ANNUAL REPORT
2024
GO
BEYOND
2024 SPARTANNASH ANNUAL REPORT
FINANCIAL HIGHLIGHTS
*The adjusted financial information presented reflects non-GAAP financial measures. Please see Item 7 of this Annual Report for the
respective reconciliations of these measures.
Net Sales (in billions)
2022
2023
2021
2020
$8.93
$9.35
$9.64
2024
$9.55
Adjusted EBITDA (in millions)*
2022
2023
2021
2020
$214
$239
$243
2024
$258
Operating Cash Flows (in millions)
2022
2023
2021
2020
$161
$307
$110
2024
$206
2024
2023
2022
2021
2020
(52 Weeks)
(52 Weeks)
(52 Weeks)
(53 Weeks)
(52 Weeks)
Net sales
$9,549
$9,729
$9,643
$8,931
$9,348
Gross profit margin
15.8%
15.3%
15.5%
15.7%
15.2%
Operating earnings
54
107
69
112
102
Adjusted operating earnings*
139
142
137
114
138
Net earnings
0.3
52
35
74
76
Adjusted earnings
69
76
85
75
92
from continuing operations*
Net earnings per diluted share
0.01
1.50
0.95
2.05
2.12
Adjusted earnings from continuing
2.03
2.18
2.33
2.08
2.58
operations per diluted share*
Adjusted EBITDA*
258
257
243
214
239
Cash provided from operating activities
206
89
110
161
307
(Dollars in millions, except per share data
and percentage data).
$9.73
$257
$89
2024 Annual Report Letter
from the President and CEO
Dear SpartanNash Shareholder,
Since joining SpartanNash, I have had the privilege of leading a team that is transforming the Company into a
People First, high-performance organization. The investments we have made in our culture continue to reap
rewards. In 2024, our 90-day new hire retention rate increased by 4%(1), and we earned national
recognition as a top employer by Newsweek®, Great Place to Work®, U.S. News & World Report®, and
Best and Brightest Companies to Work For®. We have also become an industry leader in Associate safety,
reducing our lost-time incidents by 83%(2) since 2020. I want to thank our leaders for their steadfast commitment
to creating Careers for a Better Life for our growing family of Associates.
Reflecting on our 2024 performance, we also made notable strides to improve our Wholesale customer
profitability, creating new efficiencies in our distribution network to further optimize our footprint and streamline
processes. These actions have contributed to improvement in our throughput rate(3) since launching
Our Winning Recipe® in 2021.
To complement our margin-enhancing initiatives, we also implemented a new cost leadership plan and tested
innovative loyalty and merchandising programs. Introduced in 2024, our Customer Value Proposition (“CVP”)
leverages consumer insights and best practices in our Retail stores to deliver greater freshness, value and
convenience for our shoppers. Our CVP program encompasses our enhanced category planning, store remodels,
shopper loyalty strategies and more; and we extend the learnings from our CVP to help our independent
customers grow their businesses.
In addition to our organic growth programs, in 2024 we completed the acquisitions of Metcalfe’s Market,
Fresh Encounter, and Markham Enterprises. In aggregate, these deals added 55 locations to our Retail portfolio.
Some additional highlights from fiscal 2024 include:
• Generated $9.55 billion in revenues
• Captured approximately $50 million in incremental gross benefits from our planned transformational
initiatives, generating almost $130 million in total benefits since 2021
• Generated nearly $206 million in cash from operating activities, a 130% increase compared to fiscal 2023
• Returned $45 million to shareholders(4) in the form of dividends and share repurchases
• Deployed automation solutions to reduce manual labor hours
• Continued serving active military members and veterans at commissaries and exchanges worldwide,
driving 12 consecutive quarters of sales growth compared to the prior-year quarters
In 2024, we also made progress with our corporate responsibility efforts. These efforts are aligned with our
strategic priorities and Core Capabilities – people, operational excellence and insights that drive solutions.
An in-depth update is available in the 2024 Corporate Responsibility Report, located on spartannash.com.
We are energized by the momentum we have gained going into 2025, but we are not yet satisfied. We are taking
a practical and methodical approach to mitigate the macroeconomic pressures that our industry is facing. It will take
imagination, desire, discipline and sheer will to Finish Every Mission associated with our strategic plan. I am
(1) The Company’s total 90-day new hire retention rate improvement compared to fiscal 2023 as of year-end 2024.
(2) The Company’s lost-time incidents rate improvement year-over-year as of year-end 2024.
(3) As a means of evaluating warehouse efficiency, the Company calculates the throughput rate as cases shipped divided by warehouse labor
hours worked, excluding salaried hours.
(4) Comprised of $15.1 million in share repurchases and $29.9 million in dividends.
confident we have the right team and the right capabilities to continue growing top-line revenue and
profitability while capturing market share. We remain steadfast in our commitment to drive results and maximize
shareholder value.
On behalf of the Board of Directors, our Executive Leadership Team, and our Associates, thank you for your
continued support and investment in SpartanNash.
Glad to be here,
Tony Bashir Sarsam
President and Chief Executive Officer
Forward-Looking Statements
The matters discussed in this Annual Report and the accompanying materials 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 the Company. These
forward-looking statements may be identifiable by words or phrases indicating that the Company or management "expects,"
"projects," "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 of this Annual Report. 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. These risks and uncertainties include
the Company's ability to compete in an extremely competitive industry; the Company's dependence on certain major customers;
the Company's ability to implement its growth strategy and transformation initiatives; the Company's ability to implement its
growth strategy through acquisitions and successfully integrate acquired businesses; disruptions to the Company's information
technology systems and security network, including security breaches and cyber-attacks; impacts to the availability and perfor-
mance of the Company's information technology systems; changes in relationships with the Company's vendor base; changes
in product availability and product pricing from vendors; macroeconomic uncertainty, including rising inflation, potential econom-
ic recession, tariffs and increasing interest rates; difficulty attracting and retaining well-qualified Associates and effectively
managing increased labor costs; failure to successfully retain or manage transitions with executive leaders and other key
personnel; changes in the geopolitical conditions; impairment charges for goodwill or other long-lived assets; impacts to the
Company's business and reputation due to focus on environmental, social and governance matters; customers to whom the
Company extends credit or for whom the Company guarantees loans may fail to repay the Company; disruptions associated
with severe weather conditions and natural disasters, including effects from climate change; disruptions associated with
disease outbreaks; the Company's ability to manage its private brand program for U.S. military commissaries, including the
termination of the program or not achieving the desired results; the Company's level of indebtedness; interest rate fluctuations;
the Company's ability to service its debt and to comply with debt covenants; changes in government regulations; labor relations
issues; changes in the military commissary system, including its supply chain, or in the level of governmental funding; product
recalls and other product-related safety concerns; cost increases related to multi-employer pension plans; and other risks and
uncertainties listed under "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. 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.
-1-
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 28, 2024.
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
38-0593940
(State or Other Jurisdiction) of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
850 76th Street, S.W.
P.O. Box 8700
Grand Rapids, Michigan
49518-8700
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (616) 878-2000
Securities registered pursuant to Section 12(b) of the Securities Exchange Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, no par value
SPTN
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.
Yes ☒ 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). ☐
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 12, 2024 (which was the last trading day of the registrant’s second quarter in the fiscal year ended December 28, 2024) was $621,561,074.
The number of shares outstanding of the registrant’s Common Stock, no par value, as of February 24, 2025 was 33,764,828, all of one class.
DOCUMENTS INCORPORATED BY REFERENCE
Part III, Items 10, 11, 12, 13 and 14
Definitive Proxy Statement for the 2025 Annual Meeting
-2-
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,” “projects,” “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.
-3-
TABLE OF CONTENTS
Page
PART I.
Item 1.
Business
4
Item 1A.
Risk Factors
9
Item 1B.
Unresolved Staff Comments
16
Item 1C.
Cybersecurity
16
Item 2.
Properties
17
Item 3.
Legal Proceedings
18
Item 4.
Mine Safety Disclosures
18
PART II.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
19
Item 6.
Reserved
20
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
32
Item 8.
Financial Statements and Supplementary Data
33
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
69
Item 9A.
Controls and Procedures
69
Item 9B.
Other Information
71
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
71
PART III.
Item 10.
Directors, Executive Officers and Corporate Governance
71
Item 11.
Executive Compensation
71
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
71
Item 13.
Certain Relationships and Related Transactions, and Director Independence
72
Item 14.
Principal Accountant Fees and Services
72
PART IV.
Item 15.
Exhibits and Financial Statement Schedules
72
Item 16.
Form 10-K Summary
74
Signatures
75
-4-
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 operates
196 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.
The Company 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.
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 January 3, 2026 ("2025"), December 28, 2024 (“2024” or “current year”), December 30, 2023 (“2023” or “prior
year”) and December 31, 2022 (“2022”), all of which include 52 weeks, with the exception of 2025, which will include 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. Fiscal
2025 will contain 53 weeks; therefore, the fourth quarter of fiscal 2025 will contain 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 its own 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 of $1.2 billion to
corporate-owned retail stores that are eliminated in the consolidated financial statements, totaled $7.9 billion for 2024. As of the end
of 2024, 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 28, 2024, the Company operated in all 50 states by leveraging a network of 18 distribution centers, 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, and provides opportunities for independent retailers to purchase products at competitive prices in order to
effectively compete in the grocery industry in the long-term. The Company's network also 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.
The Company’s Wholesale segment provides a selection of approximately 86,000 stock-keeping units (SKUs) of national brand 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 Wholesale
segment customers 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 Wholesale segment customers 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 has a diverse base of national accounts customers, who partner with the Company to centralize their supply across
many 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 18%, 16% and 16% of the Company's net sales for 2024, 2023 and 2022, respectively. No other
individual customer exceeded 10% of the Company's net sales in any of the years presented.
-5-
The Company is also the primary supplier of private brand products to U.S. military commissaries, a partnership with DeCA which
began in fiscal 2017, and the current contract to provide DeCA with private branded products extends through December 2025. The
Company is among the largest distributors to the DeCA commissary system in terms of annual sales.
The Company’s ten largest Wholesale customers (excluding corporate-owned retail stores) accounted for approximately 49% of total
Wholesale net sales for 2024. Approximately 90% of Wholesale net sales to independent retailers and national accounts for 2024 are
covered under supply agreements.
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 28, 2024, the Company operated 196 corporate-owned retail stores in ten states in the Midwest, and include banners
of Family Fare, Martin’s Super Markets, and D&W Fresh Market. Retail banners and store counts are fully detailed in Item 2,
“Properties.” The Company’s corporate-operated retail stores range in size from approximately 11,000 to 90,000 square feet, or on
average, approximately 42,000 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 Family Fare Shop Online and Martin's
Groceries to GO, and third-party relationships with DoorDash, Shipt, Instacart Marketplaces, and Uber Eats, which provide online
grocery shopping and curbside pickup or delivery at 190 corporate-owned retail locations as of December 28, 2024. These channels
are highly valued by customers and continuing to enhance and grow e-commerce platforms is a key component of the Company’s
strategy. The Company continues to make 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 the Company's private branded, "OwnBrands" grocery
products, including Our Family® and Finest Reserve by Our Family™. These stores also offer perishable food including produce,
dairy, meat, delicatessen items, including store prepared “grab and go” meal options, fresh cut fruits and vegetables, bakery goods,
frozen food, and seafood, as well as floral, general merchandise, beverages, health and beauty care and fuel. Sixty-nine of the
Company’s stores contain franchised Starbucks or Caribou Coffee shops, which enhance the customer experience and help to drive
traffic. OwnBrands grocery products typically generate higher margins, while also improving customer loyalty by offering quality
products at more affordable prices.
As of December 28, 2024, the Company offered pharmacy services in 101 of its corporate-owned retail stores (90 of the pharmacies
are operated by the Company) and operated two pharmacy locations not associated with corporate-owned retail locations. The
Company believes its pharmacy service offerings are 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.
As of December 28, 2024, the Company operated 39 fuel centers and convenience stores primarily in Michigan and Indiana, many
under the banner of Family Fare Express. The Company's fuel centers offer quick and convenient options for consumers to buy fuel,
food and beverages on the go. The Company is refreshing many of these sites as part of its strategic growth plan.
The following chart details the changes in the number of corporate-owned retail stores over the last five fiscal years:
2020
2021
2022
2023
2024
Number of stores at beginning of year
156
156
145
147
144
Stores acquired or constructed during year
1
—
3
—
52
Stores closed or sold during year
1
11
1
3
—
Number of stores at end of year
156
145
147
144
196
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.
-6-
Supply Chain Network
The Company’s Wholesale segment comprises 18 distribution centers. The Company warehouses product through approximately 8.5
million square feet of distribution center space. The Company operates a diverse fleet of owned and leased transportation equipment,
which includes 652 over-the-road tractors, 320 dry vans and 1,296 refrigerated trailers. In addition, the Company also operates 9 over-
the-road tractors, 117 dry vans and 62 refrigerated trailers through short-term rental contracts. The Company carefully manages the
approximate 66 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 continued executing against its comprehensive supply chain initiatives, while evolving from a state of transformation to
one of continuous improvement. The overall initiatives are focused on executing improvements to supply chain operations across the
Company’s network, which continue to result in sustained efficiencies and cost reductions. The Company is 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 executing several initiatives
aimed at improving associate engagement, customer experience and supply chain performance.
The Company is currently optimizing its network to enable more effective and efficient operations across the supply chain. The
Company continues to enhance its inventory management and control practices, 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
In 2022, the Company launched its merchandising transformation and marketing innovation programs to better engage Retail guests
and Wholesale customers, using insights from Company-operated stores to deliver an improved grocery shopping experience. The
Company made significant progress on these transformative programs in 2024, particularly with its Customer Value Proposition
("CVP") program and in the areas of vendor and customer partnerships, OwnBrands, pricing and more.
The CVP initiative is aimed at enhancing fresh, value and convenience offerings, informed by extensive shopper data. This year, the
Company piloted a CVP program in certain of its Family Fare stores, remodeling the locations with all new fresh food offerings,
providing better value for money with its product offerings, and implementing a new décor and marketing package to begin trialing
the future expression of the Family Fare banner.
Also in 2024, the Company continued enhancing its vendor relationships and expanded upon its category planning program, which
included rich media campaigns and a re-launched, comprehensive category review process. This new approach leverages customer
loyalty analytics to help inform the best assortment and arrangement on shelf for a more personalized shopping experience.
With grocery pricing top of mind for U.S. consumers in 2024, the Company’s OwnBrands portfolio played a critical role in delivering
great value at affordable prices for shoppers. More than 400 new OwnBrands products were introduced at the 2024 Food Solutions
Expo, including the newest line of premium offerings – Finest Reserve by Our Family. The collection is a curated offering of artisan-
crafted frozen pizzas, upscale pastas, sauces, dressings and marinades, premium spices, salts and seasoning blends, chocolate and wine
– with more products to come.
Furthermore, the Company completed implementation of a next-generation strategic pricing tool that unlocks efficiency and allows for
more effective pricing strategies, which is positioning the Company to capture more sales and margin growth.
To harmonize the omnichannel brand experience, loyalty programs and digitization efforts were advanced with personalized shopper
content, digital coupon capability expansion, and the launch of new retail banner brand e-commerce sites and mobile apps. The
Company increased penetration of digitally active shoppers through improved digital promotions and pilot programs with independent
customers. New chain-wide enhanced media campaigns were also rolled out to leverage in-store and out-of-store assets, delivering a
unified message around key products and promotions.
SpartanNash remains committed to its mission of delivering the ingredients for a better life, which includes creating an outstanding
grocery shopping experience. By continuing to strengthen supplier relationships and leveraging consumer insights, SpartanNash will
enhance convenience, value and affordability for shoppers at both Company-operated stores and the stores of our Wholesale
customers.
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.
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Suppliers
The Company purchases products from a large number of national, regional and local suppliers of national 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 it is proving 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 2024, the Company focused on customer-centric innovation through automation, digitization, cybersecurity and foundational
technology efforts across all business segments.
Supply Chain. The Company completed its transformational effort to replace existing transportation systems, including standardization
of processes and rationalization of disparate systems into a single integrated platform. Additionally, the Company developed process
automation improvements including robotics, artificial intelligence ("AI") and data analytic solutions around workforce productivity,
transportation management, inventory management and demand planning.
Retail. The Company continued taking steps to modernize its retail applications footprint with a comprehensive effort to upgrade and
digitize its point-of-sale platform. SpartanNash also made significant improvements to labor forecasting and scheduling through the
successful rollout of Logile's planning and scheduling solutions. In addition, the Company continued to leverage robotics in its
inventory management processes through the additional rollout of Simbe Tally Robots at its Company-operated stores. Lastly,
SpartanNash also invested in building out a customer data platform to more meaningfully understand and engage with its customers.
Corporate Systems. During the current year, the Company initiated a key financial application modernization project, consolidating
various legacy financial platforms. In addition, the Company also enhanced its human resource and corporate communication
platforms in the current year.
Human Capital
One of the Core Capabilities in Our Winning Recipe is People, and the Company has a keen focus on its People First culture. People
First means that investing in Associates is the first investment the Company makes. As the Company cultivates an environment in
which Associates can do their best work, the Company believes it is building the foundation for a high performance and sustainable
business. The Company continued to embed its People Philosophy, a commitment to all Associates to create meaningful experiences
and growth opportunities, inspiring careers for a better life. The Company also trained, developed, and selected Associates based on
eight behavioral-based competencies which improved hiring, and retention.
As of December 28, 2024, the Company employed approximately 19,000 Associates, 11,000 on a full-time basis and 8,000 on a part-
time basis. Approximately 9% of our Associates are covered by a collective bargaining agreement representing multiple Associates
across our business.
