Q3 Sales Up 3.5% at Nash Finch
Minneapolis-based food distributor Nash Finch Co. reported total company sales for the third quarter of 2013 of $1.56 billion, up 3.5 percent over the prior-year quarter.
Nash Finch officials attributed the increase primarily to sales to new customers in the company's food distribution segment. But sales in that segment were partially offset by a reduction in military segment sales resulting from the sequestration and the government shutdown during Q3. The closure of commissaries during that time reduced Q3 military segment sales by about $60 million.
"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 percent,” 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 consolidated EBITDA was $31.9 million or 2 percent of sales in Q3 versus $43.7 million or 2.9 percent a year ago. Adjusted net earnings were $8.7 million, or 66 cents per diluted share in Q3 versus $18 million or $1.38 a year ago.
Q3 military segment net sales decreased 6.5 percent to $665.5 million compared to the prior year. “Excluding the $60 million sales impact from the government shut down and sequestration, our third quarter military sales would have been above the prior year by approximately 1.9 percent,” Covington said. “We are pleased that the commissaries are all back open for business and delivering the important commissary benefit upon which our military heroes and their families have come to rely. We look forward to being able to serve even more of our military heroes and their families once our perishable and frozen addition at our Landover facility is open early next year. The combination of the expanded operations in Landover and leveraging our world-wide military distribution network should lead to additional growth in the military segment."
The combined food distribution and retail segment sales ion Q3 increased 12.4 percent to $898 million compared to the prior year period. “I am extremely pleased with the sales performance of the food distribution and retail segments during the third quarter,” Covington said. “We continue to look for creative ways to expand our portfolio of business and to work with new and existing retailers in the growth of their businesses. We also added two new stores to our retail store base during the third quarter with the acquisition of two very successful stores from existing customers.”
In other Nash Finch news, a special shareholders meeting is scheduled for Nov. 18 at which share of the company’s common stock will be converted into 1.2 shares of Spartan Stores common stock as part of the merger agreement of the two companies announced last July. Spartan Stores shareholders will own approximately 57.7 percent of the equity of the combined company and Nash Finch shareholders will own approximately 42.3 percent.
Nash Finch's core businesses include distributing food to military commissaries and retailers located in 44 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Family Fresh Market, Econofoods, Family Thrift Center, No Frills, Bag 'n Save, Avanza and Sun Mart trade names.