The Company believes that Adjusted earnings from continuing operations provide a meaningful representation of its operating performance for the Company. The Company considers Adjusted earnings from continuing operations as an additional way to measure operating performance on an ongoing basis. Adjusted earnings from continuing operations is meant to reflect the ongoing operating performance of all of its retail stores and wholesale operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because Adjusted earnings from continuing operations is a performance measure that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in Adjusted earnings from continuing operations format.
Adjusted earnings from continuing operations is not a measure of performance under accounting principles generally accepted in the United States of America, 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.
|SPARTAN STORES, INC. AND SUBSIDIARIES|
|RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS BEFORE INTEREST,|
|TAXES, DEPRECIATION AND AMORTIZATION (Adjusted EBITDA)|
|Interest expense, net||4,163||5,237||10,335||11,771|
|Depreciation and amortization||12,024||11,416||29,499||28,191|
|LIFO (income) expense||(396)||1,134||984||2,661|
|Restructuring and asset impairment costs||-||(2||)||356||(137||)|
|Other unusual items||396||-||396||1,194|
|Non-cash stock compensation and other charges||1,487||448||3,249||2,808|
|Reconciliation of operating earnings to adjusted EBITDA by segment:|
|Depreciation and amortization||9,358||8,806||22,902||21,692|
|Restructuring and asset impairment costs||-||(2||)||356||(100||)|
|Other unusual items||396||396|
|Non-cash stock compensation and other charges||557||(155||)||2,014||982|
|Depreciation and amortization||2,666||2,610||6,597||6,499|
|Restructuring and asset impairment costs||-||-||-||(37||)|
|Other unusual items||-||-||-||1,194|
|Non-cash stock compensation and other charges||930||603||1,235||1,826|
Notes: Consolidated Adjusted EBITDA is a non-GAAP operating financial measure that the Company defines as net earnings from continuing operations plus depreciation and amortization, and other non-cash items including imputed interest, deferred (stock) compensation, the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations, interest expense and the provision for income taxes to the extent deducted in the computation of Net Earnings.
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