10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q/A

(Mark One)

	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
ý	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period (twelve weeks) ended June 18, 2011

or

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
o	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)

(952) 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  ý NO  o

As of July 13, 2011 12,136,507 shares of Common Stock of the Registrant were outstanding.

EXPLANATORY NOTE


The Nash-Finch Company is filing this Amendment No. 1 (the "Form 10-Q/A") to our Quarterly Report on Form 10-Q for the quarter ended June 18, 2011 (the "Form 10-Q"), filed with the Securities and Exchange Commission ("SEC") on July 21, 2011, for the sole purpose of furnishing the Interactive Data File as Exhibit 101. The Interactive Data File was inadvertently omitted from the Form 10-Q as originally filed due to unanticipated technical difficulties.

No other changes have been made to the Form 10-Q. This Form 10-Q/A continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the Form 10-Q.

ITEM 6.  EXHIBITS

Exhibits filed or furnished with this Form 10-Q:

Exhibit No.	Description
3.1	Fifth Restated Certificate of Incorporation of Nash-Finch Company
12.1	Calculation of Ratio of Earnings to Fixed Charges
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101	The following information from the Nash Finch Company Quarterly Report on Form 10-Q for the fiscal quarter ended June 18, 2011, filed with the SEC on July 21, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Earnings, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) the Notes to the Consolidated Financial Statements, tagged as blocks of text

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: July 21, 2011	By   /s/ Robert B. Dimond
	Robert B. Dimond
	Executive Vice President and Chief Financial Officer

EX-3

Exhibit 3.1

FIFTH RESTATED CERTIFICATE OF INCORPORATION

OF

NASH-FINCH COMPANY

NASH-FINCH COMPANY, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

First: The name of the corporation is Nash-Finch Company.

Second: The original Certificate of lncorporation of the corporation was filed with the Secretary of State of Delaware on October 6, 1921. The first Restated Certificate of lncorporation was filed with the Secretary of State of Delaware on February'16, 1970. The second Restated Certificate of lncorporation was filed with the Secretary of State of Delaware on May 18, 1979. The third Restated Certificate of lncorporation was filed with the Secretary of State of the State of Delaware on May 16, 1985. The fourth Restated Certificate of lncorporation was filed with the Secretary of State of the State of Delaware on July 24, 2009.

Third: This Fifth Restated Certificate of lncorporation, which restates and integrates and also further amends the provisions of the corporation's certificate of incorporation, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. The Certificate of lncorporation is hereby amended, integrated and restated to read in its entirety as follows:

ARTICLE I.

Name: The name of this corporation shall be the NASH-FINCH COMPANY.

ARTICLE II.

Office: Place of Business and Resident Agent: The location of its principal office in the State of Delaware is in the City of Wilmington, County of New Castle. The name of the registered agent therein and in charge thereof is the Corporation Service Company. The street number and street of said principal office and the address by street and number of said registered agent is 2711 Centerville Road, Suite 400.

ARTICLE III.

Nature and Purpose: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV.

The corporation shall be authorized to issue two classes of shares of capital stock to be designated, respectively, "preferred stock" and "common stock". The total number of shares of capital stock which the corporation shall be authorized to issue is fifty million five hundred thousand, of which five hundred thousand shall be shares of preferred stock without par value and fifty million shall be shares of common stock of the par value of $1.66 2/3 per share. No holder of any shares of preferred stock or any shares of common stock shall be entitled, as such, as a matter of right, to subscribe for or purchase any part of any new or additional issue of capital stock or of securities of the corporation convertible into capital stock, of any class or series whatsoever, whether now or hereafter authorized and whether issued for cash, property, services or otherwise. Shares of preferred stock of the corporation may be ¡issued from time to time in one or more series, each of which series shall have such distinctive designation or title and such number of shares as shall be fixed by the Board of Directors prior to the issuance of any shares thereof- Each such series of preferred stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of such

series of preferred stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof pursuant to the authority hereby expressly vested in it.

The Board of Directors is further authorized to increase or decrease (but not below the number of shares then outstanding) the number of shares of any series of preferred stock subsequent to the issuance of shares of that series. Except as provided in the resolution or resolutions of the Board of Directors creating any series of preferred stock, the shares of common stock shall have the exclusive right to vote for the election and removal of directors and for all other purposes. Each holder of common stock shall be entitled to one vote for each share held.

ARTICLE V.

Paid in Stock: Three Hundred Fifty (350) shares of the common stock of the corporation have been subscribed and paid for in cash by the original subscribers.

ARTICLE VI.

Term of Existence: The term of duration and existence of this corporation shall be perpetual.

ARTICLE VII.

Corporate Debts: The private property of the stockholders shall not be subject to the payment of corporate debts.

ARTICLE VIII.

Management: (a) The number of directors shall be not less than seven (7) nor more than twelve (12) in number, which number shall be determined by the Board of Directors from time to time. At each annual meeting of stockholders from and after the annual meeting of stockholders to be held in 2008, each director shall hold office for a term expiring at the next annual meeting of stockholders to be held in the year following the year of their election, with such director to hold office until his or her successor is elected and qualified. Directors shall hold office until the expiration of the terms for which they were elected and qualified. Any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. lf the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, increase in the number of directors, or otherwise, a majority of the remaining directors, though less than a quorum, at a meeting called for that purpose, may choose a successor or successors, who shall hold office until the next annual meeting of stockholders or until a successor shall be elected and shall qualify.

(b) This Article Vlll may not be altered, amended or repealed, in whole or in part, unless authorized by the affirmative vote of the holders of not less than three-fourths of all outstanding shares entitled to vote.

ARTICLE IX.

By-Laws: The directors shall have power to make, alter, amend and repeal by-laws for the corporation. Unless and except to the extent that the bylaws of the corporation shall so require, the election of directors of the corporation need not be by written ballot.

ARTICLE X.

