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,~~9, 2021, the registrant had ~~36,971,731~~35,944,358 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 website-accessible conference calls with analysts and investor presentations include “forward-looking statements” about the plans, strategies, objectives, goals or expectations of SpartanNash Company and subsidiaries (“SpartanNash” or “the Company”). These forward-looking statements are identifiable by words or phrases indicating that SpartanNash or management “expects,” “anticipates,” “plans,” “believes,” or “estimates,” or that a particular occurrence or event “will,” “may,” “could,” “should” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook” or “trend” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” 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 2, 2021 and other periodic reports filed with the Securities and Exchange Commission (“SEC”), there are many important factors that could cause actual results to differ materially. These risks and uncertainties include disruptions associated with the COVID-19 pandemic, general business conditions, changes in overall economic conditions that impact consumer spending, the Company’s ability to integrate acquired assets, the impact of competition and other factors which are often beyond the control of the Company, and other risks listed in the “Risk Factors” ~~discussion~~discussions in ~~Item~~Items 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016~~January 2, 2021, and risks and uncertainties not presently known to the Company, or that the Company currently deems immaterial.

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 2, 2021 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.

	October 9,			January 2,
	2021			2021
Assets
Current assets
Cash and cash equivalents	$	24,645		$	19,903
Accounts and notes receivable, net		372,029			357,564
Inventories, net		550,240			541,785
Prepaid expenses and other current assets		60,316			72,229
Property and equipment held for sale		—			23,259
Total current assets		1,007,230			1,014,740

Property and equipment, net		559,239			577,059
Goodwill		181,035			181,035
Intangible assets, net		112,132			116,142
Operating lease assets		285,580			289,173
Other assets, net		97,464			99,242

Total assets	$	2,242,680		$	2,277,391

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	490,604		$	464,784
Accrued payroll and benefits		98,897			113,789
Other accrued expenses		59,817			60,060
Current portion of operating lease liabilities		47,047			45,786
Current portion of long-term debt and finance lease liabilities		5,680			5,135
Total current liabilities		702,045			689,554

Long-term liabilities
Deferred income taxes		53,699			45,728
Operating lease liabilities		271,969			278,859
Other long-term liabilities		50,936			46,892
Long-term debt and finance lease liabilities		398,465			481,309
Total long-term liabilities		775,069			852,788

Commitments and contingencies (Note 7)

Shareholders’ equity
Common stock, voting, no par value; 100,000 shares authorized; 35,944 and 35,851 shares outstanding		492,306			491,819
Preferred stock, no par value, 10,000 shares authorized; 0 shares outstanding		—			—
Accumulated other comprehensive loss		(2,132	)		(2,276	)
Retained earnings		275,392			245,506
Total shareholders’ equity		765,566			735,049

Total liabilities and shareholders’ equity	$	2,242,680		$	2,277,391

	12 Weeks Ended						40 Weeks Ended
	October 9, 2021			October 3, 2020			October 9, 2021			October 3, 2020
Net sales	$	2,073,253		$	2,060,816		$	6,837,612		$	7,101,373
Cost of sales		1,743,769			1,735,994			5,756,471			6,014,610
Gross profit		329,484			324,822			1,081,141			1,086,763

Operating expenses and (income)
Selling, general and administrative		306,847			289,039			999,032			981,066
Acquisition and integration		101			242			281			242
Restructuring and asset impairment, net		(195	)		6,543			2,981			20,455
Total operating expenses, net		306,753			295,824			1,002,294			1,001,763

Operating earnings		22,731			28,998			78,847			85,000

Other expenses and (income)
Interest expense		3,020			3,522			10,877			14,810
Other, net		(16	)		(40	)		(293	)		(1,144	)
Total other expenses, net		3,004			3,482			10,584			13,666

Earnings before income taxes		19,727			25,516			68,263			71,334
Income tax expense		4,551			5,564			16,757			7,513
Net earnings	$	15,176		$	19,952		$	51,506		$	63,821

Basic net earnings per share:	$	0.43		$	0.56		$	1.44		$	1.78

Diluted net earnings per share:	$	0.42		$	0.56		$	1.44		$	1.78

							Accumulated
							Other
	Shares			Common			Comprehensive			Retained
	Outstanding			Stock			Loss			Earnings			Total
Balance at January 2, 2021		35,851		$	491,819		$	(2,276	)	$	245,506		$	735,049
Net earnings		—			—			—			19,516			19,516
Other comprehensive income		—			—			57			—			57
Dividends - $0.20 per share		—			—			—			(7,238	)		(7,238	)
Stock-based employee compensation		—			4,185			—			—			4,185
Stock warrant		—			645			—			—			645
Issuances of common stock for stock bonus plan and associate stock purchase plan		21			385			—			—			385
Issuances of restricted stock		523			—			—			—			—
Cancellations of stock-based awards		(129	)		(2,079	)		—			—			(2,079	)
Balance at April 24, 2021		36,266		$	494,955		$	(2,219	)	$	257,784		$	750,520
Net earnings		—			—			—			16,814			16,814
Other comprehensive income		—			—			44			—			44
Dividends - $0.20 per share		—			—			—			(7,117	)		(7,117	)
Share repurchases		(265	)		(5,325	)		—			—			(5,325	)
Stock-based employee compensation		—			872			—			—			872
Stock warrant		—			430			—			—			430
Issuances of common stock for associate stock purchase plan		6			113			—			—			113
Issuances of restricted stock		27			—			—			—			—
Cancellations of stock-based awards		(91	)		(175	)		—			—			(175	)
Balance at July 17, 2021		35,943		$	490,870		$	(2,175	)	$	267,481		$	756,176
Net earnings		—			—			—			15,176			15,176
Other comprehensive income		—			—			43			—			43
Dividends - $0.20 per share		—			—			—			(7,265	)		(7,265	)
Stock-based employee compensation		—			920			—			—			920
Stock warrant		—			403			—			—			403
Issuances of common stock for associate stock purchase plan		5			113			—			—			113
Issuances of restricted stock		10			—			—			—			—
Cancellations of stock-based awards		(14	)		—			—			—			—
Balance at October 9, 2021		35,944		$	492,306		$	(2,132	)	$	275,392		$	765,566

							Accumulated
							Other
	Shares			Common			Comprehensive			Retained
	Outstanding			Stock			Loss			Earnings			Total
Balance at December 28, 2019		36,351		$	490,233		$	(1,600	)	$	198,905		$	687,538
Impact of adoption of ASU 2016-13 (Note 2)		—			—			—			(1,612	)		(1,612	)
Net earnings		—			—			—			15,402			15,402
Other comprehensive income		—			—			80			—			80
Dividends - $0.1925 per share		—			—			—			(6,997	)		(6,997	)
Share repurchases		(861	)		(10,000	)		—			—			(10,000	)
Stock-based employee compensation		—			2,342			—			—			2,342
Issuances of common stock for stock bonus plan and associate stock purchase plan		21			291			—			—			291
Issuances of restricted stock		293			—			—			—			—
Cancellations of stock-based awards		(122	)		(1,352	)		—			—			(1,352	)
Balance at April 18, 2020		35,682		$	481,514		$	(1,520	)	$	205,698		$	685,692
Net earnings		—			—			—			28,467			28,467
Other comprehensive income		—			—			20			—			20
Dividends - $0.1925 per share		—			—			—			(6,898	)		(6,898	)
Stock-based employee compensation		—			1,904			—			—			1,904
Issuance of common stock for associate stock purchase plan		6			100			—			—			100
Issuances of restricted stock		159			—			—			—			—
Cancellations of stock-based awards		(5	)		(34	)		—			—			(34	)
Balance at July 11, 2020		35,842		$	483,484		$	(1,500	)	$	227,267		$	709,251
Net earnings		—			—			—			19,952			19,952
Other comprehensive income		—			—			21			—			21
Dividends - $0.1925 per share		—			—			—			(6,901	)		(6,901	)
Stock-based employee compensation		—			1,033			—			—			1,033
Issuances of common stock for associate stock purchase plan		6			95			—			—			95
Issuances of restricted stock		50			—			—			—			—
Cancellations of stock-based awards		(27	)		—			—			—			—
Balance at October 3, 2020		35,871		$	484,612		$	(1,479	)	$	240,318		$	723,451

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

	40 Weeks Ended
	October 9, 2021			October 3, 2020
Cash flows from operating activities
Net earnings	$	51,506		$	63,821
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash restructuring, asset impairment, and other charges		3,075			18,780
Depreciation and amortization		71,260			68,984
Non-cash rent		(2,923	)		(4,720	)
LIFO expense		10,444			3,158
Postretirement benefits expense		1,795			1,216
Deferred income taxes		7,970			(2,084	)
Stock-based compensation expense		5,977			5,279
Stock warrant		1,478			—
(Gain) loss on disposals of assets		(213	)		3,403
Other operating activities		946			1,133
Changes in operating assets and liabilities:
Accounts receivable		(14,295	)		(42,832	)
Inventories		(19,268	)		(52,578	)
Prepaid expenses and other assets		(18,183	)		(7,268	)
Accounts payable		37,939			116,075
Accrued payroll and benefits		(13,920	)		46,262
Current income taxes		19,262			1,801
Other accrued expenses and other liabilities		1,103			3,402
Net cash provided by operating activities		143,953			223,832
Cash flows from investing activities
Purchases of property and equipment		(54,957	)		(45,880	)
Net proceeds from the sale of assets		29,171			9,111
Loans to customers		(180	)		(992	)
Payments from customers on loans		1,939			2,237
Other investing activities		(24	)		(12	)
Net cash used in investing activities		(24,051	)		(35,536	)
Cash flows from financing activities
Proceeds from senior secured credit facility		1,047,051			989,897
Payments on senior secured credit facility		(1,128,522	)		(1,131,187	)
Repayment of other long-term debt and finance lease liabilities		(4,511	)		(5,043	)
Share repurchases		(5,325	)		(10,000	)
Net payments related to stock-based award activities		(2,253	)		(1,389	)
Dividends paid		(21,344	)		(27,636	)
Other financing activities		(256	)		(207	)
Net cash used in financing activities		(115,160	)		(185,565	)

Net increase in cash and cash equivalents		4,742			2,731
Cash and cash equivalents at beginning of period		19,903			24,172
Cash and cash equivalents at end of period	$	24,645		$	26,903

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

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

40 Weeks Ended

October 7,

October 8,

2017

2016

Cash flows from operating activities

Net (loss) earnings
$

(87,452
)

$

43,982

Loss from discontinued operations, net of tax

125

268

(Loss) earnings from continuing operations

(87,327
)

44,250

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:

Non-cash goodwill/asset impairment, restructuring, and other charges

225,101

22,938

Depreciation and amortization

66,366

60,436

LIFO expense

2,474

2,130

Postretirement benefits expense

1,276

157

Deferred taxes on income

(62,257
)

(715
)
Stock-based compensation expense

8,593

7,010

Other, net

(86
)

(234
)
Changes in operating assets and liabilities:

Accounts receivable

(44,737
)

(5,628
)
Inventories

(49,442
)

(44,115
)
Prepaid expenses and other assets

(3,546
)

(42,287
)
Accounts payable

42,842

52,496

Accrued payroll and benefits

(19,881
)

(6,653
)
Postretirement benefit payments

(280
)

(256
)
Other accrued expenses and other liabilities

(7,533
)

(8,395
)
Net cash provided by operating activities

71,563

81,134

Cash flows from investing activities

Purchases of property and equipment

(55,292
)

(57,215
)
Net proceeds from the sale of assets

3,928

5,650

Acquisitions, net of cash acquired

(226,412
)

—

Loans to customers

(1,005
)

(1,962
)
Payments from customers on loans

1,904

1,697

Other

(279
)

(706
)
Net cash used in investing activities

(277,156
)

(52,536
)
Cash flows from financing activities

Proceeds from revolving credit facility

1,160,066

1,013,812

Payments on revolving credit facility

(918,425
)

(1,004,077
)
Share repurchase

(22,500
)

(9,000
)
Net payments related to stock-based award activities

(3,204
)

(2,229
)
Repayment of other long-term debt

(5,795
)

(7,071
)
Financing fees paid

(256
)

(99
)
Proceeds from exercise of stock options

3,207

1,032

Dividends paid

(18,649
)

(16,873
)
Net cash provided by (used in) financing activities

194,444

(24,505
)
Cash flows from discontinued operations

Net cash used in operating activities

(48
)

(414
)
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 period

24,351

22,719

Cash and cash equivalents at end of period
$

13,154

$

26,398

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SpartanNash Company and its subsidiaries (“SpartanNash” or “the Company”). Intercompany accounts and transactions have been eliminated. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended ~~December 31, 2016.~~January 2, 2021.

In the opinion of management, the accompanying condensed consolidated financial statements, taken as a whole, contain all adjustments, including normal recurring items, necessary to present fairly the financial position of SpartanNash as of October ~~7, 2017,~~9, 2021, and the results of its operations and cash flows for the interim periods presented. The preparation of the condensed consolidated financial statements and related notes to the financial statements requires management to make estimates. Estimates are based on historical experience, where applicable, and expectations of future outcomes which management believes are reasonable under the circumstances. Interim results are not necessarily indicative of results for a full year.

The unaudited information in the condensed consolidated financial statements for the third quarter and ~~year to date~~year-to-date periods of ~~2017~~2021 and ~~2016~~2020 include the results of operations of the Company for the 1212- and 40-week periods ended October ~~7, 2017~~9, 2021 and October ~~8, 2016,~~3, 2020, respectively.

Note 2 – Adoption of New Accounting Standards and Recently Issued Accounting Standards

In ~~January 2017,~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2017-04, “Intangibles~~2016-13, “Financial Instruments – ~~Goodwill~~Credit Losses”. The ASU changed the impairment model for most financial assets and ~~Other: Simplifying~~certain other instruments. The standard requires entities to use a forward-looking “expected loss” model that replaces the ~~Test for Goodwill Impairment.” ASU 2017-04 simplifies~~previous “incurred loss” model, which generally results in earlier recognition of credit losses.

In the ~~subsequent measurement~~first quarter of ~~goodwill by eliminating Step 2 of~~2020, the goodwill impairment test. If a reporting unit fails Step 1 of the goodwill impairment test, entities are no longer required to compute the implied fair value of goodwill following the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company ~~early~~ adopted this ~~guidance as of~~standard through the modified retrospective approach, with a cumulative-effect adjustment at the beginning of the ~~third quarter of~~ fiscal ~~2017.~~

In January 2017, the FASB issued ASU 2017-01, “Business Combinations – Clarifying the Definition of a Business.” ASU 2017-01 narrows the definition of a business and provides a screen to determine when a set of the three elements of a business – inputs, processes, and outputs – are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The new guidance is effective for the Company in the fiscal year ending December 29, 2018. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 provides for simplification of several aspects of the accounting for share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The Company adopted the new standard in the first quarter of fiscal 2017. Accordingly the tax benefits or deficiencies related to stock-based compensation are reflected in the condensed consolidated statements of operations as a component of the provision for income taxes, whereas they previously were recognized in equity.year. As a result of the adoption, the Company ~~recognized $1.3 million of tax benefits related~~has established revised processes and controls to ~~share-based payments~~estimate expected losses for trade and other receivables in ~~its provision for income taxes in 2017. Additionally,~~accordance with the Company’s condensed consolidated statements of cash flows now include tax benefits as an operating activity, while cash paid on associates’ behalf related to shares withheld for tax purposes is classified as a financing activity. Retrospective application of the cash flow presentation resulted in $2.6 million increases 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.new standard. The Company’s ~~stock compensation expense continues to reflect estimated forfeitures.~~process for estimating losses for trade and other receivables includes an evaluation of both historical collection experience and expectations for current credit risks based on several customer and environmental factors.

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 definition 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 for the Company in the first quarter of its fiscal year ending December 28, 2019. The adoption of ~~this ASU will result~~the standard resulted in a ~~significant increase~~transition adjustment to 2020 beginning of the year retained earnings of $2.2 million (gross of the deferred tax impact of $0.6 million). The transition adjustment relates to incremental trade and notes receivable allowances due to the ~~Company’s consolidated balance sheets for lease liabilities~~earlier recognition of expected losses under the new standard of $1.9 million and ~~right-of-use assets, and the Company is currently evaluating the other effects of adoption of this ASU on its consolidated financial statements.~~$0.3 million, respectively.

The following table provides information about disaggregated revenue by type of products and customers for each of the ~~FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The new guidance affects any reporting organization that either enters into~~Company’s reportable segments:

	12 Weeks Ended October 9, 2021								40 Weeks Ended October 9, 2021
(In thousands)	Food Distribution		Retail		Military		Total		Food Distribution		Retail		Military		Total
Type of products:
Center store (a)	$	344,624	$	235,784	$	214,505	$	794,913	$	1,135,458	$	763,006	$	701,642	$	2,600,106
Fresh (b)		333,895		233,347		121,157		688,399		1,144,025		758,591		420,621		2,323,237
Non-food (c)		328,011		98,806		95,156		521,973		1,059,067		326,543		317,024		1,702,634
Fuel		—		40,544		—		40,544		—		118,880		—		118,880
Other		24,785		256		2,383		27,424		83,373		1,138		8,244		92,755
Total	$	1,031,315	$	608,737	$	433,201	$	2,073,253	$	3,421,923	$	1,968,158	$	1,447,531	$	6,837,612
Type of customers:
Individuals	$	—	$	608,506	$	—	$	608,506	$	—	$	1,967,372	$	—	$	1,967,372
Manufacturers, brokers and distributors		12,231		—		403,952		416,183		46,644		—		1,349,307		1,395,951
Retailers		1,008,172		—		26,866		1,035,038		3,339,578		—		89,980		3,429,558
Other		10,912		231		2,383		13,526		35,701		786		8,244		44,731
Total	$	1,031,315	$	608,737	$	433,201	$	2,073,253	$	3,421,923	$	1,968,158	$	1,447,531	$	6,837,612

	12 Weeks Ended October 3, 2020								40 Weeks Ended October 3, 2020
(In thousands)	Food Distribution		Retail		Military		Total		Food Distribution		Retail		Military		Total
Type of products:
Center store (a)	$	333,988	$	245,652	$	226,507	$	806,147	$	1,144,335	$	837,655	$	790,266	$	2,772,256
Fresh (b)		334,173		229,368		128,895		692,436		1,184,091		774,498		463,013		2,421,602
Non-food (c)		324,565		94,959		94,588		514,112		1,079,971		316,255		358,157		1,754,383
Fuel		—		26,306		—		26,306		—		80,946		—		80,946
Other		19,478		374		1,963		21,815		63,164		1,129		7,893		72,186
Total	$	1,012,204	$	596,659	$	451,953	$	2,060,816	$	3,471,561	$	2,010,483	$	1,619,329	$	7,101,373
Type of customers:
Individuals	$	—	$	596,429	$	—	$	596,429	$	—	$	2,009,802	$	—	$	2,009,802
Manufacturers, brokers and distributors		13,477		—		422,662		436,139		64,654		—		1,510,859		1,575,513
Retailers		968,381		—		27,328		995,709		3,339,824		—		100,577		3,440,401
Other		30,346		230		1,963		32,539		67,083		681		7,893		75,657
Total	$	1,012,204	$	596,659	$	451,953	$	2,060,816	$	3,471,561	$	2,010,483	$	1,619,329	$	7,101,373

(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.

Under its contracts with customers, the Company stands ready to ~~transfer~~deliver product upon receipt of a purchase order. Accordingly, the Company has 0 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 ~~or enters into contracts for~~that have terms greater than one year. As the performance obligation is part of a contract that has an original expected duration of less than one year, the Company has applied the practical expedient under ASC 606 to omit disclosures regarding remaining performance obligations.

Revenue recognized from performance obligations related to prior periods (for example, due to changes in estimated rebates and incentives impacting the transaction price) was not material in any period presented.

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~~Company’s standard payment terms. Accordingly, the ~~Effective Date,” which results in~~Company has elected the ~~guidance being effective~~practical expedient to not adjust for the effects of a significant financing component. As a result, these amounts are recorded as receivables and not contract assets. The Company 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.had 0 contract assets for any period presented.

The Company ~~is currently in~~does not typically incur incremental costs of obtaining a contract that are contingent upon successful contract execution and would therefore be capitalized.

Changes to the ~~process of evaluating the impact of adoption of this standard on its consolidated financial statements and has substantially completed its initial evaluation~~balance of the major focus areas that could impact the Company. From a principal versus agent considerations perspective, the Company has evaluated its significant arrangements and has determined that revenue recognition on a gross reporting basis will remain relatively unchanged, with the exception 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. As a result of this determination, the Company is not required to assess whether these promised goods or services are performance obligations, and therefore, believes revenue recognition practices will remain relatively unchangedallowance for credit losses were as there are no additional deliverables 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 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.follows:

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 portion 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 then 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.

