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MINNEAPOLIS – Strong margin improvements in its food distribution and military segments, plus continued debt reduction, helped food distributor Nash Finch achieve third quarter net earnings of $14.6 million, or $1.15 per share, compared to $11.6 million, or 95 cents per share, for the third quarter of last year.
Results for each period were favorably affected by reductions in income tax expense as a result of the resolution of various outstanding state and federal tax issues.
Total sales for the third quarter of 2004 were $1.191 billion versus $1.215 billion in the prior-year period as a result of food and military distribution sales increases in the 2004 quarter relative to the 2003 quarter. This number was offset by a decrease in retail sales primarily due to store closures at the end of the second quarter of 2004.
For the first 40 weeks of 2004, total sales were $2.977 billion compared to $2.960 billion in the prior-year period. Net earnings were $3.7 million, or 29 cents per share, for the 40-week period of 2004, compared to $22.1 million, or $1.82, in the year-ago period. Net earnings for the first 40 weeks of 2004 were adversely affected by an after-tax special charge of $22.3 million, or $1.77 per diluted share, resulting primarily from non-cash costs associated with retail store closures announced in the second quarter, and by after-tax costs of $2.0 million, or 16 cents per share, primarily involving inventory markdowns related to the store closures that were recorded in operating income.
Net earnings for the first 40 weeks of 2003 were adversely affected by $2.3 million, or 20 cents per share, paid in the first quarter of 2003 to lenders as consideration for bond indenture and credit facility waivers.
"We continue to win new business as a result of our industry leading operational metrics and the on-going impact of the Fleming bankruptcy," said c.e.o. Ron Marshall. "We believe we have a great deal of further sales growth potential by providing our existing customers with new and improved merchandising programs and by capitalizing on independent operators purchasing stores from major retailers seeking to rationalize their markets and retailers adding food to their product offerings."