SpartanNash Company Annual Report 2022

Plain-text annual report

ANNUAL REPORT 202220222022 SPARTANNASH ANNUAL REPORT FINANCIAL HIGHLIGHTS Net Sales (in billions) 2022 2021 2020 2019 2018 Adjusted EBITDA (in millions)* 2022 2021 2020 2019 2018 Operating Cash Flows (in millions) 2022 2021 2020 2019 2018 $9.64 $243 $8.93 $9.35 $8.54 $8.06 $214 $239 $178 $209 $110 $161 $180 $172 $307 Net sales Gross profit margin Operating earnings Adjusted operating earnings* Earnings from continuing operations Adjusted earnings from continuing operations* Earnings from continuing operations per diluted share Adjusted earnings from continuing operations per diluted share* Adjusted EBITDA* Cash provided from operating activities 2022 (52 Weeks) $9,643 15.5% 69 137 35 85 0.95 2.33 243 110 2021 (52 Weeks) 2020 (53 Weeks) 2019 (52 Weeks) 2018 (52 Weeks) $8,931 15.7% 112 114 74 75 $9,348 15.2% 102 138 76 92 $8,536 14.6% $8,065 13.8% 57 88 6 44 71 120 34 71 2.05 2.12 0.16 0.94 2.08 2.58 1.23 214 161 239 307 178 180 1.97 209 172 *The adjusted financial information presented reflects non-GAAP financial measures. Please see the Appendix for the respective reconciliations of these measures (Dollars in millions, except per share data and percentage data). Amounts are for the Company’s fiscal years, which end on the Saturday closest to December 31. Executing Value-Enhancing M&A We have developed a consistent M&A assessment framework through which we evaluate external value- enhancing opportunities. In June 2022, we acquired Shop-N-Save Food Centers, a small Northern Michigan grocery chain. We finished the year strong by adding Great Lakes Foods, an independent grocery wholesaler, to our distribution network. This acquisition brings approximately 100 new customers to our portfolio and allows us to further optimize our supply chain network throughout the Midwest. We continue to evaluate inorganic growth opportunities, which would be incremental to our 2025 adjusted EBITDA target. Commitment to Sustainability One of our Core Behaviors is We Create Solutions, and we are focused on solving tough challenges in our business and for our Associates, customers, and the communities we serve. This commitment extends beyond the footprint of our distribution centers and stores, and it also supports SpartanNash’s long-term growth. We issued our first ESG Report in 2022, which provided insights on the sustainability efforts the Company has been working on for several years. The report also established baseline metrics and our approach to future ESG An update on our sustainability journey, as well as our newly established ESG goals, will be provided in our next ESG Report. The report is scheduled to be issued in mid-2023. I am energized to build on our momentum in 2023. The progress we have made thus far gives me great confidence that we are going to deliver on our long-term financial targets and continue driving value for our shareholders well into the future. On behalf of the Board of Directors, our Executive Leadership Team, and all our Associates, I thank you for your continued support and investment in SpartanNash. initiatives. Playing to Win Sincerely, Tony Bashir Sarsam President and Chief Executive Officer 2022 Annual Report Letter from the President and CEO Dear Fellow Shareholders, As a food solutions company, we are proud of the role we play in delivering the ingredients for a better life. We are also pleased with our strong performance and the value created for our shareholders in 2022. Last year, we continued to successfully build upon the execution of our corporate identity, known as Our Winning RecipeTM, and made critical investments in putting People First. Our team drove solid progress in improving our Key Performance Indicators, capturing new cost savings, and enhancing the value and service we provide to our customers. In what was a pivotal year for SpartanNash, I’m proud to share our 2022 highlights: • Generated $9.6 billion in revenues, an 8% increase, compared to $8.9 billion in 2021 • Returned $62.2 million to shareholders in the form of dividends and share repurchases • Secured $25+ million in run-rate cost savings in connection with the supply chain transformation initiative • Optimized our fleet mileage by implementing a West Coast distribution solution • Decreased ozone-depleting emissions in our distribution centers by more than 30% in 2022, compared to 2021 • Launched and made meaningful progress on our merchandising transformation initiative that we anticipate will generate significant benefits for our business, as well as our customers and vendors • Leveraged insights from our Marketing innovation work to further increase OwnBrands penetration • Hosted our largest-ever customer expo for independent retailers with more than 1,500 attendees • Continued to attract and retain top talent and earned recognition on Indeed.com's list of 25 Most Flexible • Companies Increased shareholder transparency by providing a detailed roadmap to achieving our long-term financial targets People First In the past year, I have witnessed firsthand a step-change in the positive energy across the organization. The change is invigorating. We are writing a new chapter in our Company’s 100+ year history. Our accomplishments have been made possible by our team’s dedication to operational excellence and a commitment to delivering the ingredients for a better life. I thank each of our 17,500 Associates who go above and beyond every day. With a focus on our People First culture, in 2022 we hired a new Chief Human Resources Officer and added a new Senior Director of Diversity and Inclusion role. These two leaders and their team are furthering our commitment of hiring, developing, and maintaining a diverse and inclusive workforce. Our people are the heart of the Company, and their safety and wellbeing are of the utmost importance. Since 2020, we have decreased our lost-time incidents by 72%, and we are implementing new initiatives to improve safety. Fiscal 2025 Long-Term Targets Building on the success of our transformation, we have now pivoted to growth. By continuing to implement Our Winning Recipe, we expect our fiscal 2025 long-term financial targets will grow: • Net sales to more than $10.5 billion, an increase of at least 17% from fiscal 2021 • Adjusted EBITDA to more than $300 million(1), an increase of at least 40% from fiscal 2021 (1) The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures used in the Fiscal 2025 Long-Term Targets disclosed in this letter without unreasonable effort because it is not possible to predict certain adjustment items with a reasonable degree of certainty since they are not yet known or quantifiable, and do not relate to the Company's routine activities. These adjustments may include, among other items, restructuring and asset impairment activity, acquisition and integration costs, severance, costs related to the postretirement plan amendment and settlement, and organizational realignment costs, and the impact of adjustments to the last-in-first-out (LIFO) inventory reserve. This information is dependent upon future events, which may be outside of the Company's control and could have a significant impact on its GAAP financial results for fiscal 2025. 2022 Annual Report Letter from the President and CEO Dear Fellow Shareholders, As a food solutions company, we are proud of the role we play in delivering the ingredients for a better life. We are also pleased with our strong performance and the value created for our shareholders in 2022. Last year, we continued to successfully build upon the execution of our corporate identity, known as Our Winning RecipeTM, and made critical investments in putting People First. Our team drove solid progress in improving our Key Performance Indicators, capturing new cost savings, and enhancing the value and service we provide to our customers. In what was a pivotal year for SpartanNash, I’m proud to share our 2022 highlights: • Generated $9.6 billion in revenues, an 8% increase, compared to $8.9 billion in 2021 • Returned $62.2 million to shareholders in the form of dividends and share repurchases • Secured $25+ million in run-rate cost savings in connection with the supply chain transformation initiative • Optimized our fleet mileage by implementing a West Coast distribution solution • Decreased ozone-depleting emissions in our distribution centers by more than 30% in 2022, compared to 2021 • Launched and made meaningful progress on our merchandising transformation initiative that we anticipate will generate significant benefits for our business, as well as our customers and vendors • Leveraged insights from our Marketing innovation work to further increase OwnBrands penetration • Hosted our largest-ever customer expo for independent retailers with more than 1,500 attendees • Continued to attract and retain top talent and earned recognition on Indeed.com's list of 25 Most Flexible • Increased shareholder transparency by providing a detailed roadmap to achieving our long-term Companies financial targets People First In the past year, I have witnessed firsthand a step-change in the positive energy across the organization. The change is invigorating. We are writing a new chapter in our Company’s 100+ year history. Our accomplishments have been made possible by our team’s dedication to operational excellence and a commitment to delivering the ingredients for a better life. I thank each of our 17,500 Associates who go above and beyond every day. With a focus on our People First culture, in 2022 we hired a new Chief Human Resources Officer and added a new Senior Director of Diversity and Inclusion role. These two leaders and their team are furthering our commitment of hiring, developing, and maintaining a diverse and inclusive workforce. Our people are the heart of the Company, and their safety and wellbeing are of the utmost importance. Since 2020, we have decreased our lost-time incidents by 72%, and we are implementing new initiatives to improve safety. Fiscal 2025 Long-Term Targets Building on the success of our transformation, we have now pivoted to growth. 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(cid:33)(cid:52)(cid:49)(cid:58)(cid:57)(cid:46)(cid:52)(cid:51)(cid:56)(cid:6)(cid:1) (cid:2)(cid:14)(cid:12)(cid:1) (cid:4)(cid:9)(cid:10)(cid:10)(cid:9)(cid:10)(cid:7)(cid:1) (cid:3)(cid:6)(cid:5)(cid:9)(cid:11)(cid:6)(cid:1) (cid:46)(cid:51)(cid:40)(cid:49)(cid:58)(cid:41)(cid:42)(cid:56)(cid:1) (cid:38)(cid:51)(cid:1) (cid:38)(cid:41)(cid:41)(cid:46)(cid:57)(cid:46)(cid:52)(cid:51)(cid:38)(cid:49)(cid:1) (cid:43)(cid:52)(cid:40)(cid:58)(cid:56)(cid:1) (cid:52)(cid:51)(cid:1) (cid:53)(cid:55)(cid:52)(cid:50)(cid:52)(cid:57)(cid:46)(cid:51)(cid:44)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:43)(cid:58)(cid:55)(cid:57)(cid:45)(cid:42)(cid:55)(cid:1) (cid:46)(cid:51)(cid:57)(cid:42)(cid:44)(cid:55)(cid:38)(cid:57)(cid:46)(cid:51)(cid:44)(cid:1) (cid:42)(cid:51)(cid:59)(cid:46)(cid:55)(cid:52)(cid:51)(cid:50)(cid:42)(cid:51)(cid:57)(cid:38)(cid:49)(cid:6)(cid:1) (cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:49)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:44)(cid:52)(cid:59)(cid:42)(cid:55)(cid:51)(cid:38)(cid:51)(cid:40)(cid:42)(cid:1) (cid:3)(cid:22)(cid:33)(cid:24)(cid:4)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:41)(cid:46)(cid:59)(cid:42)(cid:55)(cid:56)(cid:46)(cid:57)(cid:62)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:46)(cid:51)(cid:40)(cid:49)(cid:58)(cid:56)(cid:46)(cid:52)(cid:51)(cid:1) (cid:3)(cid:21)(cid:2)(cid:25)(cid:4)(cid:1) (cid:53)(cid:55)(cid:38)(cid:40)(cid:57)(cid:46)(cid:40)(cid:42)(cid:56)(cid:1) (cid:46)(cid:51)(cid:57)(cid:52)(cid:1) (cid:52)(cid:58)(cid:55)(cid:1) (cid:40)(cid:58)(cid:56)(cid:57)(cid:52)(cid:50)(cid:42)(cid:55)(cid:7)(cid:43)(cid:52)(cid:40)(cid:58)(cid:56)(cid:42)(cid:41)(cid:6)(cid:1) (cid:46)(cid:51)(cid:51)(cid:52)(cid:59)(cid:38)(cid:57)(cid:46)(cid:59)(cid:42)(cid:1) (cid:43)(cid:52)(cid:52)(cid:41)(cid:1) (cid:56)(cid:52)(cid:49)(cid:58)(cid:57)(cid:46)(cid:52)(cid:51)(cid:56)(cid:1) (cid:40)(cid:52)(cid:50)(cid:53)(cid:38)(cid:51)(cid:62)(cid:8)(cid:1) (cid:36)(cid:42)(cid:1) (cid:60)(cid:46)(cid:49)(cid:49)(cid:1) (cid:45)(cid:52)(cid:49)(cid:41)(cid:1) (cid:42)(cid:38)(cid:40)(cid:45)(cid:1) (cid:52)(cid:57)(cid:45)(cid:42)(cid:55)(cid:1) (cid:38)(cid:40)(cid:40)(cid:52)(cid:58)(cid:51)(cid:57)(cid:38)(cid:39)(cid:49)(cid:42)(cid:1) (cid:57)(cid:52)(cid:1) (cid:42)(cid:51)(cid:56)(cid:58)(cid:55)(cid:42)(cid:1) (cid:38)(cid:1) (cid:55)(cid:42)(cid:49)(cid:46)(cid:38)(cid:39)(cid:49)(cid:42)(cid:6)(cid:1) (cid:56)(cid:58)(cid:56)(cid:57)(cid:38)(cid:46)(cid:51)(cid:38)(cid:39)(cid:49)(cid:42)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:55)(cid:42)(cid:56)(cid:46)(cid:49)(cid:46)(cid:42)(cid:51)(cid:57)(cid:1)(cid:43)(cid:58)(cid:57)(cid:58)(cid:55)(cid:42)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:56)(cid:57)(cid:38)(cid:48)(cid:42)(cid:45)(cid:52)(cid:49)(cid:41)(cid:42)(cid:55)(cid:56)(cid:8)(cid:1) (cid:1) (cid:36)(cid:42)(cid:1)(cid:38)(cid:55)(cid:42)(cid:1)(cid:46)(cid:51)(cid:40)(cid:55)(cid:42)(cid:41)(cid:46)(cid:39)(cid:49)(cid:62)(cid:1)(cid:53)(cid:55)(cid:52)(cid:58)(cid:41)(cid:1)(cid:52)(cid:43)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:11)(cid:9)(cid:11)(cid:10)(cid:1)(cid:55)(cid:42)(cid:56)(cid:58)(cid:49)(cid:57)(cid:56)(cid:6)(cid:1)(cid:60)(cid:46)(cid:57)(cid:45)(cid:1)(cid:45)(cid:46)(cid:44)(cid:45)(cid:49)(cid:46)(cid:44)(cid:45)(cid:57)(cid:56)(cid:1)(cid:51)(cid:52)(cid:57)(cid:42)(cid:41)(cid:1)(cid:39)(cid:42)(cid:49)(cid:52)(cid:60)(cid:17)(cid:1) (cid:1) •(cid:1) (cid:24)(cid:42)(cid:51)(cid:42)(cid:55)(cid:38)(cid:57)(cid:42)(cid:41)(cid:1)(cid:2)(cid:13)(cid:6)(cid:14)(cid:1)(cid:32)(cid:39)(cid:41)(cid:41)(cid:39)(cid:44)(cid:43)(cid:1)(cid:39)(cid:43)(cid:1)(cid:46)(cid:35)(cid:50)(cid:35)(cid:43)(cid:49)(cid:35)(cid:47)(cid:8)(cid:1) •(cid:1) (cid:32)(cid:42)(cid:57)(cid:58)(cid:55)(cid:51)(cid:42)(cid:41)(cid:1)(cid:52)(cid:59)(cid:42)(cid:55)(cid:1)(cid:2)(cid:9)(cid:10)(cid:1)(cid:42)(cid:39)(cid:41)(cid:41)(cid:39)(cid:44)(cid:43)(cid:1)(cid:48)(cid:44)(cid:1)(cid:47)(cid:38)(cid:31)(cid:46)(cid:35)(cid:38)(cid:44)(cid:41)(cid:34)(cid:35)(cid:46)(cid:47)(cid:1)(cid:46)(cid:51)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:43)(cid:52)(cid:55)(cid:50)(cid:1)(cid:52)(cid:43)(cid:1)(cid:41)(cid:46)(cid:59)(cid:46)(cid:41)(cid:42)(cid:51)(cid:41)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:56)(cid:45)(cid:38)(cid:55)(cid:42)(cid:1)(cid:55)(cid:42)(cid:53)(cid:58)(cid:55)(cid:40)(cid:45)(cid:38)(cid:56)(cid:42)(cid:56)(cid:8)(cid:1) Executing Value-Enhancing M&A •(cid:1) (cid:18)(cid:40)(cid:45)(cid:46)(cid:42)(cid:59)(cid:42)(cid:41)(cid:1)(cid:7)(cid:8)(cid:6)(cid:12)(cid:3)(cid:1)(cid:48)(cid:51)(cid:44)(cid:5)(cid:53)(cid:35)(cid:31)(cid:46)(cid:1)(cid:46)(cid:35)(cid:48)(cid:31)(cid:39)(cid:41)(cid:1)(cid:33)(cid:44)(cid:42)(cid:45)(cid:31)(cid:46)(cid:31)(cid:32)(cid:41)(cid:35)(cid:1)(cid:47)(cid:31)(cid:41)(cid:35)(cid:47)(cid:6)(cid:1)(cid:56)(cid:46)(cid:44)(cid:51)(cid:46)(cid:43)(cid:46)(cid:40)(cid:38)(cid:51)(cid:57)(cid:49)(cid:62)(cid:1)(cid:42)(cid:61)(cid:40)(cid:42)(cid:42)(cid:41)(cid:46)(cid:51)(cid:44)(cid:1)(cid:46)(cid:51)(cid:46)(cid:57)(cid:46)(cid:38)(cid:49)(cid:1)(cid:42)(cid:61)(cid:53)(cid:42)(cid:40)(cid:57)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:56)(cid:8)(cid:1) We have developed a consistent M&A assessment framework through which we evaluate external value- •(cid:1) (cid:24)(cid:42)(cid:51)(cid:42)(cid:55)(cid:38)(cid:57)(cid:42)(cid:41)(cid:1) (cid:2)(cid:7)(cid:11)(cid:7)(cid:1) (cid:42)(cid:39)(cid:41)(cid:41)(cid:39)(cid:44)(cid:43)(cid:1) (cid:33)(cid:31)(cid:47)(cid:38)(cid:1) (cid:36)(cid:41)(cid:44)(cid:51)(cid:1) (cid:43)(cid:55)(cid:52)(cid:50)(cid:1) (cid:52)(cid:53)(cid:42)(cid:55)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:56)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:53)(cid:38)(cid:46)(cid:41)(cid:1) (cid:41)(cid:52)(cid:60)(cid:51)(cid:1) (cid:52)(cid:59)(cid:42)(cid:55)(cid:1) (cid:2)(cid:13)(cid:11)(cid:1) (cid:42)(cid:39)(cid:41)(cid:41)(cid:39)(cid:44)(cid:43)(cid:1) (cid:39)(cid:43)(cid:1) (cid:41)(cid:44)(cid:43)(cid:37)(cid:5)(cid:48)(cid:35)(cid:46)(cid:42)(cid:1) (cid:34)(cid:35)(cid:32)(cid:48)(cid:6)(cid:1) (cid:56)(cid:46)(cid:44)(cid:51)(cid:46)(cid:43)(cid:46)(cid:40)(cid:38)(cid:51)(cid:57)(cid:49)(cid:62)(cid:1) (cid:46)(cid:50)(cid:53)(cid:55)(cid:52)(cid:59)(cid:46)(cid:51)(cid:44)(cid:1)(cid:1) enhancing opportunities. In June 2022, we acquired Shop-N-Save Food Centers, a small Northern Michigan (cid:52)(cid:58)(cid:55)(cid:1)(cid:49)(cid:42)(cid:59)(cid:42)(cid:55)(cid:38)(cid:44)(cid:42)(cid:8)(cid:1) •(cid:1) (cid:25)(cid:50)(cid:53)(cid:49)(cid:42)(cid:50)(cid:42)(cid:51)(cid:57)(cid:42)(cid:41)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:55)(cid:46)(cid:44)(cid:52)(cid:55)(cid:52)(cid:58)(cid:56)(cid:49)(cid:62)(cid:1)(cid:38)(cid:41)(cid:45)(cid:42)(cid:55)(cid:42)(cid:41)(cid:1)(cid:57)(cid:52)(cid:1)(cid:45)(cid:42)(cid:38)(cid:49)(cid:57)(cid:45)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:56)(cid:38)(cid:51)(cid:46)(cid:57)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:39)(cid:42)(cid:56)(cid:57)(cid:1)(cid:53)(cid:55)(cid:38)(cid:40)(cid:57)(cid:46)(cid:40)(cid:42)(cid:56)(cid:1)(cid:57)(cid:52)(cid:1)(cid:55)(cid:42)(cid:50)(cid:38)(cid:46)(cid:51)(cid:1)(cid:52)(cid:53)(cid:42)(cid:55)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:38)(cid:49)(cid:6)(cid:1)(cid:60)(cid:45)(cid:46)(cid:49)(cid:42)(cid:1)(cid:42)(cid:51)(cid:56)(cid:58)(cid:55)(cid:46)(cid:51)(cid:44)(cid:1)(cid:48)(cid:38)(cid:35)(cid:1)(cid:47)(cid:31)(cid:36)(cid:35)(cid:48)(cid:53)(cid:1)(cid:44)(cid:36)(cid:1)(cid:44)(cid:49)(cid:46)(cid:1) grocery chain. We finished the year strong by adding Great Lakes Foods, an independent grocery wholesaler, to (cid:36)(cid:46)(cid:44)(cid:43)(cid:48)(cid:41)(cid:39)(cid:43)(cid:35)(cid:1)(cid:15)(cid:47)(cid:47)(cid:44)(cid:33)(cid:39)(cid:31)(cid:48)(cid:35)(cid:47)(cid:1)(cid:31)(cid:43)(cid:34)(cid:1)(cid:37)(cid:49)(cid:35)(cid:47)(cid:48)(cid:47)(cid:1)(cid:38)(cid:40)(cid:55)(cid:52)(cid:56)(cid:56)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:10)(cid:13)(cid:14)(cid:1)(cid:56)(cid:57)(cid:52)(cid:55)(cid:42)(cid:56)(cid:6)(cid:1)(cid:16)(cid:13)(cid:1)(cid:53)(cid:45)(cid:38)(cid:55)(cid:50)(cid:38)(cid:40)(cid:46)(cid:42)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:10)(cid:16)(cid:1)(cid:41)(cid:46)(cid:56)(cid:57)(cid:55)(cid:46)(cid:39)(cid:58)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:40)(cid:42)(cid:51)(cid:57)(cid:42)(cid:55)(cid:56)(cid:8)(cid:1) our distribution network. This acquisition brings approximately 100 new customers to our portfolio and allows us (cid:1) to further optimize our supply chain network throughout the Midwest. We continue to evaluate inorganic growth (cid:18)(cid:56)(cid:1)(cid:60)(cid:42)(cid:1)(cid:49)(cid:52)(cid:52)(cid:48)(cid:1)(cid:38)(cid:45)(cid:42)(cid:38)(cid:41)(cid:1)(cid:57)(cid:52)(cid:1)(cid:11)(cid:9)(cid:11)(cid:11)(cid:6)(cid:1)(cid:60)(cid:42)(cid:1)(cid:38)(cid:55)(cid:42)(cid:1)(cid:43)(cid:52)(cid:40)(cid:58)(cid:56)(cid:42)(cid:41)(cid:1)(cid:52)(cid:51)(cid:1)(cid:43)(cid:46)(cid:59)(cid:42)(cid:1)(cid:56)(cid:57)(cid:55)(cid:38)(cid:57)(cid:42)(cid:44)(cid:46)(cid:40)(cid:1)(cid:53)(cid:55)(cid:46)(cid:52)(cid:55)(cid:46)(cid:57)(cid:46)(cid:42)(cid:56)(cid:17)(cid:1) opportunities, which would be incremental to our 2025 adjusted EBITDA target. (cid:1) •(cid:1) (cid:17)(cid:46)(cid:35)(cid:31)(cid:48)(cid:35)(cid:1)(cid:31)(cid:1)(cid:27)(cid:35)(cid:44)(cid:45)(cid:41)(cid:35)(cid:1)(cid:20)(cid:39)(cid:46)(cid:47)(cid:48)(cid:1)(cid:17)(cid:49)(cid:41)(cid:48)(cid:49)(cid:46)(cid:35)(cid:1)(cid:48)(cid:44)(cid:1)(cid:24)(cid:31)(cid:40)(cid:35)(cid:1)(cid:28)(cid:45)(cid:31)(cid:46)(cid:48)(cid:31)(cid:43)(cid:25)(cid:31)(cid:47)(cid:38)(cid:1)(cid:13)(cid:8)(cid:6)(cid:1)(cid:19)(cid:42)(cid:45)(cid:41)(cid:44)(cid:53)(cid:35)(cid:46)(cid:1)(cid:44)(cid:36)(cid:1)(cid:17)(cid:38)(cid:44)(cid:39)(cid:33)(cid:35)(cid:1)(cid:64)(cid:1)(cid:18)(cid:57)(cid:57)(cid:55)(cid:38)(cid:40)(cid:57)(cid:46)(cid:51)(cid:44)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:55)(cid:42)(cid:57)(cid:38)(cid:46)(cid:51)(cid:46)(cid:51)(cid:44)(cid:1)(cid:57)(cid:52)(cid:53)(cid:1)(cid:57)(cid:38)(cid:49)(cid:42)(cid:51)(cid:57)(cid:1)(cid:46)(cid:56)(cid:1)(cid:50)(cid:52)(cid:55)(cid:42)(cid:1)(cid:46)(cid:50)(cid:53)(cid:52)(cid:55)(cid:57)(cid:38)(cid:51)(cid:57)(cid:1) Commitment to Sustainability (cid:57)(cid:45)(cid:38)(cid:51)(cid:1)(cid:42)(cid:59)(cid:42)(cid:55)(cid:8)(cid:1)(cid:36)(cid:42)(cid:1)(cid:60)(cid:46)(cid:49)(cid:49)(cid:1)(cid:40)(cid:52)(cid:51)(cid:57)(cid:46)(cid:51)(cid:58)(cid:42)(cid:1)(cid:57)(cid:52)(cid:1)(cid:50)(cid:38)(cid:48)(cid:42)(cid:1)(cid:56)(cid:46)(cid:44)(cid:51)(cid:46)(cid:43)(cid:46)(cid:40)(cid:38)(cid:51)(cid:57)(cid:1)(cid:46)(cid:51)(cid:59)(cid:42)(cid:56)(cid:57)(cid:50)(cid:42)(cid:51)(cid:57)(cid:56)(cid:1)(cid:46)(cid:51)(cid:1)(cid:18)(cid:56)(cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:57)(cid:42)(cid:1)(cid:60)(cid:38)(cid:44)(cid:42)(cid:56)(cid:6)(cid:1)(cid:39)(cid:42)(cid:51)(cid:42)(cid:43)(cid:46)(cid:57)(cid:56)(cid:6)(cid:1)(cid:55)(cid:42)(cid:40)(cid:52)(cid:44)(cid:51)(cid:46)(cid:57)(cid:46)(cid:52)(cid:51)(cid:6)(cid:1)(cid:40)(cid:52)(cid:50)(cid:50)(cid:58)(cid:51)(cid:46)(cid:40)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:6)(cid:1)(cid:21)(cid:2)(cid:25)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:56)(cid:38)(cid:43)(cid:42)(cid:57)(cid:62)(cid:1) One of our Core Behaviors is We Create Solutions, and we are focused on solving tough challenges in our (cid:53)(cid:55)(cid:52)(cid:44)(cid:55)(cid:38)(cid:50)(cid:56)(cid:1)(cid:57)(cid:52)(cid:1)(cid:42)(cid:51)(cid:56)(cid:58)(cid:55)(cid:42)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:57)(cid:42)(cid:38)(cid:50)(cid:1)(cid:45)(cid:38)(cid:56)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:56)(cid:58)(cid:53)(cid:53)(cid:52)(cid:55)(cid:57)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:46)(cid:51)(cid:56)(cid:53)(cid:46)(cid:55)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:57)(cid:45)(cid:42)(cid:62)(cid:1)(cid:51)(cid:42)(cid:42)(cid:41)(cid:1)(cid:57)(cid:52)(cid:1)(cid:41)(cid:52)(cid:1)(cid:57)(cid:45)(cid:42)(cid:46)(cid:55)(cid:1)(cid:39)(cid:42)(cid:56)(cid:57)(cid:1)(cid:60)(cid:52)(cid:55)(cid:48)(cid:8)(cid:1) •(cid:1) (cid:19)(cid:41)(cid:35)(cid:50)(cid:31)(cid:48)(cid:35)(cid:1)(cid:19)(cid:52)(cid:35)(cid:33)(cid:49)(cid:48)(cid:39)(cid:44)(cid:43)(cid:1)(cid:48)(cid:44)(cid:1)(cid:30)(cid:39)(cid:43)(cid:1)(cid:48)(cid:38)(cid:35)(cid:1)(cid:18)(cid:31)(cid:53)(cid:1)(cid:64)(cid:1)(cid:22)(cid:51)(cid:45)(cid:38)(cid:51)(cid:40)(cid:46)(cid:51)(cid:44)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:57)(cid:42)(cid:40)(cid:45)(cid:51)(cid:52)(cid:49)(cid:52)(cid:44)(cid:62)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:38)(cid:58)(cid:57)(cid:52)(cid:50)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:60)(cid:46)(cid:49)(cid:49)(cid:1)(cid:40)(cid:55)(cid:42)(cid:38)(cid:57)(cid:42)(cid:1)(cid:38)(cid:41)(cid:41)(cid:42)(cid:41)(cid:1)(cid:59)(cid:38)(cid:49)(cid:58)(cid:42)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:42)(cid:43)(cid:43)(cid:46)(cid:40)(cid:46)(cid:42)(cid:51)(cid:40)(cid:46)(cid:42)(cid:56)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:58)(cid:56)(cid:1)(cid:57)(cid:52)(cid:1) business and for our Associates, customers, and the communities we serve. This commitment extends beyond the footprint of our distribution centers and stores, and it also supports SpartanNash’s long-term growth. •(cid:1) (cid:18)(cid:35)(cid:41)(cid:39)(cid:50)(cid:35)(cid:46)(cid:1)(cid:44)(cid:43)(cid:1)(cid:48)(cid:38)(cid:35)(cid:1)(cid:27)(cid:46)(cid:44)(cid:42)(cid:39)(cid:47)(cid:35)(cid:1)(cid:48)(cid:44)(cid:1)(cid:29)(cid:46)(cid:31)(cid:43)(cid:47)(cid:36)(cid:44)(cid:46)(cid:42)(cid:1)(cid:48)(cid:38)(cid:35)(cid:1)(cid:28)(cid:49)(cid:45)(cid:45)(cid:41)(cid:53)(cid:1)(cid:17)(cid:38)(cid:31)(cid:39)(cid:43)(cid:1)(cid:64)(cid:1)(cid:30)(cid:58)(cid:55)(cid:1)(cid:56)(cid:58)(cid:53)(cid:53)(cid:49)(cid:62)(cid:1)(cid:40)(cid:45)(cid:38)(cid:46)(cid:51)(cid:1)(cid:57)(cid:55)(cid:38)(cid:51)(cid:56)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:53)(cid:55)(cid:52)(cid:47)(cid:42)(cid:40)(cid:57)(cid:1)(cid:57)(cid:45)(cid:38)(cid:57)(cid:1)(cid:49)(cid:38)(cid:58)(cid:51)(cid:40)(cid:45)(cid:42)(cid:41)(cid:1)(cid:46)(cid:51)(cid:1)(cid:11)(cid:9)(cid:11)(cid:10)(cid:1)(cid:60)(cid:46)(cid:49)(cid:49)(cid:1)(cid:40)(cid:52)(cid:51)(cid:57)(cid:46)(cid:51)(cid:58)(cid:42)(cid:1) (cid:57)(cid:52)(cid:1)(cid:41)(cid:55)(cid:46)(cid:59)(cid:42)(cid:1)(cid:53)(cid:55)(cid:52)(cid:40)(cid:42)(cid:56)(cid:56)(cid:1)(cid:46)(cid:50)(cid:53)(cid:55)(cid:52)(cid:59)(cid:42)(cid:50)(cid:42)(cid:51)(cid:57)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:56)(cid:38)(cid:59)(cid:46)(cid:51)(cid:44)(cid:56)(cid:8)(cid:1)(cid:34)(cid:45)(cid:46)(cid:56)(cid:1)(cid:53)(cid:55)(cid:52)(cid:44)(cid:55)(cid:38)(cid:50)(cid:1)(cid:38)(cid:49)(cid:56)(cid:52)(cid:1)(cid:52)(cid:53)(cid:57)(cid:46)(cid:50)(cid:46)(cid:63)(cid:42)(cid:56)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:51)(cid:42)(cid:57)(cid:60)(cid:52)(cid:55)(cid:48)(cid:1)(cid:57)(cid:52)(cid:1)(cid:46)(cid:50)(cid:53)(cid:55)(cid:52)(cid:59)(cid:42)(cid:1)(cid:40)(cid:58)(cid:56)(cid:57)(cid:52)(cid:50)(cid:42)(cid:55)(cid:1)(cid:56)(cid:42)(cid:55)(cid:59)(cid:46)(cid:40)(cid:42)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:55)(cid:42)(cid:41)(cid:58)(cid:40)(cid:42)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1) We issued our first ESG Report in 2022, which provided insights on the sustainability efforts the Company has (cid:44)(cid:55)(cid:42)(cid:42)(cid:51)(cid:45)(cid:52)(cid:58)(cid:56)(cid:42)(cid:1)(cid:44)(cid:38)(cid:56)(cid:1)(cid:42)(cid:50)(cid:46)(cid:56)(cid:56)(cid:46)(cid:52)(cid:51)(cid:56)(cid:8)(cid:1) been working on for several years. The report also established baseline metrics and our approach to future ESG •(cid:1) (cid:15)(cid:33)(cid:48)(cid:1)(cid:44)(cid:43)(cid:1)(cid:22)(cid:43)(cid:47)(cid:39)(cid:37)(cid:38)(cid:48)(cid:47)(cid:1)(cid:48)(cid:44)(cid:1)(cid:26)(cid:45)(cid:48)(cid:39)(cid:42)(cid:39)(cid:54)(cid:35)(cid:1)(cid:17)(cid:49)(cid:47)(cid:48)(cid:44)(cid:42)(cid:35)(cid:46)(cid:1)(cid:31)(cid:43)(cid:34)(cid:1)(cid:27)(cid:46)(cid:44)(cid:34)(cid:49)(cid:33)(cid:48)(cid:1)(cid:27)(cid:44)(cid:46)(cid:48)(cid:36)(cid:44)(cid:41)(cid:39)(cid:44)(cid:47)(cid:1)(cid:64)(cid:1)(cid:32)(cid:42)(cid:41)(cid:42)(cid:43)(cid:46)(cid:51)(cid:46)(cid:51)(cid:44)(cid:1)(cid:33)(cid:53)(cid:38)(cid:55)(cid:57)(cid:38)(cid:51)(cid:29)(cid:38)(cid:56)(cid:45)(cid:1)(cid:38)(cid:56)(cid:1)(cid:38)(cid:1)(cid:65)(cid:43)(cid:52)(cid:52)(cid:41)(cid:1)(cid:56)(cid:52)(cid:49)(cid:58)(cid:57)(cid:46)(cid:52)(cid:51)(cid:56)(cid:1)(cid:40)(cid:52)(cid:50)(cid:53)(cid:38)(cid:51)(cid:62)(cid:6)(cid:66)(cid:1)(cid:60)(cid:42)(cid:1)(cid:60)(cid:46)(cid:49)(cid:49)(cid:1) initiatives. (cid:49)(cid:52)(cid:52)(cid:48)(cid:1)(cid:57)(cid:52)(cid:1)(cid:42)(cid:61)(cid:53)(cid:38)(cid:51)(cid:41)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:56)(cid:42)(cid:55)(cid:59)(cid:46)(cid:40)(cid:42)(cid:1)(cid:52)(cid:43)(cid:43)(cid:42)(cid:55)(cid:46)(cid:51)(cid:44)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:53)(cid:55)(cid:52)(cid:43)(cid:46)(cid:57)(cid:38)(cid:39)(cid:46)(cid:49)(cid:46)(cid:57)(cid:62)(cid:6)(cid:1)(cid:57)(cid:38)(cid:46)(cid:49)(cid:52)(cid:55)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:55)(cid:42)(cid:57)(cid:38)(cid:46)(cid:49)(cid:1)(cid:38)(cid:56)(cid:56)(cid:52)(cid:55)(cid:57)(cid:50)(cid:42)(cid:51)(cid:57)(cid:1)(cid:57)(cid:52)(cid:1)(cid:50)(cid:38)(cid:57)(cid:40)(cid:45)(cid:1)(cid:49)(cid:52)(cid:40)(cid:38)(cid:49)(cid:1)(cid:51)(cid:42)(cid:42)(cid:41)(cid:56)(cid:6)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:53)(cid:52)(cid:56)(cid:46)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:50)(cid:46)(cid:49)(cid:46)(cid:57)(cid:38)(cid:55)(cid:62)(cid:1)(cid:39)(cid:58)(cid:56)(cid:46)(cid:51)(cid:42)(cid:56)(cid:56)(cid:1) (cid:43)(cid:52)(cid:55)(cid:1)(cid:56)(cid:58)(cid:40)(cid:40)(cid:42)(cid:56)(cid:56)(cid:1)(cid:60)(cid:46)(cid:57)(cid:45)(cid:1)(cid:53)(cid:52)(cid:55)(cid:57)(cid:43)(cid:52)(cid:49)(cid:46)(cid:52)(cid:1)(cid:41)(cid:46)(cid:59)(cid:42)(cid:55)(cid:56)(cid:46)(cid:43)(cid:46)(cid:40)(cid:38)(cid:57)(cid:46)(cid:52)(cid:51)(cid:8)(cid:1) An update on our sustainability journey, as well as our newly established ESG goals, will be provided in our next •(cid:1) (cid:23)(cid:31)(cid:49)(cid:43)(cid:33)(cid:38)(cid:1) (cid:17)(cid:49)(cid:47)(cid:48)(cid:44)(cid:42)(cid:35)(cid:46)(cid:5)(cid:17)(cid:35)(cid:43)(cid:48)(cid:46)(cid:39)(cid:33)(cid:4)(cid:1) (cid:22)(cid:43)(cid:43)(cid:44)(cid:50)(cid:31)(cid:48)(cid:39)(cid:50)(cid:35)(cid:1) (cid:28)(cid:44)(cid:41)(cid:49)(cid:48)(cid:39)(cid:44)(cid:43)(cid:47)(cid:1) (cid:64)(cid:1) (cid:36)(cid:42)(cid:1) (cid:60)(cid:46)(cid:49)(cid:49)(cid:1) (cid:49)(cid:42)(cid:59)(cid:42)(cid:55)(cid:38)(cid:44)(cid:42)(cid:1) (cid:40)(cid:58)(cid:56)(cid:57)(cid:52)(cid:50)(cid:42)(cid:55)(cid:1) (cid:46)(cid:51)(cid:56)(cid:46)(cid:44)(cid:45)(cid:57)(cid:56)(cid:1) (cid:57)(cid:52)(cid:1) (cid:44)(cid:55)(cid:52)(cid:60)(cid:1) (cid:52)(cid:58)(cid:55)(cid:1) (cid:30)(cid:60)(cid:51)(cid:19)(cid:55)(cid:38)(cid:51)(cid:41)(cid:56)(cid:1) (cid:3)(cid:53)(cid:55)(cid:46)(cid:59)(cid:38)(cid:57)(cid:42)(cid:1) (cid:39)(cid:55)(cid:38)(cid:51)(cid:41)(cid:56)(cid:4)(cid:1) ESG Report. The report is scheduled to be issued in mid-2023. (cid:53)(cid:55)(cid:52)(cid:43)(cid:46)(cid:57)(cid:38)(cid:39)(cid:49)(cid:62)(cid:6)(cid:1)(cid:52)(cid:43)(cid:43)(cid:42)(cid:55)(cid:1)(cid:51)(cid:42)(cid:60)(cid:1)(cid:56)(cid:42)(cid:55)(cid:59)(cid:46)(cid:40)(cid:42)(cid:56)(cid:1)(cid:57)(cid:45)(cid:55)(cid:52)(cid:58)(cid:44)(cid:45)(cid:1)(cid:56)(cid:57)(cid:55)(cid:38)(cid:57)(cid:42)(cid:44)(cid:46)(cid:40)(cid:1)(cid:53)(cid:38)(cid:55)(cid:57)(cid:51)(cid:42)(cid:55)(cid:56)(cid:45)(cid:46)(cid:53)(cid:56)(cid:1)(cid:46)(cid:51)(cid:1)(cid:40)(cid:55)(cid:42)(cid:38)(cid:57)(cid:46)(cid:51)(cid:44)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:42)(cid:40)(cid:52)(cid:56)(cid:62)(cid:56)(cid:57)(cid:42)(cid:50)(cid:1)(cid:52)(cid:43)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:43)(cid:58)(cid:57)(cid:58)(cid:55)(cid:42)(cid:1)(cid:57)(cid:52)(cid:1)(cid:41)(cid:42)(cid:49)(cid:46)(cid:44)(cid:45)(cid:57)(cid:1)(cid:40)(cid:58)(cid:56)(cid:57)(cid:52)(cid:50)(cid:42)(cid:55)(cid:56)(cid:6)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:57)(cid:52)(cid:1)(cid:46)(cid:51)(cid:40)(cid:55)(cid:42)(cid:38)(cid:56)(cid:42)(cid:1) (cid:42)(cid:20)(cid:52)(cid:50)(cid:50)(cid:42)(cid:55)(cid:40)(cid:42)(cid:1)(cid:56)(cid:38)(cid:49)(cid:42)(cid:56)(cid:8)(cid:1) (cid:52)(cid:53)(cid:42)(cid:55)(cid:38)(cid:57)(cid:42)(cid:1)(cid:60)(cid:46)(cid:57)(cid:45)(cid:1)(cid:42)(cid:61)(cid:40)(cid:42)(cid:49)(cid:49)(cid:42)(cid:51)(cid:40)(cid:42)(cid:8)(cid:1) Playing to Win (cid:1) I am energized to build on our momentum in 2023. The progress we have made thus far gives me great (cid:35)(cid:56)(cid:46)(cid:51)(cid:44)(cid:1)(cid:57)(cid:45)(cid:42)(cid:56)(cid:42)(cid:1)(cid:56)(cid:57)(cid:55)(cid:38)(cid:57)(cid:42)(cid:44)(cid:46)(cid:40)(cid:1)(cid:53)(cid:55)(cid:46)(cid:52)(cid:55)(cid:46)(cid:57)(cid:46)(cid:42)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:2)(cid:14)(cid:12)(cid:1)(cid:4)(cid:9)(cid:10)(cid:10)(cid:9)(cid:10)(cid:7)(cid:1)(cid:3)(cid:6)(cid:5)(cid:9)(cid:11)(cid:6)(cid:1)(cid:38)(cid:56)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:29)(cid:52)(cid:55)(cid:57)(cid:45)(cid:1)(cid:33)(cid:57)(cid:38)(cid:55)(cid:6)(cid:1)(cid:60)(cid:42)(cid:1)(cid:45)(cid:38)(cid:59)(cid:42)(cid:1)(cid:41)(cid:42)(cid:59)(cid:42)(cid:49)(cid:52)(cid:53)(cid:42)(cid:41)(cid:1)(cid:38)(cid:1)(cid:41)(cid:42)(cid:57)(cid:38)(cid:46)(cid:49)(cid:42)(cid:41)(cid:1)(cid:11)(cid:9)(cid:11)(cid:11)(cid:1)(cid:28)(cid:38)(cid:56)(cid:57)(cid:42)(cid:55)(cid:1)(cid:18)(cid:40)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1)(cid:31)(cid:49)(cid:38)(cid:51)(cid:1)(cid:57)(cid:45)(cid:38)(cid:57)(cid:1) (cid:52)(cid:58)(cid:57)(cid:49)(cid:46)(cid:51)(cid:42)(cid:56)(cid:1) (cid:57)(cid:45)(cid:42)(cid:1) (cid:20)(cid:52)(cid:50)(cid:53)(cid:38)(cid:51)(cid:62)(cid:67)(cid:56)(cid:1) (cid:56)(cid:57)(cid:55)(cid:38)(cid:57)(cid:42)(cid:44)(cid:46)(cid:40)(cid:1) (cid:43)(cid:52)(cid:40)(cid:58)(cid:56)(cid:1) (cid:38)(cid:55)(cid:42)(cid:38)(cid:56)(cid:1) (cid:38)(cid:51)(cid:41)(cid:1) (cid:55)(cid:52)(cid:38)(cid:41)(cid:50)(cid:38)(cid:53)(cid:8)(cid:1) (cid:18)(cid:56)(cid:1) (cid:38)(cid:1) (cid:55)(cid:42)(cid:56)(cid:58)(cid:49)(cid:57)(cid:6)(cid:1) (cid:25)(cid:67)(cid:50)(cid:1) (cid:59)(cid:42)(cid:55)(cid:62)(cid:1) (cid:52)(cid:53)(cid:57)(cid:46)(cid:50)(cid:46)(cid:56)(cid:57)(cid:46)(cid:40)(cid:1) (cid:38)(cid:39)(cid:52)(cid:58)(cid:57)(cid:1) (cid:52)(cid:58)(cid:55)(cid:1) (cid:53)(cid:52)(cid:57)(cid:42)(cid:51)(cid:57)(cid:46)(cid:38)(cid:49)(cid:1) (cid:57)(cid:52)(cid:1) (cid:41)(cid:42)(cid:49)(cid:46)(cid:59)(cid:42)(cid:55)(cid:1) (cid:38)(cid:51)(cid:52)(cid:57)(cid:45)(cid:42)(cid:55)(cid:1) confidence that we are going to deliver on our long-term financial targets and continue driving value for our (cid:52)(cid:58)(cid:57)(cid:56)(cid:57)(cid:38)(cid:51)(cid:41)(cid:46)(cid:51)(cid:44)(cid:1)(cid:53)(cid:42)(cid:55)(cid:43)(cid:52)(cid:55)(cid:50)(cid:38)(cid:51)(cid:40)(cid:42)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:56)(cid:45)(cid:38)(cid:55)(cid:42)(cid:45)(cid:52)(cid:49)(cid:41)(cid:42)(cid:55)(cid:56)(cid:1)(cid:46)(cid:51)(cid:1)(cid:11)(cid:9)(cid:11)(cid:11)(cid:8)(cid:1)(cid:1) shareholders well into the future. (cid:1) (cid:22)(cid:59)(cid:42)(cid:55)(cid:62)(cid:1)(cid:41)(cid:38)(cid:62)(cid:6)(cid:1)(cid:25)(cid:1)(cid:38)(cid:50)(cid:1)(cid:57)(cid:45)(cid:38)(cid:51)(cid:48)(cid:43)(cid:58)(cid:49)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:18)(cid:56)(cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:57)(cid:42)(cid:56)(cid:6)(cid:1)(cid:40)(cid:58)(cid:56)(cid:57)(cid:52)(cid:50)(cid:42)(cid:55)(cid:56)(cid:6)(cid:1)(cid:56)(cid:58)(cid:53)(cid:53)(cid:49)(cid:46)(cid:42)(cid:55)(cid:56)(cid:6)(cid:1)(cid:56)(cid:45)(cid:38)(cid:55)(cid:42)(cid:45)(cid:52)(cid:49)(cid:41)(cid:42)(cid:55)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:40)(cid:52)(cid:50)(cid:50)(cid:58)(cid:51)(cid:46)(cid:57)(cid:62)(cid:1)(cid:53)(cid:38)(cid:55)(cid:57)(cid:51)(cid:42)(cid:55)(cid:56)(cid:1)(cid:60)(cid:45)(cid:52)(cid:1)(cid:53)(cid:58)(cid:57)(cid:1)(cid:57)(cid:45)(cid:42)(cid:46)(cid:55)(cid:1)(cid:57)(cid:55)(cid:58)(cid:56)(cid:57)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:56)(cid:58)(cid:53)(cid:53)(cid:52)(cid:55)(cid:57)(cid:1)(cid:46)(cid:51)(cid:1) (cid:33)(cid:53)(cid:38)(cid:55)(cid:57)(cid:38)(cid:51)(cid:29)(cid:38)(cid:56)(cid:45)(cid:1)(cid:38)(cid:56)(cid:1)(cid:60)(cid:42)(cid:1)(cid:60)(cid:52)(cid:55)(cid:48)(cid:1)(cid:57)(cid:52)(cid:44)(cid:42)(cid:57)(cid:45)(cid:42)(cid:55)(cid:1)(cid:57)(cid:52)(cid:1)(cid:41)(cid:42)(cid:49)(cid:46)(cid:59)(cid:42)(cid:55)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:46)(cid:51)(cid:44)(cid:55)(cid:42)(cid:41)(cid:46)(cid:42)(cid:51)(cid:57)(cid:56)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:38)(cid:1)(cid:39)(cid:42)(cid:57)(cid:57)(cid:42)(cid:55)(cid:1)(cid:49)(cid:46)(cid:43)(cid:42)(cid:8)(cid:1)(cid:23)(cid:55)(cid:52)(cid:50)(cid:1)(cid:43)(cid:55)(cid:52)(cid:51)(cid:57)(cid:49)(cid:46)(cid:51)(cid:42)(cid:1)(cid:18)(cid:56)(cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:57)(cid:42)(cid:56)(cid:1)(cid:46)(cid:51)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:55)(cid:42)(cid:57)(cid:38)(cid:46)(cid:49)(cid:1)(cid:56)(cid:57)(cid:52)(cid:55)(cid:42)(cid:56)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:41)(cid:46)(cid:56)(cid:57)(cid:55)(cid:46)(cid:39)(cid:58)(cid:57)(cid:46)(cid:52)(cid:51)(cid:1) On behalf of the Board of Directors, our Executive Leadership Team, and all our Associates, I thank you for your (cid:40)(cid:42)(cid:51)(cid:57)(cid:42)(cid:55)(cid:56)(cid:1)(cid:57)(cid:52)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:40)(cid:52)(cid:55)(cid:53)(cid:52)(cid:55)(cid:38)(cid:57)(cid:42)(cid:1)(cid:18)(cid:56)(cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:57)(cid:42)(cid:56)(cid:1)(cid:60)(cid:45)(cid:52)(cid:1)(cid:42)(cid:51)(cid:38)(cid:39)(cid:49)(cid:42)(cid:1)(cid:57)(cid:45)(cid:52)(cid:56)(cid:42)(cid:1)(cid:43)(cid:55)(cid:52)(cid:51)(cid:57)(cid:49)(cid:46)(cid:51)(cid:42)(cid:1)(cid:45)(cid:42)(cid:55)(cid:52)(cid:42)(cid:56)(cid:6)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:55)(cid:52)(cid:49)(cid:42)(cid:56)(cid:1)(cid:50)(cid:38)(cid:62)(cid:1)(cid:39)(cid:42)(cid:1)(cid:41)(cid:46)(cid:43)(cid:43)(cid:42)(cid:55)(cid:42)(cid:51)(cid:57)(cid:6)(cid:1)(cid:39)(cid:58)(cid:57)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:28)(cid:46)(cid:56)(cid:56)(cid:46)(cid:52)(cid:51)(cid:1)(cid:46)(cid:56)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:56)(cid:38)(cid:50)(cid:42)(cid:8)(cid:1) (cid:1) continued support and investment in SpartanNash. (cid:30)(cid:51)(cid:1)(cid:39)(cid:42)(cid:45)(cid:38)(cid:49)(cid:43)(cid:1)(cid:52)(cid:43)(cid:1)(cid:57)(cid:45)(cid:42)(cid:1)(cid:19)(cid:52)(cid:38)(cid:55)(cid:41)(cid:1)(cid:52)(cid:43)(cid:1)(cid:21)(cid:46)(cid:55)(cid:42)(cid:40)(cid:57)(cid:52)(cid:55)(cid:56)(cid:6)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:22)(cid:61)(cid:42)(cid:40)(cid:58)(cid:57)(cid:46)(cid:59)(cid:42)(cid:1)(cid:27)(cid:42)(cid:38)(cid:41)(cid:42)(cid:55)(cid:56)(cid:45)(cid:46)(cid:53)(cid:1)(cid:34)(cid:42)(cid:38)(cid:50)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1)(cid:38)(cid:49)(cid:49)(cid:1)(cid:52)(cid:43)(cid:1)(cid:52)(cid:58)(cid:55)(cid:1)(cid:18)(cid:56)(cid:56)(cid:52)(cid:40)(cid:46)(cid:38)(cid:57)(cid:42)(cid:56)(cid:6)(cid:1)(cid:25)(cid:1)(cid:57)(cid:45)(cid:38)(cid:51)(cid:48)(cid:1)(cid:62)(cid:52)(cid:58)(cid:1)(cid:43)(cid:52)(cid:55)(cid:1)(cid:62)(cid:52)(cid:58)(cid:55)(cid:1)(cid:40)(cid:52)(cid:51)(cid:57)(cid:46)(cid:51)(cid:58)(cid:42)(cid:41)(cid:1)(cid:56)(cid:58)(cid:53)(cid:53)(cid:52)(cid:55)(cid:57)(cid:1)(cid:38)(cid:51)(cid:41)(cid:1) (cid:46)(cid:51)(cid:59)(cid:42)(cid:56)(cid:57)(cid:50)(cid:42)(cid:51)(cid:57)(cid:1)(cid:46)(cid:51)(cid:1)(cid:33)(cid:53)(cid:38)(cid:55)(cid:57)(cid:38)(cid:51)(cid:29)(cid:38)(cid:56)(cid:45)(cid:1)(cid:20)(cid:52)(cid:50)(cid:53)(cid:38)(cid:51)(cid:62)(cid:8)(cid:1) (cid:1) Sincerely, (cid:33)(cid:46)(cid:51)(cid:40)(cid:42)(cid:55)(cid:42)(cid:49)(cid:62)(cid:6)(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:29)(cid:44)(cid:43)(cid:53)(cid:1)(cid:16)(cid:31)(cid:47)(cid:38)(cid:39)(cid:46)(cid:1)(cid:28)(cid:31)(cid:46)(cid:47)(cid:31)(cid:42)(cid:1) Tony Bashir Sarsam (cid:7)(cid:18)(cid:11)(cid:19)(cid:14)(cid:10)(cid:11)(cid:16)(cid:20)(cid:1)(cid:8)(cid:16)(cid:10)(cid:1)(cid:3)(cid:13)(cid:14)(cid:11)(cid:12)(cid:1)(cid:5)(cid:23)(cid:11)(cid:9)(cid:21)(cid:20)(cid:14)(cid:22)(cid:11)(cid:1)(cid:6)(cid:12)(cid:12)(cid:14)(cid:9)(cid:11)(cid:18)(cid:1) President and Chief Executive Officer Forward-Looking Statements The matters discussed in this letter and in the Company's website-accessible conference calls with analysts and investor presentations include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amend- ed, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), about the plans, strategies, objec- tives, goals or expectations of SpartanNash and its subsidiaries (“SpartanNash” or the “Company”). These forward-looking statements may be identifiable by words or phrases indicating that the Company or management "expects," "anticipates," "plans," "believes," "intends," or "estimates," or that a particular occurrence or event "may," "could," "should," "will" or "will likely" result, occur or be pursued or "continue" in the future, that the "outlook", "trend", "guidance" or "target" is toward a particular result or occurrence, that a development is an "opportunity," "priority," "strategy," "focus," that the Company is "positioned" for a particular result, or similarly stated expectations. