During the third quarter the Company reported the effect of resolving two Internal Revenue Service examinations, 2003 statute of limitations expiration and filing of various reports to settle potential tax liabilities resulting in a decrease to income tax expense of approximately $4.9 million, or $0.36 per diluted share. Net earnings for the first forty weeks of 2007 were $30.3 million, or $2.22 per diluted share, as compared to net earnings of $3.4 million, or $0.25 per diluted share, in the prior-year period. Net earnings for both years were affected by several significant items and are detailed in the table below.

     Consolidated EBITDA¹ for the third quarter 2007 was $40.1 million, or 2.9% of sales, compared to $27.5 million, or 1.9% of sales, for the prior year quarter. For the first forty weeks of 2007, Consolidated EBITDA was $98.6 million, or 2.8% of sales, compared to $78.8 million, or 2.2%

¹ Consolidated EBITDA, as defined in our credit agreement, 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. The amount of consolidated EBITDA is provided as additional information relevant to compliance with our debt covenants.

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of sales, in the 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 remain quite pleased with the overall improvements our company has made thus far this year, and specifically the improvements in EBITDA visible in the third quarter results,” said Alec Covington, President and CEO of Nash Finch. “EBITDA as a percentage of sales increased once again among all three business units versus the prior year, a trend which we have been able to sustain throughout 2007. These accomplishments have primarily resulted from improved inventory management resulting in higher gross margins and lower product cost, as well as significant reductions in our overall expense structure.”

     The following table identifies the significant pre-tax items affecting our earnings and Consolidated EBITDA for the third quarter and year-to-date 2007 and prior year results:

	3rd Quarter		3rd Quarter		Year-to-date			Year-to-date
(dollars in millions except per share amounts)	2007		2006		2007			2006
Significant items
Increase in allowance for doubtful accounts relating to customer receivables	$	—	$	0.5	$	—		$	1.8
Inventory markdown and closure costs of retail stores		0.5		0.3		0.5			1.2
Reversal related to change in vacation policy		—		—		—			(1.5	)
Executive severance		—		4.2		—			4.2
Gain on the sale of intangible asset		—		—		(0.7	)		—
Significant items impacting Consolidated EBITDA		0.5		5.0		(0.2	)		5.7
Asset impairments and lease costs on closed retail	$	1.2	$	0.5	$	1.4		$	2.0
stores Asset impairments and lease reserve adjustments relating to customers at risk and other lease reserves		—		4.5		0.7			4.5
Trade name impairment		—		2.0		—			2.0
Change in estimate of 2004 special charge for locations subsequently sublet and updated assumptions		—		6.3		(1.3	)		6.3
Charges due to the bankruptcy of a long-time customer		—		—		—			4.1
Significant items impacting pre-tax income	$	1.7	$	18.3	$	0.6		$	24.6
Diluted earnings per share impact	$	0.08	$	0.83	$	.03		$	1.12

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Food Distribution Results

	3rd			3rd			%			Year-to-date			Year-to-date			%
	Quarter			Quarter			Change			2007			2006			Change
(dollars in millions)	2007			2006
Sales	$	810.3		$	861.2			-5.9	%	$	2,058.1		$	2,121.2			-3.0	%
Segment EBITDA1	$	31.8		$	26.0			22.0	%	$	76.1		$	66.5			14.5	%
Percentage of Sales		3.9	%		3.0	%					3.7	%		3.1	%

     The decreases in the third quarter and year-to-date 2007 food distribution segment sales versus the comparable 2006 periods were primarily attributable to the impact of a large customer which transitioned to another supplier earlier in 2007 along with customer attrition experienced in 2006 which has not been fully offset by new business gains in 2007. Excluding the impact of the $43.8 million sales decrease during the quarter attributable to this customer, the Food Distribution segment sales decrease would have been 0.8% which is a slight improvement to the year-to-date trend. The increase in the food distribution segment EBITDA for the third quarter and year-to-date periods was primarily due to significant improvements realized in gross margin and expense reductions.

     “These results reflect the stabilization of the operations within our core food distribution segment as compared to last year,” said Mr. Covington. “Through our continued focus on inventory management practices, vendor relationships, and operational and overhead expense controls, we have seen significant improvement in our results. In addition, these actions are aiding our customers by providing additional promotional product allowances with deeper discounts resulting in improved overall product costs.”

