SUPERVALU INC. (NYSE:SVU) Files An 8-K Results of Operations and Financial Condition
Item 2.02 Results of Operations and Financial Condition.>
Earnings Release
On January 11, 2017, SUPERVALU INC. (the Company) issued a News
Release announcing its financial results for the quarter (12
weeks)>ended December 3, 2016. A copy of the News Release issued
by the Company in connection with this Item 2.02 is attached as
Exhibit 99.1 and is incorporated by reference herein.
Release announcing its financial results for the quarter (12
weeks)>ended December 3, 2016. A copy of the News Release issued
by the Company in connection with this Item 2.02 is attached as
Exhibit 99.1 and is incorporated by reference herein.
Outlook for Fiscal 2017
On the fiscal 2017 third quarter conference call associated with
the News Release, the Company will provide an updated outlook for
the fiscal year ending February 25, 2017, including pro forma
adjusted EBITDA. The Company defines adjusted EBITDA as Net
earnings (loss) from continuing operations, plus Interest expense,
net and Income tax provision (benefit), less Net earnings
attributable to non-controlling interests calculated in accordance
with generally accepted accounting principles (GAAP), plus non-GAAP
adjustments for Depreciation and amortization, LIFO charge
(credit), certain employee-related costs and pension-related
charges (including severance costs, pension settlement charges,
multiemployer pension withdrawal charges, accelerated stock-based
compensation charges and other items), certain non-cash asset
impairment and other charges (including asset write-offs, store
closures and market exits), certain gains and losses on the sale of
property, goodwill and intangible asset impairment charges, costs
related to the separation of businesses, legal settlement charges
and gains, contract breakage costs and certain other non-cash
charges or items as determined by management. These items are
omitted either because they are non-cash items or are items that
are not considered in our supplemental assessment of our on-going
business performance. Certain of these adjustments are considered
in similar supplemental analyses by other companies, such as
Depreciation and amortization, LIFO charge (credit) and certain
other adjustments. Adjusted EBITDA is less disposed to variances in
actual performance resulting from depreciation, amortization and
other non-cash charges and credits, and more reflective of other
factors that affect the Companys underlying operating performance.
There are significant limitations to using adjusted EBITDA as a
financial measure including, but not limited to, it not reflecting
cash expenditures for capital assets or contractual commitments,
changes in working capital, income taxes and debt service expenses
that are recurring in the Company’s results of operations.
the News Release, the Company will provide an updated outlook for
the fiscal year ending February 25, 2017, including pro forma
adjusted EBITDA. The Company defines adjusted EBITDA as Net
earnings (loss) from continuing operations, plus Interest expense,
net and Income tax provision (benefit), less Net earnings
attributable to non-controlling interests calculated in accordance
with generally accepted accounting principles (GAAP), plus non-GAAP
adjustments for Depreciation and amortization, LIFO charge
(credit), certain employee-related costs and pension-related
charges (including severance costs, pension settlement charges,
multiemployer pension withdrawal charges, accelerated stock-based
compensation charges and other items), certain non-cash asset
impairment and other charges (including asset write-offs, store
closures and market exits), certain gains and losses on the sale of
property, goodwill and intangible asset impairment charges, costs
related to the separation of businesses, legal settlement charges
and gains, contract breakage costs and certain other non-cash
charges or items as determined by management. These items are
omitted either because they are non-cash items or are items that
are not considered in our supplemental assessment of our on-going
business performance. Certain of these adjustments are considered
in similar supplemental analyses by other companies, such as
Depreciation and amortization, LIFO charge (credit) and certain
other adjustments. Adjusted EBITDA is less disposed to variances in
actual performance resulting from depreciation, amortization and
other non-cash charges and credits, and more reflective of other
factors that affect the Companys underlying operating performance.
There are significant limitations to using adjusted EBITDA as a
financial measure including, but not limited to, it not reflecting
cash expenditures for capital assets or contractual commitments,
changes in working capital, income taxes and debt service expenses
that are recurring in the Company’s results of operations.