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.

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.

~~Changes in~~The Company has 3 reporting units; however, 0 goodwill exists within the Retail or Military reporting units. The carrying amount of goodwill ~~were~~recorded within the Food Distribution reporting unit was $181.0 million as ~~follows:~~of October 9, 2021 and January 2, 2021.

The Company has indefinite-lived intangible assets that are not amortized, consisting primarily of indefinite-lived trade names and licenses for the sale of alcoholic beverages. The carrying amount of indefinite-lived intangible assets was $67.6 million as of October 9, 2021 and January 2, 2021.

The Company reviews goodwill and other indefinite-lived intangible assets for impairment annually, during the fourth quarter of each ~~fiscal~~ year, and more frequently if circumstances indicate impairment is probable. Such circumstances have not arisen in the ~~possibility of impairment.~~current fiscal year. Testing goodwill and other indefinite-lived intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization. ~~On the first day of~~

During the third quarter of ~~fiscal 2017,~~2020, the Company ~~early adopted ASU 2017-04, which simplifies~~made the ~~subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test.~~

~~During the 12 weeks ended October 7, 2017, the Company experienced significantly lower than expected Retail operating results and, due~~decision 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, revised its future projections for the Retail reporting unit. Asabandon a result of the lower than previously estimated Retail operating results, the Company performed Step 1 of the goodwill impairment test by calculating the fair value of the Retail reporting unit based on its discounted estimated future cash flows. The Company then benchmarked the calculated fair value against a market approach using the guideline public companies method. Given there has been a sustained decline in the market multiples of publicly traded peer companies, management considered this market information when assessing the reasonableness of the fair value of the reporting unit under both the income and market approaches.

Based on the factors outlined above, together with the results of the Step 1 goodwill impairment test, it was determined that the carrying value of the Retail segment exceeded its fair value. Consequently, the Company recorded an estimated goodwill impairment charge of $189.0 million. The measurement of the fair value of the Retail segment requires significant judgments and estimates regarding short- and long-term growth rates and profitability, as well as assumptions regarding the market valuation of the business. These represent Level 3 valuation inputs under the ASC 820 fair value hierarchy, as further described in Note 7 – Fair Value Measurements. Due to the complexity and effort required to estimate the fair value of the reporting unit, the fair value estimates were based on preliminary analysis and assumptions that are subject to change. The measurement of impairment will be completed in the fourth quarter of fiscal 2017 as the Company performs its annual impairment test fortradename within the Food Distribution ~~reporting unit as well as~~segment to better integrate with the Company’s overall transportation operations, resulting in a ~~market capitalization reconciliation to assess the reasonableness~~$7.0 million impairment of the ~~fair values determined for each of the reporting units.~~associated indefinite-lived tradename asset.

~~The Food Distribution reporting unit has a fair value that is substantially in excess of its carrying value.~~

The following table provides the activity of reserves for closed properties for ~~fiscal 2017.~~the 40-week period ended October 9, 2021. Included in the liability are lease-related ancillary costs from the date of closure to the end of the remaining lease term, as well as related severance. Reserves for closed properties recorded in the condensed consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on the timing of when the obligations are expected to be paid.

										Reserves for Closed Properties
										Lease
	Lease and									Ancillary
(In thousands)	Ancillary Costs			Severance			Total			Costs			Severance			Total
Balance at December 31, 2016	$	21,932		$	—		$	21,932
Balance at January 2, 2021										$	3,349		$	114		$	3,463
Provision for closing charges		886			—			886			1,410			—			1,410
Provision for severance		—			620			620			—			357			357
Lease termination adjustments		(1,910	)		—			(1,910	)		(220	)		—			(220	)
Changes in estimates		1,141						1,141			(44	)		—			(44	)
Accretion expense		408			—			408			74			—			74
Payments		(5,045	)		(452	)		(5,497	)		(1,027	)		(433	)		(1,460	)
Balance at October 7, 2017	$	17,412		$	168		$	17,580
Balance at October 9, 2021										$	3,542		$	38		$	3,580

Included in the liability are lease obligations recorded at the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income.

Restructuring and asset impairment, ~~charges included~~net in the condensed consolidated statements of ~~operations~~earnings consisted of the following:

	12 Weeks Ended					40 Weeks Ended						12 Weeks Ended						40 Weeks Ended
	October 7,		October 8,			October 7,			October 8,			October 9,			October 3,			October 9,			October 3,
(In thousands)	2017		2016			2017			2016			2021			2020			2021			2020
Asset impairment charges(a)	$	33,158	$	2,059		$	33,678		$	5,542		$	207		$	6,767		$	3,783		$	16,411
Provision for closing charges		481		375			886			13,546			—			—			1,410			325
Loss on sales of assets related to closed facilities		238		—			912			266
Gain on sales of assets related to closed facilities (b)													(358	)		—			(2,544	)		(31	)
Provision for severance(c)		76		—			620			895			233			—			357			2,205
Other costs associated with distribution center and store closings		532		268			1,306			3,371
Other costs associated with site closures (d)													196			2			507			1,649
Changes in estimates(e)		1,141		(40	)		1,141			394			15			(226	)		(44	)		(104	)
Lease termination adjustments(f)		—		—			(1,910	)		(300	)		(488	)		—			(488	)		—
Total												$	(195	)	$	6,543		$	2,981		$	20,455
	$	35,626	$	2,662		$	36,633		$	23,714

(a) Asset impairment charges in the current year were ~~substantially all~~ incurred ~~on long-lived assets~~primarily in the Retail segment ~~due~~and relate to ~~the economic~~current year store closures and ~~competitive environment of certain stores and~~previously closed locations, as well as site closures in ~~conjunction~~connection with the Company’s ~~retail~~supply chain transformation within the Food Distribution segment. Prior year charges were incurred primarily within the Food Distribution segment and related to the evaluation of the expected net proceeds from the sale of the Fresh Kitchen facility, the exit of the Fresh Cut business, and the sale of equipment related to both Fresh Cut and Fresh Kitchen, which totaled $9.1 million. Due to a decision in the prior year to abandon a tradename within the Food Distribution segment an impairment charge of $7.0 million was recognized.

(b) Gain on sales of assets in the current year primarily relate to sales of pharmacy customer lists, equipment, and real estate associated with store ~~rationalization plan. The changes~~closings in the Retail segment, in addition to gains on sale of vacant land in the Military segment.

(c) Severance in the current year relates to the closure of distribution centers in the Food Distribution segment as well as Retail store closings. In the prior year, severance was related to the exit of the Fresh Cut business.

(d) Other costs in the current year primarily relates to Retail and Food Distribution site closures and restructuring activities. In the prior year, other costs primarily related to the Fresh Cut business and Retail store closings.

(e) Changes in estimates primarily relate to revised estimates offor turnover and other lease ~~and~~ ancillary costs ~~and sublease income~~ associated with previously closed locations due to ~~lost subtenants~~favorable dispute resolutions with landlords and ~~deterioration~~fluctuations in the amount of certain ancillary costs.

(f) Lease termination adjustments relate to the gain recognized to terminate a lease agreement in the current year, which includes a $0.3 million write-off of the ~~condition~~lease liability and $0.2 million of ~~certain~~lease ancillary costs included in the reserve for closed properties. ~~The lease termination adjustments represent the benefits recognized in connection with lease buyouts negotiated related to previously closed stores.~~

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~~$27.5 million were measured at a fair value of ~~$14.9~~$23.7 million, resulting in an impairment ~~charge~~charges of ~~$33.7~~$3.8 million. In the prior year, in connection primarily with the Company’s exit of the Fresh Cut operations and planned sales of certain Fresh Kitchen equipment assets, long-lived assetswith a book value of $53.6 million were measured at a fair value of $44.2 million, resulting in ~~2017. Fair~~impairment charges of $9.4 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.

~~Long-term debt consists~~ Assets classified as held for sale in the condensed consolidated balance sheet are valued at the expected net proceeds. The Fresh Kitchen facility, which was classified as held for sale as of January 2, 2021, was sold in the ~~following:~~

~~Subsequent to the end of the third~~first quarter of ~~fiscal 2017, the Company paid the outstanding balance on the Senior secured term loan~~2021 for proceeds 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.$20.5 million.

Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term maturities of these financial instruments. See Note 5 for discussion of the fair value measurements related to long-lived asset impairment charges and Note 4 for discussion of the fair value measurements related to goodwill. At October 7, 2017 and December 31, 2016, the book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows:

~~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~~Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the ~~Company’s business combinations involve~~short-term maturities of these financial instruments. See Notes 4 and 5 for discussion of the ~~potential for~~fair value measurements related to long- or indefinite-lived asset impairment charges. At October 9, 2021 and January 2, 2021 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 thebook value and estimated fair value of the ~~contingent consideration on the acquisition date.~~ Company’s debt instruments, excluding debt financing costs, were as follows:

The estimated fair value of ~~the contingent consideration~~debt 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,~~market quotes for instruments with similar terms 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 unobservableremaining maturities (Level 2 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.valuation techniques).

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, the Company has an unearned advance 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 to the Central States Southeast and Southwest Pension Fund (“Central States Plan” or “the Plan”), a multi-employer pension plan, based on obligations arising from certain of its collective bargaining agreements in Bellefontaine, Ohio, Lima, Ohio, and Grand Rapids, Michigan covering its supply chain associates at those locations. This Plan provides retirement benefits 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 contributes to the Central States Plan under the terms outlined in the “Primary Schedule” 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.

agreements. Based on the most recent information available to the Company, management believes that the present value of actuarial accrued liabilities in ~~this multi-employer plan~~the Plan significantly exceeds the value of the assets held in trust to pay benefits. Because SpartanNash is ~~one~~1 of a number of employers contributing to ~~this plan,~~the Plan, it is difficult to ~~ascertain what~~accurately determine the ~~exact~~ amount of the ~~underfunding would be.~~underfunding. Management is not aware of any significant change in funding levels since ~~December 31, 2016. To reduce this underfunding, management expects meaningful increases in expense as a result of required incremental multi-employer pension plan contributions in future years.~~January 2, 2021. 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 on July 9, 2021, the Act is designed to prevent such plans from becoming insolvent for the next 30 years. The ~~terms~~Central States Plan, which is in a critical and declining status, is expected to apply and qualify for relief under the Act when the filing period opens during the first half of fiscal year 2022. As a result, the legislation and the available relief will alleviate the risk of insolvency of the ~~existing collective bargaining agreement between~~Plan for the ~~Company~~next 30 years, and ~~union representing its associates in~~related potential adverse impacts to the Grand Rapids distribution center have been mutually extended by 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.Company.

