Reaffirms Fiscal 2024 Guidance Pilots Customer Value Proposition in Retail Segment GRAND RAPIDS, Mich., Aug. 15, 2024 /PRNewswire/ -- Food solutions company SpartanNash (the "Company") (NASDAQ:SPTN) today reported financial results for its 12-week second quarter ended July 13, 2024. "The team's execution of our transformational initiatives has created a foundation for future growth while contributing to our margin gains year-to-date," said SpartanNash President and CEO Tony Sarsam. "We are pleased with the progression of our investments in margin-enhancing programs and expect benefits by the end of the year. Building on this progress, we are piloting a Customer Value Proposition initiative that is informed by extensive shopper data and insights, aimed at enhancing freshness, value and convenience. As part of this store modernization program, we are lowering prices on 6,000 products to bring more value to our shoppers today." Second Quarter Fiscal 2024 Highlights(1) Net sales decreased 3.5% to $2.23 billion, driven by lower volumes in both the Wholesale and Retail segments. Wholesale segment net sales decreased 4.8% to $1.55 billion primarily due to reduced volumes in the national accounts customer channel. Retail segment net sales decreased 0.4% to $676.1 million, with comparable store sales down 2.5%. Incremental sales from newly acquired Metcalfe's Market stores were offset by lower consumer demand trends. Net earnings of $0.34 per diluted share, compared to $0.57 per diluted share. The decrease was primarily due to lower unit volumes and higher restructuring and asset impairment charges. This reduction was partially offset by benefits from the merchandising transformation, favorable segment sales mix, as well as lower LIFO expense of $3.2 million. Adjusted EPS(2) of $0.59, compared to $0.65. Adjusted EBITDA(3) of $64.5 million, compared to $66.1 million. These measures exclude, among other items, restructuring and asset impairment charges, the impact of the LIFO provision and acquisition and integration expenses. Other Fiscal 2024 Highlights(4) Cash generated from operating activities of $132.1 million compared to $49.7 million. The 166.0% increase in cash from operating activities is due primarily to ongoing working capital management initiatives. Net long-term debt(5) to adjusted EBITDA(3) ratio of 2.2x improved sequentially compared to 2.4x at the end of the first quarter. Capital expenditures and IT capital(6) of $73.4 million compared to $63.5 million. Returned $30.4 million to shareholders through $15.1 million in share repurchases and $15.4 million in dividends.   (1) All comparisons are for the second quarter of 2024 compared with the second quarter of 2023, unless otherwise noted. (2) A reconciliation of net earnings to adjusted earnings from continuing operations, as well as per diluted share ("adjusted EPS"), a non-GAAP financial measure, is provided in Table 3. (3) A reconciliation of net earnings to adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2. (4) All comparisons are for the fiscal year-to-date 2024 compared with the fiscal year-to-date 2023, unless otherwise noted. (5) A reconciliation of long-term debt and finance lease obligations to net long-term debt, a non-GAAP financial measure, is provided in Table 4. (6) A reconciliation of purchases of property and equipment to capital expenditures and IT capital, a non-GAAP financial measure, is provided in Table 5. Fiscal 2024 Outlook Based on the Company's performance to date and the current outlook for the remainder of fiscal 2024, the Company reaffirmed its previous guidance provided on May 30, 2024. The following table provides the Company's guidance for fiscal 2024: Fiscal 2023 Fiscal 2024 Outlook (In millions, except adjusted EPS(2)) Actual Low High Total net sales $ 9,729 $ 9,500 $ 9,700 Adjusted EBITDA(3) $ 257 $ 255 $ 270 Adjusted EPS(2) $ 2.18 $ 1.85 $ 2.10 Capital expenditures and IT capital(6) $ 127 $ 135 $ 145 Guidance incorporates the Company's long-term strategic initiatives, including all transformational programs and tuck-in acquisitions. Conference Call & Supplemental Earnings Presentation The Company will host a conference call to discuss its quarterly results with additional comments and details on Thursday, Aug. 15, 2024, at 10:30 a.m. ET. There will also be a simultaneous, live webcast made available at SpartanNash's website at spartannash.com/webcasts under the "Investor Relations" section and will remain archived on the Company's website through Thursday, Aug. 29, 2024. A supplemental quarterly earnings presentation will also be available on the Company's website at spartannash.com/investor-presentations. About SpartanNash SpartanNash (NASDAQ:SPTN) is a food solutions company that delivers the ingredients for a better life. Committed to fostering a People First culture, the SpartanNash family of Associates is 17,000 strong. SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products. On the retail side, SpartanNash operates 147 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin's Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for independent grocers. For more information, visit spartannash.com.  