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Exhibit 99.1
FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
Kayleigh Campbell
Head of Investor Relations
kayleigh.campbell@spartannash.com
MEDIA CONTACT:
Adrienne Chance
SVP, Communications
press@spartannash.com
SpartanNash Announces Third Quarter Fiscal 2023 Results
Transformational Initiatives Continue to Deliver Shareholder Value
Narrows Fiscal 2023 Guidance
GRAND RAPIDS, MICH. – Nov. 8, 2023 – Food solutions company SpartanNash (the “Company”) (Nasdaq: SPTN) today reported financial results for its 12-week third quarter ended October 7, 2023.
Third Quarter Fiscal 2023 Highlights
"We continue to make tremendous progress on our plan, growing share and executing on our transformational initiatives despite the ongoing headwinds facing our industry," said SpartanNash President and CEO Tony Sarsam. "Our team is capturing savings, actively collaborating with the supplier community, and delivering reliable services to our Wholesale customers and Retail shoppers. With the success of Our Winning Recipe, we are energized by the opportunities ahead to further capture share, drive results and grow sustainable value for shareholders."
Third Quarter Consolidated Financial Results
Net sales decreased $32.3 million, or 1.4%, to $2.26 billion from $2.30 billion in the prior year quarter. The year-over-year decrease reflected sales declines in both the Wholesale and Retail segments, which were unfavorably impacted by a reduction in volume, partially offset by higher pricing from inflationary trends.
Gross profit was $347.5 million, or 15.35% of net sales, compared to $351.2 million, or 15.29% of net sales, in the prior year quarter. The gross profit dollar decline was driven by lower unit volumes within both segments. Last in first out ("LIFO") expense decreased $8.3 million, or 36 basis points, compared to the prior year quarter. Additional variances in the gross profit rate are discussed within the segment financial results below.
1
Reported operating expenses for the third quarter were $324.5 million, or 14.3% of net sales, compared to $331.9 million, or 14.5% of net sales, in the prior year quarter. During the quarter, efficiencies realized from the Company's supply chain transformation helped to offset industry-wide headwinds. The reduction in expenses was also due to lower incentive compensation compared to the prior year quarter. These decreases were partially offset by an increase in acquisition and integration charges and organizational realignment costs related to the previously announced go-to-market plan.
The Company reported operating earnings of $23.1 million, an increase of $3.8 million, compared to $19.3 million in the prior year quarter. The increase was driven by the changes in net sales, gross profit, and operating expenses discussed above.
Interest expense of $9.3 million increased $3.2 million from the prior year quarter. Higher interest rates on the Company’s credit facility were driven by federal monetary policy tightening and accounted for $2.5 million of the increase in interest expense. Other income for the third quarter included a $0.8 million gain related to the amortization of a prior service credit of a previously terminated post-retirement plan.
The Company reported net earnings of $11.1 million, or $0.32 per diluted share, compared to $9.5 million, or $0.26 per diluted share in the prior year quarter. Adjusted earnings from continuing operations(2) for the third quarter were $18.8 million, or $0.54 per diluted share, compared to $20.0 million, or $0.55 per diluted share in the prior year quarter.
Adjusted EBITDA(1) increased $3.6 million to $60.9 million, compared to $57.3 million in the prior year quarter, due to the sales, gross profit and expense variances described above.
Third Quarter Segment Financial Results
Wholesale
The Company’s supply chain network serves Wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges around the globe. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products.
Net sales for Wholesale decreased $27.9 million, or 1.7%, to $1.60 billion from $1.63 billion in the prior year quarter. The decline in net sales was due primarily to marketplace demand changes from a certain national account customer.
Reported operating earnings for Wholesale were $18.2 million, compared to $14.0 million in the prior year quarter. The increase in reported operating earnings was due to an increase in the gross profit rate, lower incentive compensation, and efficiencies realized from the Company’s supply chain transformation initiative. The gross profit rate increase was primarily driven by lower LIFO expense, as well as benefits realized from the merchandising transformation initiative. These benefits mostly offset the anticipated impact of lower inflation-related price change benefits compared to elevated levels in the prior year quarter. The increase in reported operating earnings was partially offset by cycling asset impairment and restructuring gains in the prior year quarter. Adjusted EBITDA(1) increased $0.7 million to $39.0 million from $38.3 million in the prior year quarter.
Retail
The Company operates a scaled regional Retail segment with 144 brick-and-mortar grocery stores, in addition to pharmacies and fuel centers.
Net sales for Retail decreased $4.4 million, or 0.7%, to $662.2 million from $666.6 million in the prior year quarter. Retail comparable store sales grew 1.2% for the quarter, due primarily to the inflationary impact on pricing. Additionally, lower fuel sales in the quarter reduced reported net sales by 0.8%.
Reported operating earnings for Retail were $4.9 million, compared to $5.3 million in the prior year quarter. The decrease in reported operating earnings was due to higher acquisition and integration expenses, a decline in unit volume, and lower pharmacy margin rates. This was partially offset by lower incentive compensation and reduced asset impairment and restructuring charges. Adjusted EBITDA(1) increased $2.9 million to $21.9 million from $19.0 million in the prior year quarter.
2
Balance Sheet and Cash Flow
Long-term debt and finance lease liabilities, including current maturities, increased $40.6 million for the year-to-date period. The Company’s net long-term debt(3) to adjusted EBITDA(1) ratio improved sequentially by 10 basis points to 2.1x, compared to the second quarter 2023. The Company’s liquidity remains strong, giving it flexibility to support its strategic plan.