Retention. Attracting and retaining talent is imperative to achieving Our Winning Recipe. The Company’s primary initiatives in this
area include ensuring a safe and secure work environment, maintaining a competitive and compelling total rewards offer and investing
in leadership and associate development.
The Company's retention initiatives have resulted in a 7% decrease in the rate of turnover and a 4% increase in the 90-day new hire
retention rate compared to the prior year.
Environment, Health and Safety (EHS). At SpartanNash, focusing on improving the EHS of its Associates, and the communities it
serves is an integral part of our People First culture. The Company is fully committed to conducting its operations safely and in an
environmentally friendly manner. Objectives for injury prevention, natural resource conservation, energy savings and pollution
prevention are achieved by identifying, assessing, and effectively addressing environmental concerns and workplace hazards, and
through the integration of EHS considerations, into all relevant business activities.
The Company's goal is to be a safety leader in every industry segment that it operates. Since 2020, the Company has reduced injury
rates year-over-year to reach the top quartile for OSHA safety performance as of the year ended December 28, 2024. During this same
period, lost-time incidents were reduced by 83%. In 2024, the Company achieved a 25% reduction in the severity of incidents, as
measured through the Company's lost time incident rate. Approximately 98% of Associates worked injury-free in 2024. Additionally,
workers' compensation costs have been reduced by 46% since 2021.
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Associate Engagement and Training. The Company believes that engagement and education are key to assisting the Company's
Associates in providing extraordinary performance. The Company regularly conducts associate engagement surveys to solicit
feedback on its human capital practices, the resulting survey action plans are used as the basis to further associate engagement efforts.
An associate engagement survey was conducted in early 2025 to monitor the Company's progress and current performance in this area.
The Company provides company-wide training on Our Winning Recipe when new Associates join the Company and role-specific
training to ensure operational excellence. Targeted leadership development programs are in place for high potential and high
performing individual contributors, managers, directors and vice presidents. In addition, all Associates are encouraged to participate in
self-paced training curated to develop Associates in leadership and technical skill improvement.
Compensation and Benefits. The Company’s total rewards programs are designed to provide compensation and benefits packages that
will attract, retain, incentivize, and inspire its Associates to achieve a high level of performance. Overall compensation and benefits
are regularly reviewed to ensure that they remain competitive with respect to industry benchmarks. Wage investments are made to
provide greater incentive pay and to recognize career and skill development. The Company's strategy is to ensure its compensation is
competitive in the market, equitable across levels and functions, aligned to skills and performance, and sustainable for the health of
the Company. In 2024, an additional 800 Associates across the business were included in incentive plans to further align their
performance with the success of the Company. A pay equity study was conducted in 2024 to review pay practices and evaluate equity
across business segments. In addition, benefits continue to be tailored to meet the needs of our diverse work force. A new daycare
assistance program was launched in 2024 to provide subsidies and enrollment assistance to Associates who are responsible for daycare
and elder care expenses.
The Compensation Committee of the Board of Directors has the full authority and responsibility to oversee and approve the
Company's executive compensation philosophy. The Committee reviews and approves disclosures related to human capital
management contained in the Compensation Discussion and Analysis section of the Company's proxy statement.
The Company's work in the area of Human Capital Management has garnered multiple awards and recognition during the 2024
calendar year. This includes:
•
The Theo Award recognizing SpartanNash for its excellence in safety, injury prevention solutions and workers’ comp, as
awarded by National Comp and Risk & Insurance.
•
Great Place to Work ® – Awarded based on a detailed company culture analysis and independent feedback from current
Associates. This is SpartanNash’s second consecutive year receiving this certification.
•
U.S. News & World Report® – Awarded based on publicly available data in categories including professional
development and flexibility to gain an understanding of the everyday experiences of SpartanNash Associates.
SpartanNash earned recognition as one of the:
•
Best Companies to Work For, Overall
•
Best Companies to Work For, Midwest
•
Best Companies to Work For in the Personal Care, Drug and Grocery Stores Category
•
Best & Brightest® – Awarded based on an assessment of the company in categories including communication, diversity
and retention and wellness. This is SpartanNash’s 11th consecutive year as a Best & Brightest Company to Work For in
The Nation and fifth consecutive year as one of The Nation’s Best & Brightest in Wellness.
•
Organizational Leadership Award by the Grand Rapids Chamber at the 2024 ATHENA Awards, provided for the work to
support, develop and honor women leaders through comprehensive initiatives in all areas of their career.
•
Spirit Achievement Award provided by Junior Achievement to recognize an organization that understands the importance
of preparing and inspiring local youth to be successful in a global economy.
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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 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”), the Drug Enforcement Administration ("DEA") 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 “Investors” and then “SEC Filings” on the Company’s website.
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 materially, 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. Additionally, rising headwinds,
including reduced consumer demand and further industry consolidation, have intensified the competitive environment.
Alternative store formats and nontraditional competitors 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 also 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.
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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 its customers’ ability to maintain and grow their business.
The Company depends heavily on its wholesale distribution customer base which includes certain large and growing customers, and
its success is dependent on its customers’ ability to maintain and grow their own business. During the current year, the Company has
observed sales volume declines across its wholesale distribution businesses, including to some of its major customers. 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 its distribution agreements, the
Company may be materially and adversely affected through a reduction in revenue and profitability.
Sales to the Company’s largest customer accounted for 18%, 16% and 16% of the Company’s net sales in 2024, 2023 and 2022,
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, changes to its go-to-market strategy, and other margin-enhancing innovations,
including OwnBrands execution, automation, and retail execution.
The successful implementation of these initiatives may present significant challenges, many of which are beyond the Company's
control. In addition, the initiatives may not deliver financial results 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.
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.
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 acquisitions within the Wholesale and Retail segments. 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, may be required to make acquisitions which do not achieve the desired
level of profitability or sales, or may encounter inflated valuations. 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 targets 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. Also, increased regulatory and judicial scrutiny of industry consolidation
activity could negatively impact the Company's ability to successfully achieve its strategic growth initiatives.
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Disruptions to the Company’s information technology systems, including security breaches and cyber-attacks, could negatively
affect the Company’s business.
Vulnerabilities within the security of the Company’s information technology (“IT”) applications could create risk for the Company.
The Company utilizes IT systems to conduct operations and to receive, transmit, and store 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. 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. As a result, the Company faces risks of security breaches, theft, espionage, inadvertent release of
information, ransomware, and other technology-related disruptions. Associate error, faulty password management or other problems,
including, without limitation, failure of backups or redundant systems, 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. Furthermore, if
the Company is not able to leverage the use of AI effectively it may result in a material competitive disadvantage in the Wholesale and
Retail segments.
Availability and performance of the Company’s IT systems are vital to the Company’s business. Failure to successfully execute IT
projects and have IT systems available to the business would adversely impact the Company’s operations.
The Company has a complex IT infrastructure that is vital to its business operations. The effectiveness of these applications is relevant
in supporting management’s effective financial reporting and forecasting on a regular basis. Failures in the operating effectiveness of
these applications could create risk for the Company. If the Company is unable to successfully modernize legacy systems in a
coordinated manner across internal and external stakeholders, the Company could be subject to increased costs, business interruption
or reputational risk with its customers, suppliers or Associates. The failure of these systems could adversely impact the Company’s
business plans and potentially impair the day-to-day business operations. In addition, the Company’s IT systems may be vulnerable to
damage or interruption from circumstances beyond its control, including, power outages, computer and telecommunication failures,
viruses, errors by Associates, and catastrophic events such as fires, earthquakes, tornados and hurricanes. Any debilitating failure of
the Company’s critical IT systems, data centers and backup systems would require significant investments in resources to restore IT
services and may cause serious impairment in the Company’s business operations including loss of business services, increased cost of
moving merchandise and failure to provide service to its customers. Failure to modernize legacy systems efficiently and effectively
could result in the loss of the Company’s competitive position and adversely impact its financial condition and results of operations.
Changes in relationships with the Company’s vendor base 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. Changes in relationships with suppliers could lead to decreased
product availability, changes in the Company’s assortment, and decreased promotional funding, which could negatively impact the
Company’s product offering and prices offered to customers, and lead to reduced consumer demand decreasing both revenue and
profitability.
Changes in product availability and product pricing from vendors may adversely impact the Company’s business operations and
profitability.
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, new or increased government tariffs, export demand, currency exchange rates, energy and fuel
costs, water supply, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi, viral disease
outbreaks and glass, metal and plastic prices. Further industry consolidation in the Company's vendor base may materially decrease
the Company's negotiating power or impact competitive pricing. 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 has
faced and could continue to face 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.
Additionally, the Company faces vendor supply chain disruptions from labor availability, raw material shortages, and rising costs.
These supply chain disruptions have placed and could continue to place constraints on the Company’s vendors resulting in reduced
inbound fill rates and decreased product availability, which could negatively impact sales and profitability.
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Changes in macroeconomic conditions may lead to reduced consumer demand and adversely affect the Company's performance.
Macroeconomic uncertainty, including rising inflation, potential economic recession, tariffs and increasing interest rates, among other
negative macroeconomic conditions, could lead to reduced disposable income for the Company’s consumer base, resulting in less
demand for the Company’s products and services. Reduced consumer demand could lead to lower sales and increased product shrink
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 previously 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.
The Company may not successfully retain or manage transitions with executive leaders and other key personnel.
The Company’s success depends upon the continued services of executive leaders and other key Associates, as well as its ability to
effectively transition to their successors. The loss of such personnel may be disruptive to the Company, and if the Company is unable
to execute an orderly transition and successfully integrate the new executives or personnel 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.
Changes in geopolitical conditions may adversely affect the Company's operations.
Changes in geopolitical conditions, including known and/or developing conflicts, such as those in Eastern Europe, the Middle East,
and the Asia-Pacific Region, 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 these conflicts
adversely affect 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.
Impairment charges for goodwill or other long-lived assets could adversely affect the Company’s financial condition and
profitability.
The Company performs its required annual impairment test for goodwill and other long-lived tangible and intangible assets in the
fourth quarter of each year, and 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's business and reputation may be adversely impacted by the focus on environmental, social and governance matters.
In recent years, there has been an increasing focus by various stakeholders 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.
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Customers to whom the Company extends credit or for whom the Company guarantees loans may fail to repay the Company.
From time to time, the Company may advance funds, extend credit or lend money to certain independent retailers and guarantee loan
obligations of certain customers. The Company seeks to obtain a security interest and other credit support in connection with these
arrangements, but the collateral may not always 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.
Threats due to the occurrence of severe weather conditions, natural disasters or other unforeseen events, all of which could
become more frequent and extreme due to climate change, could harm the Company’s business.
The Company’s business could be impacted by severe weather conditions, natural disasters, or other events, all of which could
become more frequent and extreme due to climate change. These events 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. Additionally, risks associated with climate change also include the increased 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. Furthermore, unseasonable weather conditions that impact growing
conditions and the availability of food could lead to increased product costs to the Company or decreased inventories, which could
result in reduced profitability and revenue.
Disease outbreaks and associated responses, may disrupt the Company's business by increasing costs, negatively impacting our
supply chain, driving change in consumer behavior, and having an adverse impact on the Company's operations.
Disease outbreaks, such as the COVID-19 and Avian flu pandemics or similar communicable diseases, and responses thereto could
affect the Company's industry and business. Risks and uncertainties related to disease outbreaks, such as duration, concerns related to
the health and safety of our Associates and related labor impacts, costs associated with changes in demand, adverse supply chain
impacts and impacts to third parties in which the Company relies, increased labor costs, and increased or accelerated competition, or
other effects, 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 any future pandemic.
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" or the "Agency"), 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.
Risks Related to the Company’s Indebtedness
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 28, 2024, the Company had outstanding indebtedness of $753.8 million (net of unamortized debt issuance costs),
primarily related to its asset-based lending facility (the "Revolving Credit Facility"). Refer to Note 7 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.
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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.
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. Before consideration of hedging instruments, a hypothetical 0.50% increase in rates applicable to
borrowings under the Revolving Credit Facility as of December 28, 2024 would increase interest expense related to such debt by
approximately $3.1 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.
Legal, Regulatory and Legislative Risks
Changes in government regulations may have a material adverse effect on financial results.
The Company operates in highly regulated environments. The products it distributes and sells through retail stores are subject to
inspection and regulatory action by the United States Food and Drug Administration and the Drug Enforcement Agency for the
Company's pharmacy business. 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. The Company is also subject to the international regulations of the European Union’s
Import Control System for export shipments that are ultimately made to non-domestic commissaries. To date, as a federal contractor,
the Company has been required to 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. The Company will continue to monitor and adhere to its obligations
pursuant to law, regulation, and/or executive orders and the impact thereof. In addition, there are various other international, U.S.
federal, state and local laws, regulations and administrative practices to which the Company is subject, which 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 many hourly Associates who are compensated at an hourly rate lower than $17.00. If minimum wage rates increase, the
Company would have to increase the wages of Associates who fall below the new minimum and may need to increase the wages of
Associates 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.
-15-
A number of consumers who shop at the Company’s owned retail stores, as well as consumers who shop at the Company’s
independent wholesale grocery customers, receive benefits from government assistance programs such as the Supplemental Nutrition
Assistance Program, the Special Supplemental Nutrition Program for Women, Infants, and Children or similar programs. A material
reduction in benefit amounts offered through these programs could negatively impact the Company’s revenue and profitability.
Products supplied by the Company’s vendors may be sourced outside the United States or may contain inputs which are sourced
outside the United States. The costs for these products could be negatively impacted by increased or new taxes or tariffs on imported
goods or new import regulations. These changes could materially impact demand for these products and correspondingly the
Company’s revenue and profitability.
A number of the Company’s Associates are covered by collective bargaining agreements, and unions may attempt to organize
additional Associates.
Approximately 9% of the Company’s Associates are covered by collective bargaining agreements (“CBAs”) which expire between
April 2025 and February 2030. 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.
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.
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, 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.
-16-
Costs related to multi-employer pension 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 could increase and adversely affect the
Company’s financial conditions and results of operation.
Refer to Note 10 in the accompanying notes to the consolidated financial statements for further information.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Management's Role
The Information Security function is led by the Company's Director of Cybersecurity & Architecture, under the direction of the Chief
Information Officer ("CIO"). The Director of Cybersecurity & Architecture, assisted by a third-party fractional Chief Information
Security Officer retained by the Company in August 2024, manages the Company's Cybersecurity program. The Company’s
cybersecurity management team includes members with relevant cybersecurity experience who hold cybersecurity certifications. Key
responsibilities of this Information Security function include developing cybersecurity strategies; managing cybersecurity governance;
performing cybersecurity risk assessments and tabletop exercises; ensuring compliance with security standards and regulatory
requirements; managing identity and access; monitoring cybersecurity threats; validating cybersecurity alerts; preparing for and
responding to cybersecurity incidents, business continuity and disaster recovery plans; and creating security awareness through
periodic trainings of both Company leadership and Associates. The Company's CIO, Director of Cybersecurity & Architecture, and
Chief Legal Officer ("CLO") have shared oversight responsibilities of the Company's Cybersecurity program.
Board Oversight
The Company’s Board of Directors ("Board") has appointed the Audit Committee to assist the Board in fulfilling its responsibilities
with respect to the oversight of cybersecurity, data security, privacy programs, and the Company’s response to security breaches. Two
Company Directors serving on the Audit Committee completed the National Association of Corporate Directors/Carnegie Mellon
CERT cyber-risk oversight program along with required examinations and earned the CERT designation. The CIO provides at least
quarterly updates to the Audit Committee on the Cybersecurity program, which include a current evaluation of the Company’s
maturity within the National Institute of Standards and Technology ("NIST") framework, including assessments against key
performance indicators, updates on internal phishing campaigns, tabletop exercises conducted at various levels of the organization
including with representation from the Audit Committee, and management training. The Audit Committee also reviews reports and
recommendations from third parties periodically engaged by the Company to assess the cybersecurity control environment. In
addition, the Company’s Internal Audit function periodically audits elements of the security program and reports its observations to
the CIO, CLO and the Audit Committee.
Risk Management and Strategy
As a component of the Company’s overall risk management process, which is aligned with a broader Enterprise Risk Management
framework, the Company has implemented a multi-layered approach to minimize cybersecurity risk and safeguard its data. The
Company conducts cybersecurity risk assessments on a regular basis and responds to identified risk exposures by employing a
combination of risk mitigation strategies, including the adoption of cybersecurity controls and maintaining a cybersecurity insurance
policy that provides coverage for security breaches. The Company engages third party consultants periodically to evaluate elements of
the cybersecurity policy, processes, procedures and controls. The CIO and other members of the Executive Leadership Team respond
to applicable recommendations arising from the third-party consultants. In addition, the Company engages a Qualified Security
Assessor as part of the compliance requirements for Payment Card Industry ("PCI"). The Company also engages with a third-party
risk management provider to ensure its vendors comply with internal security and privacy requirements and that key vendors are
continually monitored for security risks. The Company’s cybersecurity governance practices are based on the Company’s common
control framework which incorporates elements from the NIST Cybersecurity Framework, the Center for Internet Security’s
benchmark standards, and specific regulatory and industry requirements including Health Insurance Portability and Accountability Act
and PCI.
-17-
The CIO provides at least quarterly updates on the cybersecurity program, including the results of the cybersecurity risk assessments
and the related responses, to the Company’s Security Governance Council composed of members of the Executive Leadership Team.
