Roundy’s, Inc. Reports Third Quarter 2012 Financial Results

The Company defines Adjusted EBITDA as earnings before interest expense, provision for income taxes, depreciation and amortization, LIFO charges, amortization of deferred financing costs, non-cash compensation expenses arising from the issuance of stock, options to purchase stock and stock appreciation rights, costs incurred in connection with the Company’s IPO (or subsequent offerings of Roundy’s common stock), loss on debt extinguishment and certain one-time employee related costs. Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of the Company’s results of operations with those of companies having different capital structures. Since the levels of indebtedness, tax structures, and methodologies in calculating LIFO expense that other companies have are different from the Company’s, it omits these amounts to facilitate investors’ ability to make these comparisons. Similarly, the Company omits depreciation and amortization because other companies may employ a greater or lesser amount of owned property, and because in the Company’s experience, whether a store is new or one that is fully or mostly depreciated does not necessarily correlate to the contribution that such store makes to operating performance. The Company believes that investors, analysts and other interested parties consider Adjusted EBITDA an important measure of the Company’s operating performance. Adjusted EBITDA should not be considered as an alternative to net income as a measure of the Company’s performance. Other companies in the Company’s industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.

Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The limitations of Adjusted EBITDA include: (i) it does not reflect the Company’s cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, the Company’s working capital needs; (iii) it does not reflect income tax payments the Company may be required to make; and (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

Roundy's, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
		December 31,				September 29,
		2011				2012
Assets						(Unaudited)
Current Assets:
Cash and cash equivalents		$	87,068			$	43,192
Notes and accounts receivable, less allowance for losses			32,467				34,206
Merchandise inventories			286,537				296,837
Prepaid expenses			18,880				18,788
Deferred income taxes			6,038				6,038
Total current assets			430,990				399,061
Property and Equipment, net			309,575				305,224
Other Assets:
Other assets - net			45,238				47,779
Goodwill			726,879				726,879
Total other assets			772,117				774,658
Total assets		$	1,512,682			$	1,478,943
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable		$	245,216			$	222,164
Accrued wages and benefits			48,876				36,418
Other accrued expenses			42,089				46,407
Current maturities of long-term debt and capital lease obligations			10,789				11,007
Income taxes			4,265				4,851
Total current liabilities			351,235				320,847
Long-term Debt and Capital Lease Obligations			809,352				687,996
Deferred Income Taxes			66,438				69,181
Other Liabilities			108,482				100,714
Total liabilities			1,335,507				1,178,738
Shareholders' Equity:
Preferred Stock			1,044				-
Common stock (150,000 shares authorized, $0.01 par value, 27,072 shares
and 45,654 shares at 12/31/11 and 9/29/12, respectively, issued and outstanding)			271				457
Additional paid-in capital			-				113,742
Retained earnings			221,365				229,500
Accumulated other comprehensive loss			(45,505	)			(43,494	)
Total shareholders' equity			177,175				300,205
Total liabilities and shareholders' equity		$	1,512,682			$	1,478,943

Roundy's, Inc.
Consolidated Statements of Cash Flows
(In thousands)
		(Unaudited)
		Thirty-nine Weeks Ended
		October 1,				September 29,
		2011				2012
Cash Flows From Operating Activities:
Net income		$	38,878			$	29,115
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:
Depreciation and amortization, including deferred financing costs			54,147				49,832
Gain on sale of property and equipment			(309	)			(123	)
LIFO charges			1,839				1,500
Amortization of debt discount			375				1,008
Stock-based compensation expense			-				1,053
Interest earned on shareholder notes receivable			(140	)			-
Loss on debt extinguishment			-				13,304
Deferred income taxes			-				392
Changes in operating assets and liabilities:
Notes and accounts receivable			(1,509	)			(1,739	)
Merchandise inventories			(20,876	)			(11,800	)
Prepaid expenses			(651	)			92
Other assets			370				113
Accounts payable			41,505				(23,052	)
Accrued expenses and other liabilities			(12,190	)			(12,492	)
Income taxes			25,547				1,171
Net cash flows provided by operating activities			126,986				48,374
Cash Flows From Investing Activities:
Capital expenditures			(48,578	)			(40,434	)
Proceeds from sale of property and equipment			376				129
Net cash flows used in investing activities			(48,202	)			(40,305	)
Cash Flows From Financing Activities:
Proceeds from long-term borrowings			-				664,875
Payments of debt and capital lease obligations			(8,207	)			(790,575	)
Dividends paid			-				(20,619	)
Issuance of common stock, net of issuance costs			-				112,540
Debt issuance and refinancing fees and related expenses			-				(18,166	)
Net cash flows used in financing activities			(8,207	)			(51,945	)
Net increase (decrease) in Cash and Cash Equivalents			70,577				(43,876	)
Cash and Cash Equivalents, Beginning of Period			36,435				87,068
Cash and Cash Equivalents, End of Period		$	107,012			$	43,192
Supplemental Cash Flow Information:
Cash paid for interest		$	53,610			$	42,239
Cash paid for income taxes			372				16,516

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