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. A full list of the risks and uncertainties is available under the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission. These risks should not be construed as a complete list of all the economic, competitive, governmental, technological and other factors that could adversely affect the Company’s expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to the Company or that the Company currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this letter. In addition, historical information should not be considered as an indicator of future performance. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2022. OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission File Number: 000-31127 SPARTANNASH COMPANY (Exact Name of Registrant as Specified in Its Charter) Michigan (State or Other Jurisdiction) of Incorporation or Organization) 850 76th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan (Address of Principal Executive Offices) 38-0593940 (I.R.S. Employer Identification No.) 49518-8700 (Zip Code) Registrant’s telephone number, including area code: (616) 878-2000 Title of each class Common Stock, no par value Securities registered pursuant to Section 12(b) of the Securities Exchange Act: Trading Symbol(s) SPTN Name of each exchange on which registered NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Securities Exchange Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ No ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Yes Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates based on the last sales price of such stock on the Nasdaq Global Select Market on July 15, 2022 (which was the last trading day of the registrant’s second quarter in the fiscal year ended December 31, 2022) was $1,119,947,910. The number of shares outstanding of the registrant’s Common Stock, no par value, as of February 27, 2023 was 35,061,566, all of one class. Part III, Items 10, 11, 12, 13 and 14 Definitive Proxy Statement for the 2023 Annual Meeting DOCUMENTS INCORPORATED BY REFERENCE -1- Forward-Looking Statements The matters discussed in this Annual Report on Form 10-K, in the Company’s press releases, and in the Company’s website- accessible conference calls with analysts and investor presentations include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), about the plans, strategies, objectives, goals or expectations of SpartanNash and its subsidiaries (“SpartanNash” or the “Company”). These forward-looking statements may be identifiable by words or phrases indicating that the Company or management “expects,” “anticipates,” “plans,” “believes,” “intends,” or “estimates,” or that a particular occurrence or event “may,” “could,” “should,” “will” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook”, “trend”, "guidance" or "target" is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies and Estimates” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. The Company’s asset impairment and restructuring cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of the Annual Report, other report, release, presentation, or statement. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. This section and the discussions contained in Item 1A “Risk Factors” of this Annual Report on Form 10-K, are intended to provide meaningful cautionary statements for purposes of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all the economic, competitive, governmental, technological and other factors that could adversely affect the Company’s expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to SpartanNash or that SpartanNash currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur, or information obtained after the date of this Annual Report. In addition, historical information should not be considered as an indicator of future performance. -2- TABLE OF CONTENTS PART I. Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Reserved Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III. Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Services PART IV. Item 15. Exhibits and Financial Statement Schedules Item 16. Form 10-K Summary Signatures Page 4 9 16 16 17 17 17 19 20 33 34 66 66 68 68 68 68 68 68 68 69 71 72 -3- PART I Item 1. Business Overview SpartanNash Company (together with its subsidiaries, “SpartanNash” or the “Company”) is a food solutions company that delivers the ingredients for a better life. Its core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges; as well as operating a premier fresh produce distribution network and the Our Family® private label brand. SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar, Djibouti, Korea and Japan. The Company owns and operates 147 supermarkets and shares its operational insights to drive solutions for its food retail independent customers. While the Company supports overseas commissaries and exchanges, all of the Company’s sales and assets are in the United States of America. At the beginning of the third quarter of 2022, the Company combined the previous Food Distribution and Military operating segments into one operating segment: Wholesale. The change in the operating segments was driven by both a change in the Company’s organizational structure, and in the reporting utilized by the Chief Operating Decision Maker to allocate the Company’s resources and assess operating performance. The combination of the two segments reflects the way the Company manages the distribution business as one comprehensive network and furthers the Company’s efforts to streamline operations in connection with its supply chain transformation and better serve customers. As a result, the Company now operates two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and compensation. Segment financial information for the comparative prior year periods within this annual report has been recast to reflect this change. The Company’s fiscal year end is the Saturday closest to December 31. In this report we discuss information as of and for the fiscal years ending or ended December 30, 2023 ("2023"), December 31, 2022 (“2022” or “current year”), January 1, 2022 (“2021” or “prior year”) and January 2, 2021 (“2020”), all of which include 52 weeks, with the exception of 2020, which includes 53 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and usually includes the Easter holiday. As a result of fiscal 2020 containing 53 weeks, the fourth quarter of fiscal 2020 contained 13 weeks. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday. The Company’s differentiated business model of Wholesale and Retail operations leverages the complementary nature of both segments and supports the ability of the Company’s independent retail customers to compete in the grocery industry in the long-term. The model produces operational efficiencies, greater visibility and broader business growth options throughout each of the segments. SpartanNash has a strategic identity called Our Winning RecipeTM that activates its mission to deliver the ingredients for a better life through a focus on core capabilities, behaviors and strategic priorities. SpartanNash has a keen focus on its core capabilities which include: people, operational excellence and insights that drive solutions. The Company’s vision is seeing a day when its customers say, “I can’t live without them.” Wholesale Segment The Company’s Wholesale segment uses a multi-channel sales approach to distribute national brand and private brand products to independent retailers, national accounts, food service distributors, e-commerce providers, and the Company's corporate owned retail stores. The Company’s Wholesale segment also contracts with manufacturers and brokers to distribute a wide variety of grocery products to 160 U.S. military commissaries and over 400 exchanges worldwide. Together with its third-party partner, Coastal Pacific Food Distributors ("CPFD"), SpartanNash represents the only global delivery solution to service the Defense Commissary Agency ("DeCA" or "the Agency"). Total net sales from the Company’s Wholesale segment, including sales to corporate owned retail stores that are eliminated in the consolidated financial statements, totaled $8.0 billion for 2022. As of the end of 2022, the Company is among the five largest wholesale distributors in the nation in terms of annual revenue. The Company is focused on growth in its Wholesale segment, through expanded relationships with existing customers as well as new business opportunities. As of December 31, 2022, the Company operated in all 50 states by leveraging a network of 19 distribution centers, in addition to a facility on the West Coast operated by third-party partner CPFD, as well as internal transportation fleets and third-party shipping partners, servicing the Wholesale segment. The Company’s extensive geographic reach drives economies of scale, provides opportunities for independent retailers to purchase products at competitive prices in order to effectively compete in the grocery industry in the long-term and includes distribution centers strategically located among the largest concentration of military bases the Company serves and near Atlantic ports used to ship grocery products to overseas commissaries and exchanges. -4- The Company’s Wholesale segment provides a selection of approximately 85,500 stock-keeping units (SKUs) of nationally branded and private brand grocery products and perishable food products, including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, and seafood, as well as floral products, general merchandise, beverages, tobacco products, health and beauty care products and pharmaceutical products. These product offerings, along with best-in-class services, allow independent retailers the opportunity to support the majority of their operations with a single supplier. The Company also provides a comprehensive menu of support services designed to assist independent retailers in becoming more profitable, efficient, competitive, and informed, ranging from real estate and site surveys to a full suite of merchandising, marketing, accounting, and information technology solutions. The Company also services national accounts through a variety of platforms and has diversified its customer base through growth with these customers. These national accounts partner with the Company to centralize their supply of grocery products or product categories, and to leverage the Company’s broad geographic reach. Sales to one of the Company’s customers in the Wholesale segment accounted for 16%, 17% and 17% of the Company's net sales for 2022, 2021 and 2020, respectively. No other individual customer exceeded 10% of the Company's net sales in any of the years presented. The Company is also the exclusive supplier of private brand products to U.S. military commissaries, a partnership with DeCA which began in fiscal 2017. The current contract to provide DeCA with private branded products extends through December 2025. In accordance with its contract with DeCA, the Company procures the grocery and related products from various manufacturers and upon receiving customer orders from DeCA, either delivers the products to the U.S. military commissaries itself or engages its worldwide strategic business partner, CPFD, to deliver the products on its behalf. The Company is among one of the four largest distributors to the DeCA commissary system, in terms of annual sales, that distributes products via the frequent delivery system. The remaining distributors that supply DeCA tend to be smaller regional and local providers. DeCA operates a chain of 236 commissaries on U.S. military installations across the world that sells approximately $4.2 billion of grocery products annually. The Company obtains distribution contracts with manufacturers through competitive bidding processes and direct negotiations. As of December 31, 2022, the Company has approximately 250 distribution contracts representing approximately 600 manufacturers that supply products to the DeCA commissary system and various exchange systems. The Company’s ten largest Wholesale customers (excluding corporate owned retail stores) accounted for approximately 43% of total Wholesale net sales for 2022. Approximately 90% of Wholesale net sales to independent retailers for 2022 are covered under supply agreements with customers. The Wholesale segment competes directly with a number of traditional and specialty grocery wholesalers and retailers that maintain or develop self-distribution systems. In addition, the Company’s independent customers face intense competition from supercenters, deep discounters, mass merchandisers, limited assortment stores, and e-commerce providers. The Company partners with these customers to help them compete efficiently and effectively. The primary competitive factors in the Wholesale business include price, service level, product quality, variety, reputation with DeCA, location of distribution centers and other value-added services. Retail Segment As of December 31, 2022, the Company operated 147 corporate owned retail stores and 36 fuel centers in nine states in the Midwest, primarily under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, and VG’s Grocery. Retail banners and store counts are fully detailed in Item 2, “Properties.” The Company’s corporate owned retail stores range in size from approximately 14,000 to 90,000 square feet, or on average, approximately 44,000 square feet per store. The Company’s convenience and community-focused strategy distinguishes its corporate owned retail stores from supercenters and limited assortment stores. This strategy is complemented by e-commerce platforms, including Fast Lane and Groceries to GO, and relationships with DoorDash, Shipt, and Uber Eats, which provide online grocery shopping and curbside pickup or delivery at 142 corporate owned retail locations as of December 31, 2022. These channels are highly valued by customers and continuing to enhance and grow this platform is a key component of the Company’s strategy. The Company makes investments to support its online ordering systems, the speed and convenience of curbside pickup, and the efficiency and completeness of order fulfillment. The Company’s corporate owned retail stores offer nationally branded and private brand grocery products, as well as perishable food products including dry groceries, produce, dairy products, meat, delicatessen items, including store prepared “grab and go” meal options, bakery goods, frozen food, and seafood, as well as floral products, general merchandise, beverages, health and beauty care products and fuel. Sixty-five of the Company’s stores contain franchised Starbucks or Caribou Coffee shops, which enhance the customer experience and help to drive traffic. Private brand grocery products typically generate higher margins while also improving customer loyalty by offering quality products at affordable prices. As of December 31, 2022, the Company offered pharmacy services in 91 of its corporate owned retail stores (81 of the pharmacies are owned by the Company) and operated three pharmacy locations not associated with corporate-owned retail locations. The Company believes the pharmacy service offering in its corporate owned retail stores is an important part of the consumer experience. Most of the Company’s pharmacies offer low-cost generic drugs and counseling for preventative health and education for its customers. Influenza and COVID-19 vaccinations are available in the pharmacies. -5- The following chart details the changes in the number of corporate owned retail stores over the last five fiscal years: Number of stores at beginning of year Stores acquired or constructed during year Stores closed or sold during year Number of stores at end of year 2018 2019 2020 2021 2022 145 — 6 139 139 24 7 156 156 1 1 156 156 — 11 145 145 3 1 147 The principal competitive factors in the Retail business include the location and image of the store; the price, quality, variety and value-add of the fresh offering; and the quality, convenience and consistency of service. In addition to competing with traditional grocery stores, the Company competes with supercenters, deep discounters, mass merchandisers, limited assortment stores, and e- commerce providers. The Company monitors planned competitive store openings and uses established proactive strategies to respond to new competition both before and after competitive store openings. Strategies to react to competition vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing and sales focus. Supply Chain Network The Company’s distribution network is comprised of 19 distribution centers, in addition to a facility on the West Coast operated by CPFD, which are utilized to service the Wholesale segment. The Company warehouses product through approximately 8.9 million square feet of distribution center space. The Company operates a diverse fleet of owned and leased transportation equipment, which includes 570 over-the-road tractors, 253 dry vans and 1,130 refrigerated trailers. In addition, the Company also operates 14 over-the- road tractors, 258 dry vans and 123 refrigerated trailers through short-term rental contracts. The Company carefully manages the approximate 64 million miles driven by its fleet and third-party carriers annually servicing military commissaries, exchanges, independent retailers, national accounts and corporate owned retail stores. The Company continues to execute its comprehensive supply chain transformation initiative. The initiative is focused on executing improvements to supply chain operations across the Company’s network, which continues to result in sustained efficiencies and cost reductions. The supply chain initiative is focused on making investments in people, process, and technology to support long-term growth and maximize operational efficiencies. The Company is investing in its workforce through an expansion of its onboarding, training and career development programs, and is working on several initiatives aimed at improving associate engagement, customer experience and overall supply chain performance. The Company is currently refining its sales and operations planning process and optimizing its network to enable more effective and efficient operations across the supply chain. The Company plans to continue to enhance its inventory management and control policies and procedures, including item assortment decisions, while also developing dynamic slotting capabilities, to improve order selection efficiency and maximize space utilization. Process improvements are also underway in other areas of warehouse operations, including enhanced labor planning tools and analytical capabilities to improve productivity. System enhancements in the areas of forecasting and replenishment are intended to support the strategic optimization of inventory, allowing for improved service levels and warehouse capacities, while also reducing excess inventory and shrink. The Company believes that its consolidation of transportation management information systems will also streamline operations and reduce miles traveled. Marketing and Merchandising During 2022, the Company leveraged data and insights to develop and implement strategies to respond to changes in consumer behavior impacted by the post-pandemic rise of food at home consumption as well as inflation. In 2022, the Company completed extensive market research to gain a better understanding of the meaning, importance, and equity of each retail banner brand. Shoppers revealed deep emotional connections with the Company's retail banner brands, including the feeling of a "hometown" store with hundreds of local products that provide a consistent, positive, and personalized experience. The Company’s retail growth strategy is focused on building in-store and digital engagement with shoppers to better personalize offers and highlight local assortment, while increasing customer satisfaction through quality, service and convenience. Key focus areas include improvement in customers’ perception of Company pricing, product assortment and increased penetration of the Company’s private brands. Although value-seeking behavior is increasing, convenient food indulgence in grocery stores is a way in which consumers are shifting away from dining out. Building on the strength of the Company's flagship brand, Our Family®, Fresh & Finest, by Our Family®, a premium fresh brand, was successfully launched in 2022. Additionally, the Company launched the first phase of a merchandising transformation initially focused on enhancing category management, including a new cost policy and better promotions planning. In 2022, the transformation leveraged advanced analytics to enable more customer-led category planning and promotions to benefit corporate retail and independent grocery customers. The Company has developed processes to measure the activation of these strategies as well as their impacts. These measures are reviewed continuously to refine and evolve the strategies. The Company will continue to share its best practices across its independent customer base within the Wholesale segment as it gains further insights. -6- Seasonality The majority of the Company’s revenues are not seasonal in nature. However, in some geographies, corporate retail stores and independent retail customers are dependent on tourism, and therefore can be affected by seasons. The Company’s revenues may also be impacted by weather patterns. Suppliers The Company purchases products from a large number of national, regional and local suppliers of name brand and OwnBrands merchandise. No single supplier accounts for more than 5% of the Company’s purchases. The Company continues to develop strategic relationships with key suppliers and believes this will prove valuable in the development of enhanced promotional programs and consumer value perceptions. Intellectual Property The Company owns valuable intellectual property, including trademarks, trade names, and other proprietary information, some of which are of material importance to its business. Technology In 2022, the Company focused on foundational IT hardware and digitization efforts across all business segments, including the continued transition to Software as a Service (“SaaS”) technology, where production environments are hosted in the cloud. Supply Chain. The Company continued its transformational effort to replace existing transportation systems, including standardization of processes and rationalization of disparate systems into a single integrated application stack. Additionally, the Company developed process automation improvements as well as data analytic solutions around workforce productivity. These automation and data analytic initiatives, combined with the workforce investments noted previously, are expected to contribute to improved hiring, retention and productivity. Retail. The Company continued taking additional steps to modernize its retail applications footprint, which began in 2021 with a comprehensive effort to upgrade and digitize its point-of-sale (“POS”) environment. The upgraded POS application includes an integrated feature set which enhances the retail experience both for SpartanNash and its independent customers. Marketing and Merchandising. In 2022, the Company completed its implementation of a cloud-based pricing and promotion automation solution. The new technology provides a vendor portal and aids workflow management for promotional activities, as well as the management of associated vendor billings for all of the Company's customers. In addition, the Company further expanded eCommerce capabilities including integration with leading marketplaces including DoorDash, Shipt, and Uber Eats. Administrative Systems, Infrastructure and Security. The Company has implemented tools to improve both the efficiency and effectiveness of internal reporting and administrative functions. A centralized cloud-based data analytics solution was implemented to consolidate the Company’s analysis and reporting platforms, which supplies the Company with advanced data analytics capabilities to provide better business insights in real-time. During 2022, the Company also took significant steps to improve its information security. Lastly, the Company made several enhancements to its foundational hardware infrastructure including upgrades to the production storage environment and network servers. Human Capital The success of the Company's strategic direction and its execution begins with its associates, which is why the Company's People First culture is vitally important. For the Company, this means investment in its people is the first investment it makes. As the Company cultivates an environment in which associates can do their best work, it is building the foundation for a thriving business that will last. During 2022, the Company hired a new Chief Human Resources Officer, Nicole Zube, who has a proven background in human capital management. As of December 31, 2022, the Company employed approximately 17,500 associates, 10,500 on a full-time basis and 7,000 on a part- time basis. Retention. Attracting and retaining talent is imperative to achieving the Company's mission of delivering the ingredients for a better life. The Company’s primary initiatives in this area include improving diversity and inclusion in our workforce, ensuring a safe and desirable work environment, maintaining a competitive and compelling total rewards offer and investing in leadership and associate development. While the rate of turnover remains high, specifically in the retail and distribution environments, the Company has specific engagement plans to further reduce attrition in 2023. Diversity, Equity, and Inclusion. The Company celebrates diversity and believes employing a diverse workforce where associates can be authentic is key to success. SpartanNash expects all of its associates to reinforce the People First culture to build a diverse and inclusive workplace. As a commitment to this, all associates are required to complete training on Dignity and Respect, Anti- Harassment and Anti-Discrimination. Additionally, during 2022 the Company named a Senior Director of Diversity and Inclusion to oversee the Company’s diversity and inclusion strategic objectives and programs. -7- The Company leads with inclusion and strives to create an environment where associates are valued and empowered to support its business objectives, customers and the communities it serves, and to provide associates connection within the organization. SpartanNash has associate resource groups available for young professionals, multicultural associates, veterans and women. The Company also believes that it is best served by leaders that have diverse perspectives, education, experience, skills, gender, race, and ethnicity as demonstrated by the current executive leadership team and Board of Directors. The Company will continue to seek out such candidates through our talent acquisition practices. Safe, Healthy and Secure Workplace. At SpartanNash, environment, health and safety (EHS) are integral to the People First culture. To keep the Company's associates safe, and achieve the mission of delivering ingredients for a better life, the Company is focusing on improving EHS. SpartanNash is fully committed to conducting its operations safely and in an environmentally friendly manner. It does this by identifying, assessing, and effectively addressing environmental concerns and workplace hazards, and focusing on injury prevention, natural resource conservation, energy saving initiatives and pollution prevention. The Company's executive leadership team is fully committed to maintaining a healthy and safe workplace and integrating health and safety into all workplace activities, which is evidenced by the Company's goal to be a leader in every safety category it measures. Associate Engagement and Training. The Company believes that engagement and education are key to ensuring the Company's associates provide extraordinary service and expertise. The Company conducted an associate engagement survey of its entire workforce in 2022 to comprehensively solicit feedback. The resulting survey action plans will be used as the basis to further associate engagement efforts in 2023. The Company provides company-wide training on Our Winning RecipeTM when new associates join the Company and role-specific training to ensure operational excellence. Front-line supervisor training was an emphasis in 2022 as all front-line leaders attended the Company's Elevate manager training programs. The Company has been recognized by Business Insider as a top employer for workplace flexibility, and external feedback scores show consistent positive growth in associate experience. Compensation and Benefits. The Company’s total rewards programs are designed to provide compensation and benefits packages that will attract, retain, reward, and inspire its associates to achieve a high level of performance. Overall compensation and benefits are periodically reviewed to ensure that they remain competitive with respect to industry benchmarks. Significant wage investments were made in 2022 across the retail and supply chain operations to attract and retain associates. Areas of focus for wages included wage improvements for certain entry level roles across all front-line operations and for distribution hourly associates, and to incentivize productivity and to address competitive truck driver pay. Since 2020, the Company has increased retail entry level wages by 30% on average. The Company's incentive programs are designed to align the associates' financial interests with those of shareholders and other stakeholders. Environmental Matters The Company may be responsible for remediation of environmental conditions and may be subject to associated liabilities relating to its stores, warehouses, and other buildings and the land on which they are situated (including responsibility and liability related to its operation of its fuel centers and truck garages and the storage of petroleum products in underground storage tanks). The Company believes that it currently conducts its operations, and in the past has conducted its operations, in substantial compliance with applicable environmental laws. Also, the Company typically conducts an environmental review prior to acquiring or leasing buildings or raw land. However, the Company cannot always control or predict what environmental conditions may be found to exist at its facilities, and future changes in regulations may result in liabilities to the Company or increases in the cost of doing business. Regulation The Company is subject to federal, state and local laws and regulations concerning the conduct of its business, including those pertaining to its workforce and the purchase, handling, sale and transportation of its products. Many of the Company’s products are subject to federal Food and Drug Administration (“FDA”) and United States Department of Agriculture (“USDA”) regulation. The Company believes that it is in compliance, in all material respects, with the FDA, USDA and other federal, state and local laws and regulations governing its businesses. Available Information SpartanNash’s web address is www.spartannash.com. The inclusion of the Company’s web address in this Form 10-K does not include or incorporate by reference the information on or accessible through the Company’s website, and the information contained on or accessible through those websites should not be considered as part of this Form 10-K. The Company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports (and amendments to those reports) filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 available on the Company’s website as soon as reasonably practicable after the Company electronically files or furnishes such materials with the SEC. Interested persons can view such materials without charge by clicking on “Investor Relations” and then “SEC Filings” on the Company’s website. -8- Item 1A. Risk Factors The Company faces many risks. If any of the events or circumstances described in the following risk factors occur, the Company’s financial condition or profitability may suffer, and the trading price of the Company’s common stock could decline. We provide these risk