The Company has a Cybersecurity Policy, Privacy Policy, Cybersecurity Incident Response Plan, and a materiality assessment
framework inclusive of disclosure controls and procedures to assist the Company in satisfying disclosure obligations. The Company
continually monitors cybersecurity threats and has a dedicated cybersecurity team in place to identify if any of the threats may lead to
a cybersecurity incident. In the event of such an incident, the Company will take decisive measures to thoroughly analyze, contain,
and eliminate the threat. The Company reviews cybersecurity incidents through a materiality assessment framework, which provides
quantitative and qualitative considerations for evaluating the magnitude of an individual event. Based on the preliminary evaluation of
an event, the Company’s Cybersecurity Incident Disclosure Committee will convene to assess materiality and determine corrective
actions and internal and external disclosure requirements. The Cybersecurity Incident Disclosure Committee is composed of the
following individuals: the Chief Financial Officer, Corporate Controller, CLO, and CIO.
Effect of Cybersecurity Threats
As of the effective date of this filing, the Company is currently not aware of any known or potential cybersecurity threats that are
reasonably likely to materially affect the Company’s business strategy, results of operations, or financial conditions. Although the
Company believes it has implemented sufficient security measures to protect against cyber-attacks, unknown cyber incidents could
materially disrupt the Company’s operations or compromise sensitive information.
Item 2. Properties
The following table lists the locations and approximate square footage of the distribution centers used by the Company's Wholesale
segment as of December 28, 2024. The lease expiration dates for the distribution centers primarily servicing the Wholesale segment
range from July 2025 to December 2031. The majority of these leases contain renewal options beyond these dates, if exercised.
Distribution Centers
Square Footage
Location
Leased
Owned
Total
Grand Rapids, Michigan
—
1,179,582
1,179,582
Norfolk, Virginia
188,093
545,073
733,166
Omaha, Nebraska
4,384
686,783
691,167
Bellefontaine, Ohio
—
666,045
666,045
Oklahoma City, Oklahoma
—
608,543
608,543
Lima, Ohio
—
517,552
517,552
Columbus, Georgia (a)
478,702
—
478,702
Bloomington, Indiana
—
471,277
471,277
San Antonio, Texas
—
461,544
461,544
Fargo, North Dakota
158,135
288,824
446,959
Lumberton, North Carolina
386,129
—
386,129
Severn, Maryland
363,872
—
363,872
Pensacola, Florida
—
355,900
355,900
St. Cloud, Minnesota
—
329,046
329,046
Sioux Falls, South Dakota
79,300
196,114
275,414
Menominee, Michigan
—
253,021
253,021
Bluefield, Virginia
—
187,531
187,531
Indianapolis, Indiana
—
118,497
118,497
Total Square Footage
1,658,615
6,865,332
8,523,947
(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.
-18-
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 28, 2024.
Retail Segment
Leased
Owned
Total
Number
Square
Number
Square
Number
Square
Grocery Store Retail Banner
Location
of Stores
Feet
of Stores
Feet
of Stores
Feet
Family Fare
Iowa, Michigan,
Minnesota, Nebraska,
North Dakota, South
Dakota, Wisconsin
82
3,548,492
13
512,961
95
4,061,453
Martin's Super Markets
Indiana, Michigan
11
660,228
9
461,727
20
1,121,955
Community Markets
Indiana, Ohio
15
311,211
—
—
15
311,211
Needler's Fresh Market
Indiana, Ohio
12
411,704
—
—
12
411,704
Chief Markets
Ohio
11
410,370
—
—
11
410,370
D&W Fresh Market
Michigan
8
393,586
2
84,458
10
478,044
VG’s Grocery
Michigan
8
363,117
1
38,012
9
401,129
Remke Markets
Kentucky, Ohio
5
262,175
—
—
5
262,175
Metcalfe's Market
Wisconsin
3
175,328
—
—
3
175,328
Family Fresh Market
Minnesota, Nebraska,
Wisconsin
—
—
3
173,740
3
173,740
Supermercado Nuestra Familia
Nebraska
1
22,540
2
83,279
3
105,819
Great Scot Community Market
Ohio
3
75,425
—
—
3
75,425
Forest Hills Foods
Michigan
2
65,209
—
—
2
65,209
Germantown Fresh Market
Ohio
1
31,364
—
—
1
31,364
Dillonvale IGA
Ohio
1
25,627
—
—
1
25,627
King Saver
Ohio
1
22,085
—
—
1
22,085
Fresh City Market
Wisconsin
1
21,470
—
—
1
21,470
Sack 'N Save Supermarket
Ohio
1
17,500
—
—
1
17,500
Total
166
6,817,431
30
1,354,177
196
8,171,608
The Company also owns four fuel centers in Michigan that are not reflected in the retail square footage above as they are not associated
with a corporate owned retail store. Also not reflected in the retail square footage above are two pharmacies not associated with
corporate-owned retail locations, located in 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 224,000 square feet in Company-owned buildings and 93,000 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 67,000 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 10, in the notes to consolidated financial
statements, which is herein incorporated by reference.
Item 4. Mine Safety Disclosures
Not Applicable.
-19-
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 24, 2025, there were approximately 1,100 shareholders of record of SpartanNash common stock.
On February 24, 2022, the Board of Directors authorized the repurchase of common shares in connection with a $50 million program,
which expires on February 22, 2027. As of December 28, 2024, $10.3 million remains available for share repurchases under the
program. The Company plans to return value to shareholders through share repurchases under this program.
In 2024, 2023, and 2022 the Company repurchased 760,740; 765,194; and 1,046,538 shares of common stock for approximately $15.0
million, $18.6 million and $32.5 million, respectively.
Repurchases of common stock includes 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 28, 2024.
Fiscal Period
Total Number of
Shares Purchased
Average Price Paid
per Share
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)
October 6 - November 2, 2024
Employee Transactions
—
$
—
N/A
N/A
Repurchase Program
—
$
—
—
$
10,350
November 3 - November 30, 2024
Employee Transactions
118
$
18.07
N/A
N/A
Repurchase Program
—
$
—
—
$
10,350
December 1 - December 28, 2024
Employee Transactions
—
$
—
N/A
N/A
Repurchase Program
—
$
—
—
$
10,350
Total for quarter ended December 28, 2024
Employee Transactions
118
$
18.07
N/A
N/A
Repurchase Program
—
$
—
—
$
10,350
-20-
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 28, 2019 and ending on
December 28, 2024.
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.
The dollar values for total shareholder return plotted above are shown in the table below:
December 28,
January 2,
January 1,
December 31,
December 30,
December 28,
2019
2021
2022
2022
2023
2024
SpartanNash
$
100.00
$
129.46
$
198.78
$
239.76
$
188.95
$
156.67
S&P SmallCap 600
100.00
111.61
141.54
118.76
137.82
150.59
S&P SmallCap 600 Food Distributors
100.00
111.49
215.52
198.10
164.17
187.14
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
-21-
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 retailers, e-commerce retailers, U.S. military commissaries and exchanges, and its corporate-owned
retail stores, pharmacies and fuel centers. SpartanNash distributes grocery and household goods, including fresh produce and its Our
Family private label brand, to locations in all 50 states. The Company's two reportable segments, Wholesale and Retail, are two
distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and
compensation.
Overview of 2024
The Company has continued to execute on Our Winning Recipe, which continued to support strong financial results in fiscal 2024.
The plan continues to generate sustainable improvements in profitability as the Company further optimizes its supply chain network,
improves value for its customers through stronger vendor relationships, and captures additional benefits, while providing exceptional
customer service and additional offerings. The Company’s 2024 highlights include:
Wholesale
•
Wholesale segment net sales decreased $209.9 million compared to the prior year due primarily to lower case volumes in both
the national accounts and independent retailers customer channels, partially offset by growth in the military customer channel.
•
Wholesale segment operating earnings of $97.4 million increased $9.7 million compared to $87.7 million in the prior year.
Adjusted EBITDA of $187.2 million increased $9.3 million compared to $177.9 million in the prior year.
Retail
•
Retail segment net sales increased $30.0 million compared to the prior year due primarily to incremental sales from stores
acquired in fiscal 2024. Retail comparable store sales decreased 1.7% compared to the prior year due primarily to lower
consumer demand trends, partially offset by increases in pharmacy sales.
•
Retail segment operating loss of $43.5 million decreased $62.5 million compared to operating earnings of $19.0 million in the
prior year. Adjusted EBITDA of $71.3 million decreased $8.2 million compared to $79.5 million in the prior year.
Other Highlights
•
The supply chain transformation, merchandising transformation, marketing innovation, and go-to-market plan drove
approximately $50 million in incremental benefits in 2024. Since launching the transformation work and beginning to realize
benefits in 2022, the Company has improved its throughput(1) rate, passed along significant benefits to its customers through the
Enhanced Category Planning program, and captured almost $130 million in total gross benefits. These benefits helped to offset
broader industry headwinds which impacted volume and profitability throughout the year.
•
During 2024, the Company returned $45.0 million to shareholders through $29.9 million in cash dividends, or $0.87 per
common share, and $15.1 million in share repurchases. In addition, the Company generated net cash from operating activities
of $205.9 million in 2024.
•
The Company reported earnings from continuing operations for the fiscal year of $0.3 million, compared to $52.2 million in the
prior year. The Company reported adjusted EBITDA for the fiscal year of $258.5 million, compared to $257.4 million in the
prior year.
(1)
As a means of evaluating warehouse efficiency, the Company calculates the throughput rate as cases shipped divided by warehouse labor hours worked, excluding salaried hours
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 2023 operations in comparison to fiscal 2022, 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 growth and cost-saving initiatives may favorably impact future results. The Company anticipates that additional
operating and capital investments will be necessary to support these and other programs. Offsetting the Company’s expectations of
favorable future results are macroeconomic headwinds including changes in consumer demand and input costs such as utilities,
insurance and occupancy costs.
-22-
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:
Percentage of Net Sales
Percentage
Change
2024
2023
2022
2024 vs 2023
Net sales
100.0
100.0
100.0
(1.8) %
Gross profit
15.8
15.3
15.5
1.8
Selling, general and administrative
14.5
14.0
14.8
1.1
Acquisition and integration, net
0.0
0.0
0.0
(8.9)
Goodwill impairment
0.5
—
—
**
Restructuring and asset impairment, net
0.3
0.1
0.0
208.9
Operating earnings
0.6
1.1
0.7
(49.4)
Other expenses, net
0.4
0.4
0.2
17.4
Earnings before income taxes
0.1
0.7
0.5
(84.3)
Income tax expense
0.1
0.2
0.1
(40.0)
Net earnings
0.0
0.5
0.4
(99.4) %
Note: Certain totals do not sum due to rounding.
** Not meaningful
Net Sales – The following table presents net sales by segment and variances in net sales between fiscal 2024 and fiscal 2023:
Percentage of
Percentage of
Total
Total
Percentage
(In thousands)
2024
Net Sales
2023
Net Sales
Variance
Change
Wholesale
$
6,709,305
70.3 %
$
6,919,217
71.1 %
$
(209,912)
(3.0) %
Retail
2,840,019
29.7
2,810,002
28.9
30,017
1.1
Net sales
$
9,549,324
100.0 %
$
9,729,219
100.0 %
$
(179,895)
(1.8) %
Net sales decreased $179.9 million, or 1.8%, to $9.55 billion in 2024 compared to $9.73 billion in 2023. The decrease was attributable
to decreased volume in the Wholesale segment, partially offset by higher sales volume in the Retail segment.
Wholesale net sales decreased $209.9 million, or 3.0%, to $6.71 billion in 2024 compared to $6.92 billion in the prior year. The
decrease in net sales was due primarily to lower case volumes in both the national accounts and independent retailers customer
channels, partially offset by higher sales in the military customer channel. Overall case volumes for the segment were down by 5.0%
in the current year.
Retail net sales increased $30.0 million, or 1.1% to $2.84 billion in 2024 compared to $2.81 billion in the prior year, while comparable
store sales decreased 1.7% in the current year. The comparable store sales decline was due primarily to lower consumer demand
trends, which resulted in a 4.5% decline in unit volume. The decrease in comparable store sales in the current year included offsetting
increases in pharmacy sales. Retail's comparable store sales decrease was more than offset by incremental sales from newly acquired
stores in the current year.
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. 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.
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 $26.9 million, or 1.8%, to $1.51 billion in the current year compared to $1.49
billion in the prior year. As a percent of net sales, gross profit increased from 15.3% to 15.8%. The gross profit rate increase in the
current year was driven by favorable segment sales mix, lower last-in-first-out ("LIFO") expense of $10.9 million, or 11 basis points,
and benefits realized from the merchandising transformation initiative. These increases were partially offset by unfavorable changes in
customer mix 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 $15.1 million, or 1.1%, to $1.38 billion in the current year from $1.37 billion in the prior year. As a percent of net sales,
SG&A expenses increased from 14.0% to 14.5% primarily due to increased Retail store labor and depreciation and amortization
expense, partially offset by benefits realized from both the merchandising transformation and go-to-market strategy changes and lower
incentive compensation.
-23-
Acquisition and Integration, net – Acquisition and integration, net was $3.1 million in the current year compared to $3.4 million in
the prior year. Current year activity includes fees associated with due diligence activities, purchase agreement negotiations and
strategic advice within both segments, as well as costs of integration activities related to three acquired businesses in the Retail
segment. Costs in the current year were partially offset by a gain associated with a reduction in the expected contingent consideration
payment. Prior year activity includes fees associated with due diligence activities, purchase agreement negotiation and strategic advice
within the Retail segment, as well as costs of integration related to an acquired business in the Wholesale segment.
Goodwill Impairment – In the current year, $45.7 million of goodwill impairment charges were incurred within the Retail segment.
The impairment was driven by an increasingly competitive grocery retail environment that steadily and negatively impacted cash flow
trends within the Retail reporting unit. These competitive factors led to increased pressure on pricing and promotions that have had an
adverse impact, and are anticipated to continue to have an adverse impact, on volume, gross profit rates and other costs within the
Retail reporting unit.
Restructuring and Asset Impairment, net – In the current year, $28.4 million of net restructuring and asset impairment charges were
incurred. The charges in the current year include $20.9 million of asset impairment charges related to impairments of indefinite-lived
trade names and long-lived assets within both the Wholesale and Retail segments as a result of changes in the competitive
environment. Restructuring charges include $5.4 million of provisions for closing charges associated with lease ancillary costs and
$2.5 million of other costs associated with site closures, primarily related to the closure of a distribution center within the Wholesale
segment, and $1.6 million of losses on sales of real and personal property of previously closed locations within both the Wholesale
and Retail segments. These charges in the current year were partially offset by $2.2 million of gains within the Retail segment
recognized from the early termination of lease agreements for previously closed locations. Prior year results included $9.2 million of
net restructuring and asset impairment charges, which were largely composed of $8.0 million of asset impairment charges in the
Wholesale segment related to initiatives associated with continued supply chain network optimization in response to customer demand
changes. Additional asset impairment charges of $3.7 million in the prior year were related to two store closures in the Retail segment
and impairment losses related to a distribution location that sustained storm damage in the Wholesale segment. These charges were
partially offset by $2.6 million of gains on sales of assets in the prior year primarily related to the sale of a store within the Retail
segment.
Operating Earnings (Loss) – The following table presents operating earnings (loss) by segment and variances in operating earnings
(loss):
Change in
Percentage of
Percentage of
Percentage of
(In thousands)
2024
Net Sales
2023
Net Sales
Variance
Net Sales
Wholesale
$
97,423
1.5 %
$
87,701
1.3 %
$
9,722
0.2 %
Retail
(43,462)
(1.5)
19,011
0.7
(62,473)
(2.2)
Operating earnings
$
53,961
0.6 %
$
106,712
1.1 %
$
(52,751)
(0.5) %
The Company reported operating earnings of $54.0 million in the current year compared to $106.7 million in the prior year. The
decrease of $52.8 million, or 49.4%, was attributable to changes in net sales, gross profit and operating expenses discussed above.
Wholesale operating earnings increased $9.7 million, or 11.1%, to $97.4 million in the current year from $87.7 million in the prior
year. The increase was due to an improvement in the gross profit rate and benefits realized from the merchandising transformation
initiative, partially offset by lower unit volumes and higher restructuring charges.
Retail operating earnings decreased $62.5 million, or 328.6%, to an operating loss of $43.5 million in the current year compared to
earnings of $19.0 million in the prior year. The decrease in operating earnings was due to goodwill impairment charges, higher
restructuring and asset impairment charges, and increased store labor as a percent of net sales, partially offset by an improvement in
the gross profit rate and lower incentive compensation.
Interest Expense – Interest expense increased $4.9 million, or 12.4%, to $44.8 million in the current year from $39.9 million in the
prior year, driven by a higher average debt balance on the Company's credit facility. The weighted average interest rate for all
borrowings, including loan fee amortization was 7.03% in both 2024 and 2023. During 2024, the total debt balance increased $156.3
million to $753.8 million, compared to $597.5 million at the end of 2023. The increase in the debt balance was due to incremental
investments in business combinations and capital expenditures.
Income Taxes – The Company’s effective income tax rates were 97.3% and 25.5% for 2024 and 2023, respectively. The differences
from the federal statutory rate in the current year were primarily due to non-deductible goodwill impairment, state taxes and non-
deductible expenses, partially offset by benefits associated with federal tax credits and contingent consideration. In the prior year, the
differences from the federal statutory rate were primarily due to state taxes and non-deductible expenses, partially offset by benefits
associated with federal tax credits, discrete benefits due to changes in tax contingencies, and discrete benefits related to stock
compensation.
-24-
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 to total capital, 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.
Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other
items, LIFO expense, organizational realignment, severance associated with cost reduction initiatives, a non-routine settlement gain
with an insurance company related to a legal matter from a previously closed operation, operating and non-operating costs associated
with the postretirement plan amendment and settlement and a non-operating benefit associated with a pension refund from an annuity
provider. Current year organizational realignment includes consulting and severance costs associated with the Company's change in its
go-to-market strategy as part of its long-term plan, which relates to the reorganization of certain functions. Costs related to the
postretirement plan amendment and settlement include operating and 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. Each of the adjusted items are
considered “non-operational” or “non-core” in nature. The pension refund from an annuity provider is related to a terminated pension
plan and is a non-operating benefit which is adjusted out of adjusted earnings from continuing operations. Each of the adjusted items
are considered “non-operational” or “non-core” in nature.
Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, among other
items, LIFO expense, organizational realignment, severance associated with cost reduction initiatives, a non-routine settlement related
to a legal matter resulting from a previously closed operation and operating and non-operating costs associated with the postretirement
plan amendment and settlement.
In 2022, adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA also exclude costs related
to shareholder activism, and non-operating costs associated with the write off of certain unamortized deferred financing costs related
to the debt modification. Costs related to shareholder activism include consulting, legal and other expenses incurred in relation to
shareholder activism activities. Organizational realignment in 2022 includes benefits for associates terminated as part of leadership
transition plans, which do not meet the definition of a reduction-in-force. Each of the adjusted items are considered “non-operational”
or “non-core” in nature.
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.
-25-
Following is a reconciliation of operating earnings (loss) to adjusted operating earnings for 2024, 2023 and 2022.
(In thousands)
2024
2023
2022
Operating earnings
$
53,961
$
106,712
$
68,544
Adjustments:
LIFO expense
5,167
16,104
56,823
Acquisition and integration, net
3,113
3,416
343
Restructuring and goodwill / asset impairment, net
74,107
9,190
805
Organizational realignment, net
2,757
5,239
1,859
Severance associated with cost reduction initiatives
537
318
831
Legal settlement
(900)
900
—
Postretirement plan amendment and settlement
99
94
133
Costs related to shareholder activism
—
—
7,335
Adjusted operating earnings
$
138,841
$
141,973
$
136,673
Wholesale:
Operating earnings
$
97,423
$
87,701
$
55,137
Adjustments:
LIFO expense
4,378
12,388
48,282
Acquisition and integration, net
2,048
216
239
Restructuring and asset impairment, net
15,914
8,548
(2,363)
Organizational realignment, net
1,720
3,269
1,160
Severance associated with cost reduction initiatives
321
303
689
Legal settlement
(900)
900
—
Postretirement plan amendment and settlement
62
59
83
Costs related to shareholder activism
—
—
4,577
Adjusted operating earnings
$
120,966
$
113,384
$
107,804
Retail:
Operating (loss) earnings
$
(43,462)
$
19,011
$
13,407
Adjustments:
LIFO expense
789
3,716
8,541
Acquisition and integration, net
1,065
3,200
104
Restructuring and goodwill / asset impairment, net
58,193
642
3,168
Organizational realignment, net
1,037
1,970
699
Severance associated with cost reduction initiatives
216
15
142
Postretirement plan amendment and settlement
37
35
50
Costs related to shareholder activism
—
—
2,758
Adjusted operating earnings
$
17,875
$
28,589
$
28,869
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.
-26-
Following is a reconciliation of net earnings to adjusted earnings from continuing operations for 2024, 2023 and 2022.
2024
2023
2022
per diluted
per diluted
per diluted
(In thousands, except per share data)
Earnings
share
Earnings
share
Earnings
share
Net earnings
$
299
$
0.01 $
52,237
$
1.50 $
34,518
$
0.95
Adjustments:
LIFO expense
5,167
16,104
56,823
Acquisition and integration, net
3,113
3,416
343
Restructuring and goodwill / asset impairment, net
74,230
9,190
805
Organizational realignment, net
2,757
5,239
1,859
Severance associated with cost reduction
initiatives
537
318
831
Pension refund from annuity provider
(239)
—
(200)
Legal settlement
(900)
900
—
Postretirement plan amendment and settlement
(1,458)
(3,174)
(776)
Costs related to shareholder activism
—
—
7,335
Write off of deferred financing costs
—
—
236
Total adjustments
83,207
31,993
67,256
Income tax effect on adjustments (a)
(14,220)
(8,218)
(17,083)
Total adjustments, net of taxes
68,987
2.02
23,775
0.68
50,173
1.38
Adjusted earnings from continuing operations
$
69,286
$
2.03 $
76,012
$
2.18 $
84,691
$
2.33
(a)
The income tax effect on adjustments is computed by applying the applicable tax rate to the adjustments.
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.
-27-
Following is a reconciliation of net earnings to adjusted EBITDA for 2024, 2023 and 2022.
(In thousands)
2024
2023
2022
Net earnings
$
299
$
52,237
$
34,518
Income tax expense
10,726
17,888
12,397
Other expenses, net
42,936
36,587
21,629
Operating earnings
53,961
106,712
68,544
Adjustments:
LIFO expense
5,167
16,104
56,823
Depreciation and amortization
103,412
98,639
94,180
Acquisition and integration, net
3,113
3,416
343
Restructuring and goodwill / asset impairment, net
74,107
9,190
805
Cloud computing amortization
7,585
5,034
3,650
Organizational realignment, net
2,757
5,239
1,859
Severance associated with cost reduction initiatives
537
318
831
Stock-based compensation
10,743
12,536
8,589
Stock warrant
868
1,559
2,158
Non-cash rent
(2,679)
(2,599)
(3,444)
(Gain) loss on disposal of assets
(284)
259
1,073
Legal settlement
(900)
900
—
Postretirement plan amendment and settlement
99
94
133
Costs related to shareholder activism
—
—
7,335
Adjusted EBITDA
$
258,486
$
257,401
$
242,879
Wholesale:
Operating earnings
$
97,423
$
87,701
$
55,137
Adjustments:
LIFO expense
4,378
12,388
48,282
Depreciation and amortization
54,291
51,535
47,601
Acquisition and integration, net
2,048
216
239
Restructuring and asset impairment, net
15,914
8,548
(2,363)
Cloud computing amortization
4,861
3,414
2,537
Organizational realignment, net
1,720
3,269
1,160
Severance associated with cost reduction initiatives
321
303
689
Stock-based compensation
7,403
8,216
5,646
Stock warrant
868
1,559
2,158
Non-cash rent
(803)
(134)
(382)
(Gain) loss on disposal of assets
(380)
(83)
512
Legal settlement
(900)
900
—
Postretirement plan amendment and settlement
62
59
83
Costs related to shareholder activism
—
—
4,577
Adjusted EBITDA
$
187,206
$
177,891
$
165,876
Retail:
Operating (loss) earnings
$
(43,462)
$
19,011
$
13,407
Adjustments:
LIFO expense
789
3,716
8,541
Depreciation and amortization
49,121
47,104
46,579
Acquisition and integration, net
1,065
3,200
104
Restructuring and goodwill / asset impairment, net
58,193
642
3,168
Cloud computing amortization
2,724
1,620
1,113
Organizational realignment, net
1,037
1,970
699
Severance associated with cost reduction initiatives
216
15
142
Stock-based compensation
3,340
4,320
2,943
Non-cash rent
(1,876)
(2,465)
(3,062)
Loss on disposal of assets
96
342
561
Postretirement plan amendment and settlement
37
35
50
Costs related to shareholder activism
—
—
2,758
Adjusted EBITDA
$
71,280
$
79,510
$
77,003
-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 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, 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 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.
Business Combinations
The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and
liabilities assumed be recorded at their estimated fair values as of the acquisition date, with any excess purchase price over the
estimated fair values of the net assets acquired being recorded as goodwill.
-29-
Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair
value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by the
Company but are inherently uncertain. Also, determining the estimated useful life of an intangible asset requires judgment based on
the Company’s expected use of the asset, as different types of intangible assets will have different useful lives and certain assets may
be considered to have indefinite useful lives. The Company primarily utilizes an income approach method to estimate the fair value of
intangible assets, which discounts the projected future cash flows attributable to the respective assets. Significant estimates and
assumptions inherent in the valuation reflect a consideration of other marketplace competition and include the amount and timing of
future cash flows, including expected growth rates and profitability, and the discount rate applied to the cash flows. Unanticipated
market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and
assumptions.
Goodwill and Other Indefinite-Lived Intangible Assets
Goodwill and other indefinite-lived intangible assets are tested for impairment on an annual basis, as of the first day of the fourth
quarter of each year, and more frequently if circumstances indicate impairment is more likely than not to have occurred. 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 reportable 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.
In 2024, the Company recorded non-cash goodwill impairment charges of $45.7 million related to the Retail reporting unit. Refer to
Note 5, Goodwill and Other Intangible Assets, in the notes to the consolidated financial statements for additional information related
to the full impairment of Retail goodwill. As of the date of the most recent goodwill impairment test, which utilized data and
assumptions as of October 6, 2024, the Wholesale reporting unit had a fair value that was substantially in excess of its carrying value.
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 reporting unit 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 $12.7 million for 2024. There were no impairments of these assets in 2023 or 2022.
-30-
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 $8.2 million, $11.7 million and $5.1 million for 2024, 2023 and 2022,
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 reportable
segment in which the asset resides, consistent with the discussion above.
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 2024, 2023 and 2022:
(In thousands)
2024
2023
2022
Cash flow activities
Net cash provided by operating activities
$
205,877
$
89,327
$
110,350
Net cash used in investing activities
(247,025)
(116,517)
(100,948)
Net cash provided by financing activities
44,754
16,068
9,018
Net increase (decrease) in cash and cash equivalents
3,606
(11,122)
18,420
Cash and cash equivalents at beginning of year
17,964
29,086
10,666
Cash and cash equivalents at end of year
$
21,570
$
17,964
$
29,086
-31-
Net cash provided by operating activities. Net cash provided by operating activities in the current year increased compared to the prior
year by $116.6 million, due primarily to changes in working capital, including the Company's efforts to streamline inventory balances.
Net cash used in investing activities. Net cash used in investing activities increased $130.5 million in 2024 compared to 2023
primarily due to acquisitions in the Retail segment and an increase in capital expenditures in the current year in line with the
Company's long-term plan.
The Wholesale and Retail segments utilized 50.0% and 50.0% of capital expenditures, respectively, for the current year. Capital
expenditures for 2024 primarily related to investments in supply chain infrastructure, store remodels, information technology upgrades
and implementations, and equipment upgrades. Capital expenditures were $132.4 million in the current year and cloud computing
application development spend, which is included in operating activities, was $12.0 million, compared to capital expenditures of
$120.3 million and cloud computing application development spend of $7.0 million in the prior year.
Net cash provided by financing activities. Net cash provided by financing activities increased $28.7 million in 2024 compared to 2023
primarily due to increased borrowings in the current year on the Company's senior credit facility.
Debt Management
Long-term debt and finance lease liabilities, including the current portion, increased $156.3 million to $753.8 million as of December
28, 2024 from $597.5 million at December 30, 2023. The increase in total debt was driven by additional borrowings on the senior
credit facility to fund three acquisitions within the Retail segment and capital expenditures in both segments. The Company's
Amended and Restated Loan and Security Agreement (the "Credit Agreement") matures on November 17, 2027. In 2023, the
Company entered into amendments (the "Amendments") to the Company's Amended and Restated Loan and Security Agreement (the
"Credit Agreement"). The principal terms of the Amendments included increasing the size of the Tranche A portion of the Company's
revolving credit facility by $130 million in 2023. The Credit Agreement provides for a Tranche A revolving loan of up to $1.17 billion
and a Tranche A-1 revolving loan with $40 million of capacity. The Company has the ability to increase the amount borrowed under
the Credit Agreement by an additional $195 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 28, 2024, the senior secured credit facility had outstanding borrowings of $627.2 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 $339.3 million at December 28, 2024. 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 $17.9 million were outstanding as of December 28, 2024. The
Company anticipates that additional borrowings may be required to fund increased investments in expenditures related to both organic
and inorganic initiatives included in the long-term strategic plan. 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 1.57:1 at December 28, 2024 compared to 1.63:1 at December
30, 2023, and its investment in working capital was $396.6 million at December 28, 2024 compared to $417.6 million at December
30, 2023. The net long-term debt to total capital ratio was 0.50:1 at December 28, 2024, compared to 0.43:1 at December 30, 2023.
Total net long-term 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 long-term debt is not a substitute for GAAP financial measures and may differ from similarly
titled measures of other companies.
Following is a reconciliation of “Long-term debt and finance lease liabilities” to net long-term debt, a non-GAAP measure, as of
December 28, 2024 and December 30, 2023.
December 28,
December 30,
(In thousands)
2024
2023
Current portion of long-term debt and finance lease liabilities
$
12,838
$
8,813
Long-term debt and finance lease liabilities
740,969
588,667
Total debt
753,807
597,480
Cash and cash equivalents
(21,570)
(17,964)
Net long-term debt
$
732,237
$
579,516
-32-
The Company’s material cash requirements as of December 28, 2024 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 7 and 11, 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 $0.2175, $0.215 and $0.21 per common share in each quarter of 2024, 2023, and
2022, 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 $627.2 million of variable rate debt as of December 28, 2024. 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 28, 2024 would increase interest expense related to such debt by approximately $3.1 million per year.
The weighted average interest rate on debt outstanding during the year ended December 28, 2024 was 7.03%.
As of December 28, 2024, the Company maintained an interest rate swap agreement with a maturity date of November 17, 2027 and
an aggregate notional amount totaling $150 million. The Company utilizes the interest rate swap to mitigate its exposure to changes in
variable interest rates on a portion of the Company's outstanding Revolving Credit Facility. Per the terms of the swap, the Company
receives one-month term Secured Overnight Financing Rate (SOFR) and pays a fixed interest rate of 3.646%. The Company's interest
rate swap is designated as a cash flow hedge as defined by GAAP. Accordingly, the change in the fair value of the interest rate swap is
initially reported in "Other comprehensive income" in the consolidated statements of comprehensive income and subsequently
reclassified to earnings in "Interest expense, net" in the consolidated statements of earnings when the hedged transactions affect
earnings. As of December 28, 2024, the fair value of the interest rate swap was recorded in "Prepaid expenses and other current assets"
and "Other assets, net" for $0.8 million and $1.1 million, respectively, and "Accumulated other comprehensive income" for $1.3
million, net of tax.
At December 28, 2024 the estimated fair value of the Company’s fixed rate long-term debt was less than book value by approximately
$2.1 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 28, 2024:
December 28, 2024
Aggregate Payments by Year
(In thousands, except rates)
Fair Value
Total
2025
2026
2027
2028
2029
Thereafter
Fixed rate debt
Principal payable
$
127,815 $
129,897 $
12,838
$
14,730
$
12,203
$
12,273
$
12,142
$
65,711
Average interest rate
6.41%
6.45%
6.48%
6.47%
6.44%
6.29%
Variable rate debt
Principal payable
$
627,248 $
627,248 $
—
$
—
$ 627,248
$
—
$
—
$
—
Average interest rate
6.24%
6.24%
6.24%
N/A
N/A
N/A
-33-
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of SpartanNash Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SpartanNash Company and subsidiaries (the "Company") as of
December 28, 2024 and December 30, 2023, the related consolidated statements of earnings, comprehensive income, shareholders'
equity, and cash flows, for the three years in the periods ended December 28, 2024, December 30, 2023, and December 31, 2022, 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 28, 2024 and December 30, 2023, and the results of its
operations and its cash flows for the three years in the periods ended December 28, 2024, December 30, 2023, and December 31,
2022, 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 28, 2024, 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 February 26, 2025, 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 a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
Goodwill Impairment Assessments — Wholesale and Retail Reporting Units — Refer to Notes 1 and 5 to the financial
statements
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying
value. The Company evaluates goodwill for impairment annually during the fourth quarter, and more frequently if circumstances
indicate impairment is more likely than not to have occurred. The goodwill balance was $181.0 million as of December 28, 2024, all
of which was allocated to the Wholesale reporting unit. The Company concluded that the fair value of the Wholesale reporting unit
was substantially in excess of its carrying value and, therefore, no impairment was recognized. The fair value of the Retail reporting
unit was less than its carrying value as of the measurement dates and therefore $45.7 million of goodwill impairment was recognized.
The estimate of the fair value of the reporting units 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 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’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.
-34-
Given the significant judgments made by management to estimate the fair value of the reporting units, performing audit procedures to
evaluate the reasonableness of management’s judgments and assumptions utilized in the impairment evaluations, 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 the reporting units included the following, among others:
•
We tested the effectiveness of controls over management’s goodwill impairment evaluations, including those over the
determination of the fair value of the reporting units, 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 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 the reporting units, 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 reporting units, which included
evaluating the reasonableness of the selected guideline public companies and the resulting market multiples calculations,
as well as benchmarking the selected multiples against these guideline public companies.