Cash flows provided by operating activities for the year-to-date period were $95.7 million, compared to $7.5 million in the prior year. The increase in cash flows compared to the prior year was due primarily to improvements in working capital.
Purchases of property and equipment were $86.2 million in the year-to-date period, compared to $66.3 million in the prior year, while capital expenditures and IT capital(4) totaled $90.3 million in the year-to-date period, compared to $69.5 million in the prior year.
Through the third quarter, the Company paid $22.4 million in cash dividends, equal to $0.645 per common share. The Company also repurchased 765,194 shares of common stock during the year-to-date period for a total of $18.5 million, at an average price of $24.21 per share. In total, the Company returned $40.9 million to shareholders through the third quarter. As of October 7, 2023, $25.5 million remains available under the Company’s share repurchase program, which expires on February 22, 2027.
Fiscal 2023 Outlook
Based upon the Company’s performance to date and the current outlook for the remainder of fiscal 2023, the Company is refining its guidance to reflect current trends and market conditions. The following table provides the Company’s updated guidance for fiscal 2023:
|
Fiscal 2022 |
|
|
Previous Fiscal 2023 Outlook |
|
|
Updated Fiscal 2023 Outlook |
|
||||||||||||||||
|
Actual |
|
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
||||||||||
Total net sales (millions) |
$ |
|
9,643 |
|
|
$ |
|
9,650 |
|
|
$ |
|
9,950 |
|
|
$ |
|
9,650 |
|
|
$ |
|
9,850 |
|
Adjusted EBITDA(1) (millions) |
$ |
|
243 |
|
|
$ |
|
248 |
|
|
$ |
|
263 |
|
|
$ |
|
253 |
|
|
$ |
|
258 |
|
Adjusted EPS(2) |
$ |
|
2.33 |
|
|
$ |
|
2.20 |
|
|
$ |
|
2.35 |
|
|
$ |
|
2.20 |
|
|
$ |
|
2.28 |
|
Capital expenditures and IT capital(4) (thousands) |
$ |
|
102,097 |
|
|
$ |
|
130,000 |
|
|
$ |
|
140,000 |
|
|
$ |
|
130,000 |
|
|
$ |
|
140,000 |
|
Conference Call & Supplemental Earnings Presentation
The Company will host a conference call to discuss its quarterly results with additional comments and details on Wednesday, November 8, 2023, at 8:30 a.m. ET. There will also be a simultaneous, live webcast made available at SpartanNash's website at www.spartannash.com/webcasts under the "Investor Relations" section and will remain archived on the Company's website through Wednesday, November 22, 2023.
A supplemental quarterly earnings presentation will also be available on the Company’s website at www.spartannash.com/investor-presentations.
About SpartanNash
SpartanNash (Nasdaq: SPTN) is a food solutions company that delivers the ingredients for a better life. Committed to fostering a People First culture, the SpartanNash family of Associates is 17,500 strong and growing. SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products. On the retail side, SpartanNash operates 144 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin’s Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for independent grocers. For more information, visit spartannash.com.
3
Forward-Looking Statements
The matters discussed in this press release and in the Company's website-accessible conference calls with analysts and investor presentations include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), about the plans, strategies, objectives, goals or expectations of the Company. These forward-looking statements may be identifiable by words or phrases indicating that the Company or management "expects," "projects," "anticipates," "plans," "believes," "intends," or "estimates," or that a particular occurrence or event "may," "could," "should," "will" or "will likely" result, occur or be pursued or "continue" in the future, that the "outlook," "trend," "guidance" or "target" is toward a particular result or occurrence, that a development is an "opportunity," "priority," "strategy," "focus," that the Company is "positioned" for a particular result, or similarly stated expectations. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. These risks and uncertainties include the Company's ability to compete in an extremely competitive industry; the Company's dependence on certain major customers; the Company's ability to implement its growth strategy and transformation initiatives; changes in relationships with the Company's vendor base and supply chain disruptions; vulnerability to decreases in the supply and increases in the price of raw materials and labor, manufacturing, distribution and other costs; macroeconomic uncertainty, including rising inflation, potential economic recession, and increasing interest rates; difficulty attracting and retaining well-qualified Associates and effectively managing increased labor costs; customers to whom the Company extends credit or for whom the Company guarantees loans or lease obligations may fail to repay the Company; not achieving the Company's strategy of growth through acquisitions and encountering difficulties successfully integrating acquired businesses that may not realize the anticipated benefits; the Company's ability to manage its private brand program for U.S. military commissaries, including the termination of the program or not achieving the desired results; disruptions to the Company's information security network, including security breaches and cyber-attacks; changes in the geopolitical conditions; instances of security threats, severe weather conditions and natural disasters; climate change and an increased focus by stakeholders on environmental sustainability and corporate responsibility; impacts to the Company's business and reputation due to an increasing focus on environmental, social and governance matters; disruptions associated with disease outbreaks, such as the COVID-19 pandemic; impairment charges for goodwill or other long-lived assets; the Company's ability to successfully manage leadership transitions; interest rate fluctuations; the Company's ability to service its debt and to comply with debt covenants; the Company's level of indebtedness; changes in government regulations; changes in the military commissary system, including its supply chain, or in the level of governmental funding; product recalls and other product-related safety concerns; labor relations issues; cost increases related to multi-employer pension plans and other postretirement plans; and other risks and uncertainties listed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission. Additional risks and uncertainties not currently known to the Company or that the Company currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this press release.