factors for investors as permitted by and to obtain the rights and protections under the Private Securities Litigation Reform Act of 1995. It is not possible to predict or identify all such factors. Consequently, investors should not consider the following to be a complete discussion of all potential risks or uncertainties applicable to our business. This discussion of risk factors should be read in conjunction with the other information in this Annual Report on Form 10-K. All of these forward-looking statements are affected by the risk factors discussed in this item and this discussion of risk factors should be read in conjunction with the discussion of forward- looking statements, which appears at the beginning of this report. Business and Operational Risks The Company operates in an extremely competitive industry where many of the Company’s competitors are much larger and may be able to compete more effectively. The grocery industry is highly competitive. The Company’s Wholesale and Retail segments have many competitors, including regional and national grocery distributors, large chain stores that have integrated wholesale and retail operations, mass merchandisers, e-commerce providers, deep discount retailers, limited assortment stores and wholesale membership clubs. Many of the Company’s competitors have greater resources than the Company and may be able to compete more effectively. Industry consolidation, alternative store formats, nontraditional competitors and e-commerce have contributed to market share losses for traditional grocery stores. The Company’s Wholesale and Retail segments are primarily focused on traditional retail grocery trade, which faces competition from faster growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet- based retailers and meal-delivery services. The Company expects these trends to continue. If the Company is not successful in effectively competing with these alternative channels, or growing sales into such channels, its business or financial results may be adversely impacted. The Company faces competitive pressures from e-commerce activity, as consumers continue to adopt this format and do more of their shopping online. While the Company offers e-commerce services at many of its stores, some of its stores and many of its independent retailer customers do not. Other e-commerce providers may offer lower prices, superior online ordering or delivery service, or greater convenience than the Company. If the Company fails to compete successfully, it could face lower sales and may decide or be compelled to offer greater discounts to its customers, which could result in decreased profitability. A significant portion of the Company’s sales are with major customers and the Company’s success is heavily dependent on retaining this business and on our customers’ ability to maintain and grow their business. The Company depends heavily on our customer base which includes certain large and growing customers, and our success is dependent on our customers’ ability to maintain and grow their business. To the extent that major customers decide to utilize alternative sources of products, whether through other distributors or self-distribution, or decide to discontinue offering certain products, the Company’s financial condition or profitability may be materially and adversely affected. Similarly, if major customers are not able to maintain or grow their business and honor the terms of our distribution agreements, the Company may be materially and adversely affected through a reduction in revenue and profitability. Sales to one of the Company’s customers accounted for 16%, 17% and 17% of the Company’s net sales in 2022, 2021 and 2020, respectively. The Company’s ability to maintain a close, mutually beneficial relationship with major customers is an important determinant of the Company’s continued growth and profitability. The Company may not be able to achieve its growth strategy through successful implementation of its transformation initiatives. The Company’s long-term strategy includes a focus on revenue growth from new customers, market share gains, and continued expansion into value-add offerings, as well as driving incremental profitability through initiatives including supply chain transformation, merchandising transformation, and other margin-enhancing innovations, including OwnBrands execution, automation, and retail execution. The successful design and implementation of these initiatives may present significant challenges, many of which are beyond the Company's control. In addition, the initiatives may not advance the Company's business strategy as expected. Events and circumstances, such as financial or strategic difficulties, delays, and unexpected costs may occur that could result in the Company not realizing all or any of the anticipated benefits or not realizing the anticipated benefits within the expected timetable. If the Company is unable to realize the anticipated financial performance of the initiatives, its ability to fund other initiatives may be adversely affected. Any failure to implement the initiatives in accordance with expectations could adversely affect the Company's ability to achieve its long-term revenue and profitability targets. -9- In addition, the complexity of the initiatives requires a substantial amount of management and operational resources. The Company's management team must successfully implement operational changes necessary to achieve the anticipated benefits of the initiatives. These and related demands on its resources may divert the Company's attention from existing core businesses and could also have adverse effects on existing business relationships with suppliers and customers. As a result, the Company's financial condition, profitability, or cash flows may be adversely affected. Changes in relationships with the Company’s vendor base and supply chain disruptions may adversely affect its business operations. The Company sources the products it sells from a wide variety of vendors. The Company generally does not have long-term written contracts with its major suppliers that would require them to continue supplying merchandise. The Company depends on its vendors for appropriate allocation of merchandise, assortments of products, operation of vendor-focused shopping experiences within its stores, and funding for various forms of promotional allowances. Recent supply chain disruptions within the industry, including labor availability, raw material shortages, and rising costs have placed constraints on the Company’s vendors resulting in reduced inbound fill rates and decreased product availability, which could negatively impact sales and profitability. There has been significant consolidation in the food industry, and this consolidation may continue to the Company’s commercial disadvantage. Such consolidations could have a material adverse impact on the Company’s revenues and profitability. The Company is vulnerable to decreases in the supply and increases in the price of raw materials and labor, manufacturing, distribution and other costs, and it may not be able to offset increasing costs by increasing prices to its customers. The Company's suppliers purchase agricultural products, including vegetables, oils and spices and seasonings, meat, poultry, packaging materials and other raw materials from growers, commodity processors, other food companies and packaging manufacturers. These products are subject to increases in price attributable to a number of factors, including changes in crop size, federal and state agricultural programs, export demand, currency exchange rates, energy and fuel costs, water supply, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi, and glass, metal and plastic prices. These increased prices, as well as other related expenses that they pass through to their customers, could result in higher costs for the products these vendors supply to the Company. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer buying patterns. The cost of labor, manufacturing, energy, fuel, packaging materials and other costs related to the production and distribution of the products the Company purchases from its vendors can from time to time increase significantly and unexpectedly. The Company attempts to manage these risks by entering into supply contracts, implementing cost saving measures and by raising sales prices. The Company expects to face continued industry-wide cost inflation. To the extent it is unable to offset present and future cost increases, the Company's operating results could be materially and adversely affected. Changes in macroeconomic conditions may adversely affect the Company's performance. Macroeconomic uncertainty, including rising inflation, potential economic recession, and increasing interest rates, among other negative macroeconomic conditions, could lead to decreased consumer spending from the Company's customer base, which could adversely affect the Company’s profitability and growth. It may be difficult for the Company to attract and retain well-qualified associates and effectively manage increased labor costs. The Company has experienced, and may continue to experience, a shortage of qualified labor, particularly for retail store associates, warehouse workers, and truck drivers. Such a shortage has caused upward pressure on wages. If the Company is unable to attract and retain quality associates to meet its needs without significant changes to its compensation offering, the Company could be required to reduce staffing below optimal levels or rely more on higher-cost third-party providers, which could significantly reduce the Company’s profitability and growth. Customers to whom the Company extends credit or for whom the Company guarantees loans or lease obligations may fail to repay the Company. From time to time, the Company may advance funds, extend credit and lend money to certain independent retailers and guarantee loan or lease obligations of certain customers. The Company seeks to obtain security interest and other credit support in connection with these arrangements, but the collateral may not be sufficient to cover the Company’s exposure. Greater than expected losses from existing or future credit extensions, loans, guarantee commitments or sublease arrangements could negatively and materially impact the Company’s operating results and financial condition. -10- The Company may not be able to achieve its strategy of growth through acquisitions, may encounter difficulties successfully integrating acquired businesses, and may not realize the anticipated benefits of business acquisitions. The Company’s strategy includes growth through the acquisition of additional wholesale distribution and retail operations. Given the recent consolidation activity which has resulted in a limited number of potential acquisition targets within the food industry, the Company may not be able to identify suitable targets for acquisition or may be required to make acquisitions which do not achieve the desired level of profitability or sales. Additionally, future acquisitions of retail grocery stores could result in the Company competing with its independent retailer customers which could adversely affect existing business relationships with those customers. As a result, the Company may not be able to actively identify or pursue suitable acquisition candidates in the future, complete acquisitions or obtain the necessary financing all of which may adversely affect the Company’s ability to grow profitably. Furthermore, if the Company fails to successfully integrate business acquisitions and realize planned synergies, the business may not perform to expectations. The integration of acquired businesses may also cause us to incur unforeseen costs which may prevent the Company from realizing the anticipated economic, operational, and other benefits and synergies timely and efficiently, all of which may negatively impact sales and long-term growth plans. The private brand program for U.S. military commissaries may be terminated or not achieve the desired results. In December 2016, the Defense Commissary Agency (“DeCA”), which operates U.S. military commissaries worldwide, competitively awarded to the Company the contract to support and supply products for the Agency’s private brand product program. The current contract to provide DeCA with private branded products expires in December 2025. Private brand products had not previously been offered in the Agency’s commissaries. The Company has invested and plans to continue to invest significant resources as it partners with DeCA to expand this program. However, the program may not be successful, may be discontinued or DeCA may suspend, terminate, shorten the scope or change certain terms and conditions in its agreement with SpartanNash which could have a significant adverse impact on the Company’s profitability. The Company expects that DeCA will face significant competition in each product category from national brands that are familiar to consumers. If the Agency is unable to drive traffic and business at the commissaries by offering one-stop shopping for military customers through a combination of both national and private brand offerings, then both DeCA and the Company may be unable to achieve expected returns from this program, which could have a material adverse effect on the Company’s business and may negatively impact DeCA's willingness to continue the program. The success of the program will depend, in part, on factors beyond the Company’s control, including the unilateral actions of DeCA. Disruptions to the Company’s information technology systems, including security breaches and cyber-attacks, could negatively affect the Company’s business. The Company has complex information technology (“IT”) systems that are vital to its business operations. It also employs mobile devices, social networking and other online activities to connect with and service customers, associates, suppliers, and business partners. The Company receives, transmits, and stores many types of sensitive information, including consumers’ personal information, personal health information, information belonging to customers, vendors, business partners, and other third parties, and the Company’s proprietary, confidential, or sensitive information. As a result, the Company faces risks of security breaches, system disruption, theft, espionage, inadvertent release of information, and other technology-related disruptions. The Company could incur significant losses due to any such event. Cyber threats evolve rapidly and are becoming more sophisticated, which may defeat the security programs and disaster recovery facilities and procedures implemented by the Company. Cyber attackers may defeat the Company's security measures and compromise the personal information of consumers, vendors, business partners, associates and other sensitive information. Associate error, faulty password management or other problems may compromise the security measures and result in a breach of the Company’s information systems, systems disruptions, data theft or other criminal activity. This could result in a loss of sales or profits or cause the Company to incur significant costs to restore its systems or to reimburse third parties for damages. Changes in geopolitical conditions, including the ongoing conflict between Russia and Ukraine, may adversely affect the Company's operations. In late February of 2022, Russia initiated a military operation in Ukraine. The Black Sea region is a key international grain and fertilizer export market and the conflict between Russia and Ukraine could continue to disrupt supply and logistics operations and impact global margins due to increased commodity, energy, and input costs, which could negatively impact the Company's profitability. To the extent the conflict between Russia and Ukraine adversely affects the Company's business, it may also have the effect of heightening other risks disclosed in this document and could further materially and adversely affect the Company's financial condition and profitability. -11- Threats to security or the occurrence of severe weather conditions, natural disasters or other unforeseen events could harm the Company’s business. The Company’s business could be severely impacted by severe weather conditions, natural disasters, or other events that could affect the warehouse and transportation infrastructure used by the Company and its vendors to supply the Company’s corporate owned retail stores, and Wholesale customers. Insurance programs may not fully cover losses, contingency plans adopted by the Company may fail, and the damage or destruction of Company facilities could compromise its ability to distribute products and generate sales and could increase energy costs needed to operate impacted facilities. Unseasonable weather conditions that impact growing conditions and the availability of food could also adversely and materially affect profitability, financial position or cash flows. Climate change, as well as an increasing focus by stakeholders on environmental sustainability and corporate responsibility matters, could adversely affect the business, brand or reputation. The Company is susceptible to risks associated with climate change, which may cause more frequent and extreme weather events. Risks associated with climate change include disruptions to the operations and supply chain; increased operating costs including those associated with use of natural gas, diesel fuel, gasoline and electricity; as well as increased costs and use of operational resources associated with complying with any new climate-related legal or regulatory requirements, including mandated use of alternative energy sources such as renewable energy or reduction of greenhouse emissions, all of which could disrupt and adversely affect the business and profitability, financial position or cash flows. Additionally, there is increased focus by stakeholders, including governmental and nongovernmental organizations, investors and customers, on environmental sustainability and corporate responsibility matters, including climate change response, packaging and waste reduction, energy consumption, and diversity, equity and inclusion. The Company’s disclosure on these matters and the failure, or perceived failure, to meet their commitments or otherwise effectively address these environmental sustainability and corporate responsibility matters, could adversely affect the business, brand or reputation. In particular, business incidents or practices, whether actual or perceived, that erode customer trust or confidence, particularly if they receive considerable publicity or result in litigation, could have a negative impact on the business. The Company's business and reputation may be adversely impacted by the increasing focus on environmental, social and governance matters. In recent years, there has been an increasing focus by stakeholders – including investors, governmental and non-governmental organizations, employees, and some customers, and suppliers – on environmental, social and governance (“ESG”) matters. Implementation of ESG initiatives may have an adverse financial impact on the Company resulting from increased costs required to achieve desired results. Moreover, a partial or complete failure, whether real or perceived, to adequately address ESG priorities or to achieve progress on the Company's reported ESG initiatives, could adversely affect the Company’s reputation and negatively impact the Company’s financial and business operations. Conversely, taking a position, whether real or perceived, on ESG, public policy, geopolitical or similar matters could also adversely impact the reputation of the Company and its financial condition stemming from increased operational and product costs, reputational damage, and shareholder activism. The Company may not successfully achieve its ESG-related goals, and any future investments that it makes in furtherance of achieving such goals may not produce the expected results or meet increasing stakeholder ESG expectations. Moreover, future events could lead the Company to prioritize other nearer-term interests over progressing toward current ESG-related goals based on business strategy, economic, regulatory, social or other factors. If the Company is unable to meet or properly report on the progress toward achieving the ESG-related goals, it could face adverse publicity and reactions from current or potential investors, activist groups or other stakeholders, which could result in reputational harm or other adverse effects to the Company. -12- Disease outbreaks, such as the COVID-19 pandemic and associated responses, may disrupt our business by increasing costs, negatively impacting our supply chain, driving change in consumer behavior, and having an adverse impact on the Company's operations. The COVID-19 pandemic and responses thereto continue to affect our industry and our business as many risks and uncertainties remain and some of the measures put in place in response to the pandemic continue to have material adverse impacts on business operations, including: • Duration of the COVID-19 pandemic, increase in the number of COVID-19 cases, and the related effect of new variants, strains or mutations of the virus on economic activity and business operations; • Ongoing concerns about the health and safety of our associates, and our ability to meet staffing needs in our retail stores, • • • • • • • distribution centers, and corporate offices; Increased distribution and operational costs due to significant increases in customer traffic and demand for grocery products, and the corresponding inability to meet demand with the existing workforce or other assets; Failure of third parties on which the Company relies, including its customers, suppliers, contractors, commercial banks and other business partners to meet their obligations to the Company, which may be caused by their own financial or operational challenges, which could materially and adversely impact the Company; Supply chain risks due to significantly increased demand following supply chain shutdowns and unprecedented disruptions and delays, including the availability of warehouse and transportation personnel and service providers or the inability to procure adequate quantities of certain goods; Reduced workforce or temporary store and distribution center closures associated with the presence of COVID-19 infections among the Company’s associates; Increased costs relating to compliance with public health and safety requirements for the Company’s associates and customers; Inability to accurately forecast financial results due to the uncertainty associated with the short- and long-term effects of the pandemic on the U.S. economy, our business, and consumer behavior; or Increased and accelerated competition from alternative channels, including e-commerce retailers, due to a change in consumer behavior post-pandemic and continued social distancing. Any of the foregoing factors, or other effects of the pandemic may materially increase costs, negatively impact sales and damage the Company’s financial condition, profitability, cash flows and its liquidity position. The significance and duration of any such impacts are not possible to predict due to the overall uncertainty associated with COVID-19 and any future pandemic. Impairment charges for goodwill or other long-lived assets could adversely affect the Company’s financial condition and profitability. The Company is required to perform an annual impairment test for goodwill and other long-lived tangible and intangible assets in the fourth quarter of each year, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. Testing goodwill and other assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or – for goodwill – the Company’s stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of the Company’s future performance, may affect the fair value of goodwill or other assets. This could result in the Company recording a non-cash impairment charge for goodwill or other long-lived assets in the period the determination of impairment is made. The Company cannot accurately predict the amount or timing of potential impairments of assets. Should the value of goodwill or other assets become impaired, the Company’s financial position and profitability may be adversely affected. The Company may not successfully manage transitions associated with the executive leadership team. The Company’s success depends upon the continued services of executive officers and other key personnel, as well as its ability to effectively transition to their successors. Within the past two years, the Company has appointed several new executive leaders. These transitions may be disruptive to the Company, and if the Company is unable to execute an orderly transition and successfully integrate the new executives to successfully develop and implement strategic initiatives, the Company’s revenue, operating results and financial performance may be adversely affected. Any future changes to the executive leadership team, including hires or departures, could cause further disruption to the business and have a negative impact on operating performance, while these operational areas are in transition. The Company may not be able to timely find suitable successors to key roles as transitions occur or may not successfully integrate successors into its leadership team or the Company’s business operations. The Company’s inability to retain other key leaders or effectively transition to their successors, or any delay in filling any such critical positions, could harm its business and profitability. -13- Risks Related to the Company’s Indebtedness The Company is exposed to interest rate risk due to the variable rates on its indebtedness, which may increase debt service obligations if interest rates rise. The Company’s borrowings under the Revolving Credit Facility bear interest at variable rates and expose it to interest rate risk. The Company may not be able to accurately predict changes in interest rates or mitigate their impact. If interest rates increase, debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same and the Company’s profitability would decrease. A hypothetical 0.50% increase in rates applicable to borrowings under the Revolving Credit Facility as of December 31, 2022 would increase interest expense related to such debt by approximately $2.2 million per year. Covenants in its debt agreements restrict the Company’s operational flexibility. The agreements governing the Revolving Credit Facility contain usual and customary restrictive covenants relating to the management and operation of the Company, including restrictions on its ability to borrow, pay dividends, or consummate certain transactions. These covenants may prevent the Company from taking actions that it believes would be in the best interest of the business and may make it difficult for the Company to successfully execute its business strategy and transformation initiatives or effectively compete with companies that are not similarly restricted. The Company may also incur future debt obligations that might subject it to additional restrictive and financial covenants that could affect financial and operational flexibility. The Company may not be granted waivers of or amendments to these agreements if for any reason it is unable to comply with them, or the Company may not be able to refinance its debt on acceptable terms or at all. In addition, failure to comply with the covenants in the Company’s debt agreements could result in all of its indebtedness becoming immediately due and payable. The Company’s level of indebtedness could adversely affect its financial condition and its ability to raise additional capital or obtain financing in the future, respond to business opportunities, react to changes in its business, and make required payments on its debt. As of December 31, 2022, the Company had outstanding indebtedness of $503.6 million (net of unamortized debt issuance costs), primarily related to its asset-based lending facility (the "Revolving Credit Facility"). Refer to Note 6 in the accompanying notes to the consolidated financial statements for further information. If the Company is not able to generate cash flow from operations sufficient to service its debt, it may need to refinance its debt, dispose of assets or issue equity to obtain necessary funds. The Company may not be able to take any of such actions on a timely basis, on satisfactory terms or at all. Indebtedness could have significant consequences, including the following: • • • • • • reduced ability to execute the Company’s growth strategy, including merger and acquisition opportunities; reduced ability to invest in the Company, which may place it at a competitive disadvantage; increased vulnerability to adverse economic and industry conditions; exposure to interest rate increases; reduced cash flow available for other purposes; or limited ability to borrow additional funds for working capital, capital expenditures and other investments. The Company’s level of indebtedness may further increase from time to time. Although the Company’s agreements governing indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness, including secured debt, that could be incurred in compliance with these restrictions could be substantial. Incurring substantial additional indebtedness could further exacerbate the risks associated with the Company’s level of indebtedness. -14- Legal, Regulatory and Legislative Risks Changes in government regulations may have a material adverse effect on financial results. The Company operates in a highly regulated environment. The products we distribute and sell through our retail stores are subject to inspection and regulatory action by the United States Food and Drug Administration. Our warehouses and distribution centers are subject to inspection by the United States Department of Agriculture, the United States Department of Labor Occupational and Health Administration, and various state health and workplace safety authorities, and our logistics operations are subject to regulation by the United States Department of Transportation and the United States Federal Highway Administration. Moreover, as a federal contractor, the Company must develop and maintain Affirmative Action Programs under the Rehabilitation Act, as enforced by the Office of Federal Contract and Compliance Programs, which may cause the Company to incur significant reputational and monetary damages for alleged discrimination in employment practices. In addition, the various federal, state and local laws, regulations and administrative practices to which the Company is subject require us to comply with numerous provisions regulating areas such as environmental, health and sanitation standards, food safety, marketing of natural or organically produced food, facilities, pharmacies, equal employment opportunity, public accessibility, employee benefits, wages and hours worked and licensing for the sale of food, drugs, tobacco and alcoholic beverages, among others. Changes in federal, state or local minimum wages and overtime laws, federal tax laws, or employee paid leave laws could result in the Company incurring significant labor costs which could have material adverse effects on the Company’s financial position and profitability. The Company employs hourly associates who are compensated at an hourly rate lower than $15.00. If minimum wage rates increase, the Company would have to increase the wages of employees who fall below the new minimum and may need to increase the wages of employees in close proximity above the new minimum to address wage compression. In addition, changes in federal tax regulations may result in significant increases in the Company’s current and deferred tax liabilities, and may include changes in federal tax rates and the deductibility of certain costs. Failure to comply with existing or new laws or regulations could result in significant damages, penalties and/or litigation costs for the Company. The Company’s Wholesale segment is dependent upon domestic and international military operations. A change in the military commissary system, including its supply chain, or a change in the level of governmental funding, could negatively impact the Company’s business. Because the Company’s Wholesale segment sells and distributes grocery products to military commissaries and exchanges in the United States and overseas, any material changes in the commissary system, the level of governmental funding to DeCA, military staffing levels, or locations of bases, or DeCA’s supply chain may have a corresponding impact on the sales and operating performance of this segment. These changes could include privatization of some or all of the military commissary system, relocation or consolidation of commissaries and exchanges, base closings, troop redeployments or consolidations in the geographic areas containing commissaries and exchanges served by the Company, a change by DeCA to a self-distribution model, or a reduction in the number of persons having access to the commissaries and exchanges. Mandated reductions in the government expenditures, including those imposed as a result of a sequestration, may impact the level of funding to DeCA and could have a material impact on the Company’s operations. If DeCA were to make material changes to its supply chain model, for example by limiting distribution authorization, then the Company’s Wholesale segment could be affected. Product recalls or other safety concerns regarding the Company’s products could harm the Company’s reputation as well as increase its costs. The Company faces risks related to the safety of the food products that it distributes or sells. It may need to recall such products for actual or alleged contamination, adulteration, mislabeling, or other safety concerns. The Company distributes fresh fruits and vegetables, as well as other fresh prepared foods. These products, and other food products that the Company sells, are at risk of contamination by disease-causing organisms such as Salmonella, E. coli, and others. These pathogens are generally found in nature, and as a result, there is a risk that they could be present in the products distributed or sold by the Company. The Company typically has little control over proper food handling before the Company’s receipt of the product or once the product has been delivered to the Company's retail customers. Recall costs can be material. A widespread product recall could result in significant losses due to the administrative costs of a recall, the destruction of inventory, and lost sales. Recalls and other food safety concerns can also result in adverse publicity, damage to the Company’s reputation, and a loss of confidence in the safety and quality of its products. Customers may avoid purchasing certain products from the Company, or may seek alternative sources of supply for some or all of their food needs, even if the basis for concern is outside of the Company’s control. Any loss of confidence on the part of the Company’s customers would be difficult and costly to overcome. Any real or perceived issue regarding the safety of any food or drug items sold by the Company, regardless of the cause, could have a substantial and adverse effect on the Company’s business. A number of the Company’s associates are covered by collective bargaining agreements, and unions may attempt to organize additional associates. Approximately 7% of the Company’s associates are covered by collective bargaining agreements (“CBAs”) which expire between February 2024 and April 2026. The Company expects that rising healthcare, pension and other employee benefit costs, among other issues, will continue to be important topics of negotiation with the labor unions. Upon the expiration of the Company’s CBAs, work stoppages by the affected workers could occur if the Company is unable to negotiate an acceptable contract with the labor unions. This could significantly disrupt the Company’s operations. -15- Further, if the Company is unable to control healthcare and pension costs provided for in the CBAs, the Company may experience increased operating costs and an adverse impact on future profitability. The Company may continue to see additional