Smart & Final Stores, Inc. Reports Third Quarter 2016 Financial Results

COMMERCE, Calif., Nov. 16, 2016 /PRNewswire/ -- Smart & Final Stores, Inc. (the "Company") (NYSE: SFS), the value-oriented food and everyday staples retailer, today reported financial results for the third fiscal quarter ended October 9, 2016.

Third Quarter Highlights:

  • Net sales increase of 11.9% to $1,394.4 million
  • Comparable store sales decrease of 1.3%, including impacts of deflation and cannibalization
  • Net income of $7.0 million, or $0.09 per diluted share
  • Adjusted net income of $15.0 million, or $0.19 per diluted share
  • Adjusted EBITDA of $57.2 million

"Smart & Final Stores continues to execute our planned growth by expanding both Smart & Final Extra! and Cash & Carry banners," said David Hirz, President and Chief Executive Officer. "Year-to-date, we've opened 33 new Smart & Final Extra! and Cash & Carry banner stores and relocated six Smart & Final legacy to new Extra! store locations. With four additional new stores and six legacy-to-Extra! store conversions planned in the fourth quarter, we are on track to deliver by year-end 15% annual new unit growth in the Smart & Final banner, and above historical average growth in the Cash & Carry banner.  We continue to build upon our differentiated brand message and support growth in our two strong, well-positioned store banners."

Mr. Hirz added, "In the third fiscal quarter, the effects of deflation and anticipated cannibalization continued to pressure comparable store sales growth and earnings, despite overall growth in customer visits.  We are pleased that our merchandising and marketing initiatives are driving broader exposure to Smart & Final's unique brands, products and service.  We will continue to focus on developing product categories with strong potential sales growth and a robust marketing program and digital campaign to support store performance during the upcoming holiday season."

In order to aid understanding of the Company's business performance, it has presented results in conformity with accounting principles generally accepted in the United States ("GAAP") and has also presented adjusted net income, adjusted net income per share, adjusted net income per diluted share, EBITDA and adjusted EBITDA, which are non-GAAP measures that are explained and reconciled to the comparable GAAP measures in the tables included in this release. Where applicable, the numbers below are first presented on a GAAP basis and then on an adjusted basis.

Third Quarter Fiscal 2016 Financial Results
Net sales were $1,394.4 million, representing an 11.9% increase as compared to $1,246.1 million in the same period of 2015.  Net sales growth was driven by the net sales contribution of new stores, partially offset by a 1.3% decrease in comparable store sales. Comparable store sales were comprised of a 0.3% increase in comparable transaction count, including the effect of anticipated cannibalization from new stores, and a 1.6% decrease in comparable average transaction size, including the impact of deflation in key product categories in both store banners.

Net sales for Smart & Final banner stores were $1,083.4 million, a 15.2% increase as compared to $940.2 million in the same period of 2015.  Comparable store sales for the Smart & Final banner decreased 1.6% in the third quarter.

Net sales for Cash & Carry banner stores were $311.0 million, a 1.7% increase as compared to $305.9 million in the same period of 2015.  Comparable store sales for the Cash & Carry banner decreased 0.4% in the third quarter.

Gross margin from operations was $203.0 million, an 8.4% increase as compared to $187.2 million in the third quarter of 2015. Gross margin rate was 14.6% as compared to 15.0% in the same period of 2015.

Operating and administrative expenses were $183.4 million, a 16.8% increase as compared to $157.0 million in the same period of 2015. This increase was primarily related to expenses associated with 39 new stores developed over the prior 12 months and related support costs.

Net income was $7.0 million, including the effects of higher store development costs, store closures, and the amendment of our First Lien Term Loan Credit Facility, as compared to net income of $12.4 million in the same period of 2015. Net income per diluted share was $0.09 as compared to $0.16 in the same period of 2015.

Adjusted net income was $15.0 million, a decrease of 11.2% as compared to $16.9 million for the same period of 2015. Adjusted net income per diluted share was $0.19 as compared to $0.22 in the same period of 2015.

Adjusted EBITDA was $57.2 million, as compared to $59.8 million in the third quarter of 2015.