Meetings of Directors: The directors shall have office and may hold meetings at Minneapolis, in the State of Minnesota, and in such other states or countries as they shall decide upon.

ARTICLE XI.

Meetings of Stockholders: Special meetings of stockholders, for any purpose or purposes, may be called at any time only by the Chairman of the Board or the President or by an affirmative vote of two{thirds of the full

Board of Directors at any regular or special meeting of the Board of Directors called for that purpose. No action shall be taken by the stockholders of the corporation except in an annual or special meeting of stockholders. This Article Xl may not be altered, amended or repealed in whole or in part, unless authorized by the affirmative vote of the holders of no less than three-fourths of all outstanding shares entitled to vote.

ARTICLE XII.

[Reserved].

ARTICLE XIII.

[Reserved].

ARTICLE XIV.

[Reserved].

ARTICLE XV.

No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty by such director as a director; provided, however, that this Article XV shall not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by any such amendment. Any amendment to or repeal of this Article XV shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such amendment or repeal.

lN WITNESS WHEREOF, Nash-Finch Company has caused this certificate to be signed by its Executive Vice President, General Counsel and Secretary this 18th day of May, 2011.

By: _/s/ Kathleen M. Mahoney___________

Kathleen M. Mahoney

Executive Vice President, General Counsel and Secretary

EX-12

Exhibit 12.1

NASH FINCH COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
		Fiscal Year Ended					24 Weeks Ended
		Dec.30,	Dec.29,	Jan.3,	Jan.2,	Jan.1,	June 19,	June 18,
(In thousands, except ratios)		2006	2007	2009	2010	2011	2010	2011
Fixed Charges:
Interest expense on	$	30,840	28,088	26,466	24,372	23,403	10,624	10,814
Indebtedness
Rent expense (1/3 of total rent expense)		9,966	9,057	9,496	10,318	9,728	4,644	4,126
Total fixed charges	$	40,806	37,145	35,962	34,690	33,131	15,268	14,940
Earnings:
Income (loss) before	$	(21,689)	53,015	53,791	23,750	72,126	31,296	28,984
provision for income taxes
Fixed charges		40,806	37,145	35,962	34,690	33,131	15,268	14,940
Total earnings	$	19,117	90,160	89,753	58,440	105,257	46,564	43,924
Ratio		0.47x	2.43x	2.50x	1.68x	3.18x	3.05x	2.94x

EX-31

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION OF THE

CHIEF FINANCIAL OFFICER

I, Robert B. Dimond, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Nash-Finch Company for the 12 weeks ended June 18, 2011;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:   July 21, 2011

By:  /s/ Robert B. Dimond

Name:  Robert B. Dimond

Title:  Executive Vice President and Chief Financial Officer

EX-31

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION OF THE

CHIEF EXECUTIVE OFFICER

I, Alec C. Covington, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Nash-Finch Company for the 12 weeks ended June 18, 2011;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  July 21, 2011

By:  /s/Alec C. Covington

Name: Alec C. Covington

Title: President and Chief Executive Officer

EX-32

Exhibit 32.1

SECTION 1350 CERTIFICATION OF THE CHIEF EXCECUTIVE

OFFICER AND CHIEF FINANCIAL OFFICER

In connection with the Quarterly Report on Form 10-Q of Nash-Finch Company, (the “Company”) for the 12 weeks ended June 18, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Alec C. Covington, President and Chief Executive Officer and Robert B. Dimond, Executive Vice President and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18. U.S.C. Section 1350, that to our knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.  

Date:   July 21, 2011

By:  /s/Alec C. Covington

Name: Alec C. Covington

Title: President and Chief Executive Officer

By:  /s/ Robert B. Dimond

Name:  Robert B. Dimond

Title:  Executive Vice President and Chief Financial Officer

1

XML



Document and Entity Information	3 Months Ended
	Jun. 18, 2011	Jul. 13, 2011
Document and Entity Information
Entity Registrant Name	NASH FINCH CO
Document Type	10-Q
Document Period End Date	Jun. 18, 2011
Amendment Flag	false
Entity Central Index Key	0000069671
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		12,136,507
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

XML



Derivatives

3 Months Ended

Jun. 18, 2011

Derivatives

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 5 – Derivatives

We have market risk exposure to changing interest rates primarily as a result of our borrowing activities and commodity price risk associated with anticipated purchases of diesel fuel.  Our objective in managing our exposure to changes in interest rates and commodity prices is to reduce fluctuations in earnings and cash flows.  From time-to-time we use derivative instruments, primarily interest rate and commodity swap agreements, to manage risk exposures when appropriate, based on market conditions.  We do not enter into derivative agreements for trading or other speculative purposes, nor are we a party to any leveraged derivative instrument. 

The interest rate swap agreements are designated as cash flow hedges and are reflected at fair value in our Consolidated Balance Sheet and the related gains or losses on these contracts are deferred in stockholders’ equity as a component of other comprehensive income.  As of June 18, 2011, and January 1, 2011, we had recorded a fair value liability of $0.2 million and $0.4 million, respectively, which are included in accrued expenses in our Consolidated Balance Sheet.  Deferred gains and losses are amortized as an adjustment to interest expense over the same period in which the related items being hedged are recognized in income.  However, to the extent that any of these contracts are not considered to be effective in accordance with ASC Topic 815 – Derivatives and Hedging (“ASC 815”) in offsetting the change in the value of the items being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income. Our two outstanding interest rate swaps have been considered effective in accordance with ASC 815 since they began during fiscal 2008.

Our interest rate swap agreements resulted in net payments of approximately $0.1 million and $0.3 million during the second quarters of fiscal 2011 and 2010, respectively, and resulted in net payments of $0.3 million and $0.5 million during year-to-date 2011 and 2010, respectively, which are included in interest expense on our Consolidated Statement of Income.