/s/ DELOITTE & TOUCHE LLP
Grand Rapids, Michigan
February 26, 2025
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
December 28,
December 30,
(In thousands)
2024
2023
Assets
Current assets
Cash and cash equivalents
$
21,570
$
17,964
Accounts and notes receivable, net
448,887
421,859
Inventories, net
546,312
575,226
Prepaid expenses and other current assets
75,042
62,440
Total current assets
1,091,811
1,077,489
Property and equipment, net
779,984
649,071
Goodwill
181,035
182,160
Intangible assets, net
117,821
101,535
Operating lease assets
327,211
242,146
Other assets, net
104,434
103,174
Total assets
$
2,602,296
$
2,355,575
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable
$
485,017
$
473,419
Accrued payroll and benefits
85,829
78,076
Other accrued expenses
61,993
57,609
Current portion of operating lease liabilities
49,562
41,979
Current portion of long-term debt and finance lease liabilities
12,838
8,813
Total current liabilities
695,239
659,896
Long-term liabilities
Deferred income taxes
91,010
73,904
Operating lease liabilities
305,051
226,118
Other long-term liabilities
26,537
28,808
Long-term debt and finance lease liabilities
740,969
588,667
Total long-term liabilities
1,163,567
917,497
Commitments and contingencies (Note 10)
Shareholders’ equity
Common stock, voting, no par value; 100,000 shares
authorized; 33,752 and 34,610 shares outstanding
454,751
460,299
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding
—
—
Accumulated other comprehensive income
1,337
796
Retained earnings
287,402
317,087
Total shareholders’ equity
743,490
778,182
Total liabilities and shareholders’ equity
$
2,602,296
$
2,355,575
See notes to consolidated financial statements.
-36-
CONSOLIDATED STATEMENTS OF EARNINGS
SpartanNash Company and Subsidiaries
(In thousands, except per share amounts)
2024
2023
2022
Net sales
$
9,549,324
$
9,729,219
$
9,643,100
Cost of sales
8,036,826
8,243,663
8,145,625
Gross profit
1,512,498
1,485,556
1,497,475
Operating expenses
Selling, general and administrative
1,381,317
1,366,238
1,427,783
Acquisition and integration, net
3,113
3,416
343
Goodwill impairment
45,716
—
—
Restructuring and asset impairment, net
28,391
9,190
805
Total operating expenses
1,458,537
1,378,844
1,428,931
Operating earnings
53,961
106,712
68,544
Other expenses and (income)
Interest expense, net
44,827
39,887
22,791
Other, net
(1,891)
(3,300)
(1,162)
Total other expenses, net
42,936
36,587
21,629
Earnings before income taxes
11,025
70,125
46,915
Income tax expense
10,726
17,888
12,397
Net earnings
$
299
$
52,237
$
34,518
Net earnings per basic common share
$
0.01
$
1.53
$
0.98
Net earnings per diluted common share
$
0.01
$
1.50
$
0.95
Weighted average shares outstanding:
Basic
33,793
34,211
35,279
Diluted
34,205
34,901
36,313
See notes to consolidated financial statements.
-37-
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SpartanNash Company and Subsidiaries
(In thousands)
2024
2023
2022
Net earnings
$
299
$
52,237
$
34,518
Other comprehensive income (loss), before tax
Change in interest rate swap
2,160
(412)
—
Postretirement liability adjustment
(1,462)
(2,475)
5,875
Total other comprehensive income (loss), before tax
698
(2,887)
5,875
Income tax (expense) benefit related to items of other comprehensive income
(loss)
(157)
704
(1,441)
Total other comprehensive income (loss), after tax
541
(2,183)
4,434
Comprehensive income
$
840
$
50,054
$
38,952
See notes to consolidated financial statements.
-38-
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
SpartanNash Company and Subsidiaries
Accumulated
Other
Shares
Common
Comprehensive
Retained
(In thousands)
Outstanding
Stock
(Loss) Income
Earnings
Total
Balance at January 1, 2022
35,948
$
493,783
$
(1,455)
$
290,541
$
782,869
Net earnings
—
—
—
34,518
34,518
Other comprehensive income
—
—
4,434
—
4,434
Dividends - $0.84 per share
—
—
—
(30,031)
(30,031)
Share repurchases
(1,047)
(32,494)
—
—
(32,494)
Stock-based compensation
—
8,353
—
—
8,353
Stock warrant
—
2,158
—
—
2,158
Issuance of common stock for associate stock
purchase plan
21
587
—
—
587
Issuance of restricted stock
391
—
—
—
—
Cancellations of stock-based awards
(234)
(4,326)
—
—
(4,326)
Balance at December 31, 2022
35,079
$
468,061
$
2,979
$
295,028
$
766,068
Net earnings
—
—
—
52,237
52,237
Other comprehensive loss
—
—
(2,183)
—
(2,183)
Dividends - $0.86 per share
—
—
—
(30,178)
(30,178)
Share repurchases
(765)
(18,595)
—
—
(18,595)
Stock-based compensation
—
12,221
—
—
12,221
Stock warrant
—
1,559
—
—
1,559
Issuance of common stock for associate stock
purchase plan and other stock-based awards
54
1,034
—
—
1,034
Issuance of restricted stock
448
—
—
—
—
Cancellations of stock-based awards
(206)
(3,981)
—
—
(3,981)
Balance at December 30, 2023
34,610
$
460,299
$
796
$
317,087
$
778,182
Net earnings
—
—
—
299
299
Other comprehensive income
—
—
541
—
541
Dividends - $0.87 per share
—
—
—
(29,984)
(29,984)
Share repurchases
(761)
(15,049)
—
—
(15,049)
Stock-based compensation
—
10,612
—
—
10,612
Stock warrant
—
868
—
—
868
Issuance of common stock for associate stock
purchase plan and other stock-based awards
68
1,220
—
—
1,220
Restricted stock units issued as common stock
15
—
—
—
—
Cancellations of stock-based awards
(180)
(3,199)
—
—
(3,199)
Balance at December 28, 2024
33,752
$
454,751
$
1,337
$
287,402
$
743,490
See notes to consolidated financial statements.
-39-
CONSOLIDATED STATEMENTS OF CASH FLOWS
SpartanNash Company and Subsidiaries
(In thousands)
2024
2023
2022
Cash flows from operating activities
Net earnings
$
299
$
52,237
$
34,518
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash restructuring, goodwill / asset impairment and other charges
71,749
9,089
553
Depreciation and amortization
103,412
98,639
94,180
Non-cash rent
(3,061)
(3,397)
(4,339)
LIFO expense
5,167
16,104
56,823
Postretirement benefits income
(976)
(2,316)
(890)
Deferred income taxes
4,971
8,229
1,415
Stock-based compensation expense
10,655
12,268
8,353
Stock warrant
868
1,559
2,158
(Gain) loss on disposals of assets
(284)
259
1,073
Other operating activities
1,838
1,741
2,183
Changes in operating assets and liabilities:
Accounts receivable
(25,615)
(17,228)
(38,168)
Inventories
59,845
(21,925)
(92,346)
Prepaid expenses and other assets
(11,457)
(14,913)
4,683
Accounts payable
4,973
(17,478)
28,069
Accrued payroll and benefits
(3,654)
(27,348)
16,855
Current income taxes
(7,432)
(424)
4,658
Other accrued expenses and other liabilities
(5,421)
(5,769)
(9,428)
Net cash provided by operating activities
205,877
89,327
110,350
Cash flows from investing activities
Purchases of property and equipment
(132,394)
(120,330)
(97,280)
Net proceeds from the sale of assets
7,916
4,333
36,825
Acquisitions, net of cash acquired
(117,937)
(780)
(41,429)
Loans to customers
(4,988)
(750)
—
Payments from customers on loans
1,728
1,298
1,358
Other investing activities
(1,350)
(288)
(422)
Net cash used in investing activities
(247,025)
(116,517)
(100,948)
Cash flows from financing activities
Proceeds from senior secured credit facility
1,386,883
1,359,560
1,468,649
Payments on senior secured credit facility
(1,282,127)
(1,282,948)
(1,382,409)
Proceeds from other long-term debt
—
1,000
—
Repayment of other long-term debt and finance lease liabilities
(10,502)
(8,157)
(6,849)
Share repurchases
(15,000)
(18,527)
(32,494)
Net payments related to stock-based award activities
(3,199)
(3,981)
(4,326)
Dividends paid
(29,909)
(29,660)
(29,708)
Other financing activities
(1,392)
(1,219)
(3,845)
Net cash provided by financing activities
44,754
16,068
9,018
Net increase (decrease) in cash and cash equivalents
3,606
(11,122)
18,420
Cash and cash equivalents at beginning of year
17,964
29,086
10,666
Cash and cash equivalents at end of year
$
21,570
$
17,964
$
29,086
See notes to consolidated financial statements.
-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 ended December 28, 2024 ("2024" or “current year”), December 30, 2023 (“2023” or “prior year”) and December 31,
2022 (“2022”), all of which include 52 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16
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.
Cost of Sales: Cost of sales represents the cost of inventory sold during the period, which includes purchase costs, in-bound freight,
physical inventory adjustments, markdowns and promotional allowances and excludes warehousing costs, depreciation 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.
-41-
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 $3.4 million and
$5.8 million as of December 28, 2024 and December 30, 2023, 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 using a similar estimated loss
model. Operating results include net bad debt (income) expense of $(0.8) million, $(0.4) million and $3.3 million for 2024, 2023 and
2022, respectively.
Accounts and notes receivable are composed of the following:
December 28,
December 30,
(In thousands)
2024
2023
Current notes receivable
$
2,941
$
2,613
Customer accounts receivable
386,792
379,208
Other receivables
62,071
44,649
Allowance for credit losses
(2,917)
(4,611)
Net accounts and current notes receivable
$
448,887
$
421,859
Long-term notes receivable
$
8,636
$
7,369
Allowance for credit losses
(481)
(1,212)
Net long-term notes receivable
$
8,155
$
6,157
Inventory Valuation: Inventories are valued at the lower of cost or net realizable value. Approximately 88.5% and 90.4% of the
Company’s inventories were valued on the last-in, first-out (LIFO) method at December 28, 2024 and December 30, 2023,
respectively. If replacement cost had been used, inventories would have been $159.9 million and $154.7 million higher at December
28, 2024 and December 30, 2023, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate
the value of inventories. During 2024, 2023 and 2022, 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 $10.1 million,
$4.0 million and $2.1 million in 2024, 2023 and 2022, 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 estimates allowances for inventory shortages based on the
results of recent physical counts.
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 as of the first day of the fourth quarter of each year, and more frequently if 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 reportable segment. Measuring the fair value of reporting units is a Level 3 measurement under the
fair value hierarchy. See Note 8, 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: customer relationships and prescription lists (period of expected benefit reflecting the pattern in
which the economic benefits are consumed), non-compete agreements and franchise fees (length of agreements). Indefinite-lived trade
names and liquor licenses are not amortized but are tested at least annually for impairment.
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
15 years
Buildings and improvements
15 to 40 years
Equipment
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
totaled $49.4 million and $45.9 million as of December 28, 2024 and December 30, 2023, respectively.
-42-
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
development costs of hosted cloud computing arrangements include configuration, installation, licenses, 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 $28.3 million and $24.3 million, as of December 28, 2024 and December 30, 2023, 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 Company's performance, economy, real estate market conditions and
inflation. The Company evaluates definite-lived intangible asset and operating and finance lease asset 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 3 to 4 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.
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 and $2.0 million for automobile liability. For healthcare, the Company’s exposure is up to $0.6 million in annual claims for
each covered individual.
-43-
A summary of changes in the Company’s self-insurance liability is as follows:
(In thousands)
2024
2023
2022
Balance at beginning of year
$
18,179
$
18,157
$
19,445
Expenses
62,827
63,722
64,386
Claim payments, net of employee contributions
(60,077)
(63,700)
(65,674)
Balance at end of year
$
20,929
$
18,179
$
18,157
The current portion of the self-insurance liability was $13.0 million and $10.9 million as of December 28, 2024 and December 30,
2023, respectively, and is included in “Other accrued expenses” in the consolidated balance sheets. The long-term portion was $8.0
million and $7.3 million as of December 28, 2024 and December 30, 2023, 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 granted to retirement-eligible Associates 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. The dilutive impact of
restricted stock awards, restricted stock units, and warrants are presented below, as applicable. Weighted average restricted stock
awards that were not included in the diluted EPS calculations because they were anti-dilutive were 182,642, 19,765, and 2,882 for
2024, 2023, and 2022 respectively. The performance share units are not currently dilutive.
The following table sets forth the computation of basic and diluted EPS:
(In thousands, except per share amounts)
2024
2023
2022
Numerator:
Net earnings
$
299
$
52,237
$
34,518
Adjustment for earnings attributable to participating securities
(2)
(408)
(404)
Net earnings used in calculating earnings per share
$
297
$
51,829
$
34,114
Denominator:
Weighted average shares outstanding, including participating securities
33,793
34,211
35,279
Adjustment for participating securities
(191)
(267)
(413)
Shares used in calculating basic earnings per share
33,602
33,944
34,866
Effect of dilutive stock warrant
316
584
847
Effect of dilutive stock-based employee compensation
96
106
187
Shares used in calculating diluted earnings per share
34,014
34,634
35,900
Basic earnings per share
$
0.01
$
1.53
$
0.98
Diluted earnings per share
$
0.01
$
1.50
$
0.95
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, restricted stock units and performance stock units. The value of the
portion of awards expected to vest is recognized as expense over the requisite service period. Performance stock units require the
Company to estimate expected achievement of performance targets over the performance period. This estimate involves judgment
regarding future expectations of various financial performance measures. If there are changes in the Company's estimates of the level
of financial performance measures expected to be achieved, the related stock-based compensation expense may be significantly
increased or reduced in the period that the estimate changes.
-44-
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 28, 2024 and December 30, 2023, 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 $31.7 million, $33.7 million and $37.6 million in 2024, 2023 and 2022, respectively.
Interest Rate Swaps: The Company utilizes an interest rate swap contract to reduce its exposure to fluctuations in variable interest
rates applicable to its credit facility. The Company values the interest rate swap using standard models and observable market inputs
including SOFR interest rates and discount rates. The Company has designated its interest rate swap as a cash flow hedge. The change
in the fair value of the interest rate swap is initially reported in "Other comprehensive income (loss)" in the consolidated statements of
comprehensive income and subsequently reclassified to earnings in "Interest expense, net" in the consolidated statements of earnings
when the hedged transactions affect earnings.
Accumulated Other Comprehensive (Loss) Income (“AOCI”): The Company reports comprehensive income, 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 and changes in the fair value of interest rate swaps, but rather are
recorded directly to shareholders’ equity. These amounts are also presented in the consolidated statements of comprehensive income.
Adoption of New Accounting Standards and Recently Issued Accounting Standards: In November 2023, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures, requiring public entities to disclose information about their reportable segments’ significant
expenses and other segment items on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended
December 28, 2024. See Note 17 Reportable Segment Information in the accompanying notes to the consolidated financial statements
for further detail.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which
requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure
of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with
early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional
information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is
effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early
adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
-45-
Note 2 – Acquisitions
The Company acquired all of the outstanding shares of Metcalfe Markets, Inc. ("Metcalfe's") and Fresh Encounter Inc. ("Fresh
Encounter") on May 19, 2024 and November 30, 2024, respectively. On December 9, 2024, the Company acquired certain assets and
assumed certain liabilities of Markham Enterprises ("Markham"). The acquisitions were funded with proceeds from the Company’s
Revolving Credit Facility. The following table provides the purchase price and the fair value of identified assets and acquired
liabilities assumed at the date of acquisition:
(In thousands)
Total Acquisitions
Consideration
Cash paid at closing
$
122,741
Less: Cash acquired
(4,804)
Acquisitions, net of cash acquired
117,937
Contingent consideration arrangement
3,000
Purchase price adjustments
8,395
Fair value of total consideration transferred
129,332
Identifiable assets acquired and liabilities assumed, net of cash acquired:
Accounts receivable
8,430
Inventory
36,606
Prepaid expenses
1,404
Intangible assets
32,750
Operating lease assets
78,788
Property and equipment
70,785
Other assets
259
Accounts payable
(14,968)
Accrued payroll and benefits
(5,036)
Other accrued expenses
(6,660)
Deferred income taxes
(11,933)
Operating lease liabilities
(78,788)
Other long-term liabilities
(894)
Long-term debt and finance lease liabilities
(26,002)
Total identifiable assets
84,741
Goodwill
$
44,591
Note: Purchase price adjustments include non-cash settlements of prior accounts receivable balances, as well as net working capital
adjustments.
The acquired assets and assumed liabilities were recorded at their estimated fair values as of the acquisition dates based on preliminary
estimates. These estimates are subject to revision upon the finalization of the valuations of the certain acquired assets including
property and equipment, intangible assets, working capital and related deferred tax liabilities. Any adjustments will be made prior to
the ends of respective one-year measurement periods. The excess of the purchase price over the fair value of net assets acquired was
recorded as goodwill in the consolidated balance sheet and allocated to the Retail segment. The goodwill related to the Markham
acquisition is deductible for tax purposes, while the goodwill related to the Metcalfe's and Fresh Encounter acquisitions is not
deductible for tax purposes.
In the fiscal year ended December 28, 2024, the Company has incurred $2.4 million of acquisition and integration costs related to
these three acquisitions within the Retail segment.
Metcalfe's currently operates three stores in Wisconsin with approximately 500 employees. Metcalfe's was not previously a customer
of the Company's Wholesale segment. The acquisition will expand the Company's Retail segment further into Wisconsin.
Fresh Encounter currently operates 49 stores in Ohio, Indiana and Kentucky with approximately 2,500 employees under the retail
store banners Community Markets, Remke Markets, Chief Markets and Needler's Fresh Market. Prior to the acquisition, Fresh
Encounter was an independent retailer and customer of the Company’s Wholesale segment. The acquisition expanded the footprint of
the Company’s Retail segment into Kentucky and grew the existing footprint in Ohio and Indiana.
Markham currently operates three fuel centers/convenience stores, in addition to providing fuel distribution services, in mid-Michigan,
with approximately 40 employees. Markham was not previously a customer of the Company's Wholesale segment. The acquisition
will expand the footprint of the Company's Retail segment, specifically fuel centers, further into mid-Michigan.
