Nash Finch’s accounting issues seem to be getting worse. In the interest of getting the technicalities right, let’s just give you excerpts from the company’s statement on Friday:
Nash Finch Company today announced that it was notified on February 13, 2003 by the Trustee for the Company's $165,000,000 8 1/2% Senior Subordinated Notes due 2008, that a default had occurred under the Indenture as a result of the Company's failure to file certain financial reports with the Securities and Exchange Commission and that, unless remedied within the 30 day grace period, such failure would constitute an event of default under the Indenture.
If the default is not remedied within 30 days, an event of default will also occur under the Company's bank credit facility. The Company is in discussions with its bank lenders concerning a waiver of the potential event of default. There can be no assurance that the Company will be able to obtain a waiver from the bank lenders. Assuming that the Company's trade credit remains substantially unaffected, and given the Company's strong operating cash flows, the Company does not project requiring borrowings under the credit facility for at least the next 30 days.
Although the Company has not yet filed its financials for the third and fourth quarters of fiscal year 2002, based upon unaudited information prepared under the assumption that the current accounting for Count-Recount charges is determined to be correct, for fiscal 2002 the Company had total sales and revenues of $3.9 billion compared to $4.0 billion for fiscal 2001. While sales were difficult in this competitive environment, based on the same assumption, the Company was able to achieve net earnings… of $29.7 million… as compared to $21.2 million…for the prior fiscal year.
In addition, for the 16-week period ended October 5, 2002, the Company had net earnings of $7.3 million… compared to $6.0 … for the comparable period last year. For the 12-week period ended December 28, 2002, the Company had net earnings of $8.4 million…compared to $6.7 million…for the prior period…
- KC's View:
