-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GStsJEgMWJPxQ06GzNplFnDYTpzQQMDzoUox8XKKbH9jGsMzAqQm8vgQkt9zAnS8 P/zCN0MDDWOdouCBfx+duw== 0001047469-98-042182.txt : 19981125 0001047469-98-042182.hdr.sgml : 19981125 ACCESSION NUMBER: 0001047469-98-042182 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981010 FILED AS OF DATE: 19981124 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASH FINCH CO CENTRAL INDEX KEY: 0000069671 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 410431960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00785 FILM NUMBER: 98758724 BUSINESS ADDRESS: STREET 1: 7600 FRANCE AVE STREET 2: PO BOX 355 CITY: SOUTH MINNEAPOLIS STATE: MN ZIP: 55435-0355 BUSINESS PHONE: 6128320534 FORMER COMPANY: FORMER CONFORMED NAME: NASH CO DATE OF NAME CHANGE: 19710617 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) /X/ OF THE SECURITIES EXCHANGE ACT OF 1934 For the forty weeks ended October 10, 1998 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-785 NASH-FINCH COMPANY (Exact Name of Registrant as Specified in its Charter) DELAWARE 41-0431960 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 7600 France Ave. South, Edina, Minnesota 55435 (Address of principal executive offices) (Zip Code) (612) 832-0534 (Registrant's telephone number including area code) 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. YES X NO ----- ----- Number of shares of common stock outstanding at November 19, 1998: 11,341,582 shares PART I - FINANCIAL INFORMATION This report is for the forty week interim period beginning January 4, 1998, through October 10, 1998. The accompanying financial information has been prepared in conformity with generally accepted accounting principles and practices, and methods of applying accounting principles and practices, (including consolidation practices) as reflected in the financial information included in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission for the preceding fiscal year. The financial statements included in this quarterly report include all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company's financial position and results of operations for the interim period. The information contained herein has not been audited by independent auditors and is subject to any adjustments which may develop in connection with the annual audit of its accounts by Ernst & Young LLP, the Company's independent auditors. NASH FINCH COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (unaudited) (In thousands, except per share amounts)
Sixteen Weeks Ended Forty Weeks Ended ------------------------------ ------------------------- October 10, October 4, October 10, October 4, 1998 1997 1998 1997 ------------ ----------- ----------- ---------- Revenues: Net sales $ 1,280,599 1,329,114 3,175,580 3,225,711 Other revenues 26,808 25,316 51,767 52,001 ------------ ----------- ----------- ---------- Total revenues 1,307,407 1,354,430 3,227,347 3,277,712 Cost and expenses: Cost of sales 1,187,265 1,228,364 2,920,095 2,950,214 Selling, general and administrative expenses 91,539 94,257 233,237 242,690 Special charges - 31,272 (1,262) 31,272 Depreciation and amortization 14,100 14,660 36,478 36,453 Interest expense 8,694 9,769 22,318 24,590 ------------ ----------- ----------- ---------- Total costs and expenses 1,301,598 1,378,322 3,210,866 3,285,219 Earnings (loss) before income taxes and extraordinary charge 5,809 (23,892) 16,481 (7,507) Income taxes (benefit) 2,411 (7,435) 6,840 (570) ------------ ----------- ----------- ---------- Earnings (loss) before extraordinary charge 3,398 (16,457) 9,641 (6,937) Extraordinary charge from early extinguishment of debt, net of income tax benefit of $3,951 - - 5,569 - ------------ ----------- ----------- ---------- Net earnings (loss) $ 3,398 (16,457) 4,072 (6,937) ------------ ----------- ----------- ---------- ------------ ----------- ----------- ---------- Basic and diluted earnings (loss) per share: Earnings (loss) before extraordinary charge $ .30 (1.46) .85 (0.61) Extraordinary charge from early extinguishment of debt - - (.49) - ------------ ----------- ----------- ---------- Net earnings (loss) $ .30 (1.46) .36 (0.61) ------------ ----------- ----------- ---------- ------------ ----------- ----------- ---------- Weighted average number of common and common equivalent shares outstanding: Basic 11,314 11,308 11,310 11,297 Diluted 11,340 11,308 11,336 11,297
- --------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
October 10, January 3, 1998 1998 ----------- ---------- (unaudited) ASSETS Current assets: Cash $ 979 933 Accounts and notes receivable, net 185,965 173,962 Inventories 300,655 287,801 Prepaid expenses 17,595 22,582 Deferred tax assets 9,071 9,072 ----------- ---------- Total current assets 514,265 494,350 Investments in affiliates 6,871 7,679 Notes receivable, noncurrent 23,613 23,092 Property, plant and equipment: Land 27,570 31,229 Buildings and improvements 133,429 137,070 Furniture, fixtures and equipment 309,628 306,762 Leasehold improvements 65,601 60,578 Construction in progress 44,047 28,485 Assets under capitalized leases 24,877 25,048 ----------- ---------- 605,152 589,172 Less accumulated depreciation and amortization (332,004) (312,939) ----------- ---------- Net property, plant and equipment 273,148 276,233 Intangible assets, net 70,818 70,732 Investment in direct financing leases 16,303 19,094 Deferred tax asset - net 2,621 2,622 Other assets 10,234 11,081 ----------- ---------- Total assets $ 917,873 904,883 ----------- ---------- ----------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Outstanding checks $ 22,404 36,271 Short-term debt payable to banks 11,350 11,300 Current maturities of long-term debt and capitalized lease obligations 2,639 7,964 Accounts payable 215,960 177,548 Accrued expenses 76,986 60,599 Income taxes 6,723 737 ----------- ---------- Total current liabilities 336,062 294,419 Long-term debt 308,531 325,489 Capitalized lease obligations 35,026 38,517 Deferred compensation 6,365 6,768 Other 7,875 14,072 Stockholders' equity: Preferred stock - no par value Authorized 500 shares; none issued - - Common stock of $1.66 2/3 par value Authorized 25,000 shares, issued 11,575 shares issued in 1998 and 1997 19,292 19,292 Additional paid-in capital 17,944 17,648 Restricted stock (322) (391) Retained earnings 188,935 190,984 ----------- ---------- 225,849 227,533 Less cost of 234 shares and 252 shares of common stock in treasury, respectively. (1,835) (1,915) ----------- ---------- Total stockholders' equity 224,014 225,618 ----------- ---------- Total liabilities and stockholders' equity $ 917,873 904,883 ----------- ---------- ----------- ----------
