Spartan Stores, Inc., (Nasdaq: SPTN) a leading regional grocery distributor and retailer, today reported financial results for its 16-week third quarter of fiscal 2013 ended January 5, 2013. Third Quarter Results Consolidated net sales for the 16-week third quarter decreased 0.9 percent to $789.9 million compared to $797.2 million in the same period last year as a result of lower distribution and supermarket sales, partially offset by increased fuel sales. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) for the quarter was $25.1 million, or 3.2 percent of net sales, compared to $26.0 million, or 3.3 percent of net sales last year. Adjusted earnings from continuing operations for the third quarter of fiscal 2013 were $5.2 million, or $0.24 per diluted share, excluding an after tax debt extinguishment charge of $1.4 million associated with the early retirement of a portion of the Company's Convertible Senior Notes due 2027 and an after tax charge for acquisition related professional fees of $0.3 million. For the third quarter of fiscal 2012, adjusted earnings from continuing operations were $5.1 million, or $0.22 per diluted share, excluding an after tax gain on the sale of assets of $0.4 million and an after tax expense associated with the early termination of the Company's interest rate swap agreement of $0.5 million. Reported earnings from continuing operations for the third quarter of fiscal 2013 were $3.5 million, or $0.16 per diluted share, compared to $5.0 million, or $0.22 per diluted share, in the third quarter of fiscal 2012. “Despite ongoing macroeconomic challenges, we made continued progress in the execution of our key strategic priorities during the third quarter,” stated Dennis Eidson, Spartan’s President and Chief Executive Officer. “We continued to invest in both our distribution and retail segments by opening new stores, remodeling existing stores, refining our promotional efforts and strengthening our private brand offerings. We acquired an upscale, high-volume grocery store in West Michigan, further solidifying our leading conventional supermarket share in this market and we recently announced an expansion of our distribution customer base in Ohio. In addition, we successfully refinanced a portion of our Convertible Senior Notes, which enabled us to lengthen the maturity of our debt obligations and reduce our overall interest expense.”
Gross profit margin for the third quarter of fiscal 2013 and fiscal 2012 was 20.4 percent. The gross profit margin reflects continued moderating inflation resulting in lower inflation-driven inventory gains in the distribution segment and a higher mix of fuel sales, offset by a decrease in LIFO expense compared to the prior year quarter in both the distribution and retail segments.
Third quarter operating expenses, excluding restructuring, asset impairment and other gains or losses, were $149.1 million, or 18.9 percent of net sales, compared to $150.5 million, or 18.9 percent of net sales in the same quarter last year. The decrease was due to lower incentive compensation expense, a reduction in promotional expenses due to the cycling of the rollout of the Yes loyalty program, and lower property taxes, partially offset by higher health care costs. Distribution Segment Net sales for the distribution segment were $346.1 million in the third quarter of fiscal 2013 compared to $353.8 million in the same period last year. Third quarter fiscal 2013 operating earnings for the distribution segment were $9.5 million compared to $10.9 million in the same period last year. The decrease in operating earnings is primarily due to a continuation of lower inflation-driven inventory gains as the rate of inflation continues to moderate, partially offset by a decrease in LIFO expense. We also incurred a $0.3 million signing bonus associated with the completion of our labor union contract in October. Retail Segment Net sales for the retail segment were $443.8 million in the third quarter of fiscal 2013 compared to $443.5 million in the same period last year. The slight increase in sales was due to increased fuel retail selling prices and increased fuel volume, partially offset by a decline in comparable store sales, excluding fuel, of 1.2 percent. Comparable store sales were negatively impacted by minimal inflation, a calendar shift due to the 53 rd week in fiscal 2012 and the change in mix of pharmacy sales away from branded medications to generics. Third quarter fiscal 2013 adjusted operating earnings for the retail segment were $2.5 million, excluding $0.4 million of professional fees associated with the single store acquisition, compared to $1.6 million last year, excluding $0.5 million from a gain on sale of assets. The improvement in adjusted operating earnings was primarily due to a decrease in incentive compensation expense, a reduction in promotional expenses due to the cycling of the rollout of the Yes loyalty program, lower LIFO expense, and higher fuel margins, partially offset by significantly higher health care costs. Third quarter operating earnings as reported were $2.1 million in both fiscal 2013 and fiscal 2012.During the third quarter, the Company remodeled two stores, opened two Valu Land stores and acquired one store and one fuel center, ending the quarter with 100 stores and 30 fuel centers. The Company plans to open one new Valu Land location during the fourth quarter of fiscal 2013.
