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MINNEAPOLIS -- Nash Finch Co. here saw a slight dip in total sales during the first quarter ended March 24, 2007, along with an increased earnings and the transition of a 20-store retail customer to a new supplier.
Sales for Nash Finch's first quarter were $1.032 billion, down 0.2 percent vs. $1.035 billion in the first quarter 2006. The wholesaler said the slight decline was attributable to the 2006 closure of underperforming retail stores, and customer attrition in the food distribution segment, offset by stronger sales in the military segment.
Net earnings for the first quarter of 2007, meanwhile, were $5.3 million, or $0.39 per share, as compared to net earnings of $3.9 million, or $0.29 per share in the prior year quarter. Consolidated EBITDA for the first quarter 2007 was $25.2 million, or 2.4 percent of sales vs. $24 million, or 2.3 percent of sales for the first quarter 2006.
Alec Covington, Nash Finch's president and c.e.o., said he was the improvement in EBITDA margins during the quarter came about as "a result of hard work on the part of our employees who are dedicated to achieving the company's goals."
Same store sales declined 0.3 percent for the first quarter 2007 as compared to the same period in 2006, which the company said marks substantial improvement from the same store sales decline reported in the fourth quarter 2006 of 0.7 percent and the decline of 1.8 percent for fiscal 2006.
The retail segment profit improvement in the first quarter 2007 relative to the same period last year was primarily due to improved gross profit margins. During the latest quarter, the company repaid $14.5 million of revolving and other long-term debt while it continued to focus on effectively managing its working capital, reducing indebtedness and improving cash flow. The company's debt leverage ratio at of the end of the first quarter 2007 improved to 3.24, down from 3.42 at the end of fiscal 2006.
Citing the appointment of Denise Wilson as s.v.p./human resources, Covington said the company now has all of its key executive positions filled.
In other news, Nash Finch also said it will discontinue its supply relationship with South Bend, Ind.-based Martin's Super Markets.
"After careful consideration and dialogue, it became apparent that it would not be possible to continue the relationship," said Covington. "Martin's has been a very loyal and supportive customer of Nash Finch Co. since our acquisition of two distribution centers in 2005, and we wish them continued success in the future. It is our intention to fully support a smooth and orderly transition to their new supplier."
Spartan Stores picked up the Martin's account.
Martin's represented approximately $153 million in Nash Finch volume during fiscal 2006 and accounted for approximately $3 million in EBITDA contribution to the company during the same timeframe. The supply transition is expected to be complete within the next 60 to 90 days, Nash Finch said.