Spartannash Company Reports Unaudited Consolidated Financial Results for the Second Quarter and Six Months Ended July 12, 2014; Provides Earnings Guidance for the Third Quarter of Fiscal 2014 and Reaffirms Earnings Guidance for Fiscal 2014
Aug 13 14
SpartanNash Company reported unaudited consolidated financial results for the second quarter and six months ended July 12, 2014. Consolidated net sales for second quarter increased 178% to $1.8 billion compared to $651.1 million last year, primarily due to $1.2 billion in sales generated as a result of the November 2013 merger with Nash Finch Company. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) for the quarter increased 97.8% to $58.3 million, or 3.2% of net sales, compared to $29.5 million, or 4.5% of net sales last year. Reported operating earnings increased 115.3% to $32.6 million compared to $15.2 million for the prior year quarter, primarily due to contributions from the merger with Nash Finch. These benefits were partially offset by the impact of low inflation, increased integration, restructuring and asset impairment charges, additional LIFO expense and a pension settlement accounting charge. Adjusted earnings from continuing operations for the second quarter were $19.1 million, or $0.50 per diluted share on approximately 37.8 million shares outstanding, compared to $10.2 million, or $0.46 per diluted share on approximately 21.9 million shares outstanding last year. For the second quarter of fiscal 2014, adjusted earnings from continuing operations excludes net after-tax charges of $2.3 million, or $0.06 per diluted share, related to merger integration expenses and asset impairment and restructuring costs and also excludes a tax benefit of $0.6 million, or $0.02 per diluted share, related to the favorable settlement of an unrecognized tax liability established in the prior year. For the prior year second quarter, adjusted earnings from continuing operations excluded net after-tax charges of $2.1 million, or $0.09 per diluted share, related to merger expenses and asset impairment charges. Adjusted earnings from continuing operations is a non-GAAP operating financial measure. Reported earnings from continuing operations were $17.4 million, or $0.46 per diluted share, compared to $8.1 million, $0.37 per diluted share, in the prior year quarter, primarily due to the factors previously mentioned. Cash flow provided by operating activities for the year to date period was $64.0 million compared to $47.4 million for the comparable period last year. The increase in cash provided was primarily the result of contributions from the merger. Net long-term debt (including current maturities and capital lease obligations and subtracting cash) for the company was $577.2 million as of July 12, 2014 compared to $142.2 million at the end of the second quarter last year, due primarily to the incurrence of $436.1 million in debt as a result of the Nash Finch merger. Net long term debt decreased $19.2 million from $596.4 million at December 28, 2013. Earnings before income taxes and discontinued operations was $27,174,000 against $12,935,000 for the same period of last year. Diluted earnings per share was $0.46 against $0.36 the same period of last year. Net cash provided by operating activities was $63,973,000 against $47,441,000 for the same period of last year.
For the six months, net sales were $4,143,902,000 against $1,431,403,000 for the same period of last year. Operating earnings were $60,227,000 against $36,258,000 for the same period of last year. Earnings before income taxes and discontinued operations was $47,273,000 against $27,505,000 for the same period of last year. Earnings from continuing operations was $29,914,000 against $16,968,000 for the same period of last year. Net earnings was $29,629,000 against $16,628,000 for the same period of last year. Diluted earnings per share from continuing operations was $0.79 against $0.78 the same period of last year. Diluted earnings per share was $0.79 against $0.76 the same period of last year. Net cash provided by operating activities was $63,973,000 against $47,441,000 for the same period of last year. Adjusted EBITDA was $123,192,000 against $65,027,000 for the same period of last year.
For the third quarter of fiscal 2014, the company anticipates that net earnings from continuing operations per diluted share will be at, or slightly below, last year's comparable third quarter results of $0.43 per diluted share, excluding merger integration costs and any other one-time expenses.
For fiscal 2014, the company is maintaining its previously issued guidance of consolidated net sales in the range of $7.90 billion to $8.04 billion, Adjusted EBITDA in the range of $230.0 million to $239.0 million and is narrowing the range of earnings per share from continuing operations to approximately $1.70 to $1.75, excluding integration costs of approximately $7.4 million after tax and any other one-time expenses. The company continues to expect capital expenditures for fiscal year 2014 to be in the range of $77.0 million to $82.0 million, with depreciation and amortization now in the range of $87.0 million to $91.0 million and total interest expense now in the range of $24.0 million to $25.0 million. As it look to the second half of the year, the company remain optimistic that it is in a position to deliver sales and earnings outlook for fiscal 2014, despite the lack of non-perishable inflation, negative impact of the reduction in SNAP benefits and competitive openings.