During the ~~12 weeks~~12- and 40- week periods ended October ~~7, 2017 and October 8, 2016,~~9, 2021, the Company recognized net periodic ~~pension income~~postretirement benefit costs of ~~$0.1~~$0.2 million and ~~$0.2~~$0.5 million, respectively, related to the SpartanNash Retiree Medical Plan (“Retiree Medical Plan”). During the 12- and 40- week periods ended October 3, 2020, the Company ~~Pension Plan and~~recognized net periodic postretirement benefit costs of $0.1 million ~~in both periods related to the SpartanNash Medical Plan.~~

~~For the 40 weeks ended October 7, 2017~~ and ~~October 8, 2016, the Company recognized net periodic pension income of~~ $0.5 ~~and $0.8~~ million, respectively, related to the Retiree Medical Plan. In the first quarter of the prior year, the Company realized a gain of $1.0 million related to a refund from the annuity provider associated with the final reconciliation of participant data of the terminated SpartanNash Company Pension Plan. Substantially all of these amounts are included in “Other, net” in the condensed consolidated statements of earnings.

The Company expects to make total contributions of approximately $0.5 million in 2021 to the Retiree Medical Plan and ~~net postretirement benefit costs of~~has made $0.3 million in ~~both periods related to~~ the ~~SpartanNash Medical Plan.~~

The Company did not make any contributions to the SpartanNash Company Pension Plan during the 40 weeks ended October 7, 2017. The Company does not expect, and is not required, to make any contributions for the remainder of the fiscal year ending December 30, 2017.

year-to-date period. The Company’s retirement programs also include defined contribution plans providing contributory benefits, as well as executive compensation plans for a select group of management personnel and/or highly compensated associates.

In addition to the plans listed above, the Company participates in the Central States Southeast and Southwest Pension Fund, ~~(EIN 7456500),~~ the Michigan Conference of Teamsters and Ohio Conference of Teamsters Health and Welfare plans (collectively referred to as “multi-employer plans”), and other company-sponsored defined contribution plans for most associates covered by collective bargaining agreements.

With respect to the Company’s participation in the Central States Plan, expense is recognized as contributions are ~~funded.~~payable. The Company’s contributions ~~for~~during the ~~40 weeks~~12-week periods ended October ~~7, 2017~~9, 2021 and October ~~8, 2016~~3, 2020 were ~~$10.2~~$2.2 million and ~~$10.1~~$2.5 million, respectively. The Company’s contributions during the 40-week periods ended October 9, 2021 and October 3, 2020 were $10.3 million and $10.6 million, respectively. See Note 87 for further information regarding contingencies related to the Company’s participation in the Central States Plan.

The effective income tax rate was ~~38.2%~~23.1% and ~~34.6%~~21.8% for the 12 weeks ended October ~~7, 2017~~9, 2021 and October ~~8, 2016,~~3, 2020, respectively. ~~For~~The effective income tax rate was 24.5% and 10.5% for the 40 weeks ended October ~~7, 2017~~9, 2021 and October ~~8, 2016, the effective income tax rate was 39.4% and 36.7%,~~3, 2020, respectively. The differences from the federal statutory rate ~~are primarily due to tax benefits related to state taxes, stock-based compensation and federal tax credits~~ in the current year ~~and~~were primarily due to state taxes and the limitations on the deductibility of executive compensation, partially offset by federal tax credits. In the prior year, the difference from the federal statutory rate was primarily the result of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, and related tax planning in the 40-week period, as well as federal tax credits, inpartially offset by state taxes, limitations on the ~~prior year. The Company adopted ASU 2016-09 on January 1, 2017, which requires tax benefits or deficiencies related to~~deductibility of executive compensation, and the impacts of stock-based compensation in both the 12- and 40- week periods.

On March 27, 2020, the U.S. government enacted tax legislation to be reflected in the condensed consolidated statements of operations as a component of the provision for income taxes whereas they were previously recognized in equity. Total tax benefits related to stock-based compensation recognized in fiscal 2017 were $1.3 million. As discussed in Note 4 – Goodwill,provide economic stimulus and support businesses and individuals during the ~~third quarter of fiscal 2017,~~COVID-19 pandemic, referred to as the CARES Act. In connection with the CARES Act, the Company recorded ~~a goodwill impairment loss of $189.0 million. This loss resulted in a reduction of deferred~~net discrete income tax ~~liabilities (net)~~benefits of ~~$70.9 million.~~$9.3 million in 2020 associated with the additional deductibility of certain expenses combined with provisions which enable companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”), when the federal statutory income tax rate was 35%. In the first quarter of 2021, the Company received tax refunds totaling $25.7 million related to the amended prior year returns.

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.

~~Stock-based~~Share-based compensation expense recognized and included in “Selling, general and administrative expenses” in the condensed consolidated statements of ~~operations,~~earnings, and related tax ~~benefits~~impacts were as follows:

The following table summarizes activity in the ~~stock-based compensation~~stock incentive plans for the 40 weeks ended October ~~7, 2017:~~

~~The Company has not issued any stock options since 2009 and all outstanding options are vested and exercisable at October 7, 2017.~~

As of October ~~7, 2017,~~9, 2021, total unrecognized compensation ~~costs~~cost related to non-vested ~~stock-based~~restricted stock awards granted under the Company’s stock incentive plans ~~were $5.1~~is $8.2 million ~~for restricted stock,~~ and ~~are~~is expected to be recognized over a weighted average period of ~~2.2~~2.3 years. ~~All compensation costs~~

On October 7, 2020, in connection with its entry into a commercial agreement with Amazon.com, Inc. (“Amazon”), the Company issued Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon, a warrant to acquire up to an aggregate of 5,437,272 shares of the Company’s common stock (the “Warrant”), subject to certain vesting conditions. Warrant shares equivalent to 2.5% of the Company’s outstanding and issuable shares, or 1,087,455 shares, vested upon the signing of the commercial agreement, and had a grant date fair value of $5.51 per share. Warrant shares equivalent to up to 10.0% of the Company’s outstanding and issuable shares, or 4,349,817 shares, may vest in connection with conditions defined by the terms of the Warrant, as Amazon makes payments to the Company in connection with the commercial supply agreement, in increments of $200 million, and had a grant date fair value of $5.33 per share. Upon vesting, shares may be acquired at an exercise price of $17.7257. The right to purchase shares in connection with the Warrant expires on October 7, 2027.

Share-based payment expense recognized as a reduction of “Net sales” in the condensed consolidated statements of earnings, and related tax benefits were as follows:

The following table summarizes stock warrant activity for the 40 weeks ended October 9, 2021:

As of October 9, 2021, total unrecognized cost related to ~~stock options have been recognized.~~non-vested warrant shares was $21.2 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 6.0 years. Additionally, 1,413,693 warrant shares are vested and exercisable. As of October 9, 2021, nonvested warrant shares had an intrinsic value of $20.5 million, and vested warrant shares had an intrinsic value of $7.2 million.

Outstanding nonvested restricted stock awards under the 2015 Stock Incentive Plan contain nonforfeitable rights to dividends or dividend equivalents, which participate in undistributed earnings with common stock. These awards are classified as participating securities and are included in the calculation of basic earnings per share. Awards under the 2020 Stock Incentive Plan do not contain nonforfeitable rights to dividends or dividend equivalents and are therefore not classified as participating securities. There were 0 stock warrants outstanding during the 12- and 40- week periods ended October 3, 2020. The dilutive impact of both the restricted stock awards and warrants are presented below, as applicable. The following table sets forth the computation of basic and diluted net earnings per ~~share from continuing operations:~~

	12 Weeks Ended						40 Weeks Ended
	October 7,			October 8,			October 7,			October 8,			12 Weeks Ended						40 Weeks Ended
(In thousands, except per share amounts)	2017			2016			2017			2016			October 9, 2021			October 3, 2020			October 9, 2021			October 3, 2020
Numerator:
(Loss) earnings from continuing operations	$	(123,452	)	$	16,730		$	(87,327	)	$	44,250
Adjustment for loss (earnings) attributable to participating securities		2,064			(292	)		1,522			(785	)
(Loss) earnings from continuing operations used in calculating earnings per share	$	(121,388	)	$	16,438		$	(85,805	)	$	43,465
Net earnings													$	15,176		$	19,952		$	51,506		$	63,821
Adjustment for earnings attributable to participating securities														(264	)		(494	)		(999	)		(1,577	)
Net earnings used in calculating earnings per share													$	14,912		$	19,458		$	50,507		$	62,244
Denominator:
Weighted average shares outstanding, including participating securities		37,254			37,470			37,596			37,479			35,525			35,730			35,671			35,900
Adjustment for participating securities		(623	)		(654	)		(655	)		(665	)		(618	)		(884	)		(692	)		(887	)
Shares used in calculating basic earnings per share		36,631			36,816			36,941			36,814			34,907			34,846			34,979			35,013
Effect of dilutive stock options		—			76			—			60
Effect of dilutive restricted stock awards														94			1			54			—
Effect of dilutive stock warrant														197			—			146			—
Shares used in calculating diluted earnings per share		36,631			36,892			36,941			36,874			35,198			34,847			35,179			35,013
Basic (loss) earnings per share from continuing operations	$	(3.31	)	$	0.45		$	(2.32	)	$	1.18
Diluted (loss) earnings per share from continuing operations	$	(3.31	)	$	0.45		$	(2.32	)	$	1.18
Basic earnings per share													$	0.43		$	0.56		$	1.44		$	1.78
Diluted earnings per share													$	0.42		$	0.56		$	1.44		$	1.78

The following tables set forth information about the Company by reporting segment:

(In thousands)	Food Distribution		Military			Retail			Total			Food Distribution		Retail		Military			Total
12 Weeks Ended October 7, 2017
12 Weeks Ended October 9, 2021
Net sales to external customers	$	937,397	$	505,631		$	463,616		$	1,906,644		$	1,031,315	$	608,737	$	433,201		$	2,073,253
Inter-segment sales		204,605		—			—			204,605			250,055		154		—			250,209
Merger/acquisition and integration		939		1,453			—			2,392
Restructuring charges and asset impairment		379		500			34,747			35,626
Acquisition and integration													—		101		—			101
Restructuring and asset impairment													36		137		(368	)		(195	)
Depreciation and amortization		6,354		2,786			9,807			18,947			7,954		10,633		3,176			21,763
Operating earnings (loss)		20,350		1,118			(215,310	)		(193,842	)		9,969		16,802		(4,040	)		22,731
Capital expenditures		4,402		1,940			11,161			17,503			7,895		4,971		2,253			15,119