-46-
Consistent with other corporate-owned retail stores and fuel centers, sales subsequent to the acquisition from the Wholesale segment
to Metcalfe's, Fresh Encounter, and Markham are eliminated.
Note 3 – 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 18%, 16%, and 16%
of the Company's net sales for 2024, 2023 and 2022, 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; rather, the impact to revenue is recognized when the customer
redeems the gift card or gift certificate to purchase product.
-47-
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:
2024
(In thousands)
Wholesale
Retail
Total
Type of products:
Center store (a)
$
2,529,761
$
1,085,202
$
3,614,963
Fresh (b)
2,070,841
1,068,549
3,139,390
Non-food (c)
2,019,635
534,071
2,553,706
Fuel
—
151,077
151,077
Other
89,068
1,120
90,188
Total
$
6,709,305
$
2,840,019
$
9,549,324
Type of customers:
Individuals
$
—
$
2,838,899
$
2,838,899
Independent retailers (d)
2,241,678
—
2,241,678
National accounts
2,098,243
—
2,098,243
Military (e)
2,330,595
—
2,330,595
Other
38,789
1,120
39,909
Total
$
6,709,305
$
2,840,019
$
9,549,324
2023
(In thousands)
Wholesale
Retail
Total
Type of products:
Center store (a)
$
2,678,297
$
1,081,840
$
3,760,137
Fresh (b)
2,153,564
1,048,759
3,202,323
Non-food (c)
1,985,816
512,679
2,498,495
Fuel
—
165,684
165,684
Other
101,540
1,040
102,580
Total
$
6,919,217
$
2,810,002
$
9,729,219
Type of customers:
Individuals
$
—
$
2,808,962
$
2,808,962
Independent retailers (d)
2,377,036
—
2,377,036
National accounts
2,218,003
—
2,218,003
Military (e)
2,277,966
—
2,277,966
Other
46,212
1,040
47,252
Total
$
6,919,217
$
2,810,002
$
9,729,219
2022
(In thousands)
Wholesale
Retail
Total
Type of products:
Center store (a)
$
2,671,666
$
1,073,765
$
3,745,431
Fresh (b)
2,171,906
1,068,240
3,240,146
Non-food (c)
1,888,318
452,557
2,340,875
Fuel
—
202,256
202,256
Other
113,346
1,046
114,392
Total
$
6,845,236
$
2,797,864
$
9,643,100
Type of customers:
Individuals
$
—
$
2,796,858
$
2,796,858
Independent retailers (d)
2,363,597
—
2,363,597
National accounts
2,311,114
—
2,311,114
Military (e)
2,115,353
—
2,115,353
Other
55,172
1,006
56,178
Total
$
6,845,236
$
2,797,864
$
9,643,100
(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 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.
-48-
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 28, 2024,
the Company estimates the present value of its maximum potential obligations for subleases and assigned leases to be approximately
$1.6 million and $5.2 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 three 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 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, which would be due in
accordance with the underlying agreements.
Changes to the balance of the allowance for credit losses were as follows:
Allowance for Credit Losses
Current Accounts
Long-term
(In thousands)
and Notes Receivable
Notes Receivable
Total
Balance at January 1, 2022
$
4,414
$
731
$
5,145
Changes in credit loss estimates
2,539
217
2,756
Write-offs charged against the allowance
(855)
—
(855)
Balance at December 31, 2022
$
6,098
$
948
$
7,046
Changes in credit loss estimates
(929)
264
(665)
Write-offs charged against the allowance
(558)
—
(558)
Balance at December 30, 2023
$
4,611
$
1,212
$
5,823
Changes in credit loss estimates
(1,406)
(381)
(1,787)
Write-offs charged against the allowance
(288)
(350)
(638)
Balance at December 28, 2024
$
2,917
$
481
$
3,398
During 2024, 2023 and 2022, the Company recognized bad debt expense of $1.0 million, $0.3 million and $1.1 million, respectively,
related to direct write-offs of uncollectable amounts.
-49-
Note 4 – Property and Equipment
Property and equipment consist of the following:
December 28,
December 30,
(In thousands)
2024
2023
Land and improvements
$
91,791
$
91,031
Buildings and improvements
740,988
646,707
Equipment
920,989
799,721
Construction in progress
42,470
59,295
Total property and equipment
1,796,238
1,596,754
Less accumulated depreciation and amortization
1,016,254
947,683
Property and equipment, net
$
779,984
$
649,071
Depreciation expense was $70.5 million, $68.0 million and $66.7 million in 2024, 2023 and 2022 respectively.
Note 5 – 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)
Wholesale
Retail
Total
Balance at December 31, 2022 and December 30, 2023
$
181,035
$
1,125
$
182,160
Acquisitions (Note 2)
—
44,591
44,591
Impairment
—
(45,716)
(45,716)
Balance at December 28, 2024
$
181,035
$
—
$
181,035
The Company reviews goodwill and other intangible assets for impairment annually, as of the first day of the fourth quarter of each
year, and more frequently if circumstances indicate impairment is more likely than not to have occurred. 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. These represent Level 3 valuation inputs under the
ASC 820 fair value hierarchy, as further described in Note 8, Fair Value Measurements.
During the Company's 2024 annual impairment review within the Wholesale and Retail reporting units, projected cash flows were
discounted under the income approach based on a weighted average cost of capital ("WACC") of 9.0% and 8.4%, respectively. The
WACC rates were 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 rates requires estimates
of an equity rate of return and a debt rate of return, which are specific to the respective industries in which the Wholesale and Retail
reporting units operate. The Company benchmarks the calculated fair value resulting from the income approach against market
comparisons using the guideline public company method.
The Company concluded that the fair value of the Wholesale reporting unit was substantially in excess of its carrying value in the
annual impairment review.
During 2024, cash flow trends within the Retail reporting unit were steadily and negatively impacted by an increasingly competitive
grocery retail environment. These competitive factors have led to increased pressure on pricing and promotions that have had an
adverse impact, and are anticipated to continue to have an adverse impact, on volume, gross profit rates and other costs within the
Retail reporting unit. Based on the Company’s annual impairment analysis, which contemplates the effects of these industry
challenges, it was determined that the carrying value of the Retail reporting unit exceeded its fair value. Therefore, the Company
concluded that a goodwill impairment existed as of the annual testing date.
Following the annual testing date, the Company entered into two businesses combinations which contributed additional goodwill to
the Retail reporting unit. As there was not a change in the underlying environmental factors of the industry, nor the assessed impact on
the Retail reporting unit, management concluded that circumstances were present that indicated a goodwill impairment was more
likely than not to be present.
The Company, therefore, performed an additional goodwill impairment test during the fourth quarter and concluded that the Retail
reporting unit carrying value, inclusive of newly acquired goodwill, again exceeded its fair value. As a result, the goodwill associated
with the fourth quarter business combinations was also impaired. In total, the Company recorded goodwill impairment charges of
$45.7 million in the Retail reporting unit.
-50-
The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated
balance sheets:
December 28, 2024
December 30, 2023
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
(In thousands)
Amount
Amortization
Amount
Amortization
Non-compete agreements
$
25
$
10
$
3,545
$
3,190
Pharmacy customer prescription lists
3,869
3,376
3,869
2,853
Customer relationships
57,937
29,808
57,937
26,146
Franchise fees
1,419
767
1,209
661
Total
$
63,250
$
33,961
$
66,560
$
32,850
The weighted average amortization periods for amortizable intangible assets as of December 28, 2024 are as follows:
Non-compete agreements
1.0 years
Pharmacy customer prescription lists
8.1 years
Customer relationships
16.4 years
Franchise fees
10.0 years
Amortization expense for intangible assets was $4.7 million, $4.9 million and $5.0 million for 2024, 2023 and 2022, respectively.
Estimated amortization expense for each of the five succeeding fiscal years is as follows:
(In thousands)
2025
2026
2027
2028
2029
Amortization expense
$
4,292
$
3,762
$
3,740
$
3,731
$
3,716
The Company has indefinite-lived intangible assets that are not amortized, consisting primarily of indefinite-lived trade names and
liquor licenses. 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 8. 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. During the second quarter and fourth quarters of 2024,
the Company recognized impairment charges of $6.1 million and $6.7 million, respectively, related to two trade names based on
changes in the assumptions supporting fair value. Changes in the carrying amount of indefinite-lived intangible assets were as follows:
Indefinite-lived
(In thousands)
Intangible Assets
Balance at December 31, 2022 and December 30, 2023
$
67,826
Additions
672
Acquisitions (Note 2)
32,750
Impairment
(12,716)
Balance at December 28, 2024
$
88,532
-51-
Note 6 – Restructuring, Asset Impairment and Other Charges
The following table provides the activity of reserves for closed properties for 2024, 2023 and 2022. 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.
Lease and
(In thousands)
Ancillary Costs
Severance
Total
Balance at January 1, 2022
$
3,124
$
—
$
3,124
Provision for closing charges
1,837
—
1,837
Provision for severance
—
9
9
Lease termination adjustments
(86)
—
(86)
Changes in estimates
28
—
28
Accretion expense
67
—
67
Payments
(993)
(9)
(1,002)
Balance at December 31, 2022
3,977
—
3,977
Provision for severance
—
21
21
Changes in estimates
(258)
—
(258)
Accretion expense
102
—
102
Payments
(844)
(21)
(865)
Balance at December 30, 2023
2,977
—
2,977
Provision for closing charges
5,356
—
5,356
Provision for severance
—
405
405
Lease termination adjustments
(1,489)
—
(1,489)
Changes in estimates
(142)
—
(142)
Accretion expense
129
—
129
Payments
(788)
(394)
(1,182)
Balance at December 28, 2024
$
6,043
$
11
$
6,054
Included in the liability are lease-related ancillary costs from the date of site closure to the end of the remaining lease term.
-52-
Restructuring, asset impairment and other charges included in the consolidated statements of earnings consisted of the following:
(In thousands)
2024
2023
2022
Asset impairment charges (a)
$
20,920
$
11,749
$
5,086
Provision for closing charges
5,356
—
1,837
Loss (gain) on sales of assets related to closed facilities (b)
1,554
(2,614)
(6,324)
Provision for severance
405
21
9
Other costs associated with site closures (c)
2,536
584
271
Lease termination adjustments (d)
(2,238)
—
(102)
Changes in estimates
(142)
(550)
28
Total
$
28,391
$
9,190
$
805
(a)
Asset impairment charges in the current year include impairments of indefinite-lived trade names and long-lived assets within
both the Wholesale and Retail segments as a result of changes in the competitive environment. Asset impairment charges of $8.0
million were incurred in 2023 within the Wholesale segment related to the Company's continued supply chain network
optimization in response to customer demand changes. Additional charges in the prior year were incurred related to two store
closures in the Retail segment and impairment losses related to a distribution location that sustained storm damage in the
Wholesale segment. In 2022, charges were incurred primarily in the Retail segment and relate to restructuring of the Retail
segment's e-commerce delivery model and a store closure.
(b)
Loss on sales of assets in the current year primarily relate to the sales of real and personal property of previously closed locations
within both the Wholesale and Retail segments. In 2023, gain on sales of assets primarily relate to the sale of a store within the
Retail segment. Gain on sales of assets in 2022 primarily relate to the sales of real property of previously closed locations within
both the Wholesale and Retail segments.
(c)
Other costs activity in the current year primarily relates to restructuring activity within the Wholesale segment, including the
closure of a distribution center. In 2023, activity primarily relates to Retail store closings. In 2022, activity primarily relates to
restructuring activity within the Wholesale segment and Retail store closings.
(d)
Lease termination adjustments in the current year relate to the gains recognized to terminate lease agreements, which included
the write-off of lease liabilities totaling $0.6 million and the write-off of lease ancillary costs included in the reserve for closed
properties totaling $1.5 million.
During the second quarter, the Company evaluated an indefinite-lived trade name within the Retail segment for potential impairment.
The indefinite-lived trade name with a book value of $23.7 million was measured at a fair value of $17.6 million, resulting in an
impairment charge of $6.1 million. During the fourth quarter, the Company evaluated an indefinite-lived trade name within the
Wholesale segment for potential impairment. The indefinite-lived trade name with a book value of $12.9 million was measured at a
fair value of $6.2 million, resulting in an impairment charge of $6.7 million. Indefinite-lived intangible assets are measured at fair
value using Level 3 inputs under the fair value hierarchy, as further described in Note 8. Fair value of indefinite-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
and, in the case of indefinite-lived trade name assets, estimated royalty rates.
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 8. In the current year, long-lived assets with a book value of $8.9 million were measured
at a fair value of $0.7 million, resulting in impairment charges of $8.2 million. In the prior year, long-lived assets with a book value of
$20.6 million were measured at a fair value of $8.9 million, resulting in impairment charges of $11.7 million. In 2022, 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.
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.
-53-
Note 7 – Long-Term Debt
Long-term debt consists of the following:
December 28,
December 30,
(In thousands)
2024
2023
Senior secured revolving credit facility, due November 2027
$
627,247
$
522,492
Finance lease liabilities (Note 11)
125,778
74,639
Other, 3.71% - 4.36%, due 2026 - 2033
4,120
4,743
Total debt - Principal
757,145
601,874
Unamortized debt issuance costs
(3,338)
(4,394)
Total debt
753,807
597,480
Less current portion
12,838
8,813
Total long-term debt and finance lease liabilities
$
740,969
$
588,667
The Company's Amended and Restated Loan and Security Agreement (the "Credit Agreement") provides for a Tranche A revolving
loan of up to $1.17 billion and a Tranche A-1 revolving loan with $40 million of capacity. The Company has the ability to increase the
amount borrowed under the Credit Agreement by an additional $195 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
Outstanding as of
Facility
December 28, 2024
Tranche
(In thousands)
SOFR Rate
Base Rate
Tranche A
$
591,400
SOFR plus 1.25% to 1.50%
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
$
35,847
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 28, 2024 and had Excess Availability after the
10% requirement of $339.3 million and $483.2 million at December 28, 2024 and December 30, 2023, respectively. The Credit
Agreement provides for the issuance of letters of credit, of which $17.9 million and $17.7 million were outstanding as of December
28, 2024 and December 30, 2023, respectively.
The weighted average interest rate for all borrowings, including loan fee amortization, was 7.03% for 2024. Refer to Note 9 for further
information on the interest rate swap.
At December 28, 2024, aggregate annual maturities and scheduled payments of long-term debt are as follows:
(In thousands)
2025
2026
2027
2028
2029
Thereafter
Total
Total borrowings
$
12,838
$
14,730
$
639,451
$
12,273
$
12,142
$
65,711
$
757,145
-54-
Note 8 – 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 other
intangible assets, and long-lived asset impairment charges, refer to Note 5 and Note 6. At December 28, 2024 and December 30, 2023,
the book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows:
December 28,
December 30,
(In thousands)
2024
2023
Book value of debt instruments, excluding debt financing costs:
Current maturities of long-term debt and finance lease liabilities
$
12,838
$
8,813
Long-term debt and finance lease liabilities
744,307
593,061
Total book value of debt instruments
757,145
601,874
Fair value of debt instruments, excluding debt financing costs
755,063
603,117
(Deficit) excess of fair value over book value
$
(2,082)
$
1,243
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).
The Company's interest rate swap agreement is considered a Level 2 instrument. The Company values the interest rate swap using
standard models and observable market inputs including SOFR interest rates and discount rates, which are considered Level 2 inputs.
The location and the fair value of the interest rate swap agreement in the consolidated balance sheets is disclosed in Note 9.
Note 9 – Derivatives
Hedging of Interest Rate Risk
During the first quarter of 2023, the Company entered into an interest rate swap contract to mitigate its exposure to changes in variable
interest rates. The Company's interest rate swap is designated as a cash flow hedge as of both the effective date, March 17, 2023, and
continues to be designated as a cash flow hedge. The interest rate swap is reflected at its fair value in the consolidated balance sheets.
Refer to Note 8 for further information on the fair value of the interest rate swap.
Details of the pay-fixed, receive-floating interest rate swap contract are as follows:
Effective Date
Maturity Date
Notional Value
(in millions)
Pay Fixed Rate
Receive Floating
Rate
Floating Rate Reset
Terms
March 17, 2023
November 17, 2027
$150
3.646%
One-Month CME
Term SOFR
Monthly
The Company performed an initial quantitative assessment of hedge effectiveness using the change-in-variable-cash-flows method.
Under this method, the Company assessed the effectiveness of the hedging relationship by comparing the present value of the
cumulative change in the expected future cash flows on the variable leg of the interest rate swap with the present value of the
cumulative change in the expected future interest cash flows on the variable-rate debt. The Company determined the interest rate swap
to be highly effective. To assess for continued hedge effectiveness, the Company performs a retrospective and prospective qualitative
assessment each quarter. The Company also monitors the credit risk of the counterparty on an ongoing basis. The change in the fair
value of the interest rate swap is initially reported in "Other comprehensive income" in the consolidated statements of comprehensive
income and subsequently reclassified to earnings in "Interest expense, net" in the consolidated statements of earnings when the hedged
transactions affect earnings.
