Delaware | 1-5418 | 41-0617000 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
11840 Valley View Road Eden Prairie, Minnesota | 55344 |
(Address of principal executive offices) | (Zip Code) |
N/A | ||
(Former name or former address, if changed since last report) |
Exhibit Number | Description | |
News Release of SUPERVALU INC., dated July 26, 2018 |
Dated: | July 26, 2018 | ||
SUPERVALU INC. | |||
By: /s/ Rob N. Woseth | |||
Rob N. Woseth | |||
Executive Vice President and Chief Financial Officer | |||
(Authorized Officer of Registrant) | |||
• | Consolidated net sales of $4.76 billion increased $1.24 billion, or 35 percent, including $1.34 billion from Unified Grocers and AG Florida |
• | Wholesale net sales of $3.81 billion increased $1.26 billion, or 49 percent |
• | Retail identical store sales of positive 0.4 percent |
• | Net loss of $27 million compared to net earnings of $9 million last year |
• | Adjusted net loss of $7 million compared to adjusted net earnings of $21 million last year |
• | Adjusted EBITDA of $98 million compared to Adjusted EBITDA of $118 million last year |
• | Total outstanding net debt, including capital leases, of $1.56 billion, a reduction of $305 million since the end of fiscal 2018 |
• | Supervalu successfully closed on the previously announced sale and leaseback of seven owned distribution centers and received approximately $382 million in aggregate proceeds, the net proceeds of which were used to reduce outstanding debt. The sale and leaseback of the eighth distribution center is expected to close by October 2018 as originally expected. |
• | Supervalu has completed the exit of its Farm Fresh banner. Twenty-one stores were sold to Harris Teeter, Kroger, and Food Lion. Five stores were sold to independent retailers and will be supplied by Supervalu’s Wholesale business. The remaining stores were closed. |
• | Supervalu continues to pursue the sale of its corporately owned and operated Shop ‘n Save (based in St. Louis) and Shop ‘n Save East (with stores in West Virginia, Maryland, Pennsylvania, and Virginia) retail operations. |
First Quarter Ended | |||||||||||||
June 16, 2018 (16 weeks) | June 17, 2017 (16 weeks) | ||||||||||||
Net sales | $ | 4,755 | 100.0 | % | $ | 3,517 | 100.0 | % | |||||
Cost of sales | 4,327 | 91.0 | 3,086 | 87.8 | |||||||||
Gross profit | 428 | 9.0 | 431 | 12.2 | |||||||||
Selling and administrative expenses(1) | 428 | 9.0 | 387 | 11.0 | |||||||||
Operating earnings | — | — | 44 | 1.3 | |||||||||
Interest expense, net(1) | 49 | 1.0 | 43 | 1.2 | |||||||||
Net periodic benefit income, excluding service costs | (12 | ) | (0.2 | ) | (17 | ) | (0.5 | ) | |||||
Equity in earnings of unconsolidated affiliates | — | — | (2 | ) | — | ||||||||
(Loss) earnings from continuing operations before income taxes(1) | (37 | ) | (0.8 | ) | 20 | 0.6 | |||||||
Income tax (benefit) provision | (10 | ) | (0.2 | ) | 11 | 0.3 | |||||||
Net (loss) earnings from continuing operations(1) | (27 | ) | (0.6 | ) | 9 | 0.2 | |||||||
Income from discontinued operations, net of tax | 6 | 0.1 | 3 | 0.1 | |||||||||
Net (loss) earnings including noncontrolling interests | (21 | ) | (0.4 | ) | 12 | 0.3 | |||||||
Less net earnings attributable to noncontrolling interests | — | — | (1 | ) | — | ||||||||
Net (loss) earnings attributable to SUPERVALU INC. | $ | (21 | ) | (0.4 | )% | $ | 11 | 0.3 | % | ||||
Basic net (loss) earnings per share attributable to SUPERVALU INC.: | |||||||||||||
Continuing operations(1) | $ | (0.70 | ) | $ | 0.21 | ||||||||
Discontinued operations | $ | 0.15 | $ | 0.08 | |||||||||
Basic net (loss) earnings per share | $ | (0.55 | ) | $ | 0.30 | ||||||||
Diluted net (loss) earnings per share attributable to SUPERVALU INC.: | |||||||||||||
Continuing operations(1) | $ | (0.70 | ) | $ | 0.21 | ||||||||
Discontinued operations | $ | 0.15 | $ | 0.08 | |||||||||