12 Weeks Ended October 8, 2016
12 Weeks Ended October 3, 2020
Net sales to external customers	$	804,500	$	506,626		$	488,959		$	1,800,085		$	1,012,204	$	596,659	$	451,953		$	2,060,816
Inter-segment sales		219,516		—			—			219,516			247,968		—		—			247,968
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
Acquisition and integration													—		242		—			242
Restructuring and asset impairment													6,538		5		—			6,543
Depreciation and amortization		21,370		8,832			32,430			62,632			7,413		10,489		2,956			20,858
Operating earnings (loss)		68,868		4,517			(198,641	)		(125,256	)		9,191		22,318		(2,511	)		28,998
Capital expenditures		18,431		5,994			30,867			55,292			5,223		9,302		746			15,271

40 Weeks Ended October 8, 2016
40 Weeks Ended October 9, 2021
Net sales to external customers	$	2,615,964	$	1,686,567		$	1,603,885		$	5,906,416		$	3,421,923	$	1,968,158	$	1,447,531		$	6,837,612
Inter-segment sales		716,665		—			—			716,665			830,313		572		—			830,885
Merger/acquisition and integration		1,201		1			3,035			4,237
Restructuring charges and asset impairment		4,749		(241	)		19,206			23,714
Acquisition and integration													—		281		—			281
Restructuring and asset impairment													799		2,550		(368	)		2,981
Depreciation and amortization		16,139		8,850			33,942			58,931			25,348		35,559		10,353			71,260
Operating earnings		64,040		8,792			11,315			84,147
Operating earnings (loss)													47,793		43,705		(12,651	)		78,847
Capital expenditures		13,581		4,198			39,436			57,215			22,288		22,648		10,021			54,957

40 Weeks Ended October 3, 2020
Net sales to external customers												$	3,471,561	$	2,010,483	$	1,619,329		$	7,101,373
Inter-segment sales													845,988		—		—			845,988
Acquisition and integration													—		242		—			242
Restructuring and asset impairment													19,222		1,233		—			20,455
Depreciation and amortization													24,934		34,570		9,480			68,984
Operating earnings (loss)													34,990		59,416		(9,406	)		85,000
Capital expenditures													16,619		24,492		4,769			45,880

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:

12 Weeks Ended

40 Weeks Ended

October 7,

October 8,

October 7,

October 8,
(In thousands, except percentages)
2017

2016

2017

2016
Center store (a)
$

1,187,631

62.3

%

$

1,143,964

63.6

%

$

3,784,779

61.0

%

$

3,731,362

63.2

%
Fresh (b)

608,136

31.9

544,200

30.2

2,051,954

33.1

1,821,347

30.8

Pharmacy

80,455

4.2

84,039

4.7

271,170

4.4

269,524

4.6

Fuel

30,422

1.6

27,882

1.5

95,954

1.5

84,183

1.4

Consolidated net sales
$

1,906,644

100.0

%

$

1,800,085

100.0

%

$

6,203,857

100.0

%

$

5,906,416

100.0

%

	October 9,		January 2,
(In thousands)	2021		2021
Total Assets
Food Distribution	$	1,105,679	$	1,112,961
Retail		738,347		763,876
Military		398,654		400,554
Total	$	2,242,680	$	2,277,391

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 2, 2021.

SpartanNash, headquartered in Grand Rapids, Michigan, is a leading multi-regional grocery distributor and grocery retailer whose core businesses include distributing grocery products to a diverse group of independent ~~grocery retailers (“independent retailers”), select national~~and chain retailers, its corporate owned retail stores, ~~and~~ military commissaries and exchanges in the United ~~States.~~States, as well as operating a premier fresh produce distribution network. The Company operates three reportable business segments: Food Distribution, ~~Military~~Retail and ~~Retail.~~Military. The Company serves customers in all 50 states.

The Company’s Food Distribution 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.~~stores, national retailers, food service distributors, and other customers. The Food Distribution segment ~~currently~~primarily conducts business in ~~47 states, primarily in~~ the Midwest ~~Great Lakes,~~ and Southeast regions of the United States. ~~Through its Food Distribution~~

As of the end of the third quarter, the Company’s Retail segment operated 147 corporate owned retail stores in the Midwest region primarily under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery, and Dan’s Supermarket. The Company also offered pharmacy services ~~select national retailers, including Dollar General. Sales to Dollar General are made to over 14,100~~in 92 of its corporate owned retail ~~locations. Through its recent acquisition of Caito Foods Service (“Caito”)~~stores and ~~Blue Ribbon Transport (“BRT”) (“the recent acquisition”)~~operated 36 fuel centers. The retail stores have a “neighborhood market” focus to distinguish them from supercenters and limited assortment stores. The Company’s Customer Growth strategy is focused on ~~January 7, 2017, the Company processes fresh-cut fruits~~meeting changing customer needs and ~~vegetables~~preferences through a data-based decision-making process, while also increasing customer satisfaction through quality, service 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 different customers. With the acquisition of BRT, the Company offers temperature-controlled logistics services throughout North America.convenience.

The Company’s Military segment contracts with manufacturers to distribute a wide variety of grocery products primarily to military commissaries and exchanges located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar and ~~Egypt.~~Djibouti. The Company ~~has over 40 years of experience acting as a distributor~~distributes grocery products to ~~U.S.~~160 military commissaries and ~~exchanges. As of December 8, 2016,~~over 400 exchanges and, together with its third-party partner, Coastal Pacific Food Distributors, represents the only delivery solution to service the Defense Commissary Agency (“DeCA”) worldwide. 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.

~~At the end of the third quarter, the Company’s Retail segment operated 147 corporate owned retail stores in the Midwest and Great Lakes regions primarily under the banners of~~ ~~Family Fare Supermarkets, VG’s Food and Pharmacy, D&W Fresh Markets, Sun Mart~~ ~~and~~ ~~Family Fresh Market.~~ The Company also offers pharmacy services in 88 of its corporate owned retail stores and operates 31 fuel centers. The 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. Fiscal 2020 contained 53 weeks; therefore, the fourth quarter of fiscal 2020 contained 13 weeks. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday.

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 ~~of fiscal 2017 due to contributions from~~include the recent acquisition, continued growth in the Food Distribution segment from both new and existing customers, and the significant improvement in the Military segment’s sales trends, despite challenging retail market conditions. The Company continues to execute against key elements of its long-term strategic plan as is demonstrated by the continued sales growth in its distribution operations, and is committed to delivering increased value and convenience to its customers.

~~Third quarter and year-to-date fiscal 2017 operational highlights include:~~following:

As the Company enters the fourth quarter of fiscal 2017, it remains committed to delivering long-term value to its shareholders and focusing on top-line and earnings growth. At the beginning of the third quarter, the Company entered into an agreement to obtain incremental distribution business from a DeCA provider exiting these operations in the Southwest United States. This new business, together with increasing contributions from the DeCA private brand program, are expected to ~~grow Military’s~~decline 1.0% to 3.0%, while Military Distribution sales ~~in the fourth quarter of fiscal 2017. Retail sales trends - while improving -~~ are ~~anticipated to remain negative for the remainder of the year. The Company also expects continued organic sales growth in the Food Distribution segment.~~

The Company expects a slight easing of deflationary pressures with modest food inflation anticipated in the fourth quarter, and therefore does not anticipate any of the LIFO benefit realized in the prior year fourth quarter to recur. The Company also anticipates that projected fourth quarter sales growth at Food Distribution and the continuation of improved sales trends at Military will be more than offset by the cycling of the prior year LIFO benefit, and that headwinds associated with hurricane impacts and the onboarding of new business will negatively affect fill rates and cause inbound freight disruptions in the fourth quarter. Retail earnings are anticipated to remain challenged for the remainder of the year as the competitive landscape and inflationary environment arenow expected to ~~persist. Based on the factors noted above, the Company anticipates fourth quarter earnings will be significantly below the prior year.~~decline 9.0% to 13.0%.

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:

	Percentage of Net Sales									Percentage Change
	12 Weeks Ended					40 Weeks Ended				12 Weeks Ended			40 Weeks Ended
	October 9, 2021			October 3, 2020		October 9, 2021		October 3, 2020		October 9, 2021			October 9, 2021
Net sales		100.0			100.0		100.0		100.0		0.6			(3.7	)
Gross profit		15.9			15.8		15.8		15.3		1.4			(0.5	)
Selling, general and administrative		14.8			14.0		14.6		13.8		6.2			1.8
Acquisition and integration		0.0			0.0		0.0		0.0		(58.3	)		16.1
Restructuring charges and asset impairment, net		(0.0	)		0.3		0.0		0.3		(103.0	)		(85.4	)
Operating earnings		1.1			1.4		1.2		1.2		(21.6	)		(7.2	)
Other expenses		0.1			0.2		0.2		0.2		(13.7	)		(22.6	)
Earnings before income taxes		1.0			1.2		1.0		1.0		(22.7	)		(4.3	)
Income tax expense		0.2			0.3		0.2		0.1		(18.2	)		123.0
Net earnings		0.7			1.0		0.8		0.9		(23.9	)		(19.3	)

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
)

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~~9, 2021 (the “third quarter”) increased ~~$106.6~~$12.4 million, or ~~5.9%~~0.6%, to ~~$1.91~~$2.07 billion from ~~$1.80~~$2.06 billion in the quarter ended October ~~8, 2016 (“prior~~3, 2020 (the “prior year quarter”). Net sales for the year-to-date period ended October ~~7, 2017 (“year-to-date~~9, 2021 (the “year-to-date period”) ~~increased $297.4~~decreased $263.8 million, or ~~5.0%~~3.7%, to ~~$6.20~~$6.84 billion from ~~$5.91~~$7.10 billion in the year-to-date period ended October ~~8, 2016 (“prior~~3, 2020 (the “prior year-to-date period”). The third quarter increase was ~~driven primarily by contributions from the Caito acquisition and organic~~attributable to continued growth ~~from~~with certain existing ~~customers in the~~ Food Distribution customers and an increase in comparable store sales within the Retail segment, ~~which more than~~partially offset by lower sales inwithin the ~~Retail~~Military segment. ~~Third quarter~~The decrease in net sales ~~trends increased sequentially from~~for the ~~second quarter~~year-to-date period was due to ~~significantly improved~~favorable prior year sales, ~~comparisons in~~attributable to increased consumer demand related to COVID-19, as well as continuation of lower volumes within the Military ~~commissary business.~~segment, partially offset by continued growth with certain existing Food Distribution customers.