# # #
4
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
|
12 Weeks Ended |
|
|
40 Weeks Ended |
|
||||||||||||||
|
October 7, |
|
|
October 8, |
|
|
October 7, |
|
|
October 8, |
|
||||||||
(In thousands, except per share amounts) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||
Net sales |
$ |
|
2,264,248 |
|
|
$ |
|
2,296,512 |
|
|
$ |
|
7,484,036 |
|
|
$ |
|
7,334,060 |
|
Cost of sales |
|
|
1,916,709 |
|
|
|
|
1,945,302 |
|
|
|
|
6,337,449 |
|
|
|
|
6,178,024 |
|
Gross profit |
|
|
347,539 |
|
|
|
|
351,210 |
|
|
|
|
1,146,587 |
|
|
|
|
1,156,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
322,796 |
|
|
|
|
333,373 |
|
|
|
|
1,059,787 |
|
|
|
|
1,094,422 |
|
Acquisition and integration, net |
|
|
2,130 |
|
|
|
|
(577 |
) |
|
|
|
2,259 |
|
|
|
|
98 |
|
Restructuring and asset impairment, net |
|
|
(458 |
) |
|
|
|
(886 |
) |
|
|
|
1,371 |
|
|
|
|
1,738 |
|
Total operating expenses |
|
|
324,468 |
|
|
|
|
331,910 |
|
|
|
|
1,063,417 |
|
|
|
|
1,096,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating earnings |
|
|
23,071 |
|
|
|
|
19,300 |
|
|
|
|
83,170 |
|
|
|
|
59,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expenses and (income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
9,280 |
|
|
|
|
6,051 |
|
|
|
|
30,218 |
|
|
|
|
14,764 |
|
Other, net |
|
|
(786 |
) |
|
|
|
(768 |
) |
|
|
|
(2,510 |
) |
|
|
|
(384 |
) |
Total other expenses, net |
|
|
8,494 |
|
|
|
|
5,283 |
|
|
|
|
27,708 |
|
|
|
|
14,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings before income taxes |
|
|
14,577 |
|
|
|
|
14,017 |
|
|
|
|
55,462 |
|
|
|
|
45,398 |
|
Income tax expense |
|
|
3,450 |
|
|
|
|
4,553 |
|
|
|
|
13,530 |
|
|
|
|
11,530 |
|
Net earnings |
$ |
|
11,127 |
|
|
$ |
|
9,464 |
|
|
$ |
|
41,932 |
|
|
$ |
|
33,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings per basic common share |
$ |
|
0.33 |
|
|
$ |
|
0.27 |
|
|
$ |
|
1.22 |
|
|
$ |
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings per diluted common share |
$ |
|
0.32 |
|
|
$ |
|
0.26 |
|
|
$ |
|
1.20 |
|
|
$ |
|
0.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
34,020 |
|
|
|
|
35,160 |
|
|
|
|
34,262 |
|
|
|
|
35,444 |
|
Diluted |
|
|
34,523 |
|
|
|
|
36,145 |
|
|
|
|
34,967 |
|
|
|
|
36,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
5
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
October 7, |
|
|
December 31, |
|
||||
(In thousands) |
2023 |
|
|
2022 |
|
||||
Assets |
|
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
17,554 |
|
|
$ |
|
29,086 |
|
Accounts and notes receivable, net |
|
|
427,275 |
|
|
|
|
404,016 |
|
Inventories, net |
|
|
579,631 |
|
|
|
|
571,065 |
|
Prepaid expenses and other current assets |
|
|
63,594 |
|
|
|
|
62,244 |
|
Total current assets |
|
|
1,088,054 |
|
|
|
|
1,066,411 |
|
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
616,320 |
|
|
|
|
610,220 |
|
Goodwill |
|
|
182,160 |
|
|
|
|
182,160 |
|
Intangible assets, net |
|
|
102,661 |
|
|
|
|
106,341 |
|
Operating lease assets |
|
|
251,426 |
|
|
|
|
257,047 |
|
Other assets, net |
|
|
93,155 |
|
|
|
|
84,382 |
|
|
|
|
|
|
|
|
|
||
Total assets |
$ |
|
2,333,776 |
|
|
$ |
|
2,306,561 |
|
|
|
|
|
|
|
|
|
||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
|
||
Accounts payable |
$ |
|
505,786 |
|
|
$ |
|
487,215 |
|
Accrued payroll and benefits |
|
|
71,531 |
|
|
|
|
103,048 |
|
Other accrued expenses |
|
|
53,267 |
|
|
|
|
62,465 |
|
Current portion of operating lease liabilities |
|
|
43,372 |
|
|
|
|
45,453 |
|
Current portion of long-term debt and finance lease liabilities |
|
|
8,410 |
|
|
|
|
6,789 |
|
Total current liabilities |
|
|
682,366 |
|
|
|
|
704,970 |
|
|
|
|
|
|
|
|
|
||
Long-term liabilities |
|
|
|
|
|
|
|
||
Deferred income taxes |
|
|
78,318 |
|
|
|
|
66,293 |
|
Operating lease liabilities |
|
|
231,809 |
|
|
|
|
239,062 |
|
Other long-term liabilities |
|
|
28,212 |
|
|
|
|
33,376 |
|
Long-term debt and finance lease liabilities |
|
|
535,804 |
|
|
|
|
496,792 |
|
Total long-term liabilities |
|
|
874,143 |
|
|
|
|
835,523 |
|
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Shareholders’ equity |
|
|
|
|
|
|
|
||
Common stock, voting, no par value; 100,000 shares |
|
|
457,830 |
|
|
|
|
468,061 |
|
Preferred stock, no par value, 10,000 shares |
|
|
— |
|
|
|
|
— |
|
Accumulated other comprehensive income |
|
|
5,155 |
|
|
|
|
2,979 |
|
Retained earnings |
|
|
314,282 |
|
|
|
|
295,028 |
|
Total shareholders’ equity |
|
|
777,267 |
|
|
|
|
766,068 |
|
|
|
|
|
|
|
|
|
||
Total liabilities and shareholders’ equity |
$ |
|
2,333,776 |
|
|
$ |
|
2,306,561 |
|
|
|
|
|
|
|
|
|
||
6
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
40 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||
Cash flow activities |