As of June 18, 2011, we had two outstanding interest rate swap agreements with notional amounts totaling $17.5 million as compared to $35.0 million as of June 19, 2010, as follows (amounts in thousands):

Notional	Effective Date	Termination Date	Fixed Rate
$20,000	10/15/2009	10/15/2010	3.49%
10,000	10/15/2010	10/15/2011	3.49%

Notional	Effective Date	Termination Date	Fixed Rate
$15,000	10/15/2009	10/15/2010	3.38%
7,500	10/15/2010	10/15/2011	3.38%

XML



Other Comprehensive Income

3 Months Ended

Jun. 18, 2011

Other Comprehensive Income

Comprehensive Income (Loss) Note [Text Block]

Note 6 – Other Comprehensive Income

Other comprehensive income for the periods presented includes market value adjustments to reflect derivative instruments at fair value, pursuant to ASC 815.   The components of comprehensive income are as follows:

		12 Weeks				24 Weeks
		Ended				Ended
(In thousands)		June 18, 2011		June 19, 2010		June 18, 2011		June 19, 2010
Net earnings	$	10,051		10,714		17,532		18,655
Change in fair value of derivatives, net of  tax		75	(1)	115	(2)	151	(3)	186	(4)
Comprehensive income	$	10,126		10,829		17,683		18,841
(1) Net of tax of $48.
(2) Net of tax of $74.
(3) Net of tax of $97.
(4) Net of tax of $119.

The gains reported in other comprehensive income during the second quarter and year-to-date periods of 2011 and 2010 reflect a change in fair value of our outstanding interest rate swap agreements during the respective periods.  Please refer to “Note 5 - Derivatives” of this Form 10-Q for information related to our interest rate swap agreements.

XML



Long-term Debt and Bank Credit Facilities

3 Months Ended

Jun. 18, 2011

Long-term Debt and Bank Credit Facilities

Long-term Debt [Text Block]

Note 7 – Long-term Debt and Bank Credit Facilities

Total debt outstanding was comprised of the following:

(In thousands)		June 18 , 2011	January 1, 2011
Asset-backed credit agreement:
Revolving credit	$	158,800	154,100
Senior subordinated convertible debt, 3.50% due in 2035		139,320	136,710
Industrial development bonds, 5.60% to 6.00% due in various installments through 2014		1,620	1,830
Notes payable and mortgage notes, 7.95% due in various installments through 2013		255	296
Total debt		299,995	292,936
Less current maturities		(684)	(670)
Long-term debt	$	299,311	292,266

Asset-backed Credit Agreement

Our credit agreement is an asset-backed loan consisting of a $340.0 million revolving credit facility, which includes a $50.0 million letter of credit sub-facility (the “Revolving Credit Facility”).  Provided no default is then existing or would arise, the Company may from time-to-time, request that the Revolving Credit Facility be increased by an aggregate amount (for all such requests) not to exceed $110.0 million.  The Revolving Credit Facility has a 5-year term and will be due and payable in full on April 11, 2013. The Company can elect, at the time of borrowing, for loans to bear interest at a rate equal to the base rate, as defined in the credit agreement, or LIBOR plus a margin. The LIBOR interest rate margin was 2.00% as of June 18, 2011, and can vary quarterly in 0.25% increments between three pricing levels ranging from 1.75% to 2.25% based on the excess availability, which is defined in the credit agreement as (a) the lesser of (i) the borrowing base; or (ii) the aggregate commitments; minus (b) the aggregate of the outstanding credit extensions.  As of June 18, 2011, $169.4 million was available under the Revolving Credit Facility after giving effect to outstanding borrowings and to $11.8 million of outstanding letters of credit primarily supporting workers’ compensation obligations. 

The credit agreement contains no financial covenants unless and until (i) the continuance of an event of default under the credit agreement, or (ii) the failure of the Company to maintain excess availability (a) greater than 10% of the borrowing base for more than two (2) consecutive business days or (b) greater than 7.5% of the borrowing base at any time, in which event, the Company must comply with a trailing 12-month basis consolidated fixed charge covenant ratio of 1.0:1.0, which ratio shall continue to be tested each month thereafter until excess availability exceeds 10% of the borrowing base for 90 consecutive days. 

                The credit agreement contains standard covenants requiring the Company and its subsidiaries, among other things, to maintain collateral, comply with applicable laws, keep proper books and records, preserve the corporate existence, maintain insurance, and pay taxes in a timely manner. Events of default under the credit agreement are usual and customary for transactions of this type including, among other things: (a) any failure to pay principal there under when due or to pay interest or fees on the due date; (b) material misrepresentations; (c) default under other agreements governing material indebtedness of the Company; (d) default in the performance or observation of any covenants; (e) any event of insolvency or bankruptcy; (f) any final judgments or orders to pay more than $15.0 million that remain unsecured or unpaid; (g) change of control, as defined in the credit agreement; and (h) any failure of a collateral document, after delivery thereof, to create a valid mortgage or first-priority lien.

                We are currently in compliance with all covenants contained within the credit agreement.

Senior Subordinated Convertible Debt

To finance a portion of the acquisition of distribution centers in 2005, we sold $150.1 million in aggregate issue price (or $322.0 million aggregate principal amount at maturity) of senior subordinated convertible notes due in 2035.  The notes are our unsecured senior subordinated obligations and rank junior to our existing and future senior indebtedness, including borrowings under our Revolving Credit Facility.  See our Annual Report on Form 10-K filed with the SEC for the fiscal year ended January 1, 2011, for additional information regarding the notes.

XML



Guarantees

3 Months Ended

Jun. 18, 2011

Guarantees

Schedule of Guarantor Obligations [Table Text Block]

Note 8 – Guarantees

We have guaranteed debt and lease obligations of certain food distribution customers.  In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, we would be unconditionally liable for the outstanding balance of their debt and lease obligations ($9.0 million as of June 18, 2011, as compared to $9.4 million as of January 1, 2011), which would be due in accordance with the underlying agreements.

