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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~7, 2017,~~8, 2022, the registrant had ~~36,971,731~~35,275,157 outstanding shares of common stock, no par value.

The matters discussed in this Quarterly Report on Form 10-Q, in the Company’s press releases, ~~and~~ in the ~~Company’s~~Company's website-accessible conference calls with analysts, and investor presentations include ~~“forward-looking statements”~~"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 Company and subsidiaries (“SpartanNash” or “the Company”). These forward-looking statements ~~are~~may be identifiable by words or phrases indicating that ~~SpartanNash~~the Company or management ~~“expects,” “anticipates,” “plans,” “believes,”~~"expects," "anticipates," "plans," "believes," or ~~“estimates,”~~"estimates," or that a particular occurrence or event ~~“will,” “may,” “could,” “should”~~"may," "could," "should," "will" or ~~“will likely”~~"will likely" result, occur or be pursued or ~~“continue”~~"continue" in the future, that the ~~“outlook”~~"outlook", "trend", "guidance" or ~~“trend”~~"target" is toward a particular result or occurrence, that a development is an ~~“opportunity,” “priority,” “strategy,” “focus,”~~"opportunity," "priority," "strategy," "focus," that the Company is ~~“positioned”~~"positioned" for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Part I, Item 2 of this Quarterly Report on Form 10-Q, 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 Quarterly Report, other report, release, presentation, or statement.~~

~~In addition to other risks and uncertainties described in connection with the~~ forward-looking statements contained in this Quarterly Report on Form 10-Q, SpartanNash’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016~~January 1, 2022 and other periodic reports filed with the Securities and Exchange Commission (“SEC”), ~~there~~which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many ~~important factors that~~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 ~~general business conditions,~~the Company's ability to compete in the highly competitive wholesale distribution and retail grocery industries; changes in ~~overall~~ economic or geopolitical conditions, ~~that impact consumer spending,~~including inflationary pressures and the ~~Company’s~~Russia-Ukraine conflict; interest rate fluctuations; labor relations issues and rising labor costs; the ability of customers to fulfill their obligations to the Company; the Company's dependence on certain major customers, suppliers and vendors; disruptions to the Company's information security network; disruptions associated with the COVID-19 pandemic; the Company's ability to ~~integrate acquired assets, the impact~~implement its growth strategy and transformation initiatives; instances of ~~competition~~security threats, severe weather conditions and natural disasters; impairment charges for goodwill and other ~~factors which are often beyond~~long-lived assets; the ~~control~~Company's ability to successfully manage leadership transitions; the Company's ability to service its debt and to comply with debt covenants; the Company's ability to manage its private brand program for U.S. military commissaries; changes in the military commissary system, including its supply chain, or in the level of ~~the Company,~~governmental funding; product recalls and other product-related safety concerns; changes in government regulations; and other risks and uncertainties listed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the ~~“Risk Factors” discussion in Item 1A of the Company’s~~Company's most recent Annual Report on Form 10-K ~~for~~and in subsequent filings with the ~~fiscal year ended December 31, 2016~~Securities and ~~risks and uncertainties not presently known to the Company or that the Company currently deems immaterial.~~Exchange Commission.

This section and the discussions contained in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016~~January 1, 2022 and in Part I, Item 2 “Critical Accounting ~~Policy”~~Policies” of ~~the~~this Quarterly Report on Form 10-Q, 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 of 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 Quarterly Report.

12 Weeks Ended

40 Weeks Ended

October 7,

October 8,

October 7,

October 8,

2017

2016

2017

2016

Net sales
$

1,906,644

$

1,800,085

$

6,203,857

$

5,906,416

Cost of sales

1,644,952

1,544,790

5,313,763

5,054,180

Gross profit

261,692

255,295

890,094

852,236

Operating expenses

Selling, general and administrative

228,489

220,339

782,659

740,138

Merger/acquisition and integration

2,392

2,427

7,031

4,237

Goodwill impairment

189,027

—

189,027

—

Restructuring charges and asset impairment

35,626

2,662

36,633

23,714

Total operating expenses

455,534

225,428

1,015,350

768,089

Operating (loss) earnings

(193,842
)

29,867

(125,256
)

84,147

Other (income) and expenses

Interest expense

6,130

4,419

19,128

14,678

Other, net

(75
)

(146
)

(248
)

(416
)

Total other expenses, net

6,055

4,273

18,880

14,262

(Loss) earnings before income taxes and discontinued operations

(199,897
)

25,594

(144,136
)

69,885

Income taxes

(76,445
)

8,864

(56,809
)

25,635

(Loss) earnings from continuing operations

(123,452
)

16,730

(87,327
)

44,250

Loss from discontinued operations, net of taxes

(54
)

(82
)

(125
)

(268
)

Net (loss) earnings
$

(123,506
)

$

16,648

$

(87,452
)

$

43,982

Basic (loss) earnings per share:

(Loss) earnings from continuing operations
$

(3.31
)

$

0.45

$

(2.32
)

$

1.18

Loss from discontinued operations

(0.01
)
*

(0.01
)
*

(0.01
)
*

(0.01
)

Net (loss) earnings
$

(3.32
)

$

0.44

$

(2.33
)

$

1.17

Diluted (loss) earnings per share:

(Loss) earnings from continuing operations
$

(3.31
)

$

0.45

$

(2.32
)

$

1.18

Loss from discontinued operations

(0.01
)
*

(0.01
)
*

(0.01
)
*

(0.01
)

Net (loss) earnings
$

(3.32
)

$

0.44

$

(2.33
)

$

1.17

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~SHAREHOLDERS’ EQUITY, CONTINUED

Note 3 – Revenue

Disaggregation of ~~cash flows now include tax benefits as an operating activity, while cash paid on associates’ behalf related to shares withheld~~Revenue

The following table provides information about disaggregated revenue by type of products and customers for ~~tax purposes is classified as a financing activity. Retrospective application~~each of the ~~cash flow presentation resulted in $2.6 million increases~~Company’s reportable segments:


	12 Weeks Ended October 8, 2022						40 Weeks Ended October 8, 2022
(In thousands)	Wholesale		Retail		Total		Wholesale		Retail		Total
Type of products:
Center store (a)	$	642,552	$	259,044	$	901,596	$	2,010,150	$	806,116	$	2,816,266
Fresh (b)		508,440		253,712		762,152		1,647,860		811,879		2,459,739
Non-food (c)		450,974		106,074		557,048		1,466,281		342,015		1,808,296
Fuel		—		47,567		47,567		—		159,514		159,514
Other		27,903		246		28,149		89,442		803		90,245
Total	$	1,629,869	$	666,643	$	2,296,512	$	5,213,733	$	2,120,327	$	7,334,060
Type of customers:
Individuals	$	—	$	666,415	$	666,415	$	—	$	2,119,553	$	2,119,553
Independent retailers (d)		554,191		—		554,191		1,787,685		—		1,787,685
National accounts		552,980		—		552,980		1,785,704		—		1,785,704
Military (e)		508,102		—		508,102		1,596,612		—		1,596,612
Other		14,596		228		14,824		43,732		774		44,506
Total	$	1,629,869	$	666,643	$	2,296,512	$	5,213,733	$	2,120,327	$	7,334,060

	12 Weeks Ended October 9, 2021						40 Weeks Ended October 9, 2021
(In thousands)	Wholesale		Retail		Total		Wholesale		Retail		Total
Type of products:
Center store (a)	$	559,129	$	235,784	$	794,913	$	1,837,100	$	763,006	$	2,600,106
Fresh (b)		455,052		233,347		688,399		1,564,646		758,591		2,323,237
Non-food (c)		423,167		98,806		521,973		1,376,091		326,543		1,702,634
Fuel		—		40,544		40,544		—		118,880		118,880
Other		27,168		256		27,424		91,617		1,138		92,755
Total	$	1,464,516	$	608,737	$	2,073,253	$	4,869,454	$	1,968,158	$	6,837,612
Type of customers:
Individuals	$	—	$	608,506	$	608,506	$	—	$	1,967,372	$	1,967,372
Independent retailers (d)		515,272		—		515,272		1,676,879		—		1,676,879
National accounts		505,131		—		505,131		1,709,343		—		1,709,343
Military (e)		430,818		—		430,818		1,439,287		—		1,439,287
Other		13,295		231		13,526		43,945		786		44,731
Total	$	1,464,516	$	608,737	$	2,073,253	$	4,869,454	$	1,968,158	$	6,837,612

(a) Center store includes dry grocery, frozen and beverages.
(b) Fresh includes produce, meat, dairy, deli, bakery, prepared proteins, seafood and floral.
(c) Non-food includes general merchandise, health and beauty care, tobacco products and pharmacy.
(d) Independent retailers include sales that were previously classified within the former Food Distribution segment to manufacturers, brokers and distributors.
(e) Military represents the distribution of grocery products to U.S. military commissaries and exchanges, which primarily includes sales to manufacturers and brokers.

Contract Assets and Liabilities

Under its contracts with customers, the Company stands ready to both net cash provided by operating activities and net cash used in financing activities, respectively, for the year-to-date period ended October 8, 2016. The Company’s stock compensation expense continues to reflect estimated forfeitures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 provides guidance for lease accounting and stipulates that lessees will need to recognize a right-of-use asset and a lease liability for substantially all leases (other than leases that meet the definitiondeliver product upon receipt of a short-term lease). The liability will be equal to the present value of lease payments. Treatment in the consolidated statements of operations will be similar to the current treatment of operating and capital leases. The new guidance is effective on a modified retrospective basis forpurchase order. Accordingly, the Company inhas 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 ~~first quarter~~performance obligation is part of ~~its fiscal~~a contract that has an original expected duration of less than one year, ~~ending December 28, 2019. The adoption of this ASU will result in a significant increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets, and~~ the Company ~~is currently evaluating~~has applied the ~~other effects of adoption of this ASU on its consolidated financial statements.~~

~~In May 2014, the FASB issued ASU 2014-09, “Revenue~~practical expedient under ASC 606, Revenue from Contracts with ~~Customers.” The new guidance affects~~Customers, 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 ~~reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for~~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 ~~nonfinancial assets unless those contracts are within the scope of other standards. The standard’s core principle is that a company will recognize revenue when it transfers promised~~ goods or services to ~~customers~~the retailers. These advances are included in ~~an amount~~Other assets, net within the condensed 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 30 days, depending on the customer. At contract inception, the Company expects that ~~reflects~~ the ~~consideration~~period of time between the transfer of goods to ~~which~~ the ~~company expects to be entitled in exchange~~customer and when the customer pays for those goods ~~or services. In August 2015,~~will be less than one year, which is consistent with the FASB issued ASU 2015-14, “Deferral of the Effective Date,” which results in the guidance being effective for the Company in the first quarter of its fiscal year ending December 29, 2018. The adoption will include updates as provided under ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net);” ASU 2016-10, “Identifying Performance Obligations and Licensing;” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients.” Adoption is allowed by either the full retrospective or modified retrospective approach.