Fiscal Year-to-Date Financial Results
In the forty weeks ended October 9, 2016, net sales were $3,341.2 million, an increase of 12.4% as compared to $2,973.4 million in the same period of 2015.  Net sales growth was driven by the net sales contribution of new stores, partially offset by a 0.1% decline in comparable store sales.  The decline in comparable store sales was comprised of a 0.9% increase in comparable transaction count and a 1.0% decrease in comparable average transaction size. 

Net sales for Smart & Final banner stores were $2,604.5 million, a 15.4% increase as compared to $2,256.4 million in the same period of 2015. Year-to-date comparable store sales decline for the Smart & Final banner was 0.1%.

Net sales for Cash & Carry banner stores were $736.7 million, a 2.7% increase as compared to $717.0 million in the same period of 2015.  Year-to-date comparable store sales for the Cash & Carry banner were flat.

Net income was $13.2 million, including the effects of higher store development costs, store closures, and the amendment of our First Lien Term Loan Credit Facility, as compared to $28.3 million in the same period of 2015. Net income per diluted share was $0.17 as compared to $0.37 for the same period of 2015.

Adjusted net income was $37.1 million, a 10.6% decrease as compared to $41.6 million in the same period of 2015. Adjusted net income per diluted share was $0.47 as compared to $0.54 in the same period of 2015.

Adjusted EBITDA was $142.9 million, as compared to $145.5 million in the same period of 2015.

Growth and Development
During the third quarter of fiscal year 2016, the Company opened two new Smart & Final Extra! stores, completed two relocations of legacy Smart & Final stores to the Smart & Final Extra! format and closed five legacy Smart & Final stores. The Company opened one new Cash & Carry store during the third quarter of fiscal year 2016.  As of October 9, 2016, the Company operated a total of 304 stores, including 165 Smart & Final Extra! stores, 83 legacy Smart & Final stores and 56 Cash & Carry stores.


Operating Stores at Quarter End (October 9, 2016)








Smart & Final Banner Stores


Cash & Carry
Banner Stores


Total
Company


Extra!
format


Legacy
format


Total



End of Fiscal 2015

127


94


221


55


276

New stores

32


-


32


1


33

Relocations, net

6


(6)


-


-


-

Conversions

-


-


-


-


-

Store closures

-


(5)


(5)


-


(5)

End of 3rd Quarter 2016

165


83


248


56


304






















 

Leverage and Liquidity
As of October 9, 2016, the Company's debt, net of debt issuance costs, was $651.6 million and cash and cash equivalents were $54.0 million.

During the third quarter of fiscal 2016, the Company amended and extended its First Lien Term Loan Credit Facility by increasing the borrowing base by $30.1 million to $625.0 million, extending the maturity of the facility from November 15, 2019 to November 15, 2022, and increasing the applicable margin by 0.25%.

In the forty week period ended October 9, 2016, the Company generated cash from operations of $86.0 million and invested $117.7 million in capital expenditures, primarily related to the development of Extra! format stores and to improvements of existing assets.

Outlook
The Company is revising certain elements of its previously issued guidance for the 2016 fiscal year ending January 1, 2017, to reflect revised expectations of the impact of deflation on net sales growth, as well as the anticipated lost sales as a result of the five Smart & Final legacy store closures during the third quarter of fiscal year 2016, and resulting impact on measures of income (revised elements noted in bold type):

Net sales growth

 11.5% - 12.0%

Comparable store sales growth 

 (0.5)% - 0.0%

Unit growth (new stores)

33 Smart & Final Extra!

4 Cash & Carry

Relocations of existing stores to Extra! format

6 Smart & Final stores

Conversions of legacy stores to Extra! format

6 Smart & Final stores

Adjusted EBITDA

$178 - $183 million

Adjusted net income

$45 - $47 million 

Adjusted diluted EPS

$0.57 - $0.59

Capital expenditures 

$150 - $160 million

Basic weighted average shares

72.8 million

Fully diluted weighted average shares

78.3 million

 

The above guidance includes certain non-GAAP financial measures (namely adjusted net income, adjusted net income per diluted share and adjusted EBITDA), which exclude certain costs and non-cash costs and provide investors with additional financial measures of the expected operating performance of the Company's business. The primary factors in reconciling these non-GAAP financial measures to comparable GAAP measures include the following: costs associated with the acquired Haggen store locations of approximately $18 million, non-cash rent related to other stores of approximately $6 million, and share-based compensation expense of approximately $10 million. The other amounts needed to reconcile these non-GAAP financial measures to comparable GAAP measures cannot be quantified and are not available without an unreasonable effort.  