We have entered into debt and lease guarantees on behalf of certain food distribution customers that are accounted for under ASC Topic 460 - Guarantees (“ASC 460”).  ASC 460 provides that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee.  The maximum undiscounted payments we would be required to make in the event of default under the guarantees is $6.5 million, which is included in the $9.0 million total referenced above.  These guarantees are secured by certain business assets and personal guarantees of the respective customers.  We believe these customers will be able to perform under their respective agreements and that no payments will be required and no loss will be incurred under the guarantees.  As required by ASC 460, a liability representing the fair value of the obligations assumed under the guarantees of $0.9 million is included in the accompanying consolidated financial statements for the guarantees accounted for under ASC 460.  All of the other guarantees were issued prior to December 31, 2002 and are therefore not subject to the recognition and measurement provisions of ASC 460.

We have also assigned various leases to other entities.  If the assignees were to become unable to continue making payments under the assigned leases, we estimate our maximum potential obligation with respect to the assigned leases to be $10.5 million as of June 18, 2011 as compared to $8.9 million as of January 1, 2011.

XML



Income Taxes

3 Months Ended

Jun. 18, 2011

Income Taxes

Income Tax Disclosure [Text Block]

Note 9 – Income Taxes

For the second quarter 2011 and 2010, our tax expense was $6.6 million and $7.3 million, respectively.  During year-to-date 2011 and 2010, our tax expense was $11.5 million and $12.6 million, respectively.  

The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted for any discrete events, which are reported in the period that they occur.  This estimate is re-evaluated each quarter based on the Company’s estimated tax expense for the full fiscal year.  During the second quarter 2010, the Company filed reports with various taxingauthorities which resulted in the refunds of tax payments.  The effect of these discrete events in the second quarter was $0.1 million. For both the second quarter and year-to-date periods of 2011, the effective tax rate was 39.5% as compared to 40.4% for each of the second quarter and year-to-date periods of 2010.

The total amount of unrecognized tax benefits as of the end of the second quarter 2011 was $1.9 million.  The net increase in unrecognized tax benefits of $0.1 million since March 26, 2011 is due to the increase in unrecognized tax benefits as a result of tax positions taken in prior periods.  The total amount of tax benefits that if recognized would impact the effective tax rate was $0.4 million at the end of the second quarter 2011.  We recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense.  At the end of the second quarter 2011, we had approximately $0.1 million for the payment of interest and penalties accrued.

We do not expect our unrecognized tax benefits to change significantly over the next 12 months. 

The Company or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions.  With few exceptions, we are no longer subject to U.S. federal, state or local examinations by tax authorities for years 2006 and prior. 

XML



Pension and Other Postretirement Benefits

3 Months Ended

Jun. 18, 2011

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 10 – Pension and Other Postretirement Benefits

                The following tables present the components of our pension and postretirement net periodic benefit cost:

12 Weeks Ended June 18, 2011 and June 19, 2010:
		Pension Benefits		Other Benefits
(In thousands)		2011	2010	2011	2010
Interest cost	$	490	510	8	9
Expected return on plan assets		(433)	(428)	-	-
Amortization of prior service cost		-	-	(5)	(7)
Recognized actuarial loss (gain)		363	323	(3)	(1)
Net periodic benefit cost	$	420	405	-	1

24 Weeks Ended June 18, 2011, and June 19, 2010:
		Pension Benefits		Other Benefits
(In thousands)		2011	2010	2011	2010
Interest cost	$	979	1,020	16	18
Expected return on plan assets		(866)	(856)	-	-
Amortization of prior service cost		-	-	(10)	(14)
Recognized actuarial loss (gain)		727	647	(7)	(3)
Net periodic benefit cost	$	840	811	(1)	1

                Weighted-average assumptions used to determine net periodic benefit cost for the second quarter and year-to-date periods of 2011 and 2010 are as follows:

	Pension Benefits		Other Benefits
	2011	2010	2011	2010
Weighted-average assumptions:
Discount rate	5.10%	5.60%	5.10%	5.60%
Expected return on plan assets	6.00%	6.50%	N/A	N/A
Rate of compensation increase	N/A	N/A	N/A	N/A

               Total contributions to our pension plan in fiscal 2011 are expected to be $4.6 million.

Multi-employer pension plan

      Certain of our unionized employees are covered by the Central States Southeast and Southwest Areas Pension Funds (“the Plan”), a multi-employer pension plan.  Contributions are determined in accordance with the provisions of negotiated union contracts and are generally based on the number of hours worked.  In fiscal 2010, the Company contributed $3.3 million to the Plan.  Based on the most recent information available, we believe the present value of actuarial accrued liabilities of the Plan substantially exceeds the value of the assets held in trust to pay benefits.  The underfunding is not a direct obligation or liability of the Company.  Moreover, if the Company were to exit certain markets or otherwise cease making contributions to the Plan, the Company could trigger a substantial withdrawal liability.  However, the amount of any increase in contributions will depend upon several factors, including the number of employers contributing to the Plan, results of the Company’s collective bargaining efforts, investment returns on assets held by the Plan, actions taken by the trustees of the Plan, and actions that the Federal government may take.  We are currently unable to reasonably estimate a withdrawal liability.  Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated.

      A more detailed discussion of the risks associated with the Plan are contained in Part I, Item 1A, “Risk Factors,” of our Annual Report filed with the SEC on Form 10-K for the fiscal year ended January 1, 2011.

