e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the sixteen weeks ended October 8, 2005
or
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 0-785
NASH-FINCH COMPANY
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE
(State or other jurisdiction of
incorporation or organization)
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41-0431960
(IRS Employer
Identification No.) |
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7600 France Avenue South,
P.O. Box 355
Minneapolis, Minnesota
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55435-0355 |
(Address of principal executive offices)
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(Zip Code) |
(952) 832-0534
(Registrants telephone number including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes þ No o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
As of November 4, 2005 13,226,933 shares of Common Stock of the Registrant were outstanding.
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(In thousands, except per share amounts)
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Sixteen Weeks Ended |
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Forty Weeks Ended |
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October 8, |
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October 9, |
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October 8, |
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October 9, |
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2005 |
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2004 |
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2005 |
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2004 |
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Sales |
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$ |
1,464,781 |
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1,191,187 |
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3,432,271 |
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2,977,034 |
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Cost and expenses: |
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Cost of sales |
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1,332,836 |
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1,063,911 |
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3,105,580 |
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2,652,446 |
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Selling, general and administrative |
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91,569 |
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84,612 |
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230,456 |
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229,973 |
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Special charge |
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(1,296 |
) |
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36,494 |
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Depreciation and amortization |
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14,357 |
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11,615 |
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33,345 |
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31,571 |
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Interest expense |
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7,919 |
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8,429 |
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18,684 |
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21,812 |
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Total costs and expenses |
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1,446,681 |
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1,168,567 |
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3,386,769 |
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2,972,296 |
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Earnings before income taxes |
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18,100 |
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22,620 |
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45,502 |
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4,738 |
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Income tax expense |
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7,059 |
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8,022 |
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17,746 |
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1,048 |
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Net earnings |
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$ |
11,041 |
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14,598 |
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27,756 |
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3,690 |
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Net earnings per share: |
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Basic earnings per share |
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$ |
0.85 |
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1.17 |
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2.16 |
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0.30 |
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Diluted earnings per share |
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$ |
0.83 |
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1.15 |
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2.12 |
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0.29 |
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Cash dividends per common share |
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$ |
0.180 |
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0.135 |
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0.495 |
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0.405 |
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Weighted average number of common shares
outstanding and common equivalent shares outstanding: |
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Basic |
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13,004 |
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12,486 |
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12,836 |
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12,398 |
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Diluted |
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13,233 |
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12,681 |
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13,117 |
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12,581 |
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See accompanying notes to consolidated financial statements.
3
NASH FINCH COMPANY & SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share amounts)
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October 8, |
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January 1, |
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October 9, |
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2005 |
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2005 |
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2004 |
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(unaudited) |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,064 |
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5,029 |
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1,142 |
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Accounts and notes receivable, net |
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200,134 |
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157,397 |
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159,709 |
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Inventories |
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297,664 |
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213,343 |
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223,144 |
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Prepaid expenses |
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16,110 |
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15,524 |
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13,858 |
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Deferred tax assets |
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16,171 |
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9,294 |
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8,547 |
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Total current assets |
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531,143 |
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400,587 |
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406,400 |
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Investments in marketable securities |
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751 |
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1,661 |
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1,545 |
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Notes receivable, net |
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22,353 |
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26,554 |
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28,953 |
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Property, plant and equipment: |
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Land |
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19,423 |
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21,289 |
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22,146 |
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Buildings and improvements |
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192,545 |
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155,906 |
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156,675 |
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Furniture, fixtures and equipment |
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313,828 |
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300,432 |
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312,848 |
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Leasehold improvements |
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69,698 |
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71,907 |
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71,499 |
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Construction in progress |
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2,008 |
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1,784 |
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2,269 |
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Assets under capitalized leases |
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40,171 |
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40,171 |
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41,060 |
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637,673 |
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591,489 |
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606,497 |
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Less accumulated depreciation and amortization |
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(391,708 |
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(377,820 |
) |
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(386,440 |
) |
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Net property, plant and equipment |
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245,965 |
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213,669 |
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220,057 |
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Goodwill |
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244,582 |
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147,435 |
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147,575 |
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Customer contracts & relationships |
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36,705 |
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4,059 |
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4,379 |
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Investment in direct financing leases |
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10,173 |
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10,876 |
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11,093 |
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Deferred tax asset, net |
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2,560 |
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Other assets |
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13,532 |
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8,227 |
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7,403 |
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Total assets |
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$ |
1,105,204 |
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815,628 |
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827,405 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Outstanding checks |
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$ |
12,390 |
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11,344 |
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9,062 |
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Current maturities of long-term debt and
capitalized lease obligations |
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4,337 |
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5,440 |
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5,208 |
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Accounts payable |
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246,673 |
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180,359 |
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196,804 |
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Accrued expenses |
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79,602 |
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72,200 |
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87,883 |
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Income taxes payable |
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7,601 |
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10,819 |
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8,591 |
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Total current liabilities |
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350,603 |
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280,162 |
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307,548 |
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Long-term debt |
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381,617 |
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199,243 |
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198,719 |
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Capitalized lease obligations |
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38,170 |
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40,360 |
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41,062 |
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Deferred tax liability, net |
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3,436 |
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|
879 |
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Other liabilities |
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21,067 |
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21,935 |
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17,527 |
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Commitments and contingencies |
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Stockholders equity: |
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Preferred stock no par value. Authorized 500 shares; none issued |
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Common stock $1.66 2/3 par value. Authorized 50,000 shares,
issued 13,208, 12,657 and 12,419 shares, respectively |
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22,014 |
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21,096 |
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20,699 |
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Additional paid-in capital |
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46,891 |
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34,848 |
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32,067 |
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Restricted stock |
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(109 |
) |
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(224 |
) |
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(277 |
) |
Common stock held in trust |
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(1,838 |
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(1,652 |
) |
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Deferred compensation obligations |
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|
1,838 |
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|
1,652 |
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Accumulated other comprehensive income |
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(3,325 |
) |
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(5,262 |
) |
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(4,745 |
) |
Retained earnings |
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|
245,046 |
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223,676 |
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|
214,123 |
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|
310,517 |
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274,134 |
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261,867 |
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Less cost of 11, 11 and 10 shares of common
stock in treasury, respectively |
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(206 |
) |
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(206 |
) |
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(197 |
) |
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Total stockholders equity |
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310,311 |
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273,928 |
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261,670 |
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Total liabilities and stockholders equity |
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$ |
1,105,204 |
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815,628 |
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827,405 |
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See accompanying notes to consolidated financial statements.
4
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(In thousands)
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Forty Weeks Ended |
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October 8, |
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October 9, |
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2005 |
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2004 |
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Operating activities: |
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Net earnings |
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$ |
27,756 |
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|
3,690 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Special charge |
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(1,296 |
) |
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|
36,494 |
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Depreciation and amortization |
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|
33,345 |
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|
31,571 |
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Amortization of deferred financing costs |
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|
865 |
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|
886 |
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Amortization of rebatable loans |
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|
2,257 |
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|
2,275 |
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Provision for bad debts |
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|
1,149 |
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|
2,645 |
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Deferred income tax |
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(881 |
) |
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(8,300 |
) |
Gain on sale of property and equipment |
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(1,865 |
) |
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(3,960 |
) |
LIFO charge |
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|
1,176 |
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|
|
2,218 |
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Asset impairments |
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|
4,319 |
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Other |
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|
2,980 |
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|
1,773 |
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Changes in operating assets and liabilities, net of effects of acquisitions |
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Accounts and notes receivable |
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|
(10,035 |
) |
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|
(15,273 |
) |
Inventories |
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|
(40,288 |
) |
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|
10,927 |
|
Prepaid expenses |
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|
(328 |
) |
|
|
1,278 |
|
Accounts payable |
|
|
28,525 |
|
|
|
30,062 |
|
Accrued expenses |
|
|
3,963 |
|
|
|
(4,241 |
) |
Income taxes payable |
|
|
(3,218 |
) |
|
|
(2,023 |
) |
Other assets and liabilities |
|
|
(1,629 |
) |
|
|
5,293 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
46,795 |
|
|
|
95,315 |
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|
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Investing activities: |
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|
|
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Disposal of property, plant and equipment |
|
|
11,033 |
|
|
|
10,940 |
|
Additions to property, plant and equipment |
|
|
(15,930 |
) |
|
|
(14,748 |
) |
Business acquired, net of cash |
|
|
(226,351 |
) |
|
|
|
|
Loans to customers |
|
|
(1,570 |
) |
|
|
(3,113 |
) |
Payments from customers on loans |
|
|
3,760 |
|
|
|
2,504 |
|
Purchase of marketable securities |
|
|
(2,064 |
) |
|
|
(2,583 |
) |
Sale of marketable securities |
|
|
2,827 |
|
|
|
1,113 |
|
Corporate owned life insurance, net |
|
|
(1,498 |
) |
|
|
|
|
Other |
|
|
148 |
|
|
|
(55 |
) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(229,645 |
) |
|
|
(5,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds (payments) of revolving debt |
|
|
38,200 |
|
|
|
(81,100 |
) |
Dividends paid |
|
|
(6,387 |
) |
|
|
(4,985 |
) |
Proceeds from exercise of stock options |
|
|
9,521 |
|
|
|
2,888 |
|
Proceeds from employee stock purchase plan |
|
|
567 |
|
|
|
654 |
|
Proceeds from long-term debt |
|
|
150,087 |
|
|
|
|
|
Payments of long-term debt |
|
|
(7,176 |
) |
|
|
(2,220 |
) |
Payments of capitalized lease obligations |
|
|
(2,031 |
) |
|
|
(1,937 |
) |
Decrease in outstanding checks |
|
|
1,046 |
|
|
|
(14,288 |
) |
Payments of deferred finance costs |
|
|
(4,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) by financing activities |
|
|
178,885 |
|
|
|
(100,988 |
) |
|
|
|
|
|
|
|
Net decrease in cash |
|
|
(3,965 |
) |
|
|
(11,615 |
) |
Cash at beginning of period |
|
|
5,029 |
|
|
|
12,757 |
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
1,064 |
|
|
|
1,142 |
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
5
Nash Finch Company and Subsidiaries
Notes to Consolidated Financial Statements
October 8, 2005
Note 1 Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information. Accordingly, they
do not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to the consolidated
financial statements and footnotes included in the Companys Annual Report on Form 10-K for the
year ended January 1, 2005.
The accompanying financial statements include all adjustments which are, in the opinion of
management, necessary to present fairly the financial position of the Company and its subsidiaries
at October 8, 2005, January 1, 2005 and October 9, 2004, and the results of operations for the
sixteen and forty weeks ended October 8, 2005 and October 9, 2004 and changes in cash flows for the
forty weeks ended October 8, 2005 and October 9, 2004. All material intercompany accounts and
transactions have been eliminated in the unaudited consolidated financial statements. Results of
operations for the interim periods presented are not necessarily indicative of the results to be
expected for the full year.
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results could differ from those
estimates.
Certain reclassifications between selling, general and administrative and interest expenses
have been reflected in the consolidated statements of income for the sixteen and forty weeks ended
October 8, 2005 and October 9, 2004. Certain reclassifications were made between customer
contracts & relationships and other assets as of October 9, 2004. These reclassifications did not
have an impact on operating earnings, earnings before income taxes, net earnings, total cash flows
or the financial position for any period.
Note 2 Acquisition
On March 31, 2005, Nash Finch completed the purchase of the wholesale food and non-food
distribution business conducted by Roundys Supermarkets, Inc. (Roundys) out of two distribution
centers located in Lima, Ohio and Westville, Indiana, the retail grocery business conducted by
Roundys from stores in Ironton, Ohio and Van Wert, Ohio, and Roundys general merchandise and
health and beauty care products distribution business involving the customers of the two purchased
distribution centers (the Business). Nash Finch also assumed certain trade payables and accrued
expenses associated with the assets being acquired, but did not assume any indebtedness in
connection with the acquisition. The aggregate purchase price paid was $225.7 million in cash, and
is subject to customary post-closing adjustments based upon changes in the net assets of the
Business. Nash Finch financed the acquisition by using cash on hand, $70.0 million of borrowings
under its senior secured credit facility, and proceeds from the private placement of $150.1 million
in aggregate issue price (or $322 million aggregate principal amount at maturity) of senior
subordinated convertible notes due 2035, the borrowings and the sale of notes referred to as the
financing transactions.
6
Under business combination accounting, the total purchase price will be allocated to the net
tangible assets and identifiable intangible assets of the Business based on their estimated fair
values. The excess of the purchase price over the net tangible assets and identifiable intangible
assets will be recorded as goodwill. Based upon a preliminary valuation, the total preliminary
purchase price was allocated as follows (in thousands):
|
|
|
|
|
Total current assets |
|
$ |
77,529 |
|
Notes receivable, net |
|
|
1,134 |
|
Net property, plant & equipment |
|
|
59,016 |
|
Customer contracts & relationships |
|
|
34,600 |
|
Goodwill |
|
|
98,013 |
|
Liabilities |
|
|
(44,577 |
) |
|
|
|
|
Total preliminary purchase price allocation |
|
$ |
225,715 |
|
|
|
|
|
The foregoing allocation of the purchase price is preliminary and is subject to change.
Pro forma financial information
The unaudited pro forma financial information in the table below combines the historical
results for Nash Finch and the historical results for the Business for the sixteen and forty week
periods ended October 8, 2005 and October 9, 2004, after giving effect to the acquisition by Nash
Finch of the Business and the financing transactions described above as of the beginning of each of
the periods presented. This pro forma financial information is provided for illustrative purposes
only and does not purport to be indicative of the actual results that would have been achieved by
the combined operations for the periods presented or that will be achieved by the combined
operations in the future.
The following pro forma combined results of operations do not include any cost savings that may
result from the combination of the Company and the Business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sixteen Weeks Ended |
|
Forty Weeks Ended |
|
|
October 8, |
|
October 9, |
|
October 8, |
|
October 9, |
(in thousands, except per share data) |
|
2005 |
|
2004 |
|
2005 |
|
2004 |
Total revenues |
|
$ |
1,464,781 |
|
|
|
1,442,289 |
|
|
|
3,637,166 |
|
|
|
3,665,594 |
|
Net income |
|
|
11,041 |
|
|
|
15,970 |
|
|
|
29,659 |
|
|
|
7,586 |
|
Basic net income per share |
|
|
0.85 |
|
|
|
1.28 |
|
|
|
2.31 |
|
|
|
0.61 |
|
Diluted net income per share |
|
|
0.83 |
|
|
|
1.26 |
|
|
|
2.26 |
|
|
|
0.60 |
|
Note 3 Inventories
The Company uses the LIFO method for valuation of a substantial portion of inventories. An
actual valuation of inventory under the LIFO method can be made only at the end of each year based
on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must
necessarily be based on managements estimates of expected year-end inventory levels and costs.
Because these are subject to many factors beyond managements control, interim results are subject
to the final year-end LIFO inventory valuation. If the FIFO method had been used, inventories would
have been approximately $49.1 million, $47.9 million and $46.6 million higher at October 8, 2005,
January 1, 2005 and October 9, 2004, respectively. For the sixteen and forty weeks ended October
8, 2005 the Company recorded LIFO (credits) charges of $(0.2) million and $1.2 million,
respectively, compared to $1.0 million and $2.2 million, respectively, for the sixteen and forty
weeks ended October 9, 2004.
7
Note 4 Stock Option Plans
As permitted by the provisions of Statement of Financial Accounting Standard (SFAS) No. 123,
"Accounting for Stock-Based Compensation, the Company has chosen to continue to apply Accounting
Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees and related
interpretations in accounting for its stock-based compensation. As a result, the Company does not
recognize compensation costs if the option price equals or exceeds the market price at the date of
grant. The following table illustrates the effect on net income and earnings per share for the
sixteen and forty weeks ended October 8, 2005 and October 9, 2004 if the Company had applied the
fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to
stock-based employee compensation (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sixteen Weeks Ended |
|
|
Forty Weeks Ended |
|
|
|
October 8, |
|
|
October 9, |
|
|
October 8, |
|
|
October 9, |
|
|
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Reported net earnings |
|
$ |
11,041 |
|
|
|
14,598 |
|
|
|
27,756 |
|
|
|
3,690 |
|
Add: stock-based compensation expense
from restricted stock plan and long term
incentive plan included in net earnings |
|
|
162 |
|
|
|
70 |
|
|
|
740 |
|
|
|
198 |
|
Deduct: stock-based compensation expense
from restricted stock plan and long term
incentive plan under fair value method,
net of tax |
|
|
(151 |
) |
|
|
(70 |
) |
|
|
(713 |
) |
|
|
(198 |
) |
Deduct: total stock-based employee
compensation expense determined under
fair value method for all option
awards, net of tax |
|
|
(127 |
) |
|
|
(364 |
) |
|
|
(475 |
) |
|
|
(790 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings |
|
$ |
10,925 |
|
|
|
14,234 |
|
|
|
27,308 |
|
|
|
2,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported basic earnings per share |
|
$ |
0.85 |
|
|
|
1.17 |
|
|
|
2.16 |
|
|
|
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic earnings per share |
|
$ |
0.84 |
|
|
|
1.14 |
|
|
|
2.13 |
|
|
|
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted earnings per share |
|
$ |
0.83 |
|
|
|
1.15 |
|
|
|
2.12 |
|
|
|
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
$ |
0.83 |
|
|
|
1.12 |
|
|
|
2.08 |
|
|
|
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 5 Other Comprehensive Income
Comprehensive income is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sixteen Weeks Ended |
|
|
Forty Weeks Ended |
|
|
|
October 8, |
|
|
October 9, |
|
|
October 8, |
|
|
October 9, |
|
|
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Net earnings |
|
$ |
11,041 |
|
|
|
14,598 |
|
|
|
27,756 |
|
|
|
3,690 |
|
Change in fair value of available-for-sale
securities, net of tax |
|
|
(2 |
) |
|
|
33 |
|
|
|
(89 |
) |
|
|
33 |
|
Change in fair value of derivative, net of
tax |
|
|
525 |
|
|
|
450 |
|
|
|
2,026 |
|
|
|
1,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
11,564 |
|
|
|
15,081 |
|
|
|
29,693 |
|
|
|
4,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
During 2005 and 2004, other comprehensive income consisted of market value adjustments to
reflect available-for-sale securities and derivative instruments at fair value, pursuant to SFAS
Nos. 115 and 133, respectively. As of October 8, 2005 all derivatives are designated as cash flow
hedges for interest and fuel rates. All investments in available-for-sale securities held by the
Company are amounts held in a rabbi trust in connection with the deferred compensation arrangement
described below.
Rabbi Trust
The Company offers deferred compensation arrangements, which allow certain employees,
officers, and directors to defer a portion of their earnings. The deferred compensation funds are
invested in a rabbi trust. The rabbi trust is accounted for in accordance with Emerging Issues Task
Force Issue No. 97-14, Accounting for Deferred Compensation Arrangements Where Amounts Earned are
Held in a Rabbi Trust and Invested. A rabbi trust is a funding vehicle used to protect deferred
compensation benefits from events other than bankruptcy, such as a change in control or a shortage
of cash flow. The investment in the rabbi trust is classified as an investment in
available-for-sale securities included in other assets on the consolidated balance sheet.
Corporate Owned Life Insurance (COLI)
During the first fiscal quarter of 2005, the Company sold securities held in the rabbi trust
and purchased life insurance policies to fund its obligations under deferred compensation
arrangements for certain employees, officers and directors. The cash surrender value of these
policies is included in other long-term assets on the consolidated balance sheet.
Note 6 Long-term Debt and Bank Credit Facilities
On February 22, 2005, the Company entered into a First Amendment to its Credit Agreement,
dated as of November 12, 2004, with the lenders party to that Credit Agreement and Deutsche Bank
Trust Company Americas, as Administrative Agent. Subject to the terms and conditions therein, the
First Amendment generally amended the Credit Agreement so as to permit the Company to enter into an
Asset Purchase Agreement to acquire certain distribution centers and other assets from Roundys and
to close and finance that acquisition, as described in Note 2 above.
To finance a portion of this acquisition the Company sold $150.1 million in aggregate issue
price (or $322 million aggregate principal amount at maturity) of senior subordinated convertible
notes due 2035 in a private placement pursuant to Rule 144A under the Securities Act of 1933, as
amended. The placement was completed on March 15, 2005.
The notes are the Companys unsecured senior subordinated obligations and rank junior to the
Companys existing and future senior indebtedness, including borrowings under its senior secured
credit facility.
9
Cash interest at the rate of 3.50% per year is payable semi-annually on the issue price of the
notes until March 15, 2013. After that date, cash interest will not be payable, unless contingent
cash interest becomes payable, and original issue discount for non-tax purposes will accrue on the
notes at a daily rate of 3.50% per year beginning on March 15, 2013 until the maturity date of the
notes. On the maturity date of the notes, a holder will receive $1,000 per note. Contingent cash
interest will be paid on the notes during any six-month period, commencing March 16, 2013, if the
average market price of a note for a ten trading day measurement period preceding the applicable
six-month period equals 130% or more of the accreted principal amount of the note, plus accrued
cash interest, if any. The contingent cash interest payable with respect to any six-month period
will equal an annual rate of 0.25% of the average market price of the note for the ten trading day
measurement period described above.
The notes will be convertible at the option of the holder, only upon the occurrence of certain
events, at an initial conversion rate of 9.312 shares of the Companys common stock per $1,000
principal amount at maturity of notes (equal to an initial conversion price of approximately $50.05
per share). Upon conversion, the Company will pay the holder the conversion value in cash up to
the accreted principal amount of the note and the excess conversion value, if any, in cash, stock
or both, at the Companys option.
The Company may redeem all or a portion of the notes for cash at any time on or after the
eighth anniversary of the issuance of the notes. Holders may require the Company to purchase for
cash all or a portion of their notes on the 8th, 10th, 15th,
20th and 25th anniversaries of the issuance of the notes. In addition, upon
specified change in control events, each holder will have the option, subject to certain
limitations, to require the Company to purchase for cash all or any portion of such holders notes.
In connection with the closing of the sale of the notes, the Company entered into a
registration rights agreement with the initial purchasers of the notes. In accordance with that
agreement, the Company filed with the Securities and Exchange Commission on July 13, 2005 a shelf
registration statement covering resales by security holders of the notes and the common stock
issuable upon conversion of the notes. The shelf registration statement was declared effective by
the Securities and Exchange Commission on October 5, 2005.
Note 7 Special Charge
During the second quarter of 2004, the Company completed a strategic review that identified
certain retail stores that did not meet return objectives, provide long-term strategic
opportunities or justify additional capital investments. Consequently, the Company closed or sold
18 stores and sought purchasers for its three Denver area AVANZA® stores. As a result of these
actions, the Company recorded a pre-tax special charge of $36.5 million which was reflected in the
Special charge line within the consolidated statements of income, and $3.3 million of costs
reflected in operating earnings, primarily involving inventory markdowns related to the store
closures. During the fourth fiscal quarter of 2004, the Company recorded a net reversal of $1.6
million of the special charge because the Company was able to settle five leases for less than
initially estimated and adjusted the estimate needed on four other properties for which more
current market information was available.
During the second fiscal quarter of 2005, the Company decided to continue to operate the three
Denver AVANZA stores and therefore recorded a reversal of $1.5 million of the special charge
related to the stores, partially offset by a $0.2 million change in estimate for one other
property.