Food Distribution net sales ~~after intercompany eliminations,~~ increased ~~$132.9~~$19.1 million, or ~~16.5%~~1.9%, to ~~$937.4 million~~$1.03 billion in the third quarter from ~~$804.5 million~~$1.01 billion in the prior year quarter. Net sales for the year-to-date period ~~increased $426.0~~decreased $49.6 million, or ~~16.3%~~1.4%, to $3.42 billion in the year-to-date period from ~~$2.62~~$3.47 billion in the prior year-to-date ~~period to $3.04 billion.~~period. The third quarter increase was attributable to continued growth with certain existing Food Distribution customers, and the favorable impact of inflation. The decrease in the year-to-date ~~increases were~~period was due to ~~contributions~~favorable prior year sales attributable to increased consumer demand related to COVID-19, as well as impacts from the ~~Caito acquisition~~Company’s decision to exit its Fresh Production business, which accounted for a $21.7 million decline in segment revenues from the prior year-to-date period, partly offset by continued growth with certain existing Food Distribution customers and ~~organic volume growth from existing customers.~~the favorable impact of inflation.

~~Military~~Retail net sales ~~decreased $1.0~~increased $12.1 million, or ~~0.2%~~2.0%, to ~~$505.6~~$608.7 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 sales at the DeCA operated commissaries, which for the third 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~~$596.7 million in the prior year quarter. Net sales for the year-to-date period decreased ~~$62.0~~$42.3 million, or ~~3.9%~~2.1%, from ~~$1.60~~$2.01 billion in the prior year-to-date period to ~~$1.54~~$1.97 billion.The third quarter increase was primarily due to increases in comparable store sales and fuel sales in the current year, partially offset by store closures. The year-to-date decrease in net sales was primarily due to cycling favorable prior year sales attributable to ~~lower~~increased consumer demand related to COVID-19, partially offset by an increase in fuel sales. Comparable store sales ~~resulting from the closures and sales of retail stores ($16.7 million~~increased 3.1% for the quarter and ~~$42.8 million year-to-date) and negative~~decreased 2.7% for the year. On a two-year comparable store ~~sales. Comparable store~~basis, sales ~~excluding fuel, were down 2.5% for~~increased 13.5% and 11.4% during the quarter and ~~2.2% for the~~ year-to-date ~~period, and reflect continued strong competition within the industry.~~periods, 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, or to the same store’s operations from the period two years ago in the case of a two-year comparison. 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.

Military net sales decreased $18.8 million, or 4.1%, to $433.2 million in the third quarter from $452.0 million in the prior year quarter. Net sales for the year-to-date period decreased $171.8 million, or 10.6%, from $1.62 billion in the prior year-to-date period to $1.45 billion. The third quarter decrease was primarily related to a reduction in export sales as a result of cycling the prior year quarter’s increased consumer demand, coupled with supply chain challenges at international shipping ports in the current year quarter, in addition to the continuation of lower volumes at domestic commissaries. The year-to-date decrease was primarily due to the continuation of lower volumes at domestic commissaries following base access and shopping restrictions implemented in the prior year,in addition to a reduction in export sales as a result of the prior year’s increased consumer demand related to the COVID-19 pandemic, coupled with supply chain challenges at ports in the current year.

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 distribution segments include shipping and handling costs in the Selling, general and administrative section of operating expenses in the consolidated statements of earnings.

Gross profit increased $4.7 million, or 1.4%, to ~~$261.7~~$329.5 million in the third quarter from ~~$255.3~~$324.8 million in the prior year quarter. As a percent of net sales, gross profit was ~~13.7%~~15.9% compared to ~~14.2%~~15.8% in the prior year quarter. Gross profit for the year-to-date period ~~increased $37.9~~decreased $5.6 million, or ~~4.4%~~0.5%, from ~~$852.2 million~~$1.09 billion in the prior year-to-date period to ~~$890.1 million.~~$1.08 billion in the current year. As a percent of net sales, gross profit for the year-to-date period was ~~14.3%~~15.8% compared to ~~14.4%~~15.3% in the prior year-to-date period. ~~As a percent of net sales, the third quarter and year-to-date~~The changes in the gross ~~margin~~profit rate were ~~primarily due to~~driven by inflation within the ~~increased mix of~~ Food Distribution ~~sales~~and Military segments, partially offset by LIFO expense, as ~~a percentage of total sales combined with margin investments~~well as increases in the proportion of margin accretive Retail ~~segment.~~and Food Distribution segment sales.

Selling, General and Administrative Expenses – Selling, general and administrative (“SG&A”) expenses consist primarily of 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~~cost of sales), out-bound freight and other administrative expenses.

SG&A expenses ~~increased $8.2 million, or 3.7%, to $228.5 million in~~for the third quarter increased $17.8 million, or 6.2%, to $306.8 million from ~~$220.3~~$289.0 million in the prior year quarter, representing ~~12.0%~~14.8% of net sales in the third quarter compared to ~~12.3%~~14.0% in the prior year quarter. SG&A expenses for the year-to-date period increased ~~$42.6~~$18.0 million, or ~~5.7%,~~1.8% from ~~$740.1~~$981.1 million in the prior year-to-date period to ~~$782.7~~$999.0 million and increased ~~to 12.6%~~from 13.8% as a percentage of net sales ~~compared to 12.5%~~ in the prior year-to-date period to 14.6% in the current year-to-date period. The increases in expenses as a rate of sales were due to a higher rate of supply chain expenses primarily in the Food Distribution segment and increases in corporate administrative costs.

Acquisition and Integration – Acquisition and integration expenses for the third quarter and year-to-date ~~increases in expense~~periods ended October 9, 2021 were ~~primarily due to the addition of the Caito acquisition, partly offset by lower incentive compensation expenses. The rate to sales decrease in~~$0.1 million and $0.3 million, respectively. Acquisition and integration expenses were $0.2 million for both the third quarter ~~was primarily due to~~and year-to-date periods ended October 3, 2020. Activities in both years are mainly associated with the ~~mix~~integration of ~~business operations~~Martin’s Super Markets.

~~Merger/Acquisition and Integration~~Asset Impairment – Third quarter and ~~year-to-date period~~prior year quarter results included ~~$2.4~~income of $0.2 million and ~~$7.0 million, respectively,~~charges 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 and~~year-to-date results included $224.7 million and $225.7 million, respectively, of net restructuring 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 value of the Retail reporting unit based on its discounted estimated future cash flows. It was determined that the carrying value 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$6.5 million, respectively, of restructuring and asset impairment ~~charges. Prior~~activity. The year-to-date period and the prior year-to-date period included charges of $3.0 million and $20.5 million, respectively. The current quarter and current year-to-date amounts consist primarily of asset impairment and retail store closing charges, partially offset by gains on the sale of pharmacy customer lists, equipment, and real estate associated with store closings, as well as the termination of a lease within Food Distribution, and the sale of real estate within the Military segment. The prior year quarter ~~restructuring~~and prior year-to-date activity consists primarily of asset impairment charges and severance costs related to the restructuring of the Company’s Fresh Production business, an asset impairment ~~consisted primarily of impairment charges~~charge related to ~~three underperforming retail stores and additional costs, incurred in connection with winding down operations at certain closed facilities in~~the decision to abandon a tradename within the Food Distribution and Retail segments. Prior year-to-date period restructuring charges and asset impairment consisted primarily of charges related to the closure of three retail stores and two food distribution centers which were part of the Company’s retail store and warehouse rationalization plan,segment, as well as ~~impairment charges related to three underperforming~~ retail ~~stores.~~store closing charges.

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

Operating earnings decreased ~~$223.7~~$6.3 million, or 21.6% to ~~a loss of $193.8~~$22.7 million in the third quarter from ~~earnings of $29.9~~$29.0 million in the prior year quarter. Operating earnings for the year-to-date period decreased ~~$209.4~~$6.2 million, or 7.2%, to ~~a loss of $125.3~~$78.8 million from ~~earnings of $84.1~~$85.0 million in the prior year-to-date period.The ~~third quarter decrease was~~decreases were primarily due to higher labor and transportation costs across the goodwill impairment, higher asset impairment charges, start-up costs associated with the new Fresh Kitchen operation 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 duesupply chain network related to the ~~goodwill impairment,~~ongoing tight labor conditions, and higher corporate administrative costs, partly offset by lower asset impairment and restructuring charges ~~predominantly related to the Retail segment as well as higher merger/acquisition~~ and integration 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.improved margin rates.

Food Distribution operating earnings increased ~~$1.4~~$0.8 million, or ~~7.3%~~8.5%, to ~~$20.3~~$10.0 million in the third quarter from ~~$19.0~~$9.2 million in the prior year quarter. Operating earnings for the year-to-date period increased ~~$4.8~~$12.8 million, or ~~7.5%~~36.6%, to ~~$68.9~~$47.8 million from ~~$64.0~~$35.0 million in the prior year-to-date period.During the prior year quarter, the Company made the decision to abandon a tradename within this segment, resulting in an impairment of $7.0 million of the associated indefinite-lived tradename asset. The increase in the third quarter operating earnings for Food Distribution was due to cycling this asset impairment charge, as well as increased earnings due to the ~~quarter~~growth in net sales and gross profit rate, mostly offset by increases in supply chain expenses. The growth in the gross profit rate was driven primarily by ~~organic~~an increase in average sales ~~growth and lower incentive compensation,~~price due to inflation, partially offset by ~~Fresh Kitchen start-up costs.~~an increase in LIFO expense. The increase ~~for~~in the year-to-date period was ~~driven by organic sales growth~~due to favorable margin rates and lower ~~incentive compensation,~~asset impairment and ~~lower~~ restructuring charges, ~~related to the Company’s warehouse optimization plan,~~ partially offset by ~~charges related to Fresh Kitchen start-up costs~~a higher rate of supply chain expenses and ~~merger/acquisition and integration expenses.~~lower sales volume.