- ---------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Forty Weeks Ended -------------------------------- October 10, October 4, 1998 1997 ----------- ---------- Operating activities: Net earnings $ 4,072 (6,937) Adjustments to reconcile net income to net cash provided by operating activities: Special Charges (3,595) 28,749 Depreciation and amortization 36,620 36,453 Provision for bad debts 1,878 2,771 Provision for losses on closed lease locations 1,178 (601) Extraordinary Charges - writeoff deferred financing costs 142 - Deferred income taxes - (9,420) Deferred compensation (404) (538) Earnings of equity investments (201) (2,565) Other (2,120) 1,891 Changes in operating assets and liabilities: Accounts and notes receivable (4,090) (18) Inventories (10,216) (15,454) Prepaid expenses 5,027 1,480 Accounts payable and outstanding checks 24,532 3,915 Accrued expenses 12,387 13,789 Income taxes 5,986 (1,045) ----------- ---------- Net cash provided by operating activities 71,196 52,470 ----------- ---------- Investing activities: Dividends received 799 1,599 Disposal of property, plant and equipment 11,994 11,534 Additions to property, plant and equipment excluding capital leases (39,980) (44,231) Business acquired, net of cash acquired (2,895) (17,748) Sale (repurchase) of receivables (7,400) - Loans to customers (12,118) (15,589) Payments from customers on loans 12,205 10,959 Other (4,624) (749) ----------- ---------- Net cash used for investing activities (42,019) (54,225) ----------- ---------- Financing activities: Dividends paid (6,121) (6,077) Payments of short-term debt 50 (4,094) Proceeds from long-term debt 165,000 - Payments of long-term debt (108,219) (5,466) Proceeds from revolving debt (79,000) 20,000 Payments of capitalized lease obligations (1,205) (3,089) Other 364 451 ----------- ---------- Net cash provided by financing activities (29,131) 1,725 ----------- ---------- Net increase (decrease) in cash $ 46 (30) ----------- ---------- ----------- ----------
- ---------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Stockholders' Equity - -------------------------------------------------------------------------------- Fiscal period ended October 10, 1998, January 3, 1998 and December 28, 1996 (In thousands, except per share amounts)
Foreign Common Stock Additional currency ---------------------- paid-in Retained translation Shares Amount capital earnings adjustment - ----------------------------------------------------------------------------------------------------------------------------------- Balance at December 30, 1995 11,224 $ 18,706 12,013 188,578 (950) Net earnings - - - 20,032 - Dividend declared of $.75 per share - - - (8,288) - Shares issued in connection with acquisition of a business 350 584 5,064 - - Treasury stock issued upon exercise of options - - 47 - - Issuance of restricted stock - - (308) - - Amortized compensation under restricted stock plan - - - - - Treasury stock purchased - - - - - --------- ---------- -------- --------- --------- Balance at December 28, 1996 11,574 19,290 16,816 200,322 (950) Net earnings (loss) - - - (1,228) - Dividend declared of $.72 per share - - - (8,110) - Treasury stock issued upon exercise of options - - 354 - - Amortized compensation under restricted stock plan - - - - - Repayment of notes receivable from holder of restricted stock - - - - - Distribution of stock pursuant to performance awards - - 460 - - Treasury stock purchased - - - - - Foreign currency translation adjustment - - - - 950 Other 1 2 18 - - --------- ---------- -------- --------- --------- Balance at January 3, 1998 11,575 19,292 17,648 190,984 - Net earnings - - - 4,072 - Dividend declared of $.54 per share - - - (6,121) - Treasury stock issued upon exercise of options - - 47 - - Amortized compensation under restricted stock plan - - - - - Repayment of notes receivable from holder of restricted stock - - - - - Distribution of stock pursuant to performance awards - - 246 - - Other - - 3 - - --------- ---------- -------- --------- --------- Balance at October 10, 1998 (unaudited) 11,575 $ 19,292 17,944 188,935 - --------- ---------- -------- --------- --------- --------- ---------- -------- --------- --------- Treasury Stock Total Restricted ----------------------- stockholders' Stock Shares Amount equity - ----------------------------------------------------------------------------------------------------------------------- Balance at December 30, 1995 - (346) $ (3,034) 215,313 Net earnings - - - 20,032 Dividend declared of $.75 per share - - - (8,288) Shares issued in connection with acquisition of a - business - - 5,648 Treasury stock issued upon exercise of options 6 42 89 Issuance of restricted stock (524) 40 995 163 Amortized compensation under restricted stock plan 24 - - 24 Treasury stock purchased - (7) (120) (120) --------- ---------- -------- --------- Balance at December 28, 1996 (500) (307) (2,117) 232,861 Net earnings (loss) - - - (1,228) Dividend declared of $.72 per share - - - (8,110) Treasury stock issued upon exercise of options - 29 143 497 Amortized compensation under restricted stock plan 29 - - 29 Repayment of notes receivable from holder of restricted stock 80 - - 80 Distribution of stock pursuant to performance awards - 30 148 608 Treasury stock purchased - (4) (89) (89) Foreign currency translation adjustment - - - 950 Other - - - 20 --------- ---------- -------- --------- Balance at January 3, 1998 (391) (252) (1,915) 225,618 Net earnings - - - 4,072 Dividend declared of $.54 per share - - - (6,121) Treasury stock issued upon exercise of options - 4 21 68 Amortized compensation under restricted stock plan 23 - - 23 Repayment of notes receivable from holder of restricted stock 46 - - 46 Distribution of stock pursuant to performance awards - 15 75 321 Other - (1) (16) (13) --------- ---------- -------- --------- Balance at October 10, 1998 (unaudited) (322) (234) $(1,835) 224,014 --------- ---------- -------- --------- --------- ---------- -------- ---------
