Nash Finch Company
's (
NAFC
) second-quarter 2012 earnings (excluding one-time items) of 69
cents per share surpassed the Zacks Consensus Estimate of 59 cents
by 17.0%.
However, it plunged 25.0% from prior-year quarter's earnings of 92
cents per share, due to the ongoing macro-economic headwinds and
increasing competition.
Quarterly Details
Nash Finch's total sales in the second quarter 2012 were $1.09
billion, marginally down from $1.10 billion in the prior-year
quarter. The takeover of 12 Bag 'N Save stores boosted total
company sales by $13.0 million. Sales were above the Zacks
Consensus Estimate of $1.08 billion.
Nash Finch's total comparable sales dipped 1.5% year over year in
the reported quarter, excluding the impact of lower sales due to
regular sale/closing of retail stores.
Adjusted EBITDA in the second quarter of 2012 was $27.8 million or
2.5% of sales, as compared with $34.4 million or 3.1% of sales in
the prior-year quarter. Selling, general and administrative
expenses went up to $62.9 million from $60.2 million in the
prior-year quarter.
Segment Update
Military Distribution: Sales declined 1.1% to $523.2 million in the
second quarter of 2012 from $529.1 million in the prior-year
quarter. The decrease in sales is attributed to the increased
competition faced by the company in this segment
The segment's EBITDA decreased to $11.8 million in the second
quarter of 2012 from $14.8 million in the prior-year quarter.
EBITDA margin was 2.3% in the reported quarter, down 50 basis
points from the previous-year quarter.
Food Distribution & Retail: The combined Food Distribution and
Retail sales was almost flat compared to year-ago quarter at $569.6
million. The decrease was primarily attributable to the
sale/closing of retail stores.
Segment's EBITDA decreased to $14.4 million from $18.5 million in
the prior-year quarter. EBITDA margin contracted 80 basis points
year over year to 2.5% in the reported quarter.
Financial Update
Cash and cash equivalents for Nash Finch were $857 million as of
June 16, 2012, versus $700 million as on March 24, 2012. Long-term
debt went up to $337.4 million at quarter-end from $298.1 million
as on March 24, 2012.
Share Repurchase and Dividend
Nash Finch did not repurchase any shares in the first quarter of
2012. Nash Finch's board of directors declared a regular quarterly
cash dividend of 18 cents per share of common stock payable on
September 7, 2012 to shareholders of record at the close of
business on August 24, 2012.
Guidance
The company expects EBITDA to improve in the third quarter on the
back of potential improvement in its food distribution business due
to discontinuation of supply to Kmart which had been generating
loss for several years.
Our Recommendation
Nash Finch currently has a Zacks #3 Rank, which implies a
short-term Hold rating.
Based in Minneapolis, Minnesota, Nash Finch operates as a wholesale
food distributor in the United States. Its close competitor is
Supervalu Inc.
(
SVU
).
NASH FINCH CO (NAFC): Free Stock Analysis
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SUPERVALU INC (SVU): Free Stock Analysis Report
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