|
|
|
|
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
$ |
|
95,680 |
|
|
$ |
|
7,454 |
|
Net cash used in investing activities |
|
|
|
|
|
(82,003 |
) |
|
|
|
(45,956 |
) |
Net cash (used in) provided by financing activities |
|
|
|
|
|
(25,209 |
) |
|
|
|
46,800 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
|
|
|
(11,532 |
) |
|
|
|
8,298 |
|
Cash and cash equivalents at beginning of the period |
|
|
|
|
|
29,086 |
|
|
|
|
10,666 |
|
Cash and cash equivalents at end of the period |
|
|
|
$ |
|
17,554 |
|
|
$ |
|
18,964 |
|
SPARTANNASH COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
Table 1: Sales and Operating Earnings by Segment
(Unaudited)
|
12 Weeks Ended |
|
|
40 Weeks Ended |
|
||||||||||||||||||||||||||
(In thousands) |
October 7, 2023 |
|
|
October 8, 2022 |
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||||||||||||||||||
Wholesale Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
|
1,602,000 |
|
|
70.8 |
% |
|
$ |
|
1,629,869 |
|
|
71.0 |
% |
|
$ |
|
5,321,048 |
|
|
71.1 |
% |
|
$ |
|
5,213,733 |
|
|
71.1 |
% |
Operating earnings |
|
|
18,153 |
|
|
|
|
|
|
14,015 |
|
|
|
|
|
|
66,020 |
|
|
|
|
|
|
54,834 |
|
|
|
||||
Retail Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
|
662,248 |
|
|
29.2 |
% |
|
|
|
666,643 |
|
|
29.0 |
% |
|
|
|
2,162,988 |
|
|
28.9 |
% |
|
|
|
2,120,327 |
|
|
28.9 |
% |
Operating earnings |
|
|
4,918 |
|
|
|
|
|
|
5,285 |
|
|
|
|
|
|
17,150 |
|
|
|
|
|
|
4,944 |
|
|
|
||||
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
|
2,264,248 |
|
|
100.0 |
% |
|
$ |
|
2,296,512 |
|
|
100.0 |
% |
|
$ |
|
7,484,036 |
|
|
100.0 |
% |
|
$ |
|
7,334,060 |
|
|
100.0 |
% |
Operating earnings |
|
|
23,071 |
|
|
|
|
|
|
19,300 |
|
|
|
|
|
|
83,170 |
|
|
|
|
|
|
59,778 |
|
|
|
||||
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding adjusted operating earnings, adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), net long-term debt, capital expenditures and IT capital, and adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company’s performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.
7
Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other items, LIFO expense, organizational realignment, severance associated with cost reduction initiatives, a non-routine settlement related to a legal matter resulting from a previously closed operation that was resolved during the year and operating and non-operating costs associated with the postretirement plan amendment and settlement. Current year organizational realignment includes consulting and severance costs associated with the Company's change in its go-to-market strategy as part of its long-term plan, which relates to the reorganization of certain functions. Costs related to the postretirement plan amendment and settlement include non-operating expenses associated with amortization of the prior service credit related to the amendment of the retiree medical plan, which are excluded from adjusted earnings from continuing operations. Postretirement plan amendment and settlement costs also include operating expenses related to payroll taxes which are adjusted out of all non-GAAP financial measures. Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other things, LIFO expense, costs related to shareholder activism, organizational realignment, operating and non-operating costs associated with the postretirement plan amendment and settlement, and severance associated with cost reduction initiatives. Costs related to shareholder activism include consulting, and other expenses incurred in relation to shareholder activism activities. Organizational realignment includes benefits for associates terminated as part of leadership transition plans, which do not meet the definition of reduction-in-force.
Each of these items are considered “non-operational” or “non-core” in nature.
The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures used in the Fiscal 2023 Outlook section of this press release without unreasonable effort because it is not possible to predict certain adjustment items with a reasonable degree of certainty since they are not yet known or quantifiable, and do not relate to the Company's normal operating activities. These adjustments may include, among other items, restructuring and asset impairment activity, acquisition and integration costs, severance, costs related to the postretirement plan amendment and settlement, and organizational realignment costs, and the impact of adjustments to the LIFO inventory reserve. This information is dependent upon future events, which may be outside of the Company's control and could have a significant impact on its GAAP financial results for fiscal 2023 or fiscal 2025, respectively.
