SpartanNash(SPTN) - 2025 Q2 - Quarterly Results

SpartanNash Second Quarter Fiscal 2025 Results Financial and Operational Highlights SpartanNash's Q2 FY2025 net sales rose 1.8% to $2.27 billion, net earnings fell to $6.2 million, but Adjusted EBITDA increased to $68.7 million Q2 Fiscal 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales (Billions $) | $2.27 | $2.23 | +1.8% | | Net Earnings (Millions $) | $6.2 | $11.5 | -46.1% | | Diluted EPS ($) | $0.18 | $0.34 | -47.1% | | Adjusted EPS ($) | $0.54 | $0.59 | -8.5% | | Adjusted EBITDA (Millions $) | $68.7 | $64.5 | +6.5% | - The ratio of net long-term debt to adjusted EBITDA improved sequentially to 2.7x from 2.9x at the end of the first quarter[6] - Capital expenditures and IT capital for the quarter amounted to $56.2 million, a decrease from $73.4 million in the prior year's quarter[6] - The company returned $15.5 million to shareholders through dividends during the quarter[6] C&S Wholesale Grocers Transaction SpartanNash agreed to be acquired by C&S Wholesale Grocers for $26.90 per share, valuing the deal at $1.77 billion, with closing expected late 2025 - On June 22, 2025, SpartanNash agreed to be acquired by C&S Wholesale Grocers in an all-cash transaction[5] Transaction Details | Metric | Value | | :--- | :--- | | Purchase Price per Share ($) | $26.90 | | Total Consideration (Billions $) | $1.77 (incl. net debt) | | Premium to June 20, 2025 Close (%) | 52.5% | | Premium to 30-day VWAP (%) | 42.0% | - The transaction is expected to close in late 2025, subject to customary closing conditions including shareholder and regulatory approvals[7] Segment Performance Retail net sales grew 12.8% to $762.9 million from acquisitions, while Wholesale net sales fell 3.0% to $1.51 billion due to volume declines Q2 2025 Segment Results (vs Q2 2024) | Segment | Net Sales ($) | % Change | Operating Earnings ($) | % Change | | :--- | :--- | :--- | :--- | :--- | | Wholesale | $1.51B | -3.0% | $18.0M | -18.3% | | Retail | $762.9M | +12.8% | $0.1M | -97.9% | - Wholesale sales decline was driven by reduced case volumes in national accounts and the elimination of intercompany sales to newly acquired stores, partially offset by higher military channel sales[6] - Retail sales growth was due to incremental sales from recently acquired stores, however, retail comparable store sales decreased by 0.5% due to lower unit volumes[6] Consolidated Financial Statements This section presents unaudited condensed consolidated financial statements, including earnings, balance sheets, and cash flows for Q2 and year-to-date fiscal 2025 Condensed Consolidated Statements of Earnings Q2 2025 net sales rose to $2.27 billion, but increased operating expenses led to lower operating earnings of $18.1 million and net earnings of $6.2 million Q2 2025 Statement of Earnings Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $2,271,145 | $2,230,756 | | Gross profit | $382,622 | $353,003 | | Total operating expenses | $364,498 | $326,877 | | Operating earnings | $18,124 | $26,126 | | Net earnings | $6,190 | $11,489 | | Diluted EPS | $0.18 | $0.34 | Condensed Consolidated Balance Sheets As of July 12, 2025, total assets were $2.56 billion, slightly down from fiscal 2024, with liabilities decreasing and shareholders' equity stable Balance Sheet Highlights (in thousands) | Line Item | July 12, 2025 | Dec 28, 2024 | | :--- | :--- | :--- | | Total current assets | $1,087,985 | $1,091,811 | | Total assets | $2,557,509 | $2,602,296 | | Total current liabilities | $693,550 | $695,239 | | Total long-term debt | $713,971 | $740,969 | | Total shareholders' equity | $741,824 | $743,490 | Condensed Consolidated Statements of Cash Flows For the 28 weeks ended July 12, 2025, net cash from operating activities decreased to $112.6 million, resulting in a net cash increase of $3.9 million for the period Year-to-Date Cash Flow Summary (in thousands) | Cash Flow Activity | 28 Weeks Ended Jul 12, 