~~The Company is currently in the process of evaluating the impact of adoption of this~~Company’s standard on its consolidated financial statements and has substantially completed its initial evaluation of the major focus areas that could impact the Company. From a principal versus agent considerations perspective,payment terms. Accordingly, the Company has ~~evaluated its significant arrangements and has determined that revenue recognition on a gross reporting basis will remain relatively unchanged, with~~elected the ~~exception~~practical expedient to not adjust for the effects of a few smaller contracts that could be reported on a net basis depending on the nature of the arrangements and management’s final assessment. As it pertains to the Food Distribution and Military segments, the Company determined that the promised goods or services other than grocery products outlined in the contracts with customers are immaterial in the context of the contracts.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 ~~this determination, the Company is not required to assess whether these promised goods or services~~obtaining a contract that are ~~performance obligations,~~contingent upon successful contract execution and would therefore ~~believes revenue recognition practices will remain relatively unchanged as there are no additional deliverables~~be capitalized.

Allowance for ~~which the transaction price will need to be allocated. Many of these contracts also include contingent amounts of variable consideration, and the Company expects there to be few, if any, changes~~Credit Losses

Changes to the timing of revenue as the Company currently recognizes these amounts under the presumption that they are determinable and can be estimated. The Company also expects there to be few, if any, changes to revenue recognition in its Retail segment based on how the Company currently records gift card breakage and loyalty rewards, which are immaterial to the consolidated financial statements.

N~~ote 3~~ – ~~Acquisitions~~

On January 6, 2017, the Company acquired certain assets and assumed certain liabilities of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”) for $214.6 million in cash, net of $2.5 million of cash acquired. Acquired assets consist primarily of property and equipment of $77.5 million, intangible assets of $72.9 million, and working capital. Intangible assets are primarily composed of customer relationships, which will be amortized over fifteen years, and indefinite lived trade names. In connection with the purchase, the Company is providing certain earn-out opportunities that have the potential to pay the sellers an additional $27.4 million, collectively, if the business achieves certain performance targets during the first three years after acquisition. If certain performance targets are not met in the first year after acquisition, the Company will be reimbursed a portionbalance of the initial purchase price at an amount not to exceed the sum of: a) $15.0 million, representing the funds paid into escrow, and b) any earn-out opportunities earned by the sellers. The reduction in purchase price, if applicable, will first be applied to funds paid into escrow and thenallowance for credit losses were as an offset against and a reduction to any payments owed on the various earn-out opportunities. The acquisition was funded with proceeds from the Company’s Credit Agreement. As of October 7, 2017, the Company has incurred $4.9 million of costs related to the acquisition, of which $2.7 million was incurred in 2017, and is recorded in merger/acquisition and integration expense.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		903			—		903
Write-offs charged against the allowance		(756	)		—		(756	)
Balance at October 8, 2022	$	4,561		$	731	$	5,292

Founded in Indianapolis in 1965, Caito is a leading supplier of fresh fruits and vegetables as well as value-added meal solutions to grocery retailers and food service distributors across 21 states in the Southeast, Midwest and Eastern United States. BRT offers temperature-controlled distribution and logistics services throughout North America. Caito and BRT service customers from facilities in Indiana and Florida. Caito also has a fresh cut fruit and vegetable facility in Indianapolis and a new 118,000 square foot Fresh Kitchen facility, also in Indianapolis. The Fresh Kitchen provides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. The Company has begun production in the Fresh Kitchen facility and is in the process of ramping up to full production. The Company acquired Caito and BRT to strengthen its fresh product offerings to its existing customer base and to expand into fast-growing, value-added services, such as freshly-prepared centerplate and side dish categories.


	Allowance for Credit Losses
	Current Accounts			Long-term
(In thousands)	and Notes Receivable			Notes Receivable		Total
Balance at January 2, 2021	$	6,232		$	371	$	6,603
Changes in credit loss estimates		(1,097	)		360		(737	)
Write-offs charged against the allowance		(693	)		—		(693	)
Balance at October 9, 2021	$	4,442		$	731	$	5,173

The acquired assets and assumed liabilities were recorded at their estimated fair values as of the acquisition date and were based on preliminary estimates. These estimates are subject to revision upon the finalization of the valuations of the acquired real estate and intangible assets. Additional adjustments, if any, will be made prior to January 5, 2018. During the third quarter of fiscal 2017, the Company increased goodwill by $0.8 million to reflect an updated valuation of certain acquired long-lived assets. The excess of the purchase price over the fair value of net assets acquired, currently estimated at $46.0 million, was recorded as goodwill in the consolidated balance sheet and allocated to the Food Distribution segment. The goodwill recognized is attributable primarily to the assembled workforce of Caito and BRT and expected synergies. The Company expects that all goodwill attributable to the acquisition will be deductible for tax purposes.

Long-lived assets which are not recoverable are measured at fair value on a nonrecurring basis using Level 3 inputsunder the fair value hierarchy, as further described in Note ~~7 – Fair Value Measurements. Assets~~6. In the current year, assets with a book value of ~~$48.6~~$4.3 million were measured at a fair value of ~~$14.9~~$0.1 million, resulting in an impairment ~~charge~~charges of ~~$33.7~~$4.2 million. In the prior year, long-lived assets with a book value of $27.5 million were measured at a fair value of $23.7 million, resulting in ~~2017. Fair~~impairment charges of $3.8 million. The fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, including the expected proceeds from the sale of assets, 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, uses real estate brokers.

The Company has evaluated assets held for sale as of October 8, 2022 and concluded that a previously closed facility in Lakeland, Florida within the Wholesale segment, with a carrying value of $2.8 million, and one previously closed store within the Retail segment, with a carrying value of $0.9 million, meet the requirements for held for sale classification within ASC 360. The assets have been classified as property and equipment held for sale in the condensed consolidated balance sheet. Liabilities with a carrying value of $0.1 million are included as part of the ~~following:~~

disposal group. Subsequent to the end of the third quarter, ~~of fiscal 2017,~~ the Company ~~paid the outstanding balance on the Senior secured term loan of $52.2 million with~~sold all property and equipment held for sale and received proceeds ~~from its Senior secured revolving credit facility. As a result of this transaction, annual interest expense is expected to be reduced through a reduction of the average interest rates paid.~~totaling $6.9 million.

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).

~~ASC 820 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.~~

Certain of the Company’s business combinations involve the potential for the receipt or payment of future contingent consideration upon the shortfall or achievement of various operating thresholds, respectively. The additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified EBITDA levels. For business combinations including contingent consideration provisions an asset or liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period with the change in fair value recognized as income or expense within operating expenses in the condensed consolidated statements of income. The Company measures the asset and liability on a recurring basis using Level 3 inputs.

The fair value of contingent consideration is measured using projected payment dates, discount rates, probabilities of payment, and projected EBITDA. Projected contingent payment or receipt amounts are discounted back to the current period using a discounted cash flow model. Projected EBITDA amounts are based on initial deal model forecasts at the time of acquisition as well as the Company’s most recent internal operational budget, and include a probability weighted range of outcomes. Changes in projected EBITDA, probabilities of payment, discount rates, or projected payment dates may result in higher or lower fair value measurements. The recurring Level 3 fair value measurements of contingent consideration include the following significant unobservable inputs as of October 7, 2017:

The fair value of contingent consideration receivable and payable associated with the Caito and BRT acquisition was $18.4 million and $3.4 million, respectively, as of October 7, 2017. The net receivable of $15 million was recorded in other assets, net in the condensed consolidated balance sheets as there is a right of offset for the payable and receivable. Upon payment, the portion of the contingent consideration related to the acquisition date fair value is reported as a financing activity in the condensed consolidated statements of cash flows. Amounts received or paid in excess of the acquisition date fair value are reported as an operating activity in the consolidated statements of cash flows.

The Company is engaged from time-to-time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity.

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 no longer remains a customer for the specified time period. As of October 7, 2017, theThe Company has ~~an unearned advance~~contributed and is required to one independent retailer for an amount representing approximately two percent of the Company’s total assets, and also has outstanding receivables from this customer in the amount of $6.2 million; the Company has established a reserve of $4.8 million given the past due status on those receivables. The Company’s collateral related to the advanced funds is a security interest in select business assets of the independent retailer’s stores, including select real property assets and other collateral, including personal guarantees, from the shareholders. However, the Company may be unable to recover the entire unearned portion of the funds advanced to this independent retailer. The Company is currently involved in an ongoing state law proceeding pursuing recovery of amounts owed. Based on the uncertainty associated with estimating the value of the collateral and the risks related to taking possession of and divesting the secured business assets, the Company cannot reasonably estimate the amount of advanced funds, if any, that should be reserved. The Company estimates that the possible range of loss related to this customer, including past due amounts, is between zero and $25.0 million, depending on the circumstances discussed above.

~~The Company contributes~~continue making contributions to the Central States Southeast and Southwest Pension Fund ~~(“Central~~(the “Central States Plan” or ~~“the Plan”~~the “Plan”), a multi-employer pension plan, based on obligations arising from certain of its collective bargaining ~~agreements in Bellefontaine, Ohio, Lima, Ohio,~~agreements. If the Company were to cease making such contributions and ~~Grand Rapids, Michigan covering its supply chain associates at those locations. This~~triggered a withdrawal from the Plan, ~~provides retirement benefits~~it is possible that the Company would be obligated to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by contributing employers and unions; however, SpartanNash is not a trustee. The trustees typically 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 and the administration of the plan. The Company currently contributespay withdrawal liability to the ~~Central States~~ Plan ~~under~~if the ~~terms outlined in~~Plan is underfunded at the ~~“Primary Schedule”~~time of Central States’ Rehabilitation Plan or those outlined in the “Default Schedule.” Both the Primary and Default schedules require varying increases in employer contributions over the previous year’s contribution. Increases are set within the collective bargaining agreement and vary by location. The Plan continues to be in red zone status, which according to the Pension Protection Act, is considered to be in critical status as red zone status plans are generally less than 65% funded.

such withdrawal. Based on the most recent information available to the Company, management believes that the Plan’s present value of actuarial accrued liabilities ~~in this multi-employer plan~~ significantly exceeds the value of the assets held in the Plan’s trust to pay benefits. ~~Because SpartanNash is one of a number of employers contributing to this plan, it is difficult to ascertain what the exact amount of the underfunding would be.~~ Management is not aware of any facts that could give rise to any assessment of withdrawal liability against the Company or any significant change in funding levels in the Plan since ~~December 31, 2016. To reduce this~~January 1, 2022. Due to uncertainty regarding future factors that could trigger withdrawal liability, 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 underfunding ~~management expects meaningful increases~~and/or the Company’s current potential withdrawal liability exposure in ~~expense as~~the event of a ~~result of required incremental multi-employer pension plan contributions in~~ future ~~years.~~withdrawal from the Plan. Any adjustment for withdrawal liability ~~will~~would be recorded when it is probable that a liability exists and can be reasonably determined.