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)
|
12 Weeks Ended |
|
|
40 Weeks Ended |
|
||||||||||||||
(In thousands) |
October 7, 2023 |
|
|
October 8, 2022 |
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||||||
Net earnings |
$ |
|
11,127 |
|
|
$ |
|
9,464 |
|
|
$ |
|
41,932 |
|
|
$ |
|
33,868 |
|
Income tax expense |
|
|
3,450 |
|
|
|
|
4,553 |
|
|
|
|
13,530 |
|
|
|
|
11,530 |
|
Other expenses, net |
|
|
8,494 |
|
|
|
|
5,283 |
|
|
|
|
27,708 |
|
|
|
|
14,380 |
|
Operating earnings |
|
|
23,071 |
|
|
|
|
19,300 |
|
|
|
|
83,170 |
|
|
|
|
59,778 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
6,606 |
|
|
|
|
14,884 |
|
|
|
|
22,445 |
|
|
|
|
42,916 |
|
Depreciation and amortization |
|
|
23,042 |
|
|
|
|
21,833 |
|
|
|
|
75,245 |
|
|
|
|
72,274 |
|
Acquisition and integration, net |
|
|
2,130 |
|
|
|
|
(577 |
) |
|
|
|
2,259 |
|
|
|
|
98 |
|
Restructuring and asset impairment, net |
|
|
(458 |
) |
|
|
|
(886 |
) |
|
|
|
1,371 |
|
|
|
|
1,738 |
|
Cloud computing amortization |
|
|
1,259 |
|
|
|
|
925 |
|
|
|
|
3,685 |
|
|
|
|
2,694 |
|
Organizational realignment, net |
|
|
2,681 |
|
|
|
|
588 |
|
|
|
|
4,710 |
|
|
|
|
1,859 |
|
Severance associated with cost reduction initiatives |
|
|
39 |
|
|
|
|
54 |
|
|
|
|
311 |
|
|
|
|
795 |
|
Stock-based compensation |
|
|
2,461 |
|
|
|
|
1,370 |
|
|
|
|
10,073 |
|
|
|
|
7,208 |
|
Stock warrant |
|
|
319 |
|
|
|
|
505 |
|
|
|
|
1,279 |
|
|
|
|
1,659 |
|
Non-cash rent |
|
|
(531 |
) |
|
|
|
(764 |
) |
|
|
|
(2,094 |
) |
|
|
|
(2,691 |
) |
Loss (gain) on disposal of assets |
|
|
258 |
|
|
|
|
63 |
|
|
|
|
304 |
|
|
|
|
(68 |
) |
Legal settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
900 |
|
|
|
|
— |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
94 |
|
|
|
|
133 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
7,335 |
|
Adjusted EBITDA |
$ |
|
60,877 |
|
|
$ |
|
57,295 |
|
|
$ |
|
203,752 |
|
|
$ |
|
195,728 |
|
8
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, continued
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)
|
12 Weeks Ended |
|
|
40 Weeks Ended |
|
||||||||||||||
(In thousands) |
October 7, 2023 |
|
|
October 8, 2022 |
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||||||
Wholesale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating earnings |
$ |
|
18,153 |
|
|
$ |
|
14,015 |
|
|
$ |
|
66,020 |
|
|
$ |
|
54,834 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
4,411 |
|
|
|
|
12,959 |
|
|
|
|
16,734 |
|
|
|
|
35,138 |
|
Depreciation and amortization |
|
|
12,151 |
|
|
|
|
11,090 |
|
|
|
|
39,165 |
|
|
|
|
36,602 |
|
Acquisition and integration, net |
|
|
65 |
|
|
|
|
— |
|
|
|
|
189 |
|
|
|
|
— |
|
Restructuring and asset impairment, net |
|
|
(293 |
) |
|
|
|
(2,088 |
) |
|
|
|
688 |
|
|
|
|
(2,216 |
) |
Cloud computing amortization |
|
|
834 |
|
|
|
|
645 |
|
|
|
|
2,499 |
|
|
|
|
1,873 |
|
Organizational realignment, net |
|
|
1,673 |
|
|
|
|
367 |
|
|
|
|
2,939 |
|
|
|
|
1,160 |
|
Severance associated with cost reduction initiatives |
|
|
39 |
|
|
|
|
43 |
|
|
|
|
296 |
|
|
|
|
662 |
|
Stock-based compensation |
|
|
1,621 |
|
|
|
|
894 |
|
|
|
|
6,615 |
|
|
|
|
4,743 |
|
Stock warrant |
|
|
319 |
|
|
|
|
505 |
|
|
|
|
1,279 |
|
|
|
|
1,659 |
|
Non-cash rent |
|
|
— |
|
|
|
|
(92 |
) |
|
|
|
(138 |
) |
|
|
|
(288 |
) |
Loss (gain) on disposal of assets |
|
|
24 |
|
|
|
|
(26 |
) |
|
|
|
(11 |
) |
|
|
|
(184 |
) |
Legal settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
900 |
|
|
|
|
— |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
59 |
|
|
|
|
83 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
4,577 |
|
Adjusted EBITDA |
$ |
|
38,997 |
|
|
$ |
|
38,312 |
|
|
$ |
|
137,234 |
|
|
$ |
|
138,643 |
|
Retail: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating earnings |
$ |
|
4,918 |
|
|
$ |
|
5,285 |
|
|
$ |
|
17,150 |
|
|
$ |
|
4,944 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
2,195 |
|
|
|
|
1,925 |
|
|
|
|
5,711 |
|
|
|
|
7,778 |
|
Depreciation and amortization |
|
|
10,891 |
|
|
|
|
10,743 |
|
|
|
|
36,080 |
|
|
|
|
35,672 |
|
Acquisition and integration, net |
|
|
2,065 |
|
|
|
|
(577 |
) |
|
|
|
2,070 |
|
|
|
|
98 |
|
Restructuring and asset impairment, net |
|
|
(165 |
) |
|
|
|
1,202 |
|
|
|
|
683 |
|
|
|
|
3,954 |
|
Cloud computing amortization |
|
|
425 |
|
|
|
|
280 |
|
|
|
|
1,186 |
|
|
|
|
821 |
|
Organizational realignment, net |
|
|
1,008 |
|
|
|
|
221 |
|
|
|
|
1,771 |
|
|
|
|
699 |
|
Severance associated with cost reduction initiatives |
|
|
— |
|
|
|
|
11 |
|
|
|
|
15 |
|
|
|
|
133 |
|
