Sales Down 4.2% at Nash Finch
Nash Finch Co. announced sales for fiscal year 2010 ending Jan. 1 of $4.992 billion, compared to $5.213 billion in the previous year, a decrease of 4.2 percent.
Excluding the previously announced transition of a portion of a food distribution customer buying group to another supplier during 2010 of $95.2 million and the non-comparable sales increase of $59.4 million attributable to the acquisition of three military distribution centers on Jan. 31, 2009, total company comparable sales for fiscal 2010 decreased 3.6 percent.
“I am pleased with the year-over-year improvements made in our fourth-quarter consolidated EBITDA and net earnings performance across all three business segments,” said Alec Covington, Nash Finch president and CEO. “We intend to build on the positive momentum evident in the fourth-quarter results as we remain focused on partnering with our independent retailers on their journey to maintain profitability notwithstanding the economic turmoil and on completing the expansion of our military footprint, which will position us to serve our military customers over a broader geographic area.”
Sales for the 12-week fourth quarter of fiscal 2010 were $1.147 billion, compared to $1.222 billion in the prior-year quarter, a decrease of 6.2 percent. Excluding the transition of a portion of a food distribution customer buying group to another supplier during 2010, sales decreased 3.5 percent during the fourth quarter, which is an improvement from the decrease of 4.9 percent in the third quarter.
Consolidated EBITDA for FY 2010 decreased 1.9 percent to $137.5 million, or 2.8 percent of sales, as compared to $140.1 million, or 2.7 percent of sales, for the prior year. For the Q4 2010, consolidated EBITDA increased 6.3 percent to $33.2 million, or 2.9 percent of sales, as compared to $31.3 million, or 2.6 percent of sales, in the prior-year period.
Net earnings for FY 2010 were $50.9 million, or $3.86 per diluted share, as compared to net earnings of $2.8 million, or 21 cents per diluted share, in 2009. Net earnings of $16.9 million were recognized during Q4 2010, or $1.30 per diluted share, as compared to a net loss of $43.1 million, or $3.20 per diluted share, in the prior-year quarter.
Due to the addition of strategically located military warehouses, Nash Finch transferred the military business from three of the food distribution warehouses in 2010 and will transfer the remaining business when its Oklahoma City warehouse begins operations. As a result, the company is changing the food distribution and military segment reporting so that it reflects all military sales and EBITDA, including the military business that has historically been reported in the food distribution segment.
Military segment sales increased $35.6 million, or 1.6 percent, to $2.29 billion in FY 2010 as compared to 2009. Excluding the non-comparable sales increase of $59.4 million pertaining to the acquisition of three distribution centers, comparable sales decreased 1.1 percent in FY 2010. Military segment sales decreased $4.1 million, or 0.8 percent, to $534.9 million in the Q4 2010, compared to a decrease of 2.8 percent in Q3 2010.
“We are pleased to announce that our new Bloomington, Indiana, distribution center began servicing military commissaries at the end of the fourth quarter. The start-up has gone very smoothly, and our customers’ responses have been gratifying,” Covington said. “As previously announced, we began operations in our Columbus, Georgia, distribution center late in the third quarter, and that location continues to perform to our expectations. During the third quarter, we announced the purchase of two distribution centers totaling 538,000 square feet in Oklahoma City, Oklahoma, which we anticipate will be operational during the first quarter of 2012.The new distribution centers were acquired to support the strategic expansion of our military distribution segment and we believe these facilities will provide significant productivity and transportation savings once they are all operational.”
Sales for the combined food distribution and retail segment decreased by 8.7 percent to $2.702 billion in FY 2010 versus 2009. Total segment comparable sales for FY 2010 were down 5.6 percent after excluding $95.2 million of sales associated with the transition of a portion of a buying group to another supplier during 2010. The combined food distribution and retail segment sales in Q4 2010 decreased by 10.5 percent to $611.9 million versus Q4 2009.
Minneapolis-based Nash Finch Co. serves independent retailers and military commissaries in 33 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 and Sun Mart banners.