MINNEAPOLIS — Nash Finch Company (Nasdaq:NAFC), a leading national food distributor and retailer, today announced that the Company will take a non-cash goodwill impairment charge in fiscal year 2009 relating to its retail segment. There is approximately $69.9 million of retail goodwill on the Companys balance sheet, and subject to the completion of appraisals that are underway, the Company expects that a significant portion of its retail goodwill will likely be written off.
It is important to understand that a write-down of goodwill is a non-cash charge on our consolidated statement of income and does not impact our cash flows or Consolidated EBITDA(1). Nash Finch has a very strong balance sheet, and despite the challenging economy, we maintain disciplined controls over our business segments and spending that allow us to generate significant cash from operations. We have one of the highest ratios of free cash flow to net assets in our industry, said Alec Covington, President and CEO of Nash Finch.
Similar to the trends seen in the rest of the food wholesaling and retail industry during this challenging economic period, the Companys comparable fourth quarter sales were soft, after excluding the sales attributable to the GSC acquisition and the 53rd week in the Companys fiscal fourth quarter of 2008. The Company expects fourth quarter Consolidated EBITDA will be below the fourth quarter of the prior year, after excluding the results of the 53rd week in its fiscal fourth quarter of 2008(2).
The Company will report fourth quarter and fiscal 2009 earnings on March 4, 2010.
(1) Consolidated EBITDA, and segment EBITDA is calculated as earnings before interest, income tax, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non-cash charges (such as LIFO, asset impairments, closed store lease costs and share-based compensation), less cash payments made during the current period on non-cash charges recorded in prior periods. Consolidated EBITDA should not be considered an alternative measure of our net income, operating performance, cash flows or liquidity. Consolidated EBITDA is provided as additional information as a key metric used to determine payout pursuant to our Short-Term and Long-Term Incentive Plans.
(2) On November 12, 2009, the Company reported the extra sales and consolidated EBITDA from the 53rd week in fiscal 2008 were approximately $99.8 million and $3.0 million, respectively.
Source: Nash Finch Company