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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on September 8, 2014

Registration No. 333-196931

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Smart & Final Stores, Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  5411
(Primary Standard Industrial
Classification Code Number)
  80-0862253
(I.R.S. Employer
Identification Number)

600 Citadel Dr.
Commerce, CA 90040
(323) 869-7500

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



David G. Hirz
President and Chief Executive Officer
Smart & Final Stores, Inc.
600 Citadel Dr.
Commerce, CA 90040
(323) 869-7500

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Philippa M. Bond
Robin M. Feiner
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
(310) 557-2900
(310) 557-2193 (facsimile)

 

Kirk A. Davenport II
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
(212) 906-1200
(212) 751-4864 (facsimile)



Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

           If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



           The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 8, 2014

                   Shares

GRAPHIC

Smart & Final Stores, Inc.

Common Stock



        This is the initial public offering of shares of our common stock. Prior to this offering, there has been no public market for our common stock. We are selling                           shares of common stock. The initial public offering price of our common stock is expected to be between $             and $             per share. We intend to apply to list our common stock on the New York Stock Exchange under the symbol "SFS."

        Investing in our common stock involves risks. See "Risk Factors" on page 15.

        The underwriters have an option to purchase up to an additional                           shares of common stock from the selling stockholders identified in this prospectus at the initial public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments of shares.

 
  Initial public
offering price
  Underwriting
discount
  Proceeds, before
expenses, to us(1)
 
Per Share   $     $     $    
Total   $     $     $    

(1)
The underwriters will receive compensation in addition to the underwriting discount. See "Underwriting (Conflicts of Interest)."

        Delivery of the shares of common stock will be made on or about                           , 2014.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse   Morgan Stanley   Deutsche Bank Securities

 

Barclays   Citigroup   Piper Jaffray   Guggenheim Securities

   

The date of this prospectus is                           , 2014


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  PAGE  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    15  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    39  

USE OF PROCEEDS

    40  

DIVIDEND POLICY

    41  

CAPITALIZATION

    42  

DILUTION

    43  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

    45  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    48  

BUSINESS

    86  

MANAGEMENT

    105  

EXECUTIVE AND DIRECTOR COMPENSATION

    113  

COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

    123  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    138  

PRINCIPAL AND SELLING STOCKHOLDERS

    141  

DESCRIPTION OF CERTAIN INDEBTEDNESS

    143  

DESCRIPTION OF CAPITAL STOCK

    147  

SHARES ELIGIBLE FOR FUTURE SALE

    152  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK

    155  

UNDERWRITING (CONFLICTS OF INTEREST)

    159  

LEGAL MATTERS

    165  

EXPERTS

    165  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

    165  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

    F-1  

        Neither we, the underwriters nor the selling stockholders identified in this prospectus have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We, the selling stockholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares of common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

        Persons who come into possession of this prospectus and any such free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

        Through and including                        , 2014 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

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BASIS OF PRESENTATION

        Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. Each of our fiscal years consists of twelve-week periods in the first, second and fourth quarters of the fiscal year and a sixteen-week period in the third quarter. Our last three completed fiscal years ended on December 29, 2013, December 30, 2012 and January 1, 2012. Our fiscal year 2012 is divided into two separate periods: the period from January 2, 2012 through November 14, 2012, representing the period prior to the Ares Acquisition (as defined below), and the period from November 15, 2012 through December 30, 2012, representing the period after the Ares Acquisition.

        Smart & Final Stores, Inc. (f/k/a SF CC Holdings, Inc. and Smart & Final Holdings, Inc.) (the "Company"), the issuer of common stock in this offering, was incorporated in October 2012 and became the ultimate parent company of our business in November 2012. All of the financial information in this prospectus prior to that time represents the results of operations of our prior parent company, Smart & Final Holdings Corp.


TRADEMARKS AND TRADE NAMES

        This prospectus includes our trademarks and service marks, including Smart & Final®, Smart & Final Extra!®, Cash & Carry Smart Foodservice®, First Street®, Ambiance®, Cattleman's Finest®, Iris®, La Romanella®, Montecito®, Simply Value® and Tradewinds®, which are protected under applicable intellectual property laws and are the property of Smart & Final Stores LLC or Cash & Carry Stores LLC, as applicable. This prospectus also contains trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, trademarks, service marks and trade names referred to in this prospectus may appear without the ® or TM symbols. We do not intend our use or display of other parties' trademarks, service marks or trade names to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.


MARKET, INDUSTRY AND OTHER DATA

        Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other industry publications, surveys and forecasts, and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and research organizations, such as Intalytics, a national customer analytics research company, and other third party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of our industry and markets, which we believe to be reasonable. In addition, projections, assumptions and estimates of the future performance of our industry and our future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors." These and other factors could cause our results to differ materially from those expressed in the estimates made by the independent industry analysts and other third party sources and by us.


COMPARABLE STORE SALES

        With respect to any period, comparable store sales for such period, at both the Company and segment levels, reflect the definition we utilized during such period and include sales for stores operating both during such period and in the same period of the previous year. Sales from a store are also included in the calculation of comparable store sales for the Company or segment, as applicable, after the 60th full week of operations, and sales from a store are also included in the calculation of comparable store sales if (i) the store has been physically relocated, (ii) the selling square footage has been increased or decreased or (iii) the store has been converted to a new format within a segment

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(e.g., from legacy Smart & Final to Smart & Final Extra!). However, sales from an existing store are not included in the calculation of comparable store sales for the Company or segment, as applicable, if the store has been converted to a different segment (e.g., from Smart & Final to Cash & Carry).

        For fiscal years prior to 2008, sales from a store were included in the calculation of comparable store sales after the 52nd full week of operations. Comparable store sales for fiscal years 1989 through 2006, as presented herein, have been derived from the financial statements of our predecessor companies which are not included in this prospectus. For fiscal years 1996 through 1998, comparable store sales, as presented herein, include sales from comparable stores that were subsequently classified as discontinued operations.

        Comparable store sales growth represents the year-over-year sales comparisons for comparable stores.


NON-GAAP FINANCIAL MEASURES

        To supplement our financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we use Adjusted EBITDA to clarify and enhance understanding of our past performance. We define Adjusted EBITDA as earnings (net income or loss) before income taxes, interest expense (net), depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing performance.

        This non-GAAP measure is intended to provide additional information only, and does not have any standard meaning prescribed by GAAP. Use of Adjusted EBITDA may differ from similar measures reported by other companies. Because of its limitations, Adjusted EBITDA should be considered as a measure of discretionary cash available to use to reinvest in the growth of our business, or as a measure of cash that will be available to meet our obligations. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

        For a reconciliation of Adjusted EBITDA to net income, a GAAP measure, see "Prospectus Summary—Summary Historical and Consolidated Financial and Other Data."

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should read this entire prospectus carefully, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes. Some of the statements in this summary constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements."

        As used in this prospectus, unless the context otherwise requires, references to the "Company," "we," "us" and "our" refer to Smart & Final Stores, Inc. (the "Issuer") and, where appropriate, its consolidated subsidiaries.

Who We Are

        We are a high-growth, value-oriented food retailer serving a diverse demographic of household and business customers through two complementary and highly productive store banners. Our Smart & Final ("Smart & Final") stores focus on both household and business customers, and our Cash & Carry ("Cash & Carry") stores focus primarily on business customers. We operate 250 convenient, non-membership, smaller-box, warehouse-style stores throughout the Western United States, with an additional 13 stores in Northwestern Mexico in a joint venture. We have a differentiated merchandising strategy that emphasizes high quality perishables, a wide selection of private label products, products tailored to business and foodservice customers and products offered in a broad range of sizes, all at "everyday low prices." We believe our compelling value proposition has enabled us to achieve comparable store sales growth in 24 of our past 25 fiscal years.

        Named after two of our founders, J.S. Smart and H.D. Final, Smart & Final represents one of the longest continuously operated food retailers in the United States and has become an iconic brand in the markets we serve. We operate 198 Smart & Final stores in California, Arizona and Nevada, which offer extensive selections of fresh perishables and everyday grocery items, together with a targeted selection of foodservice, packaging and janitorial products, under both national and private label brands. Customers can choose from a broad range of product sizes, including an assortment of standard-sized products typically found at conventional grocers, and a large selection of bulk-size offerings (including uniquely sized national brand products) more typical of larger-box warehouse clubs. Pricing in our Smart & Final stores is targeted to be substantially lower than that of conventional grocers and competitive with that of large discounters and warehouse clubs. We believe we offer higher quality produce at lower prices than large discounters. We also believe our Smart & Final stores provide a better everyday value to household and business customers than typical warehouse clubs by offering greater product selection at competitive prices, and with no membership fee requirement, in a convenient easy-to-shop format.

        Five years ago, we launched a transformational initiative to convert our larger legacy Smart & Final stores to a format called Smart & Final Extra! ("Extra!"). With a larger store footprint, our Extra! format offers a one-stop shopping experience with a more expansive selection of items than our legacy Smart & Final stores and an emphasis on perishables and household items. This initiative was facilitated, in part, by our acquisition of a dedicated perishables warehouse, and has been further supported by our continued investments in distribution capabilities and in-store merchandising. Today we operate 87 Extra! stores, of which 65 represent conversions or relocations of legacy Smart & Final stores and 22 represent new store openings. Our store conversions and relocations to the Extra! format have typically resulted in significant increases in comparable store sales and gross margin. The continued development of our Extra! store format, through additional new store openings and conversions and relocations of legacy Smart & Final stores, is the cornerstone of our growth strategy.

 

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        We also operate 52 Cash & Carry stores focused primarily on restaurants, caterers and a wide range of other foodservice businesses such as food trucks and coffee houses. We offer customers the opportunity to shop for their everyday foodservice needs in a convenient, no-frills warehouse shopping environment. These stores are located in Washington, Oregon, Northern California, Idaho and Nevada. Pricing in our Cash & Carry stores is targeted to be substantially lower than that of our foodservice delivery competitors, with greater price transparency to customers and no minimum order size. Pricing is also competitive with typical warehouse clubs, with no membership fee requirement.

        We believe that our stores are highly productive based on sales per square foot data, and that our "everyday low prices," differentiated merchandising strategy and convenient locations enable us to offer a highly differentiated food shopping experience with broad appeal to a diverse customer demographic. These attributes have enabled us to deliver strong financial results, as evidenced by the following key highlights:

    Comparable store sales growth in 24 of our past 25 fiscal years.

    Strong recent comparable store sales growth of 6.3%, 4.2%, 4.0%, 6.7% and 9.5% for the second quarter of fiscal year 2014, the first quarter of fiscal year 2014 and fiscal years 2013, 2012 and 2011, respectively.

    Fiscal year 2013 sales of $3.2 billion, a 5.5% increase compared to fiscal year 2012.

    Fiscal year 2013 sales per square foot of $666, a 3.4% increase compared to fiscal year 2012.

    Fiscal year 2013 Adjusted EBITDA of $164.3 million, a 20.2% increase compared to fiscal year 2012.

    Fiscal year 2013 net income of $8.2 million, a 62.3% increase compared to fiscal year 2012.

What Makes Us Different

        We believe that the following competitive strengths position us for accelerated growth as food shoppers increasingly focus on value and convenience:

        Unique platform that appeals to household and business customers.    We serve a diverse demographic of customers including households, businesses and community groups through our complementary Smart & Final and Cash & Carry banners. We offer a differentiated, highly convenient shopping experience with an emphasis on quality and value. We provide an easy-to-shop, no-frills, in-store environment in a smaller physical footprint compared to typical warehouse clubs, but with a greater stock keeping unit ("SKU") selection, which both simplifies and expedites our customers' shopping experience.

        Sales at our Smart & Final stores benefit from a large base of diverse business customers. Our internal surveys indicate that our business customers typically shop Smart & Final for both their household and business needs and account for approximately one-third of our Smart & Final banner sales. On average, these business customers spend approximately twice as much per visit (including purchases of household items) as our typical household customers. We believe our household customers enjoy "shopping with the pros" because it reinforces the perception of value, quality and selection. At Cash & Carry, we believe our business customers appreciate our accessible locations and consistent shopping experience, where they shop for both everyday and supplemental business needs.

        Distinctive and value-focused merchandise offering.    Our Smart & Final stores feature a comprehensive grocery offering at "everyday low prices," including high quality perishables, extensive selections of private label and national brand products and a large selection of club-pack sizes (over 2,500 SKUs). With approximately 14,500 SKUs in our Extra! stores and approximately 10,000 SKUs in our legacy Smart & Final stores, each of our Smart & Final store formats offers a wider variety of

 

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products than typical warehouse clubs. In fiscal year 2013, sales of private label items were approximately 29% of Smart & Final banner sales, and based on internal surveys commissioned by us, we estimate that approximately 43% of Smart & Final banner sales were from products or sizes (including both national brand and private label products) that are not typically found at conventional grocers.

        Our Cash & Carry stores offer customers a wide variety of approximately 9,500 key SKUs targeted to core foodservice needs, including an extensive selection of high quality perishables (approximately 45% of Cash & Carry banner sales in fiscal year 2013), national brand and private label grocery products, and related foodservice equipment and supplies. We believe Cash & Carry customers value our low prices, extensive selection, price transparency and the ability to hand-select perishable products.

        Two highly productive store banners.    We believe that our stores are highly productive based on sales per square foot data. Since 2008, we have invested more than $310 million in our operations, establishing a highly productive store base and a low cost, efficient operating structure.

    Smart & Final stores:  We operate 87 Extra! stores, which average approximately 27,000 square feet. In fiscal year 2013, our Extra! stores generated average sales per square foot of $624. Our typical new Extra! store requires a cash investment of approximately $3.2 million, including store buildout (net of landlord contributions), inventory and cash pre-opening expenses. Based on historical performance, we target pre-tax cash-on-cash returns of 25% in the third year after opening.

      Our recent Extra! store conversions generally required a cash investment of approximately $2.0 million and, based on historical performance, we target pre-tax cash-on-cash returns of at least 25% in the third year after conversion. Since 2008, we have successfully converted 45 stores to our Extra! format, generating an average sales increase of approximately 30% in the first twelve months following conversion.

      We operate 111 legacy Smart & Final stores, which average approximately 17,000 square feet. In fiscal year 2013, our legacy Smart & Final stores generated average sales per square foot of $655.

    Cash & Carry stores:  We operate 52 Cash & Carry stores, which average approximately 20,000 square feet. In fiscal year 2013, our Cash & Carry stores generated average sales per square foot of $756. Our typical new Cash & Carry store requires a low initial cash investment of approximately $1.5 million, including store buildout (net of landlord contributions), inventory and cash pre-opening expenses. Based on historical performance, we target pre-tax cash-on-cash returns of 25% in the fourth year after opening.

        Well-positioned store base and flexible real estate strategy.    We operate 250 stores across six contiguous states in the Western U.S., including 192 stores in the large and growing California market. Our long operating history has enabled us to establish a store footprint that would be difficult to replicate, and has provided us with deep institutional knowledge of the local real estate markets in which we operate.

        We have a flexible real estate strategy, which we believe enables our stores to achieve strong performance in a range of locations. Our store model is adaptable to a wide variety of potential sites, including new developments, "second use" spaces previously occupied by other retailers and conversions of non-retail sites to retail use. In addition, our stores appeal to a broad spectrum of customers in the markets we serve, which are generally characterized by ethnically and socio-economically diverse populations. This broad appeal enables us to perform profitably in a range of urban and suburban locations, however we typically target trade areas with higher concentrations of businesses.

 

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        Passionate and experienced management team.    We are led by a passionate executive team with extensive food retail experience and a long history of operational excellence. All of our senior executives have made equity investments in the Company. Our senior executives average over 30 years of experience in the grocery, foodservice and retail industries. We believe our management's experience at all organizational levels will enable us to continue to grow our store base while improving operations and driving efficiencies through a strong focus on selling high quality products at "everyday low prices."

Our Growth Strategy

        We are pursuing three primary growth strategies:

        Increase our store footprint in existing and new markets.    We plan to expand our store footprint, primarily through opening new Extra! stores in existing and adjacent markets, and by entering new markets. Since the beginning of fiscal year 2011, we have opened 18 new Extra! stores, including five in 2013 and ten in 2014. We expect to open three additional new Extra! stores in 2014, and we currently plan to open an additional 20 new Extra! stores in 2015.

        We believe that our existing and adjacent markets can support more than 180 new Extra! stores. We also estimate that up to 100 new stores could be located in our key California market and that the broader U.S. market, beyond our existing and adjacent markets, has the potential to support more than 1,250 additional Extra! stores.

        We also plan to opportunistically grow our Cash & Carry store base. We expect to open three new Cash & Carry stores through fiscal years 2014 and 2015, and to continue opening additional new stores for the foreseeable future.