10
Following is a summary of the activity in the 2004 reserve established for store dispositions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write- |
|
|
Write- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Down of |
|
|
Down of |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
Tangible |
|
|
Intangible |
|
|
Lease |
|
|
|
|
|
|
Exit |
|
|
|
|
|
|
Assets |
|
|
Assets |
|
|
Commitments |
|
|
Severance |
|
|
Costs |
|
|
Total |
|
Initial accrual |
|
$ |
20,596 |
|
|
|
1,072 |
|
|
|
14,129 |
|
|
|
109 |
|
|
|
588 |
|
|
|
36,494 |
|
Change in estimates |
|
|
889 |
|
|
|
|
|
|
|
(2,493 |
) |
|
|
(23 |
) |
|
|
|
|
|
|
(1,627 |
) |
Used in 2004 |
|
|
(21,485 |
) |
|
|
(1,072 |
) |
|
|
(2,162 |
) |
|
|
(86 |
) |
|
|
(361 |
) |
|
|
(25,166 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 1, 2005 |
|
|
|
|
|
|
|
|
|
|
9,474 |
|
|
|
|
|
|
|
227 |
|
|
|
9,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in estimates |
|
|
(1,531 |
) |
|
|
|
|
|
|
235 |
|
|
|
|
|
|
|
|
|
|
|
(1,296 |
) |
Used in 2005 |
|
|
1,531 |
|
|
|
|
|
|
|
(1,719 |
) |
|
|
|
|
|
|
(32 |
) |
|
|
(220 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance October 8, 2005 |
|
$ |
|
|
|
|
|
|
|
|
7,990 |
|
|
|
|
|
|
|
195 |
|
|
|
8,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of October 8, 2005, the Company believes the remaining reserves are adequate.
Note 8 Recently Adopted and Issued Accounting Standards
In December 2004,
the FASB issued SFAS No. 123(R) (Revised 2004), Share-Based Payment.
The revisions to SFAS No 123 require compensation costs related to share-based payment transactions
to be recognized in the financial statements. With limited exceptions, the amount of compensation
cost will be measured based on the grant-date fair value of the equity or liability instruments
issued. In addition, liability awards will be re-measured each reporting period. Compensation
cost will be recognized over the period that an employee provides service in exchange for the
award. SFAS 123(R) replaces SFAS No. 123, Accounting for Stock Based
Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. For
public entities, the provisions of the statement are effective as of the beginning of the first
annual reporting period that begins after June 15, 2005, however early adoption is allowed. The
Company expects to adopt the provisions of the new statement in the first quarter of fiscal 2006
and does not expect the impact on net income on a full year basis will be significantly different
from the historical pro forma impacts as previously disclosed in the Stock Option Plans policy
description in Part II, Item 8 in the Companys Form 10-K for the fiscal year ended January 1, 2005
under Note (1) Summary of Significant Accounting Policies, and under Note 4 discussed above.
On March 29, 2005 the SEC issued Staff Accounting Bulletin (SAB) 107 to provide guidance in
applying the provisions of SFAS No. 123(R). The SAB describes SEC expectations in
determining assumptions that underlie the fair value estimates. The provisions of the SAB are not
expected to result in significant differences between compensation expense recognized upon adoption
of SFAS 123(R) and the pro forma impacts as previously disclosed in the Stock Option Plans policy
description in Part II, Item 8 in the Companys Form 10-K for the fiscal year ended January 1, 2005
under Note (1) Summary of Significant Accounting Policies, and under Note 4 discussed above.
11
Note 9 Segment Reporting
A summary of the major segments of the business is as follows:
(In thousands)
Sixteen weeks ended October 8, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food |
|
|
|
|
|
|
|
|
Distribution |
|
Military |
|
Retail |
|
Totals |
|
|
|
Revenue from external customers |
|
$ |
886,322 |
|
|
|
353,488 |
|
|
|
224,971 |
|
|
|
1,464,781 |
|
Inter-segment revenue |
|
|
114,439 |
|
|
|
|
|
|
|
|
|
|
|
114,439 |
|
Segment profit |
|
|
29,302 |
|
|
|
11,644 |
|
|
|
7,043 |
|
|
|
47,989 |
|
Sixteen weeks ended October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food |
|
|
|
|
|
|
|
|
Distribution |
|
Military |
|
Retail |
|
Totals |
|
|
|
Revenue from external customers |
|
$ |
610,850 |
|
|
|
338,495 |
|
|
|
241,842 |
|
|
|
1,191,187 |
|
Inter-segment revenue |
|
|
121,995 |
|
|
|
|
|
|
|
|
|
|
|
121,995 |
|
Segment profit |
|
|
22,666 |
|
|
|
10,806 |
|
|
|
10,802 |
|
|
|
44,274 |
|
Forty weeks ended October 8, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food |
|
|
|
|
|
|
|
|
Distribution |
|
Military |
|
Retail |
|
Totals |
|
|
|
Revenue from external customers |
|
$ |
1,984,425 |
|
|
|
884,778 |
|
|
|
563,068 |
|
|
|
3,432,271 |
|
Inter-segment revenue |
|
|
288,478 |
|
|
|
|
|
|
|
|
|
|
|
288,478 |
|
Segment profit |
|
|
66,217 |
|
|
|
30,006 |
|
|
|
18,683 |
|
|
|
114,906 |
|
Forty weeks ended October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food |
|
|
|
|
|
|
|
|
Distribution |
|
Military |
|
Retail |
|
Totals |
|
|
|
Revenue from external customers |
|
$ |
1,491,173 |
|
|
|
847,361 |
|
|
|
638,500 |
|
|
|
2,977,034 |
|
Inter-segment revenue |
|
|
319,263 |
|
|
|
|
|
|
|
|
|
|
|
319,263 |
|
Segment profit |
|
|
54,857 |
|
|
|
27,628 |
|
|
|
17,227 |
|
|
|
99,712 |
|
12
Reconciliation to statements of operations:
(In thousands)
Sixteen weeks ended October 8, 2005 and October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2004 |
|
Profit and loss |
|
|
|
|
|
|
|
|
Total profit for segments |
|
$ |
47,989 |
|
|
|
44,274 |
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
Adjustment of inventory to LIFO |
|
|
229 |
|
|
|
(1,043 |
) |
Unallocated corporate overhead |
|
|
(30,118 |
) |
|
|
(20,611 |
) |
Special charge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
$ |
18,100 |
|
|
|
22,620 |
|
|
|
|
|
|
|
|
Forty weeks ended October 8, 2005 and October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2004 |
|
Profit and loss |
|
|
|
|
|
|
|
|
Total profit for segments |
|
$ |
114,906 |
|
|
|
99,712 |
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
Adjustment of inventory to LIFO |
|
|
(1,176 |
) |
|
|
(2,218 |
) |
Unallocated corporate overhead |
|
|
(69,524 |
) |
|
|
(56,262 |
) |
Special charge |
|
|
1,296 |
|
|
|
(36,494 |
) |
|
|
|
|
|
|
|
Earnings before income taxes |
|
$ |
45,502 |
|
|
|
4,738 |
|
|
|
|
|
|
|
|
Note 10 Guarantees
In November 2002, the FASB issued Interpretation No. 45, Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,
(FIN 45). FIN 45 elaborates on the existing disclosure requirements for most guarantees, including
residual value guarantees issued in conjunction with operating lease agreements. It also clarifies
that at the time a company issues a guarantee, the company must recognize an initial liability for
the fair value of the obligation it assumes under that guarantee and must disclose that information
in its interim and annual financial statements. The initial recognition and measurement provisions
apply on a prospective basis to guarantees issued or modified after December 31, 2002.
The Company has guaranteed the debt and lease obligations of certain of its food distribution
customers. In the event these retailers are unable to meet their debt service payments or
otherwise experience an event of default, the Company would be unconditionally liable for the
outstanding balance of their debt and lease obligations ($9.4 million as of October 8, 2005), which
would be due in accordance with the underlying agreements. All of the guarantees were issued prior
to December 31, 2002 and therefore were not subject to the recognition and measurement provisions
of FIN 45.
The Company has also assigned various leases to other entities. If the assignees were to
become unable to continue making payments under the assigned leases, the Company estimates its
maximum potential obligation with respect to the assigned leases to be $23.5 million as of October
8, 2005.
13
Note 11 Pension and Other Post-Retirement Benefits
The following tables present the components of the Companys pension and postretirement net
periodic benefit cost for the sixteen and forty weeks ended October 8, 2005 and October 9, 2004 (in
thousands):
Sixteen Weeks Ended October 8, 2005 and October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Service cost |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost |
|
|
577 |
|
|
|
594 |
|
|
|
49 |
|
|
|
71 |
|
Expected return on plan assets |
|
|
(528 |
) |
|
|
(539 |
) |
|
|
|
|
|
|
|
|
Amortization of prior service cost |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
Recognized actuarial loss |
|
|
49 |
|
|
|
41 |
|
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
94 |
|
|
|
92 |
|
|
|
42 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forty Weeks Ended October 8, 2005 and October 9, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Service cost |
|
$ |
|
|
|
|
1 |
|
|
|
|
|
|
|
4 |
|
Interest cost |
|
|
1,732 |
|
|
|
1,782 |
|
|
|
147 |
|
|
|
223 |
|
Expected return on plan assets |
|
|
(1,583 |
) |
|
|
(1,617 |
) |
|
|
|
|
|
|
|
|
Amortization of prior service cost |
|
|
(11 |
) |
|
|
(11 |
) |
|
|
(22 |
) |
|
|
(23 |
) |
Recognized actuarial loss |
|
|
149 |
|
|
|
122 |
|
|
|
|
|
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
287 |
|
|
|
277 |
|
|
|
125 |
|
|
|
259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average assumptions used to determine net periodic benefit cost for the sixteen
and forty weeks ending October 8, 2005 and October 9, 2004 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
Weighted-average assumptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate |
|
|
6.00 |
% |
|
|
6.25 |
% |
|
|
6.00 |
% |
|
|
6.25 |
% |
Expected return on plan assets |
|
|
7.50 |
% |
|
|
7.50 |
% |
|
|
|
|
|
|
|
|
Rate of compensation increase |
|
|
4.00 |
% |
|
|
4.00 |
% |
|
|
|
|
|
|
|
|
Total contributions to the Companys pension plan in 2005 are expected to be $0.
In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003
(the Act) became law in the United States. The Act introduces a prescription drug benefit under
Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide
a benefit that is at least actuarially equivalent to Medicare. The benefit and subsidy introduced
by the Act begin in 2006. In May 2004, the FASB issued FASB Staff Position (FSP) No. 106-2,
Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003. FSP 106-2 requires an employer to initially account for any subsidy
received under the Act as an actuarial experience gain to the accumulated postretirement benefit
obligation, which would be amortized over future service periods. Future subsidies would reduce
service cost each year. FSP 106-2 was effective for Nash Finch in the third fiscal quarter ended
October 9, 2004. Nash Finch believes that its postretirement benefit plan is not actuarially
equivalent to Medicare Part D under the Act and consequently will not receive significant subsidies
under the Act.
14
Note 12 Subsidiary Guarantees
The following table presents summarized combined financial information for certain wholly
owned Company subsidiaries which guarantee on a full unconditional and joint and several basis
borrowings under the Companys $300 million senior secured credit facility.