The Company further defines pro forma adjusted EBITDA to include
pro forma adjustments for net sales to reflect fees that the
Company expects to recognize in connection with performing services
for Save-A-Lot under the services agreement entered into with
Save-A-Lot on December 5, 2016 (the Services Agreement), and
Wholesale distribution sales to Save-A-Lot to a customer agreement
between the Company and Save-A-Lot that had historically been
intercompany sales. An additional adjustment is made for cost of
sales related to Wholesales distribution to Save-A-Lot which was
previously eliminated on an intercompany basis.
pro forma adjustments for net sales to reflect fees that the
Company expects to recognize in connection with performing services
for Save-A-Lot under the services agreement entered into with
Save-A-Lot on December 5, 2016 (the Services Agreement), and
Wholesale distribution sales to Save-A-Lot to a customer agreement
between the Company and Save-A-Lot that had historically been
intercompany sales. An additional adjustment is made for cost of
sales related to Wholesales distribution to Save-A-Lot which was
previously eliminated on an intercompany basis.
The following table reconciles the Companys outlook for full year
fiscal 2017 pro forma adjusted EBITDA to net earnings from
continuing operations, the most comparable GAAP measure. Additional
adjustments not related to our on-going business performance may
also arise during the fourth quarter of fiscal 2017.
fiscal 2017 pro forma adjusted EBITDA to net earnings from
continuing operations, the most comparable GAAP measure. Additional
adjustments not related to our on-going business performance may
also arise during the fourth quarter of fiscal 2017.
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RECONCILIATION OF PROJECTED NET EARNINGS FROM
CONTINUING OPERATIONS TO PROJECTED ADJUSTED EBITDA AND PRO FORMA ADJUSTED EBITDA |
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For the Fiscal Year Ended
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(In millions)
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February 25,
2017
(52 weeks)
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Results of operations, as projected
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Net earnings from continuing operations
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$
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Income tax (benefit) provision
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(3
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)
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Equity in earnings of unconsolidated affiliates
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(4
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)
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Interest expense, net
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Total operating earnings
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$
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Add Equity in earnings of unconsolidated affiliates
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Less net earnings attributable to noncontrolling
interests |
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(5
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)
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Depreciation and amortization
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LIFO charge
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Pension settlement charge
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Goodwill and intangible asset impairment charge
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Supply agreement termination fee
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(9
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)
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Other(1)
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Adjusted EBITDA
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$
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Pro forma adjustments:
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Net sales(2)
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Cost of sales(3)
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(9
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)
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Total pro forma adjustments
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Pro forma adjusted EBITDA
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$
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(1)
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Includes store closure charges and costs of $5, severance
costs of $(1) and a sales and use tax refund of $(2). |
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(2)
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This adjustment reflects (1) the fees that the Company
expects to recognize in connection with performing services for Save-A-Lot under the Services Agreement and (2) Wholesale distribution sales to Save-A-Lot to a customer agreement between the Company and Save-A-Lot that had historically been intercompany sales. Actual Services Agreement fees are subject to adjustments to the terms of the Services Agreement including for changes in service levels. This adjustment only applies to time periods prior to the sale of Save-A-Lot on December 5, 2016. |
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(3)
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This adjustment reflects the Cost of sales related to
Wholesales distribution to Save-A-Lot, which was previously eliminated on an intercompany basis. No adjustment for expenses related to the Services Agreement has been included within Cost of sales because the shared service center costs incurred to support back office functions related to the Services Agreement represent administrative overhead costs that have been included within Selling and administrative expenses within the Company’s historical consolidated financial statements. This adjustment only applies to time periods prior to the sale of Save-A-Lot on December 5, 2016. |
Management is providing an updated outlook for fiscal 2017 adjusted
EBITDA and pro forma adjusted EBITDA, which are non-GAAP financial
measures, because management believes such measurements are
important measures of business performance that provide investors
with useful supplemental information. The Company utilizes these
non-GAAP measures to analyze underlying core business trends to
understand operating performance and as a compensation performance
measure.