        We also believe that favorable macroeconomic trends in Mexico, combined with the demonstrated appeal of the Smart & Final offering in our existing Northwestern Mexico joint venture stores, represent an attractive long-term growth opportunity.

        Continue store conversions to the Extra! format and store remodels.    Extra! stores offer customers a one-stop shopping experience in a larger store footprint than our legacy Smart & Final stores to accommodate our expanded SKU selection. Since 2008, we have completed 45 Extra! store conversions and relocated 20 legacy Smart & Final stores as Extra! stores. We plan to continue converting our larger legacy Smart & Final stores to our Extra! format, including 14 planned in 2014 (as compared to eight in 2013), seven of which have already been completed. In addition, we plan to continue remodeling and relocating selected legacy Smart & Final stores that are not candidates for conversion to the Extra! format.

        Drive comparable store sales and enhance gross margins.    We have achieved comparable store sales growth in 24 of our past 25 fiscal years, including growth of 4.0%, 6.7% and 9.5% for fiscal years 2013, 2012 and 2011, respectively.

 

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Comparable Store Sales Growth(1)

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(1)
For more information on our calculation of comparable store sales growth, see "Comparable Store Sales" on page ii of this prospectus.

        We plan to leverage our significant investments in management, information technology systems, infrastructure and marketing to grow our comparable store sales and enhance our gross margins through execution of the following key initiatives:

    Continue to expand our offering of high quality perishables in our Smart & Final stores, driven by conversions of legacy Smart & Final stores to the Extra! store format and major remodels of legacy Smart & Final stores to accommodate additional perishables offerings.

    Grow private label sales through introduction of new SKUs.

    Improve merchandising mix with introduction of higher margin bulk foods, enhanced selection of natural and organic products and increased ready-to-eat offerings in our Smart & Final stores.

    Continue to drive growth among business customers through direct marketing activities and volume-based merchandising initiatives.

    Expand customer reach through increased brand awareness, enhanced in-store experience and marketing channel optimization.

The Ares Acquisition

        We were formed by funds affiliated with Ares Management, L.P. ("Ares Management") in connection with the Purchase and Sale Agreement, dated October 9, 2012, pursuant to which we acquired all of the outstanding stock of Smart & Final Holdings Corp., the former ultimate parent company of all of our operating subsidiaries (the "Ares Acquisition"). The Ares Acquisition was consummated on November 15, 2012. In connection with the Ares Acquisition, each of Ares Corporate Opportunities Fund III, L.P. and Ares Corporate Opportunities Fund IV, L.P. (together, "Ares") made an equity contribution to us in exchange for all of the shares of our common stock it currently owns. See "Principal and Selling Stockholders."

Ares Management

        Ares Management is a leading global alternative asset manager with approximately $79 billion of assets under management and approximately 700 employees in over 15 offices in the United States, Europe and Asia as of June 30, 2014. Since its inception in 1997, Ares Management has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares Management believes each of its four distinct but complementary

 

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investment groups in Tradable Credit, Direct Lending, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares Management was built upon the fundamental principle that each group benefits from being part of the greater whole.

        The Private Equity Group has approximately $10 billion of assets under management, targeting investments in high quality franchises across multiple industries. In the consumer / retail sector, selected current investments include 99 Cents Only Stores LLC, Floor and Decor Outlets of America, Inc., Guitar Center Holdings, Inc., The Neiman Marcus Group LLC and the parent company of Serta International and Simmons Bedding Company. Selected prior investments include GNC Holdings, Inc., House of Blues Entertainment, LLC, Maidenform Brands, Inc. and Samsonite Corporation.

        Upon the closing of this offering, Ares will beneficially own, in the aggregate, approximately        % of our outstanding common stock, or approximately        % if the underwriters' option to purchase additional shares from Ares is fully exercised. As a result, Ares acting alone will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors. Also, Ares may acquire or hold interests in businesses that compete directly with us, or may pursue acquisition opportunities that are complementary to our business, making such acquisitions unavailable to us. See "Risk Factors—Risks Related to this Offering and Ownership of Our Common Stock—Our principal stockholder will continue to have substantial control over us after this offering, will be able to influence corporate matters and may take actions that conflict with your interest and have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of other stockholders to approve transactions they deem to be in their best interest."

Payments in Connection with Use of Proceeds

        We intend to use approximately $             million of the net proceeds from this offering to repay borrowings under our first lien term loan facility (the "Term Loan Facility"). Funds affiliated with Ares hold approximately 10% of the outstanding loans under our Term Loan Facility and will receive funds representing their pro rata portion of such loans as a result of this repayment. See "Use of Proceeds."

Risks Related to Our Business and Strategy

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks highlighted in the section entitled "Risk Factors" following this prospectus summary before making an investment decision. These risks include, among others, the following:

    competition in our industry is intense and our failure to compete successfully may adversely affect our sales, financial condition and operating results;

    our continued growth depends on new store openings and our failure to successfully open new stores could adversely affect our business and stock price;

    real or perceived quality or food safety concerns could adversely affect our business, operating results and reputation;

    we may be unable to maintain or increase comparable store sales, which could adversely affect our business and stock price;

    the current geographic concentration of our stores and our net sales creates an exposure to local or regional downturns or catastrophic occurrences;

    disruption of significant supplier relationships could adversely affect our business;

    any significant interruption in the operations of our distribution centers or common carriers could disrupt our ability to deliver our products in a timely manner;

 

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    our failure to comply with laws, rules and regulations affecting us and our industry could adversely affect our financial condition and operating results;

    disruptions to or security breaches involving our information technology systems could harm our ability to run our business;

    we have significant debt service obligations and may incur additional indebtedness in the future, which could adversely affect our financial condition and operating results and our ability to react to changes to our business; and

    covenants in our debt agreements restrict our operational flexibility.

Corporate Information

        We are a Delaware corporation, were incorporated on October 5, 2012 under the name SF CC Holdings, Inc. and became the ultimate parent company of our operating subsidiaries in November 2012. We changed our name to Smart & Final Holdings, Inc. on December 3, 2012 and to Smart & Final Stores, Inc. on June 16, 2014. See "Business—Corporate History and Structure" for more information regarding our organizational structure. Our principal executive offices are located at 600 Citadel Dr., Commerce, California 90040, and our telephone number is (323) 869-7500. Our website address is smartandfinal.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

 

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The Offering

Common stock offered by us

                shares

Common stock to be outstanding immediately after this offering

 

              shares

Underwriters' option to purchase additional shares from the selling stockholders

 

The underwriters have the option for 30 days following the date of this prospectus to purchase up to            additional shares from the selling stockholders named in this prospectus, which are entities affiliated with Ares Management, at the initial public offering price, less the underwriting discount, to cover over-allotments of shares.

Voting rights

 

One vote per share.

 

Ares, which immediately after this offering will control approximately            % of the voting power of our outstanding common stock, or approximately    % if the underwriters' option to purchase additional shares from Ares is fully exercised, will, acting alone, be able to exercise significant influence over all matters submitted to our stockholders for approval, including the election of our directors. See "Risk Factors—Risks Related to this Offering and Ownership of our Common Stock."

Use of proceeds

 

We estimate that our net proceeds from this offering will be approximately $           million, after deducting the estimated underwriting discount and estimated offering expenses payable by us. This assumes a public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus. We intend to use $           million of the net proceeds from this offering to repay borrowings under our Term Loan Facility. We intend to use any remaining net proceeds from this offering to fund our growth initiatives and for general corporate purposes. See "Use of Proceeds" for additional information.

 

We will not receive any proceeds from the sale of shares by the selling stockholders pursuant to the underwriters' option to purchase additional shares. See "Principal and Selling Stockholders."

Conflicts of interest

 

A portion of the net proceeds from this offering will be used to repay borrowings under our Term Loan Facility. Because one or more funds or accounts managed or advised by an investment management affiliate of Guggenheim Securities, LLC are lenders under our Term Loan Facility and will receive 5% or more of the net proceeds from the sale of our common stock in this offering, Guggenheim Securities, LLC is deemed to have a "conflict of interest" under Rule 5121 of the Financial Industry Regulatory

   

 

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Authority, Inc., or "FINRA." As a result, this offering will be conducted in accordance with FINRA Rule 5121. Pursuant to that rule, the appointment of a "qualified independent underwriter" is not required in connection with this offering as the members primarily responsible for managing the public offering do not have a conflict of interest, are not affiliates of any member that has a conflict of interest and meet the requirements of paragraph (f)(12)(E) of FINRA Rule 5121. See "Use of Proceeds" and "Underwriting (Conflicts of Interest)."

Dividend policy

 

We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Our Term Loan Facility and our asset-based lending facility (our "Revolving Credit Facility" and together with our Term Loan Facility, our "Credit Facilities") contain covenants that would restrict our ability to pay cash dividends.

Risk factors

 

See "Risk Factors" beginning on page 14 and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Directed share program

 

The underwriters have reserved for sale at the initial public offering price up to            % of the shares of common stock to be sold in this offering for our employees and directors and other persons associated with us who have expressed an interest in purchasing shares of our common stock in this offering. If purchased by these persons, these shares will be subject to a 180-day lock-up restriction. The number of shares available for sale to the general public in this offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares.

New York Stock Exchange trading symbol

 

"SFS."

        Unless otherwise indicated, all information in this prospectus reflects and assumes the following:

    the            -for-one stock split of our common stock to be effected prior to the closing of this offering; and

    no exercise of the underwriters' option to purchase up to                  additional shares of common stock from the selling stockholders.

 

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        The number of shares of our common stock to be outstanding immediately after this offering is based on                  shares of our common stock outstanding immediately prior to the closing of this offering, and excludes the following:

                      shares of common stock issuable upon the exercise of stock options granted under the SF CC Holdings, Inc. 2012 Stock Incentive Plan (the "2012 Incentive Plan") and outstanding immediately prior to the closing of this offering, at a weighted average exercise price of $             per share;

    shares of common stock reserved for future issuance under our new Smart & Final Stores, Inc. 2014 Stock Incentive Plan (the "2014 Incentive Plan" and, together with the 2012 Incentive Plan, the "Incentive Plans"), which we intend to adopt prior to the closing of this offering, subject to stockholder approval, including                 shares of restricted stock and                 shares of common stock issuable upon the exercise of stock options to be granted under the 2014 Incentive Plan prior to the closing of this offering.

 

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Summary Historical and Consolidated Financial and Other Data

        The following table sets forth our summary historical consolidated financial information for the periods and dates indicated, and should be read together with "Risk Factors," "Selected Historical Consolidated Financial Information and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our financial condition or operating results to be expected in the future.

        The consolidated statements of operations data for the year ended December 29, 2013, the period from January 2, 2012 through November 14, 2012, the period from November 15, 2012 through December 30, 2012, and the year ended January 1, 2012, and the consolidated balance sheet data as of December 29, 2013 and December 30, 2012 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated balance sheet data as of January 1, 2012 has been derived from our audited consolidated financial statements not included in this prospectus. The consolidated statements of operations for the twelve-week and twenty-four-week periods ended June 15, 2014 and June 16, 2013 and the consolidated balance sheet data as of June 15, 2014 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of our management, include all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the information set forth herein. Interim financial results are not necessarily indicative of results that may be expected for the full fiscal year or any future reporting period.

        In connection with the Ares Acquisition, as a result of the application of purchase accounting, the assets and liabilities of the Company were adjusted to their estimated fair values as of the closing date of the Ares Acquisition. We refer to the Company prior to the Ares Acquisition as the "Predecessor," and to the Company after the Ares Acquisition as the "Successor." The periods prior to the Ares Acquisition are referred to as the "Predecessor periods" and the periods following the Ares Acquisition are referred to as the "Successor periods." Our fiscal year 2012 is therefore divided into a Predecessor period from January 2, 2012 through November 14, 2012 and a Successor period from November 15, 2012 through December 30, 2012. Accordingly, in this prospectus, financial information is presented separately for Predecessor and Successor periods, which relate to the accounting periods preceding and succeeding the closing of the Ares Acquisition. See "Selected Historical Consolidated Financial Information and Other Data" and our financial statements and related notes thereto included elsewhere in this prospectus.

 

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  Successor    
  Predecessor    
  Pro Forma(1)  
 
  Twenty-Four
Weeks
Ended
June 15,
2014
  Twenty-Four
Weeks
Ended
June 16,
2013
  Twelve
Weeks
Ended
June 15,
2014
  Twelve
Weeks
Ended
June 16,
2013
  Fiscal Year
2013
  Period From
November 15,
2012 Through
December 30,
2012
   
  Period From
January 2,
2012 Through
November 14,
2012
  Fiscal Year
2011
   
  Fiscal Year
2012
  Fiscal Year
2011
 
 
  (Dollars in thousands, except per share data)
 

Consolidated Statement of Operations Data:

                                                                     

Net sales

  $ 1,563,087   $ 1,446,101   $ 828,071   $ 755,943   $ 3,210,293   $ 378,550       $ 2,664,162   $ 2,840,336       $ 3,042,712   $ 2,840,336  

Cost of sales, buying and occupancy

    1,330,313     1,232,778     699,886     642,528     2,736,357     333,787         2,265,154     2,412,180         2,596,847     2,413,545  
                                                   

Gross margin

    232,774     213,323     128,185     113,415     473,936     44,763         399,008     428,156         445,865     426,791  

Operating and administrative expenses

    193,849     174,039     101,491     88,463     387,133     51,727         355,681     379,371         366,585     371,189  

Income (loss)  on property sales                

                        (5 )       8,818     1,952         8,813     1,952  
                                                   

Income (loss) from operations

    38,925     39,284     26,694     24,952     86,803     (6,959 )       34,509     46,833         70,467     53,650  

Interest expense, net

    17,758     25,429     8,922     12,467     50,365     7,133         20,761     31,395         55,831     60,190  

(Loss) on early extinguishment of debt(2)

        (7,139 )       (7,139 )   (24,487 )               (4,209 )           (4,209 )

Equity in earnings of joint venture

    714     521     262     172     1,649             820     785         820     785  
                                                   

Income (loss) from
continuing operations
before income taxes                

    21,881     7,237     18,034     5,518     13,600     (14,092 )       14,568     12,014         15,456     (9,964 )

Income tax (provision) benefit

    (8,259 )   (2,110 )   (6,919 )   (1,920 )   (5,429 )   4,804         (244 )   (4,795 )       (1,283 )   3,996  
                                                   

Income (loss) from continuing operations

    13,622     5,127     11,115     3,598     8,171     (9,288 )       14,324     7,219         14,173     (5,968 )

Income (loss) from discontinued operations, net of income taxes(3)

                                    3,260             3,260  
                                                   

Net income (loss)

  $ 13,622   $ 5,127   $ 11,115   $ 3,598   $ 8,171   $ (9,288 )     $ 14,324   $ 10,479       $ 14,173   $ (2,708 )
                                                   
                                                   

Per Share Data:

   
 
   
 
   
 
   
 
   
 
   
 
       
 
   
 
       
 
   
 
 

Basic earnings (loss) per share:

                                                                     

Income (loss) per share from
continuing operations

  $ 45.24   $ 17.13   $ 36.88   $ 12.02   $ 27.22   $ (31.04 )     $ 1.07   $ 0.54                  

Income (loss) per share from
discontinued operations,
net of income taxes

                                    0.24                  
                                                       

Basic earnings (loss) per
share

  $ 45.24   $ 17.13   $ 36.88   $ 12.02   $ 27.22   $ (31.04 )     $ 1.07   $ 0.78                  
                                                       
                                                       

Pro forma basic earnings (loss) per share(4)

  $     $                 $                                          
                                                                 
                                                                 

Diluted earnings (loss) per share:

                                                                     

Income (loss) per share from
continuing operations                

  $ 43.64   $ 16.48   $ 35.61   $ 11.55   $ 26.14   $ (31.04 )     $ 1.03   $ 0.54                  

Income (loss) per share from discontinued operations, net of income taxes

                                    0.24                  
                                                       

Diluted earnings (loss) per
share

  $ 43.64   $ 16.48   $ 35.61   $ 11.55   $ 26.14   $ (31.04 )     $ 1.03   $ 0.78                  
                                                       
                                                       

Pro forma diluted earnings (loss) per share(4)

  $     $                 $                                          
                                                                 
                                                                 

Weighted average shares outstanding—basic

    301,133     299,304     301,365     299,407     300,158     299,201         13,363,635     13,362,665                  

Weighted average shares outstanding—diluted

    312,121     311,098     312,172     311,516     312,566     299,201         13,927,566     13,425,470                  

Weighted average shares outstanding—pro forma basic(4)

                                                                     

Weighted average shares outstanding—pro forma diluted(4)

                                                                     

Selected Operating Data:

   
 
   
 
   
 
   
 
   
 
   
 
       
 
   
 
       
 
   
 
 

Adjusted EBITDA(5)

  $ 77,734   $ 71,097   $ 47,500   $ 41,586   $ 164,261                             $ 138,696   $ 125,027  

Capital expenditures

    48,446     22,000     34,202     14,768     55,093                               50,205     56,275  

Comparable store sales growth(6)

   
5.3

%
 
4.9

%
 
6.3

%
 
4.7

%
 
4.0

%
                           
6.7

%
 
9.5

%

Smart & Final banner

    4.2 %   4.5 %   4.9 %   4.3 %   3.4 %                             7.1 %   9.4 %

Cash & Carry banner

    8.4 %   6.1 %   10.5 %   5.9 %   6.1 %                             5.4 %   9.7 %

Stores at end of period

   
246
   
237
   
246
   
237
   
240
                             
235
   
234
 

Smart & Final banner

    194     185     194     185     188                               183     182  

Extra! format

    80     63     80     63     69                               56     46  

Cash & Carry banner

    52     52     52     52     52                               52     52  

Square feet at end of period

   
5,101,815
   
4,820,201
   
5,101,815
   
4,820,201
   
4,899,403
                             
4,756,165
   
4,697,834
 

Average store size at end of period(7)

    20,739     20,338     20,739     20,338     20,414                               20,239     20,076  

 

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  As of June 15, 2014  
 
  Actual   Pro Forma(4)  
 
  (Dollars in thousands)
 

Consolidated Balance Sheet Data:

             

Cash and cash equivalents

  $ 65,561        

Total assets

    1,627,431        

Long-term debt (including current portion and debt discount)

    703,276        

Total stockholders' equity

    353,890        

(1)
The unaudited pro forma condensed consolidated statements of operations for fiscal year 2012 and fiscal year 2011 give effect to the Ares Acquisition as if it had occurred on January 3, 2011. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Unaudited Pro Forma Condensed Consolidated Financial Information."

