SuperValu debt up $30 million in fiscal Q4, cash flat at $72 million

By Lisa Kerner

Charlotte, N.C., Jan. 9 - SuperValu Inc. ended its third fiscal quarter 2014 with outstanding debt of $3 billion, an increase of $30 million over the prior quarter.

"This increase at the end of our third quarter is very typical as we build inventories during the holiday selling season and reverses itself in the fourth quarter when inventories return to a more normalized level," said executive vice president and chief financial officer Bruce H. Besanko during an earnings conference call on Thursday.

Quarter-end borrowings under SuperValu's revolving credit facility totaled about $210 million.

Cash and cash equivalents totaled $72 million at Nov. 30, or flat compared to the period ended Feb. 27, 2103, according to the company's news release.

"So far this year we've used $172 million in cash within our operations compared to $22 million last year," Besanko said.

"The single biggest driver of this change, similar to what we reported in Q2, is the fact we've paid approximately $110 million more in cash taxes this year compared to F2013."

SuperValu is also carrying higher levels of working capital consistent with investments made in retail stores, he said.

Capital expenditures for the year were $64 million, or $140 million less than last year. Besanko attributed the change to an increased focus on maintenance issues in the retail stores. SuperValu expects full-year capex to be in the range of $120 million to $130 million, below original expectations of $160 million.

Financial highlights

SuperValu reported third-quarter fiscal 2014 net sales of $4.01 billion, a 1% decrease from last year, and net earnings of $31 million, or $0.12 per diluted share.

Net earnings from continuing operations for the period were $32 million, or $0.12 per diluted share. For the same period last year, the company reported a net loss from continuing operations of $15 million, or $0.07 per diluted share.

Gross profit for the third quarter was $569 million, or 14.2% of net sales, compared to gross profit of $530 million, or 13.1% of net sales, for the same period last year.

Year-to-date fiscal 2014 net cash flows used in operating activities were $172 million compared to $22 million last year, reflecting higher cash tax payments and working capital in the current year, the release stated.

The Eden Prairie, Minn.-based food wholesaler's year-to-date net cash flows used in investing activities were $42 million compared to $192 million last year, reflecting lower levels of capital expenditures.

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