The guarantor subsidiaries are 100% owned subsidiaries of the Company. Condensed
consolidating financial information for the Company and its guarantor subsidiaries is as follows:
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidating Statements of Income
Sixteen Weeks Ended October 8, 2005
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Sales |
|
$ |
967,022 |
|
|
|
533,353 |
|
|
|
7,517 |
|
|
|
(43,111 |
) |
|
|
1,464,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
879,570 |
|
|
|
490,534 |
|
|
|
5,843 |
|
|
|
(43,111 |
) |
|
|
1,332,836 |
|
Selling, general and administrative |
|
|
55,827 |
|
|
|
34,296 |
|
|
|
1,446 |
|
|
|
|
|
|
|
91,569 |
|
Depreciation and amortization |
|
|
8,654 |
|
|
|
5,622 |
|
|
|
81 |
|
|
|
|
|
|
|
14,357 |
|
Equity in consolidated subsidiaries |
|
|
(619 |
) |
|
|
|
|
|
|
|
|
|
|
619 |
|
|
|
|
|
Interest expense |
|
|
5,886 |
|
|
|
2,036 |
|
|
|
(3 |
) |
|
|
|
|
|
|
7,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost and expenses |
|
|
949,318 |
|
|
|
532,488 |
|
|
|
7,367 |
|
|
|
(42,492 |
) |
|
|
1,446,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
income taxes |
|
|
17,704 |
|
|
|
865 |
|
|
|
150 |
|
|
|
(619 |
) |
|
|
18,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
6,663 |
|
|
|
396 |
|
|
|
|
|
|
|
|
|
|
|
7,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
11,041 |
|
|
|
469 |
|
|
|
150 |
|
|
|
(619 |
) |
|
|
11,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidating Statements of Income
Forty Weeks Ended October 8, 2005
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Sales |
|
$ |
2,388,003 |
|
|
|
1,134,798 |
|
|
|
18,837 |
|
|
|
(109,367 |
) |
|
|
3,432,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,163,252 |
|
|
|
1,037,263 |
|
|
|
14,432 |
|
|
|
(109,367 |
) |
|
|
3,105,580 |
|
Selling, general and administrative |
|
|
147,428 |
|
|
|
79,386 |
|
|
|
3,642 |
|
|
|
|
|
|
|
230,456 |
|
Special charge |
|
|
(1,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,296 |
) |
Depreciation and amortization |
|
|
21,291 |
|
|
|
11,857 |
|
|
|
197 |
|
|
|
|
|
|
|
33,345 |
|
Equity in consolidated subsidiaries |
|
|
(1,675 |
) |
|
|
|
|
|
|
|
|
|
|
1,675 |
|
|
|
|
|
Interest expense |
|
|
14,572 |
|
|
|
4,105 |
|
|
|
7 |
|
|
|
|
|
|
|
18,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost and expenses |
|
|
2,343,572 |
|
|
|
1,132,611 |
|
|
|
18,278 |
|
|
|
(107,692 |
) |
|
|
3,386,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
income taxes |
|
|
44,431 |
|
|
|
2,187 |
|
|
|
559 |
|
|
|
(1,675 |
) |
|
|
45,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
16,675 |
|
|
|
1,071 |
|
|
|
|
|
|
|
|
|
|
|
17,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
27,756 |
|
|
|
1,116 |
|
|
|
559 |
|
|
|
(1,675 |
) |
|
|
27,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidating Statements of Income
Sixteen Weeks Ended October 9, 2004
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Sales |
|
$ |
945,974 |
|
|
|
286,493 |
|
|
|
7,882 |
|
|
|
(49,162 |
) |
|
|
1,191,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
856,510 |
|
|
|
251,909 |
|
|
|
5,928 |
|
|
|
(50,436 |
) |
|
|
1,063,911 |
|
Selling, general and administrative |
|
|
51,477 |
|
|
|
30,373 |
|
|
|
1,488 |
|
|
|
1,274 |
|
|
|
84,612 |
|
Depreciation and amortization |
|
|
5,991 |
|
|
|
5,559 |
|
|
|
65 |
|
|
|
|
|
|
|
11,615 |
|
Equity in consolidated subsidiaries |
|
|
769 |
|
|
|
|
|
|
|
|
|
|
|
(769 |
) |
|
|
|
|
Interest expense |
|
|
8,046 |
|
|
|
372 |
|
|
|
11 |
|
|
|
|
|
|
|
8,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost and expenses |
|
|
922,793 |
|
|
|
288,213 |
|
|
|
7,492 |
|
|
|
(49,931 |
) |
|
|
1,168,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
income taxes |
|
|
23,181 |
|
|
|
(1,720 |
) |
|
|
390 |
|
|
|
769 |
|
|
|
22,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
8,583 |
|
|
|
(561 |
) |
|
|
|
|
|
|
|
|
|
|
8,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
14,598 |
|
|
|
(1,159 |
) |
|
|
390 |
|
|
|
769 |
|
|
|
14,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidating Statements of Income
Forty Weeks Ended October 9, 2004
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Sales |
|
$ |
2,360,490 |
|
|
|
722,611 |
|
|
|
19,664 |
|
|
|
(125,731 |
) |
|
|
2,977,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,126,700 |
|
|
|
638,007 |
|
|
|
14,744 |
|
|
|
(127,005 |
) |
|
|
2,652,446 |
|
Selling, general and administrative |
|
|
148,076 |
|
|
|
76,852 |
|
|
|
3,771 |
|
|
|
1,274 |
|
|
|
229,973 |
|
Special charge |
|
|
36,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,494 |
|
Depreciation and amortization |
|
|
21,252 |
|
|
|
10,152 |
|
|
|
167 |
|
|
|
|
|
|
|
31,571 |
|
Equity in consolidated subsidiaries |
|
|
1,588 |
|
|
|
|
|
|
|
|
|
|
|
(1,588 |
) |
|
|
|
|
Interest expense |
|
|
20,734 |
|
|
|
1,046 |
|
|
|
32 |
|
|
|
|
|
|
|
21,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost and expenses |
|
|
2,354,844 |
|
|
|
726,057 |
|
|
|
18,714 |
|
|
|
(127,319 |
) |
|
|
2,972,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
|
|
5,646 |
|
|
|
(3,446 |
) |
|
|
950 |
|
|
|
1,588 |
|
|
|
4,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
1,956 |
|
|
|
(908 |
) |
|
|
|
|
|
|
|
|
|
|
1,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
3,690 |
|
|
|
(2,538 |
) |
|
|
950 |
|
|
|
1,588 |
|
|
|
3,690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
NASH FINCH COMPANY AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
October 8, 2005
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
620 |
|
|
|
404 |
|
|
|
40 |
|
|
|
|
|
|
|
1,064 |
|
Accounts and notes receivable,
net |
|
|
137,286 |
|
|
|
64,531 |
|
|
|
143 |
|
|
|
(1,826 |
) |
|
|
200,134 |
|
Accounts receivable (payable) subsidiaries |
|
|
121,815 |
|
|
|
(123,159 |
) |
|
|
1,344 |
|
|
|
|
|
|
|
|
|
Inventories |
|
|
152,233 |
|
|
|
143,520 |
|
|
|
1,911 |
|
|
|
|
|
|
|
297,664 |
|
Prepaid expenses |
|
|
14,396 |
|
|
|
1,697 |
|
|
|
17 |
|
|
|
|
|
|
|
16,110 |
|
Deferred tax assets |
|
|
20,036 |
|
|
|
(3,865 |
) |
|
|
|
|
|
|
|
|
|
|
16,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
446,386 |
|
|
|
83,128 |
|
|
|
3,455 |
|
|
|
(1,826 |
) |
|
|
531,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in affiliates |
|
|
200,619 |
|
|
|
|
|
|
|
|
|
|
|
(200,619 |
) |
|
|
|
|
Investments in marketable securities |
|
|
751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
751 |
|
Notes receivable, net |
|
|
14,591 |
|
|
|
7,762 |
|
|
|
|
|
|
|
|
|
|
|
22,353 |
|
|
Net property, plant and equipment |
|
|
120,862 |
|
|
|
123,785 |
|
|
|
1,318 |
|
|
|
|
|
|
|
245,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
30,642 |
|
|
|
211,816 |
|
|
|
2,124 |
|
|
|
|
|
|
|
244,582 |
|
Customer contracts & relationships |
|
|
4,272 |
|
|
|
32,433 |
|
|
|
|
|
|
|
|
|
|
|
36,705 |
|
Investment in direct financing leases |
|
|
2,470 |
|
|
|
7,703 |
|
|
|
|
|
|
|
|
|
|
|
10,173 |
|
Deferred tax assets, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
13,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
834,125 |
|
|
|
466,627 |
|
|
|
6,897 |
|
|
|
(202,445 |
) |
|
|
1,105,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding checks |
|
$ |
12,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,390 |
|
Current maturities of long-term debt and capitalized
lease obligations |
|
|
1,242 |
|
|
|
2,781 |
|
|
|
314 |
|
|
|
|
|
|
|
4,337 |
|
Accounts payable |
|
|
170,732 |
|
|
|
77,323 |
|
|
|
444 |
|
|
|
(1,826 |
) |
|
|
246,673 |
|
Accrued expenses |
|
|
71,237 |
|
|
|
8,074 |
|
|
|
291 |
|
|
|
|
|
|
|
79,602 |
|
Income taxes payable |
|
|
7,611 |
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
7,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
263,212 |
|
|
|
88,168 |
|
|
|
1,049 |
|
|
|
(1,826 |
) |
|
|
350,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
223,962 |
|
|
|
157,544 |
|
|
|
111 |
|
|
|
|
|
|
|
381,617 |
|
Capitalized lease obligations |
|
|
26,167 |
|
|
|
12,003 |
|
|
|
|
|
|
|
|
|
|
|
38,170 |
|
Deferred tax liability, net |
|
|
(7,971 |
) |
|
|
11,407 |
|
|
|
|
|
|
|
|
|
|
|
3,436 |
|
Other liabilities |
|
|
18,444 |
|
|
|
2,119 |
|
|
|
504 |
|
|
|
|
|
|
|
21,067 |
|
Stockholders equity |
|
|
310,311 |
|
|
|
195,386 |
|
|
|
5,233 |
|
|
|
(200,619 |
) |
|
|
310,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders equity |
|
$ |
834,125 |
|
|
|
466,627 |
|
|
|
6,897 |
|
|
|
(202,445 |
) |
|
|
1,105,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
NASH FINCH COMPANY AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
January 1, 2005
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,543 |
|
|
|
162 |
|
|
|
324 |
|
|
|
|
|
|
|
5,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable, net |
|
|
123,431 |
|
|
|
34,354 |
|
|
|
145 |
|
|
|
(533 |
) |
|
|
157,397 |
|
Accounts receivable (payable) subsidiaries |
|
|
43,688 |
|
|
|
(45,827 |
) |
|
|
2,139 |
|
|
|
|
|
|
|
|
|
Inventories |
|
|
135,661 |
|
|
|
75,707 |
|
|
|
1,975 |
|
|
|
|
|
|
|
213,343 |
|
Prepaid expenses |
|
|
14,061 |
|
|
|
1,460 |
|
|
|
3 |
|
|
|
|
|
|
|
15,524 |
|
Deferred tax assets |
|
|
14,749 |
|
|
|
(5,455 |
) |
|
|
|
|
|
|
|
|
|
|
9,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
336,133 |
|
|
|
60,401 |
|
|
|
4,586 |
|
|
|
(533 |
) |
|
|
400,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in affiliates |
|
|
200,619 |
|
|
|
|
|
|
|
|
|
|
|
(200,619 |
) |
|
|
|
|
Investments in marketable securities |
|
|
1,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,661 |
|
Notes receivable, net |
|
|
18,141 |
|
|
|
8,413 |
|
|
|
|
|
|
|
|
|
|
|
26,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net property, plant and equipment |
|
|
135,045 |
|
|
|
77,150 |
|
|
|
1,474 |
|
|
|
|
|
|
|
213,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
30,643 |
|
|
|
114,689 |
|
|
|
2,103 |
|
|
|
|
|
|
|
147,435 |
|
Customer contracts & relationships |
|
|
4,045 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
4,059 |
|
Investment in direct financing leases |
|
|
2,494 |
|
|
|
8,382 |
|
|
|
|
|
|
|
|
|
|
|
10,876 |
|
Deferred tax asset, net |
|
|
12,195 |
|
|
|
(9,635 |
) |
|
|
|
|
|
|
|
|
|
|
2,560 |
|
Other assets |
|
|
8,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
749,203 |
|
|
|
259,414 |
|
|
|
8,163 |
|
|
|
(201,152 |
) |
|
|
815,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding checks |
|
$ |
11,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,344 |
|
Current maturities of long-term debt and capitalized
lease obligations |
|
|
1,858 |
|
|
|
3,113 |
|
|
|
469 |
|
|
|
|
|
|
|
5,440 |
|
Accounts payable |
|
|
146,548 |
|
|
|
33,783 |
|
|
|
561 |
|
|
|
(533 |
) |
|
|
180,359 |
|
Accrued expenses |
|
|
66,913 |
|
|
|
5,029 |
|
|
|
258 |
|
|
|
|
|
|
|
72,200 |
|
Income taxes payable |
|
|
10,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
237,482 |