union organizing campaigns. The potential for unionization could increase as any new related legislation or regulations are passed. The Company respects its associates’ right to unionize or not to unionize. However, the unionization of a significant portion of the Company’s workforce could increase the Company’s overall costs at the affected locations and adversely affect its flexibility to run its business in the most efficient manner to remain competitive or acquire new businesses and could adversely affect its profitability by increasing its labor costs or otherwise restricting its ability to maximize the efficiency of its operations. Costs related to multi-employer pension plans and other postretirement plans could increase. The Company contributes to the Central States Southeast and Southwest Pension Fund (the “Central States Plan” or the “Plan”), a multi-employer pension plan, based on obligations arising from its CBAs with Teamsters locals 406 and 908. SpartanNash does not administer or control this Plan, and the Company does not have control over the level of contributions the Company is required to make. Benefit levels and related issues may continue to create collective bargaining challenges. The amount of any increase or decrease in its required contributions to this Plan will depend upon the outcome of collective bargaining, the actions taken by the trustees who manage the Plan, governmental regulations, actual return on investment of Plan assets, the continued viability and contributions of other contributing employers, and the potential payment of withdrawal liability should the Company choose to exit a geographic area, among other factors. Costs related to multi-employer pension plans and other postretirement plans could increase and adversely affect the Company’s financial conditions and results of operation. Refer to Note 8 in the accompanying notes to the consolidated financial statements for further information. Item 1B. Unresolved Staff Comments None. Item 2. Properties The following table lists the locations and approximate square footage of the Company’s distribution centers used by its Wholesale segment as of December 31, 2022. The lease expiration dates for the distribution centers primarily servicing the Wholesale segment range from October 2023 to December 2031. The majority of these leases contain renewal options beyond these dates, if exercised. Distribution Centers Location Grand Rapids, Michigan Norfolk, Virginia Omaha, Nebraska Bellefontaine, Ohio Oklahoma City, Oklahoma Lima, Ohio Columbus, Georgia (a) Bloomington, Indiana San Antonio, Texas Lumberton, North Carolina Fargo, North Dakota St. Cloud, Minnesota Landover, Maryland Severn, Maryland Pensacola, Florida Sioux Falls, South Dakota Menominee, Michigan Bluefield, Virginia Indianapolis, Indiana Total Square Footage Leased — 188,093 4,384 — — — 478,702 — — 386,129 81,000 40,319 368,088 363,872 — 79,300 — — — 1,989,887 Square Footage Owned 1,179,582 545,073 686,783 666,045 608,543 517,552 — 471,277 461,544 — 288,824 329,046 — — 355,900 196,114 253,021 187,531 118,497 6,865,332 Total 1,179,582 733,166 691,167 666,045 608,543 517,552 478,702 471,277 461,544 386,129 369,824 369,365 368,088 363,872 355,900 275,414 253,021 187,531 118,497 8,855,219 (a) The Columbus location requires periodic lease payments to the holder of the outstanding industrial revenue bond, which is held by the Company. Upon expiration of the lease terms, the Company will take title to the property upon redemption of the bond. -16- The following table lists the Company’s retail stores, including the adjacent fuel centers of the related stores, by retail banner, number of stores, location and approximate square footage under each banner as of December 31, 2022. Retail Segment Grocery Store Retail Banner Family Fare Martin's Super Markets D&W Fresh Market VG’s Grocery Dan's Supermarket Family Fresh Market Sun Mart Foods Supermercado Nuestra Familia Forest Hills Foods No Frills Supermarkets Dillonvale IGA Fresh City Market Total Location Michigan, Minnesota, Nebraska, North Dakota, South Dakota, Iowa, Wisconsin Indiana, Michigan Michigan Michigan North Dakota Minnesota, Nebraska, Wisconsin Nebraska Nebraska Michigan Iowa, Nebraska Ohio Wisconsin Leased Owned Total Number of Stores Square Feet Number of Stores Square Feet Number of Stores Square Feet 75 11 8 8 5 — 1 1 2 2 1 1 115 3,241,872 660,228 393,586 363,117 264,077 — 31,733 22,540 65,209 39,560 25,627 21,470 5,129,019 11 9 2 1 — 3 4 2 — — — — 32 526,423 461,727 84,458 38,012 — 173,740 93,824 83,279 — — — — 1,461,463 86 20 10 9 5 3 5 3 2 2 1 1 147 3,768,295 1,121,955 478,044 401,129 264,077 173,740 125,557 105,819 65,209 39,560 25,627 21,470 6,590,482 The Company also owns one fuel center that is not reflected in the retail square footage above, a Family Fare Quick Stop in Michigan that is not included with a corporate owned retail store but is adjacent to the Company’s corporate headquarters. Also not reflected in the retail square footage above are three pharmacies not associated with corporate-owned retail locations, located in Iowa, Michigan, and Wisconsin as well as certain properties used to facilitate the stock and transfer of goods between retail stores. The Company’s headquarters is located in Grand Rapids, Michigan. The Company maintains offices in multiple states consisting of approximately 328,000 square feet in Company-owned buildings and 23,000 square feet in leased facilities. The Company also leases two additional off-site storage facilities consisting of approximately 50,000 square feet. The Company owns and leases to independent retailers eight stores totaling approximately 372,000 square feet and owns and leases to third parties one warehouse of approximately 422,000 square feet and office space totaling 109,000 square feet. The Company believes that its properties are generally well maintained and in good operating condition, have sufficient capacity, and are suitable and adequate to carry on its business as currently conducted. Item 3. Legal Proceedings From time-to-time, the Company is engaged in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. Additionally, various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against the Company. While the ultimate effect of such actions, lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the Company’s consolidated financial position, operating results or liquidity. Legal proceedings, various lawsuits, claims, and other matters are more fully described in Note 8, in the notes to consolidated financial statements, which is herein incorporated by reference. Item 4. Mine Safety Disclosures Not Applicable. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities SpartanNash common stock is traded on the Nasdaq Global Select Market under the trading symbol “SPTN.” As of February 27, 2023, there were approximately 1,300 shareholders of record of SpartanNash common stock. During the fourth quarter of 2017, the Board authorized a $50.0 million share repurchase program, which expired during the fourth quarter of 2022. On February 24, 2022, the Board of Directors authorized the repurchase of common shares in connection with a new $50 million program, which expires on February 22, 2027. As of December 31, 2022, $44.0 million remains available under the new program. The Company plans to return value to shareholders through share repurchases under this program as well as continuing regular dividends In 2022, 2021, and 2020 the Company repurchased 1,046,538, 265,000, and 860,752 shares of common stock for approximately $32.5 million, $5.3 million and $10.0 million, respectively. -17- Repurchases of common stock may include: (1) shares of SpartanNash common stock delivered in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) shares submitted for cancellation to satisfy tax withholding obligations that occur upon the vesting of the restricted shares. The value of the shares delivered or withheld is determined by the applicable stock compensation plan. The following table provides information regarding SpartanNash's purchases of its own common stock during the 12-week period ended December 31, 2022. Fiscal Period October 9 - November 5, 2022 Employee Transactions Repurchase Program (a) November 6 - December 3, 2022 Employee Transactions Repurchase Program December 4 - December 31, 2022 Employee Transactions Repurchase Program Total for quarter ended December 31, 2022 Employee Transactions Repurchase Program Total Number of Shares Purchased Average Price Paid per Share — $ $ 84,925 118 90,585 $ $ — $ $ 113,100 118 288,610 $ $ — 31.65 31.99 32.50 — 31.60 31.99 31.90 Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Dollar Value of Shares Yet to be Purchased Under the Plans or Programs (in thousands) N/A 84,925 N/A 90,585 N/A 113,100 N/A 288,610 $ $ $ $ N/A 53,704 N/A 47,568 N/A 43,994 N/A 43,994 (a) The dollar value of shares yet to be purchased under the repurchase programs includes $3.7 million under the 2017 program that expired on November 15, 2022. Performance Graph Set forth below is a graph comparing the cumulative total shareholder return on SpartanNash common stock to that of the S&P SmallCap 600 Food Distributors Index and the S&P SmallCap 600 Index, over a period beginning December 30, 2017 and ending on December 31, 2022. Cumulative total return is measured by the sum of (1) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (2) the difference between the share price at the end and the beginning of the measurement period, divided by the share price at the beginning of the measurement period. -18- The dollar values for total shareholder return plotted above are shown in the table below: December 30, 2017 December 29, 2018 December 28, 2019 January 2, 2021 January 1, 2022 December 31, 2022 SpartanNash S&P SmallCap 600 S&P SmallCap 600 Food Distributors $ $ 100.00 100.00 100.00 $ 65.62 91.00 64.88 $ 58.07 112.04 61.81 $ 75.18 125.05 68.92 $ 115.44 158.59 133.22 139.24 133.06 122.45 The information set forth under the Heading “Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, except to the extent that the registrant specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act. Item 6. Reserved -19- Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations About SpartanNash SpartanNash, headquartered in Grand Rapids, Michigan, is a food solutions company that delivers the ingredients for a better life. As a distributor, wholesaler and retailer with a global supply chain network, SpartanNash customers span a diverse group of national accounts, independent and chain grocers, e-commerce retailers, U.S. military commissaries and exchanges, and the Company’s own brick-and-mortar grocery stores, pharmacies and fuel centers. SpartanNash distributes grocery and household goods, including fresh produce and its Our Family® portfolio of products, to locations in all 50 states. At the beginning of the third quarter of 2022, the Company combined the previous Food Distribution and Military operating segments into one operating segment: Wholesale. The change in the operating segments was driven by both a change in the Company’s organizational structure, and in the reporting utilized by the Chief Operating Decision Maker to allocate the Company’s resources and assess operating performance. The combination of the two segments reflects the way the Company manages the distribution business as one comprehensive distribution network and furthers the Company’s efforts to streamline operations in connection with its supply chain transformation and to better serve customers. As a result, the Company now operates two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and compensation. Segment financial information for the comparative prior year periods within this report has been recast to reflect this update. Overview of 2022 In a dynamic operating environment, the Company has continued to execute on Our Winning RecipeTM, which drove solid fiscal 2022 results. The plan continues to generate sustainable growth, as the Company further optimizes its supply chain network and captures additional cost savings, while providing exceptional customer service and additional offerings. Through the supply chain transformation initiative, the Company secured $25 million in run-rate cost savings and anticipates that the merchandising transformation initiative will begin generating significant benefits for customers, vendors, and the Company in 2023 and beyond. The Company’s 2022 highlights include: Wholesale • Wholesale segment net sales increased $495.5 million compared to the prior year, due primarily to the inflationary impact on pricing. The Wholesale segment realized gross margin rate improvement of 20 basis points. The change in gross profit was driven primarily by the impact of inflation, partially offset by incremental last-in-first-out ("LIFO") expense. The Company continued to execute on its comprehensive supply chain transformation initiative. The initiative is focused on executing improvements to supply chain operations across the Company’s network, which has secured more than $25 million in run-rate cost savings and delivered an approximate 7% improvement in throughput rate year-over-year. • • Retail • Retail comparable store sales increased 9.1% for the fourth quarter and increased 7.7% for the fiscal year. Other Highlights • The Company launched the first phase of a merchandising transformation initiative that is anticipated to generate significant benefits for the Company, customers, and vendors. The initiative involves enhanced category management planning, including a new cost policy, and better promotions planning. • During 2022, the Company paid $29.7 million in cash dividends, or $0.84 per common share, to shareholders and returned an additional value to shareholders in the form of share repurchases of $32.5 million. In addition, the Company generated net cash from operating activities of $110.4 million in 2022. • The Company reported earnings from continuing operations for the fiscal year of $34.5 million, compared to $73.8 million in the prior year. The Company reported adjusted EBITDA for the fiscal year of $242.9 million, compared to $213.7 million in the prior year. -20- Results of Operations The current year results of operations are presented in comparison to the prior year within the section below. For a discussion of the results of fiscal 2021 operations in comparison to fiscal 2020, refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations within the prior year Annual Report on Form 10-K. The Company believes that certain known or anticipated trends may cause future results to vary from historical results. The Company believes certain initiatives including the supply chain transformation and merchandising transformation, as well as plans to gain market share in both the Retail and Wholesale segments will favorably impact future results. The Company anticipates that additional investments in capital expenditures will be necessary to support these and other programs. Offsetting the Company’s expectations of favorable future results are macroeconomic headwinds including increasing labor costs, elevated interest rates, lower inflation-related price gains, and the reduction in government food assistance programs. The Company is also exposed to other general commodity price changes such as utilities, insurance and fuel costs. The following table sets forth items from the Company’s consolidated statements of earnings as a percentage of net sales and the percentage change from the preceding year: Net sales Gross profit Selling, general and administrative Paid time off transition adjustment Acquisition and integration, net Restructuring and asset impairment, net Operating earnings Other expenses, net Earnings before income taxes Income tax expense Net earnings Note: Certain totals do not sum due to rounding. ** Not meaningful Percentage of Net Sales 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) Percentage Change 2022 vs 2021 100.0 15.5 14.8 — 0.0 0.0 0.7 0.2 0.5 0.1 0.4 100.0 15.7 14.7 (0.2) 0.0 0.0 1.3 0.2 1.1 0.3 0.8 100.0 15.2 13.9 — 0.0 0.3 1.1 0.2 0.9 0.1 0.8 8.0 6.7 9.0 ** (51.6) (72.1) (38.9) 59.7 (52.4) (50.2) (53.2) Net Sales – The following table presents net sales by segment and variances in net sales between fiscal 2022 and fiscal 2021: (In thousands) Wholesale Retail Net sales 2022 (52 Weeks) $ $ 6,845,236 2,797,864 9,643,100 Percentage of Total Net Sales 2021 (52 Weeks) Percentage of Total Net Sales 71.0 % $ 29.0 100.0 % $ 6,349,753 2,581,286 8,931,039 71.1 % $ 28.9 100.0 % $ Variance 495,483 216,578 712,061 Percentage Change 7.8 % 8.4 8.0 % Net sales increased $712.1 million, or 8.0%, to $9.64 billion in 2022 compared to $8.93 billion in 2021. The increase was attributable to increases in net sales in both the Wholesale and Retail segments, which were favorably impacted by inflation. Wholesale net sales increased $495.5 million, or 7.8%, to $6.85 billion in 2022 compared to $6.35 billion in the prior year. The increase in net sales was due primarily to the inflationary impact on pricing, which increased net sales by 10.4% compared to the prior year, while lower case volumes decreased net sales by 2.6% compared to the prior year. Retail net sales increased $216.6 million, or 8.4% to $2.80 billion in 2022 compared to $2.58 billion in the prior year. The increase in net sales was primarily due to inflationary pricing. Comparable store sales increased 7.7% in the current year. Retail comparable store sales increased by 9.6% due to inflation, and decreased by 1.9% due to reduced item counts. The Company defines a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), regardless of remodels, expansions, or relocated stores. Acquired stores are included in the comparable sales calculation 13 periods after the acquisition date. Sales are compared to the same store’s operations from the prior year period for purposes of calculation of comparable store sales. Fuel is excluded from the comparable sales calculation due to volatility in price. Comparable store sales is a widely used metric among retailers, which is useful to management and investors to assess performance. The Company’s definition of comparable store sales may differ from similarly titled measures at other companies. -21- Gross Profit – Gross profit represents net sales less cost of sales, which is described in further detail within Note 1, in the notes to the consolidated financial statements. Gross profit increased $93.6 million, or 6.7%, to $1.50 billion in the current year compared to $1.40 billion in the prior year primarily due to the increase in net sales. As a percent of net sales, gross profit decreased from 15.7% to 15.5% primarily due to an increase in LIFO expense of $38.2 million, or 38 basis points, and a decrease in the Retail segment's margin rate. These lower margin rates were partially offset by improvements in margin rates within the Wholesale segment. Selling, General and Administrative Expenses – Selling, general and administrative (“SG&A”) expenses consist primarily of operating costs related to retail and supply chain operations, including salaries and wages, employee benefits, facility costs, shipping and handling, equipment rental, depreciation, and out-bound freight, in addition to corporate administrative expenses. SG&A expenses increased $118.3 million, or 9.0%, to $1.43 billion in the current year from $1.31 billion in the prior year. As a percent of net sales, SG&A expenses increased from 14.7% to 14.8% primarily due to higher corporate administrative costs, including increased incentive compensation of $21.6 million, costs related to shareholder activism of $7.3 million, and up-front investments in the merchandising transformation initiative of $10.6 million. The increase in operating expenses was partially offset by a reduction in supply chain expense rates as a result of efficiencies realized and lower fees associated with the supply chain transformation initiative, as well as lower health insurance costs. Paid Time Off Transition Adjustment – Paid time off transition adjustment represents the transition impact of a new paid time off (“PTO”) plan of $21.4 million in the prior year. During the fourth quarter of 2021, the Company elected to transition from a grant- based policy to an accrual-based policy, which resulted in a lower required accrual balance at the end of the fiscal year. The former PTO plan granted employees their full PTO once annually based on an employee’s service in the previous year. As the employee’s compensation for future absences related to the employee’s service in the previous year, the Company was required to accrue for the full PTO grant. Under the new PTO plan, employees earn rights ratably throughout the year based on hours worked. Upon transition at the end of 2021, the Company allowed employees to begin the new plan with the unused portion of the previous annual PTO grant. The transition impact represents the difference between the former plan’s full PTO grant and the starting balance under the new plan. Acquisition and Integration, net – Acquisition and integration, net was $0.3 million in the current year compared to $0.7 million in the prior year. The expense in the current year primarily related to acquisitions in both the Retail and Wholesale segments, partially offset by the reversal of a litigation accrual, which was initially established at the time of the Martin's Super Markets acquisition. Prior year expense was associated with the integration of Martin's Super Markets. Restructuring and Asset Impairment, net – In the current year, $0.8 million of net restructuring and asset impairment charges were incurred. The charges were largely composed of $5.1 million of asset impairment charges in the Retail segment, which primarily relate to restructuring of the segment's e-commerce delivery model, and $1.8 million of provisions for closing charges associated with lease ancillary costs. These charges in the current year were mostly offset by $6.3 million gain on sales of real property of previously closed locations within the Wholesale and Retail segments. Prior year results included $2.9 million of net restructuring and asset impairment, which were largely composed of $3.8 million of asset impairment charges primarily in the Retail segment which relate to prior year store closures and previously closed locations, as well as site closures in connection with the Company’s supply chain transformation initiative within the Wholesale segment and $1.5 million of provision for closing charges associated with lease ancillary costs. These charges in the prior year were partially offset by $2.6 million gain on sales of pharmacy customer lists, equipment and real estate associated with the store closings in the Retail segment, in addition to the gains on the sale of vacant land in the Wholesale segment. Operating Earnings – The following table presents operating earnings by segment and variances in operating earnings: (In thousands) Wholesale Retail Operating earnings 2022 (52 Weeks) Percentage of Net Sales 2021 (52 Weeks) Percentage of Net Sales Variance $ $ 55,137 13,407 68,544 0.8 % $ 0.5 0.7 % $ 45,229 66,971 112,200 0.7 % $ 2.6 1.3 % $ 9,908 (53,564) (43,656) Change in Percentage of Net Sales 0.1 % (2.1) (0.5) % The Company reported operating earnings of $68.5 million in the current year compared to $112.2 million in the prior year. The decrease of $43.7 million, or 38.9%, was attributable to changes in net sales, gross profit and operating expenses discussed above as well as cycling the transition impact of the new PTO plan in the prior year of $21.4 million. Wholesale operating earnings increased $9.9 million, or 21.9%, to $55.1 million in the current year from $45.2 million in the prior year. The increase was primarily attributable to increased sales, a higher gross margin rate and a lower rate of supply chain labor and transportation expenses. These favorable variances were partially offset by higher LIFO expense, an increase in corporate administrative costs as well as cycling the transition impact of the new PTO plan in the prior year of $10.0 million. Retail operating earnings decreased $53.6 million, or 80.0%, to $13.4 million in the current year compared to $67.0 million in the prior year. The decrease was primarily attributable to a lower gross profit rate, increased corporate administrative costs, investments in store wage rates, and the transition impact of the new PTO plan of $11.3 million in the prior year. -22- Interest Expense – Interest expense increased $8.9 million, or 64.5%, to $22.8 million in the current year from $13.9 million in the prior year primarily due to rising interest rates. The weighted average interest rate for all borrowings, including loan fee amortization increased 1.83% to 4.65% in 2022, compared to 2.82% in 2021. The total debt balance increased $97.9 million to $503.6 million in 2022, compared to $405.7 million in 2021. Income Taxes – The Company’s effective income tax rates were 26.4% and 25.2% for 2022 and 2021, respectively. The differences from the federal statutory rate in the current year were primarily due to state taxes, limitations on the deductibility of executive compensation and non-deductible expenses, partially offset by tax benefits associated with federal tax credits and discrete tax benefits related to stock compensation. In the prior year, the difference from the federal statutory rate was primarily due to state taxes and the limitations on the deductibility of executive compensation, partially offset by federal tax credits. On March 27, 2020, the U.S. government enacted tax legislation to provide economic stimulus and support businesses and individuals during the COVID-19 pandemic, referred to as the CARES Act. In connection with the Coronavirus Aid, Relief and Economic Security ("CARES") Act, the Company recorded net discrete income tax benefits of $9.3 million in 2020, associated with the additional deductibility of certain expenses combined with provisions which enable companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act, when the federal statutory income tax rate was 35%. In the first quarter of 2021, the Company received tax refunds totaling $25.7 million related to the amended prior year returns. Non-GAAP Financial Measures In addition to reporting financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company also provides information regarding adjusted operating earnings, adjusted earnings from continuing operations, as well as per diluted share ("adjusted EPS"), net long-term debt, and adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company’s performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats. At the beginning of 2022, the Company made a change to the adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EPS measures to exclude the impact of LIFO expense or benefit. The Company believes the change reduces volatility associated with temporary fluctuations in inflation, enabling investors to best establish a basis for expected performance and the ability to evaluate actual results against that expectation and the industry in which the Company operates. Prior year adjusted operating earnings and adjusted earnings from continuing operations figures have been restated to align with this change in presentation. Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other items, LIFO expense, costs related to shareholder activism, operating and non-operating costs associated with the postretirement plan amendment and settlement, non-operating costs associated with the write off of certain unamortized deferred financing costs related to the debt modification, organizational realignment, and severance associated with cost reduction initiatives. Costs related to shareholder activism include consulting, legal, and other expenses incurred in relation to shareholder activism activities. Costs related to the postretirement plan amendment and settlement include non-operating expenses associated with recognition of plan settlement losses and amortization of the prior service credit related to the amendment of the retiree medical plan, which are adjusted out of adjusted earnings from continuing operations. Postretirement plan amendment and settlement costs also include operating expenses related to payroll taxes which are adjusted out of all non-GAAP financial measures. Organizational realignment includes benefits for associates terminated as part of leadership transition plans, which do not meet the definition of a reduction-in-force. Prior year adjusted earnings from continuing operations, and adjusted EBITDA exclude organizational realignment, severance associated with cost reduction initiatives and the transition impact of a new paid time off plan. The transition impact of a new paid time off plan is not expected to recur in the foreseeable future and is considered “non-operational” or “non-core” in nature. In 2020, adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude “Fresh Cut operating losses” subsequent to the decision to exit these operations during the first quarter, severance associated with cost reduction initiatives, organizational realignment costs and fees paid to a third-party advisory firm associated with Project One Team, the Company’s initiative to drive growth while increasing efficiency and reducing costs. Pension termination income related to refunds from the annuity provider associated with the final reconciliation of participant data, as well as net tax benefits associated with the CARES Act, are excluded from adjusted earnings from continuing operations. These measures were adjusted for the impact of the 53rd week in 2020 to provide better comparability to other years. Each of the adjusted items are considered “non-operational” or “non-core” in nature. -23- The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures used in the fiscal 2023 outlook without unreasonable effort because it is not possible to predict certain adjustment items with a reasonable degree of certainty since they are not yet known or quantifiable, and do not relate to the Company's routine activities. These adjustments may include, among other items, restructuring and asset impairment activity, acquisition and integration costs, severance, costs related to the postretirement plan amendment and settlement, and organizational realignment costs, and the impact of adjustments to the LIFO inventory reserve. This information is dependent upon future events, which may be outside of the Company's control and could have a significant impact on its GAAP financial results for fiscal 2023. Adjusted Operating Earnings Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations. The Company believes that adjusted operating earnings provide a meaningful representation of its operating performance for the Company as a whole and for its operating segments. The Company considers adjusted operating earnings as an additional way to measure operating performance on an ongoing basis. Adjusted operating earnings is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted operating earnings and adjusted operating earnings by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in an adjusted operating earnings format. Adjusted operating earnings is not a measure of performance under GAAP and should not be considered as a substitute for operating earnings, and other income statement data. The Company’s definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies. Following is a reconciliation of operating earnings to adjusted operating earnings for 2022, 2021 and 2020. (In thousands) Operating earnings Adjustments: LIFO expense Acquisition and integration, net Restructuring and asset impairment, net Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Fresh Cut operating losses Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted operating earnings 53rd week Adjusted operating earnings, excluding 53rd week 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 68,544 $ 112,200 $ 102,406 56,823 343 805 — 1,859 831 — 133 7,335 — — 136,673 — 136,673 $ 18,652 708 2,886 — 589 423 — — — — (21,371) 114,087 — 114,087 $ 2,176 421 24,398 493 455 5,154 2,262 — — 82 — 137,847 (4,155) 133,692 $ -24- Following is a reconciliation of operating earnings by segment to adjusted operating earnings by segment for 2022, 2021 and 2020. Wholesale: Operating earnings Adjustments: LIFO expense Acquisition and integration, net Restructuring and asset impairment, net Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Fresh Cut operating losses Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted operating earnings 53rd week Adjusted operating earnings, excluding 53rd week Retail: Operating earnings Adjustments: LIFO expense Acquisition and integration, net Restructuring and asset impairment, net Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted operating earnings 53rd week Adjusted operating earnings, excluding 53rd week 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 55,137 $ 45,229 $ 36,047 48,282 239 (2,363) — 1,160 689 — 83 4,577 — — 107,804 — 107,804 13,407 8,541 104 3,168 — 699 142 50 2,758 — — 28,869 — 28,869 $ $ $ 15,755 — 427 — 374 310 — — — — (10,041) 52,054 — 52,054 66,971 2,897 708 2,459 — 215 113 — — — (11,330) 62,033 — 62,033 $ $ $ $ $ $ 1,875 — 21,085 329 304 3,709 2,262 — — 55 — 65,666 (1,395) 64,271 66,359 301 421 3,313 164 151 1,445 — — 27 — 72,181 (2,760) 69,421 -25- Adjusted Earnings from Continuing Operations Adjusted earnings from continuing operations, as well as per diluted share ("adjusted EPS"), is a non-GAAP operating financial measure that the Company defines as net earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations. The Company believes that adjusted earnings from continuing operations provide a meaningful representation of its operating performance for the Company. The Company considers adjusted earnings from continuing operations as an additional way to measure operating performance on an ongoing basis. Adjusted earnings from continuing operations is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and excludes the contributions of activities classified as discontinued operations. Because adjusted earnings from continuing operations is a performance measure that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted earnings from continuing operations format. Adjusted earnings from continuing operations is not a measure of performance under GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies. Following is a reconciliation of net earnings to adjusted earnings from continuing operations for 2022, 2021 and 2020. (In thousands, except per share data) Net earnings Adjustments: LIFO expense Acquisition and integration, net Restructuring and asset impairment, net Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Fresh Cut operating losses Pension refund from annuity provider Postretirement plan amendment and settlement Expenses associated with tax planning strategies Costs related to shareholder activism Paid time off transition adjustment Write off of deferred financing costs Pension termination Total adjustments Income tax effect on adjustments (a) Impact of CARES Act (b) Total adjustments, net of taxes Adjusted earnings from continuing operations 53rd week Adjusted earnings from continuing operations, excluding 53rd week 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) Earnings per diluted share Earnings per diluted share Earnings per diluted share $ 34,518 $ 0.95 $ 73,751 $ 2.05 $ 75,914 $ 2.12 56,823 343 805 — 1,859 831 — (200) (776) — 7,335 — 236 — 67,256 (17,083) — 50,173 84,691 — 18,652 708 2,886 — 589 423 — — — — — (21,371) — — 1,887 (737) — 1,150 74,901 — 1.38 2.33 — 2,176 421 24,398 493 455 5,154 2,262 — — 82 — — — (1,193) 34,248 (8,374) (9,292) 16,582 92,496 (2,999) 0.03 2.08 — 0.46 2.58 (0.08) $ 84,691 $ 2.33 $ 74,901 $ 2.08 $ 89,497 $ 2.50 (a) The income tax effect on adjustments is computed by applying the applicable tax rate to the adjustments. (b) Represents tax impacts attributable to the CARES Act, and related tax planning, primarily related to additional deductions and the utilization of net operating loss carryback. -26- Adjusted EBITDA Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”) is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non- cash items including share-based payments (equity awards measured in accordance with ASC 718, Stock Compensation, which include both stock-based compensation to employees and stock warrants issued to non-employees) and the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company. The Company believes that adjusted EBITDA provides a meaningful representation of its operating performance for the Company and for its operating segments. The Company considers adjusted EBITDA as an additional way to measure operating performance on an ongoing basis. Adjusted EBITDA is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted EBITDA and adjusted EBITDA by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted EBITDA format. Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies. Following is a reconciliation of net earnings to adjusted EBITDA for 2022, 2021 and 2020. (In thousands) Net earnings Income tax expense Other expenses, net Operating earnings Adjustments: LIFO expense Depreciation and amortization Acquisition and integration, net Restructuring and asset impairment, net Cloud computing amortization Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Stock-based compensation Stock warrant Non-cash rent Fresh Cut operating losses Loss (gain) on disposal of assets Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted EBITDA 53rd week Adjusted EBITDA, excluding 53rd week 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 34,518 12,397 21,629 68,544 56,823 94,180 343 805 3,650 — 1,859 831 8,589 2,158 (3,444) — 1,073 133 7,335 — — 242,879 — 242,879 $ $ 73,751 24,906 13,543 112,200 18,652 92,711 708 2,886 2,140 — 589 423 6,975 1,958 (4,059) — (106) — — — (21,371) 213,706 — 213,706 $ $ 75,914 9,450 17,042 102,406 2,176 89,504 421 24,398 297 493 455 5,154 6,265 6,549 (4,733) 2,262 3,330 — — 82 — 239,059 (4,246) 234,813 -27- Following is a reconciliation of operating earnings to adjusted EBITDA by segment for 2022, 2021 and 2020. (In thousands) Wholesale: Operating earnings Adjustments: LIFO expense Depreciation and amortization Acquisition and integration, net Restructuring and asset impairment, net Cloud computing amortization Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Stock-based compensation Stock warrant Non-cash rent Fresh Cut operating losses Loss (gain) on disposal of assets Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted EBITDA 53rd week Adjusted EBITDA, excluding 53rd week Retail: Operating earnings Adjustments: LIFO expense Depreciation and amortization Acquisition and integration, net Restructuring and asset impairment, net Cloud computing amortization Costs associated with Project One Team Organizational realignment, net Severance associated with cost reduction initiatives Stock-based compensation Non-cash rent Loss (gain) on disposal of assets Postretirement plan amendment and settlement Costs related to shareholder activism Expenses associated with tax planning strategies Paid time off transition adjustment Adjusted EBITDA 53rd week Adjusted EBITDA, excluding 53rd week 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 55,137 $ 45,229 $ 36,047 48,282 47,601 239 (2,363) 2,537 — 1,160 689 5,646 2,158 (382) — 512 83 4,577 — — 165,876 — 165,876 13,407 8,541 46,579 104 3,168 1,113 — 699 142 2,943 (3,062) 561 50 2,758 — — 77,003 — 77,003 $ $ $ 15,755 46,487 — 427 1,517 — 374 310 4,373 1,958 811 — (42) — — — (10,041) 107,158 — 107,158 66,971 2,897 46,224 708 2,459 623 — 215 113 2,602 (4,870) (64) — — — (11,330) 106,548 — 106,548 $ $ $ 1,875 44,305 — 21,085 200 329 304 3,709 4,131 6,549 182 2,262 1,384 — — 55 — 122,417 (1,466) 120,951 66,359 301 45,199 421 3,313 97 164 151 1,445 2,134 (4,915) 1,946 — — 27 — 116,642 (2,780) 113,862 $ $ $ -28- Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Based on the Company’s ongoing review, the Company makes adjustments it considers appropriate under the facts and circumstances. The Company believes these accounting policies, and others set forth in Note 1, in the notes to the consolidated financial statements, should be reviewed as they are integral to understanding the Company’s financial condition and results of operations. The Company has discussed the development, selection and disclosure of these accounting policies with the Audit Committee of the Board of Directors. An accounting estimate is considered critical if: a) it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and b) different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the Company’s consolidated financial statements. The Company considers the following accounting policies to represent the more critical estimates and assumptions used in the preparation of its consolidated financial statements: Customer Exposure and Credit Risk Allowance for Credit Losses. The Company evaluates the collectability of its accounts and notes receivable based on a combination of factors. The Company estimates losses using an expected loss model, by considering both historical data and future expectations, including collection experience, expectations for current credit risks, accounts receivable payment status, the customer’s financial health, as well as the Company’s collateral and creditor position. The Company pools similar assets based on their credit risk characteristics, whereby many of its trade receivables are pooled based on certain customer or aging characteristics. After assets are pooled, an appropriate loss factor is applied based on management’s expectations. Based on the estimated loss, the Company records an allowance to reduce the receivable to an amount the Company reasonably expects to collect. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the collectability based on information considered and further deterioration of accounts. If circumstances change (e.g., further evidence of material adverse creditworthiness, additional accounts become credit risks, store closures), the Company’s estimates of the recoverability of amounts due could be reduced by a material amount, including to zero. Funds Advanced to Independent Retailers. From time to time, the Company may advance funds to independent retailers which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances, for remaining a SpartanNash customer for a specified time period. These advances must be repaid if the purchase volume requirements are not met or if the retailer does not remain a customer for the specified time period. In the event these retailers are unable to repay these advances or otherwise experience an event of default, the Company may be unable to recover the unearned portion of the funds advanced to these independent retailers. The Company evaluates the recoverability of these advances based on a number of factors, including anticipated and historical purchase volume, the value of any collateral, customer financial health and other economic and industry factors, and establishes a reserve for the advances as necessary. Guarantees of Debt and Lease Obligations of Others. The Company may guarantee debt and lease obligations of independent retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements. The Company evaluates the likelihood that funding will occur and the expected credit losses on commitments to be funded using an expected loss model. The Company has guaranteed the outstanding lease obligations of certain independent retailers. These guarantees, which are secured by certain business assets and personal guarantees of the respective independent retailers, represent the maximum undiscounted payments the Company would be required to make in the event of default. When a loss is expected, a liability representing the fair value of the obligations assumed under the guarantees is included in the accompanying consolidated financial statements. The Company also subleases and assigns various leases to third parties. In circumstances when the Company becomes aware of factors that indicate deterioration in a third party’s ability to meet its financial obligations guaranteed or assigned by SpartanNash, the Company records a specific reserve in the amount the Company reasonably believes it will be obligated to pay on the third party’s behalf, net of any anticipated recoveries from the third party. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the obligations based on information considered and further deterioration of accounts, with the potential for a corresponding adverse effect on operating results and cash flows. Triggering these guarantees or obligations under assigned leases would not, however, result in cross default of the Company’s debt, but could restrict resources available for general business initiatives. -29- Goodwill and Other Indefinite-Lived Intangible Assets Goodwill and other indefinite-lived intangible assets are tested for impairment on an annual basis (during the last quarter of the year), or whenever events occur or circumstances change that would more likely than not indicate an impairment exists. The quantitative impairment evaluation of these assets involves the comparison of their fair value to their carrying values. Goodwill. The Company has two reporting units, which are the same as the Company’s reportable segments. Fair values are determined based on the discounted cash flows and comparable market values of each reporting segment. If a reporting unit’s fair value is less than its carrying value, an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The Company’s goodwill impairment analysis also includes a comparison of the estimated fair value of the enterprise as a whole to the Company’s total market capitalization. Therefore, a significant and sustained decline in the Company’s stock price could result in goodwill impairment charges. During times of financial market volatility, significant judgment is given to determine the underlying cause of the decline and whether stock price declines are short-term in nature or indicative of an event or change in circumstances. The Company estimates the fair value of the Wholesale and Retail reporting units based on the income approach using a discounted cash flow model and also incorporates the market approach using observable comparable company information. Key assumptions used by the Company in preparing the fair value estimate under the discounted cash flow method include: • Weighted average cost of capital (“WACC”): The determination of the WACC incorporates current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns. The development of the WACC requires estimates of an equity rate of return and a debt rate of return, which are specific to the industry in which the reporting unit operates. • Revenue growth rates: The Company develops its forecasts based on recent sales data for existing operations and other factors, including management’s future expectations. • Operating profits: The Company uses historical operating margins as a basis for its projections within the discounted cash flow model. Margins within the forecast may vary due to future expectations related to both product and administrative costs. The Company compares the results of the discounted cash flow model to observable comparable company market multiples to support the appropriateness of the fair value estimates. The Company concludes whether the implied multiple is reasonable with respect to the comparable company range, and whether the assumptions used in the fair value estimate are supportable. As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of July 17, 2022, the Wholesale and Retail reporting units had fair values that were substantially in excess of their carrying values. The Company has sufficient available information, both current and historical, to support its assumptions, judgments and estimates used in the goodwill impairment test; however, if actual results for the Wholesale or Retail segments are not consistent with the Company’s estimates, it could result in the Company recording a non-cash impairment charge. Other Indefinite-Lived Intangible Assets. The estimated fair value of these assets is computed by using a discounted cash flow method, such as the relief-from-royalty methodology. The Company determines future cash flows generated from the use of the asset, generally using estimated revenue growth rates and profitability rates and, in the case of the relief-from-royalty methodology, royalty rates. Discount rates are determined based on the WACC of the reporting unit in which the asset resides, consistent with the discussion above. Impairments of these assets were $8.6 million for 2020. There were no impairments of these assets in 2022 or 2021. Impairment of Long-Lived Assets Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets are evaluated at the asset-group level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Impairments of long-lived assets were $5.1 million, $3.8 million and $11.5 million for 2022, 2021 and 2020, respectively. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, the competitive environment, real estate market conditions and inflation. If the book value of assets is determined to not be recoverable, future cash flows for the expected useful life of the asset group are discounted using a rate based on the WACC of the reporting segment in which the asset resides, consistent with the discussion above. -30- Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less cost to sell. Management determines fair values using independent appraisals, quotes or expected sales prices developed by internal real estate professionals. Estimates of expected sales prices are judgments based upon the Company’s experience, knowledge of market conditions and current offers received. Changes in market conditions, the economic environment and other factors, including the Company’s ability to effectively compete and react to competitor openings, can significantly impact these estimates. While the Company believes that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in a different outcome. Insurance Reserves SpartanNash is self-insured through self-insurance retentions or high deductible programs. Refer to Note 1, in the notes to the consolidated financial statements for additional information related to self-insurance reserves. Any projection of losses concerning insurance reserves is subject to a degree of variability. Among the causes of variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, changing regulations, legal interpretations, benefit level changes and claim settlement patterns. Although the Company’s estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a material impact on future claim costs and currently recorded liabilities. The impact of many of these variables may be difficult to estimate. Income Taxes The Company reviews deferred tax assets for recoverability and evaluates whether it is more likely than not that they will be realized. In making this evaluation, the Company considers positive and negative evidence associated with several factors, including the statutory recovery periods for the assets, along with available sources of future taxable income, including reversals of existing taxable temporary differences, tax planning strategies, history of taxable income or losses, and projections of future income or losses. A valuation allowance is provided when the Company concludes, based on all available evidence, that it is more likely than not that the deferred tax assets will not be realized during the applicable recovery period. SpartanNash is subject to periodic audits by the Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company’s tax positions, such as the timing and amount of income credits and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the Company’s effective income tax rate and cash flows in future years. Liquidity and Capital Resources Cash Flow Information The following table summarizes the Company’s consolidated statements of cash flows for 2022, 2021 and 2020: (In thousands) Cash flow activities Net cash provided by operating activities Net cash used in investing activities Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 110,350 (100,948) 9,018 18,420 10,666 29,086 $ $ 161,155 (47,978) (122,414) (9,237) 19,903 10,666 $ $ 306,716 (57,221) (253,764) (4,269) 24,172 19,903 Net cash provided by operating activities. Net cash provided by operating activities in the current year decreased compared to the prior year by $50.8 million primarily due to changes in working capital. Net cash used in investing activities. Net cash used in investing activities increased $53.0 million in 2022 compared to 2021 primarily due to acquisitions in both the Wholesale and Retail segments in the current year and increase in capital expenditures. -31- The Wholesale and Retail segments utilized 53.9% and 46.1% of capital expenditures, respectively, for the current year. Capital expenditures for 2022 primarily related to store remodels, IT upgrades and implementations, investments in supply chain infrastructure, office remodels, and equipment upgrades. Capital expenditures were $97.3 million in the current year and cloud computing application development spend, which is included in operating activities, was $4.8 million, compared to capital expenditures of $79.4 million and cloud computing application development spend of $6.4 million in the prior year. The Company expects total capital expenditures and cloud computing application development ("IT capital") spend to range from $130.0 million to $145.0 million in 2023. Capital expenditures and IT capital is a non-GAAP financial measure calculated by adding spending related to the development of cloud computing applications spend to capital expenditures, the most directly comparable GAAP measure. The Company is unable to provide a full reconciliation of the GAAP to non-GAAP measures without unreasonable effort because it is not possible to predict certain adjustment items with a reasonable degree of certainty since they are not yet known or quantifiable. This information is dependent upon future events, which may be outside of the Company's control and could have a significant impact on its GAAP financial results. Net cash provided by (used in) financing activities. Net cash provided by financing activities increased $131.4 million in 2022 compared to 2021 primarily due to increased borrowings on the senior credit facility, partially offset by an increase in share repurchases. Debt Management Long-term debt and finance lease liabilities, including the current portion, increased $97.9 million to $503.6 million as of December 31, 2022 from $405.7 million at January 1, 2022. The increase in total debt was driven by additional borrowings on the senior credit facility to fund working capital changes, acquisitions, purchases of property, plant and equipment and share repurchases. On November 17, 2022, the Company and certain of its subsidiaries entered into an amendment (the "Amendment") to the Company's Amended and Restated Loan and Security Agreement (the "Credit Agreement"). The principal terms of the Amendment included an extension of the maturity date of the loans from December 18, 2023 to November 17, 2027, an amendment to the interest rate grid such that rates for the Tranche A ($975 million capacity) revolving loans are now SOFR plus 1.25% to SOFR plus 1.50% and Tranche A-1 revolving loans ($40 million capacity) are now SOFR plus 2.25% to SOFR plus 2.50%, and a reset of certain advance rates for the borrowing base. The Company has the ability to increase the amount borrowed under the Credit Agreement by an additional $325 million, subject to certain conditions. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s personal and real property. The Company may repay all loans in whole or in part at any time without penalty. Liquidity The Company’s principal sources of liquidity are cash flows generated from operations and its senior secured credit facility. As of December 31, 2022, the senior secured credit facility had outstanding borrowings of $445.9 million. Additional available borrowings under the Company’s Credit Agreement are based on stipulated advance rates on eligible assets, as defined in the Credit Agreement. The Credit Agreement requires that the Company maintain Excess Availability of 10% of the borrowing base, as defined in the Credit Agreement. The Company had excess availability after the 10% requirement of $447.8 million at December 31, 2022. Payment of dividends and repurchases of outstanding shares are permitted, provided that certain levels of excess availability are maintained. The Credit Agreement provides for the issuance of letters of credit, of which $17.7 million were outstanding as of December 31, 2022. The Company believes that cash generated from operating activities and available borrowings under the Credit Agreement will be sufficient to meet anticipated requirements for working capital, capital expenditures, dividend payments, and debt service obligations for the foreseeable future. However, there can be no assurance that the business will continue to generate cash flow at or above current levels or that the Company will maintain its ability to borrow under the Credit Agreement. The Company’s current ratio (current assets over current liabilities) was 1.51:1 at December 31, 2022 compared to 1.46:1 at January 1, 2022, and its investment in working capital was $361.4 million at December 31, 2022 compared to $301.4 million at January 1, 2022. The net long-term debt to total capital ratio was 0.38:1 at December 31, 2022, compared to 0.34:1 at January 1, 2022. Total net debt is a non-GAAP financial measure that is defined as long-term debt and finance lease liabilities, plus current portion of long-term debt and finance lease liabilities, less cash and cash equivalents. The Company believes both management and its investors find the information useful because it reflects the amount of long-term debt obligations that are not covered by available cash and temporary investments. Total net debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies. -32- Following is a reconciliation of “Long-term debt and finance lease liabilities” to net long-term debt, a non-GAAP measure, as of December 31, 2022 and January 1, 2022. (In thousands) Current portion of long-term debt and finance lease liabilities Long-term debt and finance lease liabilities Total debt Cash and cash equivalents Net long-term debt December 31, 2022 January 1, 2022 $ $ 6,789 496,792 503,581 (29,086) 474,495 $ $ 6,334 399,390 405,724 (10,666) 395,058 The Company’s material cash requirements as of December 31, 2022 primarily include long-term debt, including the estimated interest on the long-term debt, operating and finance lease liabilities, purchase obligations, and capital expenditure commitments. For additional information related to long-term debt and lease obligations, refer to Notes 6 and 9, respectively, in the notes to the consolidated financial statements. Purchase obligations include the amount of product the Company is contractually obligated to purchase in order to earn advanced contract monies that are receivable under the contracts, the majority of which are due in the next 12 months. Cash Dividends The Company declared a quarterly cash dividend of $0.21, $0.20 and $0.1925 per common share in each quarter of 2022, 2021, and 2020, respectively. Under the Credit Agreement, the Company is generally permitted to pay dividends in any year up to an amount such that all cash dividends, together with any cash distributions and share repurchases, do not exceed $35.0 million. Additionally, the Company is generally permitted to pay cash dividends in excess of $35.0 million in any year so long as its Excess Availability, as defined in the Credit Agreement, is in excess of 10% of the Total Borrowing Base, as defined in the Credit Agreement, before and after giving effect to the repurchases and dividends. Although the Company currently expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors (the “Board”) to declare future dividends. Each future dividend will be considered and declared by the Board at its discretion. Whether the Board continues to declare dividends depends on a number of factors, including the Company’s future financial condition, anticipated profitability and cash flows and compliance with the terms of its credit facilities. Recently Adopted Accounting Standards Refer to Note 1, in the notes to the consolidated financial statements for additional information related to recently adopted accounting standards, as well as the anticipated effect of any impending accounting standards. Item 7A. Quantitative and Qualitative Disclosure About Market Risk The Company is exposed to industry related price changes on several commodities, such as dairy, meat and produce, that it buys and sells in both of its segments. These products are purchased for and sold from inventory in the ordinary course of business. The Company is also exposed to other general commodity price changes such as utilities, insurance and fuel costs. The Company had $445.9 million of variable rate debt as of December 31, 2022. The Company may not be able to accurately predict changes in interest rates or mitigate their impact. A hypothetical 0.50% increase in rates applicable to borrowings under the Revolving Credit Facility as of December 31, 2022 would increase interest expense related to such debt by approximately $2.2 million per year. The weighted average interest rate on debt outstanding during the year ended December 31, 2022 was 4.65%. At December 31, 2022 the estimated fair value of the Company’s fixed rate long-term debt was lower than book value by approximately $0.5 million. The estimated fair value was based on market quotes for instruments with similar terms and remaining maturities. The following table sets forth the future principal payments of the Company’s outstanding debt and related weighted average interest rates for the outstanding instruments as of December 31, 2022: (In thousands, except rates) Fair Value Total 2023 2024 2025 2026 2027 Thereafter December 31, 2022 Aggregate Payments by Year Fixed rate debt Principal payable Average interest rate $ 61,788 $ 62,328 $ 6,789 6.53% $ 6,905 6.62% $ 6,507 6.71% $ 7,717 6.82% $ 5,172 6.89% $ 29,238 6.35% Variable rate debt Principal payable Average interest rate $ 445,880 $ 445,880 $ — $ 6.16% — $ 6.16% — $ 6.16% — $ 445,880 $ 6.16% 6.16% — N/A -33- Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and shareholders of SpartanNash Company and subsidiaries Grand Rapids, Michigan Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of SpartanNash Company and subsidiaries (the "Company") as of December 31, 2022 and January 1, 2022, the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows, for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and January 1, 2022, and the results of its operations and its cash flows for each of the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill — Wholesale Reporting Unit — Refer to Notes 1 and 4 to the financial statements Critical Audit Matter Description At the beginning of the third quarter of 2022, the Company determined that the previously disclosed Food Distribution and Military operating segments should be combined into a single operating and reportable segment, Wholesale. Following the change in the operating segments, the Company evaluated the reporting units within the Wholesale segment and concluded that there was a single reporting unit within the Wholesale segment. As a result of this change, the Company now has two reporting units, which are the same as the Company’s operating and reportable segments. The goodwill balance was $182 million as of December 31, 2022, $181 million of which was allocated to the Wholesale reporting unit (“Wholesale”). The Company evaluates goodwill for impairment annually, and more frequently if circumstances indicate the possibility of impairment. Due to the change in reporting units, the Company performed a test for impairment as of the beginning of the third quarter immediately before and after the change. The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. -34- The estimate of the fair value of Wholesale is based on the income approach using a discounted cash flow model and also incorporates the market approach using observable comparable company information. The principal factors used in the discounted cash flow analysis requiring management judgment are the determination of the weighted average cost of capital (“WACC”), revenue growth rates, and forecasted operating profits. Under the market approach, the Company compared the results of the discounted cash flow model to observable comparable company market multiples to support the appropriateness of the fair value estimates. The Company’s goodwill impairment analysis also includes a comparison of the estimated fair value of the enterprise as a whole to the Company’s total market capitalization. The Company concluded that the fair value of Wholesale was substantially in excess of its carrying value and, therefore, no impairment was recognized. Given the significant judgments made by management to estimate the fair value of Wholesale, performing audit procedures to evaluate the reasonableness of management’s judgments and assumptions utilized in the impairment evaluation, particularly the determination of revenue growth rates, forecasted operating profits, and the WACC, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to revenue growth rates, forecasted operating profits, and the selection of the WACC used by management to estimate the fair value of Wholesale included the following, among others: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of Wholesale, such as controls related to the determination of revenue growth rates and forecasted operating profits, and the selection of the WACC. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • We evaluated the reasonableness of management’s determination of revenue growth rates and forecasted operating profits for Wholesale by comparing the growth rates and forecasts to: • • • Historical revenue growth rates and operating profits. Internal communications to management and the Board of Directors. Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies. • • With the assistance of our fair value specialists, we evaluated the WACC for Wholesale, which included testing the underlying source information and the mathematical accuracy of the calculations and developing a range of independent estimates and comparing those to the WACC selected by management. With the assistance of our fair value specialists, we evaluated the market approach for Wholesale, which included evaluating the reasonableness of the selected guideline public companies and the resulting market multiples calculation, as well as benchmarking the selected multiple for Wholesale against these guideline public companies. /s/ DELOITTE & TOUCHE LLP Grand Rapids, Michigan March 1, 2023 We have served as the Company's auditor since at least 1970; however, an earlier year could not be reliably determined. -35- CONSOLIDATED BALANCE SHEETS SpartanNash Company and Subsidiaries (In thousands) Assets Current assets Cash and cash equivalents Accounts and notes receivable, net Inventories, net Prepaid expenses and other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Operating lease assets Other assets, net Total assets Liabilities and Shareholders’ Equity Current liabilities Accounts payable Accrued payroll and benefits Other accrued expenses Current portion of operating lease liabilities Current portion of long-term debt and finance lease liabilities Total current liabilities Long-term liabilities Deferred income taxes Operating lease liabilities Other long-term liabilities Long-term debt and finance lease liabilities Total long-term liabilities Commitments and contingencies (Note 8) Shareholders’ equity Common stock, voting, no par value; 100,000 shares authorized; 35,079 and 35,948 shares outstanding Preferred stock, no par value, 10,000 shares authorized; no shares outstanding Accumulated other comprehensive income (loss) Retained earnings Total shareholders’ equity Total liabilities and shareholders’ equity See notes to consolidated financial statements. December 31, 2022 January 1, 2022 $ $ 29,086 404,016 571,065 62,244 1,066,411 610,220 182,160 106,341 257,047 84,382 10,666 361,686 522,324 62,517 957,193 577,359 181,035 110,960 283,040 97,195 $ 2,306,561 $ 2,206,782 $ $ 487,215 103,048 62,465 45,453 6,789 704,970 66,293 239,062 33,376 496,792 835,523 468,061 — 2,979 295,028 766,068 447,451 86,315 67,893 47,845 6,334 655,838 63,692 266,701 38,292 399,390 768,075 493,783 — (1,455) 290,541 782,869 $ 2,306,561 $ 2,206,782 -36- CONSOLIDATED STATEMENTS OF EARNINGS SpartanNash Company and Subsidiaries (In thousands, except per share amounts) Net sales Cost of sales Gross profit Operating expenses Selling, general and administrative Paid time off transition adjustment Acquisition and integration, net Restructuring and asset impairment, net Total operating expenses Operating earnings Other expenses and (income) Interest expense Other, net Total other expenses, net Earnings before income taxes Income tax expense Net earnings Net earnings per basic common share Net earnings per diluted common share Weighted average shares outstanding: Basic Diluted See notes to consolidated financial statements. 2022 (52 Weeks) $ 9,643,100 8,145,625 1,497,475 2021 (52 Weeks) $ 8,931,039 7,527,160 1,403,879 2020 (53 Weeks) $ 9,348,485 7,923,520 1,424,965 1,427,783 — 343 805 1,428,931 1,309,456 (21,371) 708 2,886 1,291,679 1,297,740 — 421 24,398 1,322,559 68,544 112,200 102,406 22,791 (1,162) 21,629 46,915 12,397 34,518 0.98 0.95 $ $ $ 13,851 (308) 13,543 98,657 24,906 73,751 2.07 2.05 $ $ $ 18,418 (1,376) 17,042 85,364 9,450 75,914 2.12 2.12 $ $ $ 35,279 36,313 35,639 35,943 35,861 35,862 -37- CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SpartanNash Company and Subsidiaries (In thousands) Net earnings 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 34,518 $ 73,751 $ 75,914 Other comprehensive income (loss), before tax Postretirement liability adjustment 5,875 Income tax (expense) benefit related to items of other comprehensive income (1,441) 1,087 (266) (895) 219 Total other comprehensive income (loss), after tax Comprehensive income See notes to consolidated financial statements. 4,434 38,952 $ 821 74,572 $ (676) 75,238 $ -38- CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY SpartanNash Company and Subsidiaries (In thousands) Balance at December 28, 2019 Impact of adoption of ASU 2016-13 (Note 1) Net earnings Other comprehensive loss Dividends - $0.77 per share Share repurchases Stock-based compensation Stock warrant, net of issuance costs of $220 Issuance of common stock for stock bonus plan and associate stock purchase plan Issuance of restricted stock Cancellations of stock-based awards Balance at January 2, 2021 Net earnings Other comprehensive income Dividends - $0.80 per share Share repurchases Stock-based compensation Stock warrant Issuance of common stock for stock bonus plan and associate stock purchase plan Issuance of restricted stock Cancellations of stock-based awards Balance at January 1, 2022 Net earnings Other comprehensive income Dividends - $0.84 per share Share repurchases Stock-based compensation Stock warrant Issuance of common stock for associate stock purchase plan Issuances of restricted stock Cancellations of stock-based awards Balance at December 31, 2022 See notes to consolidated financial statements. Shares Outstanding 36,351 — — — — (861) — — 39 522 (200) 35,851 — — — (265) — — 37 563 (238) 35,948 — — — (1,047) — — 21 391 (234) 35,079 $ $ $ $ Accumulated Other Comprehensive Income (Loss) $ (1,600) — — (676) — — — — Common Stock 490,233 — — — — (10,000) 6,299 6,329 594 — (1,636) 491,819 — — — (5,325) 6,868 1,958 715 — (2,252) 493,783 — — — (32,494) 8,353 2,158 587 — (4,326) 468,061 $ $ $ — — — (2,276) — 821 — — — — — — — (1,455) — 4,434 — — — — — — — 2,979 Retained Earnings 198,905 (1,612) 75,914 — (27,701) — — — — — — 245,506 73,751 — (28,716) — — — — — — 290,541 34,518 — (30,031) — — — — — — 295,028 $ $ $ $ $ $ $ $ Total 687,538 (1,612) 75,914 (676) (27,701) (10,000) 6,299 6,329 594 — (1,636) 735,049 73,751 821 (28,716) (5,325) 6,868 1,958 715 — (2,252) 782,869 34,518 4,434 (30,031) (32,494) 8,353 2,158 587 — (4,326) 766,068 -39- CONSOLIDATED STATEMENTS OF CASH FLOWS SpartanNash Company and Subsidiaries (In thousands) Cash flows from operating activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 34,518 $ 73,751 $ 75,914 Non-cash restructuring, asset impairment and other charges Depreciation and amortization Non-cash rent LIFO expense Postretirement benefits (income) expense Deferred income taxes Stock-based compensation expense Stock warrant Loss (gain) on disposals of assets Other operating activities Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other assets Accounts payable Accrued payroll and benefits Current income taxes Other accrued expenses and other liabilities Net cash provided by operating activities Cash flows from investing activities Purchases of property and equipment Net proceeds from the sale of assets Acquisitions, net of cash acquired Loans to customers Payments from customers on loans Other investing activities Net cash used in investing activities Cash flows from financing activities Proceeds from senior secured credit facility Payments on senior secured credit facility Repayment of other long-term debt and finance lease liabilities Share repurchases Net payments related to stock-based award activities Dividends paid Financing fees paid Stock warrant issuance costs Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year See notes to consolidated financial statements. 