Stock-based compensation |
|
|
840 |
|
|
|
|
476 |
|
|
|
|
3,458 |
|
|
|
|
2,465 |
|
Non-cash rent |
|
|
(531 |
) |
|
|
|
(672 |
) |
|
|
|
(1,956 |
) |
|
|
|
(2,403 |
) |
Loss on disposal of assets |
|
|
234 |
|
|
|
|
89 |
|
|
|
|
315 |
|
|
|
|
116 |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
35 |
|
|
|
|
50 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
2,758 |
|
Adjusted EBITDA |
$ |
|
21,880 |
|
|
$ |
|
18,983 |
|
|
$ |
|
66,518 |
|
|
$ |
|
57,085 |
|
9
Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, continued
(Adjusted EBITDA)
(A Non-GAAP Financial Measure)
(Unaudited)
|
52 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
||
(In thousands) |
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
||
Net earnings |
$ |
|
34,518 |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
12,397 |
|
|
|
|
|
|
|
|
|
|
Other expenses, net |
|
|
21,629 |
|
|
|
|
|
|
|
|
|
|
Operating earnings |
|
|
68,544 |
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense |
|
|
56,823 |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
94,180 |
|
|
|
|
|
|
|
|
|
|
Acquisition and integration, net |
|
|
343 |
|
|
|
|
|
|
|
|
|
|
Restructuring and asset impairment, net |
|
|
805 |
|
|
|
|
|
|
|
|
|
|
Cloud computing amortization |
|
|
3,650 |
|
|
|
|
|
|
|
|
|
|
Organizational realignment, net |
|
|
1,859 |
|
|
|
|
|
|
|
|
|
|
Severance associated with cost reduction initiatives |
|
|
831 |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
8,589 |
|
|
|
|
|
|
|
|
|
|
Stock warrant |
|
|
2,158 |
|
|
|
|
|
|
|
|
|
|
Non-cash rent |
|
|
(3,444 |
) |
|
|
|
|
|
|
|
|
|
Loss on disposal of assets |
|
|
1,073 |
|
|
|
|
|
|
|
|
|
|
Postretirement plan amendment and settlement |
|
|
133 |
|
|
|
|
|
|
|
|
|
|
Costs related to shareholder activism |
|
|
7,335 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
|
242,879 |
|
|
|
|
|
|
|
|
|
|
Notes: Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”) is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including share-based payments (equity awards measured in accordance with ASC 718, Stock Compensation, which include both stock-based compensation to employees and stock warrants issued to non-employees) and the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company.
Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies.
10
Table 3: Reconciliation of Operating Earnings to Adjusted Operating Earnings
(A Non-GAAP Financial Measure)
(Unaudited)
|
12 Weeks Ended |
|
|
40 Weeks Ended |
|
||||||||||||||
(In thousands) |
October 7, 2023 |
|
|
October 8, 2022 |
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||||||
Operating earnings |
$ |
|
23,071 |
|
|
$ |
|
19,300 |
|
|
$ |
|
83,170 |
|
|
$ |
|
59,778 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
6,606 |
|
|
|
|
14,884 |
|
|
|
|
22,445 |
|
|
|
|
42,916 |
|
Acquisition and integration, net |
|
|
2,130 |
|
|
|
|
(577 |
) |
|
|
|
2,259 |
|
|
|
|
98 |
|
Restructuring and asset impairment, net |
|
|
(458 |
) |
|
|
|
(886 |
) |
|
|
|
1,371 |
|
|
|
|
1,738 |
|
Organizational realignment, net |
|
|
2,681 |
|
|
|
|
588 |
|
|
|
|
4,710 |
|
|
|
|
1,859 |
|
Severance associated with cost reduction initiatives |
|
|
39 |
|
|
|
|
54 |
|
|
|
|
311 |
|
|
|
|
795 |
|
Legal settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
900 |
|
|
|
|
— |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
94 |
|
|
|
|
133 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
7,335 |
|
Adjusted operating earnings |
$ |
|
34,069 |
|
|
$ |
|
33,363 |
|
|
$ |
|
115,260 |
|
|
$ |
|
114,652 |
|
Wholesale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating earnings |
$ |
|
18,153 |
|
|
$ |
|
14,015 |
|
|
$ |
|
66,020 |
|
|
$ |
|
54,834 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
4,411 |
|
|
|
|
12,959 |
|
|
|
|
16,734 |
|
|
|
|
35,138 |
|
Acquisition and integration, net |
|
|
65 |
|
|
|
|
— |
|
|
|
|
189 |
|
|
|
|
— |
|
Restructuring and asset impairment, net |
|
|
(293 |
) |
|
|
|
(2,088 |
) |
|
|
|
688 |
|
|
|
|
(2,216 |
) |
Organizational realignment, net |
|
|
1,673 |
|
|
|
|
367 |
|
|
|
|
2,939 |
|
|
|
|
1,160 |
|
Severance associated with cost reduction initiatives |
|
|
39 |
|
|
|
|
43 |
|
|
|
|
296 |
|
|
|
|
662 |
|
Legal settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
900 |
|
|
|
|
— |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
59 |
|
|
|
|
83 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
4,577 |
|
Adjusted operating earnings |
$ |
|
24,048 |
|
|
$ |
|
25,296 |
|
|
$ |
|
87,825 |
|
|
$ |
|
94,238 |
|