Balance Sheet and Cash Flow Cash flow provided by operating activities for the third quarter ended January 5, 2013 was $26.4 million compared to $8.7 million for the comparable quarter last year, primarily due to the timing of working capital requirements. Net long-term debt (including current maturities and capital lease obligations and subtracting cash) for the Company was $162.0 million as of January 5, 2013 compared to $124.2 million as of December 31, 2011, due primarily to funding share repurchases, tax payments and the acquisition of one retail store and fuel center, including the associated capital leases. The Company’s total net long-term debt-to-capital ratio is 0.33-to-1.0 for the third quarter of fiscal 2013 and the net long-term debt-to-Adjusted EBITDA ratio is 1.58-to-1.0 on an annual Adjusted EBITDA basis. During the third quarter, as previously announced, the Company completed a private exchange and sale of $50.0 million aggregate principal amount of newly issued, four year unsecured 6.625% Senior Notes due 2016 for $40.3 million aggregate principal amount of the Company's existing Convertible Senior Notes due 2027 ("Convertible Notes") and $9.7 million in cash. Additionally, late in the third quarter, the Company called for the redemption of the remaining outstanding $57.4 million aggregate principal amount of Convertible Notes before March 30, 2013, the end of its current fiscal year. The Company plans to fund this redemption with available borrowings under its revolving credit facility. Pre-tax charges of $2.3 million were recorded in the third quarter of fiscal 2013 for the early retirement of a portion of the Company's Convertible Senior Notes and pre-tax charges of approximately $2.8 million are expected to be recorded in the fourth quarter of fiscal 2013 related to the planned redemption of the remaining Convertible Notes. The Company extended the maturity of its debt and expects to save approximately $3.0 million in annual interest expense as a result of the private exchange of a portion of the Convertible Notes and redemption of the remainder of the Convertible Notes.The Company believes that cash flow from operating activities and the $163.4 million of availability under its revolving credit facility will support the redemption of the Convertible Senior Notes and its capital requirements for the remainder of fiscal 2013 and the coming year.
Outlook Mr. Eidson continued, “While the Michigan economy has stabilized, we continue to believe consumer discretionary spending will be pressured and that the competitive environment will remain robust. We are steadfastly committed to focusing our efforts on the initiatives that will help drive our business forward in a tough operating environment. We are encouraged by recent investments in our retail segment as, contrary to industry trends, we experienced slightly positive volume in our West Michigan stores when eliminating the impact of the calendar shift. We will continue to refine our private label offerings, marketing and loyalty programs, and Valu Land store format, while operating our business as diligently and prudently as possible. On the distribution side of the business, the contract recently signed with a significant new customer in the strategically important Ohio market is a testament to the strength of our operating model. Shipments to this customer are expected to begin late in the fourth quarter.” The Company anticipates that comparable store sales will be flat to slightly positive in the fourth quarter as it continues to benefit from the maturation of the YES Rewards loyalty program and a favorable Easter calendar. Distribution sales are expected to return to flat to slightly positive compared to the prior year as a result of new business