(2)
In the second and fourth quarters of 2013, we recognized a loss on early extinguishment of debt of $24.5 million in the aggregate in connection with amendments to our Term Loan Facility. In the second quarter of 2011, we recognized a loss on early extinguishment of debt of $4.2 million in connection with an amendment to our prior term loan facility to permit the sale of Henry's Holdings, LLC ("Henry's"). See Note 5, Debt, to the audited consolidated financial statements included elsewhere in this prospectus.

(3)
In the second quarter of 2011, we sold our wholly owned subsidiary, Henry's, to Sprouts Farmers Markets, LLC ("Sprouts"). In the fourth quarter of 2010, we closed five stores in Colorado. Accordingly, the consolidated statements of operations data for our fiscal years 2011, 2010 and 2009 reflect the results of operations of Henry's and the five stores separately as discontinued operations. The results of operations of Henry's and the five stores are immaterial for fiscal years 2013 and 2012 and are not presented separately as discontinued operations.

(4)
We present certain share data on a pro forma basis to give effect to the        -for-one stock split of our common stock to be effected prior to the closing of this offering. We present certain balance sheet data on a pro forma basis to give effect to the        -for-one stock split of our common stock to be effected prior to the closing of this offering and to give further effect to the sale by us of                  shares of common stock in this offering at an assumed initial public offering price of $        per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated expenses payable by us and the application of the estimated net proceeds from this offering as described under "Use of Proceeds."

(5)
To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA to clarify and enhance understanding of our past performance. We define Adjusted EBITDA as earnings (net income or loss) before income taxes, interest expense (net), depreciation and amortization, as adjusted for the items set forth in the table below.

This non-GAAP measure is intended to provide additional information only, and does not have any standard meaning prescribed by GAAP. Use of Adjusted EBITDA may differ from similar measures reported by other companies. Because of its limitations, Adjusted EBITDA should be considered as a measure of discretionary cash available to use to reinvest in the growth of our business, or as a measure of cash that will be available to meet our obligations. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this prospectus and the reconciliation to Adjusted EBITDA from net income (loss), the most directly comparable financial measure presented in accordance with GAAP, set forth in the table below. All of the items included in the reconciliation from net income to Adjusted EBITDA are either (a) non-cash items or (b) items that management does not consider in assessing our on-going operating performance. In the case of the non-cash items, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that affect operating performance. In the case of the other items that management does not consider in assessing our on-going operating performance, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact may not reflect on-going operating performance.

The following table reconciles Adjusted EBITDA to net income, the most comparable measure calculated in accordance with GAAP:

 
  Successor    
  Predecessor    
  Pro Forma  
(Dollars in thousands)
  Twenty-Four
Weeks
Ended
June 15,
2014
  Twenty-Four
Weeks
Ended
June 16,
2013
  Twelve
Weeks
Ended
June 15,
2014
  Twelve
Weeks
Ended
June 16,
2013
  Fiscal Year
2013
  Period from
November 15,
2012 through
December 30,
2012
   
  Period from
January 2,
2012 through
November 14,
2012
  Fiscal Year
2011
   
  Fiscal Year
2012
  Fiscal Year
2011
 

Net income

  $ 13,622   $ 5,127   $ 11,115   $ 3,598   $ 8,171   $ (9,288 )     $ 14,324   $ 10,479       $ 14,173   $ (2,708 )

Income tax provision (benefit)

    8,259     2,110     6,919     1,920     5,429     (4,804 )       244     4,795         1,283     (3,996 )

Interest expense, net

    17,758     25,429     8,922     12,467     50,365     7,133         20,761     31,395         55,831     60,190  

Depreciation and amortization

    28,453     27,375     14,434     13,814     60,759     7,353         44,045     53,643         53,831     50,968  
                                                   

EBITDA

    68,092     60,041     41,390     31,799     124,724     394         79,374     100,312         125,118     104,454  

Transaction costs(a)

   
470
   
74
   
470
   
1
   
220
   
5,300
       
23,833
   
5,719
       
83
   
5,719
 

Purchase accounting inventory adjustment(b)

                        8,600                          

Net (income) loss from closed stores and discontinued operations(c)

    970     1,445     663     1,139     3,592     407         1,549     (1,825 )       1,956     (1,825 )

(Gain) loss from asset dispositions

    235     44     162         974     (8 )       9,417     6,014         9,409     6,014  

Share based compensation expense

    1,741         1,741                     7,483     2,455              

Non-cash rent

    2,578     1,792     1,394     1,122     3,985     449         (339 )   1,679         3,265     2,645  

Pre-opening costs(d)

    1,976     259     1,535     247     1,432             375     935         375     935  

Loss on early extinguishment of debt

        7,139         7,139     24,487                 4,209             4,209  

Management fees(e)

                                1,363     1,495              

Non-recurring charges(f)

    1,672     303     145     139     4,847     71         (1,581 )   2,876         (1,510 )   2,876  
                                                   

Adjusted EBITDA

    77,734     71,097     47,500     41,586   $ 164,261   $ 15,213       $ 121,474   $ 123,869       $ 138,696 (g) $ 125,027 (g)
                                                   
                                                   

(a)
Represents costs associated with the Ares Acquisition during fiscal year 2012 and sale of Henry's during fiscal year 2011.

(b)
Represents a purchase accounting inventory valuation adjustment in connection with the Ares Acquisition, which was fully amortized to cost of sales.

(c)
Represents (i) costs related primarily to store closures for the Successor periods and the 2012 Predecessor periods and (ii) costs related primarily to discontinued operations for fiscal year 2011.

 

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(d)
Represents costs of opening new and relocated stores including rent, utilities, distribution, store labor and advertising.

(e)
Represents annual fees paid by the Predecessor to Apollo (as defined below) under a management services agreement.

(f)
Represents (i) consulting expenses related to strategic growth initiatives for the twelve-week and twenty-four-week periods ended June 15, 2014 and fiscal year 2013 and (ii) costs related to a settlement related to our Mexico joint venture and severance costs, partially offset by recovery on company-owned life insurance policy death benefits for the 2012 and 2011 Predecessor period.

(g)
The difference in Adjusted EBITDA for pro forma fiscal year 2012 and 2011 as compared to Adjusted EBITDA for actual fiscal year 2012 and 2011 reflects a purchase accounting adjustment to unamortized pension liability and a resulting decrease in pension expense.
(6)
For more information regarding our calculation of comparable store sales growth, see "Comparable Store Sales" on page ii of this prospectus.

(7)
Average store size is calculated as the gross square feet divided by the stores open at the end of the period presented.

 

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to purchase shares of our common stock. Any of the following risks could adversely affect our business, financial condition, operating results or prospects and cause the value of our common stock to decline, which could cause you to lose all or part of your investment.

Risks Related to Our Business and Industry

Competition in our industry is intense and our failure to compete successfully may adversely affect our sales, financial condition and operating results.

        We operate in the highly competitive food retail and foodservice industries. We compete on a combination of factors, including price, product selection, product quality, convenience, customer service, store format and location.

        Price is a significant driver of consumer choice in our industry. We expect our competitors to continue to apply pricing pressures, which may have an adverse effect on our ability to maintain profit margins and sales levels. We establish our consumer prices based on a number of factors, including surveys of prices of certain of our competitors. If our competitors change their cost structures such that we are unable to effectively compete on the basis of price, our financial condition and operating results could be adversely affected. Consumer choice is also driven by product selection and quality, and our success depends, in part, on our ability to identify market trends and offer products that appeal to our customers' preferences. Failure to identify such trends, offer such products or to accurately forecast changing customer preferences could lead to a decrease in the number of customer transactions at our stores and a decrease in the amount customers spend when they visit our stores.

        We attempt to create a convenient and appealing shopping experience for our customers in terms of customer service, store format and location. If we are unable to provide a convenient and appealing shopping experience, our sales, profit margins and market share may decrease, resulting in an adverse effect on our financial condition and operating results. Some of our competitors are aggressively expanding their number of stores within our primary market areas. As our competitors open stores within close proximity to our stores, our financial condition and operating results may be adversely affected through a loss of sales, decrease in market share or greater operating costs.

        Our principal competitors include conventional grocers such as Albertson's, Kroger and Safeway, discounters and warehouse clubs such as Costco, mass merchandisers such as Walmart and Target, foodservice delivery companies such as Sysco and US Foods, as well as online retailers and other specialty stores. Some of our competitors may have greater financial or marketing resources than we do and may be able to devote greater resources to sourcing, promoting and selling their products. Also, some of our competitors do not have unionized work forces, which may result in lower labor and benefit costs. These competitors could use these advantages to take certain measures, including reducing prices, that could adversely affect our competitive position, business, financial condition and operating results.

        Some of our competitors have attempted to increase market share by expanding their footprints in our marketing areas. This competitor expansion creates a more difficult competitive environment for us. In addition, other established food retailers could enter our markets, increasing competition for market share.

        Further, over the last several decades, the retail supermarket and foodservice industries have undergone significant changes. Companies such as Walmart (particularly through its Sam's Club, Walmart Neighborhood Market and Walmart Express formats) and Costco have developed a lower cost

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structure to provide their customers with an "everyday low price" offering. In addition, wholesale outlets such as Restaurant Depot offer an additional low-cost option in the markets they serve. To the extent more of our competitors adopt an "everyday low price" strategy, we could be pressured to lower our prices, which would require us to achieve additional cost savings to offset these reductions. We may be unable to change our cost structure and pricing practices rapidly enough to successfully compete in that environment.

Our continued growth depends on new store openings and our failure to successfully open new stores or successfully manage the potential difficulties associated with store growth could adversely affect our business and stock price.

        Our continued growth depends, in part, on our ability to open new stores and to operate those stores successfully. Successful execution of our growth strategy depends upon a number of factors, many of which are beyond our control, including our ability to effectively find suitable sites for new stores, negotiate and execute leases on acceptable terms, secure and manage the inventory necessary for the launch and operation of our new stores, hire, train and retain skilled store personnel, promote and market new stores and address competitive merchandising, distribution and other challenges encountered in connection with expansion into new geographic areas and markets. Delays or failures in opening new stores, or achieving lower than expected sales in new stores, could adversely affect our growth.

        Although we believe that the U.S. market can support additional Extra! and Cash & Carry stores, we cannot assure you when or whether we will open any new stores. We may not have the level of cash flow or financing necessary to execute our growth strategy. If and when such store openings occur, we cannot assure you that these new stores will be successful or result in greater sales and profitability.

        Additionally, our growth will place increased demands on our operational, managerial and administrative resources. These increased demands could cause us to operate our existing business less effectively, which in turn could adversely affect the financial condition and operating results of our existing stores. Also, new store openings in markets where we have existing stores may result in reduced sales volumes at those existing stores. We may also be unable to successfully manage the potential difficulties associated with store growth, including capturing efficiencies of scale, improving our systems, continuing cost discipline and maintaining appropriate store labor levels and disciplined product and real estate selection, which may result in stagnation or decline in our operating margins. If we experience such a decline in financial condition and operating results as a result of such difficulties, we may slow or discontinue store openings or we may close stores that we are unable to operate profitably.

        Some of our new stores may be located in areas where we have little experience or a lack of brand recognition. Those markets may have different competitive conditions, market conditions, consumer tastes and discretionary spending patterns than our existing markets, which may cause these new stores to be less successful than stores in our existing markets. If we fail to successfully execute our growth strategy, including by opening new stores, our financial condition and operating results may be adversely affected.

        Our continued growth also depends, in part, on our ability to successfully convert certain of our Smart & Final stores to our Extra! format, and to relocate certain of our Smart & Final stores to new locations as Extra! stores. If we fail to successfully identify the Smart & Final stores suitable for conversion or relocation, or fail to manage such conversions and relocations in a cost-effective manner, our financial condition and operating results may be adversely affected.

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Our new stores may adversely affect our operating results in the short term and may not achieve sales and operating levels consistent with our more mature stores on a timely basis or at all.

        We are actively pursuing new store growth and plan to continue doing so in the future. We cannot assure you that our new store openings will be successful or reach the sales and profitability levels of our existing stores. New store openings may adversely affect our financial condition and operating results in the short term due to the effect of opening costs and lower sales and contribution to overall profitability during the initial period following opening. New stores build their sales volume and their customer base over time and, as a result, generally have lower margins and higher operating expenses, as a percentage of net sales, than our more mature stores. New stores may not achieve sustained sales and operating levels consistent with our more mature store base on a timely basis or at all, which may adversely affect our long-term financial condition and operating results.

        In addition, we may not be able to successfully integrate new stores into our existing store base and those new stores may not be as profitable as our existing stores. Further, we have historically experienced, and expect to experience in the future, some sales volume transfer from our existing stores to our new stores as some of our existing customers switch to new, closer locations. If our new stores are less profitable than our existing stores, or if we experience sales volume transfer from our existing stores, our financial condition and operating results may be adversely affected.

We may be unable to maintain or increase comparable store sales, which could adversely affect our business and stock price.

        We may not be able to maintain or improve the levels of comparable store sales that we have experienced in the past. Our comparable store sales growth could be lower than our historical average for many reasons, including:

        These factors may cause our comparable store sales results to be materially lower than in recent periods, which could harm our business and result in a decline in the price of our common stock.

Our plans to remodel or convert certain of our existing stores and build new stores in our current markets could require us to spend capital, which must be allocated among various projects. Failure to use our capital efficiently could adversely affect our financial condition and operating results.

        Since October 2008, we have converted 65 Smart & Final stores to our Extra! format through a combination of store conversions and relocations. Our recent conversions and relocations have been completed for an average net cash investment of approximately $2.0 million. We intend to convert

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additional locations over the next several years. However, we cannot assure you that our future conversions will require similar levels of investment, reach the sales and profitability levels of our Smart & Final or Extra! stores or be completed at all. If any of these initiatives prove to be unsuccessful, we may experience reduced profitability and could be required to delay, significantly curtail or eliminate planned store openings, remodels or conversions.

Perishable products make up a significant portion of our sales, and ordering errors or product supply disruptions may adversely affect our financial condition and operating results.

        We could suffer significant inventory losses in the event of the loss of a major supplier, disruption of our supply chain, extended power outages, natural disasters or other catastrophic occurrences. We have a significant focus on perishable products, sales of which accounted for approximately 34% of our net sales for our fiscal year 2013 and 36% of our second fiscal quarter 2014, and rely on various suppliers to provide and deliver our perishable product inventory on a continuous basis. Adverse weather conditions and natural disasters can lower crop yields and reduce crop size and quality, which in turn could reduce the available supply or increase the price of fresh produce.

        While we have implemented certain systems to ensure our ordering is in line with demand, we cannot assure you that our ordering systems will always work efficiently, in particular in connection with the opening of new stores, which have limited or no ordering history. If we over-order, we may suffer inventory losses, which would adversely affect our financial condition and operating results.

Our private label products expose us to various risks.