Diluted net (loss) earnings per share | $ | (0.55 | ) | $ | 0.30 | ||||||||
Diluted net earnings per share | |||||||||||||
Basic | 38 | 38 | |||||||||||
Diluted | 38 | 38 |
(1) | Results from continuing operations for the first quarter ended June 16, 2018 include net charges and costs of $31 before tax ($20 after tax, or $0.53 per diluted share). Refer to Table 1 for additional information. |
June 16, 2018 | February 24, 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 37 | $ | 41 | |||
Receivables, net | 632 | 590 | |||||
Inventories, net | 1,013 | 981 | |||||
Other current assets | 135 | 119 | |||||
Current assets of discontinued operations | 84 | 130 | |||||
Total current assets | 1,901 | 1,861 | |||||
Property, plant and equipment, net | 1,048 | 1,342 | |||||
Goodwill | 775 | 780 | |||||
Intangible assets, net | 121 | 131 | |||||
Deferred tax assets | 61 | 63 | |||||
Other assets | 131 | 126 | |||||
Long-term assets of discontinued operations | 65 | 84 | |||||
Total assets | $ | 4,102 | $ | 4,387 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,133 | $ | 1,139 | |||
Accrued vacation, compensation and benefits | 184 | 187 | |||||
Current maturities of long-term debt and capital lease obligations | 25 | 34 | |||||
Other current liabilities | 111 | 106 | |||||
Current liabilities of discontinued operations | 78 | 82 | |||||
Total current liabilities | 1,531 | 1,548 | |||||
Long-term debt | 1,432 | 1,724 | |||||
Long-term capital lease obligations | 141 | 149 | |||||
Pension and other postretirement benefit obligations | 249 | 265 | |||||
Long-term tax liabilities | 51 | 44 | |||||
Other long-term liabilities | 195 | 133 | |||||
Long-term liabilities of discontinued operations | 15 | 17 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Common stock, $0.01 par value: 57 shares authorized; 39 and 38 shares issued, respectively | — | — | |||||
Capital in excess of par value | 2,852 | 2,848 | |||||
Treasury stock, at cost, 0 and 0 shares, respectively | (3 | ) | (3 | ) | |||
Accumulated other comprehensive loss | (271 | ) | (210 | ) | |||
Accumulated deficit | (2,090 | ) | (2,130 | ) | |||
Total SUPERVALU INC. stockholders’ equity | 488 | 505 | |||||
Noncontrolling interests | — | 2 | |||||
Total stockholders’ equity | 488 | 507 | |||||
Total liabilities and stockholders’ equity | $ | 4,102 | $ | 4,387 |
First Quarter Ended | |||||||
June 16, 2018 (16 weeks) | June 17, 2017 (16 weeks) | ||||||
Cash flows from operating activities | |||||||
Net (loss) earnings including noncontrolling interest | $ | (21 | ) | $ | 12 | ||
Income from discontinued operations, net of tax | 6 | 3 | |||||
Net (loss) earnings from continuing operations | (27 | ) | 9 | ||||
Adjustments to reconcile Net (loss) earnings from continuing operations to Net cash (used in) provided by operating activities—continuing operations: | |||||||
Asset impairment and other charges | 8 | — | |||||
Loss on debt extinguishment | 7 | 5 | |||||
Net gain on sale of assets and exits of surplus leases | (6 | ) | (4 | ) | |||
Depreciation and amortization | 67 | 53 | |||||
LIFO charge | 2 | 1 | |||||
Deferred income taxes | 2 | 8 | |||||
Stock-based compensation | 6 | 6 | |||||
Net pension and other postretirement income | (12 | ) | (17 | ) | |||
Contributions to pension and other postretirement benefit plans | (5 | ) | (1 | ) | |||
Other adjustments | 3 | 8 | |||||
Changes in operating assets and liabilities, net of effects from business acquisitions | (109 | ) | (38 | ) | |||
Net cash (used in) provided by operating activities—continuing operations | (64 | ) | 30 | ||||
Net cash provided by (used in) operating activities—discontinued operations | 6 | (38 | ) | ||||
Net cash used in operating activities | (58 | ) | (8 | ) | |||
Cash flows from investing activities | |||||||
Proceeds from sale of assets | 385 | 4 | |||||