Military Distribution Results

	3rd			3rd			%			Year-to-date			Year-to-date			%
	Quarter			Quarter			Change			2007			2006			Change
(dollars in millions)	2007			2006
Sales	$	376.1		$	365.0			3.0	%	$	948.4		$	906.5			4.6	%
Segment EBITDA1	$	13.0		$	11.9			9.7	%	$	33.5		$	31.3			7.0	%
Percentage of Sales		3.5	%		3.2	%					3.5	%		3.5	%

     The military segment sales increase in the third quarter reflects stronger sales domestically which were offset by a small decline in export sales. Year-to-date sales for both domestic and export sales increased relative to the prior year. The increase in military segment EBITDA for the third quarter and year-to-date periods is primarily due to operating expense reductions and slightly improved margins.

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Retail Results

	3rd			3rd			%			Year-to-date			Year-to-date			%
	Quarter			Quarter			Change			2007			2006			Change
(dollars in millions)	2007			2006
Sales	$	180.7		$	200.8			-10.0	%	$	456.8		$	504.8			-9.5	%
Segment	$	7.9		$	8.6			-8.4	%	$	23.5		$	24.3			-3.3	%
EBITDA1 Percentage of Sales		4.4	%		4.3	%					5.2	%		4.8	%

     The retail segment sales decreases in both the third quarter and year-to-date comparisons are attributable to the closure of eight stores since the end of the third quarter 2006. Same store sales decreased 1.6% in the third quarter 2007 and were down 0.6% year-to-date when compared to the same periods in 2006. The retail segment EBITDA comparisons for the quarter and year-to-date periods were lower due to costs incurred relative to unprofitable stores which were closed, along with expenses associated with a major third quarter marketing campaign launched by the Company in one of its core markets. Retail segment EBITDA margins as a percent of sales were slightly improved from the prior year.

Liquidity

     During the third quarter and year-to-date periods of 2007, the Company repaid $16.0 million and $41.3 million, respectively, of debt on its senior credit facilities. The Company continues to focus on effectively managing its working capital, reducing indebtedness, improving cash flow, and is currently in compliance with all of its debt covenants. The debt leverage ratio as of the end of the third quarter 2007 was 2.51, a significant improvement from 3.42 at the end of fiscal 2006. Availability on the Company’s revolving credit facility at the end of the quarter was $105.9 million.

Share Repurchase Program

     On November 6, 2007, the Board of Directors authorized a share repurchase program authorizing the Company to purchase up to 1 million shares of the Company’s common stock. The program will take effect on November 19, 2007 and will continue until January 3, 2009.

Financial Target Progress

     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. Substantial improvement has been achieved in 2007 relative to fiscal 2006 results towards three of the four targets, namely, consolidated EBITDA margin, the ratio of free cash flow to net assets, and debt leverage ratio. The Company expects to make improvements on the organic revenue growth metric as we implement initiatives associated with our strategic plan.

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	Long-term			Year End			3rd Quarter			Year-to-date
Financial Objectives	Target			2006			2007			2007
Organic Revenue Growth		2.0	%		-2.9	%		-4.2	%		-2.0	%
Consolidated EBITDA Margin		4.0	%		2.2	%		2.9	%		2.8	%
Trailing Four Quarter Free Cash Flow2 / Net Assets		10.0	%		8.7	%		10.9	%		10.9	%
Debt Leverage Ratio (Total Debt / Trailing Four Quarter		2.50 x			3.42 x			2.51 x			2.51 x
Consolidated EBITDA)

² Defined as cash provided from operations less capital expenditures for property, plant & equipment during the trailing four quarters.

*********************************************************

Other Matters

     Currently the Company's Board of Directors is divided into three classes of Directors, with the Directors serving staggered terms. The Board of Directors has determined that the Company should declassify its Board, and will present at the 2008 annual meeting of shareholders, and recommend that Shareholders support, a proposal to amend the Company's Restated Certificate of Incorporation to provide for annual election of Directors. If the proposal is successful, each Director will stand for election annually.

     A conference call to review the third quarter 2007 results is scheduled for 8 a.m. (CT) on November 13, 2007. 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 500 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^® 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 are 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:

• the success or failure of strategic plans, new business ventures or initiatives;

• the effect of competition on our distribution, military and retail businesses;

• our ability to identify and execute plans to improve the competitive position of our retail operations;

• risks entailed by future acquisitions, including the ability to successfully integrate acquired operations and retain the customers of those operations;

• technology failures which have a material adverse effect on our business;

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• changes in credit risk from financial accommodations extended to new or existing customers;

• general sensitivity to economic conditions, including volatility in energy prices, food commodities, and changes in market interest rates;

• our ability to identify and execute plans to expand our food distribution, military and retail operations;

• 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;

• possible changes in the military commissary system, including those stemming from the redeployment of forces, congressional action and funding levels;

• legal, governmental or administrative proceedings and/or disputes that result in adverse outcomes, such as adverse determinations or developments with respect to the litigation or SEC inquiry discussed in Part I, Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 30, 2006;

• changes in consumer spending or buying patterns;

• unanticipated problems with product procurement;

• severe weather and natural disasters adversely impacting our supply chain;

• changes in health care, pension and wage costs, and labor relations issues; and

• threats or potential threats to security or food safety.

