Spartan Stores' Q4 Earnings Up 19 Pct.

Spartan Stores, Inc. logged sales for its 12-week fourth quarter that reached a six-year high, climbing 10 percent to $571 million from $520 million in last year's 13-week fourth quarter.

Excluding the extra week of sales in last year's fourth quarter, sales improved 18.7 percent, primarily as a result of the acquisition of Felpausch stores, as well as comparable same store sales growth of 5.2 percent and incremental distribution sales to new and existing customers, the operator said.

"We are very pleased with our ability to achieve consistent sales and profit growth, as well as market share gains," said Craig C. Sturken, Spartan Stores' chairman/c.e.o. Adjusting for the extra week of sales last year, Spartan's fourth quarter operating earnings "improved considerably, making this our ninth consecutive quarter of double-digit year-to-year growth. On an adjusted basis, net sales also grew by double digits, marking the eighth consecutive quarter of sales improvement."

Fourth quarter operating earnings increased 19 percent to $15 million from $12 million in the same period last year, which included operating earnings of $2.8 million related to the extra week of sales last year. Adjusting for the extra week of sales last year, fourth-quarter operating earnings improved 51 percent. The operating earnings improvement was primarily attributable to continued sales growth and improved gross margin rates in the Company's distribution business segment.

Fourth quarter earnings from Spartan's continuing operations increased 15 percent to $7.8 million, or $0.36 per diluted share, from $6.8 million, or $0.32 per diluted share in the same period last year. Last year's fourth quarter included a pretax gain of $0.5 million from the sale of real estate.

Results of the Company's Pharm retail stores have been reclassified to "discontinued operations" for all periods presented due to the pending sale of these locations to Rite Aid Corp.
Having achieved annual EBITDA ratios of more than $92 million -- an increase of 19 percent above last year - Sturken said the results "are a consequence of leveraging our retail acquisitions, investing prudently in store remodels, products and services that enhance our customers' shopping experience, and continually investing in our distribution network. During the past two years, we have invested nearly $85 million in capital improvements that have strengthened our retail and distribution market positions and helped improve our investment returns despite the challenging economic environment."

During fiscal 2009, Sturken said the company will continue to look for growth opportunities in our existing and adjacent markets and will continue to execute its expanded capital investment program, the majority of which will be directed toward the Felpausch stores.
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