In the fourth quarter of fiscal year 2016, the Company expects to open one new Smart & Final Extra! store, complete six Smart & Final legacy to Extra! store conversions, and open three new Cash & Carry stores.

Third Quarter 2016 Conference Call
The Company will host a conference call today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its third quarter 2016 financial results. To participate in the call, please dial (877) 407-0784 (U.S.) or (201) 689-8560 (International) ten minutes prior to the start time. The conference call can also be accessed on the "Investors" section of the Company's web site at http://www.smartandfinal-investor.com/.

For those unable to participate during the live broadcast, a telephonic replay of the call will also be available beginning today at approximately 8:00 p.m. Eastern Time, by dialing (844) 512-2921 (U.S.) or (412) 317-6671 (International) and entering the replay pin number: 13647684.  The telephonic replay will be available until 11:59 p.m. Eastern Time, on Wednesday, November 30, 2016.

About Smart & Final
Smart & Final Stores, Inc. (NYSE: SFS), is a value-oriented food and everyday staples retailer, headquartered in Commerce (near Los Angeles), California. The Company offers quality products in a variety of sizes, saving household, nonprofit and business customers time and money. As of October 9, 2016, the Company operated 304 grocery and foodservice stores under the "Smart & Final," "Smart & Final Extra!" and "Cash & Carry Smart Foodservice" banners in California, Oregon, Washington, Arizona, Nevada, and Idaho, with an additional 15 stores in Northwestern Mexico operated through a joint venture. In business for 145 years, the Company remains committed to giving back to local communities through employee volunteer opportunities and Company donations to local nonprofits.

Forward-Looking Statements
Certain statements contained in this release that are not historical information contain forward-looking statements. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "may," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or, in each case, their negative, or other variations or comparable terminology. The Company derives many of its forward-looking statements from its operating budgets and forecasts, which are based upon many detailed assumptions. While the Company believes that its assumptions are reasonable, it is difficult to predict the impact of known factors and, of course, it is impossible to anticipate all factors that could affect actual results. These factors are discussed in the special note concerning "Forward-Looking Statements," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business" sections and elsewhere in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.

You should keep in mind that any forward-looking statement made by the Company herein, or elsewhere, speaks only as of the date on which made. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations 

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)










Sixteen Weeks Ended


Forty Weeks Ended


October 9, 2016


October 4, 2015


October 9, 2016


October 4, 2015

















Net sales 

$        1,394,429


$        1,246,063


$        3,341,163


$        2,973,354

Cost of sales, buying and occupancy 

1,191,400


1,058,824


2,852,569


2,522,367

Gross margin 

203,029


187,239


488,594


450,987









Operating and administrative expenses 

183,402


157,040


447,303


378,122

Income from operations 

19,627


30,199


41,291


72,865









Interest expense, net 

9,977


9,333


24,729


25,007

Loss on early extinguishment of debt

4,978



4,978


2,192

Equity in earnings of joint venture 

502


138


1,230


1,045

Income before income taxes 

5,174


21,004


12,814


46,711









Income tax benefit (provision)

1,859


(8,624)


387


(18,410)

Net income

$               7,033


$             12,380


$             13,201


$             28,301









Net income per share:








       Basic

$                 0.10


$                 0.17


$                 0.18


$                 0.39

       Diluted

$                 0.09


$                 0.16


$                 0.17


$                 0.37









Weighted average shares outstanding:








       Basic

72,601,724


73,116,746


72,956,554


73,099,258

       Diluted

77,705,917


77,404,466


78,468,330


77,025,990

 

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)






October 9, 2016


January 3, 2016


 (Unaudited) 



Assets 




Current assets: 




Cash and cash equivalents 

$             54,043


$            59,327

Accounts receivable, less allowances of $435 and $454 at October 9, 2016 and January 3, 2016, respectively 




30,304


27,304

Inventories 

255,475


234,289

Prepaid expenses and other current assets 

34,388


29,072

Deferred income taxes 

22,502


22,471

Assets held for sale

3,254


-

Total current assets 

399,966


372,463





Property, plant, and equipment: 