Retail: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating earnings |
$ |
|
4,918 |
|
|
$ |
|
5,285 |
|
|
$ |
|
17,150 |
|
|
$ |
|
4,944 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
2,195 |
|
|
|
|
1,925 |
|
|
|
|
5,711 |
|
|
|
|
7,778 |
|
Acquisition and integration, net |
|
|
2,065 |
|
|
|
|
(577 |
) |
|
|
|
2,070 |
|
|
|
|
98 |
|
Restructuring and asset impairment, net |
|
|
(165 |
) |
|
|
|
1,202 |
|
|
|
|
683 |
|
|
|
|
3,954 |
|
Organizational realignment, net |
|
|
1,008 |
|
|
|
|
221 |
|
|
|
|
1,771 |
|
|
|
|
699 |
|
Severance associated with cost reduction initiatives |
|
|
— |
|
|
|
|
11 |
|
|
|
|
15 |
|
|
|
|
133 |
|
Postretirement plan amendment and settlement |
|
|
— |
|
|
|
|
— |
|
|
|
|
35 |
|
|
|
|
50 |
|
Costs related to shareholder activism |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
2,758 |
|
Adjusted operating earnings |
$ |
|
10,021 |
|
|
$ |
|
8,067 |
|
|
$ |
|
27,435 |
|
|
$ |
|
20,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes: Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.
Adjusted operating earnings is not a measure of performance under GAAP and should not be considered as a substitute for operating earnings, and other income statement data. The Company’s definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies.
11
Table 4: Reconciliation of Net Earnings to
Adjusted Earnings from Continuing Operations, as well as per diluted share (“adjusted EPS”)
(A Non-GAAP Financial Measure)
(Unaudited)
|
12 Weeks Ended |
|
|
||||||||||||||||||
|
October 7, 2023 |
|
|
|
October 8, 2022 |
|
|
||||||||||||||
|
|
|
|
per diluted |
|
|
|
|
|
|
per diluted |
|
|
||||||||
(In thousands, except per share amounts) |
Earnings |
|
|
share |
|
|
|
Earnings |
|
|
share |
|
|
||||||||
Net earnings |
$ |
|
11,127 |
|
|
$ |
|
0.32 |
|
|
|
$ |
|
9,464 |
|
|
$ |
|
0.26 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
6,606 |
|
|
|
|
|
|
|
|
|
14,884 |
|
|
|
|
|
|
||
Acquisition and integration, net |
|
|
2,130 |
|
|
|
|
|
|
|
|
|
(577 |
) |
|
|
|
|
|
||
Restructuring and asset impairment, net |
|
|
(458 |
) |
|
|
|
|
|
|
|
|
(886 |
) |
|
|
|
|
|
||
Organizational realignment, net |
|
|
2,681 |
|
|
|
|
|
|
|
|
|
588 |
|
|
|
|
|
|
||
Severance associated with cost reduction initiatives |
|
|
39 |
|
|
|
|
|
|
|
|
|
54 |
|
|
|
|
|
|
||
Postretirement plan amendment and settlement |
|
|
(762 |
) |
|
|
|
|
|
|
|
|
(763 |
) |
|
|
|
|
|
||
Total adjustments |
|
|
10,236 |
|
|
|
|
|
|
|
|
|
13,300 |
|
|
|
|
|
|
||
Income tax effect on adjustments (a) |
|
|
(2,600 |
) |
|
|
|
|
|
|
|
|
(2,725 |
) |
|
|
|
|
|
||
Total adjustments, net of taxes |
|
|
7,636 |
|
|
|
|
0.22 |
|
|
|
|
|
10,575 |
|
|
|
|
0.29 |
|
|
Adjusted earnings from continuing operations |
$ |
|
18,763 |
|
|
$ |
|
0.54 |
|
|
|
$ |
|
20,039 |
|
|
$ |
|
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
40 Weeks Ended |
|
|
||||||||||||||||||
|
October 7, 2023 |
|
|
|
October 8, 2022 |
|
|
||||||||||||||
|
|
|
|
per diluted |
|
|
|
|
|
|
per diluted |
|
|
||||||||
(In thousands, except per share amounts) |
Earnings |
|
|
share |
|
|
|
Earnings |
|
|
share |
|
|
||||||||
Net earnings |
$ |
|
41,932 |
|
|
$ |
|
1.20 |
|
|
|
$ |
|
33,868 |
|
|
$ |
|
0.93 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIFO expense |
|
|
22,445 |
|
|
|
|
|
|
|
|
|
42,916 |
|
|
|
|
|
|
||
Acquisition and integration, net |
|
|
2,259 |
|
|
|
|
|
|
|
|
|
98 |
|
|
|
|
|
|
||
Restructuring and asset impairment, net |
|
|
1,371 |
|
|
|
|
|
|
|
|
|
1,738 |
|
|
|
|
|
|
||
Organizational realignment, net |
|
|
4,710 |
|
|
|
|
|
|
|
|
|
1,859 |
|
|
|
|
|
|
||
Severance associated with cost reduction initiatives |
|
|
311 |
|
|
|
|
|
|
|
|
|
795 |
|
|
|
|
|
|
||
Pension refund from annuity provider |
|
|
— |
|
|
|
|
|
|
|
|
|
(200 |
) |
|
|
|
|
|
||
Postretirement plan amendment and settlement |
|
|
(2,411 |
) |
|
|
|
|
|
|
|
|
(18 |
) |
|
|
|
|
|
||
Legal settlement |
|
|
900 |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
||
Costs related to shareholder activism |
|
|
— |
|
|
|
|
|
|
|
|
|
7,335 |
|
|
|
|
|
|
||
Total adjustments |
|
|
29,585 |
|
|
|
|
|
|
|
|
|
54,523 |
|
|
|
|
|
|
||
Income tax effect on adjustments (a) |
|
|
(7,525 |
) |
|
|
|
|
|
|
|
|
(13,870 |
) |
|
|
|
|
|
||
Total adjustments, net of taxes |
|
|
22,060 |
|
|
|
|
0.63 |
|
|
|
|
|
40,653 |
|
|
|
|
1.12 |
|
|
Adjusted earnings from continuing operations |
$ |
|
63,992 |
|
|
$ |
|
1.83 |
|
|
|
$ |
|
74,521 |
|
|
$ |
|
2.05 |
|
|
12
Table 4: Reconciliation of Net Earnings to
Adjusted Earnings from Continuing Operations, as well as per diluted share, continued (“adjusted EPS”)
(A Non-GAAP Financial Measure)
(Unaudited)
|
52 Weeks Ended |
|
|
|
|
|
|
|
|
|||||||
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
per diluted |
|
|
|
|
|
|
|
|
||||
(In thousands, except per share amounts) |
Earnings |
|
|
share |
|
|
|
|
|
|
|
|
||||
Net earnings |
$ |
|
34,518 |
|
|
$ |
|
0.95 |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
LIFO expense |
|
|
56,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration, net |
|
|
343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and asset impairment, net |
|
|
805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Organizational realignment, net |
|
|
1,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance associated with cost reduction initiatives |
|
|
831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension refund from annuity provider |
|
|
(200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement plan amendment and settlement |
|
|
(776 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Costs related to shareholder activism |
|
|
7,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Write off of deferred financing costs |
|
|
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments |
|
|
67,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect on adjustments (a) |
|
|
(17,083 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments, net of taxes |
|
|
50,173 |
|
|
|
|
1.38 |
|
|
|
|
|
|
|
|
Adjusted earnings from continuing operations |
$ |
|
84,691 |
|
|
$ |
|
2.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Notes: Adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), is a non-GAAP operating financial measure that the Company defines as net earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.
Adjusted earnings from continuing operations is not a measure of performance under GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.
Table 5: Reconciliation of Long-Term Debt and Finance Lease Obligations to Net Long-Term Debt
(A Non-GAAP Financial Measure)
(Unaudited)
(In thousands) |
October 7, 2023 |
|
|
December 31, 2022 |
|
||||
Current portion of long-term debt and finance lease liabilities |
$ |
|
8,410 |
|
|
$ |
|
6,789 |
|
Long-term debt and finance lease liabilities |
|
|
535,804 |
|
|
|
|
496,792 |
|
Total debt |
|
|
544,214 |
|
|
|
|
503,581 |
|
Cash and cash equivalents |
|
|
(17,554 |
) |
|
|
|
(29,086 |
) |
Net long-term debt |
$ |
|
526,660 |
|
|
$ |
|
474,495 |
|
Notes: Net long-term debt is a non-GAAP financial measure that is defined as long-term debt and finance lease obligations plus current maturities of long-term debt and finance lease obligations less cash and cash equivalents. The Company believes both management and its investors find the information useful because it reflects the amount of long-term debt obligations that are not covered by available cash and temporary investments. Net long-term debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.
13
Table 6: Reconciliation of Purchases of Property and Equipment to Capital Expenditures and IT Capital
(A Non-GAAP Financial Measure)
(Unaudited)
|
|
|
|
40 Weeks Ended |
|
|||||||
(In thousands) |
|
|
|
October 7, 2023 |
|
|
October 8, 2022 |
|
||||
Purchases of property and equipment |
|
|
|
$ |
|
86,212 |
|
|
$ |
|
66,282 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
||
Cloud computing spend |
|
|
|
|
|
4,065 |
|
|
|
|
3,236 |
|
Capital expenditures and IT capital |
|
|
|
$ |
|
90,277 |
|
|
$ |
|
69,518 |
|
|
|
|
|
52 Weeks Ended |
|
|
|
|
||
(In thousands) |
|
|
|
December 31, 2022 |
|
|
|
|||
Purchases of property and equipment |
|
|
|
$ |
|
97,280 |
|
|
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
Cloud computing spend |
|
|
|
|
|
4,817 |
|
|
|
|
Capital expenditures and IT capital |
|
|
|
$ |
|
102,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: Capital expenditures and IT capital is a non-GAAP financial measure calculated by adding spending related to the development of cloud computing applications to capital expenditures, the most directly comparable GAAP measure. Cloud computing spend only includes costs incurred during the application development phase and does not include ongoing costs of hosting or maintenance associated with these applications, which are expensed as incurred. The Company believes it is a useful indicator of the Company’s investment in its facilities and systems as it transitions to more cloud-based IT systems. Capital expenditures and IT capital is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.
14