gains and the Easter calendar shift. The Company believes adjusted earnings per diluted share from continuing operations, which excludes the impact of the anticipated fourth quarter charge related to the convertible debt redemption, will slightly exceed the prior year fourth quarter when excluding the 53rd week and non-recurring benefits previously disclosed last year. The net effect of the 53rd week and the non-recurring items in the prior year’s fourth quarter was a benefit of $0.11 to $0.12 per diluted share. The Company currently expects capital expenditures for fiscal year 2013 to be in the range of $43.5 million to $44.5 million, with depreciation and amortization in the range of $39.0 million to $40.0 million and total interest expense in the range of $13.0 to $13.5 million, excluding the debt extinguishment charges.Conference Call
A telephone conference call to discuss the Company’s third quarter of fiscal 2013 financial results is scheduled for 9:00 a.m. Eastern Time, Thursday, February 14, 2013. A live webcast of this conference call will be available on the Company’s website, www.spartanstores.com. Simply click on “For Investors” and follow the links to the live webcast. The webcast will remain available for replay on the Company’s website for approximately ten days. About Spartan Stores Grand Rapids, Michigan-based Spartan Stores, Inc. (Nasdaq:SPTN) is the nation's tenth largest grocery distributor with 1.4 million square feet of warehouse, distribution, and office space located in Grand Rapids, Michigan. The Company distributes more than 40,000 private and national brand products to approximately 375 independent grocery locations in Michigan, Indiana and Ohio, and to the Company’s 100 corporate owned stores located in Michigan, including Family Fare Supermarkets, Glen's Markets, D&W Fresh Markets, VG's Food and Pharmacy, and Valu Land. Forward-Looking Statements This press release contains forward-looking statements. Forward-looking statements are identifiable by words or phrases such as “initiatives”, “guidance”, “priority”, “trend”, “outlook”, “position”, “momentum”, or “strategy”; that an event or trend “could”, “will” or “should” occur “begin” “remain” or “continue” or is “likely” or that Spartan Stores or its management “anticipates”, “believes”, “expects” or “plans” a particular result. Accounting estimates are inherently forward-looking. Our restructuring cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. These forward-looking statements are subject to a number of factors that could cause actual results to differ materially. Our ability to achieve the results stated in our “Outlook” discussion, successfully realize growth opportunities, expand our customer base, effectively implement and achieve the expected benefits of capital investments, our new retail banner and model store, our loyalty program, warehouse consolidation and store openings, successfully respond to the weak economic environment and changing consumer behavior, anticipate and successfully respond to openings of competitors’ stores, successfully integrate acquired store or new distribution customer business, achieve expected sales, cash flows, operating efficiencies and earnings, implement plans, programs and strategies, reduce debt, and continue to pay dividends and repurchase shares is not certain and depends on many factors, not all of which are in our control. Additional information about the risk factors to which Spartan Stores is exposed and other factors that may adversely affect these forward-looking statements is contained in Spartan Stores’ reports and filings with the Securities and Exchange Commission. Other risk factors exist and new risk factors may emerge at any time. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Spartan Stores undertakes no obligation to update or revise any forward-looking statements to reflect developments or information obtained after the date of this press release.| SPARTAN STORES, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| 16 Weeks Ended | 40 Weeks Ended | |||||||||||||||