XML



Earnings Per Share

3 Months Ended

Jun. 18, 2011

Net earnings per share:

Earnings Per Share [Text Block]

Note 11– Earnings Per Share

                The following table reflects the calculation of basic and diluted earnings per share:

		Second Quarter		Year-to-Date
		Ended		Ended
(In thousands, except per share amounts)		June 18, 2011	June 19, 2010	June 18, 2011	June 19, 2010
Net earnings	$	10,051	10,714	17,532	18,655
Net earnings per share-basic:
Weighted-average shares outstanding		12,744	12,904	12,731	13,015
Net earnings per share-basic	$	0.79	0.83	1.38	1.43
Net earnings per share-diluted:
Weighted-average shares outstanding		12,744	12,904	12,731	13,015
Shares contingently issuable		298	359	298	337
Weighted-average shares and potential dilutive shares outstanding		13,042	13,263	13,029	13,352
Net earnings per share-diluted	$	0.77	0.81	1.35	1.40

                SARs are excluded from the calculation of diluted net earnings per share because the exercise price was greater than the market price of the stock and would have been anti-dilutive under the treasury stock method.

     The senior subordinated convertible notes due in 2035 will be convertible at the option of the holder, only upon the occurrence of certain events, at an adjusted conversion rate of 9.6224 shares (initially 9.3120) of our common stock per $1,000 principal amount at maturity of notes (equal to an adjusted conversion price of approximately $48.44 per share). Upon conversion, we will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value, if any, in cash, stock or both, at our option.  The notes are only dilutive above their accreted value and for all periods presented the weighted average market price of the Company’s stock did not exceed the accreted value.  Therefore, the notes are not dilutive to earnings per share for any of the periods presented.  

                During the second quarters of 2011 and 2010, performance units granted under the 2008 LTIP Plan and 2007 LTIP Plan, respectively, were settled in shares of common stock, some of which were deferred by executives as required by the plan.  Vested shares deferred by executives and board members are included in the calculation of basic earnings per share.  Other performance units and RSUs granted during 2007, 2008, 2009, 2010 and 2011 pursuant to the 2000 Plan and 2009 Plan will be settled in shares of Nash Finch common stock.  Unvested RSUs are not included in basic earnings per share until vested.  All shares of time-restricted stock are included in diluted earnings per share using the treasury stock method, if dilutive.  Performance units granted for the LTIP are only issuable if certain performance criteria are met, making these shares contingently issuable under ASC Topic 260 – Earnings Per Share.  Therefore, the performance units are included in diluted earnings per share at the payout percentage based on performance criteria results as of the end of the respective reporting period and then accounted for using the treasury stock method, if dilutive.  For the second quarter 2011, approximately 60,000 shares related to the LTIP and 238,000 shares related to RSUs were included under “shares contingently issuable” in the calculation of diluted EPS as compared to approximately 143,000 shares related to the LTIP and 216,000 shares related to RSUs during the second quarter 2010.  For year-to-date 2011, approximately 54,000 shares related to the LTIP and 244,000 shares related to RSUs were included under “shares contingently issuable” in the calculation of diluted EPS as compared to approximately 127,000 shares related to the LTIP and 210,000 shares related to RSUs during year-to-date 2010.

XML



Segment Reporting

3 Months Ended

Jun. 18, 2011

Segment Reporting

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Note 12 – Segment Reporting

We sell and distribute products that are typically found in supermarkets and operate three reportable operating segments.  The military segment consists of seven distribution centers that distribute products to military commissaries and exchanges and one shared facility which services both military and independent food distribution customers.  During fiscal 2010, our military distribution centers in Columbus, Georgia and Bloomington, Indiana became operational.  Excluded from the military distribution center total are two adjacent military distribution centers we purchased during the third quarter of fiscal 2010 in Oklahoma City, Oklahoma, which are scheduled to become operational during fiscal 2012.  Our food distribution segment consists of 14 distribution centers that sell to independently operated retail food stores, our corporate owned stores and other customers.  The retail segment consists of 46 corporate-owned stores that sell directly to the consumer.  During the second quarter 2011, we closed two and sold four retail stores. 

During fiscal 2009 and fiscal 2010, we acquired facilities in Columbus, Georgia, Bloomington, Indiana and Oklahoma City, Oklahoma for expansion of our military distribution business.  We have historically serviced military commissaries and exchanges outside of the military segment’s distribution network through distribution centers that are included in our food distribution segment.  The revenue and segment profit associated with this business had previously been reported in the food distribution segment.  We are currently in the process of transitioning the military business serviced by the food distribution segment to military distribution facilities and are scheduled to have all of the business transitioned during fiscal 2012.  Accordingly, we revised our segment reporting during the fourth quarter of fiscal 2010 to include this business in our military segment, which impacts quarterly amounts previously reported during fiscal 2010.  This revision had no impact on our consolidated financial statements in any period presented.

Certain prior year amounts shown below have been revised to conform to the current year presentation.  Quarterly periods presented after the second quarter 2011 will be revised as shown the next time those periods are presented.

				Year-to-date
		2nd Quarter 2010		2nd Quarter 2010		3rd Quarter 2010
(In thousands)		As adjusted	As reported	As adjusted	As reported	As adjusted	As reported
Segment revenue:
Military	$	515,785	456,588	1,055,419	934,585	699,655	620,822
Food Distribution		514,982	574,179	1,037,174	1,158,008	652,670	731,503
Retail		123,850	123,850	241,717	241,717	158,556	158,556
Total revenue	$	1,154,617	1,154,617	2,334,310	2,334,310	1,510,881	1,510,881
Segment profit:
Military	$	12,663	11,519	25,581	23,335	14,270	12,822
Food Distribution		7,636	8,581	12,540	14,380	11,666	12,848
Retail		2,190	2,389	2,210	2,616	2,558	2,824
Total segment profit	$	22,489	22,489	40,331	40,331	28,494	28,494

A summary of the major segments of the business is as follows:

		Second Quarter Ended
		June 18, 2011			June 19, 2010
(In thousands)		Sales from external customers	Inter-segment sales	Segment profit	Sales from external customers	Inter-segment sales	Segment profit
Military	$	529,141	-	11,285	515,785	-	12,663
Food Distribution		459,465	55,313	7,709	514,982	61,361	7,636
Retail		110,969	-	2,128	123,850	-	2,190
Eliminations		-	(55,313)	-	-	(61,361)	-
Total	$	1,099,575	-	21,122	1,154,617	-	22,489