On March 10, 2021, the United States Congress passed the American Rescue Plan Act of 2021 (the “Act”), which provides financial relief to certain failing multiemployer pension plans. In accordance with the interim guidance issued by the Pension Benefit Guaranty Corporation (the "PBGC") on July 9, 2021, the Act is designed to prevent such plans from becoming insolvent for the next 30 years. On April 28, 2022, the Central States Plan submitted an initial application to the PBGC for relief. The ~~terms~~Central States Plan withdrew the initial application and submitted a revised application on August 12, 2022. As the Central States Plan is in a critical and declining status, it is expected to qualify for relief under the Act. The PBGC has up to 120 days from the date of the ~~existing collective bargaining agreement between~~most recent submission to review the ~~Company~~application. The legislation and ~~union representing its associates in~~ the ~~Grand Rapids distribution center have been mutually extended by~~available relief are designed to alleviate the ~~parties through December 2, 2017. The parties have agreed to continue negotiations in an effort to reach agreement on a longer term collective bargaining agreement.~~risk of insolvency of the Plan for the next 30 years.

The Company ~~has a~~sponsors shareholder-approved stock incentive ~~plan~~plans that ~~provides~~provide for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, ~~stock awards,~~performance shares, performance share units, dividend equivalent rights, and other stock-based and stock-related awards to directors, officers and other key associates.

The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel, and other items and services. The following table presents sales by type of similar products and services:

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q, the information contained under the caption “Forward-Looking Statements,” which appears at the beginning of this report, and the information in the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016.~~January 1, 2022.

SpartanNash, headquartered in Grand Rapids, Michigan, is a ~~leading multi-regional grocery~~food solutions company that delivers the ingredients for a better life. As a distributor, wholesaler and ~~grocery~~ retailer ~~whose core businesses include distributing grocery products to~~with a global supply chain network, SpartanNash customers span a diverse group of national accounts, independent ~~grocery~~and chain grocers, e-commerce retailers, ~~(“independent retailers”), select national retailers, its corporate owned retail stores, and~~U.S. military commissaries and exchanges, and the Company’s own brick-and-mortar grocery stores, pharmacies and fuel centers. SpartanNash distributes grocery and household goods, including fresh produce and its Our Family® portfolio of products, to locations in all 50 states.

At the beginning of the third quarter of 2022, the Company combined the previous Food Distribution and Military operating segments into one operating segment: Wholesale. The change in the ~~United States.~~operating segments was driven by both a change in the Company’s organizational structure, and in the reporting utilized by the Chief Operating Decision Maker to allocate the Company’s resources and assess operating performance. The combination of the two segments reflects the way the Company manages the distribution business as one comprehensive distribution network and furthers the Company’s efforts to streamline operations in connection with its Supply Chain Transformation and better serve customers. As a result, the Company now operates ~~three~~two reportable ~~business~~ segments: ~~Food Distribution, Military~~Wholesale and Retail. Segment financial information for the comparative prior year periods within this quarterly report has been recast to reflect this update.

The Company’s ~~Food Distribution~~Wholesale segment provides a wide variety of nationally branded and private brand grocery products and perishable food products to ~~over 2,000~~ independent ~~retailers, food distributors and~~grocers, the Company’s corporate owned retail stores. The Food Distribution segment currently conducts business in 47 states, primarily in the Midwest, Great Lakes, and Southeast regions of the United States. Through its Food Distribution segment, the Company also services selectstores, national retailers, including Dollar General. Sales to Dollar General are made to over 14,100 of its retail locations. Through its recent acquisition of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”) (“the recent acquisition”) on January 7, 2017, the Company processes fresh-cut fruits and vegetables and other value-added meal solutions and supplies these products to grocery retailers and food service distributors, ~~through its Indiana~~ and Florida facilities. With the new Caito Fresh Kitchen facility, the Company is developing the ability to process, cook and package fresh protein-based foods and complete meal solutions for a number of differentother customers. ~~With the acquisition of BRT, the Company offers temperature-controlled logistics services throughout North America.~~

The Company’s ~~Military~~Wholesale segment ~~contracts with manufacturers to distribute a wide variety of~~also distributes grocery products ~~primarily~~ to 160 military commissaries and over 400 exchanges ~~located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain and Egypt.~~worldwide. The ~~Company has over 40 years of experience acting as a distributor to U.S. military commissaries and exchanges. As of December 8, 2016, the~~ Company is the exclusive ~~worldwide~~ supplier of private brand products to U.S. military commissaries, ~~and~~a partnership with DeCA which began ~~shipping private brand products to military commissaries during the second quarter of~~in fiscal 2017.

AtAs of the end of the third quarter, the Company’s Retail segment operated 147 corporate owned retail stores in the Midwest ~~and Great Lakes regions~~region primarily under the banners of Family Fare, ~~Supermarkets, VG’s Food~~Martin’s Super Markets and ~~Pharmacy,~~ D&W Fresh ~~Markets, Sun Mart~~ ~~and~~ ~~Family Fresh~~ Market. The Company also ~~offers~~offered pharmacy services in 8891 of its corporate owned retail stores and ~~operates 31~~operated 36 fuel centers. The Company’s neighborhood market strategy distinguishes its corporate owned retail stores ~~have a “neighborhood market” focus to distinguish them~~ from supercenters and limited assortment stores.

All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday.

InThe majority of the Company’s revenues are not seasonal in nature. However, in certain geographic areas, ~~the Company’s sales~~corporate retail stores and ~~operating performance may vary with seasonality. Many stores~~independent retail customers are dependent on tourism, and therefore, are ~~most~~ affected by seasons and weather ~~patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months.~~patterns.

~~The Company’s sales growth trends accelerated in~~Key financial and operational highlights for the third quarter include the following:

In November 2022, the Company increased fiscal 2022 guidance, including, among other items, net sales, adjusted EBITDA, adjusted EPS and interest expense. The change in the guidance is in line with known or anticipated trends related to additional benefits expected from the Company's Supply Chain Transformation initiative and continued inflation, which are tempered by labor investments in both the Wholesale and Retail ~~earnings~~segments and elevated interest rates. The Company now expects net sales to range from $9.5 billion to $9.7 billion, with Wholesale sales now expected to increase 6.5% to 8.0% and Retail comparable stores expected to increase 6% to 7.5%. Adjusted EBITDA is now expected to range from $237 million to $242 million and adjusted EPS is now expected to range from $2.27 per diluted share to $2.37 per diluted share. The interest expense is now expected to range from $21 million to $23 million.

The Company believes certain Company initiatives including the Supply Chain Transformation, initiatives relating to merchandising transformation and marketing innovation, and plans to gain market share in both the Retail and Wholesale segments will favorably impact the Company’s future results. The Company believes additional future investments in capital expenditures will be necessary to support these programs. Tempering the Company’s expectations of favorable future results are ~~anticipated to remain challenged for the remainder~~macroeconomic headwinds including a tight labor market, possibility of ~~the year as the competitive landscape~~a recession, reduction in government food assistance programs, and inflationary ~~environment are expected to persist. Based on the factors noted above, the Company anticipates fourth quarter earnings will be significantly below the prior year.~~pressures.

The following table sets forth items from the condensed consolidated statements of ~~operations~~earnings as a percentage of net sales and the year-to-year percentage change in the dollar amounts:

Net Sales –The following table presents net sales by segment and variances in net sales:

Net sales for the quarter ended October ~~7, 2017 (“third~~8, 2022 (the “third quarter”) increased ~~$106.6~~$223.3 million, or ~~5.9%~~10.8%, to ~~$1.91~~$2.30 billion from ~~$1.80~~$2.07 billion in the quarter ended October ~~8, 2016 (“prior~~9, 2021 (the “prior year quarter”). Net sales for the year-to-date period ended October ~~7, 2017 (“year-to-date~~8, 2022 (the “year-to-date period”) increased ~~$297.4~~$496.4 million, or ~~5.0%~~7.3%, to ~~$6.20~~$7.33 billion from ~~$5.91~~$6.84 billion in the year-to-date period ended October ~~8, 2016 (“prior year-to-date~~9, 2021 (the “prior-year-to-date period”). The ~~increase was driven primarily~~increases were attributable to increases in net sales in both the Wholesale and Retail segments, which were favorably impacted by ~~contributions from the Caito acquisition and organic growth from existing customers~~inflation.

Wholesale net sales increased $165.4 million, or 11.3%, to $1.63 billion in the ~~Food Distribution segment, which more than offset lower sales~~third quarter from $1.46 billion in the ~~Retail segment. Third quarter~~prior year quarter. Net sales for the year-to-date period increased $344.3 million, or 7.1%, to $5.21 billion from $4.87 billion in the prior year-to-date period. The increases in net sales ~~trends increased sequentially from~~were due primarily to the ~~second quarter due to significantly improved sales comparisons in the Military commissary business.~~inflationary impact on pricing.

Retail net sales ~~after intercompany eliminations,~~ increased ~~$132.9~~$57.9 million, or ~~16.5%~~9.5%, to ~~$937.4~~$666.6 million in the third quarter from ~~$804.5~~$608.7 million in the prior year quarter. Net sales for the year-to-date period increased ~~$426.0~~$152.2 million, or ~~16.3%~~7.7%, from ~~$2.62~~$1.97 billion in the prior year-to-date period to ~~$3.04~~$2.12 billion. The ~~third quarter and year-to-date~~ increases ~~were due to contributions from the Caito acquisition and organic volume growth from existing customers.~~

Military net sales decreased $1.0 million, or 0.2%, to $505.6 million in the third quarter from $506.6 million in the prior year quarter, representing a significant improvement from the 6.8% decline in the second quarter. Net sales for the year-to-date period decreased $66.5 million, or 3.9%, from $1.69 billion in the prior year-to-date period to $1.62 billion. The third quarter and year-to-date decreases were primarily due to ~~lower~~inflationary pricing. Comparable store sales ~~at the DeCA operated commissaries, which~~increased 8.0% and 7.2% for the ~~third~~current quarter ~~were mostly offset by new business.~~

~~Retail net sales decreased $25.4 million, or 5.2%, to $463.6 million in the third quarter from $489.0 million in the prior year quarter. Net sales for~~and the year-to-date period, decreased $62.0 million, or 3.9%, from $1.60 billion in the prior year-to-date period to $1.54 billion. The decrease in net sales was primarily attributable to lower sales resulting from the closures and sales of retail stores ($16.7 million for the quarter and $42.8 million year-to-date) and negative comparable store sales. Comparable store sales, excluding fuel, were down 2.5% for the quarter and 2.2% for the year-to-date period, and reflect continued strong competition within the industry.respectively. 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. ~~Please note that~~Acquired stores are included in the comparable sales calculation 13 periods after the acquisition date. Sales are compared to the same store’s operations from the prior year period for purposes of calculation of comparable store sales. Fuel is excluded from the comparable sales calculation due to volatility in price. Comparable store sales is a widely used metric among retailers, which is useful to management and investors to assess performance. The Company’s definition of comparable store sales may differ from similarly titled measures at other companies.