~~Military~~Retail operating earnings decreased ~~$1.7~~$5.5 million, or ~~60.9%,~~24.7% to ~~$1.1~~$16.8 million in the third quarter from ~~$2.9~~$22.3 million in the prior year quarter. Operating earnings for the year-to-date period decreased ~~$4.3~~$15.7 million, or ~~48.6%~~26.4%, to ~~$4.5~~$43.7 million from ~~$8.8~~$59.4 million in the prior year-to-date period.The decrease in the third quarter ~~decrease~~operating earnings was due to ~~higher merger/acquisition~~lower gross margin rates driven by lower fuel margins, cycling favorable prior year inventory shrink, and ~~integration and impairment expenses partly~~reduced vendor promotional activity in the current quarter, partially offset by ~~margin rate improvements and lower incentive compensation expenses.~~the increase in net sales. The ~~year-to-date~~ decrease in year-to-date operating earnings was primarily ~~due~~attributable 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~~reduced margin rates and a ~~large insurance claim.~~decrease in sales volume.

~~Retail~~Military operating ~~earnings decreased $223.4~~loss increased $1.5 million, or 60.9% to ~~a loss of $215.3~~$4.0 million in the third quarter from ~~earnings of $8.0~~$2.5 million in the prior year quarter. Operating ~~earnings~~loss for the year-to-date period ~~decreased $210.0~~increased $3.2 million, or 34.5%, to ~~a loss of $198.6~~$12.7 million from ~~earnings of $11.3~~$9.4 million in the prior year-to-date period.The third quarter ~~decrease was primarily~~increase in operating loss were due to ~~the goodwill impairment, higher asset impairment charges, lower~~decreases in net sales and ~~investments in margin, partly offset by lower merger/acquisition and integration expenses. The year-to-date decrease was primarily due to~~a higher ~~asset impairment charges, higher health care costs, lower comparable store sales and the shift~~rate of ~~New Year’s Day,~~supply chain expense, partially offset by ~~lower merger/acquisition and integration expenses and the closure~~improvements in gross margin rates. The year-to-date increase was primarily attributable to a decrease in net sales, a higher rate of ~~unprofitable stores.~~supply chain expense, partially offset by improvements in gross margin rates.

Interest Expense – Interest expense ~~increased $1.7~~decreased $0.5 million, or ~~38.7%~~14.3%, to ~~$6.1~~$3.0 million in the third quarter from ~~$4.4~~$3.5 million in the prior year quarter. Interest expense for the year-to-date period ~~increased $4.4~~decreased $3.9 million, or ~~30.3%,~~26.6% from ~~$14.7~~$14.8 million in the prior year-to-date period to ~~$19.1~~$10.9 million.The ~~increase~~third quarter decrease in interest expense was ~~primarily~~ due to ~~increased borrowings related~~significant decreases in the average debt balance. The year-to-date decrease in interest expense was due to rate cuts implemented by the ~~Caito and BRT acquisition.~~Federal Reserve during the prior year, as well as significant decreases in the average debt balance.

Income Taxes – The effective income tax rates were ~~38.2%~~23.1% and ~~34.6%~~21.8% 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%~~24.5% and ~~36.7%~~10.5%, respectively. The differences from the federal statutory rate ~~are~~in the current year were primarily due to state taxes and the limitations on the deductibility of executive compensation, partially offset by federal tax ~~benefits~~credits. In the prior year, the differences from the federal statutory rate were primarily as a result of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and related ~~to stock-based compensation and~~tax planning in the 40- week period, as well as federal tax credits, ~~in the current year and~~partially offset by state taxes, limitations on the deductibility of executive compensation, and ~~federal tax credits in~~ the ~~prior year. The Company’s effective 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 both the 12- and 40- week periods.

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 a net discrete income tax benefit of $9.3 million in 2020, associated with the additional deductibility of certain expenses combined with provisions which enable companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act, when the federal statutory income tax rate was 35%. In the first quarter ~~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, and ~~Adjusted Earnings Before Interest, Taxes, Depreciation~~adjusted earnings before interest, taxes, depreciation and ~~Amortization~~amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company’s performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude ~~start-up costs~~organizational realignment and severance associated with cost reduction initiatives. Organizational realignment includes benefits for associates terminated as part of a leadership transition plan which do not meet the definition of a reduction-in-force. Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude “Fresh Cut operating losses” subsequent to the decision to exit these operations, severance associated with cost reduction initiatives, and fees paid to a third-party advisory firm associated with Project One Team, the Company’s initiative to drive growth while increasing efficiency and reducing costs. Pension termination income related to a refund from the annuity provider associated with the ~~new Fresh Kitchen operation as well as an executive retirement stock compensation award. The Fresh Kitchen~~final reconciliation of participant data is a newly constructed facility that provides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. Given the Fresh Kitchen represents a new lineexcluded from adjusted earnings from continuing operations. Each of ~~business for the Company, the start-up activities associated with testing, training, and preparing the Fresh Kitchen for production, as well as incorporating the related operations into the business,~~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~~9, 2021 and October ~~8, 2016.~~3, 2020.

Following is a reconciliation of operating earnings (loss) by segment for the 12 and 40 weeks ended October 9, 2021 and October 3, 2020.

	12 Weeks Ended					40 Weeks Ended
	October 7,			October 8,		October 7,			October 8,			12 Weeks Ended						40 Weeks Ended
(In thousands)	2017			2016		2017			2016			October 9, 2021			October 3, 2020			October 9, 2021			October 3, 2020
Operating (loss) earnings	$	(193,842	)	$	29,867	$	(125,256	)	$	84,147
Adjustments:
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 compensation associated with executive retirement		—			—		1,172
Severance associated with cost reduction initiatives		4			149		27			839
Adjusted operating earnings	$	35,293		$	35,105	$	115,322		$	112,937
Reconciliation of operating earnings (loss) to adjusted operating earnings by segment:
Food Distribution:
Operating earnings	$	20,350		$	18,957	$	68,868		$	64,040		$	9,969		$	9,191		$	47,793		$	34,990
Adjustments:
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 compensation associated with executive retirement		—			—		591			—
Restructuring and asset impairment, net													36			6,538			799			19,222
Costs associated with Project One Team													—			—			—			265
Organizational realignment, net													—			—			287			—
Expenses associated with tax planning													—			(8	)		—			44
Severance associated with cost reduction initiatives													143			—			246			3,143
Fresh Cut operating losses													—			—			—			2,262
Adjusted operating earnings												$	10,148		$	15,721		$	49,125		$	59,926
Retail:
Operating earnings												$	16,802		$	22,318		$	43,705		$	59,416
Adjustments:
Acquisition and integration													101			242			281			242
Restructuring and asset impairment, net													137			5			2,550			1,233
Costs associated with Project One Team													—			—			—			164
Organizational realignment, net													—			—			215			—
Expenses associated with tax planning													—			(5	)		—			27
Severance associated with cost reduction initiatives		4			12		25			218			69			9			98			1,441
Adjusted operating earnings	$	23,758		$	19,815	$	82,706		$	70,208		$	17,109		$	22,569		$	46,849		$	62,523
Military:
Operating earnings	$	1,118		$	2,862	$	4,517		$	8,792
Operating loss												$	(4,040	)	$	(2,511	)	$	(12,651	)	$	(9,406	)
Adjustments:
Merger/acquisition and integration		1,453			—		1,453			1
Restructuring charges (gains)		500			18		500			(241	)
Stock compensation associated with executive retirement		—			—		147			—
Restructuring and asset impairment, gain													(368	)		—			(368	)		—
Costs associated with Project One Team													—			—			—			64
Organizational realignment, net													—			—			87			—
Expenses associated with tax planning													—			(2	)		—			11
Severance associated with cost reduction initiatives		—			20		1			242			27			31			33			537
Adjusted operating earnings	$	3,071		$	2,900	$	6,618		$	8,794
Retail:
Operating (loss) earnings	$	(215,310	)	$	8,048	$	(198,641	)	$	11,315
Adjustments:
Merger/acquisition and integration		—			1,788		324			3,035
Restructuring charges and asset impairment		223,774			2,437		223,880			19,206
Stock compensation associated with executive retirement		—			—		434			—
Severance associated with cost reduction initiatives		—			117		1			379
Adjusted operating earnings	$	8,464		$	12,390	$	25,998		$	33,935
Adjusted operating loss												$	(4,381	)	$	(2,482	)	$	(12,899	)	$	(8,794	)

Adjusted earnings from continuing operations 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~~9, 2021 and October ~~8, 2016.~~3, 2020.

	12 Weeks Ended
	October 9, 2021					October 3, 2020
				per diluted					per diluted
(In thousands, except per share amounts)	Earnings			share		Earnings			share
Net earnings	$	15,176		$	0.42	$	19,952		$	0.56
Adjustments:
Acquisition and integration		101					242
Restructuring and asset impairment, net		(195	)				6,543
Expenses associated with tax planning		—					(15	)
Severance associated with cost reduction initiatives		239					40
Total adjustments		145					6,810
Income tax effect on adjustments (a)		(36	)				(1,830	)
Impact of CARES Act (b)		—					212
Total adjustments, net of taxes		109			0.01		5,192			0.14	*
Adjusted earnings from continuing operations	$	15,285		$	0.43	$	25,144		$	0.70

	12 Weeks Ended											40 Weeks Ended
	October 7, 2017						October 8, 2016					October 9, 2021						October 3, 2020
				per diluted						per diluted					per diluted						per diluted
(In thousands, except per share amounts)	Earnings			share			Earnings			share		Earnings			share			Earnings			share
(Loss) earnings from continuing operations	$	(123,452	)	$	(3.31	)	$	16,730		$	0.45
Net earnings												$	51,506		$	1.44		$	63,821		$	1.78
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						—
Acquisition and integration													281						242
Restructuring and asset impairment, net													2,981						20,455
Costs associated with Project One Team													—						493
Organizational realignment, net													589						—
Expenses associated with tax planning													—						82
Severance associated with cost reduction initiatives		4						149					377						5,121
Fresh Cut operating losses													—						2,262
Pension termination													—						(1,004	)
Total adjustments		229,135						5,238					4,228						27,651
Income tax effect on adjustments (a)		(85,546	)					(1,918	)				(1,060	)					(6,827	)
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	)
Impact of CARES Act (b)													—						(9,298	)
Total adjustments, net of taxes		150,738			4.01			17,919			0.48		3,168			0.08	*		11,526			0.32
Adjusted earnings from continuing operations	$	63,411		$	1.69		$	62,169		$	1.66	$	54,674		$	1.52		$	75,347		$	2.10
* Includes rounding

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~~9, 2021 and October ~~8, 2016.~~

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

	12 Weeks Ended						40 Weeks Ended
(In thousands)	October 9, 2021			October 3, 2020			October 9, 2021			October 3, 2020
Net earnings	$	15,176		$	19,952		$	51,506		$	63,821
Income tax expense		4,551			5,564			16,757			7,513
Other expenses, net		3,004			3,482			10,584			13,666
Operating earnings		22,731			28,998			78,847			85,000
Adjustments:
LIFO expense		5,887			387			10,444			3,158
Depreciation and amortization		21,763			20,858			71,260			68,611
Acquisition and integration		101			242			281			242
Restructuring and asset impairment, net		(195	)		6,543			2,981			20,455
Costs associated with Project One Team		—			—			—			493
Organizational realignment, net		—			—			589			—
Severance associated with cost reduction initiatives		239			40			377			5,121
Stock-based compensation		920			1,033			6,084			5,181
Stock warrant		403			—			1,478			—
Non-cash rent		(994	)		(1,188	)		(2,980	)		(3,981	)
Fresh Cut operating losses		—			—			—			2,262
Loss (gain) on disposal of assets		49			35			(213	)		3,462
Other non-cash charges		570			94			1,528			193
Adjusted EBITDA	$	51,474		$	57,042		$	170,676		$	190,197

28Following is a reconciliation of operating earnings (loss) to adjusted EBITDA by segment for the 12- and 40- weeks ended October 9, 2021 and October 3, 2020.