     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

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NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(In thousands, except per share amounts)

	Sixteen					Forty
	Weeks Ended					Weeks Ended
	October 6,		October 7,			October 6,			October 7,
	2007		2006			2007			2006
Sales	$	1,367,116		1,426,967		$	3,463,333			3,532,490
Cost of sales		1,245,731		1,307,171			3,155,145			3,223,760
Gross profit		121,385		119,796			308,188			308,730
Other costs and expenses:
Selling, general and administrative		84,298		99,214			216,492			243,787
Losses (gains) on sale of real estate		—		25			(147	)		(1,167	)
Special charges		—		6,253			(1,282	)		6,253
Depreciation and amortization		11,902		12,685			29,885			32,004
Interest expense		6,948		7,906			18,214			20,093
Total other costs and expenses		103,148		126,083			263,162			300,970
Earnings (loss) before income taxes and cumulative effect of a change in accounting principle		18,237		(6,287	)		45,026			7,760
Income tax expense (benefit)		2,832		(1,670	)		14,726			4,560
Net earnings (loss) before cumulative effect of a change in accounting principle		15,405		(4,617	)		30,300			3,200
Cumulative effect of a change in accounting principle, net of income tax expense of $119 in 2006		—		—			—			169
Net earnings (loss)	$	15,405		(4,617	)	$	30,300			3,369
Net earnings (loss) per share:
Basic:
Net earnings (loss) before cumulative effect of a change in accounting principle	$	1.14		(0.34	)	$	2.25			0.24
Cumulative effect of a change in accounting principle, net of income tax expense		—		—			—			0.01
Net earnings (loss) per share	$	1.14		(0.34	)	$	2.25			0.25
Diluted:
Net earnings (loss) before cumulative effect of a change in accounting principle	$	1.12		(0.34	)	$	2.22			0.24
Cumulative effect of a change in accounting principle, net of income tax expense		—		—			—			0.01
Net earnings (loss) per share	$	1.12		(0.34	)	$	2.22			0.25
Declared dividends per common share	$	0.180		0.180		$	0.540			0.540
Weighted average number of common shares outstanding and common equivalent shares outstanding:
Basic		13,524		13,384			13,490			13,368
Diluted		13,720		13,384			13,622			13,382

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NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share amounts)

	October 6,			December 30,
	2007			2006
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,687			958
Accounts and notes receivable, net		184,242			186,833
Inventories		286,395			241,875
Prepaid expenses and other		14,342			15,445
Deferred tax asset, net		19,919			11,942
Total current assets		509,585			457,053
Notes receivable, net		12,002			13,167
Property, plant and equipment:
Property, plant and equipment		620,684			620,555
Less accumulated depreciation and amortization		(420,400	)		(400,750	)
Net property, plant and equipment		200,284			219,805
Goodwill		215,174			215,174
Customer contracts and relationships, net		29,239			32,141
Investment in direct financing leases		5,081			6,143
Other assets		10,217			10,820
Total assets	$	981,582			954,303
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt and capitalized lease obligations	$	4,028			3,776
Accounts payable		243,269			209,503
Accrued expenses		65,840			64,943
Total current liabilities		313,137			278,222
Long-term debt		272,451			313,985
Capitalized lease obligations		31,088			33,869
Deferred tax liability, net		994			4,214
Other liabilities		40,281			29,633
Stockholders’ equity:
Preferred stock — no par value. Authorized 500 shares; none issued		—			—
Common stock — $1.66 2/3 par value. Authorized 50,000 shares, issued 13,548 and 13,409 shares, respectively		22,580			22,348
Additional paid-in capital		60,268			53,697
Common stock held in trust		(2,122	)		(2,051	)
Deferred compensation obligations		2,122			2,051
Accumulated other comprehensive income (loss)		(4,904	)		(4,582	)
Retained earnings		246,186			223,416
Common stock in treasury, 21 and 21 shares, respectively		(499	)		(499	)
Total stockholders’ equity		323,631			294,380
Total liabilities and stockholders’ equity	$	981,582			954,303

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NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

