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Special charges weighed heavily on Nash Finch Co.'s third quarter profits, which slid 44 percent in spite of a 5.1 percent sales gain.
The Minneapolis, Minn.-based wholesaler posted net earnings of $8.6 million, or $0.65 per share, during the 16-week period ended October 4, 2008, down from $15.4 million in the same quarter last year. The company said the earnings slide came as a result of charges totaling $4.6 million or $0.35 per share, net of tax, which resulted primarily from the year-over-year increase in non-cash LIFO charges.
On the bright side, total company sales rose 5 percent to $1.4 billion. Sales for the first 40 weeks of 2008 were $3.5 billion compared to $3.5 billion in the prior-year period, a 1 percent increase. Excluding the impact of the sales decrease attributable to a large customer who transitioned to another supplier in mid-2007 of $72.8 million, total company sales increased by 3.3 percent year-to-date.
Segment-wise, food distribution sales increased 3.7 percent to $840 million from $810 million in the previous year as a result of increases in sales to new and existing customers.
Alec Covington, Nash Finch's president and chief executive, the company is cutting costs and working on improving sales, "All of our business units contributed with strong sales and EBITDA performance over the prior year."
Covington further noted that Nash Finch remains "committed to identifying profitable opportunities to grow top-line sales while taking prudent steps to contain and reduce controllable costs. We have examined the impact of the recent financial crisis and I am pleased to report our company balance sheet is solid, our access to credit is unaffected and our bank lending group is intact."
In its military distribution segment, sales rose 9 percent year-over-year, reflecting significant sales increases at both domestic and European commissionaires.