Gross Profit – Gross profit represents net sales less cost of sales, which for all non-production operations includes ~~product~~ purchase costs, in-bound freight, physical inventory adjustments, markdowns and promotional allowances and excludes warehousing costs, depreciation and other administrative expenses. For the Company’s food processing operations, cost of sales includes direct product and production costs, inbound freight, purchasing and receiving costs, utilities, depreciation, and other indirect production costs and excludes out-bound freight and other administrative expenses. The Company’s gross profit definition may not be identical to similarly titled measures reported by other companies. Vendor allowances that relate to the buying and merchandising activities consist primarily of promotional allowances, which are generally 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 ~~associated with product cost~~ are recognized as a reduction in cost of sales when the 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 in the consolidated statements of earnings.

Gross profit increased $21.7 million, or 6.6%, to ~~$261.7~~$351.2 million in the third quarter from ~~$255.3~~$329.5 million in the prior year quarter. As a percent of net sales, gross profit was ~~13.7%~~15.3% compared to ~~14.2%~~15.9% in the prior year quarter. Gross profit for the year-to-date period increased ~~$37.9~~$74.9 million, or ~~4.4%~~6.9%, from ~~$852.2 million~~$1.08 billion in the prior year-to-date period to ~~$890.1 million.~~$1.16 billion in the current year. As a percent of net sales, gross profit for both the year-to-date and prior year-to-date periods was 15.8%. The gross profit rate decline in the current quarter was driven by an increase in LIFO expense of $9.0 million, or 36 basis points. After considering the impact of LIFO, lower Retail margin rates were partially offset by improvements in margin rates within the Wholesale segment. Gross profit rate in the year-to-date period ~~was 14.3%~~remained flat when compared to ~~14.4%~~the prior year as the improvements in the ~~prior year-to-date period. As~~Wholesale margin rates were offset by a ~~percent~~total company increase in LIFO expense of ~~net sales, the third quarter and year-to-date changes in gross margin were primarily due to the increased mix of Food Distribution sales~~$32.5 million, as well as a ~~percentage of total sales combined with margin investments in the Retail segment.~~lower gross profit rate within Retail.

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, ~~warehousing costs, store occupancy~~facility costs, shipping and handling, ~~utilities,~~ equipment rental, depreciation, ~~(to the extent not included in Cost of sales),~~and out-bound freight, ~~and other~~in addition to corporate administrative expenses.

SG&A expenses ~~increased $8.2 million, or 3.7%, to $228.5 million in~~for the third quarter increased $26.5 million, or 8.6%, to $333.4 million from ~~$220.3~~$306.8 million in the prior year quarter, representing ~~12.0%~~14.5% of net sales in the third quarter compared to ~~12.3%~~14.8% in the prior year quarter. SG&A ~~expenses~~expense for the year-to-date period increased ~~$42.6~~$95.4 million, or ~~5.7%,~~9.5% to $1.1 billion from ~~$740.1 million~~$1.0 billion in the prior year-to-date, representing 14.9% in the current year-to-date period compared to ~~$782.7 million, and increased to 12.6%~~14.6% as a percentage of net sales ~~compared to 12.5%~~ in the prior year-to-date period. The ~~third~~decrease in operating expenses as a percentage of sales in the current quarter was due to a reduction in the supply chain expense rates as a result of efficiencies realized from the Company’s Supply Chain Transformation initiative. These efficiencies were partially offset by an increase in corporate administrative costs, which included higher incentive compensation expense and up-front investments in the Merchandising Transformation initiative. The increase in operating expenses as a percentage of sales in the year-to-date period was due to higher corporate administrative costs, which included an increase in incentive compensation expense, costs related to shareholder activism, and up-front investments in the Merchandising transformation initiative. The increase in operating expenses was partially offset by efficiencies realized from the Supply Chain Transformation initiative.

Acquisition and Integration, net – Third quarter and prior year quarter results included net gains of $0.6 million and charges of $0.1 million, respectively. Acquisition and integration expenses for the year-to-date ~~increases in expense~~periods ended October 8, 2022 and October 9, 2021 were $0.1 million and $0.3 million, respectively. The current quarter activity primarily ~~due to~~consists of a gain from the ~~addition~~reversal of a litigation accrual which was initially established at the time of the ~~Caito~~Martin's Super Markets acquisition. In the current quarter, the Company successfully appealed the litigation and released the corresponding accrual. Current year-to-date expense is primarily related to an acquisition ~~partly~~within the Retail segment, partially offset by ~~lower incentive compensation expenses. The rate to sales decrease~~the reversal of the litigation accrual in the ~~third~~current quarter. Prior year expense was associated with the integration of Martin's Super Markets.

Restructuring and Asset Impairment, net – Third quarter and prior year quarter results included net gains of $0.9 million and $0.2 million, respectively. The year-to-date period and the prior year-to-date period included net charges of $1.7 million and $3.0 million, respectively. The current quarter income was primarily due to ~~the mix~~gains on sales of ~~business operations and lower incentive compensation expenses.~~

~~Merger/Acquisition and Integration~~ ~~– Third quarter and year-to-date period results included $2.4 million and $7.0 million, respectively,~~real property of merger/acquisition and integration expenses mainly associated with recent acquisitions. Prior year quarter and year-to-date results included $2.4 million and $4.2 million, respectively, of merger/acquisition and integration primarily associated with the merger of Spartan Stores, Inc. and Nash-Finch Company.

~~Restructuring Charges and Goodwill and Asset Impairment~~ ~~– Third quarter andyear-to-date results included $224.7 million and $225.7 million, respectively, of net restructuring~~previously closed locations within both segments, partially offset by Retail store closing charges and asset impairment charges ~~predominantly associated with third quarter goodwill and asset impairment charges. In the third quarter, the Company recorded a non-cash goodwill impairment charge of $189.0 million~~ related to the Retail segment. As a result of significantly lower than expected Retail operating results due to an increasingly competitive retail environment and the related pricing pressures that are anticipated to negatively impact gross margin, operating profit, and future cash flows, the Company revised its future projections for the Retail reporting unit. The Company performed Step 1 of the goodwill impairment test by calculating the fair valuerestructuring of the Retail ~~reporting unit based on its discounted estimated future cash flows. It was determined that the carrying value~~segment's e-commerce delivery model. Current year expense primarily consists of ~~the Retail segment exceeded its fair value, and consequently, the Company recorded an estimated goodwill impairment charge of $189.0 million. The Company also recorded $35.6 million of~~ asset impairment and restructuring charges in the third quarter primarily associated with the underlying performance of Company’s retail store base and the execution of its store rationalization program. Prior year quarter and year-to-date results included $2.7 million and $23.7 million, respectively, of restructuring and asset impairment charges. Prior year quarter restructuring charges and asset impairment consisted primarily of impairment charges related to ~~three underperforming retail stores and additional costs, incurred in connection with winding down operations at certain closed facilities in~~restructuring of the ~~Food Distribution~~Retail segment's ecommerce delivery model and Retail store closing charges, partially offset by a gain on sales of assets related to the sale of real property of previously closed locations in both segments. ~~Prior~~The prior year quarter and prior year-to-date ~~period restructuring charges~~amounts consist primarily of retail store closing and asset impairment ~~consisted primarily~~charges, partially offset by gains on the sale of ~~charges related to the closure of three retail stores~~pharmacy customer lists, equipment, and ~~two food distribution centers which were part of the Company’s retail~~real estate associated with store ~~and warehouse rationalization plan,~~closings, as well as ~~impairment charges related to three underperforming retail stores.~~the termination of a lease and the sale of real estate within the Wholesale segment.

Operating Earnings –The following table presents operating ~~(loss)~~ earnings by segment and variances in operating ~~earnings:~~earnings.

Operating earnings decreased ~~$223.7~~$3.4 million, or 15.1% to ~~a loss of $193.8~~$19.3 million in the third quarter from ~~earnings of $29.9~~$22.7 million in the prior year quarter. Operating earnings for the year-to-date period decreased ~~$209.4~~$19.1 million, or 24.2%, to ~~a loss of $125.3~~$59.8 million from ~~earnings of $84.1~~$78.8 million in the prior year-to-date period. The ~~third quarter decrease was primarily~~decreases in operating earnings were due to the ~~goodwill impairment, higher asset impairment charges, start-up costs associated with the new Fresh Kitchen operation~~changes in net sales, gross profit and the negative impact of lower sales in the Retail segment, which more than offset lower incentive compensation costs and organic sales growth in Food Distribution. The year-to-date decrease was primarily due to the goodwill impairment, higher asset impairment and restructuring charges predominantly related to the Retail segment as well as higher merger/acquisition and integrationoperating expenses ~~and start-up costs associated with the recent acquisition, which more than offset the positive impacts of lower incentive compensation and organic sales growth in Food Distribution.~~discussed above.

~~Food Distribution~~Wholesale operating earnings increased ~~$1.4~~$8.1 million, or ~~7.3%~~136.4%, to ~~$20.3~~$14.0 million in the third quarter from ~~$19.0~~$5.9 million in the prior year quarter. Operating earnings for the year-to-date period increased ~~$4.8~~$19.7 million, or ~~7.5%~~56.0%, to ~~$68.9~~$54.8 million from ~~$64.0~~$35.1 million in the prior year-to-date period. The increase in operating earnings for Wholesale in the third quarter was ~~driven by organic~~due to increased sales ~~growth~~ and ~~lower incentive compensation,~~a reduced rate of supply chain expenses, partially offset by ~~Fresh Kitchen start-up costs.~~increases in corporate administrative costs and LIFO expense. The increase in the operating earnings for Wholesale in the year-to-date period was ~~driven by organic~~due to increased sales, ~~growth~~a higher gross margin rate and ~~lower incentive compensation, and lower restructuring charges related to the Company’s warehouse optimization plan,~~a reduced rate of supply chain expenses, partially offset by ~~charges related to Fresh Kitchen start-up costs and merger/acquisition and integration expenses.~~an increase in corporate administrative costs.

~~Military~~Retail operating earnings decreased ~~$1.7~~$11.5 million, or ~~60.9%,~~68.5% to ~~$1.1~~$5.3 million in the third quarter from ~~$2.9~~$16.8 million in operating earnings in the prior year quarter. Operating earnings for the year-to-date period decreased ~~$4.3~~$38.8 million, or ~~48.6%~~88.7%, to ~~$4.5~~$4.9 million from ~~$8.8~~$43.7 million in operating earnings in the prior year-to-date period. The third quarter decrease was due to higher merger/acquisition and integration and impairment expenses partly offset by margin rate improvements and lower incentive compensation expenses. The year-to-date decrease in operating earnings was ~~primarily~~ due to ~~higher merger/acquisition and integration expenses, the negative impact of the shift of New Year’s Day into the first quarter, and higher costs for health care and~~ a ~~large insurance claim.~~

Retail operating earnings decreased $223.4 million to a loss of $215.3 million in the third quarter from earnings of $8.0 million in the prior year quarter. Operating earnings for the year-to-date period decreased $210.0 million to a loss of $198.6 million from earnings of $11.3 million in the prior year-to-date period. The third quarter decrease was primarily due to the goodwill impairment, higher asset impairment charges, lower ~~sales, and~~gross profit rate, investments in ~~margin, partly offset by lower merger/acquisition~~store wage rates, and ~~integration expenses. The year-to-date decrease was primarily due to higher asset impairment charges, higher health care costs, lower comparable store sales~~increased corporate administrative, utilities and ~~the shift of New Year’s Day, partially offset by lower merger/acquisition and integration expenses and the closure of unprofitable stores.~~supplies costs.