		Year-to-Date Ended
		June 18, 2011			June 19, 2010
(In thousands)		Sales from external customers	Inter-segment sales	Segment profit	Sales from external customers	Inter-segment sales	Segment profit
Military	$	1,066,581	-	23,432	1,055,419	-	25,581
Food Distribution		909,772	110,235	13,554	1,037,174	119,653	12,540
Retail		223,031	-	1,144	241,717	-	2,210
Eliminations		-	(110,235)	-	-	(119,653)	-
Total	$	2,199,384	-	38,130	2,334,310	-	40,331

Reconciliation to Consolidated Statements of Income:
		Second Quarter Ended		Year-to-Date Ended
		June 18,	June 19,	June 18,	June 19,
(In thousands)		2011	2010	2011	2010
Total segment profit	$	21,122	22,489	38,130	40,331
Unallocated amounts:
Interest		(4,508)	(4,523)	(9,146)	(9,035)
Earnings before income taxes	$	16,614	17,966	28,984	31,296

XML



Legal Proceedings

3 Months Ended

Jun. 18, 2011

Legal Proceedings

Legal Matters and Contingencies [Text Block]

Note 13 – Legal Proceedings

                We are engaged from time-to-time in routine legal proceedings incidental to our business.  We do not believe that these routine legal proceedings, taken as a whole, will have a material impact on our business or financial condition.

XML



Consolidated Statements of Income (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 18, 2011	Jun. 19, 2010	Jun. 18, 2011	Jun. 19, 2010
Sales	$ 1,099,575	$ 1,154,617	$ 2,199,384	$ 2,334,310
Cost of sales	1,008,998	1,060,280	2,019,818	2,148,153
Gross profit	90,577	94,337	179,566	186,157
Other costs and expenses:
Selling, general and administrative	60,241	62,835	122,818	127,482
Depreciation and amortization	8,367	8,170	16,950	16,755
Interest expense	5,355	5,366	10,814	10,624
Total other costs and expenses	73,963	76,371	150,582	154,861
Earnings before income taxes	16,614	17,966	28,984	31,296
Income tax expense	6,563	7,252	11,452	12,641
Net earnings	$ 10,051	$ 10,714	$ 17,532	$ 18,655
Net earnings per share:
Earnings per share, Basic	$ 0.79	$ 0.83	$ 1.38	$ 1.43
Earnings per share, Diluted	$ 0.77	$ 0.81	$ 1.35	$ 1.40
Declared dividends per common share	$ 0.18	$ 0.18	$ 0.36	$ 0.36
Weighted average number of common shares outstanding and common equivalent shares outstanding:
Shares outstanding, Basic	12,744	12,904	12,731	13,015
Shares outstanding, Diluted	13,042	13,263	13,029	13,352

XML



Consolidated Balance Sheets (USD $) In Thousands	Jun. 18, 2011		Jan. 01, 2011
Current assets:
Cash and cash equivalents	$ 659		$ 830
Accounts and notes receivable, net	240,944		233,436
Inventories	309,720		333,146
Prepaid expenses and other	15,334		15,817
Deferred tax asset, net	7,864		8,281
Total current assets	574,521		591,510
Notes receivable, net	18,237		20,350
Property, plant and equipment:
Property, plant and equipment	658,259		649,256
Less accumulated depreciation and amortization	403,700		409,190
Net property, plant and equipment	254,559		240,066
Goodwill	166,856		167,166
Customer contracts and relationships, net	16,871		18,133
Investment in direct financing leases	2,831		2,948
Other assets	10,336		10,502
Total assets	1,044,211		1,050,675
Current liabilities:
Current maturities of long-term debt and capitalized lease obligations	3,001		3,159
Accounts payable	207,694		230,082
Accrued expenses	55,356		60,001
Total current liabilities	266,051		293,242
Long-term debt	299,311		292,266
Capital lease obligations	17,113		18,920
Deferred tax liability, net	39,179		36,344
Other liabilities	30,212		32,899
Commitments and contingencies	0		0
Stockholders' equity:
Preferred stock	0	[1]	0	[1]
Common stock	22,796	[2]	22,796	[2]
Additional paid-in capital	115,992		114,799
Common stock held in trust	(1,223)		(1,213)
Deferred compensation obligations	1,223		1,213
Accumulated other comprehensive loss	(10,833)		(10,984)
Retained earnings	316,630		303,584
Common stock in treasury	(52,240)	[3]	(53,191)	[4]
Total stockholders' equity	392,345		377,004
Total liabilities and stockholders' equity	$ 1,044,211		$ 1,050,675

[1] No par value, 500 shares authorized, none issued

[2] $1.66 2/3 par value, 50,000 shares authorized, 13677 shares issued

[3] 1569 shares of common stock held in treasury

[4] 1541 shares of common stock held in treasury

XML



Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data	Jun. 18, 2011	Jan. 01, 2011
Preferred Stock, No Par Value	$ 0	$ 0
Preferred Stock, Shares Authorized	500	500
Preferred Stock, Shares Issued	0	0
Common Stock, Par Value Per Share	$ 1.66	$ 1.66
Common Stock, Shares Authorized	50,000	50,000
Common Stock, Shares, Issued	13,677	13,677
Common Stock, Shares, Outstanding	12,136	12,108
Treasury Stock, Shares	1,541	1,569