Purchases of property, plant and equipment | (70 | ) | (81 | ) | |||
Net cash provided by (used in) investing activities—continuing operations | 315 | (77 | ) | ||||
Net cash provided by investing activities—discontinued operations | 57 | — | |||||
Net cash provided by (used in) investing activities | 372 | (77 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from revolving credit facility | 1,292 | 49 | |||||
Payments on revolving credit facility | (1,224 | ) | (49 | ) | |||
Proceeds from issuance of debt | 10 | 550 | |||||
Payments of debt and capital lease obligations | (389 | ) | (532 | ) | |||
Payments for shares traded for taxes | (2 | ) | (3 | ) | |||
Payments for debt financing costs | (3 | ) | (8 | ) | |||
Distributions to noncontrolling interests | (2 | ) | (2 | ) | |||
Net cash (used in) provided by financing activities—continuing operations | (318 | ) | 5 | ||||
Net cash (used in) provided by financing activities—discontinued operations | (2 | ) | — | ||||
Net cash (used in) provided by financing activities | (320 | ) | 5 | ||||
Net decrease in cash and cash equivalents | (6 | ) | (80 | ) | |||
Cash and cash equivalents at beginning of period | 48 | 332 | |||||
Cash and cash equivalents at the end of period | $ | 42 | $ | 252 | |||
Less cash and cash equivalents of discontinued operations at end of period | (5 | ) | (6 | ) | |||
Cash and cash equivalents of continuing operations at end of period | $ | 37 | $ | 246 | |||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
Supervalu’s non-cash activities were as follows: | |||||||
Purchases of property, plant and equipment included in Accounts payable | $ | 17 | $ | 13 | |||
Capital lease asset additions | $ | — | $ | 1 | |||
Interest and income taxes paid: | |||||||
Interest paid, net of amounts capitalized | $ | 50 | $ | 47 | |||
Income taxes (refunded) paid, net | $ | (1 | ) | $ | 37 |
First Quarter Ended | ||||||||
(In millions) | June 16, 2018 (16 weeks) | June 17, 2017 (16 weeks) | ||||||
Wholesale | $ | 3,814 | $ | 2,556 | ||||
Retail | 901 | 906 | ||||||
Corporate | 40 | 55 | ||||||
Total net sales | $ | 4,755 | $ | 3,517 |
RECONCILIATIONS OF (LOSS) EARNINGS FROM CONTINUING OPERATIONS TO (LOSS) EARNINGS FROM CONTINUING OPERATIONS AFTER ADJUSTMENTS | ||||||||||||
Table 1 | ||||||||||||
First Quarter Ended June 16, 2018 | ||||||||||||
(In millions, except per share data) | Loss Before Tax | Loss After Tax | Diluted Loss Per Share | |||||||||
Continuing operations | $ | (37 | ) | $ | (27 | ) | $ | (0.70 | ) | |||
Adjustments: | ||||||||||||
Store closure charges and costs | 11 | 8 | 0.21 | |||||||||
Severance costs | 9 | 8 | 0.20 | |||||||||
Merger and integration costs | 6 | 4 | 0.11 | |||||||||
Debt refinancing costs | 5 | 3 | 0.08 | |||||||||
Unamortized financing charges | 3 | 2 | 0.06 | |||||||||
Holding company restructuring costs | 1 | 1 | 0.03 | |||||||||
Deferred income tax benefit | — | (3 | ) | (0.08 | ) | |||||||
Gain on sale of property | (4 | ) | (3 | ) | (0.08 | ) | ||||||
Continuing operations after adjustments | $ | (6 | ) | $ | (7 | ) | $ | (0.17 | ) |
Table 2 | ||||||||||||
First Quarter Ended June 17, 2017 | ||||||||||||
(In millions, except per share data) | Earnings Before Tax | Earnings After Tax | Diluted Earnings Per Share | |||||||||
Continuing operations | $ | 20 | $ | 9 | $ | 0.21 | ||||||
Adjustments: | ||||||||||||
Legal reserve charge | 9 | 6 | 0.15 | |||||||||
Merger and integration costs | 4 | 3 | 0.08 | |||||||||
Unamortized financing charges | 3 | 2 | 0.05 | |||||||||
Debt refinancing costs | 2 | 1 | 0.03 | |||||||||
Severance costs | 2 | 1 | 0.03 | |||||||||
Gain on sale of property | (2 | ) | (1 | ) | (0.04 | ) | ||||||
Continuing operations after adjustments | $ | 38 | $ | 21 | $ | 0.51 |
RECONCILIATIONS OF NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA | ||||||||
Table 3 | ||||||||
First Quarter Ended | ||||||||