| January 5, 2013 | December 31, 2011 | January 5, 2013 | December 31, 2011 | |||||||||||||
| Net sales | $ | 789,880 | $ | 797,242 | $ | 2,015,351 | $ | 2,019,453 | ||||||||
| Cost of sales | 628,925 | 634,292 | 1,602,450 | 1,598,429 | ||||||||||||
| Gross margin | 160,955 | 162,950 | 412,901 | 421,024 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 137,085 | 139,089 | 340,503 | 346,479 | ||||||||||||
| Depreciation and amortization | 12,024 | 11,416 | 29,499 | 28,191 | ||||||||||||
| Restructuring, asset impairment and other | - | (2 | ) | 356 | (137 | ) | ||||||||||
| (Gain) loss on disposal of assets | 299 | (545 | ) | 335 | (478 | ) | ||||||||||
| Total operating expenses | 149,408 | 149,958 | 370,693 | 374,055 | ||||||||||||
| Operating earnings | 11,547 | 12,992 | 42,208 | 46,969 | ||||||||||||
| Non-operating expense (income) | ||||||||||||||||
| Interest expense, net | 3,054 | 4,101 | 7,432 | 8,977 | ||||||||||||
| Non-cash convertible debt interest | 1,109 | 1,136 | 2,903 | 2,794 | ||||||||||||
| Debt extinguishment | 2,285 | 2,285 | - | |||||||||||||
| Other, net | 7 | 3 | (667 | ) | 11 | |||||||||||
| Total non-operating expense, net | 6,455 | 5,240 | 11,953 | 11,782 | ||||||||||||
| Earnings before income taxes and discontinued operations | 5,092 | 7,752 | 30,255 | 35,187 | ||||||||||||
| Income taxes | 1,620 | 2,764 | 10,352 | 13,794 | ||||||||||||
| Earnings from continuing operations | 3,472 | 4,988 | 19,903 | 21,393 | ||||||||||||
| Loss from discontinued operations, net of taxes | (72 | ) | (11 | ) | (195 | ) | (135 | ) | ||||||||
| Net earnings | $ | 3,400 | $ | 4,977 | $ | 19,708 | $ | 21,258 | ||||||||
| Basic earnings per share: | ||||||||||||||||
| Earnings from continuing operations | $ | 0.16 | $ | 0.22 | $ | 0.91 | $ | 0.94 | ||||||||
| Loss from discontinued operations | - | - | (0.01 | ) | (0.01 | ) | ||||||||||
| Net earnings | $ | 0.16 | $ | 0.22 | $ | 0.90 | $ | 0.93 | ||||||||
| Diluted earnings per share: | ||||||||||||||||
| Earnings from continuing operations | $ | 0.16 | $ | 0.22 | $ | 0.91 | $ | 0.93 | ||||||||
| Loss from discontinued operations | - | - | (0.01 | ) | (0.01 | ) | ||||||||||
| Net earnings | $ | 0.16 | $ | 0.22 | $ | 0.90 | $ | 0.92 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 21,750 | 22,866 | 21,780 | 22,812 | ||||||||||||
| Diluted | 21,816 | 23,080 | 21,855 | 22,995 | ||||||||||||
| SPARTAN STORES, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Assets | January 5, 2013 | December 31, 2011 | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 8,960 | $ | 55,059 | ||||
| Accounts receivable, net | 50,267 | 56,764 | ||||||
| Inventories, net | 133,879 | 120,908 | ||||||
| Prepaid expenses | 10,583 | 10,428 | ||||||
| Other current assets | 8,334 | 1,392 | ||||||
| Deferred taxes on income | 269 | |||||||
| Property held for sale | 710 | 1,708 | ||||||
| Total current assets | 213,002 | 246,259 | ||||||
| Goodwill | 246,925 | 240,589 | ||||||
| Property and equipment, net | 272,368 | 245,265 | ||||||
| Other, net | 62,266 | 56,375 | ||||||
| Total assets | $ | 794,561 | $ | 788,488 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 116,207 | $ | 111,273 | ||||
| Accrued payroll and benefits | 33,782 | 35,312 | ||||||
| Other accrued expenses | 19,696 | 16,377 | ||||||
| Current portion of restructuring costs | 3,297 | 3,596 | ||||||
| Current maturities of long-term debt and capital lease obligations | 4,104 | 49,313 | ||||||