2025 | 28 Weeks Ended Jul 13, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $112,563 | $132,098 | | Net cash used in investing activities | $(59,445) | $(79,495) | | Net cash used in financing activities | $(49,184) | $(45,325) | | Net increase in cash | $3,934 | $7,278 | Non-GAAP Financial Measures and Reconciliations This section details non-GAAP financial measures like Adjusted EBITDA and EPS, used by management to assess performance by excluding non-operational items, with reconciliations - The company provides non-GAAP measures such as adjusted EPS, net long-term debt, and adjusted EBITDA, which management believes provide useful supplemental information for investors to evaluate performance[24] - Adjustments to derive non-GAAP measures exclude items considered "non-operational" or "non-core," such as LIFO expense, organizational realignment costs, acquisition and integration expenses, and restructuring charges[25][26] Reconciliation of Net Earnings to Adjusted EBITDA (Table 2) Q2 2025 Adjusted EBITDA increased to $68.7 million, reconciled from GAAP net earnings of $6.2 million by adding back depreciation, acquisition, and realignment costs Q2 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net earnings | $6,190 | $11,489 | | Depreciation and amortization | $27,876 | $23,342 | | Acquisition and integration, net | $9,315 | $2,613 | | Organizational realignment, net | $4,330 | $1,369 | | Adjusted EBITDA | $68,695 | $64,506 | Reconciliation of Net Earnings to Adjusted EPS (Table 3) Q2 2025 Adjusted EPS was $0.54, adjusted from GAAP diluted EPS of $0.18 by excluding after-tax impacts of acquisition and organizational realignment costs Q2 Adjusted EPS Reconciliation | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net earnings (Thousands $) | $6,190 | $11,489 | | Diluted EPS ($) | $0.18 | $0.34 | | Total adjustments, net of taxes (Thousands $) | $12,465 | $8,390 | | Adjusted earnings (Thousands $) | $18,655 | $19,879 | | Adjusted EPS ($) | $0.54 | $0.59 | Reconciliation of Debt to Net Long-Term Debt (Table 4) As of July 12, 2025, net long-term debt was $703.4 million, with the leverage ratio improving to 2.7x from 2.9x sequentially Net Long-Term Debt and Leverage Ratio | Metric (in thousands, except ratio) | July 12, 2025 | April 19, 2025 | | :--- | :--- | :--- | | Total debt (Thousands $) | $728,941 | $777,028 | | Less: Cash and cash equivalents (Thousands $) | $(25,504) | $(19,970) | | Net long-term debt (Thousands $) | $703,437 | $757,058 | | Rolling 52-Weeks Adjusted EBITDA (Thousands $) | $264,644 | $260,455 | | Net long-term debt to adjusted EBITDA ratio (x) | 2.7x | 2.9x | Reconciliation of Purchases of Property and Equipment to Capital Expenditures and IT Capital (Table 5) For the 28 weeks ended July 12, 2025, total capital expenditures and IT capital decreased to $56.2 million from $73.4 million in the prior year YTD Capital Expenditures and IT Capital (in thousands) | Line Item | 28 Weeks Ended Jul 12, 2025 | 28 Weeks Ended Jul 13, 2024 | | :--- | :--- | :--- | | Purchases of property and equipment | $51,179 | $67,074 | | Plus: Cloud computing spend | $5,032 | $6,347 | | Capital expenditures and IT capital | $56,211 | $73,421 | Forward-Looking Statements and Other Information This section outlines risks and uncertainties for forward-looking statements, particularly regarding the C&S transaction, directing investors to SEC filings - Due to the pending transaction with C&S, the company will not host an earnings conference call or provide fiscal 2025 financial guidance[8] - The report includes forward-looking statements subject to significant risks, including the ability to complete the C&S transaction, competitive pressures, macroeconomic uncertainty, and other factors detailed in SEC filings[10][11] - Investors are urged to read the definitive proxy statement filed with the SEC on July 31, 2025, for important information regarding the proposed transaction[12]