Chairman and Former CEO, Dennis Eidson,
Appointed Interim President and CEO; Dave Staples Resigns
Announces Decision to Exit its Fresh Kitchen
Operations
Announces Preliminary Second Quarter 2019 Net
Sales and Earnings Results; Updates Fiscal 2019 Outlook
SpartanNash Company (Nasdaq: SPTN) (“SpartanNash” or the
“Company”) today announced that its Board of Directors has
appointed the Company’s Chairman, Dennis Eidson, to the additional
roles of Interim President and CEO, effective immediately. Mr.
Eidson will serve in these additional roles until the next CEO is
identified. Mr. Eidson served as CEO from 2008-2017, and previously
served as SpartanNash’s President, Chief Operating Officer and
Executive Vice President of Marketing and Merchandising during his
16-year tenure with the Company. The Board also announced that it
has accepted the resignation of President and CEO, Dave Staples,
who is leaving the Company and the SpartanNash Board.
“The Board remains confident in the Company’s strategic
direction and its ability to generate top line growth; however,
execution has fallen short of our expectations and we believe that
now is the time for a leadership change,” said Douglas Hacker, Lead
Independent Director of the Board. “I want to thank Dennis for
returning to the leadership position to guide the Company’s efforts
in revitalizing performance and maximizing long-term shareholder
value.”
Mr. Hacker continued, “On behalf of the Board, I also want to
thank Dave for his contributions to SpartanNash throughout his
tenure. Since joining the Company in 2000, Dave has presided over
numerous successful business initiatives and has been instrumental
in driving SpartanNash’s growth. We wish him well in the
future.”
“I am confident in the strength of our platform and look forward
to working with our talented team to deliver improved performance,”
said Mr. Eidson. “Our focus will be on enhancing our distribution
business, driving operational execution and organizational
development while positioning SpartanNash to achieve long-term
profitable growth and improved value for shareholders. In order to
provide transparency, we have elected to preview our second quarter
financial results, as well as our current outlook for the balance
of the year.”
Exit of Fresh Kitchen Operations
SpartanNash is announcing that it has made the decision to exit
its Indianapolis-based Fresh Kitchen operations to improve
operating earnings and EBITDA results, within the Food Distribution
segment. The Company will shift its focus and expertise to its
produce distribution and Fresh Cut operations, which have been the
hallmark of the Caito business. The Fresh Kitchen, which was
acquired in 2017 as part of SpartanNash’s acquisition of Caito
Foods, is a newly constructed facility that cooks and packages
fresh protein-based foods and complete meal solutions for a number
of different customers.
The annual net sales impact of exiting the Fresh Kitchen
operations will be approximately $20.0 million. Second quarter
preliminary earnings from continuing operations include
approximately $14.0 million of asset impairment expenses associated
with Caito’s Fresh Operations. The Company expects to complete its
transition by the end of fiscal 2019.
Preliminary Second Quarter 2019 Results and Full Year
Outlook
SpartanNash is providing preliminary results for the 12-week
second quarter ended July 13, 2019, and an updated fiscal 2019
outlook. The Company expects net sales for the 12-week second
quarter ended July 13, 2019 to be $2.00 billion compared to net
sales of $1.90 billion for the second quarter of fiscal 2018.
For the 2019 second quarter and fiscal year the Company now
expects the following:
Preliminary Results Second
Quarter Ended July 13, 2019
Reported Loss from Continuing
Operations
$(6.8) million
Reported EPS from Continuing
Operations
$(0.19)
Adjusted Earnings from Continuing
Operations
$12.2 million
Adjusted EPS from Continuing
Operations
$0.34
Adjusted EBITDA
$44.3 million
Previous Guidance Fiscal
Year Ending December 28, 2019
Updated Guidance Fiscal
Year Ending December 28, 2019
Net Sales Growth
Mid-single digits
Mid-single digits
Adjusted EBITDA
$190 - $205 million
$183 - $195 million
Adjusted EPS from Continuing
Operations
$1.20 - $1.50
$1.20 - $1.35
Reported EPS from Continuing
Operations
$0.70 - $1.04
$0.21 - $0.47
The Company’s updated guidance for the fiscal year ending
December 28, 2019 does not include costs associated with the CEO
transition and costs from a non-recurring, supplemental, transition
incentive program for eligible associates.
The Company’s adjusted earnings per diluted share for the full
fiscal year include adjustments totaling $32.0 million to $36.0
million after tax, which include after tax charges to terminate the
Company's frozen pension plan of $7.0 million to $8.3 million for
the remainder of the year and projected losses and disposition
expenses associated with the Company’s planned exit of its Fresh
Kitchen operations of $3.7 million to $4.5 million. The financial
update provided today is an estimate based on information available
to management as of the date of this release and is subject to
further changes upon completion of the Company’s standard quarter
end closing procedures. This update does not present all necessary
information for an understanding of SpartanNash’s financial
condition as of July 13, 2019, nor its results of operations for
the quarter then ended. A quantitative reconciliation of non-GAAP
adjusted earnings per diluted share for the second quarter and full
fiscal year 2019 will be provided as part of the Company’s full
second quarter financial results.
The Company does not plan to provide preliminary financial
results in the future other than in unique circumstances, or in the
event of a material event that requires disclosure. The Company
will report full second quarter financial results on Wednesday,
August 14, 2019 after the stock market closes and host a conference
call to discuss its results on Thursday, August 15, 2019 at 8:00
a.m. ET.
About SpartanNash
SpartanNash (Nasdaq: SPTN) is a Fortune 400 company whose core
businesses include distributing grocery products to a diverse group
of independent and chain retailers, its corporate-owned retail
stores and U.S. military commissaries and exchanges; as well as
premier fresh produce distribution and fresh food processing.
SpartanNash serves customer locations in all 50 states and the
District of Columbia, Europe, Cuba, Puerto Rico, Bahrain, Djibouti
and Egypt. SpartanNash currently operates 160 supermarkets,
primarily under the banners of Family Fare Supermarkets, Martin's
Super Markets, D&W Fresh Market, VG's Grocery, Dan's
Supermarket and Family Fresh Market. Through its MDV military
division, SpartanNash is a leading distributor of grocery products
to U.S. military commissaries.
Forward-Looking Statements
This press release contains “forward-looking” statements within
the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. These include
statements preceded by, followed by or that otherwise include the
words “outlook,” “believe,” “anticipates,” “continue,” “expects,”
“guidance,” “trend,” “on track,” “encouraged” or “plan” or similar
expressions. The statements in the “Outlook” section of this press
release are inherently forward looking. Forward-looking statements
relating to expectations about future results or events are based
upon information available to SpartanNash as of today's date and
are not guarantees of the future performance of the Company, and
actual results may vary materially from the results and
expectations discussed. Additional risks and uncertainties include,
but are not limited to, the Company's ability to compete in the
highly competitive grocery distribution, retail grocery, and
military distribution industries. Additional information concerning
these, and other risks is contained in SpartanNash’s most recently
filed Annual Report on Form 10-K, recent Current Reports on Form
8-K and other SEC filings. All subsequent written and oral
forward-looking statements concerning SpartanNash, or other matters
and attributable to SpartanNash or any person acting on its behalf
are expressly qualified in their entirety by the cautionary
statements above. SpartanNash does not undertake any obligation to
publicly update any of these forward-looking statements to reflect
events or circumstances that may arise after the date hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20190812005157/en/
Investor Contact: Mark Shamber Chief Financial Officer
and Executive Vice President (616) 878-8023
Media Contact: Meredith Gremel Vice President Corporate
Affairs and Communications (616) 878-2830
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