XML



Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 18, 2011	Jun. 19, 2010
Operating activities:
Net earnings	$ 17,532	$ 18,655
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	16,950	16,755
Amortization of deferred financing costs	845	846
Non-cash convertible debt interest	2,610	2,413
Amortization of rebateable loans	2,066	2,531
Provision for bad debts	779	433
Provision for (reversal of) lease reserves	607	(434)
Deferred income tax expense	3,252	174
Loss (gain) on sale of property, plant and equipment	1,422	(229)
LIFO charge (credit)	2,632	(362)
Asset impairments	349	818
Share-based compensation	2,531	3,462
Deferred compensation	609	463
Other operating activities	(584)	(387)
Changes in operating assets and liabilities:
Accounts and notes receivable	(5,548)	17,099
Inventories	21,279	(27,130)
Prepaid expenses	(446)	157
Accounts payable	(23,230)	(12,992)
Accrued expenses	(4,493)	(804)
Income taxes payable	929	(6,398)
Other assets and liabilities	(2,599)	2,609
Net cash provided by operating activities	37,492	17,679
Investing activities:
Disposal of property, plant and equipment	3,074	347
Additions to property, plant and equipment	(33,110)	(10,369)
Business acquired, net of cash	(1,587)	0
Loans to customers	(2,285)	(600)
Payments from customers on loans	672	1,102
Other investing activities	(902)	(297)
Net cash used in investing activities	(34,138)	(9,817)
Financing activities:
Proceeds of revolving debt	4,700	10,600
Dividends paid	(4,364)	(4,549)
Repurchase of common stock	0	(15,191)
Payments of long-term debt	(251)	(233)
Payments of capitalized lease obligations	(1,577)	(1,839)
Increase (decrease) in outstanding checks	(1,526)	3,285
Other financing activities	(507)	0
Net cash used in financing activities	(3,525)	(7,927)
Net decrease in cash and cash equivalents	(171)	(65)
Cash and cash equivalents:
Beginning of year	830	830
End of period	$ 659	$ 765

XML



Basis of Presentation

3 Months Ended

Jun. 18, 2011

Basis of Presentation

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 – Basis of Presentation

                The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended January 1, 2011.

The accompanying unaudited consolidated financial statements include all adjustments which are, in the opinion of management, necessary to present fairly the financial position of Nash-Finch Company and our subsidiaries (“Nash Finch” or “the Company”) at June 18, 2011, and January 1, 2011, the results of operations for the 12 and 24 weeks ended June 18, 2011 (“second quarter 2011”), and June 19, 2010 (“second quarter 2010”), and cash flows for the 24 weeks ended June 18, 2011, and June 19, 2010.  Adjustments consist only of normal recurring items, except for any items discussed in the notes below.  All material intercompany accounts and transactions have been eliminated in the unaudited 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. 

                The preparation of financial statements in conformity with U.S. GAAP 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.

XML



Inventories

3 Months Ended

Jun. 18, 2011

Inventories {2}

Inventory Disclosure [Text Block]

Note 2 – Inventories

We use the LIFO method for valuation of a substantial portion of inventories.  An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs.  Because these estimates are subject to many factors beyond management’s control, interim results are subject to the final year-end LIFO inventory valuation.  If the FIFO method had been used, inventories would have been approximately $75.8 million higher on June 18, 2011 and $73.1 million higher on January 1, 2011.  We recorded a LIFO charge of $2.1 million during the second quarter 2011 as compared to a LIFO credit of $0.3 million during the second quarter 2010.  During year-to-date 2011, we recorded a LIFO charge of $2.6 million as compared to a LIFO credit of $0.4 million during year-to-date 2010.

XML



Share-Based Compensation

3 Months Ended

Jun. 18, 2011

Share-Based Compensation

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Note 3 – Share-Based Compensation

We account for share-based compensation awards in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 – Compensation-Stock Compensation (“ASC 718”) which requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period.  We recognized share-based compensation expense as a component of selling, general and administrative expense in our Consolidated Statements of Income in the amount of $1.4 million during the second quarter 2011 versus $1.9 million during the second quarter 2010.  During year-to-date 2011, share-based compensation expense was $2.5 million as compared to $3.5 million during year-to-date 2010.

We have four equity compensation plans under which incentive stock options, non-qualified stock options and other forms of share-based compensation have been, or may be, granted primarily to key employees and non-employee members of the Board of Directors.  These plans include the 2009 Incentive Award Plan (as Amended and Restated as of March 2, 2010) (“2009 Plan”), the 2000 Stock Incentive Plan (as amended and restated on July 14, 2008) (“2000 Plan”), the Director Deferred Compensation Plan, and the 1997 Non-Employee Director Stock Compensation Plan.  These plans are more fully described in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended January 1, 2011 under the caption “Footnote 10 – Share-based Compensation Plans” and in our Definitive Proxy Statement on Form DEF 14A filed on April 15, 2011.

Since 2005, awards have taken the form of performance units (including share units pursuant to our Long-Term Incentive Plan (“LTIP”)), restricted stock units (“RSUs”) and Stock Appreciation Rights (“SARs”). 

Performance units have been granted during each of fiscal years 2005 through 2011 pursuant to our LTIP.  These units vest at the end of a three-year performance period.  All units under the 2007 plan were settled in shares of our common stock during the second quarter 2010. Under the 2008 plan, 104,111 units vested on January 1, 2011 and were settled in the second quarter 2011 for approximately 122,000 shares of common stock, of which approximately 96,000 were deferred by recipients until termination of employment as provided in the plan.

During year-to-date 2011, a total of 109,236 units were granted pursuant to our 2011 LTIP.  Depending on a comparison of the Company’s three-year compound annual growth rate of Consolidated EBITDA results to the Company’s peer group and the Company’s ranking on absolute return on net assets and compound annual growth rate for return on net assets among the companies in the peer group, a participant could receive a number of shares ranging from zero to 200% of the number of performance units granted.   Because these units can only be settled in stock, compensation expense (for shares expected to vest) is recorded over the three-year period for the grant date fair value. 

During fiscal 2006 through 2010, RSUs were awarded to certain executives of the Company.  Awards vest in increments over the term of the grant or cliff vest on the fifth anniversary of the grant date, as designated in the award documents.  In addition to the time vesting criteria, awards granted in 2008 and 2009 to two of the Company’s executives include performance vesting conditions.  The Company records expense for such awards over the service vesting period if the Company anticipates the performance vesting conditions will be satisfied.