Interest Expense – Interest expense increased ~~$1.7~~$3.0 million, or ~~38.7%~~100.4%, to $6.1 million in the third quarter from ~~$4.4~~$3.0 million in the prior year quarter. Interest expense for the year-to-date period increased ~~$4.4~~$3.9 million, or ~~30.3%~~35.7%, from ~~$14.7~~$10.9 million in the prior year-to-date period to ~~$19.1~~$14.8 million. The increase in interest expense was ~~primarily~~ due to ~~increased~~rising interest rates and an increase in borrowings ~~related~~due to ~~the Caito and BRT acquisition.~~inflationary increases in working capital.

Income Taxes – The effective income tax rates were ~~38.2%~~32.5% and ~~34.6%~~23.1% for the third quarter and prior year quarter, respectively. For the year-to-date period and prior year-to-date period, the effective ~~income~~ tax rates were ~~39.4%~~25.4% and ~~36.7%~~24.5%, respectively. The difference from the federal statutory rate in current quarter was primarily due to state taxes, limitations on the deductibility of executive compensation and other non-deductible expenses, partially offset by tax benefits associated with federal tax credits. The difference in the federal statutory rate in the current year was primarily due to state taxes, limitations on the deductibility of executive compensation and non-deductible expenses, partially offset by tax benefits associated with federal tax credits and discrete tax benefits related to stock compensation. In the prior year, the differences from the federal statutory rate ~~are~~was primarily due to state taxes and the limitations on the deductibility of executive compensation, partially offset by federal tax credits.

On March 27, 2020, the U.S. government enacted tax legislation to provide economic stimulus and support businesses and individuals during the COVID-19 pandemic, referred to as the CARES Act. In connection with the CARES Act, the Company recorded net discrete income tax benefits ~~related~~of $9.3 million in 2020 associated with the additional deductibility of certain expenses combined with provisions which enable companies to ~~stock-based compensation~~carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”), when the federal ~~tax credits in the current year and state taxes and federal tax credits in the prior year. The Company’s effective~~statutory income tax rate was ~~impacted by the stock-based compensation benefits recognized resulting from the adoption of ASU 2016-09. The tax impacts of stock-based compensation are primarily generated in~~35%. In the first quarter ~~due~~of 2021, the Company received tax refunds totaling $25.7 million related to the ~~timing of awards and vesting schedules.~~amended prior year returns.

In addition to reporting financial results in accordance with 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, capital expenditures and ~~Adjusted Earnings Before Interest, Taxes, Depreciation~~IT capital, and ~~Amortization~~adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company’s performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

At the beginning of 2022, the Company made a change to the adjusted operating earnings and adjusted earnings from continuing operations measures to exclude the impact of LIFO expense or benefit. The Company believes the change reduces volatility associated with temporary fluctuations in inflation, enabling investors to best establish a basis for expected performance and the ability to evaluate actual results against that expectation and the industry in which the Company operates. Prior year adjusted operating earnings and adjusted earnings from continuing operations figures have been restated to align with this change in presentation. Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude, ~~start-up~~among other items, LIFO expense, costs related to shareholder activism, operating and non-operating costs associated with the ~~new Fresh Kitchen operation as well as an executive retirement stock compensation award. The Fresh Kitchen is a newly constructed facility that provides the Company with the ability to process, cook,~~postretirement plan amendment and ~~package fresh protein-based foods~~settlement, organizational realignment and ~~complete meal solutions. Given the Fresh Kitchen represents a new line of business for the Company, the start-up activities~~severance associated with ~~testing, training,~~cost reduction initiatives. Costs related to shareholder activism include consulting, legal, and ~~preparing~~other expenses incurred in relation to shareholder activism activities. Costs related to the ~~Fresh Kitchen~~postretirement plan amendment and settlement include non-operating expenses associated with recognition of plan settlement losses and amortization of the prior service credit related to the amendment of the retiree medical plan, which are adjusted out of adjusted earnings from continuing operations. Postretirement plan amendment and settlement costs also include operating expenses related to payroll taxes which are adjusted out of all non-GAAP financial measures. Organizational realignment includes benefits for ~~production,~~associates terminated as ~~well as incorporating~~part of leadership transition plans, which do not meet the ~~related~~definition of a reduction-in-force. Prior year adjusted operating earnings, adjusted earnings from continuing operations, ~~into the business,~~and adjusted EBITDA exclude, among other things, LIFO expense, organizational realignment and severance associated with cost reduction initiatives.

Each of these items are considered “non-operational” or “non-core” in nature. The retirement stock compensation award represents incremental compensation expense in connection with an executive retirement that is also considered “non-operational” or “non-core” in nature.

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 ~~accounting principles generally accepted in the United States of America (“GAAP”),~~GAAP and should not be considered as a substitute for operating earnings, ~~cash flows from operating activities~~ and other income ~~or cash flow~~ statement data. The Company’s definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of operating ~~(loss)~~ earnings to adjusted operating earnings for the 12 ~~weeks~~ and 40 weeks ended October ~~7, 2017~~8, 2022 and October ~~8, 2016.~~9, 2021.

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 ~~from continuing operations~~ 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 ~~also~~ 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 accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of ~~(loss)~~net earnings ~~from continuing operations~~ to adjusted earnings from continuing operations for the 12 ~~weeks~~ and 40 weeks ended October ~~7, 2017~~8, 2022 and October ~~8, 2016.~~9, 2021.

12 Weeks Ended

October 7, 2017

October 8, 2016

per diluted

per diluted

(In thousands, except per share amounts)
Earnings

share

Earnings

share

(Loss) earnings from continuing operations
$

(123,452
)

$

(3.31
)

$

16,730

$

0.45

Adjustments:

Merger/acquisition and integration

2,392

2,427

Restructuring charges and asset impairment

224,653

2,662

Fresh Kitchen start-up costs

2,086

—

Severance associated with cost reduction initiatives

4

149

Total adjustments

229,135

5,238

Income tax effect on adjustments (a)

(85,546
)

(1,918
)

Total adjustments, net of taxes

143,589

3.85

3,320

0.08

Adjusted earnings from continuing operations
$

20,137

$

0.54

$

20,050

$

0.53

40 Weeks Ended

October 7, 2017

October 8, 2016

per diluted

per diluted

(In thousands, except per share amounts)
Earnings

share

Earnings

share

(Loss) earnings from continuing operations
$

(87,327
)

$

(2.32
)

$

44,250

$

1.18

Adjustments:

Merger integration and acquisition expenses

7,031

4,237

Restructuring charges and asset impairment

225,660

23,714

Fresh Kitchen start-up costs

6,688

—

Severance associated with cost reduction initiatives

27

839

Stock compensation associated with executive retirement

1,172

—

Total adjustments

240,578

28,790

Income tax effect on adjustments (a)

(89,840
)

(10,871
)

Total adjustments, net of taxes

150,738

4.01

17,919

0.48

Adjusted earnings from continuing operations
$

63,411

$

1.69

$

62,169

$

1.66

* Includes rounding

(a)

The income tax effect on adjustments is computed by applying the effective tax rate, before discrete tax items, to the total adjustments for the period.

~~(a)~~

~~The income tax effect on adjustments is computed by applying the tax rate, before discrete tax items, to the total adjustments for the period.~~

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 ~~deferred (stock)~~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 and costs associated with the closing of operational locations.

The Company believes that adjusted EBITDA provides a meaningful representation of its operating performance for the Company ~~as a whole~~ 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 ~~accounting principles generally accepted in the United States of America,~~GAAP and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of net earnings to adjusted EBITDA for the 12 ~~weeks~~ and 40 weeks ended October ~~7, 2017~~8, 2022 and October ~~8, 2016.~~9, 2021.


	12 Weeks Ended						40 Weeks Ended
(In thousands)	October 8, 2022			October 9, 2021			October 8, 2022			October 9, 2021
Net earnings	$	9,464		$	15,176		$	33,868		$	51,506
Income tax expense		4,553			4,551			11,530			16,757
Other expenses, net		5,283			3,004			14,380			10,584
Operating earnings		19,300			22,731			59,778			78,847
Adjustments:
LIFO expense		14,884			5,887			42,916			10,444
Depreciation and amortization		21,833			21,763			72,274			71,260
Acquisition and integration, net		(577	)		101			98			281
Restructuring and asset impairment, net		(886	)		(195	)		1,738			2,981
Cloud computing amortization		925			570			2,694			1,528
Organizational realignment, net		588			—			1,859			589
Severance associated with cost reduction initiatives		54			239			795			377
Stock-based compensation		1,370			920			7,208			6,084
Stock warrant		505			403			1,659			1,478
Non-cash rent		(764	)		(994	)		(2,691	)		(2,980	)
Loss (gain) on disposal of assets		63			49			(68	)		(213	)
Postretirement plan amendment and settlement		—			—			133			—
Costs related to shareholder activism		—			—			7,335			—
Adjusted EBITDA	$	57,295		$	51,474		$	195,728		$	170,676

12 Weeks Ended

40 Weeks Ended

October 7,

October 8,

October 7,

October 8,

(In thousands)
2017

2016

2017

2016

Net (loss) earnings
$

(123,506
)

$

16,648

$

(87,452
)

$

43,982

Loss from discontinued operations, net of tax

54

82

125

268

Income taxes

(76,445
)

8,864

(56,809
)

25,635

Other expenses, net

6,055

4,273

18,880

14,262

Operating (loss) earnings

(193,842
)

29,867

(125,256
)

84,147

Adjustments:

LIFO expense (benefit)

192

(341
)

2,474

2,130

Depreciation and amortization

19,455

17,927

63,553

58,931

Merger/acquisition and integration

2,392

2,427

7,031

4,237

Restructuring charges and asset impairment

224,653

2,662

225,660

23,714

Fresh Kitchen start-up costs

2,086

—

6,688

—

Stock-based compensation

1,102

943

8,593

7,010

Other non-cash (gains) charges

(138
)

(71
)

(661
)

3

Adjusted EBITDA
$

55,900

$

53,414

$

188,082

$

180,172

Reconciliation of operating earnings (loss) to adjusted EBITDA by segment:

Food Distribution:

Operating earnings
$

20,350

$

18,957

$

68,868

$

64,040

Adjustments:

LIFO expense (benefit)

98

(348
)

1,361

941

Depreciation and amortization

6,862

4,842

22,291

16,139

Merger/acquisition and integration

939

639

5,254

1,201

Restructuring charges and asset impairment

379

207

1,280

4,749

Fresh Kitchen start-up costs

2,086

—

6,688

—

Stock-based compensation

488

409

3,999

3,090

Other non-cash (gains) charges

(57
)

(61
)

(11
)

137

Adjusted EBITDA
$

31,145

$

24,645

$

109,730

$

90,297

Military:

Operating earnings
$

1,118

$

2,862

$

4,517

$

8,792

Adjustments:

LIFO (benefit) expense

(63
)

134

329

678

Depreciation and amortization

2,786

2,693

8,832

8,850

Merger/acquisition and integration

1,453

—

1,453

1

Restructuring charges (gains)

500

18

500

(241
)
Stock-based compensation

186

171

1,313

1,178

Other non-cash charges (gains)

1

58

(15
)

262

Adjusted EBITDA
$

5,981

$

5,936

$

16,929

$

19,520

Retail:

Operating (loss) earnings
$

(215,310
)

$

8,048

$

(198,641
)

$

11,315

Adjustments:

LIFO expense (benefit)

157

(127
)

784

511

Depreciation and amortization

9,807

10,392

32,430

33,942

Merger/acquisition and integration

—

1,788

324

3,035

Restructuring charges and asset impairment

223,774

2,437

223,880

19,206

Stock-based compensation

428

363

3,281
��

2,742

Other non-cash gains

(82
)

(68
)

(635
)

(396
)
Adjusted EBITDA
$

18,774

$

22,833

$

61,423

$

70,355

2826

Following is a reconciliation of operating earnings to adjusted EBITDA by segment for the 12 and 40 weeks ended October 8, 2022 and October 9, 2021.