- -------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements. NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 10, 1998 NOTE 1 The accompanying financial statements include all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company and its subsidiaries at October 10, 1998 and January 3, 1998, the results of operations for the 40-weeks ending October 10, 1998 and October 4, 1997, and the changes in cash flows for the 40-week period ending October 10, 1998 and October 4, 1997, respectively. All material inter company accounts and transactions have been eliminated in the condensed consolidated financial statements. Results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Warehousing and transportation expenses, historically classified as selling, general and administrative expenses and other operating expenses, are reclassified as cost of sales. Amounts in prior periods were reclassified to conform with current presentation. For the current and prior year quarter, $41.3 million and $42.5 million were reclassified respectively, and $101.1 million and $99.8 million for the current and prior year to date, respectively. The reclassifications have impact on neither operating income nor net income and conform the Company's financial reporting with the reporting practices of other large food wholesale distribution companies. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NOTE 2 The Company uses the LIFO method for valuation of a substantial portion of inventories. If the FIFO method had been used, inventories would have been approximately $44.1 million and $43.1 million higher at October 10, 1998 and at January 3, 1998, respectively. NOTE 3 In March 1998, the American Institute of Certified Public Accountants issued Statement of Position ("SOP") 98-1, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED FOR OR OBTAINED FOR INTERNAL USE. Although the SOP is effective beginning on January 1, 1999, the Company has chosen early adoption as of January 4, 1998. The SOP requires the capitalization of certain costs incurred after the date of adoption in connection with developing or obtaining software for internal use. Certain costs that are required to be capitalized by the SOP were previously being expensed as incurred by the Company. As a result of this change in accounting in 1998, the Company capitalized $2.2 million and $5.1 million, for the quarter and year to date, respectively, in payroll and payroll-related costs for employees who are directly involved with and devote time to internal-use software development projects. NOTE 4 Pursuant to the provisions of Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE, the weighted average shares used in computing basic and diluted earnings per share (EPS) are as follows:
(in thousands of shares) 16 weeks ended 40 weeks ended -------------------------- ------------------------- October 10, October 4, October 10, October 4, 1998 1997 1998 1997 ----------- ---------- ----------- ---------- Shares for computation of basic EPS 11,314 11,308 11,310 11,297 Effect of contingent shares 26 26 ----------- ---------- ----------- ---------- Shares for computation of diluted EPS 11,340 11,308 11,336 11,297 ----------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
The impact of contingent shares in 1997 would have been antidilutive. NOTE 5 On December 29, 1997, a Receivables Purchase Agreement (the "Agreement") was executed by the Company, Nash Finch Funding Corporation ("NFFC"), a wholly-owned subsidiary of the Company, and a certain third party purchaser (the "Purchaser") pursuant to a securitization transaction. On this date the Company sold $44.6 million of accounts receivable on a non-recourse basis to NFFC. NFFC sold $37.0 million of its undivided interest in such receivables to the Purchaser, subject to specified collateral requirements. NFFC maintains a variable undivided interest in these receivables and is subject to losses on its share of the receivables and, accordingly, maintains an allowance for doubtful accounts. The Agreement is a five-year $50 million revolving receivable purchase facility allowing the Company to sell additional receivables to NFFC, and NFFC to sell, from time to time, variable undivided interests in these receivables to the Purchaser. At October 10, 1998, the balance of receivables sold under the revolving agreement was $29.6 million. On September 8, 1995, the Company entered into an agreement with a financial institution which allowed the Company to sell, on a revolving basis, customer notes receivable. Although the agreement lapsed on December 28, 1996, the notes, which have maturities through the year 2002, were sold at face value with recourse. As a result, the Company is contingently liable should these notes become uncollectible. The remaining balances of such sold notes receivable totaled $6.2 million and $9.1 million at October 10, 1998 and January 3, 1998, respectively. NOTE 6 During the third quarter of 1997, the Company recorded special charges, totaling $31.3 million relative to asset impairment and consolidation of certain warehouses and retail stores. During 1998, the Company closed distribution facilities in Lexington, Kentucky and Lincoln, Nebraska and closed or sold a total of five retail stores. Costs totaling $2.3 million incurred as a result of the shut down of these units were charged to accrued expenses. In addition, $1.3 million associated with the planned closing of a retail store was reflected as special charges income following the sale of the store. At October 10, 1998, accrued liabilities established for purposes of the special charges total $12.4 million. On November 17, 1998 the Company announced that it will close its distribution center in Grand Island, Nebraska in January 1999. The facility is owned by the Company and will be marketed for sale after the closing is completed. Most of the distribution business will be consolidated into the Company's distribution center in Omaha, Nebraska. Costs associated with the warehouse consolidation were provided through last year's special charges. NOTE 7 On April 24, 1998, the Company completed the sale of $165 million 8.5% senior subordinated notes due May 1, 2008, using the net proceeds from the offering after fees and expenses, to reduce certain amounts borrowed under its revolving credit facility. In the first quarter of 1998, in conjunction with the planned senior subordinated debt offering, the Company prepaid $106.3 million of senior notes, and paid prepayment premiums and wrote off related deferred financing costs totaling $9.5 million. This transaction resulted in an extraordinary charge of $5.6 million, or $.49 per share, net of income tax benefits of $4.0 million. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS REVENUES Total revenues for the third quarter were $1.307 billion compared to $1.354 billion last year, a decrease of 3.5%. On a year to date basis, revenues were $3.227 billion compared to $3.278 billion last year, a reduction of 1.5%. During the quarter, both the wholesale and retail segments of the Company experienced revenue declines. Wholesale segment revenues for the quarter decreased 1.6% from $1.073 billion in 1997 to $1.055 billion in 1998. The decline, largely attributed to Super Food, in particular from competitive pressures realized by its Michigan operation, more than offset revenue gains reported by certain Midwest and Southeast non-military distribution centers. During the quarter, the Company began servicing two stores operated by a new independent retailer following a transaction in which the Company sold the retailer three of its corporately owned retail locations in North Dakota. On a year to date basis, wholesale revenues were $2.610 billion compared to $2.601 billion last year, an increase of .3% principally attributable to the United-A.G. acquisition which occurred in June 1997. Retail segment revenues for the quarter and year to date were $221.0 million and $568.5 million, respectively, compared to $250.8 million and $626.1 million for the same periods last year. The declines are largely due to the closing or sale of 15 stores since the end of the third quarter of 1997, partially offset by the opening or purchase of nine stores during the same period. Included in the stores purchased were three locations in the Rapid City, South Dakota area, acquired from Sooper Dooper Markets, Inc. late in the quarter. Same store revenues for both the quarter and year to date were flat compared to last year. GROSS MARGINS Gross margins for the quarter were 9.2% compared to 9.3% last year. On a year to date basis, margins were 9.5% in 1998 compared to 10.0% for the three quarters of 1997. The decline this year is partially attributed to the growing proportion of lower margin wholesale business. For the quarter and year to date, wholesale segment business represented 81.1% of the Company's consolidated revenues compared to 79.5% for the same period last year. A decline in retail margins as a result of continuing competitive pressures in certain markets, also contributed to the overall lower gross margin. The Company's internally measured food price index indicated almost no inflation; however, continued price increases for tobacco and tobacco-related products resulted in a LIFO charge of $.8 million for the quarter compared to $1.0 million last year and $1.0 million year to date, the same as last year. SELLING, GENERAL AND ADMINISTRATIVE EXPENSE Selling, general and administrative expenses as a percent of total revenues were 7.0% and 7.2% for the quarter and year to date, respectively, compared to 7.0% and 7.4% for the comparable periods last year. Expense levels compare favorably on a year to date basis to last year due in part to the increasing proportion of wholesale business which typically operates at lower expense levels than retail. In addition, the Company changed accounting policies when it adopted Statement of Position (SOP) 98-1. This change resulted in the capitalization of $2.1 million for the quarter, and $5.1 million year to date, of internal development costs related to HORIZONS, a project involving new business information technology. Since these costs had been historically expensed, this change in accounting increased diluted earnings per share by $.11 and $.26 for the quarter and year to date, respectively. Information system expenses primarily related to HORIZONS increased $1.3 million and $2.4 million for the quarter and year to date, respectively, compared to last year, partially offsetting the positive impact of the accounting change. SPECIAL CHARGES During the second quarter, the Company completed an assignment of a lease and sale of certain assets related to a retail store included in the special charges recorded in 1997. As a result, $1.3 million in accrued costs were reflected as special charges income for 1998. Subsequent to the end of the third quarter, the Company announced it will close its distribution center in Grand Island, Nebraska. Certain costs associated with the closing were provided in the special charges last year. DEPRECIATION EXPENSE Depreciation and amortization expense decreased 3.8% for the quarter compared to last year and remained substantially the same as last year on a year to date basis. The decrease reflects the reduction in depreciable assets resulting from the sale or closing of retail stores and lower depreciation resulting from the write down of impaired assets recorded as part of the special charges last year. At the end of the quarter, approximately $28.9 million in HORIZONS development costs have been classified as construction in progress on the balance sheet. Depreciation on these assets will not commence until the related systems are fully developed and ready for use. Depreciation expense related to information technology already in use increased $.9 million and $1.6 million for the quarter and year to date, respectively, compared to the same periods last year. Amortization of goodwill and other intangibles for the current and prior year quarter were $1.9 and $2.1 million, respectively, and $4.9 and $5.1 million for the current and prior year to date, respectively. INTEREST EXPENSE Interest expense decreased from $9.8 million in the prior year quarter, to $8.7 million this year, a decline of 11.0%. The reduction is attributed to lower borrowings under a revolving credit facility, brought about by the sale of receivables at the end of 1997 and improved asset management during 1998. Also, the Company reduced its long-term borrowing rates through the sale of $165.0 million of senior subordinated notes which was completed during the second quarter. INCOME TAXES The effective tax rate for 1998 is estimated at 41.5%, compared to last year's annual rate of 425.4%, which was significantly affected by the special charges. EXTRAORDINARY CHARGE During the first quarter of 1998, in conjunction with a planned senior subordinated debt offering, the Company prepaid $106.3 million of senior notes, and paid prepayment premiums and wrote off related deferred financing costs totaling $9.5 million, all with borrowings under the Company's revolving credit facility. This transaction resulted in an extraordinary charge of $5.6 million or $.49 per share after income tax benefits of $4.0 million. EARNINGS BEFORE TAXES AND EXTRAORDINARY CHARGE Earnings before taxes and extraordinary charge for the quarter were $5.8 million compared to $7.4 million last year before special charges, a reduction of 21.3%. This decline is attributed to the performance of Super Food, in particular its Michigan wholesale operation, and heightened competition in several retail markets which resulted in weak performance in those areas. On the other hand, Nash DeCamp's performance for the quarter improved largely due to timing. Because of weather-related harvest delays, profit which would have been realized in the second quarter was not recognized until the third quarter. Also, the Company's Southeast division contributed improved wholesale results compared to the prior year quarter. Year to date earnings before taxes and extraordinary charge were $16.5 million compared to $23.8 million last year before the effect of the special charge, a decrease of 30.7%. The decrease primarily results from the decline in earnings from Super Food, competitive pressures in certain retail markets and