On December 17, 2008, in connection with the Company’s announcement of its planned acquisition of certain military distribution assets of GSC Enterprises, Inc., eight executives of the Company were granted a total of 267,345 SARs with a per share price of $38.44.  The SARs are eligible to become vested during the 36 month period commencing on closing of the acquisition of the GSC assets which was January 31, 2009.  The SARs will vest on (i) the first business day during the vesting period that follows the date on which the closing prices on NASDAQ for a share of Nash Finch common stock for the previous 90 market days is at least $55.00, (ii) a change in control occurs following the six month anniversary of the grant date or (iii) termination of the executive’s employment due to death or disability.  Upon exercise, the Company will award the executive a number of shares of restricted stock equal to (a) the product of (i) the number of shares with respect to which the SAR is exercised and (ii) the excess, if any, of (x) the fair market value per share of common stock on the date of exercise over (y) the base price per share relating to such SAR, divided by (b) the fair market value of a share of common stock on the date such SAR is exercised.  The restricted stock shall vest on the first anniversary of the date of exercise so long as the executive remains continuously employed with the Company.

The fair value of SARs is estimated on the date of grant using a modified binomial lattice model which factors in the market and service vesting conditions.  The modified binomial lattice model used by the Company incorporates a risk-free interest rate based on the 5-year treasury rate on the date of the grant.  The model uses an expected volatility calculated as the daily price variance over 60, 200 and 400 days prior to grant date using the Fair Market Value (average of daily high and low market price of Nash Finch common stock) on each day.  Dividend yield utilized in the model is calculated by the Company as the average of the daily yield (as a percent of the Fair Market Value) over 60, 200 and 400 days prior to the grant date.  The modified binomial lattice model calculated a fair value of $8.44 per SAR which is recorded over a derived service period of 3.55 years.

The following assumptions were used to determine the fair value of SARs granted during fiscal 2008:

Assumptions - SARs Valuation
Weighted-average risk-free interest rate	1.37%
Expected dividend yield	1.86%
Expected volatility	35%
Exercise price	$38.44
Market vesting price (90 consecutive market days at or above this price)	$55.00
Contractual term	5.1 years

The following table summarizes activity in our share-based compensation plans during the year-to-date 2011:

(in thousands, except vesting periods)	Service Based Grants (Board Units and RSUs)	Weighted Average Remaining Restriction/ Vesting Period (Years)	Performance Based Grants (LTIP & Performance RSUs)	Weighted Average Remaining Restriction/ Vesting Period (Years)
Outstanding at January 1, 2011	646.5	0.6	568.8	0.7
Granted	11.6		109.5
Forfeited/cancelled	-		(16.1)
Restrictions lapsed/ units settled	(33.2)		(104.1)
Shares deferred upon vesting/settlement & dividend equivalents on deferred shares(1)	36.6		96.4
Outstanding at June 18, 2011	661.5	0.3	654.5	0.8
Exercisable/unrestricted at January 1, 2011	322.1		323.7
Exercisable/unrestricted at June 18, 2011	358.6		316.0

⁽¹⁾“Shares deferred upon vesting/settlement” above are net of the performance adjustment factor applied to the “units settled” for the participants that deferred shares as provided in the plan.

(in thousands, except per share amounts)	Stock Appreciation Rights	Weighted Average Base/Exercise Price Per SAR
Outstanding at January 1, 2011	267.3	$                 38.44
Granted	-
Exercised/restrictions lapsed	-
Forfeited/cancelled	-
Outstanding at June 18, 2011	267.3	38.44
Exercisable/unrestricted at January 1, 2011	-
Exercisable/unrestricted at June 18, 2011	-

The weighted-average grant-date fair value of time vesting equity units and performance vesting units granted during year-to-date 2011 was $35.58 and $39.69, respectively. 

XML



Fair Value Measurements

3 Months Ended

Jun. 18, 2011

Fair Value Measurements

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

Note 4 – Fair Value Measurements

ASC Topic 820 – Fair Value Measurement (“ASC 820”) defines fair value, establishes a framework for measuring fair value and expands disclosures about financial and non-financial assets and liabilities recorded at fair value.   It also applies under other accounting pronouncements that require or permit fair value measurements.  

The fair value hierarchy for disclosure of fair value measurements under ASC 820 is as follows:

Level 1:  Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:  Quoted prices, other than quoted prices included in Level 1, which are observable for the assets or liabilities, either directly or indirectly.

Level 3:  Inputs that are unobservable for the assets or liabilities.

Our outstanding interest rate swap agreements are classified within level 2 of the valuation hierarchy as readily observable market parameters are available to use as the basis of the fair value measurement.  As of June 18, 2011, we have recorded a fair value liability of $0.2 million in relation to our outstanding interest rate swap agreements as compared to $0.4 million as of January 1, 2011, which is included in accrued expenses on our Consolidated Balance Sheet.

Other Financial Assets and Liabilities

          Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable.  Financial liabilities with carrying values approximating fair value include accounts payable and outstanding checks. The carrying value of these financial assets and liabilities approximates fair value due to their short maturities.

The fair value of notes receivable approximates the carrying value at June 18, 2011 and January 1, 2011.  Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates.

Long-term debt, which includes the current maturities of long-term debt, at June 18, 2011, had a carrying value and fair value of $300.0 million and $305.6 million, respectively, and at January 1, 2011, had a carrying value and fair value of $292.9 million and $305.6 million, respectively. The fair value is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.

We account for the impairment of long-lived assets in accordance with ASC Topic 360 – Property, Plant, and Equipment.  During each of the second quarters 2011 and 2010, asset impairments of $0.3 million were recognized.  For year-to-date 2011 and 2010, asset impairments were $0.3 million and $0.8 million, respectively.  We utilize a discounted cash flow model that incorporates unobservable level 3 inputs to test for long-lived asset impairment.