	Forty
	Weeks Ended
	October 6,			October 7,
	2007			2006
Operating activities:
Net earnings	$	30,300			3,369
Adjustments to reconcile net earnings to net cash provided by operating activities:
Special charges		(1,282	)		6,253
Depreciation and amortization		29,885			32,004
Amortization of deferred financing costs		629			634
Amortization of rebatable loans		2,126			3,503
Provision for bad debts		894			4,274
Provision for lease reserves		551			4,542
Deferred income tax expense (benefit)		5,299			(2,049	)
Gain on sale of real estate and other		(422	)		(1,225	)
LIFO charge		2,692			2,513
Asset impairments		1,781			7,316
Share-based compensation		4,172			680
Cumulative effect of a change in accounting principle		—			(288	)
Deferred compensation		558			(696	)
Other		(36	)		(719	)
Changes in operating assets and liabilities:
Accounts and notes receivable		2,048			(2,375	)
Inventories		(47,213	)		(996	)
Prepaid expenses		(259	)		5,064
Accounts payable		32,837			16,424
Accrued expenses		(1,802	)		(12,453	)
Income taxes payable		7,747			(6,714	)
Other assets and liabilities		(8,920	)		(2,753	)
Net cash provided by operating activities		61,585			56,308
Investing activities:
Disposal of property, plant and equipment		2,412			5,284
Additions to property, plant and equipment		(10,371	)		(18,434	)
Loans to customers		(2,494	)		(5,767	)
Payments from customers on loans		1,493			1,867
Purchase of marketable securities		—			(233	)
Sale of marketable securities		2			921
Corporate owned life insurance, net		(85	)		(246	)
Other		—			(180	)
Net cash used in investing activities		(9,043	)		(16,788	)
Financing activities:
Payments of revolving debt		(41,300	)		(24,200	)
Dividends paid		(7,269	)		(7,202	)
Proceeds from exercise of stock options		1,913			647
Proceeds from employee stock purchase plan		497			502
Payments of long-term debt		(344	)		(5,823	)
Payments of capitalized lease obligations		(2,418	)		(2,241	)
Decrease in book overdraft		(851	)		(2,081	)
Tax benefit from exercise of stock options		959			58
Other		—			493
Net cash used by financing activities		(48,813	)		(39,847	)
Net increase (decrease) in cash and cash equivalents		3,729			(327	)
Cash and cash equivalents:
Beginning of year		958			1,257
End of period	$	4,687			930

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NASH FINCH COMPANY AND SUBSIDIARIES
Supplemental Data (Unaudited)

	Sixteen			Sixteen			Forty			Forty
	Weeks Ended			Weeks Ended			Weeks Ended			Weeks Ended
	October 6,			October 7,			October 6,			October 7,
Other Data (In thousands)	2007			2006			2007			2006
Total debt	$	307,567		$	379,972		$	307,567		$	379,972
Stockholders’ equity	$	323,631			321,644		$	323,631			321,644
Capitalization	$	631,198			701,616		$	631,198			701,616
Debt to total capitalization		49	%		54	%		49	%		54	%
Working capital ratio (a)		3.83			2.62			3.83			2.62
Non-GAAP Data
Consolidated EBITDA (b)	$	40,132			27,520		$	98,611			78,810
Interest coverage ratio — trailing 4 qtrs. (consolidated EBITDA to interest expense) (c)		5.08			4.35			5.08			4.35
Leverage ratio — trailing 4 qtrs. (debt to consolidated EBITDA) (d)		2.51			3.43			2.51			3.43
Senior secured leverage ratio (senior secured debt to consolidated EBITDA) (e)		0.97			1.68			0.97			1.68
Comparable GAAP Data
Earnings before income taxes to interest expense (c)		0.82			1.14			0.82			1.14
Debt to earnings before income taxes (d)		15.55			13.05			15.55			13.05
Senior secured debt to earnings before income taxes (e)		6.00			6.40			6.00			6.40

Debt Covenants	Required Ratio	Actual Ratio
Working capital ratio	1.75 (minimum)		3.83
Interest coverage ratio	3.50 (minimum)		5.08
Senior secured leverage ratio	2.50 (maximum)		0.97
Leverage ratio	3.50 (maximum)		2.51

(a)	Working capital ratio is defined as net trade accounts receivable plus inventory divided by the sum of loans and letters of credit outstanding under our senior secured credit agreement plus certain additional secured debt.
(b)	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 additional information relevant to compliance with our debt covenants.
(c)	Interest coverage ratio is defined as the Company’s Consolidated EBITDA divided by interest expense for the four trailing quarters ending October 6, 2007 and October 7, 2006, respectively. The most comparable GAAP ratio is earnings from continuing operations before income taxes divided by interest expense (less deferred financing costs) for the same periods.
(d)	Leverage ratio is defined as the Company’s total debt at October 6, 2007 and October 7, 2006, 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 trailing quarters.
(e)	Senior secured leverage ratio is defined as total senior secured debt at October 6, 2007 and October 7, 2006 divided by Consolidated EBITDA for the respective four trailing quarters. The most comparable GAAP ratio is total senior secured debt at the same date divided by earnings from continuing operations before income taxes for the respective four trailing quarters.