an increase in overhead expenses from consulting costs, severance costs related to management changes and additional provisions for closed store future lease costs. YEAR 2000 The Company's Year 2000 resolution was initially incorporated in the system design of the HORIZONS project. However, due to programming and testing delays in the development of HORIZONS, it has been determined that the system will not provide the level of Year 2000 readiness the Company had previously expected in the time frame required. As a result, the Company has embarked on a process to develop a remediation plan which accelerates existing efforts toward resolving Year 2000 issues. The plan will result in an aggressive timetable to address the modification and/or replacement of existing business critical software and the identification of the non-information technology systems that may be affected by Year 2000. In addition, the plan will assess the readiness of third parties with which the Company does business and the related risks to the Company in the event of their non-compliance. To expedite this Year 2000 solution, the Company has reallocated internal resources and has contracted outside resources to assist in the remediation effort. The timetable for finalizing the plan and taking initial action to implement the plan is December 1998. The total future cost for Year 2000 remediation is estimated at approximately $18.5 million, which includes $ 4.0 million for the purchase of new equipment that will be capitalized and $ 14.5 million, which will be expensed as incurred, primarily for internal and external costs associated with the modification of existing software. This $18.5 million remediation effort will be funded from approximately $20.0 million, of which $15.3 million related to capital expenditures, that was previously allocated to a more aggressive HORIZONS implementation. The Company is maintaining a small HORIZONS team to assess a continuing HORIZONS development and implementation strategy based on an enhanced software release, which may allow the Company greater functionality. The costs or consequences of incomplete or untimely resolution of the Year 2000 issue may have a material effect on the Company's business, results of operations and financial condition. However, this time, the Company is unable to measure the monetary impact of its failure to comply or failure of other parties on which it is dependent. The Company is currently devoting resources toward designing and executing a plan to insure full compliance with Year 2000 issues by December 1999. In addition, the Company has begun to develop a contingency plan, in the event of system or function failure, which will allow it to continue normal business activities beyond 1999. LIQUIDITY AND CAPITAL RESOURCES Historically, the Company has financed capital needs through a combination of internal and external sources. These sources include cash flow from operations, short-term bank borrowings, various types of long-term debt, lease and equity financing. Operating activities generated positive net cash flows of $71.2 million during the quarter compared to $52.5 million a year ago. The improvement is primarily due to an increase in accounts payable and accrued expenses, somewhat offset by increases in inventory and accounts receivable. Working capital was $178.2 million at the end of the third quarter, a reduction of $21.7 million, or 10.9%, for the three quarters of 1998. The current ratio decreased from 1.68 at the end of fiscal 1997 to 1.53 at the end of the third quarter. On October 10, 1998 and January 3, 1998, the Company had $11.3 million in short-term debt from available lines of credit totaling $25 million. On April 24, 1998, the Company completed the sale of $165 million 8.5% senior subordinated notes due May 1, 2008, using the net proceeds from the offering, after fees and expenses, to reduce certain amounts borrowed under its revolving credit facility. Other transactions affecting liquidity during the quarter include capital expenditures of $14.8 million, of which approximately $5.6 million related to HORIZONS, and payment of a cash dividend of $2.0 million or $.18 per share. On June 22, 1998 the Company sold three stores to Miracle Mart, Inc., a new wholesale customer in Mandan, North Dakota, for approximately $4.7 million in cash. Also, on September 21, 1998, the Company purchased three stores in South Dakota from Sooper Dooper Markets, Inc. for cash and other consideration totaling $2.3 million. The Company believes that borrowing under the revolving credit facility, sale of subordinated notes, other credit agreements, cash flows from operating activities and lease financings will be adequate to meet the Company's working capital needs, planned capital expenditures and debt service obligations for the foreseeable future. FORWARD-LOOKING STATEMENTS The information contained in this Form 10-Q includes forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by the use of words like "believes," "expects," "may," "will," "should," "anticipates" or similar expressions, as well as discussions of strategy. Although such statements represent management's current expectations based on available data, they are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those anticipated. Such risks, uncertainties and other factors may include, but are not limited to, the Company's ability to: meet debt service obligations and maintain future financial flexibility; respond to continuing competitive pricing pressures; retain existing independent wholesale customers and attract new accounts; attract and retain qualified personnel and other resources to address Year 2000 issues; otherwise address Year 2000 issues as they affect the Company, its customers and vendors; and fully integrate acquisitions and realize expected synergies. PART II - OTHER INFORMATION Items 1, 2, 3, 4, and 5 are not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS. 10.1 Retirement Agreement dated as of May 12, 1998 between Alfred N. Flaten and the Company. 27.1 Financial Data Schedule (b) REPORTS ON FORM 8-K. Not applicable. 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 thereunto duly authorized. NASH-FINCH COMPANY Registrant Date: November 24, 1998 By /s/ John R. Scherer ----------------------------- John R. Scherer Chief Financial Officer By /s/ Lawrence A. Wojtasiak ----------------------------- Lawrence A. Wojtasiak Controller NASH-FINCH COMPANY EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q For the Forty Weeks Ended October 10, 1998
Item No. Item Method of Filing -------- ---- ---------------- 10.1 Retirement Agreement dated as of May 12, 1998 Filed herewith. between Alfred N. Flaten and the Company. 27.1 Financial Data Schedule Filed herewith.