	12 Weeks Ended						40 Weeks Ended
(In thousands)	October 8, 2022			October 9, 2021			October 8, 2022			October 9, 2021
Wholesale:
Operating earnings	$	14,015		$	5,929		$	54,834		$	35,142
Adjustments:
LIFO expense		12,959			5,197			35,138			8,862
Depreciation and amortization		11,090			11,130			36,602			35,701
Restructuring and asset impairment, net		(2,088	)		(332	)		(2,216	)		431
Cloud computing amortization		645			423			1,873			1,067
Organizational realignment, net		367			—			1,160			374
Severance associated with cost reduction initiatives		43			170			662			279
Stock-based compensation		894			549			4,743			3,843
Stock warrant		505			403			1,659			1,478
Non-cash rent		(92	)		122			(288	)		833
(Gain) loss on disposal of assets		(26	)		25			(184	)		(112	)
Postretirement plan amendment and settlement		—			—			83			—
Costs related to shareholder activism		—			—			4,577			—
Adjusted EBITDA	$	38,312		$	23,616		$	138,643		$	87,898
Retail:
Operating earnings	$	5,285		$	16,802		$	4,944		$	43,705
Adjustments:
LIFO expense		1,925			690			7,778			1,582
Depreciation and amortization		10,743			10,633			35,672			35,559
Acquisition and integration, net		(577	)		101			98			281
Restructuring and asset impairment, net		1,202			137			3,954			2,550
Cloud computing amortization		280			147			821			461
Organizational realignment, net		221			—			699			215
Severance associated with cost reduction initiatives		11			69			133			98
Stock-based compensation		476			371			2,465			2,241
Non-cash rent		(672	)		(1,116	)		(2,403	)		(3,813	)
Loss (gain) on disposal of assets		89			24			116			(101	)
Postretirement plan amendment and settlement		—			—			50			—
Costs related to shareholder activism		—			—			2,758			—
Adjusted EBITDA	$	18,983		$	27,858		$	57,085		$	82,778

Liquidity and Capital Resources

Cash Flow Information

The following table summarizes the Company’s consolidated statements of cash flows:


	40 Weeks Ended
(In thousands)	October 8, 2022			October 9, 2021
Cash flow activities
Net cash provided by operating activities	$	7,454		$	143,953
Net cash used in investing activities		(45,956	)		(24,051	)
Net cash provided by (used in) financing activities		46,800			(115,160	)
Net increase in cash and cash equivalents		8,298			4,742
Cash and cash equivalents at beginning of the period		10,666			19,903
Cash and cash equivalents at end of the period	$	18,964		$	24,645

40 Weeks Ended

October 7,

October 8,

(In thousands)

2017

2016

Cash flow activities

Net cash provided by operating activities (a)

$

71,563

$

81,134

Net cash used in investing activities

(277,156
)

(52,536
)
Net cash provided by (used in) financing activities (a)

194,444

(24,505
)
Net cash used in discontinued operations

(48
)

(414
)
Net (decrease) increase in cash and cash equivalents

(11,197
)

3,679

Cash and cash equivalents at beginning of fiscal year

24,351

22,719

Cash and cash equivalents at end of fiscal year

$

13,154

$

26,398

~~(a)~~ Prior period amounts have been adjusted for the impact of the adoption of ASU 2016-09. Refer to Note 2 of the notes to condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Net cash provided by operating activities. Net cash provided by operating activities decreased ~~during~~$136.5 million in the current year-to-date period ~~from~~compared to the prior year-to-date period, ~~by approximately $9.6 million mainly~~primarily due to ~~the timing of~~changes in working capital, ~~requirements, particularly higher accounts receivable balances associated with sales to new~~including the impact of inflation, inventory buying patterns and ~~existing~~expansion of the distribution ~~customers, largely offset by lower customer advances to support sales growth compared to~~network in the ~~prior year period.~~current year.

Net cash used in investing activities. Net cash used in investing activities increased ~~$224.6~~$21.9 million in the current year compared to the prior year primarily due to an increase in capital expenditures in the ~~recent~~current year and an acquisition ~~(see Note 3~~within the Retail segment in the current year.

Capital expenditures were $66.3 million in the current year and cloud computing application development spend, which is included in operating activities, was $3.2 million, compared to capital expenditures of $55.0 million and cloud computing application development spend of $7.0 million in the ~~condensed consolidated financial statements).~~

prior year. The ~~Food Distribution, Military~~Company expects fiscal year 2022 capital expenditures and cloud computing application development spend to range from $100.0 million to $110.0 million. The Wholesale and Retail segments utilized ~~25.1%, 11.1%~~52.6% and ~~63.8%~~47.4% of capital expenditures, respectively, in the current year.

Net cash provided by (used in) financing activities. Net cash provided by financing activities increased ~~$218.9~~$162.0 million in the current year compared to the prior year, primarily due to increased net borrowings on the ~~revolving~~senior credit facility ~~to fund~~in the ~~recent acquisition.~~current year, partially offset by an increase in share repurchases in the current year.

~~Net cash used in discontinued operations.~~ Net cash used in discontinued operations contains the net cash flows of the Company’s Retail and Food Distribution discontinued operations and is primarily composed of facility maintenance expenditures.

Debt Management

Total debt, including ~~capital~~finance lease ~~obligations and current maturities,~~liabilities, was ~~$670.9~~$519.5 million and ~~$431.1~~$405.7 million as of October ~~7, 2017~~8, 2022 and ~~December 31, 2016,~~January 1, 2022, respectively. The increase in total debt was ~~driven by drawdowns~~due to additional net borrowings on the senior credit facility to ~~finance the recent acquisition.~~fund working capital changes, purchases of property, plant and equipment and share repurchases.

Subsequent to the end of the third quarter of fiscal 2017, the Company paid the outstanding balance on the Senior secured term loan of $52.2 million with proceeds from its Senior secured revolving credit facility. As a result of this transaction, annual interest expense is expected to be reduced through a reduction of the average interest rates paid.Liquidity

~~Liquidity~~

The Company’s principal sources of liquidity are cash flows generated from operations and its senior secured credit ~~facility which has maximum available credit of $1.0 billion.~~facility. As of October ~~7, 2017,~~8, 2022, the senior secured ~~revolving~~ credit facility ~~and senior secured term loan collectively~~ had outstanding borrowings of ~~$627.7~~$461.8 million. Additional available borrowings under the Company’s ~~$1.0 billion~~ credit facility 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 such term is defined in the Credit Agreement. The Company had excess availability after the 10% covenant of ~~$348.2~~$434.1 million at October ~~7, 2017.~~8, 2022. Payment of dividends and repurchases of outstanding shares are permitted, provided that certain levels of excess availability are maintained. The credit facility provides for the issuance of letters of credit, of which ~~$9.2~~$17.7 million were outstanding as of October ~~7, 2017.~~8, 2022. The ~~revolving~~ credit facility matures December ~~2021,~~18, 2023 and is secured by substantially all of the Company’s assets.

The Company believes that cash generated from operating activities and available borrowings under the credit facility 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 facility.~~Credit Agreement.

The Company’s current ratio (current assets to current liabilities) was ~~1.81-to-1~~1.63-to-1 at October ~~7, 2017~~8, 2022 compared to ~~1.77-to-1~~1.46-to-1 at ~~December 31, 2016,~~January 1, 2022, and its investment in working capital was ~~$455.6~~$443.9 million at October ~~7, 2017~~8, 2022 compared to ~~$387.5~~$301.4 million at ~~December 31, 2016. Net~~January 1, 2022. The net long-term debt to total capital ratio was ~~0.48-to-1~~0.39-to-1 at October ~~7, 2017~~8, 2022 compared to ~~0.33-to-1~~0.34-to-1 at ~~December 31, 2016.~~January 1, 2022.

~~Total net~~Net long-term debt is a non-GAAP financial measure that is defined as long-term debt and ~~capital~~finance lease ~~obligations,~~liabilities, plus current ~~maturities~~portion of long-term debt and ~~capital~~finance lease ~~obligations,~~liabilities, less cash and cash equivalents. The ratio of net long-term debt to total capital is a non-GAAP financial measure that is calculated by dividing net long-term debt, as defined previously, by total capital (net long-term debt plus total shareholders’ equity). 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~~“Long-term debt and ~~capital~~finance lease ~~obligations~~liabilities” to ~~total net~~Net long-term debt ~~and capital lease obligations~~ as of October ~~7, 2017~~8, 2022 and ~~December 31, 2016.~~January 1, 2022.


	October 8,			January 1,
(In thousands)	2022			2022
Current portion of long-term debt and finance lease liabilities	$	6,759		$	6,334
Long-term debt and finance lease liabilities		512,704			399,390
Total debt		519,463			405,724
Cash and cash equivalents		(18,964	)		(10,666	)
Net long-term debt	$	500,499		$	395,058

Following is a reconciliation of "Net long-term debt" and "Total shareholders' equity" to Total capital as of October 8, 2022 and January 1, 2022.


	October 8,		January 1,
(In thousands)	2022		2022
Net long-term debt	$	500,499	$	395,058
Total shareholders' equity		780,410		782,869
Total capital	$	1,280,909	$	1,177,927

October 7,

December 31,

2017

2016

Current maturities of long-term debt and capital lease obligations
$

19,407

$

17,424

Long-term debt and capital lease obligations

651,537

413,675

Total debt

670,944

431,099

Cash and cash equivalents

(13,154
)

(24,351
)
Total net long-term debt
$

657,790

$

406,748

For information on contractual obligations, see the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016.~~January 1, 2022. At October ~~7, 2017,~~8, 2022, there have been no material changes to the Company’s significant contractual obligations outside the ordinary course of business.