EBITDA and pro forma adjusted EBITDA, which are non-GAAP financial
measures, because management believes such measurements are
important measures of business performance that provide investors
with useful supplemental information. The Company utilizes these
non-GAAP measures to analyze underlying core business trends to
understand operating performance and as a compensation performance
measure.
The information in this Item 2.02 and in Exhibit 99.1 of this
Current Report on Form 8-K shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that Section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, regardless of any
general incorporation language in such filing.
Current Report on Form 8-K shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that Section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, regardless of any
general incorporation language in such filing.
Forward-Looking Statements
Except for the historical and factual information contained herein,
the matters set forth in this report and related conference call,
particularly those pertaining to SUPERVALUs expectations, guidance
or future operating results, and other statements identified by
words such as estimates, expects, projects, plans, intends, outlook
and similar expressions are forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including competition, ability to execute
operations and initiatives, ability to realize benefits from
acquisitions and dispositions, reliance on wholesale customers
ability to grow, ability to maintain or increase margins,
substantial indebtedness,
the matters set forth in this report and related conference call,
particularly those pertaining to SUPERVALUs expectations, guidance
or future operating results, and other statements identified by
words such as estimates, expects, projects, plans, intends, outlook
and similar expressions are forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including competition, ability to execute
operations and initiatives, ability to realize benefits from
acquisitions and dispositions, reliance on wholesale customers
ability to grow, ability to maintain or increase margins,
substantial indebtedness,
labor relations issues, escalating costs of providing employee
benefits, relationships with Save-A-Lot, including the services
agreement entered into in connection with the sale of the
Save-A-Lot business, Albertsons LLC and New Albertsons Inc.,
intrusions to and disruption of information technology systems,
impact of economic conditions, commodity pricing, governmental
regulation, food and drug safety issues, legal proceedings,
pharmacy reimbursement and health care financing, intellectual
property protection, severe weather, natural disasters and adverse
climate changes, disruption to supply chain and distribution
network, changes in military business, adequacy of insurance,
volatility in fuel and energy costs, asset impairment charges,
fluctuations in our common stock price and other risk factors
relating to our business or industry as detailed from time to time
in SUPERVALUs reports filed with the SEC. You should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this report. Unless legally required,
SUPERVALU undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
benefits, relationships with Save-A-Lot, including the services
agreement entered into in connection with the sale of the
Save-A-Lot business, Albertsons LLC and New Albertsons Inc.,
intrusions to and disruption of information technology systems,
impact of economic conditions, commodity pricing, governmental
regulation, food and drug safety issues, legal proceedings,
pharmacy reimbursement and health care financing, intellectual
property protection, severe weather, natural disasters and adverse
climate changes, disruption to supply chain and distribution
network, changes in military business, adequacy of insurance,
volatility in fuel and energy costs, asset impairment charges,
fluctuations in our common stock price and other risk factors
relating to our business or industry as detailed from time to time
in SUPERVALUs reports filed with the SEC. You should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this report. Unless legally required,
SUPERVALU undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Item 9.01 Financial Statements and Exhibits.>
(d) Exhibits.
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Exhibit Number
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Description
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99.1
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News Release of SUPERVALU INC., dated January 11, 2017
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>
About SUPERVALU INC. (NYSE:SVU)
Supervalu Inc. is a wholesale distributor to independent retail customers across the United States. The Company’s segments include Wholesale and Retail. The Company offers a range of advertised brand name and private-label products, including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail stores to shoppers and through its Wholesale segment to independent retail customers. The Company’s Wholesale segment provides wholesale distribution of products to independent retail customers. Wholesale is organized and operated through two geographic regions: East and West. As of February 27, 2016, the Company conducted its Retail operations through a total of 200 stores primarily organized under five regionally-based retail banners of Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s, as well as two Rainbow and two County Market stores. SUPERVALU INC. (NYSE:SVU) Recent Trading Information
SUPERVALU INC. (NYSE:SVU) closed its last trading session 00.00 at 4.79 with 5,196,549 shares trading hands.