| Total current liabilities | 177,086 | 215,871 | ||||||
| Long-term liabilities | ||||||||
| Deferred taxes on income | 86,689 | 78,739 | ||||||
| Postretirement benefits | 13,548 | 12,446 | ||||||
| Other long-term liabilities | 15,625 | 16,257 | ||||||
| Restructuring costs | 5,427 | 8,359 | ||||||
| Long-term debt and capital lease obligations | 166,843 | 129,916 | ||||||
| Total long-term liabilities | 288,132 | 245,717 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Common stock, voting, no par value; 50,000 sharesauthorized; 21,750 and 22,868 shares outstanding | 146,320 | 166,015 | ||||||
| Preferred stock, no par value, 10,000shares authorized; no shares outstanding | - | - | ||||||
| Accumulated other comprehensive loss | (13,793 | ) | (12,351 | ) | ||||
| Retained earnings | 196,816 | 173,236 | ||||||
| Total shareholders’ equity | 329,343 | 326,900 | ||||||
| Total liabilities and shareholders’ equity | $ | 794,561 | $ | 788,488 | ||||
| SPARTAN STORES, INC. AND SUBSIDIARIES CONDENSED | ||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| 16 Weeks Ended | ||||||||
| January 5, 2013 | December 31, 2011 | |||||||
| Cash flows from operating activities Net cash provided by operating activities | $ | 26,401 | $ | 8,718 | ||||
| Net cash used in investing activities | (26,519 | ) | (11,539 | ) | ||||
| Net cash provided by (used in) financing activities | 1,973 | (4,222 | ) | |||||
| Net cash (used in) provided by discontinued operations | (386) | 22 | ||||||
| Net increase (decrease) in cash and cash equivalents | 1,469 | (7,021) | ||||||
| Cash and cash equivalents at beginning of period | 7,491 | 62,080 | ||||||
| Cash and cash equivalents at end of period | $ | 8,960 | $ | 55,059 | ||||
| SPARTAN STORES, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| 16 Weeks Ended | 40 Weeks Ended | ||||||||||
| January 5, 2013 | December 31, 2011 | January 5, 2013 | December 31, 2011 | ||||||||
| Retail Segment: | |||||||||||
| Net sales | $ | 443,752 | $ | 443,487 | $ | 1,151,633 | $ | 1,152,343 | |||
| Operating Earnings | $ | 2,054 | $ | 2,129 | $ | 14,044 | $ | 19,940 | |||
| Distribution Segment: | |||||||||||
| Net sales | $ | 346,128 | $ | 353,755 | $ | 863,718 | $ | 867,110 | |||
| Operating Earnings | $ | 9,493 | $ | 10,863 | $ | 28,164 | $ | 27,029 | |||
| SPARTAN STORES, INC. AND SUBSIDIARIES | |||||||||||||||||
| RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED EARNINGS FROM | |||||||||||||||||
| CONTINUING OPERATIONS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Third Quarter | |||||||||||||||||
| January 5, 2013 | December 31, 2011 | ||||||||||||||||
| Earnings perdiluted share | Earnings perdiluted share | ||||||||||||||||
| Earnings from continuing operations | $ | 3,472 | $ | 0.16 | $ | 4,988 | $ | 0.22 | |||||||||
| Adjustments, net of taxes: | |||||||||||||||||
| Acquisition related professional fees | 250 | 0.01 | |||||||||||||||
| Gain on sale of assets | (351 | ) | (0.02 | ) | |||||||||||||
| Interest rate swap termination | 499 | 0.02 | |||||||||||||||
| Debt extinguishment | 1,443 | 0.07 | - | ||||||||||||||
| Adjusted earnings from continuing operations | $ | 5,165 | $ | 0.24 | $ | 5,136 | $ | 0.22 | |||||||||
| Year-to-date | |||||||||||||||||
| January 5, 2013 | December 31, 2011 | ||||||||||||||||
| Earnings perdiluted share | Earnings perdiluted share | ||||||||||||||||
| Earnings from continuing operations | $ | 19,903 | $ | 0.91 | $ | 21,393 | $ | 0.93 | |||||||||
| Adjustments, net of taxes: | |||||||||||||||||
| Acquisition related professional fees | 250 | 0.01 | |||||||||||||||
| Non-recurring professional fees | 744 | 0.03 | |||||||||||||||
| Asset impairment and restructuring charge | 225 | 0.01 | |||||||||||||||
| Gain on sale of assets | (422 | ) | (0.02 | ) | (351 | ) | (0.01 | ) | |||||||||