EX-10.1 2 EXHIBIT 10.1 RETIREMENT AGREEMENT THIS AGREEMENT, dated as of May 12, 1998, is entered into by and between Nash Finch Company, a Delaware corporation (the "Company"), and Alfred N. Flaten, an individual presently residing in the State of Minnesota (the "Executive"). RECITALS A. The Company and the Executive have agreed to certain terms and conditions relating to the remaining term of the Executive's employment with the Company and membership on the Company's Board of Directors and the Executive's retirement from the Company and the Board of Directors. B. All of the terms and conditions relating to the Executive's employment with the Company and membership on the Company's Board of Directors and the Executive's retirement from the Company and the Board of Directors are set forth herein and this Agreement supersedes and replaces in its entirety any previous agreement or understanding relating thereto between the Company and the Executive. In consideration of the foregoing and the mutual agreements set forth below the parties hereto agree as follows: 1. RETIREMENT. The Executive's employment with the Company will continue until June 1, 1998 (the "Retirement Date"). Effective on the Retirement Date, without any further action or notice, the Executive will resign as an employee, officer and director of the Company and all of its subsidiaries. The terms of the announcement of the Executive's retirement will be mutually agreed upon by the Executive and the Chair of the Nominating Committee of the Company's Board of Directors. 2. COMPENSATION FOR SERVICES THROUGH RETIREMENT DATE. From the date of this Agreement through the Retirement Date, the Executive will continue to receive his base salary at his current rate and will continue to participate in all employee benefit plans for which he is eligible in accordance with the terms of those plans. 3. ADDITIONAL COMPENSATION. Subject to compliance by the Executive with the terms and conditions of this Agreement, and subject to the execution and delivery by the Executive of the release in the form attached hereto (the "Release") and the effectiveness of the Release following the passage of any applicable period of time during which the Release may be revoked by the Executive, and in consideration for the obligations of the Executive under Sections 5 and 6 of this Agreement, the Company agrees as follows. A. PERIODIC PAYMENTS. From the Retirement Date until December 31, 1999 or the date of the Executive's death, whichever is earlier, the Company will make periodic cash payments to the Executive at $462,500, the Executive's current annual rate of base salary. The payments will be made in accordance with the Company's standard payroll practices. B. LUMP SUM PAYMENT. In lieu of any cash bonus payment for fiscal year 1998, not later than the date on which the Company pays cash bonuses to executives for fiscal year 1998, the Company will make a cash payment to the Executive in the amount of $127,000 (the amount of the Executive's cash bonus for fiscal year 1997). The Executive is not eligible for any further cash bonuses from the Company. C. RETIREE MEDICAL. The Company acknowledges that as of the Retirement Date, the Executive will be eligible for retiree medical coverage under the terms of the Nash Finch Company Welfare Benefit Plan in effect on the date of this Agreement. From the Retirement Date until December 31, 1999 or the date of the Executive's death, whichever is earlier, the Company will reimburse the Executive for premiums paid by the Executive for retiree medical coverage under the Plan to the extent the premiums paid by the Executive exceed the premiums paid under the Plan for similar medical coverage by an active employee of the Company. To the extent the reimbursement payments are includible in the Executive's gross income, the Executive acknowledges that he is responsible for the tax due. The Executive acknowledges that the Company reserves the right to amend, modify or terminate the Nash Finch Company Welfare Benefit Plan, including without limitation, the provisions of the Plan relating to retiree medical coverage, and that nothing in this Agreement in any way eliminates or changes that right. D. LIFE INSURANCE. The Company acknowledges that as of the Retirement Date, the Executive will be eligible for retiree life insurance benefits in accordance with the Company's group life insurance plan. If the Executive is eligible for and elects to continue group life insurance coverage pursuant to the Company's group life insurance plan, from the effective date of such coverage until December 31, 1999 or the date of the Executive's death, whichever is earlier, the Company will reimburse the Executive for premiums paid by the Executive for the continuation coverage. To the extent the reimbursement payments are includible in the Executive's gross income, the Executive acknowledges that he is responsible for any tax due. E. EXECUTIVE INCENTIVE BONUS AND DEFERRED COMPENSATION PLAN. Subject to Section 8 of the Nash Finch Company Executive Incentive Bonus and Deferred Compensation Plan, distribution of amounts to which the Executive is entitled pursuant to the Plan will be made in equal monthly installments over a period of 120 months commencing with the second month following the month that includes the Retirement Date. If the Retirement Date is on or after the last day of the 1998 fiscal year, the Executive will be eligible for an allotment pursuant to the Plan for fiscal year 1998 in accordance with the terms of the Plan. If the Retirement Date is before the last day of fiscal year 1998, in lieu of an allotment pursuant to the Plan for fiscal year 1998, the Company will determine the amount, if any, that would have been allotted to the Executive under the Plan for fiscal year 1998 if he had continued employment until the end of the fiscal year, his base salary for the year were $462,500 and his bonus for the year were $127,000. The determination will be made at the same time allotments are determined pursuant to the Plan for fiscal year 1998. The amount so determined and interest thereon determined in accordance with Section 6 of the Plan will be paid by the Company to the Executive in equal monthly installments commencing with the month first following the month during which the determination is made and continuing for as many months as the Executive receives installment payments pursuant to the Plan, as if such amounts were paid 2 pursuant to the Plan, including for example, the provisions of Section 8 of the Plan relating to forfeitures and the provisions of Section 14.c. of the Plan relating to acceleration of payment in the event of a change in control. Other than as provided in this Section 3.E, the Executive acknowledges that he is not eligible for allotments pursuant to the Plan for the 1998 fiscal year or any subsequent fiscal year. F. PROFIT SHARING PLAN. For the plan year ending December 31, 1998, if the Company determines that the Executive is not eligible to share in the Company's profit sharing contribution, if any, pursuant to the Nash Finch Company Profit Sharing Plan because he fails to satisfy applicable eligibility conditions as a result of his retirement, and for the plan year ending December 31, 1999, the Company will make a cash payment to the Executive in an amount, if any, equal to the amount of the Company's profit sharing contribution that would have been allocated to his account pursuant to the Plan for the 1998 and 1999 plan years had he satisfied applicable eligibility conditions and received eligible earnings for the plan year equal to the maximum amount that may be taken into account for the plan year under I.R.C. Section 401(a)(17). Any payments to the Executive pursuant to this Section 3.F. will be made as soon as administratively practicable after the Company makes its profit sharing contribution pursuant to the Plan for the plan year in question but not later than 10 days after the Company makes its profit sharing contribution. The Executive acknowledges that except as provided in this Section 3.F. he is not eligible for any further allocations of contributions to his accounts under the Plan other than pre-tax contributions relating to compensation earned through the Retirement Date. 4. 