553 94,180 (4,339) 56,823 (890) 1,415 8,353 2,158 1,073 2,183 (38,168) (92,346) 4,683 28,069 16,855 4,658 (9,428) 110,350 (97,280) 36,825 (41,429) — 1,358 (422) (100,948) 1,468,649 (1,382,409) (6,849) (32,494) (4,326) (29,708) (3,845) — 9,018 2,973 92,711 (4,854) 18,652 1,611 17,603 6,868 1,958 (106) 1,262 (4,005) 320 (18,992) (18,286) (37,331) 17,475 9,545 161,155 (79,427) 29,375 — (180) 2,317 (63) (47,978) 22,422 89,876 (5,550) 2,176 1,775 2,457 6,299 6,549 3,330 1,416 (12,936) (7,030) (7,724) 65,197 66,722 (12,552) 8,375 306,716 (67,298) 9,201 — (1,847) 2,739 (16) (57,221) 1,374,478 (1,455,016) (5,710) (5,325) (2,252) (28,327) (262) — (122,414) 1,383,637 (1,584,293) (6,510) (10,000) (1,636) (34,509) (233) (220) (253,764) 18,420 10,666 29,086 $ (9,237) 19,903 10,666 $ (4,269) 24,172 19,903 $ -40- SPARTANNASH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Summary of Significant Accounting Policies and Basis of Presentation Principles of Consolidation: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SpartanNash Company and its subsidiaries (“SpartanNash” or “the Company”). Intercompany accounts and transactions have been eliminated. Fiscal Year: The Company’s fiscal year end is the Saturday nearest to December 31. The following discussion is as of and for the fiscal years ending or ended December 31, 2022 ("2022" or “current year”), January 1, 2022 (“2021” or “prior year”) and January 2, 2021 (“2020”), all of which include 52 weeks, with the exception of 2020, which includes 53 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks. The fourth quarter of 53-week years include 13 weeks. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods might differ from those estimates. Revenue Recognition: The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods and services to a customer, in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. This is achieved through applying the following five-step model: • • Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation The Company generates substantially all of its revenue from contracts with customers, whether formal or implied. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes, with the exception of taxes assessed during the procurement process of select inventories. Greater than 99% of the Company’s revenues are recognized at a point in time. Revenues from product sales are recognized when control of the goods is transferred to the customer, which occurs at a point in time, typically upon delivery or shipment to the customer, depending on shipping terms, or upon customer check-out in a corporate-owned retail store. Freight revenues are also recognized upon delivery, at a point in time. Other revenues, including revenues from value-added services and leases, are recognized as earned, over a period of time. All of the Company’s revenues are domestic, as the Company has no performance obligations on international shipments subsequent to delivery to the domestic port. The Company evaluates whether it is a principal (i.e., reports revenues on a gross basis) or an agent (i.e., reports revenues on a net basis) with respect to each contract with customers. Based upon the nature of the products the Company sells, its customers have limited rights of return, which are immaterial. Discounts provided by the Company to customers at the time of sale are recognized as a reduction in sales as the products are sold. Certain contracts include rebates and other forms of variable consideration, including up-front rebates, rebates in arrears, rebatable incentives, non-cash incentives including stock warrants, and product incentives, which may have tiered structures based on purchase volumes and which are accounted for as variable consideration. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. -41- Cost of Sales: Cost of sales represents the cost of inventory sold during the period, which for all non-production operations includes purchase costs, in-bound freight, physical inventory adjustments, markdowns and promotional allowances and excludes warehousing costs, depreciation and other administrative expenses. For the Company’s food processing operations which wound down during fiscal 2020, cost of sales included direct product and production costs, inbound freight, purchasing and receiving costs, utilities, depreciation, and other indirect production costs and excludes out-bound freight and other administrative expenses. The Company’s cost of sales and gross profit may not be identical to similarly titled measures reported by other companies. Vendor allowances and credits that relate to the Company’s buying and merchandising activities consist primarily of promotional allowances, which are allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for the Company’s merchandising costs such as setting up warehouse infrastructure. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The Wholesale segment includes shipping and handling costs in the selling, general and administrative section of operating expenses within the consolidated statements of earnings. Cash and Cash Equivalents: Cash and cash equivalents consists of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. Accounts and Notes Receivable: Accounts and notes receivable are presented net of allowances for credit losses of $7.0 million and $5.1 million as of December 31, 2022 and January 1, 2022, respectively. The Company estimates losses using an expected loss model, considering both historical data and future expectations, including collection experience, expectations for current credit risks, accounts receivable payment status, the customer’s financial health, as well as the Company’s collateral and creditor position. The Company pools similar assets based on their credit risk characteristics, whereby many of its trade receivables are pooled based on certain customer or aging characteristics. After assets are pooled, an appropriate loss factor is applied based on management’s expectations. The Company also records specific reserves for credit losses in certain circumstances. Operating results include net bad debt expense (income) of $3.3 million, $(0.3) million and $2.7 million for 2022, 2021 and 2020, respectively. Accounts and notes receivable are comprised of the following: (In thousands) Customer notes receivable Customer accounts receivable Other receivables Allowance for credit losses Net accounts and current notes receivable Long-term notes receivable Allowance for credit losses Net long-term notes receivable December 31, 2022 January 1, 2022 $ $ $ $ 1,622 375,550 32,942 (6,098) 404,016 8,573 (948) 7,625 $ $ $ $ 1,915 328,093 36,092 (4,414) 361,686 7,061 (731) 6,330 Inventory Valuation: Inventories are valued at the lower of cost or net realizable value. Approximately 87.5% and 84.0% of the Company’s inventories were valued on the last-in, first-out (LIFO) method at December 31, 2022 and January 1, 2022, respectively. If replacement cost had been used, inventories would have been $138.6 million and $81.8 million higher at December 31, 2022 and January 1, 2022, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate the value of inventories. During 2022, 2021 and 2020, certain inventory quantities were reduced which resulted in the liquidation of LIFO inventory carried at lower costs prevailing in prior years, the effect of which decreased the LIFO provision by $2.1 million, $2.1 million and $1.4 million in 2022, 2021 and 2020, respectively. The Company accounts for its Wholesale segment inventory using a perpetual system and utilizes the retail inventory method (“RIM”) to value inventory for center store products in the Retail segment. Under RIM, inventory is stated at cost, determined by applying a cost ratio to the retail value of inventories. Fresh, pharmacy and fuel products are accounted for at cost in the Retail segment. The Company records allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date. Goodwill and Other Intangible Assets: Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in business combinations after amounts have been allocated to intangible assets. Goodwill is not amortized, but is reviewed for impairment during the last quarter of each year, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, using a discounted cash flow model and comparable market values of each reporting segment. Measuring the fair value of reporting units is a Level 3 measurement under the fair value hierarchy. See Note 7, for a discussion of fair value levels. Intangible assets primarily consist of trade names, customer relationships, pharmacy prescription lists, non-compete agreements, liquor licenses and franchise fees. The following assets are amortized on a straight-line basis over the period of time in which their expected benefits will be realized: prescription lists and customer relationships (period of expected benefit reflecting the pattern in which the economic benefits are consumed), non-compete agreements and franchise fees (length of agreements), and trade names with definite lives (expected life of the assets). Indefinite-lived trade names and liquor licenses are not amortized but are tested at least annually for impairment. -42- Property and Equipment: Property and equipment are recorded at cost. Expenditures which improve or extend the life of the respective assets are capitalized, whereas expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation expense on land improvements, buildings and improvements, and equipment is computed using the straight-line method as follows: Land improvements Buildings and improvements Equipment 15 years 15 to 40 years 3 to 15 years Property under finance leases and leasehold improvements are amortized on a straight-line basis over the shorter of the remaining terms of the leases or the estimated useful lives of the assets. Internal use software is included in Property and equipment, net and amounted to $47.3 million and $42.6 million as of December 31, 2022 and January 1, 2022, respectively. Cloud Computing Arrangements: Implementation costs for software that is accessed in hosted cloud computing arrangements is accounted for in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other. Capitalized costs of hosted cloud computing arrangements include configuration, installation, other upfront costs and internal labor costs of employees devoted to the cloud computing software implementation project. Once a project is complete, amortization is computed using the straight-line method over the term of the associated hosting arrangement, including any options to extend the hosting arrangement that the Company is reasonably certain to exercise, generally 3 to 8 years. These costs are classified in the consolidated balance sheets in “Prepaid expenses and other current assets” or “Other assets, net” based on the term of the arrangement, and the related cash flows are presented as cash outflows from operations. The net book value of these implementation costs was $21.3 million and $20.6 million, as of December 31, 2022 and January 1, 2022, respectively. Leases: At the commencement or modification of a contract, the Company determines whether a lease exists based on 1) the identification of an underlying asset and 2) the right to control the use of the identified asset. When the Company is a lessee, leases are classified as either operating or finance. Operating and finance lease assets represent the Company’s right to use an underlying asset for the lease term, while lease obligations represent the Company’s obligation to make lease payments arising from the lease. Most of the Company’s lease agreements include variable payments related to executory costs for property taxes, utilities, insurance, maintenance and other occupancy costs related to the leased asset. Additionally, certain of the Company’s lease agreements include rental payments based on a percentage of retail sales over contractual levels or, in the case of transportation equipment, provisions requiring payment of variable rent based upon miles driven. These variable payments are not included in the measurement of the lease liability or asset and are expensed as incurred. Leases with an initial expected term of 12 months or less are not recorded in the consolidated balance sheets and the related lease expense is recognized on a straight-line basis over the lease term. Lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments and initial direct costs incurred, less incentives, over the lease term. In the absence of stated or implicit interest rates within lease contracts, incremental borrowing rates are estimated based on the Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments. Incremental borrowing rates are determined by using the yield curve based on the Company’s creditworthiness on a collateralized basis. The Company includes option periods in the assumed lease term when it is reasonably certain that the options will be exercised. Operating lease assets and liabilities are reported discretely in the consolidated balance sheets. Finance lease assets are included in Property and equipment, net and finance lease liabilities are included in Long-term debt and finance lease liabilities within the Company’s consolidated balance sheets. Impairment of Long-Lived Assets: The Company reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted expected future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be sold or disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices based upon market participant data developed by third party professionals or by internal licensed real estate professionals. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation. The Company evaluates definite-lived intangible asset and operating and finance lease impairments in conjunction with testing of the related asset groups as described above. Impairment reserves are applied proportionally as a reduction to the assets in the asset group, including lease assets. Reserves for Closed Properties: The Company records reserves for closed properties that are subject to long-term lease commitments based upon the lease ancillary costs from the date of closure to the end of the remaining lease term. Future cash flows are based on historical expenses, contractual lease terms and knowledge of the geographic area in which the closed site is located. These estimates are subject to multiple factors, including inflation, ability to sublease the property and other economic conditions. The reserved expenses are paid over the remaining lease terms, which range from 1 to 6 years. Subsequent adjustments to closed property reserves are made when actual exit costs differ from the original estimates. These adjustments are made for changes in estimates in the period in which the changes become known. The current portion of the future closed property obligations is included in “Other accrued expenses,” and the long-term portion is included in “Other long-term liabilities” in the consolidated balance sheets. -43- Debt Issuance Costs: Debt issuance costs are amortized over the term of the related financing agreement and are included as a direct deduction from the carrying amount of the related debt liability in “Long-term debt and finance lease liabilities” in the consolidated balance sheets. Insurance Reserves: SpartanNash is insured through self-insurance retentions or high deductible programs for workers’ compensation, general liability, and automobile liability, and is also self-insured for healthcare costs. Self-insurance liabilities are recorded based on claims filed and an estimate of claims incurred but not yet reported. Workers’ compensation, general liability and automobile liabilities are actuarially estimated based on available historical information on an undiscounted basis. The Company has purchased stop-loss coverage to limit its exposure to any significant exposure on a per claim basis for its self-insurance retentions and high deductible programs. On a per claim basis, the Company’s exposure is up to $0.5 million for workers’ compensation and general liability, $2.0 million for automobile liability and $0.6 million for healthcare per covered life per year. A summary of changes in the Company’s self-insurance liability is as follows: (In thousands) Balance at beginning of year Expenses Claim payments, net of employee contributions Balance at end of year 2022 2021 2020 19,445 64,386 (65,674) 18,157 $ $ 16,737 72,101 (69,393) 19,445 $ $ 16,780 62,999 (63,042) 16,737 $ $ The current portion of the self-insurance liability was $10.2 million and $11.9 million as of December 31, 2022 and January 1, 2022, respectively, and is included in “Other accrued expenses” in the consolidated balance sheets. The long-term portion was $7.9 million and $7.5 million as of December 31, 2022 and January 1, 2022, respectively, and is included in “Other long-term liabilities” in the consolidated balance sheets. Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred and other tax assets and liabilities. Earnings per share: Earnings per share (“EPS”) is computed using the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends and their respective participation rights in undistributed earnings. Outstanding nonvested restricted stock incentive awards under the Company’s 2015 Plan contain nonforfeitable rights to dividends or dividend equivalents, which participate in undistributed earnings with common stock. These awards are classified as participating securities and are included in the calculation of basic earnings per share. Awards under the 2020 Plan do not contain nonforfeitable rights to dividends or dividend equivalents and are therefore not classified as participating securities. The dilutive impact of both the restricted stock awards and warrants are presented below, as applicable. Weighted average restricted stock awards that were not included in the EPS calculations because they were anti-dilutive were 2,882, 13,614, and 76,654 for 2022, 2021, and 2020 respectively. The following table sets forth the computation of basic and diluted EPS: (In thousands, except per share amounts) Numerator: Net earnings Adjustment for earnings attributable to participating securities Net earnings used in calculating earnings per share Denominator: Weighted average shares outstanding, including participating securities Adjustment for participating securities Shares used in calculating basic earnings per share Effect of dilutive stock warrant Effect of dilutive restricted stock awards Shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ $ $ 34,518 (404) 34,114 $ $ 73,751 (1,399) 72,352 $ $ 35,279 (413) 34,866 847 187 35,900 0.98 0.95 $ $ 35,639 (676) 34,963 225 79 35,267 2.07 2.05 $ $ 75,914 (1,871) 74,043 35,861 (884) 34,977 — 1 34,978 2.12 2.12 -44- Stock-Based Employee Compensation: All share-based payments to associates are generally recognized in the consolidated financial statements as compensation cost based on the fair value on the date of grant. The grant date closing price per share of SpartanNash stock is used to estimate the fair value of restricted stock awards and restricted stock units. The value of the portion of awards expected to vest is recognized as expense over the requisite service period. Stock Warrants: Stock warrants are accounted for as equity instruments and measured in accordance with ASC 718, Compensation – Stock Compensation. For awards granted to a customer which are not in exchange for distinct goods or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of the transaction price, in accordance with ASC 606, Revenue from Contracts with Customers. To determine the fair value of the warrants in accordance with ASC 718, the Company uses pricing models based in part on assumptions for which management is required to use judgment. Based on the fair value of the awards, the Company determines the amount of warrant expense based on the customer’s achievement of vesting conditions, which is recorded as a reduction of net sales on the consolidated statement of earnings. The dilutive impact of stock warrants is determined using the treasury stock method. Shareholders’ Equity: The Company’s restated articles of incorporation provide that the Board of Directors may at any time, and from time to time, provide for the issuance of up to 10 million shares of preferred stock in one or more series, each with such designations as determined by the Board of Directors. At December 31, 2022 and January 1, 2022, there were no shares of preferred stock outstanding. Advertising Costs: The Company’s advertising costs are expensed as incurred and are included in Selling, general and administrative expenses. Advertising expenses were $37.6 million, $37.7 million and $36.6 million in 2022, 2021 and 2020, respectively. Accumulated Other Comprehensive Income (Loss)(“AOCI”): The Company reports comprehensive income (loss), which includes net earnings and other comprehensive income (loss). Other comprehensive income (loss) refers to expenses, gains and losses that are not included in net earnings, such as postretirement liability adjustments, but rather are recorded directly to shareholders’ equity. These amounts are also presented in the consolidated statements of comprehensive income. Segment Change: At the beginning of the third quarter of 2022, the Company determined that the previously disclosed Food Distribution and Military operating segments should be combined into a single operating segment, Wholesale. The change in operating segments was driven by both a change in the Company’s organizational structure and a change in the reporting regularly provided to the Chief Operating Decision Maker ("CODM") to assess performance and allocate resources. The combination of the two segments reflects the way the Company manages the distribution business as one comprehensive distribution network and furthers the Company’s efforts to streamline operations in connection with its supply chain transformation and better serve customers. The change in the Company's organizational structure included the elimination of the Military segment manager role and the creation of the Chief Customer Officer position, which oversees relationships across the entire Wholesale portfolio, including independent retailers, national accounts and military. The Company also made changes to its supply chain structure to combine the reviews of performance and key metrics among the legacy Food Distribution and Military distribution centers. The change in reporting to the CODM included the consolidation of the former Food Distribution and Military into one combined Wholesale segment, which allows the CODM to better assess performance and allocate resources across Wholesale commercial operations and the supply chain network. Accordingly, the Company's business now consists of two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and compensation. Prior periods have been recast to reflect this change. Refer to Note 2 for information regarding the basis of organization and types of products, services and customers that the Company derives revenue from. Adoption of New Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The ASU changed the impairment model for most financial assets and certain other instruments. The standard requires entities to use a forward-looking “expected loss” model that replaces the previous “incurred loss” model, which generally results in the earlier recognition of credit losses. The adoption of the standard resulted in a transition adjustment to 2020 beginning of the year retained earnings of $2.2 million (gross of the deferred tax impact of $0.6 million). The transition adjustment relates to incremental trade and notes receivable allowances due to the earlier recognition of expected losses under the new standard of $1.9 million and $0.3 million, respectively. -45- Note 2 – Revenue Sources of Revenue SpartanNash is a distributor, wholesaler and retailer with a global supply chain network. SpartanNash's customers span a diverse group of national accounts, independent and chain grocers, e-commerce retailers, U.S. military commissaries and exchanges, and the Company’s own brick-and-mortar grocery stores, pharmacies and fuel centers. SpartanNash distributes grocery and household goods, including fresh produce and its Our Family® portfolio of products, to locations in all 50 states. The Company’s main sources of revenue include the following: Customer Supply Agreements (“CSAs") – The Company enters into CSAs (also known as Retail Sales and Service Agreements) with many of its retailer customers. These contracts obligate the Company to supply grocery and related products upon receipt of a purchase order from its customers. The contracts often specify minimum purchases a customer is required to make, in dollars or as a percentage of their total purchases, in order to earn certain rebates or incentives. In some cases, customers are required to repay advanced or loaned funds if they fail to meet purchase minimums or otherwise exit the supply agreement. Many of these contracts include various performance obligations other than providing grocery products, such as providing store resets, shelf tags, signage, or merchandising services. The Company has determined that these obligations are not material in the overall context of the contracts, and as such has not allocated transaction prices to these obligations. Revenue is recognized under these contracts when control of the product passes to the customer, which may happen before or after delivery depending upon specified shipping terms. The Company’s Wholesale customer base is diverse. Sales to one customer in the Wholesale segment represented 16%, 17%, and 17% of the Company's net sales for 2022, 2021 and 2020, respectively. No other single customer exceeded 10% of the Company's net sales in any of the years presented. Contracts with Manufacturers and Brokers to supply the Defense Commissary Agency (“DeCA”) and Other Government Agencies – DeCA operates a chain of commissaries on U.S. military installations. DeCA contracts with manufacturers to obtain grocery products for the commissary system. Manufacturers either deliver the products to the commissaries themselves or, more commonly, contract with distributors such as SpartanNash to provide products to the commissaries. Manufacturers must authorize the distributors as their official representatives to DeCA, and the distributors must adhere to DeCA’s frequent delivery system procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. The Company obtains distribution contracts with manufacturers through competitive bidding processes and direct negotiations. As commissaries need to be restocked, DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is the manufacturer’s official representative for a particular commissary or exchange location, and then places a product order with that distributor under DeCA’s master contract with the applicable manufacturer. The distributor selects that product from its existing inventory, delivers it to the commissary or port (in the case of overseas shipments) designated by DeCA, and bills the manufacturer for the product price plus a drayage fee that is typically based on a percentage of the purchase price, but may in some cases be based on a dollar amount per case or pound of product sold. The manufacturer then bills DeCA under the terms of its master contract. As control of the product passes to the customer upon delivery, revenue is recognized by SpartanNash at that time. Revenue is recognized for the full amount paid by the vendor (for product and drayage) as the Company is a principal in the transaction and therefore recognizes revenue on a gross basis for these contracts. The definition of a principal in the transaction is centered on controlling goods before they are transferred to the customer. Key considerations supporting that SpartanNash controls the goods for these contracts prior to transfer to the customer include the following: (i) the Company has the ability to obtain substantially all of the remaining benefits from the assets by selling the goods and/or by pledging the related assets as collateral for borrowings; (ii) the Company is required to bear the risk of inventory loss prior to transfer to the customer; (iii) the Company has shared responsibilities in the fulfillment and acceptability of the goods; and (iv) to a lesser extent, the Company has some discretion in establishing the price for the goods sold to DeCA. Retail Sales – The corporate owned retail stores recognize revenue at the time the customer takes possession of the goods. While there are no formal contracts related to these sales, they are within the scope of ASC 606. Customer returns are not material. The Company does not recognize a sale when it sells gift cards and gift certificates or a reduction of sales when it awards fuel discounts; rather, the impact to revenue is recognized when the customer redeems the fuel discounts, gift card or gift certificate to purchase product. -46- Disaggregation of Revenue The following table provides information about disaggregated revenue by type of products and customers for each of the Company’s reportable segments: (In thousands) Type of products: Center store (a) Fresh (b) Non-food (c) Fuel Other Total Type of customers: Individuals Independent retailers (d) National accounts Military (e) Other Total (In thousands) Type of products: Center store (a) Fresh (b) Non-food (c) Fuel Other Total Type of customers: Individuals Independent retailers (d) National accounts Military (e) Other Total (In thousands) Type of products: Center store (a) Fresh (b) Non-food (c) Fuel Other Total Type of customers: Individuals Independent retailers (d) National accounts Military (e) Other Total Wholesale 52 Weeks Ended December 31, 2022 Retail Total $ $ $ $ $ $ $ $ $ $ $ $ 2,671,666 2,171,906 1,888,318 — 113,346 6,845,236 — 2,363,597 2,311,114 2,115,353 55,172 6,845,236 $ $ $ $ 1,073,765 1,068,240 452,557 202,256 1,046 2,797,864 2,796,858 — — — 1,006 2,797,864 Wholesale 52 Weeks Ended January 1, 2022 Retail 2,419,163 2,027,020 1,783,229 — 120,341 6,349,753 — 2,197,892 2,211,458 1,882,602 57,801 6,349,753 $ $ $ $ 1,001,920 992,897 427,872 157,236 1,361 2,581,286 2,580,277 — — — 1,009 2,581,286 Wholesale 53 Weeks Ended January 2, 2021 Retail 2,562,487 2,161,446 1,876,775 — 109,860 6,710,568 — 2,253,940 2,247,552 2,123,494 85,582 6,710,568 $ $ $ $ 1,097,013 1,013,657 419,507 106,213 1,527 2,637,917 2,636,993 — — — 924 2,637,917 $ $ $ $ $ $ $ $ $ $ $ $ 3,745,431 3,240,146 2,340,875 202,256 114,392 9,643,100 2,796,858 2,363,597 2,311,114 2,115,353 56,178 9,643,100 Total 3,421,083 3,019,917 2,211,101 157,236 121,702 8,931,039 2,580,277 2,197,892 2,211,458 1,882,602 58,810 8,931,039 Total 3,659,500 3,175,103 2,296,282 106,213 111,387 9,348,485 2,636,993 2,253,940 2,247,552 2,123,494 86,506 9,348,485 (a) Center store includes dry grocery, frozen and beverages. (b) Fresh includes produce, meat, dairy, deli, bakery, prepared proteins, seafood and floral. (c) Non-food includes general merchandise, health and beauty care, tobacco products and pharmacy. (d) Independent retailers include sales that were previously classified within the former Food Distribution segment to manufacturers, brokers and distributors. (e) Military represents the distribution of grocery products to U.S. military commissaries and exchanges, which primarily includes sales to manufacturers and brokers. -47- Contract Assets and Liabilities Under its contracts with customers, the Company stands ready to deliver product upon receipt of a purchase order. Accordingly, the Company has no performance obligations under its contracts until its customers submit a purchase order. The Company does not receive pre-payment from its customers or enter into commitments to provide goods or services that have terms greater than one year. As the performance obligation is part of a contract that has an original expected duration of less than one year, the Company has applied the practical expedient under ASC 606 to omit disclosures regarding remaining performance obligations. Revenue recognized from performance obligations related to prior periods (for example, due to changes in estimated rebates and incentives impacting the transaction price) was not material in any period presented. For volume-based arrangements, the Company estimates the amount of the advanced funds earned by the retailers based on the expected volume of purchases by the retailer, and amortizes the advances as a reduction of the transaction price and revenue earned. These advances are not considered contract assets under ASC 606 as they are not generated through the transfer of goods or services to the retailers. These advances are included in Other assets, net within the consolidated balance sheets. When the Company transfers goods or services to a customer, payment is due subject to normal terms and is not conditional on anything other than the passage of time. Typical payment terms range from "due upon receipt" to due within 30 days, depending on the customer. At contract inception, the Company expects that the period of time between the transfer of goods to the customer and when the customer pays for those goods will be less than one year, which is consistent with the Company’s standard payment terms. Accordingly, the Company has elected the practical expedient to not adjust for the effects of a significant financing component. As a result, these amounts are recorded as receivables and not contract assets. The Company had no contract assets for any period presented. The Company does not typically incur incremental costs of obtaining a contract that are contingent upon successful contract execution and would therefore be capitalized. Concentration of Credit Risk In the ordinary course of business, the Company may advance funds to certain independent retailers (“customer advances”) which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company. These customer advances must be repaid if the purchase volume requirements are not met. The collectability of customer advances is not assured. In the ordinary course of business, the Company also subleases and assigns certain leases to third parties. As of December 31, 2022, the Company estimates the present value of its maximum potential obligations for subleases and assigned leases to be approximately $4.5 million and $6.9 million, respectively. The Company may also provide financial assistance in the form of loans to certain independent retailers for inventories, store fixtures and equipment and store improvements. Loans are generally secured by liens on real estate, inventory and/or equipment, personal guarantees and other types of collateral, and are generally repayable over a period of five to ten years. The Company establishes reserves based upon assessments of the credit risk of specific customers, collateral value, historical trends and other information. The Company believes that adequate provision has been recorded for any uncollectable amounts. In addition, the Company may guarantee debt and lease obligations of independent retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements. Changes to the balance of the allowance for credit losses were as follows: (In thousands) Balance at December 28, 2019 Impact of adoption of new credit loss standard (ASU 2016-13) Provision for expected credit losses Write-offs charged against the allowance Balance at January 2, 2021 Changes in credit loss estimates Write-offs charged against the allowance Balance at January 1, 2022 Changes in credit loss estimates Write-offs charged against the allowance Balance at December 31, 2022 $ $ Current Accounts and Notes Receivable Allowance for Credit Losses Long-term Notes Receivable Total 2,739 1,911 1,966 (384) 6,232 (1,101) (717) 4,414 2,539 (855) 6,098 $ $ 233 259 — (121) 371 360 — 731 217 — 948 $ $ 2,972 2,170 1,966 (505) 6,603 (741) (717) 5,145 2,756 (855) 7,046 -48- During 2022, 2021 and 2020, the Company recognized bad debt expense of $1.1 million, $0.4 million and $0.7 million, respectively, related to direct write-offs of uncollectable amounts. Note 3 – Property and Equipment Property and equipment consist of the following: (In thousands) Land and improvements Buildings and improvements Equipment Total property and equipment Less accumulated depreciation and amortization Property and equipment, net December 31, 2022 January 1, 2022 $ $ 91,859 616,581 773,410 1,481,850 871,630 610,220 $ $ 92,416 580,317 714,680 1,387,413 810,054 577,359 Depreciation expense was $66.7 million, $65.9 million and $64.7 million in 2022, 2021 and 2020 respectively. Note 4 – Goodwill and Other Intangible Assets The Company has two reporting units, Wholesale and Retail. Changes in the carrying amount of goodwill were as follows: (In thousands) Balance at January 2, 2021 and January 1, 2022 Acquisitions Balance at December 31, 2022 Wholesale Retail Total $ $ 181,035 — 181,035 $ $ — $ 1,125 1,125 $ 181,035 1,125 182,160 The Company acquired goodwill within the Retail reporting unit of $1.1 million related to an immaterial acquisition during the second quarter of 2022. The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each year, and more frequently if circumstances indicate impairment is more likely than not to have occurred. Following the change in the reportable segments in the third quarter of 2022, as disclosed in Note 1, the Company evaluated the reporting units within the Wholesale segment in accordance with ASC 350 Intangibles - Goodwill and Other. As a result of the evaluation, the Company concluded that there was a single reporting unit within the Wholesale segment. Due to the change in reporting units, the Company performed a test for impairment as of the beginning of the third quarter immediately before and after the change. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization. During the Company's third quarter impairment review, projected cash flows were discounted based on a weighted average cost of capital ("WACC") of 9.6%. This WACC was developed from adjusted market-based and company specific factors, current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns. The development of the WACC requires estimates of an equity rate of return and a debt rate of return, which are specific to the industry in which the Wholesale reporting unit operates. The Company concluded that the fair values of both the previous Food Distribution reporting unit, as well as the current Wholesale reporting unit, were substantially in excess of their carrying values. As the Company performed a quantitative assessment in the third quarter of the current year, the Company also performed a qualitative assessment in the fourth quarter of the current year. The Company assessed the qualitative factors during the fourth quarter assessment and concluded that the fair value of the Wholesale reporting unit was more likely than not in excess of its carrying value. The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated balance sheets: (In thousands) Non-compete agreements Pharmacy customer prescription lists Customer relationships Trade names Franchise fees Total December 31, 2022 January 1, 2022 Gross Carrying Amount $ $ 3,545 4,168 57,937 — 1,165 66,815 Accumulated Amortization 2,621 $ 2,598 22,484 — 598 28,301 $ $ $ Gross Carrying Amount 4,287 4,233 57,937 1,068 1,110 68,635 Accumulated Amortization 2,792 $ 2,095 18,822 987 605 25,301 $ -49- The weighted average amortization periods for amortizable intangible assets as of December 31, 2022 are as follows: Non-compete agreements Pharmacy customer prescription lists Customer relationships Franchise fees 6.4 years 8.0 years 16.4 years 10.0 years Amortization expense for intangible assets was $5.0 million, $5.2 million and $5.7 million for 2022, 2021 and 2020, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows: (In thousands) Amortization expense 2023 2024 2025 2026 2027 $ 4,828 $ 4,576 $ 4,180 $ 3,665 $ 3,660 The Company has indefinite-lived intangible assets that are not amortized, consisting primarily of indefinite-lived trade names and liquor licenses, totaling $67.8 million and $67.6 million as of December 31, 2022 and January 1, 2022, respectively. During the third quarter of 2020, the Company made the decision to abandon a tradename within the Wholesale segment to better integrate with the Company’s overall transportation operations, resulting in a $7.0 million impairment of the associated indefinite-lived tradename asset. During the fourth quarter of 2020, the Company recognized an impairment charge of $1.7 million, related to a tradename, based on a change in the assumptions supporting fair value. Note 5 – Restructuring, Asset Impairment and Other Charges The following table provides the activity of reserves for closed properties for 2022, 2021 and 2020. Reserves for closed properties recorded in the consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on when the obligations are expected to be paid. (In thousands) Balance at December 28, 2019 Provision for closing charges Changes in estimates Accretion expense Payments Balance at January 2, 2021 Provision for closing charges Provision for severance Lease termination adjustments Changes in estimates Accretion expense Payments Balance at January 1, 2022 Provision for closing charges Provision for severance Lease termination adjustments Changes in estimates Accretion expense Payments Balance at December 31, 2022 Lease and Ancillary Costs Severance Total 4,971 $ 325 26 121 (2,094) 3,349 1,509 — (220) 2 91 (1,607) 3,124 1,837 — (86) 28 67 (993) 3,977 $ 17 $ 2,205 (228) — (1,880) 114 — 362 — — — (476) — — 9 — — — (9) - $ 4,988 2,530 (202) 121 (3,974) 3,463 1,509 362 (220) 2 91 (2,083) 3,124 1,837 9 (86) 28 67 (1,002) 3,977 $ $ Included in the liability are lease-related ancillary costs from the date of site closure to the end of the remaining lease term. -50- Restructuring, asset impairment and other charges included in the consolidated statements of earnings consisted of the following: (In thousands) Asset impairment charges (a) Provision for closing charges Gain on sales of assets related to closed facilities (b) Provision for severance (c) Other costs associated with site closures (d) Lease termination adjustments (e) Changes in estimates (f) Total 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 5,086 1,837 (6,324) 9 271 (102) 28 805 $ $ 3,783 1,509 (2,607) 362 636 (799) 2 2,886 $ $ 20,148 325 (31) 2,205 1,953 — (202) 24,398 (a) Asset impairment charges in the current year were incurred primarily in the Retail segment and relate to restructuring of the Retail segment's e-commerce delivery model and a current year store closure. Asset impairment charges in 2021 were incurred primarily in the Retail segment and relate to 2021 store closures and previously closed locations, as well as site closures in connection with the Company’s supply chain transformation initiatives within the Wholesale segment. In 2020, asset impairment charges of $9.1 million were incurred in the Wholesale segment related to the evaluation of the expected net proceeds from the Fresh Kitchen facility, the exit of the Fresh Cut business, and the sale of equipment related to both Fresh Cut and Fresh Kitchen. Charges of $8.6 million primarily relate to the abandonment of a tradename related to the integration of the Company’s transportation operations. Additionally, certain of the Company’s Retail assets were determined not to be recoverable based on management’s intention to close stores or sell assets related to previously closed stores, resulting in impairment charges totaling $2.1 million. (b) Gain on sales of assets in the current year primarily relates to the sales of real property of previously closed locations within both the Wholesale and Retail segments. In 2021, gain on sales of assets primarily relate to sales of pharmacy customer lists, equipment, and real estate associated with the store closings in the Retail segment, in addition to gains on sale of vacant land in the Wholesale segment. (c) Severance in 2021 relates to closures in the Wholesale segment as well as Retail store closings. In 2020, severance was related to the exit of the Fresh Cut business within the Wholesale segment. (d) Other costs associated with distribution center and store closings represent additional costs, including labor, inventory transfer and other administrative costs, incurred in connection with restructuring operations in the Wholesale and Retail segments. (e) Lease termination adjustments represent the benefits recognized in connection with early lease buyouts for previously closed sites. Payments made in connection with lease buyouts were applied to reserves for closed properties and lease liabilities, as applicable. In the current year, adjustments include the gain recognized to terminate a lease agreement, which includes a $16 thousand write-off of the lease liability and $86 thousand reduction of lease ancillary costs included in the reserve for closed properties. In 2021, adjustments include gains of $0.8 million and $0.2 million from write-offs of the lease liability and lease ancillary costs, offset by the cost of a $0.2 million early termination fee. (f) Changes in estimates primarily relate to revised estimates for turnover and other lease ancillary costs associated with previously closed locations. Indefinite lived intangible assets are tested for impairment at least annually, and as needed if an indicator of potential impairment exists. A qualitative assessment was performed to determine whether it is more likely than not that an indefinite lived intangible asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair value of the indefinite lived intangible asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment does not support the fair value of the indefinite lived intangible asset, then a quantitative assessment is performed. Indefinite lived intangible assets are measured at fair value using Level 3 inputs under the fair value hierarchy, as further described in Note 7. The fair value of indefinite lived intangible assets is determined by estimating the amount and timing of net future cash flows generated from the use of the asset, generally using estimated revenue growth rates and profitability rates and, in the case of the relief-from-royalty methodology, royalty rates. Future cash flows are discounted based on the WACC of the reporting unit in which the asset resides, determined using current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns, as well as estimates of industry-specific equity and debt rates of return. Long-lived assets which are not recoverable are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 7. In the current year, long-lived assets with a book value of $5.2 million were measured at a fair value of $0.1 million, resulting in impairment charges of $5.1 million. In 2021, long-lived assets consisting of property and equipment with a book value of $27.5 million were measured at a fair value of $23.7 million, resulting in impairment charges of $3.8 million. The fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the geographic area in which the assets are located, and when necessary, consultations with real estate brokers. -51- Note 6 – Long-Term Debt Long-term debt consists of the following: (In thousands) Senior secured revolving credit facility, due November 2027 Finance lease liabilities (Note 9) Other, 4.35% - 4.36%, due 2023 - 2026 Total debt - Principal Unamortized debt issuance costs Total debt Less current portion Total long-term debt and finance lease liabilities $ December 31, 2022 445,880 57,515 4,813 508,208 (4,627) 503,581 6,789 496,792 $ January 1, 2022 359,640 43,142 5,617 408,399 (2,675) 405,724 6,334 399,390 $ $ On November 17, 2022, SpartanNash and certain of its subsidiaries entered into an amendment (the "Amendment") to the Company's Amended and Restated Loan and Security Agreement (the "Credit Agreement"). The principal terms of the Amendment included an extension of the maturity date of the loans from December 18, 2023 to November 17, 2027, an amendment to the interest rate grid such that rates for the Tranche A revolving loans, with a $975 million capacity, are now SOFR plus 1.25% to SOFR plus 1.50% and Tranche A-1 revolving loans, with a $40 million capacity, are now SOFR plus 2.25% to SOFR plus 2.50%, and a reset of certain advance rates for the borrowing base. The Company has the ability to increase the amount borrowed under the Credit Agreement by an additional $325 million, subject to certain conditions. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s personal and real property. The Company may repay all loans in whole or in part at any time without penalty. Availability under the Credit Agreement is based upon advance rates on certain asset categories owned by the Company, including, but not limited to the following: inventory, accounts receivable, real estate, prescription lists, cigarette tax stamps, and rolling stock. The Credit Agreement imposes certain restrictions on the Company, including limitations on dividends and investments, limitations on the Company’s ability to incur debt, make loans, acquire other companies, change the nature of the Company’s business, enter a merger or consolidation, or sell assets. These requirements can be more restrictive depending upon the Company’s Excess Availability, as defined under the Credit Agreement. Borrowings under the credit facility bear interest at the Company’s option as either SOFR loans or Base Rate loans, subject to a grid based upon Excess Availability. The interest rate terms for each of the aforementioned tranches are as follows: Credit Facility Tranche Tranche A Outstanding as of December 31, 2022 (In thousands) SOFR Rate $ 409,719 SOFR plus 1.25% to 1.50% Base Rate Greater of: (i) the Federal Funds Rate plus 0.75% to 1.00% (ii) the SOFR Rate plus 1.25% to 1.50% (iii) the prime rate plus 0.25% to 0.50% Tranche A-1 $ 36,161 SOFR plus 2.25% to 2.50% Greater of: (i) the Federal Funds Rate plus 1.75% to 2.00% (ii) the SOFR Rate plus 2.25% to 2.50% (iii) the prime rate plus 1.25% to 1.50% The Company also incurs an unused line of credit fee on the unused portion of the loan commitments at a rate of 0.25%. The Credit Agreement requires that the Company maintain Excess Availability of 10% of the borrowing base, as defined in the Credit Agreement. The Company is in compliance with all financial covenants as of December 31, 2022 and had Excess Availability after the 10% requirement of $447.8 million and $468.5 million at December 31, 2022 and January 1, 2022, respectively. The Credit Agreement provides for the issuance of letters of credit, of which $17.7 million and $16.1 million were outstanding as of December 31, 2022 and January 1, 2022, respectively. The weighted average interest rate for all borrowings, including loan fee amortization, was 4.65% for 2022. At December 31, 2022, aggregate annual maturities and scheduled payments of long-term debt are as follows: (In thousands) Total borrowings 2023 2024 2025 2026 $ 6,789 $ 6,905 $ 6,507 $ 7,717 $ 2027 451,052 Thereafter $ 29,238 $ Total 508,208 -52- Note 7 – Fair Value Measurements ASC 820, Fair Value Measurement, prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability, reflecting the reporting entity’s own assumptions about the assumptions that market participants would use in pricing. Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term maturities of these financial instruments. For discussion of the fair value measurements related to goodwill, and long- lived asset impairment charges, refer to Note 4 and Note 5. At December 31, 2022 and January 1, 2022, the book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows: (In thousands) Book value of debt instruments, excluding debt financing costs: Current maturities of long-term debt and finance lease liabilities Long-term debt and finance lease liabilities Total book value of debt instruments Fair value of debt instruments, excluding debt financing costs (Deficit) excess of fair value over book value December 31, 2022 January 1, 2022 $ $ 6,789 501,419 508,208 507,668 (540) $ $ 6,334 402,065 408,399 414,667 6,268 The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (Level 2 inputs and valuation techniques). Note 8 – Commitments and Contingencies The Company is engaged from time-to-time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity. The Company subleases property at certain locations and for 2022, 2021 and 2020, received rental income of $3.9 million, $4.4 million and $4.0 million, respectively. In the event of customer default, the Company would be responsible for fulfilling these lease obligations. Future payment obligations under these leases are disclosed in Note 9. Contingencies related to credit risk and collectability are disclosed in Note 2. Unions represent approximately 7% of SpartanNash’s associates. These associates are covered by collective bargaining agreements (“CBAs”). The facilities covered by CBAs, the unions representing the covered associates and the expiration dates for each existing CBA are provided in the following table: Distribution Center Locations Landover, Maryland Lima, Ohio Warehouse Lima, Ohio Drivers Bellefontaine, Ohio GTL Truck Lines, Inc. Bellefontaine, Ohio General Merchandise Service Division Norfolk, Virginia Columbus, Georgia Grand Rapids, Michigan Union Locals IBT 639 IBT 908 IBT 908 IBT 908 IBT 908 IBT 822 IBT 528 IBT 406 Expiration Dates February 2024 January 2025 January 2025 February 2025 February 2025 April 2025 September 2025 April 2026 -53- The Company contributes to the Central States Southeast and Southwest Pension Fund (the “Central States Plan” or the “Plan”), a multi-employer pension plan, in accordance with provisions in place in collective bargaining agreements covering its supply chain operations in Bellefontaine and Lima, Ohio and Grand Rapids, Michigan. This Plan provides retirement benefits to participants based on their service to contributing employers. The benefits to participants under the Plan are paid from assets held in trust for that purpose. An equal number of Trustees are appointed by contributing employers on one hand and by the applicable union(s) on the other hand; however, no representative of SpartanNash is currently serving as a trustee of the Plan. The trustees are responsible for determining the level of benefits to be provided to participants, as well as for such matters as the investment of the assets held in trust and the overall administration of the plan. The Company's contributions to the Central States Plan are established by each applicable collective bargaining agreement and vary by location. However, required contributions may increase based on the funded status of the Plan and legal requirements. On March 31, 2022, in accordance with the Pension Protection Act ("PPA"), the plan actuary certified that the Plan was considered to be in "critical and declining" zone status for the plan year beginning January 1, 2022. Among other factors, plans in the “critical and declining” zone are generally less than 65% funded and are projected to become insolvent within the next 15 years (or 20 years depending on the ratio of active-to-inactive participants). On March 10, 2021, the United States Congress passed the American Rescue Plan Act of 2021 (the “Act”), which provides financial relief to certain failing multiemployer pension plans. In accordance with the interim guidance issued by the Pension Benefit Guaranty Corporation ("PBGC") on July 9, 2021, the Act is designed to prevent such plans from becoming insolvent for the next 30 years. On December 8, 2022, the PBGC approved the Central States Pension Fund's application for Special Financial Assistance ("SFA") in accordance with the Act. The PBGC reported that it has approved approximately $35.8 billion in SFA, inclusive of interest, and the Plan received the funds on January 12, 2023. The SFA is designed to alleviate the risk of insolvency of the Plan and the Plan is expected to reach full funding over time. The risk of participating in a multi-employer pension plan is different from the risk associated with single-employer plans in the following respects: a. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. b. c. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a company chooses to stop participating in a multi-employer plan, makes market exits such as closing a distribution center without opening another one in the same locale, or otherwise has participation in the plan drop below certain levels, the company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Based on the most recent information available to the Company, management believes that with the SFA received as part of the Act, the value of assets held in trust to pay benefits covers the present value of actuarial accrued liabilities in the Central States Plan. Except with respect to the approved SFA, management is not aware of any significant change in funding levels in the Plan since December 31, 2022. Due to uncertainty regarding future factors that could trigger a withdrawal liability, as well as the absence of specific information regarding matters such as the Plan’s current financial situations, we are unable to determine with certainty the current amount of the Plan’s funding and/or SpartanNash’s current potential withdrawal liability exposure in the event of a future withdrawal from the Plan. Any adjustment for withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably determined. -54- Note 9 – Leases A portion of the Company’s retail stores and warehouses operate in leased facilities. The Company also leases the majority of the tractors and trailers within its fleet and certain other assets. Most of the property leases contain multiple renewal options, which generally range from one to ten years in length. In those locations in which it is economically feasible to continue to operate, management expects that renewal options will be exercised as they come due. The terms of certain leases contain provisions requiring payment of variable rent based on sales and payment of executory costs such as property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premises or, in the case of transportation equipment, provisions requiring payment of variable rent based upon miles driven. Certain properties or portions thereof are subleased to others. As most of the Company’s leases do not reference an implicit discount rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The components of lease cost were as follows: (In thousands) Operating lease cost Short-term lease cost Finance lease cost Amortization of assets Interest on lease liabilities Variable rent Sublease income Total net lease cost Supplemental balance sheet information related to leases was as follows: (In thousands) Operating leases: Operating lease assets Current portion of operating lease liabilities Noncurrent operating lease liabilities Total operating lease liabilities Finance leases: Property and equipment, at cost Accumulated amortization Property and equipment, net Current portion of finance lease liabilities Noncurrent finance lease liabilities Total finance lease liabilities Weighted average remaining lease term (in years): Operating leases Finance leases Weighted average discount rate: Operating leases Finance leases 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 57,876 7,576 6,134 3,369 236 (3,907) 71,284 $ $ 58,410 8,469 4,645 3,005 162 (4,356) 70,335 $ $ 55,955 8,698 4,045 3,194 333 (3,994) 68,231 December 31, 2022 January 1, 2022 $ $ $ $ $ $ $ 257,047 45,453 239,062 284,515 73,739 (21,727) 52,012 5,791 51,724 57,515 $ $ $ $ $ $ $ 7.5 9.6 5.4% 6.9% 283,040 47,845 266,701 314,546 56,591 (18,707) 37,884 5,359 37,783 43,142 7.8 10.2 5.2% 7.1% -55- Supplemental cash flow and other information related to leases was as follows: (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases Operating cash flows used for finance leases Financing cash flows used for finance leases Lease assets obtained in exchange for lease liabilities: Total operating lease liabilities Total finance lease liabilities 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 61,103 3,372 6,045 $ 62,590 3,005 4,738 62,008 3,173 4,075 23,027 21,032 36,867 4,238 62,500 3,602 The Company’s total future lease commitments under operating and finance leases in effect at December 31, 2022 are as follows: (In thousands) 2023 2024 2025 2026 2027 Thereafter Total Less interest Present value of lease liabilities Less current portion Long-term lease liabilities Operating Leases Finance Leases $ $ 59,363 52,660 48,997 42,999 37,726 109,012 350,757 66,242 284,515 45,453 239,062 $ $ 9,494 9,128 8,826 8,107 7,345 35,539 78,439 20,924 57,515 5,791 51,724 Total 68,857 61,788 57,823 51,106 45,071 144,551 429,196 87,166 342,030 51,244 290,786 $ $ Certain retail store facilities, either owned or obtained through leasing arrangements, are leased to others. A majority of the leases provide for minimum rent obligations and contain renewal options. Certain of the leases contain escalation clauses and contingent rentals based upon stipulated sales volumes. Owned assets, included in property and equipment, which are leased to others are as follows: (In thousands) Land and improvements Buildings Owned assets leased to others Less accumulated amortization and depreciation Net owned assets leased to others Future minimum rentals to be received under leases in effect at December 31, 2022 are as follows: (In thousands) Owned property Leased property Total 2023 2024 2025 2026 2027 $ $ 4,848 3,803 8,651 $ $ 3,927 3,051 6,978 $ $ 2,815 2,159 4,974 $ $ 2,554 1,280 3,834 $ $ 2,182 737 2,919 December 31, 2022 January 1, 2022 $ $ $ $ 7,154 26,623 33,777 11,473 22,304 Thereafter 16,111 521 16,632 $ $ $ $ 8,681 40,900 49,581 15,944 33,637 Total 32,437 11,551 43,988 Note 10 – Associate Retirement Plans The Company provides salary deferral defined contribution plans to substantially all of the Company’s associates not covered by CBAs. Associates covered by CBAs at the Company’s Columbus, Georgia; Norfolk, Virginia; and Landover, Maryland facilities all participate in a defined contribution plan; the remaining associates covered under CBAs participate in a multi-employer pension plan. The Company’s former non-contributory pension plan has been terminated. Defined Contribution Plans Expense for employer matching contributions made to defined contribution plans totaled $12.0 million, $11.8 million and $12.2 million in 2022, 2021 and 2020, respectively. -56- Executive Compensation Plans The Company has a deferred compensation plan for a select group of management personnel or highly compensated associates. The plan is unfunded and permits participants to defer receipt of a portion of their base salary, annual bonus, or long-term incentive compensation which would otherwise be paid to them. The deferred amounts, plus earnings, are distributed following the associate’s termination of employment. Earnings are based on the performance of hypothetical investments elected by the participant from a portfolio of investment options. The Company holds variable universal life insurance policies on certain key associates intended to fund distributions under the deferred compensation plan referenced above. The net cash surrender value of approximately $4.4 million and $4.3 million at December 31, 2022 and January 1, 2022, respectively, is recorded in “Other assets, net” in the consolidated balance sheets. These policies have an aggregate amount of life insurance coverage of approximately $15.0 million. Defined Benefit Plans On February 28, 2018, the Company’s Board of Directors granted approval to proceed with terminating the SpartanNash Company Pension Plan (the “Pension Plan”), a frozen defined benefit pension plan. The Pension Plan was terminated on July 31, 2018 and the distribution of assets to plan participants occurred in 2019. In 2020, the Company realized gains of $1.2 million related to refunds from the annuity provider to the Pension Plan associated with the final reconciliation of participant data. The remaining plan asset balance of $2.7 million was used to fund employer match liabilities associated with defined contribution plans in 2021. Postretirement Medical Plans SpartanNash Company and certain subsidiaries provide healthcare benefits to retired associates under the SpartanNash Company Retiree Medical Plan (the “Retiree Medical Plan” or "Plan"). Former Spartan Stores, Inc. associates hired prior to January 1, 2002 who were not covered by CBAs during their employment, who have at least 10 years of service and have attained age 55 upon retirement qualify as “covered associates.” Covered associates who retired prior to March 31, 1992 receive Medicare supplemental benefits. Covered associates retiring after April 1, 1992 are eligible for monthly postretirement healthcare benefits of $5 multiplied by the associate’s years of service. This benefit is provided in the form of a credit against their monthly insurance premium or Medicare supplemental insurance. The retiree is responsible to pay the balance of the premium. Effective June 30, 2022, the Company has amended the Retiree Medical Plan. In connection with the amendment, the Company will make lump sum cash payments to all active and retired participants in lieu of future monthly benefits and reimbursements previously offered under the Plan. As a result of the amendment, the Plan obligation was remeasured, resulting in a reduction to the obligation of $6.6 million and a corresponding prior service credit in AOCI, which will be amortized to net periodic postretirement benefit income over the remaining period until the final payment on July 1, 2024. On July 1, 2022, the Company made lump sum payments to retired participants totaling $2.0 million. The payments constituted a partial settlement of the Plan, which resulted in the recognition within net periodic postretirement expense of $0.7 million related to the net actuarial loss within AOCI. The remaining payments which relate to active participants are expected to be made in two equal installments on or about July 1, 2023, and July 1, 2024. -57- The following tables set forth the actuarial present value of benefit obligations, funded status, changes in benefit obligations and plan assets, weighted average assumptions used in actuarial calculations and components of net periodic benefit costs for the Company’s significant pension and postretirement benefit plans, excluding multi-employer plans. The prepaid, current accrued, and noncurrent accrued benefit costs associated with pension and postretirement benefits are reported in “Prepaid expenses and other current assets,” “Other assets, net,” “Accrued payroll and benefits,” and “Other long-term liabilities,” respectively, in the consolidated balance sheets. (In thousands, except percentages) Funded Status Projected/Accumulated benefit obligation: Balance at beginning of year Service cost Interest cost Actuarial loss (gain) Plan amendment Benefits paid Balance at end of year Fair value of plan assets: Balance at beginning of year Company contributions Excess asset transfer Benefits paid Balance at end of year Unfunded status Components of net amount recognized in consolidated balance sheets: Current liabilities Noncurrent liabilities Net liability Amounts recognized in AOCI: Net actuarial loss Prior service credit Accumulated other comprehensive (income) loss Pension Plan Retiree Medical Plan December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 $ $ $ $ $ $ $ $ $ — $ — — — — — — $ — $ — — — — $ — $ — $ — — $ — $ — — $ — $ — — — — — — $ $ 2,689 — (2,689) — — $ — $ — $ — — $ — $ — — $ 11,031 76 185 30 (6,614) (2,296) 2,412 $ $ — $ 2,296 — (2,296) — $ $ (2,412) (1,270) (1,142) (2,412) 743 (4,960) (4,217) $ $ $ $ 11,909 187 226 (849) — (442) 11,031 — 442 — (442) — (11,031) (496) (10,535) (11,031) 1,653 — 1,653 Weighted average assumptions at measurement date: Discount rate Ultimate health care cost trend rate N/A N/A N/A N/A 5.34% N/A 2.90% 4.50% — $ — — $ 2022 (In thousands, except percentages) Components of net periodic benefit (income) cost: Service cost Interest cost Amortization of prior service credit Gain on reconciliation with annuity provider Recognized actuarial net loss Net periodic benefit (income) expense Settlement expense Total net periodic benefit (income) cost — — $ $ — $ — — $ Pension Plan 2021 2020 2022 Retiree Medical Plan 2021 2020 — $ — — — — — $ — — 76 185 (1,653) (1,193) — — 200 — $ — (1,193) $ — (1,192) 740 — $ (1,193) $ (452) $ $ $ 187 226 — — 230 643 — 643 $ $ $ 182 303 — — 104 589 — 589 Weighted average assumptions used to determine net periodic benefit (income) cost: Discount rate N/A N/A N/A 2.90% 2.57% 3.26% -58- Assumed healthcare cost trend rates have a significant effect on the amounts reported for the Retiree Medical Plan. Assumed current healthcare cost trend rates used to determine net periodic benefit cost were as follows: Post-65 2022 2021 2020 N/A 7.00% 7.50% The following estimated benefit payments are expected to be paid in the following fiscal years: (In thousands) Post-retirement medical benefits Multi-Employer Health and Welfare Plans 2023 2024 $ 1,270 $ 1,270 In addition to the plans described above, the Company participates in the Michigan Conference of Teamsters and Ohio Conference of Teamsters Health and Welfare plans. The Company contributes to these multi-employer health and welfare plans under the terms contained in existing CBAs, including the requisite contribution amounts set forth within such CBAs. The health and welfare plans provide medical, dental, pharmacy, vision, and other ancillary benefits to active associates and retirees, as determined under the terms of the plan. Although the plans may provide certain benefits to retired employees, the Company’s only contribution obligation is to make contributions in amounts tied to the hours worked by its active employees. As a result, the plan does not constitute a postretirement benefit plan of the Company. Because the plans aggregate contributions from multiple employers, the Company is unable to determine how much of its contributions are allocated to benefits paid to its active employees and those, if any, that are allocated to benefits paid to other employer’s active employees and/or postretirement benefits. These types of plans often have a significant surplus of funds held in reserve in excess of claims incurred, and there is no potential withdrawal liability related to the Company’s participation in the plans. With respect to the Company’s participation in these plans, expense is recognized as contributions are made. The Company contributed $13.4 million, $13.2 million and $13.7 million to these plans in 2022, 2021 and 2020, respectively. Multi-Employer Pension Plan The Company also contributes to the Central States Plan, a multi-employer plan defined previously, under the terms of CBAs that cover its union-represented associates, including the requisite contribution amounts set forth within such CBAs. The Company is party to four CBAs that require contributions to the Central States Plan with expiration dates ranging from February 2024 to April 2026. These CBAs cover warehouse personnel and drivers in Grand Rapids, Michigan and Bellefontaine and Lima, Ohio. With respect to the Company’s participation in the Central States Plan (EIN 36-60442343 / Pension Plan Number 001), expense is recognized as contributions are made to the Central States Plan. The Company contributed $12.3 million, $13.5 million and $14.1 million to the Central States Plan in 2022, 2021 and 2020, respectively. The contributions made by the Company represent less than five percent of the Plan’s total contributions in 2022. Refer to Note 8, for further information regarding the Company’s participation in the Central States Plan. As of the date the consolidated financial statements were issued, an annual report for the Central States Plan on IRS Form 5500 was not publicly available for the plan year ended December 31, 2022. Note 11 – Accumulated Other Comprehensive Income or Loss ("AOCI") AOCI represents the cumulative balance of other comprehensive income (loss), net of tax, as of the end of the reporting period. For the Company, the activity relates to postretirement benefit plans, including those described in Note 10. Changes in AOCI are as follows: (In thousands) Balance at beginning of the year, net of tax Other comprehensive income (loss) before reclassifications Income tax (expense) benefit Other comprehensive income (loss), net of tax, before reclassifications Amortization of amounts included in net periodic benefit (income) cost (a) Income tax benefit (expense) (b) Amounts reclassified out of AOCI, net of tax Other comprehensive income (loss), net of tax Balance at end of the year, net of tax 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ (1,455) 6,576 (1,614) 4,962 (701) 173 (528) 4,434 2,979 $ $ (2,276) 837 (203) 634 250 (63) 187 821 (1,455) $ $ (1,600) (1,086) 268 (818) 191 (49) 142 (676) (2,276) (a) Reclassified from AOCI into Other, net, or Selling, general and administrative expense. Amounts include amortization of net actuarial loss, amortization of prior service credit, and settlement expense totaling $0.7 million in 2022 and $0.1 million in 2020. There was no settlement expense in 2021. (b) Reclassified from AOCI into Income tax expense (benefit). -59- Note 12 – Income Tax The income tax provision for continuing operations is made up of the following components: (In thousands) Current income tax expense: Federal State Total current income tax expense Deferred income tax expense (benefit): Federal State Total deferred income tax expense Total income tax expense A reconciliation of the statutory federal rate to the effective rate is as follows: Federal statutory income tax rate Stock compensation Non-deductible expenses Change in tax contingencies Charitable product donations Other, net Federal loss carryback (a) State taxes, net of federal income tax benefit Tax credits Effective income tax rate 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 8,585 2,397 10,982 46 1,369 1,415 12,397 $ $ 5,436 1,867 7,303 14,877 2,726 17,603 24,906 $ $ 1,844 5,149 6,993 5,637 (3,180) 2,457 9,450 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) 21.0 % (2.8) 5.5 (0.1) (0.3) 0.1 — 6.7 (3.7) 26.4 % 21.0 % 0.0 1.7 0.0 (0.1) (0.3) — 3.8 (0.9) 25.2 % 21.0 % 0.7 1.9 0.9 (0.2) (1.0) (11.9) 1.7 (2.0) 11.1 % (a) On March 27, 2020, the U.S. government enacted tax legislation to provide economic stimulus and support businesses and individuals during the COVID-19 pandemic, referred to as the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. In connection with the CARES Act, the Company recorded net discrete income tax benefits of $10.1 million in 2020 associated with the additional deductibility of certain expenses combined with provisions which enable companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”), where the federal statutory income tax rate was 35%. As a result of carrying back losses to previous tax years, the Company recorded $0.8 million in expense to reinstate tax contingencies which had previously expired, included in the “Change in tax contingencies” line in the table above. -60- Deferred tax assets and liabilities resulting from temporary differences as of December 31, 2022 and January 1, 2022 are as follows: (In thousands) Deferred tax assets: Employee benefits Accrued workers' compensation Allowance for credit losses Restructuring Deferred revenue Stock warrant Lease liabilities Accrued insurance State net operating loss carryforwards (a) All other Total deferred tax assets Valuation allowances Net deferred tax assets Deferred tax liabilities: Property and equipment Lease assets Inventory Goodwill Intangible assets All other Total deferred tax liabilities Net deferred tax liability December 31, 2022 January 1, 2022 $ $ 27,387 2,126 1,823 655 1,266 626 82,284 985 5,608 4,433 127,193 (357) 126,836 48,251 73,986 33,290 33,606 1,195 2,801 193,129 66,293 $ $ 25,358 1,943 1,317 333 2,083 1,258 85,781 893 6,576 2,338 127,880 — 127,880 47,240 76,589 35,382 30,044 187 2,130 191,572 63,692 (a) As of December 31, 2022, the Company’s state net operating loss carryforwards in various taxing jurisdictions expire in tax years 2023 through 2042 if not utilized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (In thousands) Balance at beginning of year Gross increases - tax positions taken in prior years Gross decreases - tax positions taken in prior years Lapsed statutes of limitations Balance at end of year 2022 2021 $ $ 1,220 — — (55) 1,165 $ $ 1,317 84 (11) (170) 1,220 Unrecognized tax benefits of $1.0 million are set to expire prior to December 30, 2023. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. The amount recognized due to a lapse in the statute of limitations that reduced the Company’s effective income tax rate in 2022 and 2021 was immaterial in both years. The amount of unrecognized tax benefits, including interest and penalties, that would reduce the Company’s effective income tax rate if recognized in future periods was $1.0 million as of December 31, 2022. SpartanNash or its subsidiaries file income tax returns with federal, state and local tax authorities within the United States. With few exceptions, SpartanNash is no longer subject to examinations by U.S. federal tax authorities for fiscal years before the year ended January 3, 2015, and state or local tax authorities for fiscal years before the year ended December 31, 2018. Note 13 – Share-Based Payments Share-Based Payments to Employees The Company sponsors a shareholder-approved stock incentive plan (the “2020 Plan”) that provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, dividend equivalent rights, and other stock-based and stock-related awards to directors, employees, or contractors of the Company, as determined by the Compensation Committee of the Board of Directors. Holders of restricted stock and stock awards issued under the 2020 Plan are entitled to participate in dividends, payable upon the vesting of the underlying awards. As of December 31, 2022, a total of 1,441,593 shares remained unissued under the 2020 Plan. All outstanding unvested shares of restricted stock vest immediately upon a “Change in Control,” as defined by the Plan. -61- Restricted shares awarded to associates in 2022 and 2021 vest ratably over a three-year service period and over one year for grants to members of the Board of Directors. Restricted shares awarded to associates prior to 2021 vest ratably over a four-year service period. Awards are subject to forfeiture and certain transfer restrictions prior to vesting. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the required service period. The following table summarizes restricted stock activity for 2022, 2021 and 2020: Outstanding and nonvested at December 28, 2019 Granted Vested Forfeited Outstanding and nonvested at January 2, 2021 Granted Vested Forfeited Outstanding and nonvested at January 1, 2022 Granted Vested Forfeited Outstanding and nonvested at December 31, 2022 Weighted Average Grant-Date Fair Value 20.28 15.96 21.65 16.48 17.72 18.96 19.81 18.19 17.56 28.63 17.92 20.71 22.05 Shares 928,733 521,566 (396,219) (80,132) 973,948 562,653 (388,403) (116,361) 1,031,837 391,334 (470,145) (89,963) 863,063 $ $ The total intrinsic value of shares vested was $14.3 million, $7.3 million and $5.3 million in 2022, 2021 and 2020, respectively. Share-based payment expense recognized and included in “Selling, general and administrative expenses” in the consolidated statements of earnings, and related tax benefits were as follows: (In thousands) Restricted stock Tax benefits Stock-based compensation stock expense, net of tax 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 8,308 (4,094) 4,214 $ $ 6,868 (1,744) 5,124 $ $ 6,299 (839) 5,460 As of December 31, 2022, total unrecognized compensation cost related to non-vested restricted stock awards granted under the stock incentive plan was $8.4 million. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 1.8 years. The Company recognized tax deductions of $14.7 million, $7.7 million and $5.9 million related to the vesting of restricted stock in 2022, 2021 and 2020, respectively. The Company sponsored a stock bonus plan covering 300,000 shares of SpartanNash common stock. Under the provisions of this plan, certain officers and key associates could elect to receive a portion of their annual bonus in common stock rather than cash, which was issued at 120% of cash value. After the shares are issued, the holder is not able to sell or otherwise transfer the shares until the end of the holding period, which is 24 months. Compensation expense is recorded based upon the market price of the stock as of the measurement date. Under the plan, 15,778 and 3,443 shares were issued in 2021, and 2020, respectively. The stock bonus plan expired on March 31, 2021. In 2022, the Company adopted a new associate stock purchase plan ("2022 Plan"), which covers 300,000 shares of SpartanNash common stock and enables eligible associates of the Company to purchase shares at 85% of the fair market value. The Company has determined this represents compensation expense in accordance with ASC 718, Compensation – Stock Compensation. The 2022 Plan replaced a previous Company-sponsored associate stock purchase plan covering 200,000 shares of SpartanNash common stock that enabled associates of the Company to purchase shares at 95% of the fair market value. As of December 31, 2022, 194,195 shares were issued under the previous plan and 9,895 shares have been issued under the 2022 Plan. -62- Stock Warrant On October 7, 2020, in connection with its entry into a commercial agreement with Amazon.com, Inc. (“Amazon”), the Company issued to Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon, a warrant to acquire up to an aggregate of 5,437,272 shares of the Company’s common stock (the “Warrant”), subject to certain vesting conditions. Warrant shares equivalent to 2.5% of the Company’s outstanding and issuable shares, or 1,087,455 shares, vested upon the signing of the commercial agreement, and had a grant date fair value of $5.51 per share. Warrant shares equivalent to up to 10.0% of the Company’s outstanding and issuable shares, or 4,349,817 shares, may vest in connection with conditions defined by the terms of the Warrant, as Amazon makes payments to the Company in connection with the commercial supply agreement, in increments of $200 million, and had a grant date fair value of $5.33 per share. Upon vesting, shares may be acquired at an exercise price of $17.7257. The Warrant contains customary anti-dilution, down-round and change-in-control provisions. The right to purchase shares in connection with the Warrant expires on October 7, 2027. Non-cash share-based payment expense associated with the Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the Warrant. The fair value of the Warrant was determined as of the grant date in accordance with ASC 718, Compensation – Stock Compensation, using the binomial lattice pricing model (the “lattice model”). The lattice model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the lattice model for the Warrant were as follows: Risk free interest rate Volatility Dividend yield Selected Assumption 0.56% 47.00% 4.57% Methodology Derived from the Constant Maturity Treasury Rate with maturity matching time to expiration of the Warrants Based on historical equity volatility of Company stock over a period matching the assumed warrants term Based on the historical dividends paid by the Company The warrant shares, which vested upon the signing of the commercial agreement, have a contractual term of 7 years, whereas the warrant shares, which vest upon payments made to the Company in connection with the commercial supply agreement, had an estimated weighted average term of 3.6 years. The following table summarizes the Warrant activity for 2022, 2021 and 2020: Outstanding and nonvested at December 28, 2019 Granted Vested Outstanding and nonvested at January 2, 2021 Vested Outstanding and nonvested at January 1, 2022 Vested Outstanding and nonvested at December 31, 2022 Warrant — 5,437,272 (1,087,455) 4,349,817 (434,984) 3,914,833 (434,984) 3,479,849 Share-based payment expense recognized, included as a reduction of “Net sales” in the consolidated statements of earnings, and related tax benefits were as follows: (In thousands) Warrant expense Tax benefits Warrant expense, net of tax 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ $ 2,158 (203) 1,955 $ $ 1,958 (152) 1,806 $ $ 6,549 (2,051) 4,498 As of December 31, 2022, total unrecognized cost related to non-vested warrants was $18.5 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 4.8 years. Warrants representing 1,957,423 shares are vested and exercisable. As of December 31, 2022, non-vested warrant shares had an intrinsic value of $43.5 million, and vested warrant shares had an intrinsic value of $24.5 million. -63- Note 14 – Supplemental Cash Flow Information Supplemental cash flow information is as follows: (In thousands) Non-cash investing activities: Capital expenditures included in accounts payable Non-cash financing activities: Dividends declared but unpaid Other supplemental cash flow information: Cash paid for interest Income tax payments (refunds) Note 15 – Reporting Segment Information 2022 (52 Weeks) 2021 (52 Weeks) 2020 (53 Weeks) $ 25,701 $ 15,277 $ 15,984 324 18,431 6,513 485 12,245 (10,110) 99 18,448 18,717 SpartanNash sells and distributes products that are typically found in supermarkets and discount stores. The Company’s operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. The Company’s Chief Operating Decision Maker is the Chief Executive Officer, who determines the allocation of resources and, through a regular review of financial information, assesses the performance of the operating segments. As disclosed in Note 1, during the third quarter of fiscal 2022, the Company combined the former Food Distribution and Military reportable segments into a single reportable segment, Wholesale. The Company's operations are now classified by management into two reportable segments: Wholesale and Retail. Segment information from prior periods has been recast to reflect this change. The Company reviews its reportable segments on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred. Refer to Note 2 for information regarding the basis of organization and types of products, services and customers from which the Company derives revenue. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1. Identifiable assets represent total assets directly associated with the reporting segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments. Capital expenditures primarily relate to store remodels, IT upgrades and implementations, investments in supply chain infrastructure, office remodels, and equipment upgrades. -64- The following tables set forth information about the Company by reporting segment: (In thousands) 2022 (52 Weeks) Net sales to external customers Inter-segment sales Acquisition and integration, net Restructuring and asset impairment, net Depreciation and amortization Operating earnings Capital expenditures 2021 (52 Weeks) Net sales to external customers Inter-segment sales Acquisition and integration, net Restructuring and asset impairment, net Depreciation and amortization Operating earnings Capital expenditures 2020 (53 Weeks) Net sales to external customers Inter-segment sales Acquisition and integration, net Restructuring and asset impairment, net Depreciation and amortization Operating earnings Capital expenditures (In thousands) Total Assets Wholesale Retail Total Wholesale Retail Total $ $ $ 6,845,236 1,204,497 239 (2,363) 47,601 55,137 52,394 6,349,753 1,095,647 — 427 46,487 45,229 46,020 6,710,568 1,125,112 — 21,085 44,677 36,047 33,404 $ $ $ $ $ $ $ $ 2,797,864 928 104 3,168 46,579 13,407 44,886 2,581,286 827 708 2,459 46,224 66,971 33,407 2,637,917 359 421 3,313 45,199 66,359 33,894 9,643,100 1,205,425 343 805 94,180 68,544 97,280 8,931,039 1,096,474 708 2,886 92,711 112,200 79,427 9,348,485 1,125,471 421 24,398 89,876 102,406 67,298 December 31, 2022 January 1, 2022 1,525,760 780,801 2,306,561 $ $ 1,459,440 747,342 2,206,782 -65- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. Item 9A. Controls and Procedures Disclosure Controls and Procedures An evaluation of the effectiveness of the design and operation of SpartanNash Company’s disclosure controls and procedures (as currently defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was performed as of December 31, 2022 (the “Evaluation Date”). This evaluation was performed under the supervision and with the participation of SpartanNash Company’s management, including its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Corporate Controller. As of the Evaluation Date, SpartanNash Company’s management, including the CEO, CFO and Corporate Controller, concluded that SpartanNash’s disclosure controls and procedures were effective to ensure that material information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to management, including its principal executive, principal financial and principal accounting officers as appropriate to allow for timely decisions regarding required disclosure. Management’s Report on Internal Control Over Financial Reporting The management of SpartanNash Company, including its CEO, CFO and Corporate Controller, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. SpartanNash Company’s internal controls were designed by, or under the supervision of, the CEO, CFO, and Corporate Controller, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of SpartanNash Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of SpartanNash Company are being made only in accordance with authorizations of management and directors of SpartanNash Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SpartanNash Company’s assets that could have a material effect on the financial statements. Management of SpartanNash Company conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Through this evaluation, management did not identify any material weakness in the Company’s internal control. There are inherent limitations in the effectiveness of any system of internal control over financial reporting. Based on the evaluation, management has concluded that SpartanNash Company’s internal control over financial reporting was effective as of December 31, 2022. The independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K Annual Report has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 as stated in their report on the following page. Changes in Internal Controls Over Financial Reporting During the last fiscal quarter, there was no change in SpartanNash’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, SpartanNash’s internal control over financial reporting. -66- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and shareholders of SpartanNash Company and subsidiaries Grand Rapids, Michigan Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of SpartanNash Company and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated March 1, 2023, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Grand Rapids, Michigan March 1, 2023 -67- Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item is here incorporated by reference from the sections titled “Board of Directors,” “SpartanNash’s Executive Officers,” “Ownership of SpartanNash Stock—Delinquent Section 16(a) Reports,” and “Corporate Governance—Code of Conduct,” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2023. Item 11. Executive Compensation The information required by this item is here incorporated by reference from the sections entitled “Executive Compensation,” “Compensation of Directors,” “Board of Directors—Interlocks and Insider Relationships” and “Compensation Committee Report” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2023. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is here incorporated by reference from the section titled “Ownership of SpartanNash Stock” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2023. The following table provides information about SpartanNash’s equity compensation plans regarding the number of securities to be issued under these plans, the weighted-average exercise prices of options outstanding under these plans and the number of securities available for future issuance as of the end of fiscal 2022. EQUITY COMPENSATION PLAN INFORMATION Plan Category Equity compensation Plans approved by security holders (a) Equity compensation plans not approved by security holders Total Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) Weighted-average exercise price of outstanding options, warrants and rights (2) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1)) (3) — — — — Not applicable — 1,441,593 — 1,441,593 (a) Consists of the Stock Incentive Plan of 2020. The numbers of shares reflected in column (3) in the table above with respect to the Stock Incentive Plan of 2020 represent shares that remain available for future issuance under the plan other than upon the exercise of outstanding options, warrants or rights. The plan contains customary anti-dilution provisions that are applicable in the event of a stock split or certain other changes in SpartanNash’s capitalization. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is here incorporated by reference from the section titled “Transactions with Related Persons” and “Corporate Governance—Director Independence” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2023. Item 14. Principal Accountant Fees and Services The information required by this item is here incorporated by reference from the section titled “Independent Auditors” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2023. -68- PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this Report: 1. Financial Statements. A. In Item 8. Reports of Independent Registered Public Accounting Firm of Deloitte & Touche LLP (PCAOB ID No. 34) dated March 1, 2023 Consolidated Balance Sheets at December 31, 2022 and January 1, 2022 Consolidated Statements of Earnings for the years ended December 31, 2022, January 1, 2022 and January 2, 2021 Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, January 1, 2022 and January 2, 2021 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2022, January 1, 2022 and January 2, 2021 Consolidated Statements of Cash Flows for the years ended December 31, 2022, January 1, 2022 and January 2, 2021 Notes to Consolidated Financial Statements 2. Financial Statement Schedules. Schedules are omitted because the required information is either inapplicable or presented in the consolidated financial statements or related notes. 3. Exhibits. The information required by this Section (a)(3) of Item 15 is set forth on the exhibit index that follows the Signatures page of this Form 10-K and is incorporated herein by reference. -69- Exhibit Number 3.1 3.2 4.1 10.1 10.2* 10.3* 10.4* 10.5* 10.6* 10.7* 10.8* 10.9* 10.10* 10.11* 10.12* 10.13* 10.14* 10.15* 10.16* 10.17* EXHIBIT INDEX Document Restated Articles of Incorporation of SpartanNash Company, as amended. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 15, 2017. Incorporated herein by reference. Bylaws of SpartanNash Company, as amended. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Incorporated herein by reference. Description of Capital Stock. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended January 2, 2021. Incorporated herein by reference. Amendment No. 6 to Amended and Restated Loan and Security Agreement, dated November 17, 2022, among SpartanNash Company and certain of its subsidiaries, as borrowers, and Wells Fargo Capital Finance, LLC, as administrative agent, and certain lenders from time to time party thereto. Form of SPTN Long-Term Incentive Plan Document. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2022. Incorporated herein by reference. Form of SPTN Annual Cash Incentive Plan Document. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2022. Incorporated herein by reference. Form of 2021 Long-Term Incentive Plan. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 24, 2021. Incorporated herein by reference. Form of 2021 Annual Cash Incentive Plan. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 24, 2021. Incorporated herein by reference. Form of 2020 Long-Term Cash Incentive Plan. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 18, 2020. Incorporated herein by reference. SpartanNash Company Stock Incentive Plan of 2020. Previously filed as an exhibit to the Company’s Form S-8 filed on May 29, 2020. Incorporated herein by reference. SpartanNash Company Stock Incentive Plan of 2015. Previously filed as an exhibit to the Company’s Form S-8 filed on June 4, 2015. Incorporated herein by reference. SpartanNash Company Supplemental Executive Retirement Plan, as amended. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended March 27, 2010. Incorporated herein by reference. SpartanNash Company Supplemental Executive Savings Plan. Previously filed as an exhibit to the Company’s Form S-8 Registration Statement filed on December 21, 2001. Incorporated herein by reference. Form of SPTN Restricted Stock Award Plan Document (Non-Employee Directors). Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2022. Incorporated herein by reference. Form of Restricted Stock Award to Executive Officers. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 11, 2020. Incorporated herein by reference. Form of SPTN Restricted Stock Award Plan Document (Associates). Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2022. Incorporated herein by reference. Form of Indemnification Agreement. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended January 2, 2016. Incorporated herein by reference. Executive Separation Agreement between SpartanNash Company and Kathleen Mahoney. Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 9, 2021. Incorporated herein by reference Executive Employment Agreement between SpartanNash Company and Tony B. Sarsam. Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended January 1, 2022. Incorporated herein by reference. Form of Executive Employment Agreement between SpartanNash Company and certain executive officers. Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended January 1, 2022. Incorporated herein by reference. -70- 10.18* 10.19* 10.20 10.21 21 23 24 31.1 31.2 32.1 Executive Separation Agreement between SpartanNash Company and Yvonne Trupiano. Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended October 8, 2022. Incorporated herein by reference. Executive Separation Agreement between SpartanNash Company and Arif Dar. Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended October 8, 2022. Incorporated herein by reference. Transaction Agreement, by and between SpartanNash and Amazon.com NV Investments Holdings LLC, dated as of October 7, 2020. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on October 8, 2020. Incorporated herein by reference. Warrant to Purchase Common Stock of SpartanNash Company, by and between SpartanNash Company and Amazon.com NV Investment Holdings LLC, dated as of October 7, 2020. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on October 8, 2020. Incorporated herein by reference. Subsidiaries of SpartanNash Company. Consent of Independent Registered Public Accounting Firm. Powers of Attorney. Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212. 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, has been formatted in Inline XBRL. * These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10- K. Item 16. Form 10-K Summary None. -71- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, SpartanNash Company (the Registrant) has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES Date: March 1, 2023 SPARTANNASH COMPANY (Registrant) By /s/ Tony B. Sarsam Tony B. Sarsam President and Chief Executive Officer (Principal Executive Officer) -72- Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of SpartanNash Company and in the capacities and on the dates indicated. March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 March 1, 2023 By * M. Shân Atkins Director By * Douglas A. Hacker Chairman of the Board By * Matthew Mannelly Director By * Hawthorne Proctor Director By * William R. Voss Director By * Julien Mininberg Director By * Jaymin Patel Director By * Pamela Puryear, PhD Director By /s/ Tony B. Sarsam Tony B. Sarsam President and Chief Executive Officer (Principal Executive Officer) By /s/ Jason Monaco Jason Monaco Executive Vice President and Chief Financial Officer (Principal Financial Officer) By /s/ R. Todd Riksen R. Todd Riksen Vice President and Corporate Controller (Principal Accounting Officer) *By /s/ Jason Monaco Jason Monaco Attorney-in-Fact -73- APPENDIX 012'#2343*%3'#$'5$61%$7*8#3#9)$%'$:+;()%1+$7*8#3#9)$<15'81$"#%181)%=$>*?1)=$@1A8123*%3'#$*#+$:B'8%3C*%3'# !:+;()%1+$7<">@:, Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization !:$6'#DE::F$G3#*#23*4$H1*)(81, (Adjusted EBITDA) | (A Non-GAAP Financial Measure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otes: Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("adjusted EBITDA") is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including share-based payments (equity awards measured in accordance with ASC 718, Stock Compensation, which include both stock-based compensation to employees and stock warrants issued to non-employees) and the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company. Adjusted EBITDA is not a measure of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings and other income or cash flow statement data. The Company's definitions of adjusted EBITDA may not be identical to similarly titled measures reported by other companies. Reconciliation of Operating Earnings to Adjusted Operating Earnings 012'#2343*%3'#$'5$KA18*%3#9$7*8#3#9)$%'$:+;()%1+$KA18*%3#9$7*8#3#9) !:$6'#DE::F$G3#*#23*4$H1*)(81, (A Non-GAAP Financial Measure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otes: Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations. Adjusted operating earnings is not a measure of performance under GAAP and should not be considered as a substitute for operating earnings, and other income statement data.The Company's definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies. Reconciliation of Net Earnings to Adjusted Earnings from Continuing Operations, as well as per diluted share ("adjusted EPS") -./'#/010*%0'#$'2$3.%$4*5#0#6)$%'$7+8()%.+$4*5#0#6)$25'?$L'#%0#(0#6$K>.5*%0'#):$*)$M.11$*)$>.5$+01(%.+$)&*5.$!N*+8()%.+$4CON, (A Non-GAAP Financial Measure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a) The income tax effect on adjustments is computed by applying the effective tax rate, before discrete tax items, to the total adjustments for the period. C?D'A9$':"8,.0;'-$.7/F$)'/06"8$'#.E'?$0$5/#%'-$7.#$)'#"'-$8$.%+-/01'/#%')$5$--$)'#.E'.%%$#%'.0)'7/.?/7/#/$%'#"'-$57$6#'#9$'69.01$'/0'#9$'5$)$-.7'%#.#+#"-;'-.#$'-$%+7#/01'5-"8'#9$'A.E':+#%'.0)'G"?%'(6#>'H067+)$%'IJ>J'8/77/"0'"5'#.E'?$0$5/#%'.##-/?+#.?7$'#"'#.E',7.00/01'%#-.#$1/$%'-$7.#$)'#"'#9$' A.E':+#%'.0)'G"?%'(6#'5"-'KLJM> (b) The Company realized income tax benefits related to remeasuring its deferred tax assets and liabilities to reflect the change in the federal statutory rate resulting from the Tax Cuts and Jobs Act. Includes $1.1 million of tax benefits attributable to tax planning strategies related to the Tax Cuts and Jobs Act for 2018. C6D'N$,-$%$0#%'#.E'/8,.6#%'.##-/?+#.?7$'#"'#9$':(NOP'(6#@'.0)'-$7.#$)'#.E',7.00/01@',-/8.-/7;'-$7.#$)'#"'.))/#/"0.7')$)+6#/"0%'.0)'#9$'+#/7/F.#/"0'"5'0$#'",$-.#/01'7"%%'6.--;?.6Q> !"#$%&'()*+%#$)'$.-0/01%'5-"8'6"0#/0+/01'",$-.#/"0%@'.%'=$77'.%',$-')/7+#$)'%9.-$'CR.)*+%#$)'O4PRD@'/%'.'0"023((4'",$-.#/01'5/0.06/.7'8$.%+-$'#9.#'#9$':"8,.0;')$5/0$%'.%'0$#'$.-0/01%',7+%'"-'8/0+%'.)*+%#8$0#%'5"-'/#$8%'#9.#')"'0"#'-$57$6#'#9$'"01"/01'",$-.#/01'.6#/ back. ()*+%#$)'$.-0/01%'5-"8'6"0#/0+/01'",$-.#/"0%'/%'0"#'.'8$.%+-$'"5',$-5"-8.06$'+0)$-'3((4'.0)'%9"+7)'0"#'?$'6"0%/)$-$)'.%'.'%+?%#/#+#$'5"-'0$#'$.-0/01%@'6.%9'57"=%'5-"8'",$-.#/01'.6#/'A9$':"8,.0;B%')$5/0/#/"0'"5'.)*+%#$)'$.-0/01%' Notes: Adjusted earnings from continuing operations, as well as per diluted share ("adjusted EPS"), is a non-GAAP operating financial measure that the Company defines as 5-"8'6"0#/0+/01'",$-.#/"0%'8.;'0"#'?$'/)$0#/6.7'#"'%/8/7.-7;'#/#7$)'8$.%+-$%'-$,"-#$)'?;'"#9$-'6"8,.0/$%> net earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations. Adjusted earnings from continuing operations is not a measure of performance under GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company's definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies. !"#$"%#&$'()!*#%+*#,*("-#.*%/&'0#&$#%+*#%1,(* ((((153671( !"#$%&"'()*"+)$"('#,-&"'(.%)+".(/-&.&)0'#0$( ((((123;99( ((((1239:4( ((((123141( (((153824( CORPORATE EXECUTIVE OFFICERS Tony B. Sarsam President and Chief Executive Officer Ileana McAlary Executive Vice President, Chief Legal Officer and Corporate Secretary Jason Monaco Executive Vice President and Chief Financial Officer Bennett Morgan Senior Vice President and Chief Merchandising Officer David Petko Executive Vice President and Chief Supply Chain Officer David Sisk Senior Vice President and Chief Customer Officer Thomas Swanson Executive Vice President and General Manager, Corporate Retail Masiar Tayebi Executive Vice President and Chief Strategy and Information Officer BOARD OF DIRECTORS M. Shân Atkins Independent Business Executive and Retired Retail and Consumer Executive Douglas A. Hacker Chairman of the Board Independent Business Executive and Retired Chief Financial Officer and Executive Vice President Strategy of UAL Corp. Matthew M. Mannelly Retired Chief Executive Officer of Prestige Brands Julien R. Mininberg Chief Executive Officer of Helen of Troy Limited Jaymin B. Patel Executive Chairman of Perennial Climate, Inc. Major General (Ret.) Hawthorne L. Proctor Managing Partner of Proctor & Boone Consulting LLC Pamela S. Puryear, Ph.D. Independent Business Executive and Former Chief Human Resources Officer in Retail and Healthcare Tony B. Sarsam President and Chief Executive Officer of SpartanNash William R. Voss Managing Partner of Lake Pacific Partners, LLC 2022 SPARTANNASH ANNUAL REPORT CORPORATE INFORMATION Transfer Agent Computershare P.O. Box 43078 Providence, Rhode Island 02940 800.622.6757 (US, Canada & Puerto Rico) 781.575.4735 (non-US) Independent Registered Public Accounting Firm Deloitte & Touche LLP 37 Ottawa Ave NW Suite 600 Grand Rapids, MI, 49503 616.336.7900 INVESTOR INFORMATION On February 27, 2023, there were approximately 1,300 shareholders of record of SpartanNash common stock. SpartanNash common stock is listed on NASDAQ under the trading symbol “SPTN.” A copy of SpartanNash’s Annual Report to the Securities and Exchange Commission on Form 10-K for the year ended December 31, 2022, may be obtained by any shareholder without charge by writing to: SpartanNash Company c/o Investor Relations 850 76th Street SW P.O. Box 8700 Grand Rapids, Michigan 49518-8700 616.878.2000 spartannash.com IR@spartannash.com SpartanNash (Nasdaq: SPTN) is a food solutions company that delivers the ingredients for a better life. Committed to fostering a People First culture, the SpartanNash family of Associates is 17,500 and growing. SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products. On the retail side, SpartanNash operates 147 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin’s Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for independent grocers. For more information, visit spartannash.com. 850 76th Street SW | PO BOX 8700 | Grand Rapids, MI 49518-8700 | spartannash.com

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