Cash Dividends

During the ~~year-to-date period~~quarter ended October ~~7, 2017,~~8, 2022, the Company ~~returned $41.1~~declared $7.4 million ~~to shareholders from dividend payments and share repurchases.~~in dividends. A ~~10.0%~~5.0% increase in the quarterly dividend rate from ~~$0.15~~$0.20 per share to ~~$0.165~~$0.21 per share was approved by the Board of Directors and announced on March ~~6, 2017.~~2, 2022. Although the Company expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors to declare future dividends. Each future dividend will be considered and declared by the Board of Directors at its discretion. Whether the Board of Directors 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.

Under the senior revolving credit facility, the Company is generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends, together with any cash distributions and share repurchases, do not exceed ~~$25.0~~$35.0 million. Additionally, the Company is generally permitted to pay cash dividends and repurchase shares in excess of ~~$25.0~~$35.0 million in any fiscal year so long as its Excess Availability, as defined in the senior revolving credit facility, is in excess of 10% of the Total Borrowing Base, as defined in the senior revolving credit facility, before and after giving effect to the repurchases and dividends.

Off-Balance Sheet Arrangements

The Company has also made certain commercial commitments that extend beyond October ~~7, 2017.~~8, 2022. These commitments consist primarily of ~~operating leases and~~ purchase commitments, ~~(as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016),~~ standby letters of credit of ~~$9.2~~$17.7 million as of October ~~7, 2017,~~8, 2022, and interest on long-term debt and ~~capital~~finance lease ~~obligations.~~liabilities.

Critical Accounting Policies

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 the related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to bad debts, inventories, intangible assets, assets held for sale, long-lived assets, income taxes, self-insurance reserves, restructuring costs, retirement benefits, stock-based compensation, contingencies and litigation. 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. This discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements. The Company believes these accounting policies and others set forth in Item ~~8, Note 1~~7 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016~~January 1, 2022 should be reviewed as they are integral to ~~the~~ 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. The accompanying financial statements are prepared using the same critical accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016.~~January 1, 2022.

Recently Issued Accounting Standards

Refer to Note 2 in the notes to the condensed consolidated financial statements for further information.

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

There have been no material changes in market risk of SpartanNash from the information provided in Part II, Item 7A, “Quantitative and Qualitative Disclosure About Market Risk,” of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016.~~January 1, 2022.

ITEM 4. 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)~~Act) was performed as of October ~~7, 2017~~8, 2022 (the “Evaluation Date”). This evaluation was performed under the supervision and with the participation of SpartanNash Company’s management, including its Chief Executive Officer (“CEO”), and Chief Financial Officer (“CFO”~~) and Chief Accounting Officer (“CAO”~~). As of the Evaluation Date, SpartanNash Company’s management, including the CEO ~~CFO~~ and ~~CAO,~~CFO, concluded that SpartanNash’s disclosure controls and procedures were effective as of the Evaluation Date 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 and Exchange Act of 1934 is accumulated and communicated to management, including its principal executive and principal financial ~~officers~~officer, as appropriate, to allow for timely decisions regarding required disclosure. During the third quarter of 2022 there ~~was~~were no ~~change~~changes in SpartanNash’s internal control over financial reporting that ~~has~~ materially affected, or iswere reasonably likely to materially affect, SpartanNash’s internal control over financial reporting.

3229

PART II

OTHER INFORMATION

ITEM 1. Legal Proceedings

The informationrequired by this Part II, Item 1 is incorporated by reference to the information set forth under the caption “Commitments and Contingencies” in Note 7 in the notes to condensed consolidated financial statements included in this report.

ITEM 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K (2021 10-K) for the year ended January 1, 2022 filed with Securities and Exchange Commission. You should carefully consider the risks included in our 2021 10-K, together with all the other information in the Quarterly Reports on Form 10-Q for the quarters ended April 23, 2022 and July 16, 2022 and this Quarterly Report on Form 10-Q, including the forward-looking statements which appear at the beginning of this report.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~The following table provides information regarding SpartanNash’s purchases~~During the fourth quarter of ~~its own~~2017, the Board authorized a publicly announced $50 million share repurchase program, expiring in 2022. There were $16.7 million of common stock share repurchases made under this program during the ~~12 week period ended~~third quarter of 2022. At October ~~7, 2017. All employee transactions are~~8, 2022, $6.4 million remains available under ~~associate~~the program. Repurchases of common stock ~~compensation plans. These~~ may ~~include:~~include: (1) shares of SpartanNash common stock delivered in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) shares submitted for cancellation to satisfy tax withholding obligations that occur upon the vesting of the restricted shares. The value of the shares delivered or withheld is determined by the applicable stock compensation plan.

On February 22, 2022, the Board of Directors authorized the repurchase of common shares in connection with a new $50 million program, increasing the total availability for share repurchases to approximately $56 million. The Company plans to return value to shareholders through share repurchases under this program as well as continuing regular dividends.

Total

Number

Average

of Shares

Price Paid

Period

Purchased

per Share

July 16 – August 12, 2017

Repurchase Program

265,378

$

26.86

August 13 – September 9, 2017

None

—

$

—

September 10 – October 7, 2017

Employee Transactions

1,550

$

26.46

Repurchase Program

296,472

$

25.30

Total for Quarter ended October 7, 2017

Employee Transactions

1,550

$

26.46

Repurchase Program

561,850

$

26.03


			Average
	Total Number		Price Paid
Fiscal Period	of Shares Purchased		per Share
July 17 - August 13, 2022
Employee Transactions		—	$	—
Repurchase Program		149,995	$	31.84
August 14 - September 10, 2022
Employee Transactions		409	$	31.07
Repurchase Program		158,200	$	31.28
September 11 - October 8, 2022
Employee Transactions		—	$	—
Repurchase Program		234,331	$	29.84
Total for quarter ended October 8, 2022
Employee Transactions		409	$	31.07
Repurchase Program		542,526	$	30.81

3330

ITEM 6. Exhibits

The following documents are filed as exhibits to this Quarterly Report on Form 10-Q:


Exhibit Number		Document

~~2.1~~3.1		~~Asset Purchase Agreement dated as of November 3, 2016 by and among SpartanNash Company, Caito Food Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito as Seller’s Representative. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on~~ ~~November 4, 2016. Incorporated herein by reference.~~

~~2.2~~		Amendment to Asset Purchase Agreement dated as of January 6, 2017 by and among SpartanNash Company, Caito Food Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito as Seller’s Representative~~. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 9, 2017. Incorporated herein by reference.~~

~~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~~.amended. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016, filed on March 1, 2017. Here incorporated~~2016. Incorporated herein by reference.

~~10.1~~10.1*		Executive ~~Employment~~Separation Agreement between SpartanNash Company and ~~Mark Shamber~~Yvonne Trupiano.**.

~~10.2~~10.2*		Executive ~~Severance~~Separation Agreement between SpartanNash Company and ~~Mark Shamber~~Arif Dar..

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002..

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~.

~~31.3~~		~~Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~.2002.

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002..

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 8, 2022, has been formatted in Inline XBRL.

* Indicates management contract or compensatory plan.

** Refiled to correct the inadvertent filing of an earlier draft of the Executive Separation Agreement between SpartanNash Company and Yvonne Trupiano, previously included as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on June 2, 2022.

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SPARTANNASH COMPANY (Registrant)
Date: November ~~9, 2017~~10, 2022	By	/s/ ~~Mark E. Shamber~~Jason Monaco
		~~Mark E. Shamber~~Jason Monaco Executive Vice President and Chief Financial Officer (Principal Financial Officer)

3532


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
(Address of Principal Executive Offices)		(Zip Code)


		Page
PART I.	FINANCIAL INFORMATION	4

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Earnings	5

	Condensed Consolidated Statements of Comprehensive Income	6

	Condensed Consolidated Statements of Shareholders’ Equity	7

	Condensed Consolidated Statements of Cash Flows	9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	31

	Signatures	32


	October 8,		January 1,
	2022		2022
Assets
Current assets
Cash and cash equivalents	$	18,964	$	10,666
Accounts and notes receivable, net		430,150		361,686
Inventories, net		623,504		522,324
Prepaid expenses and other current assets		70,151		62,517
Property and equipment held for sale		3,707		—
Total current assets		1,146,476		957,193

Property and equipment, net		558,409		577,359
Goodwill		182,160		181,035
Intangible assets, net		107,415		110,960
Operating lease assets		261,697		283,040
Other assets, net		85,320		97,195

Total assets	$	2,341,477	$	2,206,782

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	492,876	$	447,451
Accrued payroll and benefits		104,436		86,315
Other accrued expenses		52,834		67,893
Current portion of operating lease liabilities		45,717		47,845
Current portion of long-term debt and finance lease liabilities		6,759		6,334
Total current liabilities		702,622		655,838

Long-term liabilities
Deferred income taxes		70,557		63,692
Operating lease liabilities		243,957		266,701
Other long-term liabilities		31,227		38,292
Long-term debt and finance lease liabilities		512,704		399,390
Total long-term liabilities		858,445		768,075

Commitments and contingencies (Note 7)

Shareholders’ equity
Common stock, voting, no par value; 100,000 shares authorized; 35,359 and 35,948 shares outstanding		475,136		493,783
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding		—		—
Accumulated other comprehensive income (loss)		3,527		(1,455	)
Retained earnings		301,747		290,541
Total shareholders’ equity		780,410		782,869

Total liabilities and shareholders’ equity	$	2,341,477	$	2,206,782

	October 7,			December 31,
	2017			2016
Assets
Current assets
Cash and cash equivalents	$	13,154		$	24,351
Accounts and notes receivable, net		370,482			291,568
Inventories, net		598,493			539,857
Prepaid expenses and other current assets		33,426			37,187
Property and equipment held for sale		—			521
Total current assets		1,015,555			893,484

Property and equipment, net		588,416			559,722
Goodwill		178,392			322,686
Intangible assets, net		135,656			60,202
Other assets, net		115,755			94,242

Total assets	$	2,033,774		$	1,930,336

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	440,590		$	372,432
Accrued payroll and benefits		60,632			75,333
Other accrued expenses		39,361			40,788
Current maturities of long-term debt and capital lease obligations		19,407			17,424
Total current liabilities		559,990			505,977

Long-term liabilities
Deferred income taxes		60,397			123,243
Postretirement benefits		16,564			16,266
Other long-term liabilities		39,330			45,768
Long-term debt and capital lease obligations		651,537			413,675
Total long-term liabilities		767,828			598,952

Commitments and contingencies (Note 8)

Shareholders’ equity
Common stock, voting, no par value; 100,000 shares authorized; 36,974 and 37,539 shares outstanding		508,570			521,984
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding		—			—
Accumulated other comprehensive loss		(11,373	)		(11,437	)
Retained earnings		208,759			314,860
Total shareholders’ equity		705,956			825,407