-55-
The location and the fair value of the interest rate swap in the consolidated balance sheets is as follows:
Derivative Fair Value
(In thousands)
Consolidated Balance Sheets Location
December 28, 2024
December 30, 2023
Cash Flow Hedge:
Interest rate swap
Prepaid expenses and other current assets
$
808
$
1,721
Interest rate swap
Other assets, net
1,053
—
Interest rate swap
Other long-term liabilities
—
1,914
Interest rate swap
Accumulated other comprehensive income
1,337
(316)
The location and amount of gains or losses recognized in the consolidated statements of earnings for the interest rate swap, presented
on a pre-tax basis, are as follows:
Interest expense, net
52 Weeks Ended
(In thousands)
December 28, 2024
December 30, 2023
Total amounts of expense line items presented in the condensed consolidated statements of
earnings in which the effects of cash flow hedges are recorded
$
44,827
$
39,887
Gain on cash flow hedging relationships:
Gain reclassified from comprehensive income into earnings
2,311
1,832
Note 10 – Commitments and Contingencies
The Company continuously evaluates its exposure to loss contingencies, including those related to routine legal proceedings to which
the Company is a party and which are incidental to its business, based upon the best available information. Although assessing and
predicting the outcome and impact related to loss contingencies involves substantial uncertainties, the Company believes that its
allowances for loss have been disclosed to the extent necessary, that its assessment of contingencies is reasonable and that their
outcome will not result in a material adverse effect on the Company’s consolidated financial position, operating results or liquidity.
Any material variations in or adjustments to the Company's loss contingency estimates will be reported when known.
The Company subleases property at certain locations and, for 2024, 2023 and 2022, received rental income of $3.4 million, $3.8
million and $3.9 million, respectively, related to such subleases. In the event of any sublessee default, the Company would be
responsible for fulfilling these lease obligations. Future payment obligations under these leases are disclosed in Note 11.
Contingencies related to credit risk and collectability are disclosed in Note 3.
Unions represent approximately 9% of SpartanNash’s Associates. These Associates are covered by collective bargaining agreements
(“CBAs”). The Company facilities covered by CBAs, the unions representing the covered Associates and the expiration dates for each
existing CBA are provided in the following table:
Company Locations
Union Locals
Expiration Dates
Wholesale:
Norfolk, Virginia
IBT 822
April 2025
Columbus, Georgia
IBT 528
September 2025
Grand Rapids, Michigan
IBT 406
April 2026
Lima, Ohio Warehouse
IBT 908
January 2030
Lima, Ohio Drivers
IBT 908
January 2030
Bellefontaine, Ohio GTL Truck Lines, Inc.
IBT 908
February 2030
Bellefontaine, Ohio General Merchandise Service Division
IBT 908
February 2030
Retail:
Northwest Ohio
UFCW 75
January 2028
Findlay, Ohio
UFCW 75
March 2029
Hillsboro, Ohio
UFCW 1059
August 2029
Tosa, Wisconsin
UFCW 1473
August 2029
Hilldale, Wisconsin
UFCW 1473
August 2029
-56-
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 CBAs 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 a combination of contributing employers and the applicable union(s); 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 Central States Plan implemented a rehabilitation plan on March 25, 2008.
The Company's contributions to the Central States Plan are established by each applicable CBA and vary by location. However,
required contributions may increase based on the funded status of the Plan and certain legal requirements. On January 12, 2023, the
Central States Plan received approximately $35.8 billion in Special Financial Assistance (the "SFA") from the Pension Benefit
Guaranty Corporation, inclusive of interest, which was granted to alleviate the risk of insolvency of the Plan. On March 29, 2024, in
accordance with the Pension Protection Act ("PPA"), the Plan's actuary certified that the Plan was considered to be in "critical" zone
status for the plan year beginning January 1, 2024. In light of the receipt of the SFA, the Central States Plan has represented that the
Plan is expected to be funded well into the future. Despite the expectations of the Plan, the Company views the Plan's solvency as an
ongoing risk factor.
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.
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining
participating employers.
c.
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 the value of assets held in trust to pay
benefits covers the present value of actuarial accrued liabilities in the Central States Plan. Management is not aware of any significant
change in funding levels in the Plan since December 28, 2024. Due to uncertainty regarding future factors that could trigger a
withdrawal liability or increase the funding obligations of the Plan borne by the Company, as well as the absence of specific
information regarding matters such as the Plan’s current financial situation, we are unable to determine with certainty the current
amount of the Plan’s funding, SpartanNash’s current potential withdrawal liability exposure in the event of a future withdrawal from
the Plan and/or the Company's potential exposure to increased funding obligations in the event of one or more participating employers
withdrawing from the Plan. Any adjustment for withdrawal liability would be recorded when it is probable that a liability exists and
can be reasonably determined.
Note 11 – 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)
2024
2023
2022
Operating lease cost
$
56,704
$
55,807
$
57,876
Short-term lease cost
8,965
8,367
7,576
Finance lease cost
Amortization of assets
10,281
8,244
6,134
Interest on lease liabilities
5,417
4,454
3,369
Variable rent
217
348
236
Sublease income
(3,428)
(3,845)
(3,907)
Total net lease cost
$
78,156
$
73,375
$
71,284
-57-
Supplemental balance sheet information related to leases was as follows:
December 28,
December 30,
(In thousands)
2024
2023
Operating leases:
Operating lease assets
$
327,211
$
242,146
Current portion of operating lease liabilities
$
49,562
$
41,979
Noncurrent operating lease liabilities
305,051
226,118
Total operating lease liabilities
$
354,613
$
268,097
Finance leases:
Property and equipment, at cost
$
152,043
$
92,598
Accumulated amortization
(34,589)
(25,472)
Property and equipment, net
$
117,454
$
67,126
Current portion of finance lease liabilities
$
12,141
$
7,739
Noncurrent finance lease liabilities
113,637
66,900
Total finance lease liabilities
$
125,778
$
74,639
Weighted average remaining lease term (in years):
Operating leases
8.8
7.6
Finance leases
9.8
9.0
Weighted average discount rate:
Operating leases
6.2%
5.9%
Finance leases
6.5%
6.8%
Supplemental cash flow and other information related to leases was as follows:
(In thousands)
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases
$
58,828
$
58,251
$
61,103
Operating cash flows used for finance leases
5,413
4,450
3,372
Financing cash flows used for finance leases
8,787
6,897
6,045
Lease assets obtained in exchange for lease liabilities:
Total operating lease liabilities
$
131,035
$
39,018
$
23,027
Total finance lease liabilities
60,567
17,833
21,032
The Company’s total future lease commitments under operating and finance leases in effect at December 28, 2024 are as follows:
Operating
Finance
(In thousands)
Leases
Leases
Total
2025
$
69,639
$
19,887
$
89,526
2026
64,012
19,109
83,121
2027
57,479
18,113
75,592
2028
48,632
17,529
66,161
2029
40,269
16,573
56,842
Thereafter
186,836
79,073
265,909
Total
466,867
170,284
637,151
Less interest
112,254
44,506
156,760
Present value of lease liabilities
354,613
125,778
480,391
Less current portion
49,562
12,141
61,703
Long-term lease liabilities
$
305,051
$
113,637
$
418,688
-58-
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:
December 28,
December 30,
(In thousands)
2024
2023
Land and improvements
$
6,373
$
7,147
Buildings
26,659
27,227
Owned assets leased to others
33,032
34,374
Less accumulated amortization and depreciation
12,816
12,369
Net owned assets leased to others
$
20,216
$
22,005
Future minimum rentals to be received under leases in effect at December 28, 2024 are as follows:
(In thousands)
2025
2026
2027
2028
2029
Thereafter
Total
Owned property
$
5,022
$
5,015
$
4,821
$
4,717
$
3,181
$
12,029
$
34,785
Leased property
2,886
2,124
1,533
866
656
457
8,522
Total
$
7,908
$
7,139
$
6,354
$
5,583
$
3,837
$
12,486
$
43,307
Note 12 – 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; and Norfolk, Virginia; facilities all participate in a defined
contribution plan; the remaining Associates covered under CBAs participate in a multi-employer pension plan.
Defined Contribution Plans
Expense for employer matching contributions made to defined contribution plans totaled $11.9 million, $12.0 million and $12.0
million in 2024, 2023 and 2022, respectively.
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.
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.” Effective June 30, 2022, the Company has amended the Retiree Medical Plan. In
connection with the amendment, the Company would 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 effective June 30, 2022,
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 was amortized to net periodic postretirement benefit income over the remaining period until the final payment was
made on June 28, 2024.
On June 28, 2024, the Company made the final lump sum payment of $1.3 million to all remaining active or retired participants,
which constituted a final settlement of the Plan. On July 1, 2023, the Company made a lump sum payment to retired participants
totaling $1.3 million, which constituted a partial settlement of the Plan. The payments resulted in the recognition within net periodic
postretirement expense of $0.1 million and $0.3 million on June 28, 2024 and July 1, 2023, respectively, related to the net actuarial
loss within AOCI.
-59-
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 postretirement benefit plans, excluding multi-employer plans. The current accrued, and noncurrent accrued benefit costs
associated with postretirement benefits are reported in “Accrued payroll and benefits,” and “Other long-term liabilities,” respectively,
in the consolidated balance sheets.
Retiree Medical Plan
December 28,
December 30,
(In thousands, except percentages)
2024
2023
Funded Status
Projected/Accumulated benefit obligation:
Balance at beginning of year
$
1,236
$
2,412
Interest cost
17
85
Actuarial loss
12
23
Benefits paid
(1,265)
(1,284)
Balance at end of year
$
—
$
1,236
Fair value of plan assets:
Balance at beginning of year
$
—
$
—
Company contributions
1,265
1,284
Benefits paid
(1,265)
(1,284)
Balance at end of year
$
—
$
—
Unfunded status
$
—
$
(1,236)
Components of net amount recognized in consolidated
balance sheets:
Current liabilities
$
—
$
(1,236)
Net liability
$
—
$
(1,236)
Amounts recognized in AOCI:
Net actuarial loss
$
—
$
217
Prior service credit
—
(1,653)
Accumulated other comprehensive income
$
—
$
(1,436)
Weighted average assumptions at measurement date:
Discount rate
N/A
5.65%
Ultimate health care cost trend rate
N/A
N/A
Retiree Medical Plan
(In thousands, except percentages)
2024
2023
2022
Components of net periodic benefit income:
Service cost
$
—
$
—
$
76
Interest cost
17
85
185
Amortization of prior service credit
(1,653)
(3,307)
(1,653)
Recognized actuarial net loss
94
249
200
Net periodic benefit income
$
(1,542)
$
(2,973)
$
(1,192)
Settlement expense
135
299
740
Total net periodic benefit income
$
(1,407)
$
(2,674)
$
(452)
Weighted average assumptions used to determine net
periodic benefit income:
Discount rate
5.65%
5.62%
2.90%
-60-
Multi-Employer Health and Welfare Plans
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 $15.9 million, $17.0 million and $13.4 million to these plans in 2024, 2023 and
2022, 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 five CBAs that require contributions to the Central States Plan with expiration dates ranging from April 2026 to February
2030. 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 $13.5 million, $13.1 million and $12.3
million to the Central States Plan in 2024, 2023 and 2022, respectively. The contributions made by the Company represent less than
five percent of the Plan’s total contributions in 2024.
Refer to Note 10, 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, 2024.
-61-
Note 13 – Accumulated Other Comprehensive Income or Loss ("AOCI")
AOCI represents the cumulative balance of other comprehensive income, net of tax, as of the end of the reporting period. For the
Company, the activity relates to postretirement benefit plans and an interest rate swap, including those described in Notes 12 and 9,
respectively.
Changes in AOCI are as follows:
(In thousands)
2024
2023
2022
Postretirement benefit plans:
Balance at beginning of the year, net of tax
$
1,112
$
2,979
$
(1,455)
Other comprehensive income before reclassifications
—
203
6,576
Income tax expense
—
(51)
(1,614)
Other comprehensive income, net of tax, before reclassifications
—
152
4,962
Reclassification into net earnings (a)
(1,462)
(2,677)
(701)
Income tax benefit (b)
350
658
173
Amounts reclassified out of AOCI, net of tax
(1,112)
(2,019)
(528)
Other comprehensive (loss) income, net of tax
(1,112)
(1,867)
4,434
Balance at end of the year, net of tax
$
—
$
1,112
$
2,979
Interest rate swap:
Balance at beginning of the year, net of tax
$
(316)
$
—
$
—
Other comprehensive income before reclassifications
4,471
1,419
—
Income tax expense
(1,051)
(332)
—
Other comprehensive income, net of tax, before reclassifications
3,420
1,087
—
Reclassification into net earnings (c)
(2,311)
(1,832)
—
Income tax benefit (b)
544
429
—
Amounts reclassified out of AOCI, net of tax
(1,767)
(1,403)
—
Other comprehensive income (loss), net of tax
1,653
(316)
—
Balance at end of the year, net of tax
$
1,337
$
(316)
$
—
Total accumulated other comprehensive income
$
1,337
$
796
$
2,979
(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 $0.1 million, $0.4 million and $0.7 million in
2024, 2023 and 2022, respectively.
(b)
Reclassified from AOCI into Income tax expense (benefit).
(c)
Reclassified from AOCI into Interest expense.
Note 14 – Income Tax
The income tax provision for continuing operations is made up of the following components:
(In thousands)
2024
2023
2022
Current income tax expense:
Federal
$
4,027
$
6,698
$
8,585
State
1,728
2,961
2,397
Total current income tax expense
5,755
9,659
10,982
Deferred income tax expense:
Federal
4,414
6,546
46
State
557
1,683
1,369
Total deferred income tax expense
4,971
8,229
1,415
Total income tax expense
$
10,726
$
17,888
$
12,397
-62-
A reconciliation of the statutory federal rate to the effective rate is as follows:
2024
2023
2022
Federal statutory income tax rate
21.0 %
21.0 %
21.0 %
Non-deductible goodwill impairment
49.4
—
—
State taxes, net of federal income tax benefit
17.1
5.3
6.7
Non-deductible expenses
21.4
3.4
5.5
Stock compensation
0.7
(0.9)
(2.8)
Change in tax contingencies
(0.6)
(1.3)
(0.1)
Charitable product donations
(1.1)
(0.2)
(0.3)
Contingent consideration
(4.1)
—
—
Other, net
(2.0)
(0.3)
0.1
Tax credits
(4.5)
(1.5)
(3.7)
Effective income tax rate
97.3 %
25.5 %
26.4 %
The increase in the effective tax rate in 2024 was driven primarily by the impact of the goodwill impairment within the Retail
reporting unit. This included the impact of non-deductible goodwill impairment, as well as included the effect of lower pre-tax
earnings which increased the rate of state taxes and other non-deductible expenses.
Deferred tax assets and liabilities resulting from temporary differences as of December 28, 2024 and December 30, 2023 are as
follows:
December 28,
December 30,
(In thousands)
2024
2023
Deferred tax assets:
Employee benefits
$
20,991
$
21,074
Accrued workers' compensation
1,949
2,082
Allowance for credit losses
856
1,500
Restructuring
192
601
Deferred revenue
1,236
987
Lease liabilities
116,234
82,970
Accrued insurance
1,798
1,045
State net operating loss carryforwards (a)
5,533
5,507
All other
6,930
8,569
Total deferred tax assets
155,719
124,335
Valuation allowances
(419)
(399)
Net deferred tax assets
155,300
123,936
Deferred tax liabilities:
Property and equipment
57,977
49,038
Lease assets
107,277
74,472
Inventory
36,343
31,618
Goodwill
32,511
36,936
Intangible assets
8,571
2,200
All other
3,631
3,576
Total deferred tax liabilities
246,310
197,840
Net deferred tax liability
$
91,010
$
73,904
(a) As of December 28, 2024, the Company’s state net operating loss carryforwards in various taxing jurisdictions expire in tax
years 2025 through 2044 if not utilized.
The Company does not have material unrecognized tax positions in either 2024 or 2023. All remaining unrecognized tax benefits are
set to expire prior to January 3, 2026. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in
income tax expense.
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 1, 2022, and state or local tax authorities for fiscal years before the year ended January 2, 2021.
-63-
Note 15 – Share-Based Payments
Stock-Based Employee Awards
The Company previously sponsored a shareholder-approved stock incentive plan (the “2020 Plan”) and on May 22, 2024, the
Company's shareholders approved a new stock incentive plan (the "2024 Plan"), which replaced the 2020 Plan. The 2024 Plan
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 2024 Plan are entitled to participate in dividends, payable upon the vesting of the underlying awards.
The 2024 Plan provided for 2,144,000 shares, and as of December 28, 2024, a total of 1,727,207 shares remained unissued under the
2024 Plan. In the event of a "Change in Control", as defined by the Plan, all outstanding unvested shares of restricted stock vest
immediately, while outstanding unvested shares of performance share units vest immediately on a pro-rata basis.
Restricted Stock
Restricted stock awards and restricted stock units granted to Associates vest ratably over a three-year service period and over one year
for grants to members of the Board of Directors. Awards and units 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 2024, 2023 and 2022:
Restricted
Weighted
Average
Restricted
Weighted
Average
Stock
Grant-Date
Stock
Grant-Date
Awards
Fair Value
Units
Fair Value
Outstanding and nonvested at January 1, 2022
1,031,837
$
17.56
—
$
—
Granted
391,334
28.63
—
—
Vested
(470,145)
17.92
—
—
Forfeited
(89,963)
20.71
—
—
Outstanding and nonvested at December 31, 2022
863,063
22.05
—
—
Granted
447,910
26.95
—
—
Vested
(432,549)
21.16
—
—
Forfeited
(58,967)
25.96
—
—
Outstanding and nonvested at December 30, 2023
819,457
24.92
—
—
Granted
—
—
610,842
20.28
Vested
(468,785)
23.14
(15,490)
20.41
Forfeited
(25,444)
27.15
(31,881)
20.41
Outstanding and nonvested at December 28, 2024
325,228
$
27.32
563,471
$
20.27
The total intrinsic value of restricted stock award shares vested was $9.7 million, $11.7 million and $14.3 million in 2024, 2023 and
2022, respectively. The total intrinsic value of restricted stock units vested was $0.3 million in 2024. As of December 28, 2024, total
unrecognized compensation cost related to nonvested restricted stock awards and restricted stock units granted under the Company's
stock incentive plans is $3.1 million and $6.4 million, respectively, and is expected to be recognized over a weighted average period
of 1.0 years and 2.1 years, respectively.
