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Nash Finch Reports Third Quarter 2013 Results

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MINNEAPOLIS--(BUSINESS WIRE)--

Nash Finch Company (NASDAQ: NAFC), one of the leading food distribution companies in the United States, today announced financial results for the sixteen weeks (third quarter) ended October 5, 2013.

Financial Results

Total Company sales for the third quarter 2013 were $1.56 billion compared to $1.51 billion in the prior-year quarter, an increase of 3.5%. The increase was primarily attributable to sales to new customers in our Food Distribution segment. The increase in Food Distribution sales was partially offset by a reduction in Military segment sales resulting from the impacts of sequestration and the government shutdown which occurred during our third quarter. The closure of commissaries caused by the government sequestration and shutdown reduced Military segment sales by approximately $60.2 million in the third quarter.

Adjusted Consolidated EBITDA1 was $31.9 million or 2.0% of sales in the third quarter of 2013 as compared to $43.7 million or 2.9% of sales in the third quarter of 2012. Consolidated EBITDA3 was adjusted to exclude the impact of significant items of $0.4 million and $4.0 million in the third quarters of 2013 and 2012, respectively. Including the impact of significant items, Consolidated EBITDA for the third quarter 2013 was $31.5 million or 2.0% of sales as compared to $39.7 million or 2.6% of sales in the prior year quarter. The year over year comparison was negatively impacted by $8.6 million due to the reversal of year-to-date incentive compensation accruals that occurred in the third quarter of 2012.

"We continued to experience solid sales performance across all of our business segments in the third quarter. Excluding the impact of the government sequestration and shutdown, our total company sales growth would have been over 7%”, said Alec Covington, President and CEO of Nash Finch. “The third quarter Consolidated EBITDA and EPS comparisons to the prior year came in right where we expected; the comparisons were negatively skewed by the reversal of year-to-date incentive compensation accruals last year.”

Adjusted Net Earnings4 were $8.7 million or $0.66 per diluted share in the third quarter 2013 as compared to $18.0 million or $1.38 per diluted share in the third quarter 2012. Net earnings were adjusted to exclude the impact of significant items totaling $2.7 million or $0.20 per diluted share in 2013 and $3.3 million or $0.26 per diluted share in 2012. Including the impact of significant items, our reported net earnings for the third quarter of 2013 were $6.0 million or $0.46 per diluted share as compared to $14.6 million or $1.12 per diluted share in 2012.

The following table identifies the significant items affecting our Consolidated EBITDA, net earnings and diluted earnings per share for the third quarter 2013 and prior year results:

(dollars in millions except per share amounts)   3rd Quarter   Fiscal
2013   2012   2013   2012
Significant items      
Transaction costs related to acquisitions $ - (0.6 ) - (1.9 )
Restructuring costs (0.2 ) - (1.3 ) -
Military distribution center conversion and transition costs - (3.4 ) - (4.8 )
Casualty insurance claim losses - - (2.1 ) -
Retail store closing costs (0.2 ) - (0.2 ) -
Gain on early termination of supply agreement   -       -       2.6       -  
Significant charges impacting Consolidated EBITDA $ (0.4 ) (4.0 ) (1.0 ) (6.7 )
 
LIFO charges 1.3 (1.4 ) 2.3 (2.0 )
Gain on acquisition of business - - - 6.6
Merger related costs (2.5 ) - (2.8 ) -
Military distribution center non-cash pre-opening expense - - - (0.1 )

Losses due to government shutdown and sequestration

(2.8 ) - (2.8 ) -
Goodwill impairment   -       -       -       (132.0 )
Total significant charges impacting earnings before tax $ (4.4 ) (5.4 ) (4.3 ) (134.2 )
Income tax on significant net charges 1.7 2.1 1.7 3.5
Tax on goodwill impairment and acquisition gain   -       -       -       32.6  
Total significant charges impacting net earnings $ (2.7 )     (3.3 )     (2.6 )     (98.1 )
 
Diluted earnings per share impact from significant items (0.20 ) (0.26 ) (0.20 ) (7.55 )
Diluted earnings per share, as reported   0.46       1.12       1.30       (5.01 )
Diluted earnings per share, as adjusted $ 0.66       1.38       1.50       2.54  
 
Consolidated EBITDA, as reported 31.5 39.7 76.4 88.7
Consolidated EBITDA impact from significant items   (0.4 )     (4.0 )     (1.0 )     (6.7 )
Consolidated EBITDA, as adjusted $ 31.9     $ 43.7     $ 77.4     $ 95.4  
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