| Interest rate swap termination | 499 | 0.02 | |||||||||||||||
| Debt extinguishment | 1,443 | 0.07 | - | ||||||||||||||
| Impact of state tax law changes | (623 | ) | (0.03 | ) | 518 | 0.02 | |||||||||||
| Adjusted earnings from continuing operations | $ | 20,776 | $ | 0.95 | $ | 22,803 | $ | 0.99 | |||||||||
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) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| Third Quarter | Year-to-Date | ||||||||||||||||
| January 5,2013 | December 31,2011 | January 5,2013 | December 31,2011 | ||||||||||||||
| Net earnings | $ | 3,400 | $ | 4,977 | $ | 19,708 | $ | 21,258 | |||||||||
| Add: | |||||||||||||||||
| Discontinued operations | 72 | 11 | 195 | 135 | |||||||||||||
| Income taxes | 1,620 | 2,764 | 10,352 | 13,794 | |||||||||||||
| Interest expense, net | 4,163 | 5,237 | 10,335 | 11,771 | |||||||||||||
| Debt extinguishment | 2,285 | 2,285 | |||||||||||||||
| Non-operating expense | 7 | 3 | (667 | ) | 11 | ||||||||||||
| Operating earnings | 11,547 | 12,992 | 42,208 | 46,969 | |||||||||||||
| Add: | |||||||||||||||||
| 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 | |||||||||||||
| Adjusted EBITDA | $ | 25,058 | $ | 25,988 | $ | 76,692 | $ | 81,686 | |||||||||
| Reconciliation of operating earnings to adjusted EBITDA by segment: | |||||||||||||||||
| Retail: | |||||||||||||||||
| Operating earnings | $ | 2,054 | $ | 2,129 | $ | 14,044 | $ | 19,940 | |||||||||
| Add: | |||||||||||||||||
| Depreciation and amortization | 9,358 | 8,806 | 22,902 | 21,692 | |||||||||||||
| LIFO expense | 216 | 785 | 1,064 | 1,749 | |||||||||||||
| 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 | ||||||||||||
| Adjusted EBITDA | $ | 12,581 | $ | 11,563 | $ | 40,776 | $ | 44,263 | |||||||||
| Distribution: | |||||||||||||||||
| Operating earnings | $ | 9,493 | $ | 10,863 | $ | 28,164 | $ | 27,029 | |||||||||
| Add: | |||||||||||||||||
| Depreciation and amortization | 2,666 | 2,610 | 6,597 | 6,499 | |||||||||||||
| LIFO expense | (612) | 349 | (80) | 912 | |||||||||||||
| Restructuring and asset impairment costs | - | - | - | (37 | ) | ||||||||||||
| Other unusual items | - | - | - | 1,194 | |||||||||||||
| Non-cash stock compensation and other charges | 930 | 603 | 1,235 | 1,826 | |||||||||||||
| Adjusted EBITDA | $ | 12,477 | $ | 14,425 | $ | 35,916 | $ | 37,423 | |||||||||
The Company believes that Adjusted EBITDA provides a meaningful representation of the operating performance for the Company as a whole and for its operating segments. The Company considers Adjusted EBITDA as an additional way to measure operating performance on an ongoing basis. Adjusted EBITDA 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 EBITDA 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 its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in Adjusted EBITDA format.
Adjusted EBITDA 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 EBITDA may not be identical to similarly titled measures reported by other companies.| SPARTAN STORES, INC. AND SUBSIDIARIES RECONCILIATION OF LONG-TERM | |||||||||||
| DEBT AND CAPITAL LEASE OBLIGATIONS TO TOTAL NET LONG TERM DEBT AND | |||||||||||
| CAPITAL LEASE OBLIGATIONS | |||||||||||
| (A NON-GAAP FINANCIAL MEASURE) | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| January 5, 2013 | March 31, 2012 | December 31, 2011 | |||||||||
| Current maturities of long-term debt and capital lease obligations | $ | 4,104 | $ | 4,449 | $ | 49,313 | |||||
| Long-term debt and capital lease obligations | 166,843 | 133,565 | 129,916 | ||||||||
| Total debt | 170,947 | 138,014 | 179,229 | ||||||||
| Cash and cash equivalents | (8,960 | ) | (26,476 | ) | (55,059 | ) | |||||
| Total net long-term debt | $ | 161,987 | $ | 111,538 | $ | 124,170 | |||||