Land 

9,259


10,940

Buildings and improvements 

17,691


20,441

Leasehold improvements 

283,214


237,820

Fixtures and equipment 

338,481


266,080

Construction in progress 

14,240


19,501


662,885


554,782

Less accumulated depreciation and amortization 

230,023


174,906


432,862


379,876





Capitalized software, net of accumulated amortization of $14,912 and $12,356 at October 9, 2016 and January 3, 2016, respectively 







11,292


11,365

Other intangible assets, net 

371,130


376,122

Goodwill 

611,242


611,242

Equity investment in joint venture 

14,090


12,763

Other assets 

57,626


53,250

Total assets 

$        1,898,208


$       1,817,081









Liabilities and stockholders' equity




Current liabilities: 




Accounts payable 

$           205,264


$          194,149

Accrued salaries and wages 

35,540


33,859

Accrued expenses

87,352


77,374

Current portion of debt, less debt issuance  costs

35,280


3,904

Total current liabilities 

363,436


309,286





Long-term debt, less debt issuance costs

616,317


586,956

Deferred income taxes 

127,931


128,752

Postretirement and postemployment benefits 

110,797


117,417

Other long-term liabilities 

118,383


108,099





Commitments and contingencies 








Stockholders' equity: 




Preferred stock, $0.001 par value; 




Authorized shares – 10,000,000 




Issued and outstanding shares – none


Common stock, $0.001 par value; 




Authorized shares – 340,000,000




Issued and outstanding shares - 72,944,908 and 73,789,608 at October 9, 2016 and January 3, 2016, respectively

73


74

Additional paid-in capital 

499,615


502,304

Retained earnings

68,186


70,181

Accumulated other comprehensive loss

(6,530)


(5,988)

Total stockholders' equity 

561,344


566,571

Total liabilities and stockholders' equity 

$        1,898,208


$       1,817,081

 

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)






 Forty Weeks Ended 


October 9, 2016


October 4, 2015

Operating activities 




Net income 

$              13,201


$              28,301

Adjustments to reconcile net income to net cash provided by operating activities: 







Depreciation 

38,421


28,982

Amortization 

26,094


22,688

Amortization of debt discount and debt issuance costs

2,040


2,114

Share-based compensation

7,248


8,081

Excess tax benefits related to share-based payments


(275)

Deferred income taxes

(608)


1,442

Equity in earnings of joint venture 

(1,230)


(1,045)

Loss (gain) on disposal of property, plant, and equipment 

34


(38)

Asset impairment 

790


562

Loss on early extinguishment of debt

4,978


2,192

Changes in operating assets and liabilities: 




Accounts receivable, net 

(3,000)


1,085

Inventories

(21,185)


(8,814)

Prepaid expenses and other assets 

(6,469)


15,620

Accounts payable 

11,115


6,623

Accrued salaries and wages 

1,681


201

Other accrued liabilities 

12,905


6,835

Net cash provided by operating activities 

86,015


114,554





Investing activities 




Purchases of property, plant, and equipment 

(113,195)


(101,025)

Proceeds from sale of property, plant, and equipment 

443


8,103

Assets acquired in Haggen Transaction

(2,235)


Investment in capitalized software 

(2,752)


(3,254)

Other 

(2,106)


(1,252)

Net cash used in investing activities 

(119,845)


(97,428)





Financing activities




Proceeds from exercise of stock options

3,477


196

Payment of minimum withholding taxes on net share settlement of share-based compensation awards

(652)


(694)

Fees paid in conjunction with debt financing

(8,374)


(1,236)

Borrowings on bank line of credit

70,000


Payments on bank line of credit

(38,000)


Issuance of bank debt, net of issuance costs

30,093


Payments of public offering costs


(214)

Excess tax benefits related to share-based payments


275

Stock repurchases

(27,998)


Net cash provided by (used in) financing activities

28,546


(1,673)





Net increase in cash and cash equivalents

(5,284)


15,453

Cash and cash equivalents at beginning of period

59,327


106,847

Cash and cash equivalents at end of period

$              54,043


$            122,300





Cash paid during the period for:




Interest 

$              21,766


$              22,407

Income taxes

$                8,091


$              10,229





Non-cash investing and financing activities




Software development costs incurred but not paid

$                     41


$                       –

Construction in progress costs incurred but not paid

$              13,695


$              16,147

 

 Smart & Final Stores, Inc. and Subsidiaries 

 Segment Reporting 

 (In Thousands) 