        We expect to continue to grow our exclusive private label products within many product categories. We have invested in our development and procurement resources and marketing efforts relating to these private label products. If we cannot anticipate, identify and react to changing consumer preferences relating to our private label products in a timely manner, or if our profit margins or sales levels from such products decline, then our financial condition and operating results may be adversely affected.

        Our private label products also subject us to certain specific risks in addition to those discussed elsewhere in this section, such as:

        An increase in sales of our private label products may also adversely affect sales of our suppliers' products, which may, in turn, adversely affect our relationship with our suppliers. Our failure to adequately address some or all of these risks could have a material adverse effect on our business, financial condition and operating results.

Real or perceived quality or food safety concerns could adversely affect our business, operating results and reputation.

        Brand value is based in large part on perceptions of subjective qualities, and even isolated incidents can erode trust and confidence, particularly if they result in governmental investigations, litigation or adverse publicity, especially in social media outlets, all of which can adversely affect these

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perceptions and lead to adverse effects on our business, operating results and reputation. We believe our customers hold us to a high food safety standard. Real or perceived concerns regarding the safety of our food products or the safety and quality of our food supply chain, whether or not ultimately based on fact and whether or not involving products sold at our stores, could cause consumers to avoid shopping with us, and could adversely affect our financial condition and operating results, even if the basis for the concern is outside of our control. Any lost confidence on the part of consumers would be difficult and costly to reestablish.

Products we sell could cause unexpected side effects, illness, injury or death that could result in the discontinuance of such products or expose us to litigation, either of which could result in unexpected costs and damage to our reputation.

        There is increasing governmental scrutiny and public awareness of food safety. Unexpected side effects, illness, injury or death caused by products we sell could result in the discontinuance of sales of these products or prevent us from achieving market acceptance of the affected products. Such side effects, illnesses, injuries and deaths could also expose us to product liability or negligence lawsuits. Any claims brought against us may exceed our existing or future insurance policy coverage or limits. Any judgment against us that is in excess of our policy limits would have to be paid from our cash reserves, which would reduce our capital resources. Also, we may not have sufficient capital resources to pay a judgment, in which case our creditors could levy against our assets. The real or perceived sale of contaminated or harmful products would cause negative publicity regarding our company, brand or products, which could in turn harm our reputation and net sales and adversely affect our business, financial condition and operating results.

If we fail to maintain our reputation and the value of our brand, our sales may decline.

        We believe our continued success depends on our ability to maintain and grow the value of our Smart & Final, Extra! and Cash & Carry brands. Maintaining, promoting and positioning our brands and reputation will depend largely on the success of our marketing and merchandising efforts and our ability to provide a consistent, high quality customer experience. Brand value is based in large part on perceptions of subjective qualities, and even isolated incidents can erode trust and confidence, particularly if they result in governmental investigations, litigation or adverse publicity. Our brands could be adversely affected if we fail to achieve these objectives or if our public image or reputation were to be tarnished by negative publicity.

The current geographic concentration of our stores and our net sales creates an exposure to local or regional downturns or catastrophic occurrences.

        As of June 15, 2014, we operated 177 Smart & Final stores in California, representing 91% of our total Smart & Final stores and accounting for 95% of Smart & Final banner sales in the twenty-four weeks ended June 15, 2014. Also, as of June 15, 2014, we operated 40 Cash & Carry stores in the Pacific Northwest (Washington, Oregon and Idaho), representing 77% of our total Cash & Carry stores and accounting for 77% of Cash & Carry banner sales in the twenty-four weeks ended June 15, 2014. In addition, we source a significant portion of our produce from California.

        As a result, our business is currently more susceptible to regional conditions than the operations of our more geographically diversified competitors and we are vulnerable to economic downturns in those regions. Any unforeseen events or circumstances that adversely affect the areas in which we have stores or from which we obtain products, particularly in California and the Pacific Northwest, could adversely affect our financial condition and operating results. These factors include, among other things, changes in demographics, population, employee bases and economic conditions, wage increases, severe weather conditions, power outages and other catastrophic occurrences. Such conditions may result in reduced customer traffic and spending in our stores, physical damage to our stores, loss of inventory, closure of

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one or more of our stores, inadequate work force in our markets, temporary disruption in the supply of products, delays in the delivery of goods to our stores and a reduction in the availability of products in our stores. Any of these factors may disrupt our business and adversely affect our financial condition and operating results.

Disruption of supplier relationships could adversely affect our business.

        We source our products from over 1,650 vendors and suppliers. The cancellation of our distribution arrangement with or the disruption, delay or inability of any of these vendors or suppliers to deliver products to our stores could cause operational disruptions or delays or increased or unexpected costs including, among others, costs associated with finding alternative vendors or suppliers and obtaining inventory that meets our and our customers' standards.

        As an example, Unified Grocers, Inc. ("Unified Grocers") is the primary supplier of dry grocery and perishable products to our Cash & Carry stores, accounting for approximately 82% of our product requirements (measured at cost) for our Cash & Carry stores for each of our fiscal year ended December 29, 2013 and the twenty-four-week period ended June 15, 2014, respectively, and 22% of our total Company product requirements (measured at cost) for each of our fiscal year ended December 29, 2013 and the twenty-four-week period ended June 15, 2014, respectively. Based on Unified Grocers' disclosure in its public filings, we accounted for 14% of Unified Grocers' total net sales for its fiscal year ended September 28, 2013. Our current contractual relationship with Unified Grocers continues through December 5, 2015. If our distribution arrangement with Unified Grocers was cancelled or Unified Grocers was unwilling or unable to supply our stores with dry grocery or perishable products, we could experience disruptions to our operations and incur unexpected expenses associated with finding one or more alternative suppliers or utilizing our own infrastructure to replace the products provided to and services performed for us by Unified Grocers.

Changes in commodity prices and availability may affect our financial condition and operating results.

        Many products we sell include ingredients such as wheat, corn, oils, milk, sugar, cocoa and other commodities. Commodity prices worldwide have been increasing. Any increase in commodity prices may cause our suppliers to seek price increases from us. We cannot assure you that we will be able to mitigate supplier efforts to increase our costs, either in whole or in part. In the event we are unable to continue mitigating potential supplier price increases, we may consider raising our prices and our customers may be deterred by any such price increases. Our financial condition and operating results may be adversely affected through increased costs to us, which may affect gross margins, or through reduced sales as a result of a decline in the number and average size of customer transactions.

        While management believes that these commodities are not currently in short supply and all are readily available from our current independent suppliers, an interruption in the supply chains of or volatility in the markets for any of these commodities could have an adverse effect on their overall supply and impede our ability or that of our suppliers to obtain products containing these commodities. Such a decrease in their availability to us or our suppliers, whether as a result of increased prices or otherwise, could adversely affect our financial condition and operating results.

Any significant interruption in the operations of our distribution centers or common carriers could disrupt our ability to deliver our products in a timely manner.

        We distribute our products through six distribution centers in California, two of which serve our stores in Northern California and four of which serve our stores in Southern California, Arizona and Nevada. The operations of four of our distribution centers are outsourced to third parties. See "Business—Properties." We also maintain relationships with numerous common carriers. Any significant interruption in the operation of our distribution center infrastructure, such as disruptions

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due to fire, severe weather or other catastrophic events, power outages, labor disagreements or shipping problems, or any disruption or cancellation of our contractual relationships with the third party operators of our distribution centers, could adversely affect our ability to distribute products to our stores. Such interruptions could result in lost sales and a loss of customer loyalty to our brands. While we maintain business interruption and property insurance, if the operation of our distribution centers were interrupted for any reason causing delays in shipment of products to our stores, our insurance may not be sufficient to cover losses we experience, which could adversely affect our business, financial condition and operating results.

        We rely on common carriers, including rail and trucking, to transport products from our suppliers to our central distribution centers and from these centers to our stores. A disruption in the services of common carriers due to weather, employee strikes, increases in fuel costs or other unforeseen events, or any disruption or cancellation of our contractual relationships with our common carriers, could affect our ability to maintain sufficient quantities of inventory in our stores.

Our failure to comply with laws, rules and regulations affecting us and our industry could adversely affect our financial condition and operating results.

        We are subject to numerous federal, state and local laws, rules and regulations that affect our business, such as those affecting food manufacturing, food and drug distribution, retailing, labor and employment and environmental practices, accounting standards and taxation requirements. We must also comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum wages and licensing for the sale of food, drugs and alcoholic beverages. Our ongoing efforts related to compliance with such laws, rules and regulations, including with respect to implementation of immigration legislation, recently enacted food safety and health care reform legislation, new mandates, fees and taxes and stricter regulatory oversight, create uncertainty about the probability and effect of future regulatory changes and can significantly affect our operations and compliance costs. We cannot predict future laws, rules and regulations or the effect they will have on our financial condition and operating results, but in any event, additional record keeping, increased costs of recruiting, training and retaining employees, expanded documentation of the properties of certain products, and expanded or different labeling required by such laws, rules and regulations, could significantly increase our costs of doing business could adversely affect our business, financial condition and operating results.

        As is common in our industry, we rely on our suppliers, including suppliers of our private label products, to ensure that the products they sell to us comply with all applicable regulatory and legislative requirements. In general, we seek certifications of compliance, representations and warranties, indemnification and/or insurance from our suppliers. However, even with adequate insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in our products. In order to comply with applicable statutes and regulations, our suppliers have from time to time recalled, reformulated, eliminated or relabeled certain of their products.

        In addition, many of our customers rely on food stamps and other governmental assistance programs to supplement their grocery-shopping budgets. As a result, any change in the ability of our customers to obtain food stamps and other governmental assistance could adversely affect our business, financial condition and operating results.

General economic conditions that affect consumer spending could adversely affect our business, financial condition and operating results.

        The food retail and foodservice industries are sensitive to changes in general economic conditions. Recessionary economic cycles, increases in interest rates, higher prices for commodities, fuel and other energy, inflation, high levels of unemployment and consumer debt, depressed home values, high tax

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rates and other economic factors that affect consumer spending and confidence or buying habits may adversely affect the demand for products we sell in our stores. In recent years, the U.S. economy has experienced volatility due to uncertainties related to energy prices, credit availability, difficulties in the banking and financial services sectors, decreases in home values and retirement accounts, high unemployment and falling consumer confidence. As a result, consumers are more cautious and could shift their spending to lower-priced competition, such as warehouse membership clubs, dollar stores or extreme value formats. In addition, inflation or deflation could affect our business. Food deflation could reduce sales growth and profit margins, while food inflation, combined with reduced consumer spending, could reduce gross profit margins. As a result of any of these factors, our business, financial condition and operating results could be adversely affected.

A widespread health epidemic could adversely affect our business.

        Our business could be severely affected by a widespread regional, national or global health epidemic. A widespread health epidemic may cause customers to avoid public gathering places such as our stores or otherwise change their shopping behaviors. Additionally, a widespread health epidemic could adversely affect our business by disrupting production and delivery of products to our stores and by affecting our ability to appropriately staff our stores.

If we are unable to attract, train and retain, or maintain satisfactory relations with, our employees we may not be able to grow or successfully operate our business.

        The food retail and foodservice industries are labor intensive. Our continued success is dependent in part upon our ability to attract, train and retain qualified employees who understand and appreciate our culture and can represent our brands effectively and establish credibility with our business partners and customers. We face intense competition for qualified employees, many of whom are subject to offers from competing employers. Our ability to meet our labor needs, while controlling wage and labor-related costs, is subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force in the markets in which we operate, unemployment levels within those markets, unionization of the available work force, prevailing wage rates, changing demographics, health and other insurance costs and changes in employment legislation. If we fail to maintain competitive wages, the quality of our workforce could decline and cause our customer service to suffer. However, increasing our wages could cause our profit margins to decrease. If we are unable to hire and retain employees capable of meeting our business needs and expectations, our business and brand images may be impaired. Any failure to meet our staffing needs or any material increase in turnover rates of our employees or employee wages may adversely affect our business, financial condition and operating results.

        As of June 15, 2014, we had 8,805 employees. 181 of our employees, all of whom work at our Cash & Carry stores, are members of the International Brotherhood of Teamsters (the "Union") and are covered by a collective bargaining agreement. We may experience pressure from labor unions or become the target of campaigns similar to those faced by our competitors. The unionization of a more significant portion of our workforce, particularly at our Company-operated distribution centers and Smart & Final stores, could increase the overall costs at the affected locations and adversely affect our flexibility to run our business competitively and otherwise adversely affect our business, financial condition and operating results.

        Labor relations issues arise from time to time, including issues in connection with Union efforts to represent employees at our stores and distribution centers, and with the negotiation of new collective bargaining agreements. If we fail to maintain satisfactory relations with our employees or with the Union, we may experience labor strikes, work stoppages or other labor disputes. Negotiation of collective bargaining agreements also could result in higher ongoing labor costs. Also, our recruiting and retention efforts and efforts to increase productivity may not be successful and there may be a

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shortage of qualified employees in future periods. Any such shortage would decrease our ability to effectively serve our customers. Such a shortage would also likely lead to higher wages for employees and a corresponding reduction in our operating results.

We have obligations under our defined benefit employee pension plans and may be required to make plan contributions in excess of our current estimates.

        We sponsor one single-employer defined benefit pension plan (the "Single-Employer Plan"), which, with limited exceptions, is frozen with respect to new participants. In addition, we participate through our Cash & Carry operations in one multiemployer pension plan, the Western Conference of Teamsters Pension Plan (the "Multiemployer Plan"), on behalf of our union-affiliated employees, and we are required to make contributions to this plan under our collective bargaining agreement. Neither the Single-Employer Plan nor the Multiemployer Plan are fully funded based on standards provided by the Pension Benefit Guaranty Corporation (the "PBGC"), in part due to increases in the costs of benefits provided or paid under the plans as well as lower returns on plan assets. Our funding requirements vary based upon plan asset performance, interest rates and actuarial assumptions. Poorer than assumed asset performance and continuing low interest rates may result in increased future funding contributions by us and, with respect to the Multiemployer Plan, other participating employers.

        Going forward, our required contributions to the Multiemployer Plan could also increase as a result of many factors, including the outcome of collective bargaining with the Union, actions taken by the trustee that manages the plan, government regulations, the actual return on assets held in the plan and the payment of a withdrawal liability if we choose to exit the plan. Our risk of future increased payments may be greater if other participating employers withdraw from the Multiemployer Plan and are not able to pay the total liability assessed as a result of such withdrawal or if the pension plan adopts surcharges and/or increased pension contributions as part of a rehabilitation plan.

        Pursuant to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the PBGC has the right, subject to satisfaction of certain statutory requirements, to involuntarily terminate the pension plans described above (thus accelerating funding obligations) or enter into an alternative arrangement with us to prevent such termination. We expect to fund certain excess contributions to the Single-Employer Plan through plan year 2018 under the terms of an agreement with the PBGC that we entered into in connection with the Ares Acquisition. The amounts and timing of the remaining contributions we expect to make to the pension plans described above reflect a number of actuarial and other estimates and assumptions with respect to our expected plan funding obligations. The actual amounts and timing of these contributions will depend upon a number of factors and the actual amounts and timing of our future plan funding contributions may differ materially from those presented in this prospectus.

The minimum wage and cost of providing employee benefits continues to increase and is subject to factors outside of our control.

        A considerable number of our employees are paid at rates related to the federal minimum wage. Many of our stores are located in states, including California, where the minimum wage is greater than the federal minimum wage and receive compensation equal to the state's minimum wage. The current California minimum wage is $8.00 per hour, and it will increase to $9.00 per hour effective July 1, 2014, and to $10.00 per hour effective January 1, 2016. Moreover, municipalities may set minimum wages above the applicable state standards. Any further increases in the federal minimum wage or the enactment of additional state or local minimum wage increases could increase our labor costs.

        We provide health benefits to substantially all of our full-time employees and to certain part-time employees depending on average hours worked. Though employees generally pay a portion of the cost of such benefits, our cost of providing these benefits has increased steadily over the last several years.

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We anticipate future increases in the cost of health benefits, partly, but not entirely, as a result of the implementation of the Patient Protection and Affordable Care Act enacted in 2010, as well as other healthcare reform legislation being considered by Congress and state legislatures. We are currently evaluating the potential effects of the Patient Protection and Affordable Care Act on our business. Due to provisions requiring phasing-in over time, changes to our healthcare costs structure could have a significant, negative impact on our future business. If we are unable to control healthcare and pension costs, we may experience increased operating costs, which may adversely affect our financial condition and operating results.

The loss of any of our executive officers could adversely affect our business.

        We are dependent upon each of our executive officers listed under "Management—Executive Officers." Losing the services of any or a significant number of such individuals could adversely affect our business, as we may not be able to find suitable individuals to replace them on a timely basis, if at all. In addition, any such departure could be viewed negatively by investors and analysts, which may cause our stock price to decline. We do not maintain key person insurance on any employee, though we are the beneficiary of life insurance policies on certain members of management for the purpose of funding our obligations under our non-qualified defined benefit plan.