|
|
|
41,925 |
|
|
|
1,288 |
|
|
|
(533 |
) |
|
|
280,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
190,902 |
|
|
|
8,033 |
|
|
|
308 |
|
|
|
|
|
|
|
199,243 |
|
Capitalized lease obligations |
|
|
27,092 |
|
|
|
13,268 |
|
|
|
|
|
|
|
|
|
|
|
40,360 |
|
Other liabilities |
|
|
19,799 |
|
|
|
1,495 |
|
|
|
641 |
|
|
|
|
|
|
|
21,935 |
|
Stockholders equity |
|
|
273,928 |
|
|
|
194,693 |
|
|
|
5,926 |
|
|
|
(200,619 |
) |
|
|
273,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders equity |
|
$ |
749,203 |
|
|
|
259,414 |
|
|
|
8,163 |
|
|
|
(201,152 |
) |
|
|
815,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
NASH FINCH COMPANY AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
October 9, 2004
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
680 |
|
|
|
419 |
|
|
|
43 |
|
|
|
|
|
|
|
1,142 |
|
Accounts and notes receivable,
Net |
|
|
121,946 |
|
|
|
38,412 |
|
|
|
142 |
|
|
|
(791 |
) |
|
|
159,709 |
|
Accounts receivable (payable) subsidiaries |
|
|
46,115 |
|
|
|
(47,655 |
) |
|
|
1,540 |
|
|
|
|
|
|
|
|
|
Inventories |
|
|
145,581 |
|
|
|
75,707 |
|
|
|
1,856 |
|
|
|
|
|
|
|
223,144 |
|
Prepaid expenses |
|
|
12,743 |
|
|
|
1,108 |
|
|
|
7 |
|
|
|
|
|
|
|
13,858 |
|
Deferred tax assets |
|
|
14,538 |
|
|
|
(5,991 |
) |
|
|
|
|
|
|
|
|
|
|
8,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
341,603 |
|
|
|
62,000 |
|
|
|
3,588 |
|
|
|
(791 |
) |
|
|
406,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in affiliates |
|
|
196,283 |
|
|
|
|
|
|
|
|
|
|
|
(196,283 |
) |
|
|
|
|
Investments in marketable securities |
|
|
1,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,545 |
|
Notes receivable, net |
|
|
22,432 |
|
|
|
6,521 |
|
|
|
|
|
|
|
|
|
|
|
28,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net property, plant and equipment |
|
|
139,262 |
|
|
|
79,380 |
|
|
|
1,415 |
|
|
|
|
|
|
|
220,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
30,643 |
|
|
|
114,829 |
|
|
|
2,103 |
|
|
|
|
|
|
|
147,575 |
|
Customer contracts & relationships |
|
|
4,361 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
4,379 |
|
Investments in direct financing leases |
|
|
2,501 |
|
|
|
8,592 |
|
|
|
|
|
|
|
|
|
|
|
11,093 |
|
Deferred tax assets, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
7,253 |
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
|
7,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
745,883 |
|
|
|
271,490 |
|
|
|
7,106 |
|
|
|
(197,074 |
) |
|
|
827,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding checks |
|
$ |
9,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,062 |
|
Current maturities of long-term debt and capitalized
lease obligations |
|
|
1,713 |
|
|
|
3,026 |
|
|
|
469 |
|
|
|
|
|
|
|
5,208 |
|
Accounts payable |
|
|
158,277 |
|
|
|
38,848 |
|
|
|
470 |
|
|
|
(791 |
) |
|
|
196,804 |
|
Accrued expenses |
|
|
82,640 |
|
|
|
5,039 |
|
|
|
204 |
|
|
|
|
|
|
|
87,883 |
|
Income taxes payable |
|
|
8,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
260,283 |
|
|
|
46,913 |
|
|
|
1,143 |
|
|
|
(791 |
) |
|
|
307,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
189,669 |
|
|
|
8,625 |
|
|
|
425 |
|
|
|
|
|
|
|
198,719 |
|
Capitalized lease obligations |
|
|
27,378 |
|
|
|
13,684 |
|
|
|
|
|
|
|
|
|
|
|
41,062 |
|
Deferred tax liability, net |
|
|
(8,694 |
) |
|
|
9,573 |
|
|
|
|
|
|
|
|
|
|
|
879 |
|
Other liabilities |
|
|
15,577 |
|
|
|
1,486 |
|
|
|
464 |
|
|
|
|
|
|
|
17,527 |
|
Stockholders equity |
|
|
261,670 |
|
|
|
191,209 |
|
|
|
5,074 |
|
|
|
(196,283 |
) |
|
|
261,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders equity |
|
$ |
745,883 |
|
|
|
271,490 |
|
|
|
7,106 |
|
|
|
(197,074 |
) |
|
|
827,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
NASH FINCH COMPANY AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Forty Weeks Ended October 8, 2005
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating
activities |
|
$ |
(33,217 |
) |
|
|
79,874 |
|
|
|
138 |
|
|
|
|
|
|
|
46,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of property, plant and equipment |
|
|
9,526 |
|
|
|
1,507 |
|
|
|
|
|
|
|
|
|
|
|
11,033 |
|
Additions to property, plant and equipment |
|
|
(11,918 |
) |
|
|
(3,942 |
) |
|
|
(70 |
) |
|
|
|
|
|
|
(15,930 |
) |
Business acquired, net of cash |
|
|
(668 |
) |
|
|
(225,683 |
) |
|
|
|
|
|
|
|
|
|
|
(226,351 |
) |
Loans to customers |
|
|
(1,570 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,570 |
) |
Payments from customers on loans |
|
|
3,260 |
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
3,760 |
|
Purchase of marketable securities |
|
|
(2,064 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,064 |
) |
Sale of marketable securities |
|
|
2,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,827 |
|
Corporate owned life insurance, net |
|
|
(1,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,498 |
) |
Other |
|
|
148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities |
|
|
(1,957 |
) |
|
|
(227,618 |
) |
|
|
(70 |
) |
|
|
|
|
|
|
(229,645 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds of revolving debt |
|
|
38,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,200 |
|
Dividends paid |
|
|
(6,387 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,387 |
) |
Proceeds from exercise of stock options |
|
|
9,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,521 |
|
Proceeds from employee stock purchase plan |
|
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
567 |
|
Proceeds of long term debt |
|
|
|
|
|
|
150,087 |
|
|
|
|
|
|
|
|
|
|
|
150,087 |
|
Payments of long-term debt |
|
|
(5,935 |
) |
|
|
(889 |
) |
|
|
(352 |
) |
|
|
|
|
|
|
(7,176 |
) |
Payments of capitalized lease obligations |
|
|
(819 |
) |
|
|
(1,212 |
) |
|
|
|
|
|
|
|
|
|
|
(2,031 |
) |
Decrease in outstanding checks |
|
|
1,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,046 |
|
Payment of deferred
financing costs |
|
|
(4,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing
activities |
|
|
31,251 |
|
|
|
147,986 |
|
|
|
(352 |
) |
|
|
|
|
|
|
178,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase
in cash |
|
|
(3,923 |
) |
|
|
242 |
|
|
|
(284 |
) |
|
|
|
|
|
|
(3,965 |
) |
Cash at beginning of year |
|
|
4,543 |
|
|
|
162 |
|
|
|
324 |
|
|
|
|
|
|
|
5,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of year |
|
$ |
620 |
|
|
|
404 |
|
|
|
40 |
|
|
|
|
|
|
|
1,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
NASH FINCH COMPANY AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Forty Weeks Ended October 9, 2004
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
Nash Finch |
|
|
|
Nash |
|
|
Guarantor |
|
|
Guarantor |
|
|
Consolidation |
|
|
Company & |
|
|
|
Finch |
|
|
Subsidiaries |
|
|
Subsidiaries |
|
|
Adjustments |
|
|
Subsidiaries |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities |
|
$ |
91,489 |
|
|
|
3,729 |
|
|
|
97 |
|
|
|
|
|
|
|
95,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of property, plant and equipment |
|
|
6,360 |
|
|
|
4,580 |
|
|
|
|
|
|
|
|
|
|
|
10,940 |
|
Additions to property, plant and equipment |
|
|
(11,958 |
) |
|
|
(2,724 |
) |
|
|
(66 |
) |
|
|
|
|
|
|
(14,748 |
) |
Loans to customers |
|
|
(3,113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,113 |
) |
Payments from customers on loans |
|
|
2,404 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
2,504 |
|
Purchase of marketable securities |
|
|
(2,583 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,583 |
) |
Sale of marketable securities |
|
|
1,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,113 |
|
Other |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by investing
activities |
|
|
(7,832 |
) |
|
|
1,956 |
|
|
|
(66 |
) |
|
|
|
|
|
|
(5,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments of bank credit facility debt |
|
|
(81,100 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(81,100 |
) |
Dividends paid |
|
|
(4,985 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,985 |
) |
Proceeds from exercise of stock options |
|
|
2,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,888 |
|
Proceeds from employee stock purchase plan |
|
|
654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
654 |
|
Payments of long-term debt |
|
|
(969 |
) |
|
|
(899 |
) |
|
|
(352 |
) |
|
|
|
|
|
|
(2,220 |
) |
Payments of capitalized lease obligations |
|
|
(719 |
) |
|
|
(1,218 |
) |
|
|
|
|
|
|
|
|
|
|
(1,937 |
) |
Decrease in outstanding checks |
|
|
(10,928 |
) |
|
|
(3,360 |
) |
|
|
|
|
|
|
|
|
|
|
(14,288 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities |
|
|
(95,159 |
) |
|
|
(5,477 |
) |
|
|
(352 |
) |
|
|
|
|
|
|
(100,988 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase
in cash |
|
|
(11,502 |
) |
|
|
208 |
|
|
|
(321 |
) |
|
|
|
|
|
|
(11,615 |
) |
Cash at beginning of year |
|
|
12,182 |
|
|
|
211 |
|
|
|
364 |
|
|
|
|
|
|
|
12,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of year |
|
$ |
680 |
|
|
|
419 |
|
|
|
43 |
|
|
|
|
|
|
|
1,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are the second largest publicly traded wholesale food distribution company in the United
States. Our business consists of three primary operating segments: food distribution, military food
distribution and food retailing. The four cornerstones of our strategy are to (i) take advantage
of new business opportunities with new and existing food distribution customers to strengthen our
position as one of the leading wholesale choices; (ii) increase our market position as a leading
military food distributor and extend our customer base and product offerings; (iii) improve returns
from our existing retail operations; and (iv) drive shareholder value through debt reduction and
return of cash to shareholders through regular dividend payments. In addition, we may from time to
time identify and evaluate acquisition opportunities in our food distribution and military food
distribution segments to the extent we believe such opportunities present strategic benefits to
those segments and can be achieved in a cost-effective manner
Our food distribution segment sells and distributes a wide variety of nationally branded and
private label products to independent grocery stores and other customers primarily in the Midwest
and Southeast regions of the United States. On March 31, 2005 we completed the purchase from
Roundys of the net assets, including customer contracts, of Roundys wholesale food distribution
divisions in Westville, Indiana and Lima, Ohio and two retail stores in Ironton, Ohio and Van Wert,
Ohio for approximately $225.7 million, subject to customary post-closing adjustments. The
Westville and Lima divisions represent approximately $1.0 billion in annual food distribution
sales, servicing over five hundred customers principally in Indiana, Illinois, Ohio and Michigan.