(In millions) | June 16, 2018 (16 weeks) | June 17, 2017 (16 weeks) | ||||||
Net (loss) earnings from continuing operations | $ | (27 | ) | $ | 9 | |||
Income tax (benefit) provision | (10 | ) | 11 | |||||
Equity in earnings of unconsolidated affiliates | — | (2 | ) | |||||
Interest expense, net | 49 | 43 | ||||||
Net periodic benefit income, excluding service costs | (12 | ) | (17 | ) | ||||
Total operating earnings | $ | — | $ | 44 | ||||
Add equity in earnings of unconsolidated affiliates | — | 2 | ||||||
Less net earnings attributable to noncontrolling interests | — | (1 | ) | |||||
Depreciation and amortization | 67 | 53 | ||||||
Stock-based compensation | 6 | 6 | ||||||
LIFO charge | 2 | 1 | ||||||
Store closure charges and costs | 11 | — | ||||||
Severance costs | 9 | 2 | ||||||
Merger and integration costs | 6 | 4 | ||||||
Holding company restructuring costs | 1 | — | ||||||
Legal reserve charge | — | 9 | ||||||
Gain on sale of property | (4 | ) | (2 | ) | ||||
Adjusted EBITDA(1) | $ | 98 | $ | 118 |
(1) | Our measure of Adjusted EBITDA includes operating earnings, as reported, less net earnings attributable to noncontrolling interests, plus depreciation and amortization, stock-based compensation, LIFO charge, equity earnings of unconsolidated affiliates and certain adjustment items as determined by management. |
RECONCILIATION OF OPERATING EARNINGS FROM CONSOLIDATED SEGMENT FINANCIAL INFORMATION AS REPORTED TO SUPPLEMENTALLY PROVIDED ADJUSTED EBITDA | ||||||||
Table 4 | ||||||||
First Quarter Ended | ||||||||
(In millions) | June 16, 2018 (16 weeks) | June 17, 2017 (16 weeks) | ||||||
Reconciliation of segment operating earnings to total operating earnings, as reported | ||||||||
Wholesale operating earnings | $ | 48 | $ | 58 | ||||
Retail operating loss | (20 | ) | — | |||||
Corporate operating loss | (28 | ) | (14 | ) | ||||
Total operating earnings | $ | — | $ | 44 | ||||
Reconciliation of segment operating earnings, as reported, to segment Adjusted EBITDA: | ||||||||
Wholesale operating earnings, as reported | $ | 48 | $ | 58 | ||||
Adjustments: | ||||||||
Severance costs | (2 | ) | — | |||||
Gain on sale of property | (4 | ) | — | |||||
Legal reserve charge | — | 9 | ||||||
Wholesale operating earnings, as adjusted | 42 | 67 | ||||||
Wholesale depreciation and amortization | 37 | 18 | ||||||
LIFO charge | 2 | 1 | ||||||
Wholesale adjusted EBITDA(1) | $ | 81 | $ | 86 | ||||
Retail operating (loss) earnings, as reported | $ | (20 | ) | $ | — | |||
Adjustments: | ||||||||
Severance costs | 11 | — | ||||||
Store closure charges and costs | 3 | — | ||||||
Retail operating (loss) earnings, as adjusted | (6 | ) | — | |||||
Retail depreciation and amortization | 26 | 31 | ||||||
Equity in earnings of unconsolidated affiliates | — | 2 | ||||||
Net earnings attributable to noncontrolling interests | — | (1 | ) | |||||
Retail adjusted EBITDA(1) | $ | 20 | $ | 32 | ||||
Corporate operating loss, as reported | $ | (28 | ) | $ | (14 | ) | ||
Adjustments: | ||||||||
Store closure charges and costs | 8 | — | ||||||
Merger and integration costs | 6 | 4 | ||||||
Holding company restructuring costs | 1 | — | ||||||
Severance costs | — | 2 | ||||||
Gain on sale of property | — | (2 | ) | |||||
Corporate operating loss, as adjusted | (13 | ) | (10 | ) | ||||
Corporate depreciation and amortization | 4 | 4 | ||||||
Stock-based compensation | 6 | 6 | ||||||
Corporate adjusted EBITDA(1) | $ | (3 | ) | $ | — | |||
Total adjusted EBITDA(1) | $ | 98 | $ | 118 |
(1) | Our measure of Adjusted EBITDA includes operating earnings, as reported, less net earnings attributable to noncontrolling interests, plus depreciation and amortization, stock-based compensation, LIFO charge, equity earnings of unconsolidated affiliates and certain adjustment items as determined by management. |
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