	12 Weeks Ended						40 Weeks Ended
(In thousands)	October 9, 2021			October 3, 2020			October 9, 2021			October 3, 2020
Food Distribution:
Operating earnings	$	9,969		$	9,191		$	47,793		$	34,990
Adjustments:
LIFO expense		3,760			295			6,180			1,684
Depreciation and amortization		7,954			7,413			25,348			24,561
Restructuring and asset impairment, net		36			6,538			799			19,222
Costs associated with Project One Team		—			—			—			265
Organizational realignment, net		—			—			287			—
Severance associated with cost reduction initiatives		143			—			246			3,143
Stock-based compensation		407			522			2,772			2,524
Stock warrant		403			—			1,478			—
Non-cash rent		208			31			1,125			125
Fresh Cut operating losses		—			—			—			2,262
Loss (gain) on disposal of assets		4			(6	)		(95	)		1,613
Other non-cash charges		364			52			881			103
Adjusted EBITDA	$	23,248		$	24,036		$	86,814		$	90,492
Retail:
Operating earnings	$	16,802		$	22,318		$	43,705		$	59,416
Adjustments:
LIFO expense		690			(15	)		1,582			586
Depreciation and amortization		10,633			10,489			35,559			34,570
Acquisition and integration		101			242			281			242
Restructuring and asset impairment, net		137			5			2,550			1,233
Costs associated with Project One Team		—			—			—			164
Organizational realignment, net		—			—			215			—
Severance associated with cost reduction initiatives		69			9			98			1,441
Stock-based compensation		371			364			2,241			1,756
Non-cash rent		(1,116	)		(1,134	)		(3,813	)		(3,818	)
Loss (gain) on disposal of assets		24			34			(101	)		1,905
Other non-cash charges		147			30			461			64
Adjusted EBITDA	$	27,858		$	32,342		$	82,778		$	97,559
Military:
Operating loss	$	(4,040	)	$	(2,511	)	$	(12,651	)	$	(9,406	)
Adjustments:
LIFO expense		1,437			107			2,682			888
Depreciation and amortization		3,176			2,956			10,353			9,480
Restructuring and asset impairment, gain		(368	)		—			(368	)		—
Costs associated with Project One Team		—			—			—			64
Organizational realignment, net		—			—			87			—
Severance associated with cost reduction initiatives		27			31			33			537
Stock-based compensation		142			147			1,071			901
Non-cash rent		(86	)		(85	)		(292	)		(288	)
Loss (gain) on disposal of assets		21			7			(17	)		(56	)
Other non-cash charges		59			12			186			26
Adjusted EBITDA	$	368		$	664		$	1,084		$	2,146

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

~~(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~~$79.9 million in the current year-to-date period from the prior year-to-date period by approximately $9.6 million mainly due to the timing of working capital requirements, particularly higher accounts receivable balances associated with sales to new and existing distribution customers, largely offset by lower customer advances to support sales growth compared to the prior year-to-date period. In the prior year, ~~period.~~significant increases in sales volume related to the COVID-19 pandemic resulted in incremental earnings, as well as a net reduction in working capital, which benefited operating cash flows.

Net cash used in investing activities. Net cash used in investing activities ~~increased $224.6~~decreased $11.5 million in the current year compared to the prior year primarily due to significant proceeds from the ~~recent acquisition (see Note 3~~sale of fixed assets in the current year, partially offset by an increase in capital expenditures in the current year.

Capital expenditures were $55.0 million in the current year and cloud computing application development spend, which is included in operating activities, was $7.0 million, compared to capital expenditures of $45.9 million and cloud computing application development spend of $7.7 million in the ~~condensed consolidated financial statements).~~

prior year. The Company expects fiscal year 2021 capital expenditures and cloud computing application development spend to range from $80.0 million to $90.0 million. The Food Distribution, ~~Military~~Retail and ~~Retail~~Military segments utilized ~~25.1%~~40.6%, ~~11.1%~~41.2% and ~~63.8%~~18.2% of capital expenditures, respectively, in the current year.

Net cash ~~provided by (used in)~~used in financing activities. Net cash ~~provided by~~used in financing activities ~~increased $218.9~~decreased $70.4 million in the current year compared to the prior year, primarily due to ~~borrowings~~higher net payments on the ~~revolving~~senior credit facility ~~to fund~~in the ~~recent acquisition.~~

~~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.prior year.

Total debt, including ~~capital~~finance lease ~~obligations and current maturities,~~liabilities, was ~~$670.9~~$404.1 million and ~~$431.1~~$486.4 million as of October ~~7, 2017~~9, 2021 and ~~December 31, 2016,~~January 2, 2021, respectively. The ~~increase~~decrease in total debt was ~~driven by drawdowns~~due to payments on the senior credit facility ~~to finance the recent acquisition.~~

~~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.~~cash provided by operating activities.

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,~~9, 2021, the senior secured ~~revolving~~ credit facility ~~and senior secured term loan collectively~~ had outstanding borrowings of ~~$627.7~~$358.7 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~~$486.4 million at October ~~7, 2017.~~9, 2021. 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~~$16.1 million were outstanding as of October ~~7, 2017.~~9, 2021. 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~~1.43-to-1 at October ~~7, 2017~~9, 2021 compared to ~~1.77-to-1~~1.47-to-1 at ~~December 31, 2016,~~January 2, 2021, and its investment in working capital was ~~$455.6~~$305.2 million at October ~~7, 2017~~9, 2021 compared to ~~$387.5~~$325.2 million at ~~December 31, 2016. Net~~January 2, 2021. The net long-term debt to total capital ratio was ~~0.48-to-1~~0.33-to-1 at October ~~7, 2017~~9, 2021 compared to ~~0.33-to-1~~0.39-to-1 at ~~December 31, 2016.~~January 2, 2021.

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 debt to 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~~9, 2021 and ~~December 31, 2016.~~

For information on contractual obligations, see the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 31, 2016.~~January 2, 2021. At October ~~7, 2017,~~9, 2021, there have been no material changes to the Company’s significant contractual obligations outside the ordinary course of business.

During the ~~year-to-date period~~quarter ended October ~~7, 2017,~~9, 2021, the Company ~~returned $41.1~~declared $7.3 million ~~to shareholders from dividend payments and share repurchases.~~in dividends. A ~~10.0%~~3.9% increase in the quarterly dividend rate from ~~$0.15~~$0.1925 per share to ~~$0.165~~$0.20 per share was approved by the Board of Directors and announced on March ~~6, 2017.~~5, 2021. 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.

The Company has also made certain commercial commitments that extend beyond October ~~7, 2017.~~9, 2021. 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)~~January 2, 2021), standby letters of credit of ~~$9.2~~$16.1 million as of October ~~7, 2017,~~9, 2021, and interest on long-term debt and ~~capital~~finance lease ~~obligations.~~liabilities.

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 2, 2021 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 2, 2021.

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

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 2, 2021.

An evaluation of the effectiveness of the design and operation of SpartanNash Company’s disclosure controls and procedures (as currently defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was performed as of October ~~7, 2017~~9, 2021 (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 2021 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.

~~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 not any common stock share repurchases made under this program during the ~~12 week period ended~~third quarter of 2021. At October ~~7, 2017. All employee transactions are~~9, 2021, $29.7 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.

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

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.

Michigan		38-0593940
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

850 76^th 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	30

Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 6.	Exhibits	32

	Signatures	33

	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

	Allowance for Credit Losses
	Current Accounts			Long-term
(In thousands)	and Notes Receivable			Notes Receivable			Total
Balance at December 28, 2019	$	2,739		$	233		$	2,972
Impact of adoption of new credit loss standard (ASU 2016-13)		1,911			259			2,170
Provision for expected credit losses		583			—			583
Write-offs charged against the allowance		(202	)		(121	)		(323	)
Balance at October 3, 2020	$	5,031		$	371		$	5,402

	October 7,			December 31,
(In thousands)	2017			2016
Senior secured revolving credit facility, due December 2021	$	575,550		$	359,127
Senior secured term loan, due December 2021		52,172			26,954
Capital lease obligations		44,114			48,255
Other, 2.61% - 8.75%, due 2019 - 2020		6,238			5,028
Total debt - Principal		678,074			439,364
Unamortized debt issuance costs		(7,130	)		(8,265	)
Total debt		670,944			431,099
Less current portion		19,407			17,424
Total long-term debt	$	651,537		$	413,675

~~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 2, 2021		4,349,817
Vested		326,238
Outstanding and nonvested at October 9, 2021		4,023,579

(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
	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	)

	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

Exhibit Number		Document

~~2.1~~		~~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~~Incorporated herein by reference.

10.1		Executive ~~Employment~~Separation Agreement between SpartanNash Company and ~~Mark Shamber~~Kathleen Mahoney..

~~10.2~~		~~Executive Severance Agreement between SpartanNash Company and Mark Shamber~~.

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 9, 2021, has been formatted in Inline XBRL.