No facility closures are expected given the strategic fit of these distribution centers into the
Nash Finch network. To finance this acquisition, we sold $150.1 million in aggregate gross
proceeds of senior subordinated convertible notes due 2035, borrowed $70 million under the
revolving credit portion of our senior secured credit facility and used cash on hand.
We believe the acquisition of the Lima and Westville divisions provides a uniquely valuable
strategic opportunity for us to further leverage our existing
relationships in the regions in which these
divisions operate and to grow our food distribution business in a cost-effective manner. The
demands of integrating this acquisition have, however, diverted attention and resources from our
day-to-day operational execution and made us less aggressive in managing our core business, as
discussed below. In addition, some elements of the logistical and technical integration have
fallen behind schedule, necessitating the shift of additional resources to those tasks. In
combination, these factors have temporarily affected margins and delayed the realization of the financial
benefit of the synergies inherent in this acquisition.
Our military food distribution segment contracts with vendors to distribute a wide variety of
grocery products to military commissaries located primarily in the Mid-Atlantic region of the
United States, and in Europe, Cuba, Puerto Rico, Iceland and the Azores. We are the largest
distributor of grocery products to U.S. military commissaries, with over 30 years of experience
acting as a distributor to U.S. military commissaries.
23
Our retail segment operated 80 corporate-owned stores primarily in the Upper Midwest as of
October 8, 2005. Predominantly due to intensely competitive conditions, same store sales in our
retail business have declined since 2002, although the declines have moderated in more recent
periods. We have taken and expect to take initiatives of varying scope and duration to improve our
response to and performance under these difficult competitive conditions. To complement these
initiatives, we completed during the second quarter of 2004 a strategic review that identified
certain retail stores that did not meet return objectives, provide long-term strategic
opportunities or justify additional capital investments. Consequently, we closed or sold 18 stores
at the end of the second quarter of 2004. We continue to evaluate and assess strategic
alternatives for retail stores that do not provide attractive returns. As a result of this process,
we closed or sold ten additional stores since the second quarter of 2004. As we continue to assess
the impact of performance improvement initiatives and the operating results of individual stores,
we may have to recognize additional impairments of long-lived assets and an impairment of goodwill
associated with our retail segment. In addition, we may be compelled to close or sell additional
retail stores, and may incur restructuring or other charges in connection with such closure or
sales activities.
During the third quarter of 2005, Ron Marshall, our chief executive officer and a member of
our Board of Directors, advised us that he will resign as of March 2, 2006 from those positions.
The Board has formed a search committee and retained an executive search firm to assist it in
identifying suitable candidates for Mr. Marshalls replacement.
Results of Operations
The following discussion compares our operating results for the sixteen and forty weeks ended
October 8, 2005 and the sixteen and forty weeks ended October 9, 2004.
Sales
The following tables summarize our sales activity for the sixteen weeks ended October 8, 2005
compared to the sixteen weeks ended October 9, 2004 (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2004 |
|
|
|
|
|
|
|
Percent |
|
|
Percent |
|
|
|
|
|
|
Percent |
|
Segment sales: |
|
Sales |
|
|
of Sales |
|
|
Change |
|
|
Sales |
|
|
of Sales |
|
Food Distribution |
|
$ |
886.3 |
|
|
|
60.5 |
% |
|
|
45.1 |
% |
|
$ |
610.9 |
|
|
|
51.3 |
% |
Military |
|
|
353.5 |
|
|
|
24.1 |
% |
|
|
4.4 |
% |
|
|
338.5 |
|
|
|
28.4 |
% |
Retail |
|
|
225.0 |
|
|
|
15.4 |
% |
|
|
(7.0 |
)% |
|
|
241.8 |
|
|
|
20.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales |
|
$ |
1,464.8 |
|
|
|
100.0 |
% |
|
|
23.0 |
% |
|
$ |
1,191.2 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables summarize our sales activity for the forty weeks ended October 8,
2005 compared to the forty weeks ended October 9, 2004 (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2004 |
|
|
|
|
|
|
|
Percent |
|
|
Percent |
|
|
|
|
|
|
Percent |
|
Segment sales: |
|
Sales |
|
|
of Sales |
|
|
Change |
|
|
Sales |
|
|
of Sales |
|
Food Distribution |
|
$ |
1,984.4 |
|
|
|
57.8 |
% |
|
|
33.1 |
% |
|
$ |
1,491.2 |
|
|
|
50.1 |
% |
Military |
|
|
884.8 |
|
|
|
25.8 |
% |
|
|
4.4 |
% |
|
|
847.3 |
|
|
|
28.5 |
% |
Retail |
|
|
563.1 |
|
|
|
16.4 |
% |
|
|
(11.8 |
)% |
|
|
638.5 |
|
|
|
21.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales |
|
$ |
3,432.3 |
|
|
|
100.0 |
% |
|
|
15.3 |
% |
|
$ |
2,977.0 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
The increase in food distribution sales for the sixteen and forty weeks ended October 8,
2005 was primarily due to the acquisition of the Lima and Westville divisions, which added $244.2
million and $429.0 million, or 88.6% and 87.0% of the sales increase, respectively. The remainder
of the sales increase was primarily related to new accounts, partially offset by customer
attrition.
The increase in military segment sales for the sixteen and forty weeks ended October 8, 2005
over the comparable 2004 periods, was largely due to increases in domestic commissary customer
traffic.
The decrease in retail sales for the sixteen and forty weeks ended October 8, 2005 as compared
to the 2004 periods is attributable to the store closures during 2004, seven additional stores
closed during first three quarters of 2005 and a decline in same store sales. Same store sales,
which compare retail sales for stores which were in operation for the same number of weeks in the
comparative periods, decreased 4.9% and 4.5% for the sixteen and forty weeks ended October 8, 2005,
respectively. These declines continue to reflect a difficult competitive environment in which
supercenters and other alternative formats compete for price conscious consumers.
During the sixteen and forty weeks ended October 8, 2005 our corporate store count changed as
follows:
|
|
|
|
|
|
|
|
|
|
|
Sixteen Weeks |
|
|
Forty Weeks |
|
Number of stores at beginning of period |
|
|
84 |
|
|
|
85 |
|
Closed or sold stores |
|
|
(4 |
) |
|
|
(7 |
) |
Number of new stores |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
Number of stores at end of period |
|
|
80 |
|
|
|
80 |
|
|
|
|
|
|
|
|
Gross Profit
Gross profit (calculated as sales less cost of sales) for the sixteen weeks ended October 8,
2005 was 9.0% of sales compared to 10.7% of sales for the same sixteen week period last year, and
was 9.5% of sales for the forty weeks ended October 8, 2005 compared to 10.9% for the same forty
week period last year. The decline in gross profit was primarily due to a higher percentage of
2005 sales in food distribution and military as opposed to retail, which historically has a higher
gross profit margin. Our gross profit margins in 2005 were also adversely affected by declines in
the food distribution and retail segments, reflecting depressed profit margins principally relating
to the management of manufacturer promotional spending and inadequate execution in pricing across
our retail operations, as well as an increase in unallocated corporate overhead that was also
related to management of manufacturer promotional spending. The gross margins in each of these
segments were negatively affected by the increased attention given to the integration of the Lima
and Westville divisions, which diverted attention from our core business operations. Gross profit
also included a decrease in LIFO expense of $1.3 million and $1.0 million for the sixteen and forty
weeks ended October 8, 2005 compared to the same periods last year. In addition, gross profit for
the forty weeks ended October 9, 2004 was also adversely
affected by additional costs of $3.3
million, primarily resulting from inventory markdowns related to our second quarter 2004 store
closures.
25
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) for the sixteen and forty weeks ended
October 8, 2005 were 6.3% and 6.7% of sales compared to 7.1% and 7.7% of sales for the same periods
last year. This decrease in SG&A expenses as a percentage of sales primarily reflected the fact
that our retail segment, which has higher SG&A expenses than our food distribution and military
distribution segments, represented a smaller percentage of our total sales in the 2005 periods.
The improvement in SG&A expense ratios in the 2005 periods was partially offset by impairment
charges of $1.7 million and $4.3 million, increased provision for bad debts of $1.5 million and
$1.1 million, and decreased gains on the sale of real estate of $2.7 million and $2.3 million for
the sixteen and forty weeks ended October 8, 2005, respectively. The impairment charges relate to stores which
were determined to be impaired as a result of increased competition within their market areas. The
estimated undiscounted cash flows related to these facilities indicated that the carrying value of
the assets may not be recoverable based on current expectations, causing these assets to be written
down to their estimated fair value in accordance with SFAS No. 144 Accounting for the Impairment
or Disposal of Long-Lived Assets.
Special Charge
During the second quarter of 2004, we completed a strategic review that identified certain
retail stores that did not meet return objectives, provide long-term strategic opportunities or
justify additional capital investments. Consequently, we closed or sold 18 stores and sought
purchasers for our three Denver area AVANZA stores. As a result of these actions, we recorded in
the second quarter of 2004 a pre-tax special charge of $36.5 million which is reflected in the
Special charge line within the consolidated statements of income, and $3.3 million of costs
reflected in operating earnings, primarily involving inventory markdowns related to the store
closures. During the fourth fiscal quarter of 2004, we recorded a net reversal of $1.6 million of
the special charge because we were able to settle five leases for less than initially estimated and
adjusted the estimate needed on four other properties for which more current market information was
available.
During the second fiscal quarter of 2005, we decided to continue to operate the three Denver
AVANZA stores and therefore recorded a reversal of $1.5 million of the special charge related to
the stores, partially offset by a $0.2 million change in estimate for one other property.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by $2.7 million and $1.8 million for the
sixteen and forty week periods ended October 8, 2005, respectively, as compared to the same periods
last year. The increases were primarily caused by the increased depreciation and amortization
expense related to the acquisition of the Lima and Westville divisions. See Note 2 for further
information regarding the purchase price allocation of this acquisition.
Interest Expense
Interest expense decreased $0.5 million to $7.9 million for the sixteen weeks ended October 8,
2005 as compared to $8.4 million for the same period last year. The decrease was largely due to a
decrease in our effective interest rate from 8.6% for the sixteen weeks ended October 9, 2004 to
5.5% for the sixteen weeks ended October 8, 2005. The decrease in our effective interest rate was
primarily due to the impact of interest rate swaps, fourth quarter 2004 redemption of $165 million
in outstanding
principal amount of our 8.5% Senior Subordinated Notes due 2008 and the first quarter 2005
issuance
26
of $150.1 million aggregate issue price of 3.5% senior subordinated convertible notes due
2035. The effect of the decrease in our effective rate was partially offset by an increase in the
average borrowing levels from $293.8 million for the sixteen weeks ended October 9, 2004 to $439.8
million for the sixteen weeks ended October 8, 2005.
For the forty weeks ended October 8, 2005, interest expense decreased $3.1 million to $18.7
million as compared to $21.8 million for the same period last year. The decrease was largely due
to a decrease in the effective interest rate from 8.1% for the forty weeks ended October 9, 2004 to
5.6% for the forty weeks ended October 8, 2005 because of the impact of interest rate swaps and
changes in the composition of our debt as discussed above. The effect of the decrease in our
effective rate was partially offset by an increase in the average borrowing levels from $330.7
million for the forty weeks ended October 9, 2004 to $394.6 million for the forty weeks ended
October 8, 2005 and by the payment of a $0.75 million bridge loan fee during the second quarter of
2005 in connection with arrangement of our financing for the acquisition of the Lima and Westville
divisions.
Income Taxes
Income tax expense is provided on an interim basis using managements estimate of the annual
effective rate. The effective income tax rate was 39.0% for the sixteen and forty weeks ended
October 8, 2005, compared to 35.5% and 22.1% for the sixteen and forty weeks ended October 9, 2004,
respectively. During the third quarter of 2004, we recognized a reduction in income taxes of $0.8
million as a result of the resolution of various outstanding state and federal tax issues.