Energy costs are an increasingly significant component of our operating expenses and increasing energy costs, unless offset by more efficient usage or other operational responses, may affect our financial condition and operating results.

        We use natural gas, water, sewer and electricity in our stores and gasoline and diesel in trucks that deliver products to our stores. We may also be required to pay certain adjustments or other amounts pursuant to our supply and delivery contracts in connection with increases in fuel prices. Increases in energy costs, whether driven by increased demand, decreased or disrupted supply or an anticipation of any such events will increase the costs of operating our stores. We may not be able to recover these increased costs by raising prices charged to our customers. Any such increased prices may also exacerbate the risk of customers choosing lower-cost alternatives. In addition, if we are unsuccessful in attempts to protect against these increases in energy costs through long-term energy contracts, improved energy procurement, improved efficiency and other operational improvements, the overall costs of operating our stores will increase, which could adversely affect our financial condition and operating results.

Disruptions to or security breaches involving our information technology systems could harm our ability to run our business.

        In connection with payment card sales and other transactions, including bank cards, debit cards, credit cards and other merchant cards, we process and transmit confidential banking and payment card information. Additionally, as part of our normal business activities, we collect and store sensitive personal information, related to our employees, customers, vendors and other parties. Despite our security measures, our information technology and infrastructure may be vulnerable to criminal cyber-attacks or security incidents due to employee error, malfeasance or other vulnerabilities. Any such incident could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Third parties may have the technology and know-how to breach the security of this information, and our security measures and those of our banks, merchant card processing and other technology vendors may not effectively prohibit others from obtaining improper access to this information. The techniques used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched against a target; accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures. Any security breach could expose us to risks of data loss, regulatory and law enforcement investigations, litigation and liability and could seriously disrupt our operations and any resulting negative publicity could significantly harm our reputation and relationships with our customers and adversely affect our business, financial condition and operating results.

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        Furthermore, our systems and operations, and those of our third party Internet and other systems service providers, are vulnerable to damage or interruption from natural disasters and other catastrophic events, power outages, server failures, telecommunications and Internet service failures, computer viruses and denial-of-service attacks, physical or electronic breaches, sabotage, human errors and similar events. Any of these events could lead to system interruptions, processing, distribution, communication and order fulfillment delays and loss of critical data for us or our Internet and other systems service providers or suppliers, and could have an adverse effect on our business, financial condition and operating results. Because we are dependent on third-party service providers for the implementation and maintenance of certain aspects of our systems and operations and because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, if at all, and any system disruptions could adversely affect our business, financial condition and operating results.

We need to comply with credit and debit card security regulations.

        As a merchant that processes credit and debit card payments from customers, we are required to comply with the Payment Card Industry Data Security Standards and other requirements imposed on us for the protection and security of our customers' credit and debit card information. If we are unable to remain compliant with these standards and requirements, our business and operations could be adversely affected because we could incur significant fines or penalties from payment card companies or be prevented in the future from accepting customer payments by means of a credit or debit card. We also may need to expend significant management and financial resources to become or remain compliant with these requirements, which could divert these resources from other initiatives and adversely affect our business, financial condition and operating results.

Legal proceedings could adversely affect our business, financial condition and operating results.

        Our operations, which are characterized by a high volume of customer traffic and by transactions involving a wide variety of product selections, carry a higher exposure to consumer litigation risk when compared to the operations of companies operating in some other industries. Consequently, we may be a party to individual personal injury, product liability, intellectual property, employment-related and other legal actions in the ordinary course of our business, including litigation arising from food-related illness. The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. While we maintain insurance, insurance coverage may not be adequate and the cost to defend against future litigation may be significant. There may also be adverse publicity associated with litigation that may decrease consumer confidence in our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and operating results.

        In addition, we believe there is a growing number of employment (including "wage-and-hour"), health, environmental and other lawsuits against companies in our industry, especially in California. State, federal and local laws and regulations regarding employment (including minimum wage requirements), health and the environment change frequently and the ultimate cost of compliance cannot be precisely estimated. Any changes in laws or regulations, or the imposition or enforcement of new laws or regulations, including legislation that impacts employment, health, the environment, labor or trade, could adversely affect our business, financial condition and operating results.

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We may be unable to adequately protect our intellectual property rights, which could harm our business, financial condition and operating results.

        Our trademarks, service marks, copyrights, patents, trade secrets, domain names and other intellectual property are valuable assets that are critical to our success. The unauthorized reproduction or other misappropriation of our intellectual property could diminish the value of our brands or goodwill and cause a decline in our net sales. Any infringement or other intellectual property claim made against us, whether or not it has merit, could be time-consuming, result in costly litigation, cause product delays or require us to enter into royalty or licensing agreements. As a result, any such claim could have a material adverse effect on our business, financial condition and operating results.

Claims under our insurance plans and policies may differ from our estimates, which could adversely affect our operating results.

        We use a combination of insurance and self-insurance plans to provide for the potential liabilities for workers' compensation, general liability (including, in connection with legal proceedings described above under "—Risks Related to Our Business and Industry—Legal proceedings could adversely affect our business, financial condition and operating results"), property insurance, director and officers' liability insurance, vehicle liability and employee health-care benefits. Liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Our results could be adversely affected by claims and other expenses related to such plans and policies if future occurrences and claims differ from these assumptions and historical trends.

Changes in accounting standards may adversely affect reporting of our financial condition and operating results.

        New accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. A change in accounting rules or regulations may even affect our reporting of transactions completed before the change is effective, and future changes to accounting rules or regulations or the questioning of current accounting practices may adversely affect our results of operations. The Financial Accounting Standards Board ("FASB") is focusing on several broad-based convergence projects, including accounting standards for financial instruments and leases. In August 2010, the FASB issued an exposure draft outlining proposed changes to current lease accounting under GAAP in FASB Accounting Standards Codification 840, "Leases." In July 2011, the FASB made the decision to issue a revised exposure draft, which was issued in May 2013. Currently, substantially all of our leased properties are accounted for as operating leases with limited related assets and liabilities recorded on our balance sheet. The proposed new accounting standard, if ultimately adopted in its proposed form, would treat each lease as creating an asset and a liability and require the capitalization of such leases on the balance sheet. While this change would not impact the cash flow related to our store leases, we would expect our assets and liabilities to increase relative to the current presentation, which may impact our ability to raise additional financing from banks or other sources in the future. The guidance as proposed may also affect the future reporting of our results from operations as both income and expense on leases previously accounted for as operating leases would be front-end loaded as compared to the existing accounting requirements. However, even if the new guidance is adopted as proposed, certain incurrence ratios and other provisions under the credit agreements governing the Credit Facilities permit us to account for leases in accordance with the existing accounting requirements. As a result, our ability to incur additional debt or otherwise comply with such covenants may not directly correlate to our financial condition or results from operations as each would be reported under GAAP as so amended.

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Our high level of fixed lease obligations could adversely affect our financial condition and operating results.

        Our high level of fixed lease obligations will require us to use a significant portion of cash generated by our operations to satisfy these obligations and could adversely affect our ability to obtain future financing to support our growth or other operational investments. We will require substantial cash flows from operations to make our payments under our operating leases, which in some cases provide for periodic adjustments in our rent rates. If we are not able to make the required payments under the leases, the lenders to or owners of the relevant stores, distribution centers or administrative offices may, among other things, repossess those assets, which could adversely affect our ability to conduct our operations. In addition, our failure to make payments under our operating leases could trigger defaults under other leases or under agreements governing our indebtedness, which could cause the counterparties under those agreements to accelerate the obligations due thereunder.

Our lease obligations may require us to continue paying rent for store locations that we no longer operate.

        We are subject to risks associated with our current and future store, distribution center and administrative office real estate leases. We generally cannot cancel our leases, so if we decide to close or relocate a location, we may nonetheless be committed to perform our obligations under the applicable lease, including paying the base rent for the remaining lease term. In addition, as our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could adversely affect our business, financial condition and operating results.

The joint venture in Northwestern Mexico subject us to risks associated with the legislative, judicial, accounting, regulatory, political, economic and other risks and conditions specific to that country, which could adversely affect our business, financial condition and operating results.

        We are currently engaged, through one of our wholly owned subsidiaries, in the operation of 13 Smart & Final stores in Northwestern Mexico through a joint venture. For each of our fiscal year 2013 and the twenty-four weeks ended June 15, 2014, our Mexican operations generated approximately 12% and 3%, respectively, of our income from continuing operations. As a result of our expansion activities into Northwestern Mexico, we expect that our international operations could account for a larger portion of our net income in future years. Our future operating results in Mexico could be adversely affected by a variety of factors, most of which are beyond our control. These factors include political conditions and instability, economic conditions, legal and regulatory constraints, anti-money laundering laws and regulations, trade policies, currency regulations and other matters in this region, now or in the future. Foreign currency exchange rates and fluctuations may have an effect on our future costs or on future cash flows from our Mexican operations and could adversely affect our financial condition and operating results. Moreover, the economy in Mexico has in the past suffered from high rates of inflation and currency devaluations, which, if they occur again, could adversely affect our financial condition and operating results. Other factors that may affect, and additional risks inherent in, our Mexican operations include:

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The various risks inherent in doing business in the U.S. generally also exist when doing business outside of the United States and may be exaggerated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations.

        In Mexico, our associates, contractors or agents could, in contravention of our policies, engage in business practices prohibited by U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act, and we are subject to the risk that one or more of our associates, contractors or agents, including those based in or from countries where practices that violate such U.S. laws and regulations or the laws and regulations of other countries may be customary, will engage in business practices that are prohibited by our policies, circumvent our compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by our internal policies, could adversely affect our business, financial condition and operating results.

        We also license certain of our trademarks to our Mexico joint venture for use in connection with operating the Smart & Final brand in Mexico. If the licensee fails to maintain the quality of the goods and services used in connection with these trademarks, our rights to and the value of this and similar trademarks could potentially be harmed. Also, negative publicity relating to the licensee could also be incorrectly associated with us, which could harm our business.

We have significant debt service obligations and may incur additional indebtedness in the future, which could adversely affect our financial condition and operating results and our ability to react to changes to our business.

        As of June 15, 2014, on a pro forma basis, after giving effect to the application of the net proceeds of this offering as described in "Use of Proceeds," we would have had outstanding indebtedness of approximately $           million. We may incur additional indebtedness in the future, including borrowings under our Revolving Credit Facility. We will continue to have significant debt service obligations following the closing of this offering. Our existing indebtedness, and any additional indebtedness we may incur could require us to divert funds identified for other purposes for debt service and impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt, dispose of assets or issue equity to obtain necessary funds. We do not know whether we will be able to take any of such actions on a timely basis, on terms satisfactory to us or at all.

        The fact that a substantial portion of our cash flow from operations could be needed to make payments on our indebtedness could have important consequences, including the following:

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        Our ability to obtain necessary funds through borrowing will depend on our ability to generate cash flow from operations. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us under our Credit Facilities or otherwise in amounts sufficient to enable us to fund our liquidity needs, our financial condition and operating results may be adversely affected. Our inability to make scheduled payments on our debt obligations in the future would require us to refinance all or a portion of our indebtedness on or before maturity, sell assets, delay capital expenditures or seek additional equity investment.

Covenants in our debt agreements restrict our operational flexibility.

        The agreements governing our Credit Facilities contain usual and customary restrictive covenants relating to our management and the operation of our business, including restrictions on the ability of certain of our domestic direct and indirect subsidiaries to:

        In addition, the Credit Facilities place certain restrictions on Intermediate Holdings with respect to the incurrence or creation of additional liens on the equity interests of certain subsidiaries, the preservation of its corporate existence and the maintenance of its passive holding company status.

        The Revolving Credit Facility includes a "springing" financial maintenance covenant, applicable when availability under the Revolving Credit Facility has fallen below a threshold level and for a specified period of time thereafter. At any time when the financial maintenance covenant is applicable, Smart & Final Stores LLC is required to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0. Our ability to satisfy the financial maintenance covenant under the Revolving Credit Facility, if applicable, could be affected by events beyond our control. Failure to comply with any of the covenants under either of our Credit Facilities could result in a default under the same and a cross-default from one Credit Facility to the other, which could cause our lenders to accelerate the timing of payments and exercise their lien on substantially all of our assets, which would adversely affect our business, financial condition and operating results.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

        Our borrowings under our Credit Facilities bear interest at variable rates and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same and our net income would decrease. A hypothetical 0.50% increase in LIBOR rates applicable to borrowings under the Term Loan Facility, after giving effect to this offering, would increase interest expense related to such debt by approximately $         million per year, and a hypothetical 0.50% increase in LIBOR rates applicable to

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borrowings under the Revolving Credit Facility would increase interest expense related to such debt by approximately $         million per year, assuming the Revolving Credit Facility is fully borrowed.

Our ability to raise capital in the future may be limited.

        Our business and operations may consume resources faster than we anticipate. To support our growth strategy, we must have sufficient capital to continue to make significant investments in our new and existing stores and advertising. We cannot assure you that cash generated by our operations will be sufficient to allow us to fund such expansion. In the future, we may need to raise additional funds through credit, the issuance of new equity or debt securities or a combination of both. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. If we obtain credit or issue new debt securities, the debt holders would have rights senior to holders of our common stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities, existing stockholders will experience dilution and the new equity securities could have rights senior to those of our common stock. Because our decision to obtain credit or issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of such transactions. Thus, you bear the risk of our future indebtedness or securities offerings reducing the market price of our common stock and/or diluting your interest.

        In addition, the credit and securities markets and the financial services industry have recently experienced disruption characterized by the bankruptcy, failure, collapse or sale of various financial institutions, increased volatility in securities prices, diminished liquidity and credit availability and intervention from the U.S. and other governments. The cost and availability of credit has been and may continue to be adversely affected by these conditions. We cannot be certain that funding for our capital needs will be available from our existing financial institutions and the credit and securities markets if needed, and if available, to the extent required, and on acceptable terms.

        The Term Loan Facility matures on November 15, 2019, and the Revolving Credit Facility matures on November 15, 2017. If we cannot renew or refinance our Credit Facilities facility upon their respective maturities or, more generally, obtain funding when needed, in each case on acceptable terms, we may be unable to continue our current rate of growth and store expansion, which may have an adverse effect on our sales and operating results.

If our goodwill becomes impaired, we may be required to record a significant charge to earnings.

        We have a significant amount of goodwill. As of June 15, 2014, we had goodwill of approximately $611 million, which represented approximately 38% of our total assets as of such date. Goodwill is reviewed for impairment on an annual basis in the fourth fiscal quarter or whenever events occur or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount. Fair value is determined based on the discounted cash flows and comparable market values of our two reporting units (our Smart & Final stores and our Cash & Carry stores). If the fair value of the reporting unit is less than its carrying value, the fair value of the implied goodwill is calculated as the difference between the fair value of our reporting unit and the fair value of the underlying assets and liabilities, excluding goodwill. In the event an impairment to goodwill is identified, an immediate non-cash charge to earnings in an amount equal to the excess of the carrying value over the implied fair value would be recorded, which would adversely affect our operating results. See "Management's Discussion and Analysis of Financial Condition and Operating Results—Critical Accounting Estimates—Goodwill and Intangible Assets."

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        Determining market values using a discounted cash flow method requires that we make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate market rates. Our judgments are based on historical experience, current market trends and other information. In estimating future cash flows, we rely on internally generated forecasts for operating profits and cash flows, including capital expenditures. Based on our annual impairment test during fiscal years 2013, 2012 and 2011, no goodwill impairment charge was required to be recorded. Changes in estimates of future cash flows caused by items such as unforeseen events or changes in market conditions could adversely affect our reporting units' respective fair values and result in an impairment charge. Factors that could cause us to change our estimates of future cash flows include a prolonged economic crisis, successful efforts by our competitors to gain market share in our core markets, our inability to compete effectively with other retailers or our inability to maintain price competitiveness. An impairment of a significant portion of our goodwill could adversely affect our financial condition and operating results.

Risks Related to this Offering and Ownership of Our Common Stock

You may not be able to resell your shares at or above the offering price or at all, and our stock price may be volatile, which could result in a significant loss or impairment of your investment.

        Prior to this offering, there has been no public market for our common stock. An active public market for our common stock may not develop or be sustained after this offering, in which case it may be difficult for you to sell your shares of our common stock at a price that is attractive to you or at all. The price of our common stock in any such market may be higher or lower than the price that you pay in this offering. If you purchase shares of our common stock in this offering, you will pay a price that was not established in a competitive market. Rather, you will pay the price that we negotiated with the representatives of the underwriters, which may not be indicative of prices that will prevail in the trading market.