1994 STOCK INCENTIVE PLAN. The Company acknowledges that for purposes of the Nash Finch Company 1994 Stock Incentive Plan, including the Management Restricted Stock Purchase Program and the Performance Equity Plan implemented thereunder, the Executive's separation from service constitutes a "retirement" and the Executive's rights under the Plan will be determined accordingly. The Executive is not eligible for any further grants or awards under the Plan. 5. CONSULTING SERVICES. On and after the Retirement Date and through December 31, 1999 or the date of the Executive's death or disability, whichever is earlier, the Executive will make himself available to the Company to provide consulting services as reasonably requested by the Chief Executive Officer of the Company or the Chair of the Company's Board of Directors and will diligently and conscientiously perform such services. In no case will the Executive be required to perform consulting services in excess of an average of 30 hours in any calendar month. The Company will pay the Executive a fee of $100 per hour for each hour of consulting services actually performed by the Executive. The Executive will invoice the Company at the end of each month during which he performs services and the Company will pay the Executive within 30 days of receiving the invoice. Consulting fees payable to the Executive pursuant to this Section 5 are in addition to any other compensation to which the Executive is entitled pursuant to this Agreement. The Company will reimburse the Executive in accordance with the Company's normal reimbursement policy for reasonable travel and other expenses incurred in connection with his consulting services. The Executive will serve the Company as an independent contractor with respect to consulting services provided pursuant to this Section 5 and will not be considered an employee of the Company or any of its subsidiaries or affiliates. The Executive agrees that he is responsible for any taxes due in connection with his consulting income and that he is not entitled to any benefits provided to employees of the Company or any of its subsidiaries 3 or affiliates in connection with the performance of consulting services and agrees not to make any claims for benefits. 6. NON-COMPETITION AND NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive agrees that from and after the date of this Agreement and through December 31, 1999, without the prior written consent of the Company's Chief Executive Officer, the Executive will not alone or in any capacity (other than by way of holding shares listed on a stock exchange in a number not exceeding five percent of the outstanding class or series of shares so listed) with any other person or entity: A. directly or indirectly engage in any commercial activity involving retail or wholesale food and grocery sales or services to retail food stores and military commissaries anywhere in the world in which the Company or any of its subsidiaries or affiliates then conducts business or has publicly announced plans to conduct business in the future, except to the extent that the Executive's direct or indirect engagement in such commercial activities preceded the date on which the Company and its subsidiaries and affiliates first conducted or publicly announced plans to conduct business; or B. in any way interfere or attempt to interfere with the Company's relationships with any of its current or potential vendors, suppliers, distributors or customers; or C. solicit for employment, employ or attempt to employ any employee currently employed by the Company or any employee that hereafter becomes employed by the Company. The Executive acknowledges that his entitlement to receive benefits under the Nash Finch Company Executive Incentive Bonus and Deferred Compensation Plan after the Retirement Date is subject to all of the terms and conditions of that Plan, including, for example, the terms and conditions set forth in Section 8 of the Plan relating to competition with the Company or its subsidiaries and availability for consultation, and that nothing in this Agreement in any way eliminates or changes any of those terms and conditions. The Executive further agrees that from and after the date hereof, except as may be expressly required in the performance of the Executive's duties for and on behalf of the Company, the Executive will not use or disclose to any party any proprietary or confidential information of the Company or any of its subsidiaries. The parties agree that the additional compensation described in Section 3.A of this Agreement is allocable to the Executive's agreement not to compete pursuant to this Section 6. If the Executive breaches his agreement not to compete pursuant to this Section 6, the Executive will not be entitled to any further payments pursuant to Section 3.A and the Company may pursue other remedies in accordance with Section 16 of this Agreement. 7. NON-DISPARAGEMENT. The Executive agrees that he will not, at any time, disparage, demean or criticize, or do or say anything to cause injury to, the business, reputation, management, employees, members of the Board of Directors or products or services of the Company. The Company agrees that it will not, at any time, disparage, demean or criticize, or do or say anything to cause injury to the reputation or career development of the Executive. In addition to any other damages or remedies that may be available to a non-breaching party for any breach of this Section 7, any breaching party will further be obliged to the non-breaching party for any reasonable attorneys fees and costs incurred by the non-breaching party to enforce the provisions of this Section 7. 4 8. CONFIDENTIALITY. The Company and the Executive each agree that they will hold the facts and circumstances of this Agreement in strict confidence and will not reveal the existence of this Agreement or the terms of this Agreement to anyone except as may be required by law or as expressly provided in this Agreement. Notwithstanding the foregoing, each of the parties hereto will be entitled to advise their respective professional advisors of the terms hereof, and the Executive will be entitled to discuss the terms hereof with immediate family members. 9. NO OTHER COMPENSATION. Other than his right to receive distributions of the benefits he has earned through the Retirement Date pursuant to the terms of the Nash Finch Company Profit Sharing Plan, the Nash Finch Company 1994 Stock Incentive Plan, the Nash Finch Company Income Deferral Plan and the Nash Finch Company Executive Incentive Bonus and Deferred Compensation Plan in accordance with the express terms of these Plans and his right to elect continuation coverage pursuant to I.R.C. Section 4980B or the corresponding provisions of Minnesota law and to exercise any conversion rights available under any Company welfare benefit plan, and the rights granted to the Executive under this Agreement, the Executive agrees and understands that he is entitled to no other compensation other than as expressly enumerated in this Agreement and will not accrue or become entitled to any benefits other than as expressly enumerated herein. Without limiting the prior sentence, the Executive acknowledges that as of the Retirement Date, the change in control agreement between the Executive and the Company dated April 12, 1991, as amended effective February 16, 1993, is terminated. The Executive also understands that payments made pursuant to this Agreement may be subject to withholding of applicable income and other employment-related taxes and consents to the Company's right to withhold from such payments. Furthermore, the Executive acknowledges that the benefits under this Agreement are more than he would have received under normal policies in the absence of this Agreement and the Release. 