 Smart & Final 


 Cash & Carry 


 Corporate /
Other 


 Consolidated 

 Sixteen Weeks Ended October 9, 2016 









 Net sales 


$      1,083,437


$         310,992


$                             -


$     1,394,429

 Cost of sales, distribution and store occupancy 


922,201


266,238


2,961


1,191,400

 Operating and administrative expenses 


141,010


21,082


21,310


183,402

 Income (loss) from operations 


$           20,226


$           23,672


$                 (24,271)


$          19,627



















 Capital expenditures 


$           38,345


$             3,957


$                     1,914


$          44,216

 Assets acquired in Haggen Transaction 


$                    8


$                     -


$                             -


$                   8




























 Sixteen Weeks Ended October 4, 2015 









 Net sales 


$         940,168


$         305,895


$                             -


$     1,246,063

 Cost of sales, distribution and store occupancy 


794,004


262,131


2,689


1,058,824

 Operating and administrative expenses 


116,276


19,964


20,800


157,040

 Income (loss) from operations 


$           29,888


$           23,800


$                 (23,489)


$          30,199



















 Capital expenditures 


$           39,365


$             1,741


$                     1,149


$          42,255




























 Forty Weeks Ended October 9, 2016 









 Net sales 


$      2,604,505


$         736,658


$                             -


$     3,341,163

 Cost of sales, distribution and store occupancy 


2,214,012


630,934


7,623


2,852,569

 Operating and administrative expenses 


344,251


51,132


51,920


447,303

 Income (loss) from operations 


$           46,242


$           54,592


$                 (59,543)


$          41,291



















 Capital expenditures 


$         105,468


$             5,843


$                     4,636


$        115,947

 Assets acquired in Haggen Transaction 


$             2,235


$                     -


$                             -


$            2,235




























 Forty Weeks Ended October 4, 2015 









 Net sales 


$      2,256,357


$         716,997


$                             -


$     2,973,354

 Cost of sales, distribution and store occupancy 


1,898,841


616,646


6,880


2,522,367

 Operating and administrative expenses 


276,922


48,483


52,717


378,122

 Income (loss) from operations 


$           80,594


$           51,868


$                 (59,597)


$          72,865



















 Capital expenditures 


$           93,415


$             6,060


$                     4,804


$        104,279

 

Non-GAAP Financial Measures

To supplement the Company's financial information presented in accordance with GAAP, the Company uses certain non-GAAP financial measures (namely adjusted net income, adjusted net income per share, adjusted net income per diluted share, EBITDA and adjusted EBITDA) to evaluate our operating and financial performance and to compare such performance to that of prior periods. We also use these non-GAAP financial measures in making operational and financial decisions and in establishing operational goals. We believe that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, helps investors to (i) evaluate our operating and financial performance and future prospects, (ii) compare financial results across accounting periods, (iii) better understand the long-term performance of our core business and (iv) evaluate trends in our business, all consistent with how management evaluates such performance and movements. The Company defines adjusted net income as net income adjusted for the items set forth in the table below.  The Company defines adjusted net income per share as adjusted net income divided by the weighted average basic shares outstanding.  The Company defines adjusted net income per diluted share as adjusted net income divided by the weighted average diluted shares outstanding.  The Company defines EBITDA as net income before depreciation and amortization, interest expense and provision for income tax, and adjusted EBITDA as EBITDA adjusted for the items set forth in the table below.

Use of these non-GAAP measures may differ from similar measures reported by other companies. Each of these non-GAAP measures has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

The following tables present reconciliations of adjusted net income, EBITDA and adjusted EBITDA to net income, and adjusted net income per share and adjusted net income per diluted share to net income per share, for the sixteen-week and forty-week periods ended October 9, 2016 and October 4, 2015.

