FOR IMMEDIATE RELEASE
FOR MORE INFORMATION CONTACT
Investor Contact: Dave Staples, Executive Vice President & CFO, (616) 878-8319
Media Contact: Jeanne Norcross, Director Corporate Communications, (616)
SPARTAN STORES REACHES AGREEMENTS TO SELL CONVENIENCE DISRIBUTION SUBSIDIARIES
L&L JIROCH AND J.F. WALKER
Focuses on Core Grocery Operations; Continues Strengthening Balance Sheet
GRAND RAPIDS, Mich. May 8, 2003 - Spartan Stores, Inc., (Nasdaq:SPTN) today
announced that it has signed a definitive agreement with The H.T. Hackney
Company, a Knoxville, Tennessee wholesale convenience-store distributor, to
sell substantially all of the assets of its convenience-store distribution
subsidiaries L&L Jiroch Company and J.F. Walker Company, Inc. These
subsidiaries generated $720 million in sales for the fiscal year ended March
29, 2003 from distribution facilities in Grand Rapids, Michigan, Louisville,
Kentucky, and Columbus, Ohio. The transaction does not include Spartan's
subsidiary, United Wholesale Grocery Company; a 12 location cash and carry
convenience-store distribution operation.
Under terms of the agreement, H.T. Hackney and its affiliates are expected to
pay Spartan Stores approximately $42 million in cash and assume certain
liabilities. The final purchase price will be adjusted to reflect changes in
asset and liability levels pending closing. The Company intends to use the net
proceeds from the transaction to reduce outstanding bank borrowings. It expects
to complete the transaction in 45 days.
"We are pleased to have reached an agreement with The H.T. Hackney Company,"
stated Spartan Stores' President and Chief Executive Officer, Craig C. Sturken.
"The sale is a sound transaction for both parties that will further strengthen
our financial position and allow us to focus resources on our core grocery
operations," said Mr. Sturken.
Mr. Bill Sansom, Chairman and Chief Executive Officer of H.T. Hackney
commented, "We are very enthused about the addition of L&L Jiroch and J.F.
Walker to our organization. The transaction is an ideal strategic fit for
Hackney, as it provides a strong complement to our existing products,
customers, and geographic distribution network."
Spartan Stores, Inc., (Nasdaq:SPTN) Grand Rapids, Michigan, owns and operates
80 supermarkets and 21 deep-discount drug stores in Michigan and Ohio,
including Ashcraft's Markets, Family Fare Supermarkets, Food Town, Glen's
Markets, Great Day Food Centers, Prevo's Family Markets and The Pharm. The
Company also distributes more than 40,000 private-label and national brand
products to more than 330 independent grocery stores.
Established in 1891, The H.T. Hackney Company is one of the largest
privately-owned wholesale distributors in the United States with revenues in
excess of $3.0 billion upon completion of this transaction. The Company serves
over 20,000 retail customers and stocks more than 25,000 products in
strategically located distribution centers that extend its distribution network
to 21 states.
This press release contains forward-looking statements about Spartan Stores'
plans, strategies, objectives, goals, and expectations. These forward-looking
statements are identifiable by words or phrases indicating that Spartan Stores
or management "expects," "anticipates," or similarly stated expectations.
Accounting estimates, including but not limited to asset impairment charges,
exit cost accruals and insurance loss reserves, are inherently forward-looking
statements. These forward-looking statements are subject to a number of factors
that could cause actual results to differ materially. Our ability to strengthen
our financial conditions and improve our grocery operations and implement the
transactions, plans, strategies, objectives, goals or expectations described in
this press release will be affected by, among other factors, ability to comply
with terms and conditions of the purchase agreement, competitive pressures
among food retail and distribution companies; changes in economic conditions
generally or in the markets and geographic areas that we serve; integration of
our acquisitions and our retail and distribution operations; adverse effects of
the changing food and distribution industries; sales declines; loss of
customers or suppliers; continued compliance with our credit facility; and
labor shortages or stoppages. Additional information about these and other
factors that may adversely effect these forward-looking statements are
contained in Spartan Stores' reports and filings with the Securities and
Exchange Commission. Spartan Stores undertakes no obligation to update or
revise any forward-looking statements to reflect developments or information
obtained after the date of this press release.