        The trading price of our common stock may be volatile and subject to wide price fluctuations in response to various factors, many of which are beyond our control, including those described above in "—Risks Related to Our Business and Industry" and the following:

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        Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations sometimes have been unrelated or disproportionate to the operating performance of those companies. These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise adversely affect the price or liquidity of our common stock.

        In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, we could incur substantial costs defending it or paying for settlements or damages. Such a lawsuit could also divert the time and attention of our management from our operating business. As a result, such litigation may adversely affect our business, financial condition and operating results.

Our principal stockholder will continue to have substantial control over us after this offering, will be able to influence corporate matters and may take actions that conflict with your interests and have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of other stockholders to approve transactions they deem to be in their best interest.

        Upon the closing of this offering, our directors, executive officers and holders of more than 5% of our common stock, together with their affiliates, will beneficially own, in the aggregate, approximately            % of our outstanding common stock. Ares will beneficially own, in the aggregate, approximately            % of our outstanding common stock, or approximately            % if the underwriters exercise in full the option to purchase additional shares from Ares. As a result, these stockholders acting together, or Ares acting alone, will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of us or all or substantially all of our assets. The interests of Ares could conflict in material respects with yours, and this concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

The large number of shares eligible for public sale in the future, or the perception of the public that these sales may occur, could depress the market price of our common stock.

        The market price of our common stock could decline as a result of (i) sales of a large number of shares of our common stock in the market after this offering, particularly sales by our directors, employees (including our executive officers) and significant stockholders, and (ii) a large number of shares of our common stock being registered or offered for sale. These sales, or the perception that these sales could occur, may depress the market price of our common stock. We will have            shares of common stock outstanding after this offering (or            shares if the underwriters' option to purchase additional shares is exercised in full). Of these shares, the common stock sold in this offering will be freely tradable, except for any shares purchased by our "affiliates" as defined in Rule 144 ("Rule 144") promulgated under the Securities Act of 1933, as amended (the "Securities Act").

        Additionally, as of the closing of this offering,            shares of our common stock will be issuable upon exercise of stock options that vest and are exercisable at various dates through            , 2024, with an average weighted exercise price of $            per share. Of such options,             are currently

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exercisable. As soon as practicable after the closing of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register shares of our common stock issued or reserved for issuance under the Incentive Plans. The Form S-8 registration statement will become effective immediately upon filing, and shares covered by that registration statement will thereupon be eligible for sale in the public markets, subject to vesting restrictions, the lock-up agreements described below and Rule 144 limitations applicable to affiliates.

        We expect our executive officers and directors and substantially all of our stockholders, including the selling stockholders, to agree to a lock-up agreement, pursuant to which neither we nor they will sell any shares without the prior consent of the representatives of the underwriters for 180 days after the date of this prospectus, subject to certain exceptions and extensions under certain circumstances. In addition, participants in the directed share program described under "Underwriting (Conflicts of Interest)—Directed Share Program" will be subject to similar restrictions during the 180-day period beginning on the date of this prospectus, except with the prior written consent of Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC. Following the expiration of the applicable lock-up period, all these shares of our common stock will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144. In addition, Ares has certain demand registration rights, and all of our stockholders have piggyback registration rights with respect to the common stock that they will retain following this offering. See "Shares Eligible for Future Sale" for a discussion of the shares of common stock that may be sold into the public market in the future, including common stock held by Ares.

        Sales of common stock as restrictions end may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

You will incur immediate and substantial dilution in your investment because our earlier investors paid substantially less than the initial public offering price when they purchased their shares.

        If you purchase shares in this offering, you will incur immediate and substantial dilution of $            in net tangible book value per share (or $            if the underwriters' option to purchase additional shares from the selling stockholders is exercised in full), based on an assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, because the price that you pay will be substantially greater than the net tangible book value per share of the shares acquired. This dilution arises because our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. Furthermore, there will be options to purchase shares of common stock outstanding upon the closing of this offering that have exercise prices below the initial public offering price. To the extent such options are exercised in the future, there may be further dilution to new investors. See "Dilution."

In the future, we expect to issue options, restricted stock and/or other forms of share-based compensation, which have the potential to dilute stockholders, value and cause the price of our common stock to decline.

        We expect to offer stock options, restricted stock and/or other forms of share-based compensation to our directors and employees in the future. If any options that we issue are exercised or any restrictions on restricted stock that we issue lapse, and those shares are sold into the public market, the market price of our common stock may decline. In addition, the availability of shares of common stock for award under the Incentive Plans or the grant of stock options, restricted stock or other forms of share-based compensation may adversely affect the market price of our common stock.

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Our future operating results may fluctuate significantly and our current operating results may not be a good indication of our future performance. Fluctuations in our quarterly or annual operating results could affect our stock price in the future.

        Our operating results have historically varied from period to period and we expect that they will continue to do so as a result of a number of factors, many of which are outside of our control. If our quarterly or annual operating results or our forecasts of future operating results fail to meet the expectations of securities analysts and investors, our common stock price could be adversely affected. Any volatility in our quarterly or annual financial results may make it more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our stock. Our operating results for prior periods may not be effective predictors of our future performance.

        Factors associated with our industry, the operation of our business and the markets for our products may cause our quarterly and annual operating results to fluctuate, including those factors discussed elsewhere in this prospectus.

Although we do not expect to rely on the "controlled company" exemption, since we will qualify as a "controlled company" within the meaning of the New York Stock Exchange upon completion of this offering, we will qualify for exemptions from certain corporate governance requirements.

        Under the rules of the New York Stock Exchange (the "NYSE"), a company of which more than 50% of the voting power is held by another person or group of persons acting together is a "controlled company" and may elect not to comply with certain rules of the NYSE regarding corporate governance, including:

        These requirements will not apply to us as long as we remain a "controlled company." Although we will qualify as a "controlled company" upon completion of this offering, we do not expect to rely on this exemption, and we intend to fully comply with all corporate governance requirements under the rules of the NYSE. However, if we were to utilize some or all of these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of the rules of the NYSE regarding corporate governance.

Conflicts of interest may arise because some of our directors are representatives of our principal stockholder.

        Funds affiliated with Ares Management may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. In addition, Richard A. Anicetti and Norman H. Axelrod provide consulting services to Ares Management and Ares, and Dennis T. Gies, David B. Kaplan and Adam L. Stein are partners or employees of Ares Management or its affiliates. As a result of these relationships, when conflicts arise between the interests of Ares and its affiliates, on the one hand, and the interests of the Company and our other stockholders, on the other hand, these directors may not be disinterested. Although our

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directors and officers have a duty of loyalty to the Company, under Delaware law, transactions that we enter into in which a director or officer has a financial interest are not void or voidable solely as a result of such interest so long as (i) the material facts relating to the director's or officer's relationship or interest and as to the transaction are disclosed or are known to our board of directors and a majority of our disinterested directors, or a committee consisting solely of disinterested directors approves the transaction, (ii) the material facts relating to the director's or officer's relationship or interest and as to the transaction are disclosed or are known to our stockholders and a majority of our disinterested stockholders specifically approves the transaction or (iii) the transaction is otherwise fair to us. Under our amended and restated certificate of incorporation (our "certificate of incorporation"), representatives of Ares are not required to offer to us any business opportunity of which they become aware and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them in writing solely in their capacity as an officer or director of us.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

        Our management will have broad discretion to use the net proceeds from this offering and you will be relying on the judgment of our management regarding the application of such proceeds. Our management might not apply the net proceeds of this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering to pay down indebtedness, to fund our growth initiatives and for general corporate purposes. We have not allocated these net proceeds for any specific purposes. Our management might not be able to generate a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence management's decisions regarding how to use the net proceeds from this offering.

Anti-takeover provisions could impair a takeover attempt and adversely affect existing stockholders and the market value of our common stock.

        Certain provisions of our certificate of incorporation and bylaws that will be in effect upon the closing of this offering and applicable provisions of Delaware law may have the effect of rendering more difficult, delaying or preventing an acquisition of our company, even when such an acquisition would be in the best interest of our stockholders. These provisions include:

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        Our issuance of shares of preferred stock could delay, defer or prevent a change of control of the Company without further action by our stockholders, even where stockholders are offered a premium for their shares. Our board of directors has the authority to cause us to issue, without any further vote or action by our stockholders, up to            shares of preferred stock, par value $0.001 per share, in one or more series, to designate the number of shares constituting any series and to fix the rights, preferences, privileges of such series and qualifications, limitations and restrictions thereof, including, without limitation, dividend rights, voting rights, conversion rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.

        In addition, the issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock. We currently do not anticipate issuing any shares of preferred stock in the foreseeable future.

        These provisions could delay or prevent hostile takeovers and changes in control or changes in our management. Also, the issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in our common stock less attractive. For example, a conversion feature could cause the trading price of our common stock to decline to the conversion price of the preferred stock. Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control or otherwise makes an investment in our common stock less attractive could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. See "Description of Capital Stock."

The provision of our certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

        Our certificate of incorporation, as it will be in effect upon the closing of this offering, will require, to the fullest extent permitted by law, unless otherwise consented to by us, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (the "DGCL") or our certificate of incorporation or the bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies and by

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avoiding the time and expense of multi-forum litigation, the provision may have the effect of discouraging lawsuits against our directors and officers.

Since we do not expect to pay any cash dividends for the foreseeable future, investors in this offering may be forced to sell their stock in order to obtain a return on their investment.

        We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock. Instead, we plan to retain any earnings to finance our operations and growth plans discussed elsewhere in this prospectus. In addition, our Credit Facilities contain covenants that would restrict the ability of our operating subsidiaries to pay cash dividends to us. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our common stock.

We will incur increased costs as a result of being, and our management has limited experience managing, a public company, and our current resources may not be sufficient to fulfill our public company obligations.

        We will incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations of the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), the Dodd-Frank Act of 2010 and the listing requirements of the NYSE. These requirements, including record keeping, financial reporting and corporate governance rules and regulations, will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Any changes that we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis or at all.

        Our management and other personnel have limited experience in managing a public company and will need to devote a substantial amount of time to ensure that we comply with all of these requirements. Our internal infrastructure may not have adequate resources to support the increased reporting obligations associated with being a public company and we may be unable to hire, train or retain necessary staff and may initially be reliant on engaging outside consultants or professionals to overcome our lack of experience. Our business could be adversely affected if our internal infrastructure is inadequate, we are unable to engage outside consultants or are otherwise unable to fulfill our public company obligations.

If we are unable to implement and maintain effective internal control over financial reporting in the future, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline.

        As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, we will be required to file a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act beginning with our 2015 annual report on Form 10-K to be filed in 2016. We are in the process of designing, implementing and testing the internal control over financial reporting required to comply with this future obligation, which is a time-consuming, costly and complicated process. In addition, beginning with our 2015 annual report on Form 10-K to be filed in 2016, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.

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        If we identify any material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected. In addition, we could become subject to investigations by the NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources.

Our holding company structure makes us dependent on our subsidiaries for our cash flow and subordinates your rights as a stockholder to the rights of creditors of our subsidiaries in the event of an insolvency or liquidation of any of our subsidiaries.

        We are a holding company and, accordingly, substantially all of our operations are conducted through our subsidiaries. Our subsidiaries are separate and distinct legal entities. As a result, our cash flow depends upon the earnings of our subsidiaries. In addition, we depend on the distribution of earnings, loans or other payments by our subsidiaries to us, which is restricted by the covenants in the agreements governing our Credit Facilities. Our subsidiaries have no obligation to provide us with funds for our payment obligations. If there is an insolvency, liquidation or other reorganization of any of our subsidiaries, you as a stockholder will have no right to proceed against their assets. Creditors of those subsidiaries will be entitled to payment in full from the sale or other disposal of the assets of those subsidiaries before we, as a stockholder, would be entitled to receive any distribution from that sale or disposal.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our industry, or if they adversely change their recommendations regarding our stock, our stock price and trading volume could decline.

        The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our industry or our competitors. If we do not establish and maintain adequate research coverage or if any of the analysts who may cover us downgrade our stock, publish inaccurate or unfavorable research about our business or provide relatively more favorable recommendations about our competitors, our stock price could decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports about us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus, including the sections entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," contains forward-looking statements. All statements other than statements of historical fact contained in this prospectus, including statements regarding our future operating results and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as "may," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions.

        The forward-looking statements contained in this prospectus reflect our views as of the date of this prospectus about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results, performance or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements in this prospectus are reasonable, we cannot guarantee future events, results, performance or achievements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements in this prospectus, including, without limitation, those factors described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Some of the key factors that could cause actual results to differ from our expectations include the following:

        Readers are urged to consider these factors carefully in evaluating the forward-looking statements in this prospectus and are cautioned not to place undue reliance on these forward-looking statements. All of the forward-looking statements in this prospectus are based on information available to us on the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.

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USE OF PROCEEDS

        We estimate that our net proceeds from the sale of our common stock in this offering will be approximately $           million, assuming an initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

        A $1.00 increase (decrease) in the assumed initial public offering price of $          per share would increase (decrease) the net proceeds to us from this offering by $           million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us. Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us from this offering by $           million, assuming the assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

        We intend to use approximately $           million of the net proceeds from this offering to repay borrowings under the Term Loan Facility. As of June 15, 2014, the interest rate on the Term Loan Facility, which is scheduled to mature on November 15, 2019, was 4.75%. See "Description of Certain Indebtedness" for more information. We intend to use the remaining net proceeds from this offering to fund our growth initiatives and for general corporate purposes. We will have broad discretion in the way we use the net proceeds.

        Affiliates of Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Guggenheim Securities, LLC, underwriters in this offering, are lenders under the Term Loan Facility and therefore will receive a portion of the net proceeds of this offering. See "Underwriting (Conflicts of Interest)."

        In addition, funds affiliated with Ares hold approximately 10% of the outstanding loans under the Term Loan Facility and will receive funds representing their pro rata portion of such loans.

        We will not receive any proceeds from the sale of shares by the selling stockholders, which are entities affiliated with Ares Management, pursuant to the underwriters' option to purchase additional shares. See "Principal and Selling Stockholders."

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DIVIDEND POLICY

        We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Our Credit Facilities contain covenants that would restrict our ability to pay cash dividends. See "Risk Factors—Risks Related to Our Business and Industry—Covenants in our debt agreements restrict our operational flexibility."

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of June 15, 2014 on:

        The table below should be read in conjunction with "Use of Proceeds," "Selected Historical Consolidated Financial Information and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Capital Stock," and our consolidated financial statements and the related notes included in this prospectus.

 
  As of June 15, 2014  
 
  Actual   Pro Forma(1)  
 
  (in thousands, except
share data)

 

Cash and cash equivalents

  $ 65,561   $             
           
           

Long-term debt (including current portion and debt discount of $8,912)

  $ 703,276        
           

Stockholders' equity:

             

Undesignated preferred stock, par value $0.001 per share; 375,000 shares authorized, no shares issued and outstanding, actual and pro forma

                    

Common stock, par value $0.001 per share; 750,000 shares authorized, actual;           shares authorized, pro forma; 303,195 shares issued and outstanding, actual;           shares issued and outstanding, pro forma

           

Additional paid-in capital

    312,324        

Retained earnings/(accumulated deficit)

    12,505        

Accumulated other comprehensive income

    29,061        
           

Total stockholders' equity

  $ 353,890   $    
           

Total capitalization

  $ 1,057,166   $    
           
           

(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would result in approximately a $             million increase (decrease) in the pro forma amounts of each of (i) cash and cash equivalents, (ii) long-term debt, including current portion, (iii) total debt, (iv) additional paid-in capital, (v) total stockholders' equity and (vi) total capitalization, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would result in approximately a $             million increase (decrease) in the pro forma amounts of each of (i) cash and cash equivalents, (ii) long-term debt, including current portion, (iii) total debt, (iv) additional paid-in capital, (v) total stockholders' equity and (vi) total capitalization, assuming the assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

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DILUTION

        If you invest in our common stock, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering.

        The net tangible book value of our common stock as of June 15, 2014 was $           million, or $          per share. Net tangible book value is the amount of our total tangible assets less our total liabilities. Net tangible book value per share is our net tangible book value, divided by the number of outstanding shares, after giving effect to the             -for-one stock split of our common stock to be effected prior to the closing of this offering.

        Pro forma net tangible book value and pro forma net tangible book value per share give effect to the (i) the sale by us of            shares of common stock in this offering at an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount and estimated offering expenses payable by us, and (ii) application of the net proceeds received by us as described under "Use of Proceeds." The pro forma net tangible book value of our common stock as of June 15, 2014 was approximately $           million, or approximately $          per share. This represents an immediate increase in pro forma net tangible book value of $          per share to our existing stockholders and an immediate dilution of $          per share to investors purchasing common stock in this offering.