Total liabilities and shareholders’ equity	$	2,033,774		$	1,930,336

							Accumulated
							Other
	Shares			Common			Comprehensive			Retained
	Outstanding			Stock			Income (Loss)			Earnings			Total
Balance at December 31, 2016		37,539		$	521,984		$	(11,437	)	$	314,860		$	825,407
Net loss		—			—			—			(87,452	)		(87,452	)
Other comprehensive income		—			—			64			—			64
Dividends - $0.495 per share		—			—			—			(18,649	)		(18,649	)
Share repurchase		(862	)		(22,500	)		—			—			(22,500	)
Stock-based employee compensation		—			8,593			—			—			8,593
Issuances of common stock on stock option exercises and stock bonus plan		172			3,697			—			—			3,697
Issuances of restricted stock		296			—			—			—			—
Cancellations of stock-based awards		(171	)		(3,204	)		—			—			(3,204	)
Balance at October 7, 2017		36,974		$	508,570		$	(11,373	)	$	208,759		$	705,956


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(In thousands)	Food Distribution		Retail				Total
Balance at December 31, 2016	$	132,367	$	190,319		(a)	$	322,686		(a)
Acquisitions (Note 3)		46,025		—				46,025
Impairment		—		(189,027	)			(189,027	)
Disposals		—		(1,292	)			(1,292	)
Balance at October 7, 2017	$	178,392	$	—		(b)	$	178,392		(b)

	Lease and
(In thousands)	Ancillary Costs			Severance			Total
Balance at December 31, 2016	$	21,932		$	—		$	21,932
Provision for closing charges		886			—			886
Provision for severance		—			620			620
Lease termination adjustments		(1,910	)		—			(1,910	)
Changes in estimates		1,141						1,141
Accretion expense		408			—			408
Payments		(5,045	)		(452	)		(5,497	)
Balance at October 7, 2017	$	17,412		$	168		$	17,580


	Reserves for Closed Properties
	Lease
	Ancillary
(In thousands)	Costs			Severance			Total
Balance at January 1, 2022	$	3,124		$	—		$	3,124
Provision for closing charges		857			—			857
Provision for severance		—			9			9
Lease termination adjustments		(86	)		—			(86	)
Changes in estimates		(73	)		—			(73	)
Accretion expense		53			—			53
Payments		(806	)		(9	)		(815	)
Balance at October 8, 2022	$	3,069		$	—		$	3,069

~~Unobservable Input~~	~~Range~~
~~Discount rate~~		~~11.80%~~
~~Probability of payments~~	~~0% - 100%~~
~~Projected fiscal year(s) of payments~~	~~2017 - 2019~~

									Weighted
	Shares			Weighted		Restricted			Average
	Under			Average		Stock			Grant-Date
	Options			Exercise Price		Awards			Fair Value
Outstanding at December 31, 2016		200,517		$	19.94		660,143		$	26.48
Granted		—			—		296,297			34.68
Exercised/Vested		(152,589	)		21.02		(258,183	)		25.90
Cancelled/Forfeited		—			—		(82,739	)		29.09
Outstanding at October 7, 2017		47,928		$	16.52		615,518		$	30.32


	Warrant
Outstanding and nonvested at January 1, 2022		3,914,833
Vested		(326,238	)
Outstanding and nonvested at October 8, 2022		3,588,595


	12 Weeks Ended						40 Weeks Ended
(In thousands, except per share amounts)	October 8, 2022			October 9, 2021			October 8, 2022			October 9, 2021
Numerator:
Net earnings	$	9,464		$	15,176		$	33,868		$	51,506
Adjustment for earnings attributable to participating securities		(100	)		(264	)		(406	)		(999	)
Net earnings used in calculating earnings per share	$	9,364		$	14,912		$	33,462		$	50,507
Denominator:
Weighted average shares outstanding, including participating securities		35,160			35,525			35,444			35,671
Adjustment for participating securities		(370	)		(618	)		(425	)		(692	)
Shares used in calculating basic earnings per share		34,790			34,907			35,019			34,979
Effect of dilutive stock warrant		792			197			784			146
Effect of dilutive restricted stock awards		193			94			170			54
Shares used in calculating diluted earnings per share		35,775			35,198			35,973			35,179
Basic earnings per share	$	0.27		$	0.43		$	0.96		$	1.44
Diluted earnings per share	$	0.26		$	0.42		$	0.93		$	1.44

(In thousands)	Food Distribution		Military			Retail			Total
12 Weeks Ended October 7, 2017
Net sales to external customers	$	937,397	$	505,631		$	463,616		$	1,906,644
Inter-segment sales		204,605		—			—			204,605
Merger/acquisition and integration		939		1,453			—			2,392
Restructuring charges and asset impairment		379		500			34,747			35,626
Depreciation and amortization		6,354		2,786			9,807			18,947
Operating earnings (loss)		20,350		1,118			(215,310	)		(193,842	)
Capital expenditures		4,402		1,940			11,161			17,503

12 Weeks Ended October 8, 2016
Net sales to external customers	$	804,500	$	506,626		$	488,959		$	1,800,085
Inter-segment sales		219,516		—			—			219,516
Merger/acquisition and integration		639		—			1,788			2,427
Restructuring charges and asset impairment		207		18			2,437			2,662
Depreciation and amortization		4,842		2,693			10,392			17,927
Operating earnings		18,957		2,862			8,048			29,867
Capital expenditures		3,386		1,151			11,342			15,879

40 Weeks Ended October 7, 2017
Net sales to external customers	$	3,041,983	$	1,620,021		$	1,541,853		$	6,203,857
Inter-segment sales		681,368		—			—			681,368
Merger/acquisition and integration		5,254		1,453			324			7,031
Restructuring charges and asset impairment		1,280		500			34,853			36,633
Depreciation and amortization		21,370		8,832			32,430			62,632
Operating earnings (loss)		68,868		4,517			(198,641	)		(125,256	)
Capital expenditures		18,431		5,994			30,867			55,292

40 Weeks Ended October 8, 2016
Net sales to external customers	$	2,615,964	$	1,686,567		$	1,603,885		$	5,906,416
Inter-segment sales		716,665		—			—			716,665
Merger/acquisition and integration		1,201		1			3,035			4,237
Restructuring charges and asset impairment		4,749		(241	)		19,206			23,714
Depreciation and amortization		16,139		8,850			33,942			58,931
Operating earnings		64,040		8,792			11,315			84,147
Capital expenditures		13,581		4,198			39,436			57,215

(In thousands)	October 7, 2017		December 31, 2016
Total Assets
Food Distribution	$	1,088,383	$	776,725
Military		449,845		395,737
Retail		492,079		754,625
Discontinued operations		3,467		3,249
Total	$	2,033,774	$	1,930,336


	Percentage of Net Sales										Percentage Change
	12 Weeks Ended						40 Weeks Ended				12 Weeks Ended			40 Weeks Ended
	October 8, 2022			October 9, 2021			October 8, 2022		October 9, 2021		October 8, 2022			October 8, 2022
Net sales		100.0			100.0			100.0		100.0		10.8			7.3
Gross profit		15.3			15.9			15.8		15.8		6.6			6.9
Selling, general and administrative		14.5			14.8			14.9		14.6		8.6			9.5
Acquisition and integration, net		(0.0	)		0.0			0.0		0.0	**			**
Restructuring charges and asset impairment, net		(0.0	)		(0.0	)		0.0		0.0	**			**
Operating earnings		0.8			1.1			0.8		1.2		(15.1	)		(24.2	)
Other expenses		0.2			0.1			0.2		0.2		75.9			35.9
Earnings before income taxes		0.6			1.0			0.6		1.0		(28.9	)		(33.5	)
Income tax expense		0.2			0.2			0.2		0.2		0.0			(31.2	)
Net earnings		0.4			0.7			0.5		0.8		(37.6	)		(34.2	)

	Percentage of Net Sales														Percentage Change
															12 Weeks
	12 Weeks Ended							40 Weeks Ended							Ended
	October 7,				October 8,			October 7,				October 8,			October 7,
	2017				2016			2017				2016			2017
Net sales		100.0		%		100.0	%		100.0		%		100.0	%		5.9
Gross profit		13.7				14.2			14.3				14.4			2.5
Selling, general and administrative expenses		12.0				12.3	*		12.6				12.5			3.7
Merger/acquisition and integration		0.1				0.1			0.1				0.1			(1.4	)
Restructuring charges and goodwill/asset impairment		11.8				0.1			3.6				0.4			8,339.3
Operating (loss) earnings		(10.2	)			1.7			(2.0	)			1.4			(749.0	)
Other income and expenses		0.3				0.3	*		0.3				0.2			41.7
(Loss) earnings before income taxes and discontinued operations		(10.5	)			1.4			(2.3	)			1.2			(881.0	)
Income taxes		(4.0	)	*		0.5			(0.9	)			0.5	*		(962.4	)
(Loss) earnings from continuing operations		(6.5	)			0.9			(1.4	)			0.7			(837.9	)
Loss from discontinued operations, net of taxes		—				—			—				—			(34.1	)
Net (loss) earnings		(6.5	)	%		0.9	%		(1.4	)	%		0.7	%		(841.9	)

	12 Weeks Ended
	October 7, 2017						October 8, 2016
				per diluted						per diluted
(In thousands, except per share amounts)	Earnings			share			Earnings			share
(Loss) earnings from continuing operations	$	(123,452	)	$	(3.31	)	$	16,730		$	0.45
Adjustments:
Merger/acquisition and integration		2,392						2,427
Restructuring charges and asset impairment		224,653						2,662
Fresh Kitchen start-up costs		2,086						—
Severance associated with cost reduction initiatives		4						149
Total adjustments		229,135						5,238
Income tax effect on adjustments (a)		(85,546	)					(1,918	)
Total adjustments, net of taxes		143,589			3.85			3,320			0.08
Adjusted earnings from continuing operations	$	20,137		$	0.54		$	20,050		$	0.53



	40 Weeks Ended
	October 7, 2017						October 8, 2016
				per diluted						per diluted
(In thousands, except per share amounts)	Earnings			share			Earnings			share
(Loss) earnings from continuing operations	$	(87,327	)	$	(2.32	)	$	44,250		$	1.18
Adjustments:
Merger integration and acquisition expenses		7,031						4,237
Restructuring charges and asset impairment		225,660						23,714
Fresh Kitchen start-up costs		6,688						—
Severance associated with cost reduction initiatives		27						839
Stock compensation associated with executive retirement		1,172						—
Total adjustments		240,578						28,790
Income tax effect on adjustments (a)		(89,840	)					(10,871	)
Total adjustments, net of taxes		150,738			4.01			17,919			0.48
Adjusted earnings from continuing operations	$	63,411		$	1.69		$	62,169		$	1.66
* Includes rounding

	Total
	Number		Average
	of Shares		Price Paid
Period	Purchased		per Share
July 16 – August 12, 2017
Repurchase Program		265,378	$	26.86
August 13 – September 9, 2017
None		—	$	—
September 10 – October 7, 2017
Employee Transactions		1,550	$	26.46
Repurchase Program		296,472	$	25.30
Total for Quarter ended October 7, 2017
Employee Transactions		1,550	$	26.46
Repurchase Program		561,850	$	26.03