Net Earnings
Net earnings for the sixteen weeks ended October 8, 2005 were $11.0 million, or $0.83 per
diluted share, compared to $14.6 million, or $1.15 per diluted share for the sixteen weeks ended
October 9, 2004. Net earnings for the forty weeks ended October 8, 2005 were $27.8 million, or
$2.12 per diluted share, compared to net earnings of $3.7 million, or $0.29 per diluted share for
the forty weeks ended October 9, 2004. Net earnings for the sixteen and forty week periods ending
October 8, 2005 and October 9, 2004 were affected by events included in the discussion above that
affected the comparability of results. The significant events are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sixteen Weeks Ended |
|
Sixteen Weeks Ended |
|
|
October 8, 2005 |
|
October 9, 2004 |
|
|
Amount |
|
Diluted |
|
Amount |
|
Diluted |
|
|
(in 000s) |
|
EPS |
|
(in 000s) |
|
EPS |
Net earnings as reported |
|
$ |
11,041 |
|
|
|
0.83 |
|
|
|
14,598 |
|
|
|
1.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items affecting earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction in income tax expense |
|
|
|
|
|
|
|
|
|
|
(800 |
) |
|
|
(0.06 |
) |
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forty Weeks Ended |
|
Forty Weeks Ended |
|
|
October 8, 2005 |
|
October 9, 2004 |
|
|
Amount |
|
Diluted |
|
Amount |
|
Diluted |
|
|
(in 000s) |
|
EPS |
|
(in 000s) |
|
EPS |
Net earnings as reported |
|
$ |
27,756 |
|
|
|
2.12 |
|
|
|
3,690 |
|
|
|
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items affecting earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special charge |
|
|
(791 |
) |
|
|
(0.06 |
) |
|
|
22,262 |
|
|
|
1.77 |
|
Store closure cost reflected in operations |
|
|
|
|
|
|
|
|
|
|
2,009 |
|
|
|
0.16 |
|
Bridge loan fee |
|
|
457 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
Reduction in income tax expense |
|
|
|
|
|
|
|
|
|
|
(800 |
) |
|
|
(0.06 |
) |
Liquidity and Capital Resources
Historically, we have financed our capital needs through a combination of internal and
external sources. For the remainder of fiscal 2005, and after giving effect to the additional
borrowings necessary to effect the acquisition of the Business, we expect that cash flow from
operations will be sufficient to meet our working capital needs and enable us to reduce our debt,
with temporary draws on our revolving credit line needed during the year to build inventories for
certain holidays. Longer term, we believe that cash flows from operations, short-term bank
borrowings, various types of long-term debt and lease and equity financing will be adequate to meet
our working capital needs, planned capital expenditures and debt service obligations.
Operating cash flows were $46.8 million for the forty weeks ended October 8, 2005, a decrease
of $48.5 million from $95.3 million the forty weeks ended October 9, 2004. The primary reasons for
the decrease in operating cash flows for the forty weeks ended October 8, 2005 as compared to the
same period last year were a decrease in net earnings, net of the impact of the special charge, and
an increase of $40.3 million in inventory primarily because of new business and the integration of
the Lima and Westville divisions. Net earnings and special charges were $27.7 million and $(1.3)
million, respectively for the forty weeks ended October 8, 2005 compared to $3.7 million and $36.5
million for the forty weeks ended October 9, 2004.
Cash used for investing activities increased by $223.7 million to $229.6 million for the forty
weeks ended October 8, 2005 as compared to $5.9 million for the same period last year, primarily
because of the acquisition of the Lima and Westville divisions.
Cash provided by financing activities was $178.9 million for the forty weeks ended October 8,
2005 as compared to cash used for financing activities of $101.0 million during the same period
last year. Financing activities for the forty weeks ended October 8, 2005 primarily included
proceeds from the previously described private placement of $150.1 million in aggregate issue price
of senior subordinated convertible notes and net receipts from revolving debt of $38.2 million to
finance the acquisition. Net payments of $81.1 million were made on the senior secured credit
facility for the forty weeks ended October 9, 2004. At October 8, 2005, credit availability under
the senior secured credit facility was $57.2 million.
28
Senior Secured Credit Facility
Our senior secured bank credit facility consists of $125 million in revolving credit, all of
which may be used for loans and up to $40 million of which may be used for letters of credit, and a
$175 million Term Loan B. Borrowings under the facility bear interest at either the Eurodollar
rate or the prime rate, plus in either case a margin spread that is dependent on our total leverage
ratio. The revolving credit portion of the facility has a five year term and the Term Loan B has a
six year term. We pay a commitment commission on the unused portion of the revolver. On February
22, 2005, we entered into a First Amendment to our credit facility permitting us to enter into the
asset purchase agreement with Roundys and to close and finance the acquisition of the Lima and
Westville divisions.
Our senior secured credit facility represents one of our primary sources of liquidity, both
short-term and long-term, and the continued availability of credit under that facility is of
material importance to our ability to fund our capital and working capital needs. The credit
agreement governing the credit facility contains various restrictive covenants, compliance with
which is essential to continued credit availability. Among the most significant of these
restrictive covenants are financial covenants which require us to maintain predetermined ratio
levels related to interest coverage and leverage. These ratios are based on EBITDA, on a rolling
four quarter basis, with some adjustments (Consolidated EBITDA). Consolidated EBITDA is a
non-GAAP financial measure that is defined in our bank credit agreement as earnings before
interest, income taxes, depreciation and amortization, adjusted to exclude extraordinary gains or
losses, gains or losses from sales of assets other than inventory in the ordinary course of
business, upfront fees and expenses incurred in connection with the execution and delivery of the
credit agreement, and non-cash charges (such as LIFO charges, closed store lease costs and asset
impairments), less cash payments made during the current period on non-cash charges recorded in
prior periods. In addition, for purposes of determining compliance with prescribed leverage ratios
and adjustments in the credit facilitys margin spread and commitment commission, Consolidated
EBITDA is calculated on a pro forma basis that takes into account all permitted acquisitions, such
as the acquisition of the Lima and Westville divisions that have occurred since the beginning of
the relevant four quarter computation period. Consolidated EBITDA should not be considered an
alternative measure of our net income, operating performance, cash flow or liquidity. It is
provided as additional information relative to compliance with our debt covenants.
As of October 8, 2005, we were in compliance with all financial covenants as defined in our
credit agreement which are summarized as follows:
|
|
|
|
|
Financial Covenant |
|
Required Ratio |
|
Actual Ratio |
Interest Coverage Ratio (1)
|
|
3.50:1.00 (minimum)
|
|
5.74:1.00 |
Leverage Ratio (2)
|
|
3.50:1.00 (maximum)
|
|
2.81:1.00 |
Senior Secured Leverage Ratio (3)
|
|
2.75:1.00 (maximum)
|
|
1.48:1.00 |
Working Capital Ratio (4)
|
|
1.50:1.00 (minimum)
|
|
2.25:1.00 |
|
|
|
(1) |
|
Ratio of Consolidated EBITDA for the trailing four quarters to interest expense for
such period. |
|
(2) |
|
Total outstanding debt to Consolidated EBITDA for the trailing four quarters. |
|
(3) |
|
Total outstanding senior secured debt to Consolidated EBITDA for the trailing four
quarters. |
|
(4) |
|
Ratio of net trade accounts receivable plus inventory to the sum of loans and letters
of credit outstanding under the new credit agreement plus certain additional secured debt. |
Any failure to comply with any of these financial covenants would constitute
an event of default under the bank credit agreement, entitling a majority of the bank lenders to,
among other things, terminate future credit availability under the agreement and accelerate the
maturity of outstanding obligations under that agreement.
29
The following is a summary of the calculation of Consolidated EBITDA (in thousands) for the
trailing four quarters ended October 8, 2005 and October 9, 2004:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
|
2005 |
|
|
2005 |
|
|
2005 |
|
|
Rolling 4 |
|
|
|
Qtr 4 |
|
|
Qtr 1 |
|
|
Qtr 2 |
|
|
Qtr 3 |
|
|
Qtr. |
|
Earnings before income taxes |
|
$ |
14,461 |
|
|
|
11,361 |
|
|
|
16,041 |
|
|
|
18,100 |
|
|
|
59,963 |
|
Interest expense |
|
|
5,369 |
|
|
|
4,187 |
|
|
|
6,578 |
|
|
|
7,919 |
|
|
|
24,053 |
|
Depreciation and amortization |
|
|
8,670 |
|
|
|
8,374 |
|
|
|
10,614 |
|
|
|
14,357 |
|
|
|
42,015 |
|
LIFO |
|
|
1,307 |
|
|
|
577 |
|
|
|
828 |
|
|
|
(229 |
) |
|
|
2,483 |
|
Closed store lease costs |
|
|
3,211 |
|
|
|
178 |
|
|
|
|
|
|
|
216 |
|
|
|
3,605 |
|
Asset impairments |
|
|
853 |
|
|
|
458 |
|
|
|
2,089 |
|
|
|
1,772 |
|
|
|
5,172 |
|
Gains on sale of real estate |
|
|
(2,173 |
) |
|
|
|
|
|
|
(541 |
) |
|
|
(556 |
) |
|
|
(3,270 |
) |
Subsequent cash payments on non-cash charges |
|
|
(693 |
) |
|
|
(1,375 |
) |
|
|
(652 |
) |
|
|
(752 |
) |
|
|
(3,472 |
) |
Extinguishment of debt |
|
|
7,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,204 |
|
Special charge |
|
|
(1,715 |
) |
|
|
|
|
|
|
(1,296 |
) |
|
|
|
|
|
|
(3,011 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated EBITDA |
|
$ |
36,494 |
|
|
|
23,760 |
|
|
|
33,661 |
|
|
|
40,827 |
|
|
|
134,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
|
2004 |
|
|
2004 |
|
|
2004 |
|
|
Rolling 4 |
|
|
|
Qtr 4 |
|
|
Qtr 1 |
|
|
Qtr 2 |
|
|
Qtr 3 |
|
|
Qtr |
|
Earnings (loss) before income taxes |
|
$ |
20,572 |
|
|
|
7,757 |
|
|
|
(25,639 |
) |
|
|
22,620 |
|
|
|
25,310 |
|
Interest expense |
|
|
7,226 |
|
|
|
6,706 |
|
|
|
6,677 |
|
|
|
8,429 |
|
|
|
29,038 |
|
Depreciation and amortization |
|
|
10,232 |
|
|
|
10,156 |
|
|
|
9,800 |
|
|
|
11,615 |
|
|
|
41,803 |
|
LIFO |
|
|
(1,961 |
) |
|
|
392 |
|
|
|
783 |
|
|
|
1,043 |
|
|
|
257 |
|
Closed store lease costs |
|
|
187 |
|
|
|
(129 |
) |
|
|
1,146 |
|
|
|
643 |
|
|
|
1,847 |
|
Asset impairments |
|
|
591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
591 |
|
Gains on sale of real estate |
|
|
(338 |
) |
|
|
(82 |
) |
|
|
(14 |
) |
|
|
(3,317 |
) |
|
|
(3,751 |
) |
Subsequent cash payments on non-cash charges |
|
|
(598 |
) |
|
|
(565 |
) |
|
|
(625 |
) |
|
|
(1,633 |
) |
|
|
(3,421 |
) |
Special charge |
|
|
|
|
|
|
|
|
|
|
36,494 |
|
|
|
|
|
|
|
36,494 |
|
Curtailment of post retirement plan |
|
|
(4,004 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,004 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated EBITDA |
|
$ |
31,907 |
|
|
|
24,235 |
|
|
|
28,622 |
|
|
|
39,400 |
|
|
|
124,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The credit agreement also contains covenants that limit our ability to incur debt
(including guaranteeing the debt of others) and liens, acquire or dispose of assets, pay dividends
on and repurchase our stock, make capital expenditures and make loans or advances to others,
including customers.