10. VOLUNTARY AGREEMENT. The Executive hereby acknowledges that he fully understands and accepts the terms of this Agreement, that his signature is freely, voluntarily and knowingly given, and that he has been provided 21 days and a full opportunity to review and reflect on the terms of this Agreement and to obtain the advice of legal counsel of his choice, which advice the Company has encouraged him to obtain. 11. RESCISSION PERIOD. On June 2, 1998, the Executive will hand deliver to the Company the executed Release, dated as of the delivery date. The Executive understands that he may rescind this Agreement (and the Release) by delivering written notice of such rescission within 15 days of the date on which he delivers the Release. The notice of rescission may be hand-delivered to the Company's General Counsel or may be mailed by certified mail, return receipt requested, to Nash Finch Company, 7600 France Avenue, Edina, Minnesota 55435, Attn.: General Counsel. The Executive understands that this Agreement (and the Release) will not become effective until the end of such 15-day period and only if the Executive does not rescind this Agreement (and the Release). 12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties and supersedes all previous negotiations, representations and agreements heretofore made by the parties with respect to the subject matter hereof and except as to those rights reserved to the Executive under this Agreement with respect to any other agreement between the Company and the Executive as recited herein. The headings in this Agreement are included only for convenience of reference; if there is a conflict between a heading and the text of the Agreement, the text will control. No amendment, waiver or discharge hereof will be valid unless in writing 5 and executed by both parties hereto. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party does not constitute a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party. 13. GOVERNING LAW. The laws of the State of Minnesota will govern the validity, construction and performance of this Agreement, without regard to the conflict of law provisions of any jurisdictions. Any legal proceeding related to this Agreement, will be brought in an appropriate Minnesota court, and both the Company and the Executive hereby consent to the exclusive jurisdiction of that court for this purpose. 14. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted so that it is valid under applicable law. If any provision of the Agreement is to any extent rendered invalid under applicable law, that provision will still be effective to the extent it remains valid. The remainder of this Agreement also will continue to be valid, and the entire Agreement will continue to be valid in other jurisdictions. 15. NO ASSIGNMENT. The Executive may not assign this Agreement to any third party for whatever purpose without the express written consent of the Company. The Company may not assign this Agreement to any third party, except by operation of law through merger, consolidation, liquidation or recapitalization, or by sale of all or substantially all of the assets of the Company, without the express written consent of the Executive. 16. REMEDIES. The parties hereto agree that the rights granted by this Agreement are both unique and special, and the parties contemplate that enforcement of this Agreement may be had by recourse to the equitable remedies available in courts of appropriate jurisdiction in addition to any other remedies which may be or may become available at law. 17. BINDING EFFECT. This Agreement and the obligations of the respective parties hereunder shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. In furtherance of, and not in limitation of, the foregoing, the Company agrees that the provisions of this Agreement will be binding upon any successor to the business and assets of the Company and the provisions of this Agreement for the benefit of the Executive will inure to the benefit of the Executive's estate in the event of the Executive's death. The parties have duly executed this Agreement as of the date set forth above. NASH FINCH COMPANY By: /s/ Norman R. Soland ------------------------------------------------ Its: Vice President, Secretary & General Counsel ------------------------------------------- ALFRED N. FLATEN /s/ Alfred N. Flaten ----------------------------------------------------- 6 RELEASE I, Alfred N. Flaten, for good and valuable consideration, do hereby fully and completely release and waive any and all claims, complaints, causes of action or demands of whatever kind, which I have or may have against Nash Finch Company, its predecessors, successors, subsidiaries and affiliates and all of its past and present board members, officers, employees, consultants and agents of those persons and companies (collectively "Nash Finch") for any actions, conduct, decisions, behavior or events relating to or arising out of the terms, conditions, or circumstances of my employment, and membership on the Board of Directors, and separation from employment with, and membership on the Board of Directors of, Nash Finch Company occurring up through the date of my signature on this Release. I understand and accept that I am giving up any claims, complaints, causes of actions or demands which I have or may have against Nash Finch relating in any way to the terms, conditions or circumstances of my employment and my separation from employment including, but not limited to, claims for employment discrimination prohibited under Title VII of the Federal Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Americans With Disabilities Act and the Minnesota Human Rights Act, any other state or federal statutes and all claims which I may have based on statutory or common law claims for negligence or other breach of duty, wrongful discharge, breach of express or implied contract, sexual harassment, promissory estoppel, breach of any express or implied promise, misrepresentation, fraud, retaliation, negligent or intentional infliction of emotional distress, defamation, invasion of privacy, tortious interference with contract, negligent hiring, retention or supervision, retaliatory discharge contrary to public policy and any other theory whether legal or equitable. This Release does not apply to any rights of indemnification that I may have had as an officer and director of Nash Finch Company or any of its subsidiaries or affiliates, including without limitation, any rights that I may have under my July 18, 1995 Indemnification Agreement with Nash Finch Company and any rights that I may have under any directors and officers insurance policy. In addition, this Release does not apply to any rights that I have under my May 12, 1998 Retirement Agreement with Nash Finch Company. I acknowledge that I have been given 21 days to consider whether I should enter into this Release and have been advised to consult with legal counsel of my choice. By my signature below, I acknowledge that I freely, voluntarily and knowingly accept the terms of this Release. I believe that the money and other consideration I am receiving from Nash Finch Company is a full and fair payment for this Release. I understand that I may rescind this Release if I do so in writing delivered by certified mail, return receipt requested, to Nash Finch Company in the care of the General Counsel, 7600 France Avenue, Edina, Minnesota 55435 postmarked within 15 days of the date below. I further acknowledge that I have been given the full opportunity to review and reflect on the terms of this Release. ---------------------------------------- Alfred N. Flaten Subscribed and sworn to before me this ______ day of June, 1998 - ---------------------------------------- Notary Public 7 EX-27.1 3 EX-27.1
5 1,000 3-MOS JAN-02-1999 JUN-21-1998 OCT-10-1998 979 0 205,977 20,012 300,655 514,265 605,152 332,004 917,873 336,062 308,531 0 0 19,292 204,722 917,873 1,280,599 1,307,407 1,187,265 104,663 0 976 8,694 5,809 2,411 3,398 0 0 0 3,398 .30 .30
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