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Derivation of Consolidated EBITDA; Segment Consolidated EBITDA; and Segment Profit (in thousands)

FY 2007

	2006			2007			2007			2007			Rolling
	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Earnings (loss) from continuing operations before income taxes	$	(25,253	)		9,485			17,304			18,237			19,773
Add/(deduct)
Interest expense		6,551			5,595			5,671			6,948			24,765
Depreciation and amortization		9,447			9,082			8,901			11,902			39,332
LIFO		117			808			807			1,077			2,809
Lease reserves		2,675			(888	)		825			614			3,226
Asset impairments		4,127			866			275			640			5,908
Losses (gains) on sale of real estate		37			—			(147	)		—			(110	)
Subsequent cash payments on non-cash charges		(686	)		(700	)		(663	)		(918	)		(2,967	)
Goodwill impairment		26,419			—			—			—			26,419
Share based compensation(b)		486			956			1,584			1,632			4,658
Special charges		—			—			(1,282	)		—			(1,282	)
Total Consolidated EBITDA	$	23,920			25,204			33,275			40,132			122,531

	2006			2007			2007			2007			Rolling
Segment Consolidated EBITDA	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Food Distribution	$	20,234			20,637			23,715			31,750			96,336
Military		9,941			9,892			10,602			13,000			43,435
Retail		6,227			6,784			8,857			7,905			29,773
Unallocated Corporate Overhead		(12,482	)		(12,109	)		(9,899	)		(12,523	)		(47,013	)
	$	23,920			25,204			33,275			40,132			122,531

	2006			2007			2007			2007			Rolling
Segment profit	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Food Distribution	$	17,676			18,180			21,343			28,601			85,800
Military		9,485			9,472			10,170			12,406			41,533
Retail		4,296			4,821			6,818			5,096			21,031
Unallocated Corporate Overhead		(56,710	)		(22,988	)		(21,027	)		(27,866	)		(128,591	)
	$	(25,253	)		9,485			17,304			18,237			19,773

FY 2006

	2005			2006			2006			2006			Rolling
	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Earnings (loss) from continuing operations before income taxes	$	21,364			6,314			7,733			(6,287	)		29,124
Add/(deduct)
Interest expense		6,048			6,067			6,120			7,906			26,141
Depreciation and amortization		10,376			9,702			9,617			12,685			42,380
LIFO		(452	)		462			461			1,590			2,061
Lease reserves		(191	)		902			1,327			4,455			6,493
Asset impairments		851			1,547			3,247			2,522			8,167
Losses (gains) on sale of real estate		(2,600	)		33			(1,225	)		25			(3,767	)
Subsequent cash payments on non-cash charges		(2,690	)		(808	)		(656	)		(1,862	)		(6,016	)
Special Charge		—			—			—			6,253			6,253
Share based compensation(b)		14			(187	)		634			233			694
Total Consolidated EBITDA	$	32,720			24,032			27,258			27,520			111,530

Segment Consolidated EBITDA
after reclass of marketing revenues	2005			2006			2006			2006			Rolling
and bad debt expense (a)	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Food Distribution	$	22,962			20,352			20,089			26,030			89,433
Military		9,669			9,173			10,295			11,850			40,987
Retail		10,969			6,743			8,965			8,633			35,310
Unallocated Corporate Overhead		(10,880	)		(12,236	)		(12,091	)		(18,993	)		(54,200	)
	$	32,720			24,032			27,258			27,520			111,530

Segment profit after reclass of
marketing revenues and	2005			2006			2006			2006			Rolling
bad debt expense (a)	Qtr 4			Qtr 1			Qtr 2			Qtr 3			4 Qtr
Food Distribution	$	20,576			17,841			17,584			22,689			78,690
Military		9,259			8,747			11,011			11,283			40,300
Retail		8,284			4,272			6,600			5,645			24,801
Unallocated Corporate Overhead		(16,755	)		(24,546	)		(27,462	)		(45,904	)		(114,667	)
	$	21,364			6,314			7,733			(6,287	)		29,124

(a)	Segment information for periods prior to fiscal year 2006, reflect a reclassification of bad debt expense from Unallocated Corporate Overhead to Food Distribution.
(b)	The calculation of EBITDA has been revised for all periods presented to include an adjustment for non-cash share-based compensation.

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