        The following table illustrates this dilution on a per share basis to new investors:

Assumed initial public offering price per share

        $           

Net tangible book value per share as of June 15, 2014

  $                 

Increase in pro forma net tangible book value per share attributable to new investors purchasing shares in this offering

                    
             

Pro forma net tangible book value per share after this offering

                    
             

Dilution per share to new investors purchasing shares in this offering

        $           
             
             

        A $1.00 increase (decrease) in the assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus would increase (decrease) the pro forma net tangible book value after this offering by $          per share and the dilution to new investors by $          per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

        Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the pro forma net tangible book value (deficit) after this offering by approximately $          per share and decrease (increase) the dilution in pro forma to investors participating in this offering by approximately $          per share, assuming the assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

        If the underwriters were to fully exercise their option to purchase additional shares of our common stock from the selling stockholders, the pro forma net tangible book value per share as of                        , 2014 would be $          per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $          per share.

        The table below summarizes, as of June 15, 2014, on a pro forma basis described above, the number of shares of our common stock, the total consideration and the average price per share (i) paid to us by our existing stockholders and (ii) to be paid by new investors purchasing our common stock in

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this offering at an assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discount and estimated offering expenses payable by us.

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased    
 
 
  Average Price Per
Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                          % $                       % $           

New investors

                          %                         %             
                       

Total

                 100.0 %                100.0 %             
                       
                       

        A $1.00 increase (decrease) in the assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors by $          and increase (decrease) the percentage of total consideration paid by new investors by         %, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

        Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) total consideration paid by new investors by $          and increase (decrease) the percent of total consideration paid by new investors by        %, assuming the assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

        If the underwriters' option to purchase additional shares from the selling stockholders in this offering is exercised in full, the percentage of shares of our common stock held by existing stockholders will be reduced to        % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by new investors will increase to          shares, or        % of the total number of shares of our common stock outstanding after this offering.

        The discussion and tables above are based on            shares of our common stock outstanding as of June 15, 2014, assuming the            -for-one stock split of our common stock to be effected prior to the closing of this offering, and exclude the following:

        If all of these outstanding options were exercised, then our existing stockholders, including the holders of these outstanding options, would own        % and our new investors would own        % of the total number of shares of our common stock outstanding upon the closing of this offering. In such event, the total consideration paid by our existing stockholders, including the holders of these outstanding options, would be approximately $           million, or        %, the total consideration paid by our new investors would be $           million, or        %, the average price per share paid by our existing stockholders would be $          , and the average price per share paid by our new investors would be $          .

        In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

        The following table sets forth our selected historical consolidated financial information and other data for the periods and dates indicated, and should be read together with "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and unaudited interim consolidated financial statements related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our financial condition or operating results to be expected in the future.

        The consolidated statements of operations data for the year ended December 29, 2013, the period from January 2, 2012 through November 14, 2012, the period from November 15, 2012 through December 30, 2012, and the year ended January 1, 2012, and the consolidated balance sheet data as of December 29, 2013 and December 30, 2012 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the years ended January 2, 2011 and January 3, 2010 and the consolidated balance sheet data as of January 1, 2012, January 2, 2011 and January 3, 2010 have been derived from our audited consolidated financial statements not included in this prospectus. The consolidated statements of operations for the twelve-week and twenty-four-week periods ended June 15, 2014 and June 16, 2013 and the consolidated balance sheet data as of June 15, 2014 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The consolidated balance sheet data as of June 16, 2013 has been derived from our unaudited interim consolidated financial statements of our business not included in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of our management, include all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the information set forth herein. Interim financial results are not necessarily indicative of results that may be expected for the full fiscal year or any future reporting period.

        In connection with the Ares Acquisition, as a result of the application of business combination accounting, the assets and liabilities of the Company were adjusted to their estimated fair values as of the closing date of the Ares Acquisition. We refer to the Company prior to the Ares Acquisition as the "Predecessor." The periods prior to the Ares Acquisition are referred to as the "Predecessor periods" and the periods following the Ares Acquisition are referred to as the "Successor periods." Our fiscal year 2012 is therefore divided into a Predecessor period from January 2, 2012 through November 14, 2012 and a Successor period from November 15, 2012 through December 30, 2012. Accordingly, in this prospectus, financial information is presented separately for Predecessor and Successor periods, which relate to the accounting periods preceding and succeeding the closing of the Ares Acquisition.

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  Successor    
  Predecessor  
 
  Twenty-
Four
Weeks
Ended
June 15,
2014
  Twenty-
Four
Weeks
Ended
June 16,
2013
  Twelve
Weeks
Ended
June 15,
2014
  Twelve
Weeks
Ended
June 16,
2013
  Fiscal Year
2013
  Period From
November 15,
2012 Through
December 30,
2012
   
  Period From
January 2,
2012 Through
November 14,
2012
  Fiscal Year
2011
  Fiscal Year
2010
  Fiscal Year
2009(1)
 
 
  (Dollars in thousands, except per share data)
 

Consolidated Statement of Operations Data:

                                                                 

Net sales

  $ 1,563,087   $ 1,446,101   $ 828,071   $ 755,943   $ 3,210,293   $ 378,550       $ 2,664,162   $ 2,840,336   $ 2,591,116   $ 2,558,183  

Cost of sales, buying and occupancy

    1,330,313     1,232,778     699,886     642,528     2,736,357     333,787         2,265,154     2,412,180     2,218,618     2,176,160  
                                               

Gross margin

    232,774     213,323     128,185     113,415     473,936     44,763         399,008     428,156     372,498     382,023  

Operating and administrative expenses

    193,849     174,039     101,491     88,463     387,133     51,727         355,681     379,371     341,921     344,547  

Income (loss) on property sales

                        (5 )       8,818     1,952          
                                               

Income (loss) from operations

    38,925     39,284     26,694     24,952     86,803     (6,959 )       34,509     46,833     30,577     37,476  

Interest expense, net

    17,758     25,429     8,922     12,467     50,365     7,133         20,761     31,395     33,330     42,134  

(Loss) on early extinguishment of debt(2)

        (7,139 )       (7,139 )   (24,487 )               (4,209 )        

Equity in earnings of joint venture

    714     521     262     172     1,649             820     785     1,772     330  
                                               

Income (loss) from continuing operations before income taxes

    21,881     7,237     18,034     5,518     13,600     (14,092 )       14,568     12,014     (981 )   (4,328 )

Income tax (provision) benefit

    (8,259 )   (2,110 )   (6,919 )   (1,920 )   (5,429 )   4,804         (244 )   (4,795 )   920     1,418  
                                               

Income (loss) from continuing operations

    13,622     5,127     11,115     3,598     8,171     (9,288 )       14,324     7,219     (61 )   (2,910 )

Income (loss) from discontinued operations, net of income taxes(3)

                                    3,260     (12,870 )   10,987  
                                               

Net income (loss)

  $ 13,622   $ 5,127   $ 11,115   $ 3,598   $ 8,171   $ (9,288 )     $ 14,324   $ 10,479   $ (12,931 ) $ 8,077  
                                               

Per Share Data:

   
 
   
 
   
 
   
 
   
 
   
 
       
 
   
 
   
 
   
 
 

Basic earnings (loss) per share:

                                                                 

Income (loss) per share from continuing operations

  $ 45.24   $ 17.13   $ 36.88   $ 12.02   $ 27.22   $ (31.04 )     $ 1.07   $ 0.54   $ (0.00 ) $ (0.22 )

Income (loss) per share from discontinued operations, net of income taxes

                                    0.24     (0.96 )   0.82  
                                               

Basic earnings (loss) per share

  $ 45.24   $ 17.13   $ 36.88   $ 12.02   $ 27.22   $ (31.04 )     $ 1.07   $ 0.78   $ (0.97 ) $ 0.60  
                                               

Diluted earnings (loss) per share:

                                                                 

Income (loss) per share from continuing operations

  $ 43.64   $ 16.48   $ 35.61   $ 11.55   $ 26.14   $ (31.04 )     $ 1.03   $ 0.54   $ (0.00 ) $ (0.22 )

Income (loss) per share from discontinued operations, net of income taxes

                                    0.24     (0.96 )   0.82  
                                               

Diluted earnings (loss) per share

  $ 43.64   $ 16.48   $ 35.61   $ 11.55   $ 26.14   $ (31.04 )     $ 1.03   $ 0.78   $ (0.97 ) $ 0.60  
                                               

Weighted average shares outstanding—basic

    301,133     299,304     301,365     299,407     300,158     299,201         13,363,635     13,362,665     13,367,108     13,377,740  

Weighted average shares outstanding—diluted

    312,121     311,098     312,172     311,516     312,566     299,201         13,927,566     13,425,470     13,367,108     13,377,740  

Selected Operating Data:

   
 
   
 
   
 
   
 
   
 
   
 
       
 
   
 
   
 
   
 
 

Comparable store sales growth(4)

    5.3 %   4.9 %   6.3 %   4.7 %   4.0 %   5.3 %       6.9 %   9.5 %   2.9 %   3.8 %

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    4.2 %   4.5 %   4.9 %   4.3 %   3.4 %   5.2 %       7.3 %   9.4 %   2.8 %   5.5 %

Cash & Carry banner

    8.4 %   6.1 %   10.5 %   5.9 %   6.1 %   5.5 %       5.4 %   9.7 %   3.3 %   (1.3 )%

Stores at end of period

   
246
   
237
   
246
   
237
   
240
   
235
       
236
   
234
   
234
   
234
 

Smart & Final banner

    194     185     194     185     188     183         184     182     182     182  

Extra! format

    80     63     80     63     69     56         56     46     35     32  

Cash & Carry banner

    52     52     52     52     52     52         52     52     52     52  

Square feet at end of period

   
5,101,815
   
4,820,201
   
5,101,815
   
4,820,201
   
4,899,403
   
4,756,165
       
4,774,486
   
4,697,834
   
4,665,795
   
4,633,109
 

Average store size at end of period(5)

    20,739     20,338     20,739     20,338     20,414     20,239         20,231     20,076     19,939     19,800  

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  Successor    
  Predecessor  
 
  As of    
  As of  
 
  June 15,
2014
  June 16,
2013
  December 29,
2013
  December 30,
2012
   
  November 14,
2012
  January 1,
2012
  January 2,
2011
  January 3,
2010
 
 
  (Dollars in thousands, except per share data)
 

Consolidated Balance Sheet Data:

                                                     

Cash and cash equivalents

  $ 65,561   $ 67,548   $ 53,699   $ 35,987       $ 92,676   $ 72,462   $ 32,092   $ 52,971  

Total assets

    1,627,431     1,585,086     1,599,541     1,572,914         1,049,039     1,038,384     1,377,212     1,398,627  

Long-term debt (including current portion and debt discount)

    703,276     700,049     706,191     704,734         304,074     303,258     728,613     735,502  

Total stockholders' equity

    353,890     314,925     341,859     307,023         287,076     248,579     225,813     242,771  

(1)
Fiscal year 2009 was comprised of a 53-week period.

(2)
In the second and fourth quarters of 2013, we recognized a loss on early extinguishment of debt of $24.5 million in the aggregate in connection with a repricing amendment to our Term Loan Facility. In the second quarter of 2011, we recognized a loss on early extinguishment of debt of $4.2 million in connection with an amendment to our prior term loan facility to permit the sale of Henry's. See Note 5, Debt, to the audited consolidated financial statements included elsewhere in this prospectus.

(3)
In the second quarter of 2011, we sold Henry's to Sprouts. In the fourth quarter of 2010, we closed five stores in Colorado. Accordingly, the consolidated statements of operations data for our fiscal years 2011, 2010 and 2009 reflect the results of operations of Henry's and the five stores separately as discontinued operations. The results of operations of Henry's and the five stores are immaterial for fiscal years 2013 and 2012 and are not presented separately as discontinued operations.

(4)
For more information regarding our calculation of comparable store sales growth, see "Comparable Store Sales" on page ii of this prospectus.

(5)
Average store size is calculated as the gross square feet divided by the stores open at the end of the period presented.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        You should read the following discussion and analysis of our financial condition and results of operations together with "Selected Historical Consolidated Financial Information and Other Data" and the consolidated financial statements and related notes that are included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" or in other parts of this prospectus. Please also see the section entitled "Special Note Regarding Forward-Looking Statements."

Business Overview

        We are a high-growth, value-oriented food retailer serving a diverse demographic of household and business customers through two complementary and highly productive store banners: Smart & Final and Cash & Carry. We operate 250 non-membership, warehouse-style stores throughout the Western United States, with an additional 13 stores in Northwestern Mexico in a joint venture. We have a differentiated merchandising strategy that emphasizes high quality perishables, a wide selection of private label products, products tailored to business and foodservice customers and products offered in a broad range of sizes.

        We consider each of our store banners to be an operating segment, and have concluded that presenting disaggregated information for our two operating segments provides meaningful information because of differences in their respective economic characteristics and customer bases. For our fiscal year 2013, our Smart & Final and Cash & Carry segments represented approximately 75.5% and 24.5%, respectively, of our consolidated sales, compared to 75.7% and 24.3%, respectively, for our fiscal year 2012.

        Our Smart & Final segment is based in Commerce, California and includes 111 legacy Smart & Final stores and 87 Extra! format stores, which focus on household and business customers and are located in California, Arizona and Nevada. Our Smart & Final stores offer extensive selections of fresh perishables and everyday grocery items, together with a targeted selection of foodservice, packaging and janitorial products, under both national and private label brands. Our Extra! store format offers a one-stop shopping experience with a more expansive selection of items than our legacy Smart & Final stores and an emphasis on perishables and household items. The continued development of our Extra! store format, through additional new store openings and conversions and relocations of legacy Smart & Final stores, is the cornerstone of our growth strategy.

        Our Cash & Carry segment is based in Portland, Oregon and includes 52 Cash & Carry stores, which focus primarily on business customers and are located in Washington, Oregon, Northern California, Idaho and Nevada. Our Cash & Carry stores offer a wide variety of SKUs tailored to the core needs of foodservice customers such as restaurants, caterers and a wide range of other foodservice businesses in a flexible mix of "case quantity" or single unit purchases.

Outlook

        We plan to expand our store footprint, primarily through opening new Extra! stores in existing and adjacent markets, and by entering new markets. We believe we have a scalable operating infrastructure to support our anticipated growth which, together with our flexible real estate strategy and advanced distribution capabilities, position us to capitalize on our growth opportunities. We plan to continue converting our larger legacy Smart & Final stores to our Extra! format and investing in our legacy Smart & Final stores that are not candidates for conversion to the Extra! format by completing major remodel projects and targeted relocations. We also plan to opportunistically grow our Cash & Carry store footprint.

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        In addition, we plan to leverage our significant investments in management, information technology systems, infrastructure and marketing to grow our comparable store sales and enhance our operating margins through execution of a number of key initiatives, including initiatives to increase net sales of perishable products in our Smart & Final stores, to increase net sales of private label products in our Smart & Final and Cash & Carry stores, and to expand our marketing programs in our Smart & Final and Cash & Carry stores. We expect each of these key initiatives, if successful, to generate increased comparable store sales and also expect our initiative to increase net sales of private label products to enhance our operating margins, as private label products have historically generated higher gross margins relative to national branded products.

Factors Affecting Our Results of Operations

        Various factors affect our results of operations during each period, including:

Store Openings

        We expect that a primary driver of our growth in sales and gross margin will be the continued development of our Extra! format stores through new store openings, conversions and relocations. We also plan to opportunistically open new Cash & Carry stores, which will further amplify sales and gross margin. Our results of operations have been and will continue to be materially affected by the timing and number of new store openings, including conversions and relocations of legacy Smart & Final stores to the Extra! format, and the amount of associated costs. For example, we typically incur higher than normal employee costs at the time of a new store opening, conversion or relocation associated with set-up and other related costs. Also, our operating margins are typically negatively affected by promotional discounts and other marketing costs associated with new store openings, conversions and relocations, as well as higher inventory markdowns and costs related to hiring and training new employees in new stores. Additionally, promotional activities may result in higher than normalized sales in the first several weeks following a new store opening. Our new Extra! and Cash & Carry stores typically build a customer base over time and reach a mature sales growth rate in the third and fourth year after opening, respectively. As a result, our new stores generally have lower margins and higher operating expenses, as a percentage of sales, than our more mature stores.

        Based on our experience, we expect that certain of our new Extra! stores will impact sales at our existing stores in close proximity in the short term. However, we believe that over the longer term any such sales impact will be more than offset by future sales growth and expanded market share.