 Smart & Final  Stores, Inc. and Subsidiaries 

 Reconciliation of EBITDA to Adjusted EBITDA 

 (Unaudited) 

 (In Thousands) 










 Sixteen Weeks Ended 


 Forty Weeks Ended 


October 9, 2016


October 4, 2015


October 9, 2016


October 4, 2015

 Net income 

$               7,033


$             12,380


$             13,201


$             28,301

 Depreciation and amortization  

27,728


21,887


64,515


51,670

 Interest expense, net 

9,977


9,333


24,729


25,007

 Income tax (benefit) provision 

(1,859)


8,624


(387)


18,410

 EBITDA 

42,879


52,224


102,058


123,388









 Adjustments to EBITDA 








 Transaction costs (a) 

-


-


-


936

 Net loss from closed stores and exit costs (b) 

2,283


638


6,021


2,012

 Loss from asset dispositions (c) 

819


55


1,004


558

 Share-based compensation expense (d) 

3,830


3,178


7,248


8,081

 Non-cash rent (e) 

1,222


1,801


2,055


3,078

 Pre-opening costs (f) 

1,287


1,764


1,724


5,174

 Costs associated with acquired Haggen store locations (g) 

1,297


-


19,248


-

 Loss on extinguishment of debt (h) 

4,978


-


4,978


2,192

 Other items (i) 

(1,401)


142


(1,395)


97

 Adjusted EBITDA 

$             57,194


$             59,802


$           142,941


$           145,516

 

 Smart & Final  Stores, Inc. and Subsidiaries 

 Reconciliation of Net Income to Non-GAAP Adjusted Net Income 

 (Unaudited) 

 (In Thousands, Except Share and Per Share Amounts) 










 Sixteen Weeks Ended 


 Forty Weeks Ended 


October 9, 2016


October 4, 2015


October 9, 2016


October 4, 2015

 Net income 

$               7,033


$             12,380


$             13,201


$             28,301

 Income tax (benefit) provision 

(1,859)


8,624


(387)


18,410

 Income before income taxes 

5,174


21,004


12,814


46,711









 Adjustments to Net Income 








 Transaction costs (a) 

-


-


-


936

 Net loss from closed stores and exit costs (b) 

2,283


638


6,021


2,012

 Loss from asset dispositions (c) 

819


55


1,004


558

 Share-based compensation expense (d) 

3,830


3,178


7,248


8,081

 Non-cash rent (e) 

1,222


1,801


2,055


3,078

 Pre-opening costs (f) 

1,287


1,764


1,724


5,174

 Costs associated with acquired Haggen store locations (g) 

1,297


-


19,248


-

 Loss on extinguishment of debt (h) 

4,978


-


4,978


2,192

 Other items (i) 

(1,401)


142


(1,395)


97

 Adjusted income tax provision 

(4,448)


(11,651)


(16,555)


(27,289)

 Adjusted net income 

$             15,041


$             16,931


$             37,142


$             41,550









Adjusted Net Income Per Share
















Net income per share - basic

$                 0.10


$                 0.17


$                 0.18


$                 0.39

Per share impact of net income adjustments

0.11


0.06


0.33


0.18

Adjusted net income per share - basic

$                 0.21


$                 0.23


$                 0.51


$                 0.57

Net income per share - diluted

$                 0.09


$                 0.16


$                 0.17


$                 0.37

Per share impact of net income adjustments

0.10


0.06


0.30


0.17

Adjusted net income per share - diluted

$                 0.19


$                 0.22


$                 0.47


$                 0.54









Weighted average shares - basic

72,601,724


73,116,746


72,956,554


73,099,258

Weighted average shares - fully diluted

77,705,917


77,404,466


78,468,330


77,025,990









(a)

Represents costs primarily associated with the Company's secondary public offering that were charged to expense in the forty weeks ended October 4, 2015.

(b)

Represents costs associated with store closure and exit costs.

(c)

Represents non-cash loss associated with asset dispositions and impairment charges.

(d)

Represents expenses associated with the Company's equity-based incentive award program.

(e)

Represents non-cash component of recognized rent expense. 

(f)

Represents new store and relocation opening costs consisting primarily of rent, utilities, distribution, store labor and advertising.

(g)

Represents new store opening and relocation costs and non-cash rent related to acquired former Haggen store locations.

(h)

Represents loss on the early extinguishment of debt in the sixteen and forty weeks ended October 9, 2016 and the forty weeks ended October 4, 2015 in connection with amendments to the Company's First Lien Term Loan Credit Facility.

(i)

Represents (i) death benefit income from Company-owned life insurance policies in the sixteen and forty weeks ended October 9, 2016 and the forty weeks ended October 4, 2015 and (ii) severance costs in the sixteen and forty weeks ended October 9, 2016 and the sixteen and forty weeks ended October 4, 2015.

 

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SOURCE Smart & Final Stores, Inc.