Q3 Sales Down 7.5% at Nash Finch
Minneapolis-based grocery distributor Nash Finch Co. reported total company sales for the third quarter of 2010 were $1.51 billion, compared to $1.63 billion in the prior-year quarter, a decrease of 7.5 percent.
“Although we continued to experience significant headwinds that impacted our top line sales during the third quarter, we were able to increase year-over-year EBITDA as a percentage of sales,” said Alec Covington, Nash Finch president and CEO. “This was achieved by placing a sharp focus on executing initiatives to improve productivity, reduce overall expenses and maintain profitability during this challenging economic environment.”
Total company sales for the first forty weeks of 2010 were $3.85 billion, compared to $3.99 billion in the prior-year period, a decrease of 3.6 percent. Consolidated EBITDA for the third quarter 2010 was $43.8 million, or 2.9 percent of sales, compared to $46 million, or 2.8 percent of sales, for the prior-year-quarter.
Net earnings for the third quarter 2010 were $15.3 million, or $1.18 per diluted share, as compared to net earnings of $21.9 million, or $1.64 per diluted share, in the prior year quarter.
“The company completed the closing of the Bridgeport, Michigan, distribution center, which will allow us to more efficiently serve our customers and will improve productivity in our Lima, Ohio, facility,” Covington said. “We have also taken advantage of the depressed real estate market during the third quarter by purchasing three distribution facilities that will expand our military footprint at a very low cost. We anticipate this will provide significant transportation savings and offer long-term strategic growth in the Midwest, Southeast and Southwestern United States.”
Military segment sales were down 2.5 percent during the third quarter 2010 as compared to the prior year, primarily due to timing differences between the quarters relating to export shipments and to a lesser extent from a reduction in domestic sales promotions. Year-to-date military sales increased 3.1 percent in comparison to the prior year.
“I am pleased to announce that our new Columbus, Georgia, distribution center began shipping product at the end of the third quarter and the start-up has gone very smoothly,” Covington said. “We expect to realize significant transportation cost savings by opening this facility which will also provide for significant strategic growth opportunities. In addition, during the third quarter we announced the purchase of a 303,000-square-foot facility in Bloomington, Indiana, and two facilities totaling 538,000 square feet in Oklahoma City, Oklahoma, to support the expansion of our military distribution segment.”
The combined food distribution and retail segment sales decrease in the third quarter and year-to-date periods compared to the 2009 periods was 10.7 percent and 7.7 percent, respectively. The decrease in sales was negatively impacted by the previously announced transition of a portion of a customer buying group to another supplier during the second quarter 2010.
Nash Finch’s core business, food distribution, serves independent retailers and military commissaries in 36 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods, Family Thrift Center, Avanza, Family Fresh Market and Sun Mart trade names.