Forward-Looking Statements The matters discussed in this press release and in the Company's website-accessible conference calls with analysts and investor presentations include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), about the plans, strategies, objectives, goals or expectations of the Company. These forward-looking statements may be identifiable by words or phrases indicating that the Company or management "expects," "projects," "anticipates," "plans," "believes," "intends," or "estimates," or that a particular occurrence or event "may," "could," "should," "will" or "will likely" result, occur or be pursued or "continue" in the future, that the "outlook," "trend," "guidance" or "target" is toward a particular result or occurrence, that a development is an "opportunity," "priority," "strategy," "focus," that the Company is "positioned" for a particular result, or similarly stated expectations. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. These risks and uncertainties include the Company's ability to compete in an extremely competitive industry; the Company's dependence on certain major customers; the Company's ability to implement its growth strategy and transformation initiatives; the Company's ability to implement its growth strategy through acquisitions and successfully integrate acquired businesses; disruptions to the Company's information security network, including security breaches and cyber-attacks; impacts to the availability and performance of the Company's information technology systems; changes in relationships with the Company's vendor base; changes in product availability and product pricing from vendors; macroeconomic uncertainty, including rising inflation, potential economic recession, and increasing interest rates; difficulty attracting and retaining well-qualified Associates and effectively managing increased labor costs; failure to successfully retain or manage transitions with executive leaders and other key personnel; impacts to the Company's business and reputation due to an increasing focus on environmental, social and governance matters; customers to whom the Company extends credit or for whom the Company guarantees loans may fail to repay the Company; changes in the geopolitical conditions; disruptions associated with severe weather conditions and natural disasters, including effects from climate change; disruptions associated with disease outbreaks; the Company's ability to manage its private brand program for U.S. military commissaries, including the termination of the program or not achieving the desired results; impairment charges for goodwill or other long-lived assets; the Company's level of indebtedness; interest rate fluctuations; the Company's ability to service its debt and to comply with debt covenants; changes in government regulations; labor relations issues; changes in the military commissary system, including its supply chain, or in the level of governmental funding; product recalls and other product-related safety concerns; cost increases related to multi-employer pension plans; and other risks and uncertainties listed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission. Additional risks and uncertainties not currently known to the Company or that the Company currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this press release. INVESTOR CONTACT:Kayleigh CampbellHead of Investor MEDIA CONTACT: Adrienne Chance  SVP,   SPARTANNASH COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) 12 Weeks Ended 28 Weeks Ended July 13, July 15, July 13, July 15, (In thousands, except per share amounts) 2024 2023 2024 2023 Net sales $ 2,230,756 $ 2,312,394 $ 5,037,019 $ 5,219,788 Cost of sales 1,877,753 1,960,012 4,243,672 4,420,740 Gross profit 353,003 352,382 793,347 799,048 Operating expenses  Selling, general and administrative 318,157 318,795 721,790 736,991  Acquisition and integration, net 2,613 55 2,940 129  Restructuring and asset impairment, net 6,107 (2,254) 11,875 1,829 Total operating expenses 326,877 316,596 736,605 738,949 Operating earnings 26,126 35,786 56,742 60,099 Other expenses and (income)  Interest expense, net 10,541 9,349 24,028 20,938  Other, net (550) (685) (1,598) (1,724) Total other expenses, net 9,991 8,664 22,430 19,214 Earnings before income taxes 16,135 27,122 34,312 40,885  Income tax expense 4,646 7,654 9,852 10,080 Net earnings $ 11,489 $ 19,468 $ 24,460 $ 30,805 Net earnings per basic common share $ 0.34 $ 0.57 $ 0.72 $ 0.90 Net earnings per diluted common share $ 0.34 $ 0.56 $ 0.71 $ 0.88 Weighted average shares outstanding:   Basic 33,726 34,125 33,962 34,366   Diluted 33,958 34,641 34,329 35,116   SPARTANNASH COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) July 13, December 30, (In thousands) 2024 2023 Assets  Current assets Cash and cash equivalents $ 25,242 $ 17,964 Accounts and notes receivable, net 426,869 421,859 Inventories, net 527,595 575,226 Prepaid expenses and other current assets 65,126 62,440 Total current assets 1,044,832 1,077,489  Property and equipment, net 662,501 649,071  Goodwill 190,214 182,160  Intangible assets, net 102,793 101,535  Operating lease assets 266,221 242,146  Other assets, net 99,323 103,174 Total assets $ 2,365,884 $ 2,355,575 Liabilities and Shareholders' Equity  Current liabilities Accounts payable $ 466,830 $ 473,419 Accrued payroll and benefits 60,720 78,076 Other accrued expenses 63,557 57,609 Current portion of operating lease liabilities 42,394 41,979 Current portion of long-term debt and finance lease liabilities 9,754 8,813 Total current liabilities 643,255 659,896