Derivative Instruments
We have market risk exposure to changing interest rates primarily as a result of our borrowing
activities. Our objective in managing our exposure to changes in interest rates is to reduce
fluctuations in earnings and cash flows. To achieve these objectives, we use derivative
instruments, primarily interest rate swap agreements, to manage risk exposures when appropriate,
based on market conditions. We do not enter into derivative agreements for trading or other
speculative purposes, nor are we a party to any leveraged derivative instrument.
The interest rate swap agreements are designated as cash flow hedges and are reflected at fair
value in our consolidated balance sheet and the related gains or losses on these contracts are
deferred in stockholders equity as a component of other comprehensive income. Deferred gains and
losses are amortized as an adjustment to expense over the same period in which the related items
being hedged are
recognized in income. However, to the extent that any of these contracts are not considered
to be perfectly effective in offsetting the change in the value of the items being hedged, any
changes in fair value relating to the ineffective portion of these contracts are immediately
recognized in income.
30
Interest rate swap agreements are entered into for periods consistent with related underlying
exposures and do not constitute positions independent of those exposures. At October 8, 2005, we
had seven outstanding interest rate swap agreements which call for an exchange of interest payments
with us making payments based on fixed rates for the respective time intervals and receiving
payments based on floating rates, without an exchange of the notional amount upon which the
payments are based. The agreements commenced and expire as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Notional |
|
|
Effective Date |
|
Termination Date |
|
Fixed Rate |
|
$ |
50,000 |
|
|
12/13/2004 |
|
12/13/2005 |
|
2.985 |
% |
|
|
40,000 |
|
|
12/13/2004 |
|
12/13/2005 |
|
3.010 |
% |
|
|
50,000 |
|
|
12/13/2004 |
|
12/13/2005 |
|
2.992 |
% |
|
|
45,000 |
|
|
12/13/2005 |
|
12/13/2006 |
|
3.809 |
% |
|
|
20,000 |
|
|
12/13/2005 |
|
12/13/2006 |
|
3.825 |
% |
|
|
20,000 |
|
|
12/13/2006 |
|
12/13/2007 |
|
4.095 |
% |
|
|
30,000 |
|
|
12/13/2006 |
|
12/13/2007 |
|
4.100 |
% |
|
We are also using commodity swap agreements to reduce price risk associated with
anticipated purchases of diesel fuel. The outstanding commodity swap agreements hedge
approximately 35% of our expected fuel usage for the periods set forth in the swap agreements. At
October 8, 2005, we had two outstanding commodity swap agreements which commenced and expire as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional |
|
Effective Date |
|
|
Termination Date |
|
|
Fixed Rate |
|
100,000 gallons/month |
|
12/7/2004 |
|
|
|
11/30/2006 |
|
|
|
$ |
1.18 |
|
100,000 gallons/month |
|
1/1/2005 |
|
|
|
12/31/2006 |
|
|
|
$ |
1.16 |
|
Off-Balance Sheet Arrangements
As of the date of this report, we do not participate in transactions that generate
relationships with unconsolidated entities or financial partnerships, such as entities often
referred to as structured finance or special purpose entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and
liabilities. Management bases its estimates on historical experience, consultation with experts
and various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of assets and
liabilities that may not be readily apparent from other sources.
An accounting policy is considered critical if it requires an accounting estimate to be made
based on assumptions about matters that are highly uncertain at the time the estimate is made, and
if different estimates that reasonably could have been used, or changes in the accounting estimates
that are reasonably likely to occur periodically, could materially impact our financial statements.
We consider the accounting policies discussed under the caption Critical Accounting Policies in
Part II, Item 7 of
our Form 10-K for the year ended January 1, 2005 to be critical in that materially different
amounts could be reported under different conditions or using different assumptions.
31
Any effects on our business, financial position or results of operations resulting from
revised estimates or different assumptions are recorded in the period in which the facts that give
rise to the revision become known.
Forward Looking Information and Cautionary Factors
This report contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The statements regarding the Company contained in this report that
are not historical in nature, particularly those that utilize terminology such as may, will,
should, likely, expects, anticipates, estimates, believes or plans, or comparable
terminology, are forward-looking statements based on current expectations and assumptions, and
entail various risks and uncertainties that could cause actual results to differ materially from
those expressed in such forward-looking statements. Important factors known to us that could cause
material differences include the following:
|
|
|
the effect of competition on our distribution, military and retail businesses; |
|
|
|
|
our ability to identify and execute plans to increase or preserve the value of our
remaining retail operations; |
|
|
|
|
our ability to identify and execute plans to expand our wholesale operations; |
|
|
|
|
general sensitivity to economic conditions; |
|
|
|
|
risks entailed by acquisitions, including the ability to successfully integrate acquired
operations and retain the customers of those operations; |
|
|
|
|
changes in the nature of vendor promotional programs and the allocation of funds among
the programs; |
|
|
|
|
credit risk from financial accommodations extended to customers; |
|
|
|
|
limitations on financial and operating flexibility due to debt levels and debt
instrument covenants; |
|
|
|
|
future changes in market interest rates; |
|
|
|
|
changes in consumer spending, buying patterns or food safety concerns; |
|
|
|
|
adverse determinations or developments with respect to litigation, other legal
proceedings or the SEC investigation discussed in Part I, Item 3 of our Annual Report on
Form 10-K for the fiscal year ended January 1, 2005; |
|
|
|
|
unanticipated problems with product procurement; |
|
|
|
|
the success or failure of new business ventures or initiatives; and |
|
|
|
|
possible changes in the military commissary system. |
A more detailed discussion of these factors is contained in Part I, Item 3 of our Annual
Report on Form 10-K for the fiscal year ended January 1, 2005 and in Part I, Item 2 of our
Quarterly Report on Form 10-Q for the twelve weeks ended June 18, 2005. You should carefully
consider each cautionary factor and all of the other information in this report. We undertake no
obligation to revise or update publicly any forward-looking statements. You are advised, however
to consult any future disclosures we make on related subjects in future reports to the SEC.
New Accounting Standards
In December 2004, the FASB issued SFAS 123(R) (Revised 2004), Share-Based Payment.
The revisions to SFAS No 123 require compensation costs related to share-based payment transactions
to be recognized in the financial statements. With limited exceptions, the amount of
compensation cost will be measured based on the grant-date fair value of the equity or
liability instruments issued. In addition, liability awards will be re-measured each reporting
period. Compensation cost will be recognized over the period that an employee provides service in
exchange for the award. SFAS 123(R) replaces FASB SFAS 123, Accounting for Stock
Based
32
Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.
For public entities, the provisions of the statement are effective as of the beginning of the
first annual reporting period that begins after June 15, 2005, however early adoption is allowed.
We expect to adopt the provisions of the new statement in the first quarter of fiscal 2006 and do
not expect the impact on net income on a full year basis will be significantly different from the
historical pro forma impacts as previously disclosed in the Stock Option Plans policy description
in Part II, Item 8 in our January 1, 2005 Form 10-K under Note (1) Summary of Significant
Accounting Policies, and under Note 4 discussed above.
On March 29, 2005 the SEC issued Staff Accounting Bulletin (SAB) 107 to provide guidance in
applying the provisions of SFAS No. 123(R). The SAB describes SEC expectations in
determining assumptions that underlie the fair value estimates. The provisions of the SAB are not
expected to result in significant differences between compensation expense recognized upon adoption
of SFAS 123(R) and the pro forma impacts as previously disclosed in the Stock Option Plans policy
description in Part II, Item 8 in our January 1, 2005 Form 10-K under Note (1) Summary of
Significant Accounting Policies, and under Note 4 discussed above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have market risk exposure to changing interest rates primarily as a result of our borrowing
activities. We use interest rate swap agreements to manage our risk exposure (See Part II, Item 7
of our January 1, 2005 Form 10-K and Part I, Item 2 of this report under the caption Liquidity and
Capital Resources).
ITEM 4. CONTROLS AND PROCEDURES
Management of the Company, with the participation and under the supervision of the Chief
Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Companys
disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the
period covered by this quarterly report. Based on this evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls and procedures are
effective as of the end of the period covered by this quarterly report to provide reasonable
assurance that material information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified by the Securities and Exchange Commissions rules and forms. There was no
change in the Companys internal control over financial reporting that occurred during the
Companys most recently completed fiscal quarter that materially affected, or is reasonably likely
to materially affect, the Companys internal control over financial reporting.
PART II OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) |
|
The following table summarizes purchases of Nash Finch common stock by the trustee of the
Nash Finch Company Director Deferred Compensation Plan Trust during the third quarter 2005.
All such purchases reflect the reinvestment by the trustee of dividends paid during the third
quarter of 2005 on shares of the Companys common stock held in the Trust in accordance with
the requirements of the trust agreement. |
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
|
(d) |
|
|
|
|
|
|
|
|
|
|
Total number of |
|
Maximum number (or |
|
|
(a) |
|
|
|
|
|
shares purchased as |
|
approximate dollar value) of |
|
|
Total number |
|
(b) |
|
part of publicly |
|
shares that may yet be |
|
|
of shares |
|
Average price |
|
announced plans or |
|
purchased under plans or |
Period |
|
purchased |
|
paid per share |
|
programs |
|
programs |
Period 7
(June 19 to July 16, 2005) |
|
|
600 |
|
|
$ |
36.82 |
|
|
|
(1 |
) |
|
|
(1 |
) |
Period 8
(July 17 to August 13, 2005) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period 9
(August 14 to September 10,
2005) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period 10
(September 11 to October 8,
2005) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
600 |
|
|
$ |
36.82 |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The Nash Finch Company Deferred Compensation Plans Trust Agreement requires that dividends
paid on Company common stock held in the Trust be reinvested in additional shares of such
common stock. |
ITEM 5. OTHER INFORMATION
During the third quarter of 2005, Bruce Cross, formerly the Companys Senior Vice President,
Business Transformation, was promoted to Executive Vice President, Merchandising, replacing James
Patitucci who has left the Company. Michael Lewis, formerly Executive Vice President, Retail
Strategy, resigned from the Company effective October 28, 2005.
ITEM 6. EXHIBITS
Exhibits filed or furnished with this Form 10-Q:
|
|
|
Exhibit |
|
|
No. |
|
Description |
10.1
|
|
Summary Sheet of Salary Actions
Affecting Named Executive Officers. |
|
|
|
10.2
|
|
Form of Executive Retention Letter Agreement (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on September 21, 2005 (File No. 0-785)). |
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of the Chief Executive Officer. |
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of the Chief Financial Officer. |
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer and
Chief Financial Officer (furnished herewith). |
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
|
|
|
NASH-FINCH COMPANY |
|
|
|
|
Registrant |
|
|
|
Date: November 10, 2005
|
|
By
|
|
/s/ Ron Marshall
|
|
|
|
|
Ron Marshall |
|
|
|
|
Chief Executive Officer |
|
|
|
|
|
|
|
|
|
Date: November 10, 2005
|
|
By
|
|
/s/ LeAnne M. Stewart |
|
|
|
|
|
|
|
|
|
|
|
LeAnne M. Stewart |
|
|
|
|
Senior Vice President and Chief Financial
Officer |
|
|
35
NASH FINCH COMPANY
EXHIBIT INDEX TO QUARTERLY REPORT
ON FORM 10-Q
For the Sixteen Weeks Ended October 8, 2005
|
|
|
|
|
Exhibit No. |
|
Item |
|
Method of Filing |
|
10.1
|
|
Summary Sheet of Salary Actions
Affecting Named Executive Officers.
|
|
Filed
electronically
herewith (E) |
|
|
|
|
|
10.2
|
|
Form of Executive Retention Letter Agreement
|
|
Incorporated by
reference |
|
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of the Chief Executive Officer.
|
|
E |
|
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of the Chief Financial Officer.
|
|
E |
|
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer and
Chief Financial Officer.
|
|
Furnished
electronically
herewith |
36