-64-
Performance Share Units
Performance share units were awarded to certain officers and key Associates in 2024 and 2023. The vesting of these awards is
contingent upon meeting certain performance metrics over a three year period, which include adjusted EPS and return on invested
capital for the 2023 awards and adjusted EPS and net sales for the 2024 grants. The quantity of shares awarded ranges from 0% to
200% of “Target,” as defined in the award agreement, based on the achievement against the performance metrics. Stock-based
compensation expense is recorded over the performance period and is reevaluated at each reporting date based on the probability of
the achievement of the performance metrics. The fair value of performance shares is based on the Company’s stock price on the date
of grant. Performance share unit awards have a three-year cliff vest, subject to achievement of the performance metrics. Awards are
subject to forfeiture and certain transfer restrictions prior to vesting.
The following table summarizes performance share unit activity for 2024 and 2023:
Performance
Weighted Average
Share
Grant-Date
Units
Fair Value
Outstanding and nonvested at December 31, 2022
—
$
—
Granted
299,840
27.01
Forfeited
(9,530)
27.24
Outstanding and nonvested at December 30, 2023
290,310
$
27.00
Granted
422,786
20.56
Forfeited
(34,531)
23.24
Outstanding and nonvested at December 28, 2024
678,565
$
23.18
As of December 28, 2024, total unrecognized compensation cost related to nonvested performance share unit awards granted under the
Company's stock incentive plans is $6.4 million and is expected to be recognized over a weighted average period of 2.0 years.
Stock-Based Compensation Expense
Stock-based compensation 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)
2024
2023
2022
Restricted stock award expense
$
5,418
$
10,220
$
8,308
Restricted stock unit expense
5,399
—
—
Performance share unit expense
(162)
2,048
—
Income tax benefit
(2,776)
(4,199)
(4,094)
Stock-based compensation expense, net of tax
$
7,879
$
8,069
$
4,214
Stock-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience.
The Company recognized tax deductions of $10.8 million, $12.2 million and $14.7 million related to the vesting of restricted stock
and performance share units in 2024, 2023 and 2022, respectively.
The Company sponsors an associate stock purchase plan covering 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. As of December 28, 2024, 128,777 shares
have been issued under the Plan.
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 totaling 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 totaling
up to 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.
-65-
The following table summarizes the Warrant activity for 2024, 2023 and 2022:
Warrant
Outstanding and nonvested at January 1, 2022
3,914,833
Vested
(434,984)
Outstanding and nonvested at December 31, 2022
3,479,849
Vested
(217,492)
Outstanding and nonvested at December 30, 2023
3,262,357
Vested
(217,492)
Outstanding and nonvested at December 28, 2024
3,044,865
Warrant expense recognized as a reduction of “Net sales” in the consolidated statements of earnings, and related tax benefits were as
follows:
(In thousands)
2024
2023
2021
Warrant expense
$
868
$
1,559
$
2,158
Tax benefits
(71)
(133)
(203)
Warrant expense, net of tax
$
797
$
1,426
$
1,955
As of December 28, 2024, total unrecognized cost related to non-vested warrants was $16.1 million, which may be expensed as
vesting conditions are satisfied over the remaining term of the agreement, or 2.8 years. Warrants representing 2,392,407 shares are
vested and exercisable. As of December 28, 2024, non-vested warrant shares had an intrinsic value of $1.5 million, and vested warrant
shares had an intrinsic value of $1.2 million.
Note 16 – Supplemental Cash Flow Information
Supplemental cash flow information is as follows:
(In thousands)
2024
2023
2022
Non-cash investing activities:
Capital expenditures included in accounts payable and other long-term liabilities
$
22,845
$
28,102
$
25,701
Other supplemental cash flow information:
Cash paid for interest
43,280
37,939
18,431
Income tax payments
13,371
11,172
6,513
Note 17 – Reportable Segment Information
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. The segment
adjusted EBITDA is regularly provided to the CODM to assess segment profitability as well as to identify opportunities and risks to
profitability within the segments to determine resource allocations accordingly. The business is classified by management into
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.
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 3 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
reportable 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.
-66-
The following tables set forth information about the Company by reportable segment:
2024
(In thousands)
Wholesale
Retail
Total
Net sales (including inter-segment sales)
$
7,906,020
$
2,841,800
$
10,747,820
Elimination of inter-segment sales
(1,196,715)
(1,781)
(1,198,496)
Total consolidated net sales
6,709,305
2,840,019
9,549,324
Less (a):
Cost of sales
5,921,242
2,110,417
8,031,659
Selling, general and administrative
600,857
658,322
1,259,179
Segment adjusted EBITDA
187,206
71,280
258,486
Reconciliation of Adjusted EBITDA
LIFO expense
(5,167)
Depreciation and amortization
(103,412)
Acquisition and integration, net
(3,113)
Restructuring and goodwill / asset impairment, net
(74,107)
Cloud computing amortization
(7,585)
Organizational realignment, net
(2,757)
Severance associated with cost reduction initiatives
(537)
Stock-based compensation
(10,743)
Stock warrant
(868)
Non-cash rent
2,679
Gain on disposal of assets
284
Legal settlement
900
Postretirement plan amendment and settlement
(99)
Interest and non-operating expenses, net
(42,936)
Earnings before income taxes
$
11,025
Other segment disclosures:
Acquisition and integration, net
$
2,048
$
1,065
$
3,113
Restructuring and goodwill / asset impairment, net
15,914
58,193
74,107
Depreciation and amortization
54,291
49,121
103,412
Capital expenditures
66,180
66,214
132,394
a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief
operating decision maker. Amounts are presented on a non-GAAP, or adjusted basis.
-67-
2023
(In thousands)
Wholesale
Retail
Total
Net sales (including inter-segment sales)
$
8,108,655
$
2,811,334
$
10,919,989
Elimination of inter-segment sales
(1,189,438)
(1,332)
(1,190,770)
Total consolidated net sales
6,919,217
2,810,002
9,729,219
Less (a):
Cost of sales
6,136,812
2,090,747
8,227,559
Selling, general and administrative
604,514
639,745
1,244,259
Segment adjusted EBITDA
177,891
79,510
257,401
Reconciliation of Adjusted EBITDA
LIFO expense
(16,104)
Depreciation and amortization
(98,639)
Acquisition and integration, net
(3,416)
Restructuring and asset impairment, net
(9,190)
Cloud computing amortization
(5,034)
Organizational realignment, net
(5,239)
Severance associated with cost reduction initiatives
(318)
Stock-based compensation
(12,536)
Stock warrant
(1,559)
Non-cash rent
2,599
Loss on disposal of assets
(259)
Legal settlement
(900)
Postretirement plan amendment and settlement
(94)
Interest and non-operating expenses, net
(36,587)
Earnings before income taxes
$
70,125
Other segment disclosures:
Acquisition and integration, net
$
216
$
3,200
$
3,416
Restructuring and asset impairment, net
8,548
642
9,190
Depreciation and amortization
51,535
47,104
98,639
Capital expenditures
75,509
44,821
120,330
a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief
operating decision maker. Amounts are presented on a non-GAAP, or adjusted basis.
-68-
2022
(In thousands)
Wholesale
Retail
Total
Net sales (including inter-segment sales)
$
8,049,733
$
2,798,792
$
10,848,525
Elimination of inter-segment sales
(1,204,497)
(928)
(1,205,425)
Total consolidated net sales
6,845,236
2,797,864
9,643,100
Less (a):
Cost of sales
6,016,894
2,071,908
8,088,802
Selling, general and administrative
662,466
648,953
1,311,419
Segment adjusted EBITDA
165,876
77,003
242,879
Reconciliation of Adjusted EBITDA
LIFO expense
(56,823)
Depreciation and amortization
(94,180)
Acquisition and integration, net
(343)
Restructuring and asset impairment, net
(805)
Cloud computing amortization
(3,650)
Organizational realignment, net
(1,859)
Severance associated with cost reduction initiatives
(831)
Stock-based compensation
(8,589)
Stock warrant
(2,158)
Non-cash rent
3,444
Loss on disposal of assets
(1,073)
Postretirement plan amendment and settlement
(133)
Costs related to shareholder activism
(7,335)
Interest and non-operating expenses, net
(21,629)
Earnings before income taxes
$
46,915
Other segment disclosures
Acquisition and integration, net
$
239
$
104
$
343
Restructuring and asset impairment, net
(2,363)
3,168
805
Depreciation and amortization
47,601
46,579
94,180
Capital expenditures
52,394
44,886
97,280
a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief
operating decision maker. Amounts are presented on a non-GAAP, or adjusted basis.
December 28,
December 30,
(In thousands)
2024
2023
Total assets
Wholesale
$
1,576,043
$
1,576,182
Retail
1,026,253
779,393
Total
$
2,602,296
$
2,355,575
-69-
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 28, 2024 (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 28, 2024.
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 28, 2024 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.
-70-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of SpartanNash Company
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 28, 2024, 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 28, 2024, 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 28, 2024, of the Company and our report dated
February 26, 2025, 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
February 26, 2025
-71-
Item 9B. Other Information
The Company has adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the
Company's securities by directors, officers and employees, or the Company itself, that are reasonably designed to promote compliance
with insider trading laws, rules and regulations, and the listing standards of the Nasdaq Global Select Market. The directors and
officers of the Company (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) ("Exchange Act") may
from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the
affirmative defense of Rule 10b5-1(c) under the Exchange Act.
During the quarter ended December 28, 2024, no Rule 10b5-1 trading arrangements or "non-Rule 10b5-1 trading arrangements" (as
defined by S-K Item 408(c)) were entered into or terminated by our directors or officers (as defined in Rule 16a-1(f) under the
Exchange Act).
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 2025.
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 2025.
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 2025.
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 2024:
EQUITY COMPENSATION PLAN INFORMATION
Number of securities
remaining
Number of securities to
available for future issuance
be issued upon exercise
Weighted-average exercise
under equity compensation
of outstanding options,
price of outstanding options,
plans (excluding securities
warrants and rights
warrants and rights
reflected in column (1))
Plan Category
(1)
(2)
(3)
Equity compensation Plans approved by
security holders (a)
1,920,601 (b)
— (c)
1,727,207
Equity compensation plans not approved
by security holders
—
Not applicable
—
Total
1,920,601
—
1,727,207
(a)
Consists of the Stock Incentive Plan of 2024 and 2020. The numbers of shares reflected in column (3) in the table above with
respect to the Stock Incentive Plan of 2024 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.
(b)
This amount reflects the outstanding restricted stock awards, restricted stock units and the maximum number of shares that may
be issued under outstanding performance share units; however, the actual number of shares which may be issued will be
determined based on the satisfaction of certain conditions, and therefore may be significantly lower.
(c)
The weighted average exercise price excludes restricted stock units and performance units, as there is no exercise price
associated with these awards. The only outstanding options, warrants or rights are restricted stock units and performance units.
All equity awards were granted under our Stock Incentive Plan.
See Note 15 to the consolidated financial statements for additional information.
-72-
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 2025.
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 2025.
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
February 26, 2025
Consolidated Balance Sheets at December 28, 2024 and December 30, 2023
Consolidated Statements of Earnings for the years ended December 28, 2024, December 30, 2023 and December
31, 2022
Consolidated Statements of Comprehensive Income for the years ended December 28, 2024, December 30, 2023
and December 31, 2022
Consolidated Statements of Shareholders’ Equity for the years ended December 28, 2024, December 30, 2023 and
December 31, 2022
Consolidated Statements of Cash Flows for the years ended December 28, 2024, December 30, 2023 and December
31, 2022
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 precedes the Signatures
page of this Form 10-K and is incorporated herein by reference.
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EXHIBIT INDEX
Exhibit
Number
Document
3.1
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.
3.2
Bylaws of SpartanNash Company, as amended. Previously filed as an exhibit to the Company’s Current Report on
Form 8-K filed on September 13, 2024. Incorporated herein by reference.
4.1
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.
10.1
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. Previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 2022. Incorporated herein by reference.
10.2*
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 20, 2024. Incorporated herein by reference.
10.3*
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 20, 2024. Incorporated herein by reference.
10.4*
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.
10.5*
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.
10.6*
Form of SPTN Restricted Stock Unit 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 20, 2024. Incorporated herein by
reference.
10.7*
Form of SPTN Restricted Stock Unit Plan Document (Associates). Previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended April 20, 2024. Incorporated herein by reference.
10.8*
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.
10.9*
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.
10.10*
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.
10.11*
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.
10.12*
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.
10.13*
Form of SPTN Restricted Stock Award Plan Document (Attorneys). Previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended April 22, 2023. Incorporated herein by reference.
10.14
Interest Rate Swap Agreement. Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended April 22, 2023. Incorporated herein by reference.
10.15
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.
10.16
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.
10.17
Lender Joinder Agreement - Associated and CoBank, dated April 17, 2023. Previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended April 22, 2023. Incorporated herein by reference.
-74-
10.18
Lender Joinder and Assignment Agreement - Bank of America and TD Bank, dated April 3, 2023. Previously filed
as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended April 22, 2023. Incorporated
herein by reference.
10.19
Lender Joinder Agreement - AgFirst Farm Credit Bank, dated October 26, 2023. Previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 30, 2023. Incorporated herein by reference.
10.20*
Executive Separation Agreement between SpartanNash Company and David Sisk. Previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended December 30, 2023. Incorporated herein by
reference.
10.21*
SpartanNash Company Stock Incentive Plan of 2024. Previously filed as an exhibit to the Company’s Form S-8 filed
on May 31, 2024. Incorporated herein by reference.
19
Insider Trading Policy.
21
Subsidiaries of SpartanNash Company.
23
Consent of Independent Registered Public Accounting Firm.
24
Powers of Attorney.
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release
Number 33-8212.
97
Clawback Policy. Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended
December 30, 2023. Incorporated herein by reference.
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 with embedded linkbases Document
104
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 28, 2024, 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.
-75-
SIGNATURES
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.
SPARTANNASH COMPANY
(Registrant)
Date: February 26, 2025
By
/s/ Tony B. Sarsam
Tony B. Sarsam
President and Chief Executive Officer
(Principal Executive Officer)
-76-
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.
February 26, 2025
By
*
M. Shân Atkins
Director
February 26, 2025
By
*
Fred Bentley, Jr.
Director
February 26, 2025
By
*
Dorlisa K. Flur
Director
February 26, 2025
By
*
Douglas A. Hacker
Chairman of the Board
February 26, 2025
By
*
Kerrie D. MacPherson
Director
February 26, 2025
By
*
Julien R. Mininberg
Director
February 26, 2025
By
*
Jaymin B. Patel
Director
February 26, 2025
By
*
Pamela S. Puryear, PhD
Director
February 26, 2025
By
/s/ Tony B. Sarsam
Tony B. Sarsam
President and Chief Executive Officer
(Principal Executive Officer)
February 26, 2025
By
/s/ Jason Monaco
Jason Monaco
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 26, 2025
By
/s/ R. Todd Riksen
R. Todd Riksen
Vice President and Corporate Controller
(Principal Accounting Officer)
February 26, 2025
*By
/s/ Jason Monaco
Jason Monaco
Attorney-in-Fact
EXECUTIVE OFFICERS
Tony B. Sarsam
President and Chief Executive Officer
Mamadou Djouma Barry
Senior Vice President and Chief Retail Officer
Ileana McAlary
Executive Vice President, Chief Legal Officer and Corporate Secretary
Amy McClellan
Executive Vice President and Chief Customer Officer
Jason Monaco
Executive Vice President and Chief Financial Officer
Bennett Morgan
Executive Vice President and Chief Merchandising Officer
David Petko
Executive Vice President and Chief Supply Chain Officer
Masiar Tayebi
Executive Vice President and Chief Strategy and Information Officer
Through April 11, 2025
CORPORATE INFORMATION
Transfer Agent
Computershare
P.O. Box 43078
Providence, RI 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 24, 2025, there were approximately 1,100
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 28, 2024, 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, MI 49518
616.878.2000
spartannash.com
IR@spartannash.com
BOARD OF DIRECTORS
M. Shân Atkins
Independent Business Executive and Retired Retail
and Consumer Executive
Fred Bentley, Jr.
President and Chief Executive Officer of DexKo Global, Inc.
Dorlisa K. Flur
Independent Business Executive and Former Chief Strategy &
Transformation Officer, Southeastern Grocers
Douglas A. Hacker
Chairman of the Board
Independent Business Executive and Retired Chief Financial
Officer and Executive Vice President Strategy of UAL Corp.
Kerrie D. MacPherson
Independent Business Executive and Former Senior Partner of
Ernst & Young, LLP
Julien R. Mininberg
Independent Business Executive and Former Chief Executive
Officer of Helen of Troy Limited
Jaymin B. Patel
Executive Chairman of Perennial Climate, Inc.
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
2024 SPARTANNASH
ANNUAL REPORT
850 76th Street SW | PO BOX 8700 | Grand Rapids, MI 49518
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 20,000 strong.
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 nearly 200
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 with convenience stores.
Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for
independent grocers. For more information, visit spartannash.com.
WE DELIVER
THE INGREDIENTS
FOR A BETTER LIFE.