Developments in Competitive Landscape

        We operate in the highly competitive food retail and foodservices industries. We compete on a combination of factors, including price, product selection, product quality, convenience, customer service, store format and location. Our principal competitors include conventional grocers such as Albertsons, Kroger and Safeway, discounters and warehouse clubs such as Costco, mass merchandisers such as Walmart and Target, foodservice delivery companies such as Sysco and US Foods, as well as online retailers and other specialty stores. Some of our competitors may have greater financial or marketing resources than we do and may be able to devote greater resources to sourcing, promoting and selling their products. These competitors could use these advantages to take certain measures, including reducing prices that could adversely affect our competitive position, business, financial condition and operating results.

Pricing Strategy and Investments in "Everyday Low Prices"

        We have a commitment to "everyday low prices," which we believe positions both our Smart & Final and Cash & Carry stores as top of mind destinations for our target customers. Pricing in our

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Smart & Final stores is targeted to be substantially lower than that of conventional grocers and competitive with that of large discounters and warehouse clubs, with no membership fee requirement. Pricing in our Cash & Carry stores is targeted to be substantially lower than our foodservice delivery competitors, with greater price transparency to customers and no minimum order size, and competitive with typical warehouse clubs.

        Our pricing strategy is geared toward optimizing the pricing and promotional activities across our mix of higher-margin perishable items and everyday value-oriented traditional grocery items. This strategy involves determining prices that will improve our operating margins based upon our analysis of how demand varies at different price levels as well as our costs and inventory levels.

Expanded Private Label Offerings

        Private label products are key components of our pricing and merchandising strategy, as we believe they build and deepen customer loyalty, enhance our value proposition, generate higher gross margins relative to national brands and improve the breadth and selection of our product offering. We believe that a strong private label offering has become an increasingly important competitive advantage in the food retail and foodservices industries.

        As of the end of fiscal year 2013, we had a portfolio of over 2,500 private label items, which represented 29% of our Smart & Final banner sales. Typically, our private label products generate a higher gross margin as a percentage of sales as compared to a comparable national brand product.

General Economic Conditions and Changes in Consumer Behavior

        The overall economic environment in the markets we serve, particularly California, and related changes in consumer behavior, have a significant impact on our business and results of operations. In general, positive conditions in the broader economy promote customer spending in our stores, while economic weakness results in reduced customer spending. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include employment rates, business conditions, changes in the housing market, the availability of consumer credit, interest rates, tax rates and fuel and energy costs.

        Although continuing economic weakness has decreased overall consumer spending, we believe that many consumers are spending less of their overall food budget on meals away from home and more at food retailers. As a result, we believe that the impact of the recent economic slowdown on our results of operations has at least been partially mitigated by increased consumer preferences for meals at home. Further, our primary markets feature relatively stable local economies with diversified employer bases and stable to modestly growing populations.

Infrastructure Investment

        Our historical results of operations reflect the impact of our ongoing investments in infrastructure to support our growth. We have made significant investments in senior management, information technology systems, supply chain systems and marketing. These investments include significant additions to our personnel, including experienced industry executives and management and merchandising teams to support our long-term growth objectives. We plan on continuing to make targeted investments in our infrastructure as necessary to support our growth.

Inflation and Deflation Trends

        Inflation and deflation can impact our financial performance. During inflationary periods, our results of operations can be positively impacted in the short term, as we sell lower-priced inventory in a higher price environment. Over the longer term, the impact of inflation is largely dependent on our

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ability to pass through product cost increases to our customers, which is subject to competitive market conditions. In recent inflationary periods, we have generally been able to pass through most cost increases. While food deflation moderated in fiscal year 2011, we began to experience inflation starting in early fiscal year 2012, particularly in some commodity driven categories, although we were generally able to pass through the effect of these higher prices. Food inflation moderated in early fiscal year 2013 and was essentially flat through the remainder of calendar year 2013.

Changes in Interest Expense and Loss on Debt Extinguishment

        Our interest expense in any particular period is impacted by our overall level of indebtedness during that period and by changes in the applicable interest rates on such indebtedness. In connection with the Ares Acquisition, we entered into the Term Loan Facility and the Second Lien Term Loan Facility (as defined below), consisting of $525.0 million and $195.0 million of term indebtedness, respectively, and our $150.0 million Revolving Credit Facility. We recorded a $24.5 million loss on the early extinguishment of debt in fiscal year 2013, no such loss in the 2012 Predecessor or Successor periods and a $4.2 million loss in Predecessor fiscal year 2011. The losses in fiscal year 2013 were primarily the result of two amendments to the Term Loan Facility, which resulted in changes to the applicable margin and the incurrence of additional term loans under the Term Loan Facility, the proceeds of which were used to repay all amounts outstanding under the Second Lien Term Loan Facility (as defined below). Additionally, because we have a Term Loan Facility and a Revolving Credit Facility, each of which bears interest at a rate based in part on LIBOR, the federal funds rate or the prime rate, we are exposed to fluctuations in interest rates.

Components of Results of Operations

Net Sales

        We recognize revenue from the sale of products at the point of sale. Discounts provided to customers at the time of sale are recognized as a reduction in sales as the products are sold. Sales tax collections are presented in the statement of operations and comprehensive income (loss) on a net basis and, accordingly, are excluded from reported sales revenues. Proceeds from the sale of our Smart & Final gift cards are recorded as a liability at the time of sale, and recognized as sales when they are redeemed by the customer. Our Smart & Final gift cards do not have an expiration date. We have not recorded any unredeemed gift card revenue or breakage related to our gift card program.

        We regularly review and monitor comparable store sales growth to evaluate and identify trends in our sales performance. With respect to any fiscal period during any year, comparable store sales include sales for stores operating both during such fiscal period in such year and in the same fiscal period of the previous year. Sales from a store will be included in the calculation of comparable store sales after the 60th full week of operations, and sales from a store are also included in the calculation of comparable store sales if (i) the store has been physically relocated, (ii) the selling square footage has been increased or decreased or (iii) the store has been converted to a new format within a store banner (e.g., from a legacy Smart & Final store to the Extra! format). However, sales from an existing store will not be included in the calculation of comparable store sales if the store has been converted to a different store banner (e.g., from Smart & Final to Cash & Carry).

Cost of Sales, Buying and Occupancy and Gross Margin

        The major categories of costs included in cost of sales, buying and occupancy are cost of goods sold, distribution costs, costs of our buying department and store occupancy costs, net of earned vendor rebates and other allowances. Distribution costs consist of all warehouse receiving and inspection costs, warehousing costs, all transportation costs associated with shipping goods from our warehouses to our stores, and other costs of our distribution network. Store occupancy costs include store rental, common

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area maintenance, property taxes, property insurance, depreciation and amortization of favorable and unfavorable leasehold interests.

        Gross margin represents sales less cost of sales, buying and occupancy. Our gross margin may not be comparable to other retailers, since not all retailers include all of the costs related to their distribution network in cost of sales like we do. Some retailers exclude a portion of these costs (e.g., store occupancy and buying department costs) from cost of sales and include them in selling, general and administrative expenses.

        Our cost of sales, buying and occupancy expense and gross margin are correlated to sales volumes. As sales increase, gross margin is affected by the relative mix of products sold, pricing strategies, inventory shrinkage and improved leverage of fixed costs.

Operating and Administrative Expenses

        Operating and administrative expenses include direct store-level expenses associated with displaying and selling our products at the store level, including salaries and benefits for our store work force, fringe benefits, store supplies, advertising and marketing and other store-specific costs. Operating and administrative expenses also consist of store overhead costs and corporate administrative costs including salaries and benefits costs, share-based compensation, corporate occupancy costs and amortization expense.

        We expect that our operating and administrative expenses will increase in future periods as a result of additional legal, accounting, insurance and other expenses associated with being a public company and increases resulting from our store development program, including the growth in the number of our stores, as well as increased share-based compensation expense related to equity awards granted to our directors and eligible employees under the 2014 Incentive Plan both in connection with and following this offering and as explained elsewhere in this prospectus.

Income Tax (Provision) Benefit

        We are subject to federal income tax as well as state income tax in various jurisdictions of the United States in which we conduct business. Income taxes are accounted for under the asset and liability method.

Equity in Earnings of Mexico Joint Venture

        Our wholly owned subsidiary, Smart & Final de Mexico S.A. de C.V., is a Mexican holding company that owns a 50% interest in a joint venture. The remaining 50% of the joint venture is owned by Grupo Calimax S.A. de C.V., an entity comprising the investment interests of a family group who are also the owners of the Calimax grocery store chain in Mexico. As of June 15, 2014, this joint venture operated 13 Smart & Final stores in Northwestern Mexico, which are similar in concept to our legacy Smart & Final stores. This joint venture operates as a Mexican domestic corporation under the name Smart & Final del Noroeste, S.A. de C.V. Our interest in this joint venture is not consolidated and is reported using the equity method of accounting.

Factors Affecting Comparability of Results of Operations

        We were formed by affiliates of Ares Management in connection with the Ares Acquisition, which was consummated on November 15, 2012. Upon completion of the Ares Acquisition, each share of Smart & Final Holdings Corp. was converted into the right to receive cash, for an aggregate cash consideration of approximately $669.5 million. In addition, payments in satisfaction of the Smart & Final Holdings Corp. stock options aggregated $54.2 million. As of the end of fiscal year 2013, Ares Management and Smart & Final Holdings Corp. reached agreement on the final calculation of working

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capital adjustment, which resulted in an increase in the purchase price of $2.5 million. Our consolidated balance sheets and consolidated statements of cash flows reflect this change in the purchase price. The Ares Acquisition was accounted for as a business combination in accordance with Accounting Standards Codification ("ASC"), Business Combinations ("ASC 805"), whereby the purchase price paid to effect the acquisition was assigned to the assets acquired and the liabilities assumed based on their fair values at the acquisition date. The determination of fair value included the consideration of various factors including quoted market prices, expected future cash flows, current replacement costs, market rate assumptions and appropriate discounts and growth rates.

Basis of Presentation

        Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. Each of our 52-week fiscal years consists of twelve-week periods in the first, second and fourth quarters of the fiscal year and a sixteen-week period in the third quarter. Our last three completed fiscal years ended on December 29, 2013, December 30, 2012 and January 1, 2012.

        The accompanying consolidated financial information presents the financial position of the Successor as of December 29, 2013 and December 30, 2012 and the results of operations and cash flows of the Successor for fiscal year 2013 and for the period from November 15, 2012 through December 30, 2012, as well as the financial position of the Predecessor as of January 1, 2012 and the results of operations and cash flows of the Predecessor for the period from January 2, 2012 through November 14, 2012 and fiscal year 2011.

        The consolidated financial information for all Predecessor periods has been prepared using the historical basis of accounting for the Company. Due to the significance of the Ares Acquisition and related transactions, as well as our application of purchase accounting with respect to the Ares Acquisition, our capitalization and basis of accounting have changed. Therefore, the financial information, other than net sales, for all Successor periods is not comparable to that of the Predecessor periods presented in the following tables and elsewhere in this prospectus.

Results of Operations

        The following discussion of our financial performance includes supplemental unaudited pro forma condensed consolidated financial information for fiscal year 2012 and fiscal year 2011. Because the Ares Acquisition occurred during the fourth quarter of 2012, we believe this pro forma information aids in the comparison between historical periods presented. The pro forma information does not purport to represent what our results of operations would have been had the Ares Acquisition actually occurred at the beginning of fiscal year 2011, nor does it purport to project our results of operations or financial condition for any future period.

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        The following table contains results of operations for the twelve weeks and twenty-four weeks ended June 15, 2014 and June 16, 2013, respectively, and results of operations for fiscal year 2013, results of operations for the period from November 15, 2012 through December 30, 2012, results of operations for the period from January 2, 2012 through November 14, 2012 and results of operations for fiscal year 2011.

 
   
   
   
   
   
   
   
   
   
 
 
  Successor    
  Predecessor  
 
  Twenty-Four
Weeks Ended
June 15, 2014
  Twenty-Four
Weeks Ended
June 16, 2013
  Twelve
Weeks Ended
June 15, 2014
  Twelve
Weeks Ended
June 16, 2013
  Fiscal Year
2013
  Period From
November 15, 2012
Through
December 30, 2012
   
  Period From
January 2, 2012
Through
November 14, 2012
  Fiscal Year
2011
 
 
  (Dollars in thousands, except per share)
 
 
   
   
   
   
   
   
   
   
   
 

Net sales

  $ 1,563,087   $ 1,446,101   $ 828,071   $ 755,943   $ 3,210,293   $ 378,550       $ 2,664,162   $ 2,840,336  

Cost of sales, buying and occupancy

    1,330,313     1,232,778     699,886     642,528     2,736,357     333,787         2,265,154     2,412,180  
                                       

Gross margin

    232,774     213,323     128,185     113,415     473,936     44,763         399,008     428,156  

Operating and administrative expense

    193,849     174,039     101,491     88,463     387,133     51,727         355,681     379,371  

Loss (gain) on asset sales

                        (5 )       8,818     1,952  
                                       

Income from operations

    38,925     39,284     26,694     24,952     86,803     (6,959 )       34,509     46,833  

Interest expense, net

    17,758     25,429     8,922     12,467     50,365     7,133         20,761     31,395  

(Loss) on early extinguishment of debt

        (7,139 )       (7,139 )   (24,487 )               (4,209 )

Equity in earnings of joint venture

    714     521     262     172     1,649             820     785  
                                       

Income (loss) from continuing operations before income taxes

    21,881     7,237     18,034     5,518     13,600     (14,092 )       14,568     12,014  

Income tax (provision) benefit

    (8,259 )   (2,110 )   (6,919 )   (1,920 )   (5,429 )   4,804         (244 )   (4,795 )
                                       

Income (loss) from continuing operations

    13,622     5,127     11,115     3,598     8,171     (9,288 )       14,324     7,219  

Income (loss) from discontinued operations, net of income taxes

                                    3,260  
                                       

Net income (loss)

  $ 13,622   $ 5,127   $ 11,115   $ 3,598   $ 8,171   $ (9,288 )     $ 14,324   $ 10,479  
                                       
                                       

Earnings (loss) per share:

                                                     

Net income (loss) per share—Basic

  $ 45.24   $ 17.13   $ 36.88   $ 12.02   $ 27.22   $ (31.04 )     $ 1.07   $ 0.78  

Net income (loss) per share—Diluted

  $ 43.64   $ 16.48   $ 35.61   $ 11.55   $ 26.14   $ (31.04 )     $ 1.03   $ 0.78  

        The table below sets forth the components of our consolidated statements of operations as a percentage of net sales:

 
  Successor    
  Predecessor  
 
   
 
 
  Twenty-Four
Weeks Ended
June 15, 2014
  Twenty-Four
Weeks Ended
June 16, 2013
  Twelve
Weeks Ended
June 15, 2014
  Twelve
Weeks Ended
June 16, 2013
  Fiscal Year
2013
  Period From
November 15, 2012
Through
December 30, 2012
   
  Period From
January 2, 2012
Through
November 14, 2012
  Fiscal Year
2011
 

Net sales

    100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %       100.0 %   100.0 %

Cost of sales, buying and occupancy

    85.1 %   85.2 %   84.5 %   85.0 %   85.2 %   88.2 %       85.0 %   84.9 %
                                       

Gross margin

    14.9 %   14.8 %   15.5 %   15.0 %   14.8 %   11.8 %       15.0 %   15.1 %

Operating and administrative expense

    12.4 %   12.0 %   12.3 %   11.7 %   12.1 %   13.7 %       13.4 %   13.4 %

Loss (gain) on asset sales

    0.0 %   0.0 %   0.0 %   0.0 %       0.0 %       0.3 %   0.1 %
                                       

Income from operations

    2.5 %   2.7 %   3.2 %   3.3 %   2.7 %   (1.8 )%       1.3 %   1.6 %

Interest expense, net

    1.1 %   1.8 %   1.1 %   1.6 %   1.6 %   1.9 %       0.8 %   1.1 %

(Loss) on early extinguishment of debt

    0.0 %   0.5 %   0.0 %   0.9 %   0.8 %               0.1 %

Equity in earnings of joint venture

    0.0 %   0.0 %   0.0 %   0.0 %   0.1 %   0.0 %       0.0 %   0.0 %
                                       

Income (loss) from continuing operations before income taxes

    1.4 %   0.5 %   2.2 %   0.7 %   0.4 %   (3.7 )%       0.5 %   0.4 %

Income tax (provision) benefit

    (0.5 )%   (0.1 )%   (0.8 )%   (0.3 )%   (0.2 )%   1.3 %       0.0 %   (0.2 )%
                                       

Income (loss) from continuing operations

    0.9 %   0.4 %   1.3 %   0.5 %   0.3 %   (2.5 )%       0.5 %   0.3 %

Income (loss) from discontinued operations, net of income taxes

    0.0 %   0.0 %   0.0 %   0.0 %                   0.1 %