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    Nash Finch Q4 Revenue Up 12 %; Net Off 27 %

    The distributor is angling to strengthen its financial position during “one of the most difficult business environments in history.”

    Nash Finch yesterday posted a fourth-quarter revenue gain of $1.2 billion, up from $1.07 billion during the same period in the prior year, while same-store sales rose 5.3 percent alongside an 11 percent gain in food distribution sales. The company’s fourth-quarter results, which excluded a 13th week vs. the same period last year, also found military distribution segment revenues increasing 16.5 percent.

    Meanwhile, during the quarter ended Jan. 3, the Minneapolis-based food distributor’s net income fell 27 percent on 12 percent higher revenue, while its earnings declined to $6.2 million, or 47 cents a share, from $8.5 million, or 62 cents, in the year-ago period. Nash Finch cited special charges -- including those related to inventory accounting totaling $3.5 million, or 26 cents per share -- as the culprits for hurting its net income by 26 cents a share in the latest quarter, and one cent a share a year earlier.

    For the year, the company reported sales of $4.7 billion, up from $4.5 billion in 2007, and earnings of $36.2 million, or $2.75 per share, down from $38.8 million, or $2.84 per share.

    Consolidated EBITDA for fiscal 2008 increased 11.6 percent to a record $143.7 million, or 3.1 percent of sales vs. $129 million, or 3 percent of sales, for the prior-year period. For the fourth quarter 2008, Nash Finch’s consolidated EBITDA rose 17.5 percent to $35.5 million, or 3 percent of sales, vs. $30 million, or 3 percent of sales, in the prior-year period.

    “We strengthened our financial position during one of the most difficult business environments in history,” said Alec Covington, Nash Finch’s president and CEO, of the company’s fourth-quarter performance. “Each of our business units achieved positive sales and EBITDA performance over the prior year, resulting in a strong second half and full year for 2008.”

    In particular, Covington cited the company’s sales of $4.7 billion and EBITDA of $143.7 million as new company records that “confirm we are on the right path [in] implementing our strategies.”

    The company said its 2 percent fiscal 2008 retail segment sales increase to $602 million was primarily attributable to the acquisition of the two new stores, an additional week of sales, and the closure of four retail stores. Excluding the extra sales from the 53rd week in fiscal 2008 of $11.3 million, sales were flat vs. fiscal 2007.

    The company said its retail segment sales increase of 10 percent in the fourth quarter 2008 to $148 million was primarily attributable to the acquisition of two retail stores in the second quarter 2008 and the additional week of sales. Excluding the extra sales from the 53rd week in the fourth quarter of 2008, sales increased by 1.4 percent, while same-store sales vs. the prior year were down 0.2 percent and 0.8 percent in the fourth quarter and fiscal 2008, respectively.

    During the fourth quarter, Covington said the company added new customers and implemented supply chain and working capital initiatives “that resulted in significant progress in achieving our long-term financial targets. As we continue to invest in our businesses, our focus will be on providing sustainable growth while maintaining our position as a low-cost supplier in a competitive marketplace.

    “We enter 2009 cautiously, due to the uncertainty of the breadth and depth of the current economic downturn,” noted Covington, adding that deflation within certain key commodities will “create a challenging business environment for us. In spite of these challenges, we remain committed to our core businesses and are particularly pleased with the accomplishments of our military segment last year, both in terms of sales and EBITDA growth.”

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