|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.3
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following tables provide unaudited pro forma combined financial information for Spartan Stores after giving effect to the merger with Seaway. The following unaudited pro forma combined balance sheet as of June 17, 2000 is based upon the historical consolidated financial statements of Spartan Stores as of that period and of Seaway as of May 27, 2000. The following unaudited pro forma combined statement of earnings for the first quarter ended June 17, 2000 is based upon the historical consolidated financial statements of Spartan Stores for that period and of Seaway for the quarter ended May 27, 2000. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma combined financial statements.
This information is based on adjustments to the historical consolidated financial statements of Spartan Stores and Seaway to give effect to the merger using the purchase method of accounting for business combinations. The pro forma adjustments do not include any of the cost savings and other synergies anticipated to result from the merger. These pro forma results are based on assumptions considered appropriate by management and include adjustments as considered necessary. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of results which would have actually been reported had the merger taken place on March 26, 2000, or which may be reported in the future.
|
Spartan Stores, Inc. |
|||||||||||||
|
|
Seaway |
|
|
|||||||||
|
Current assets: |
|||||||||||||
|
Cash and cash equivalents |
$ 48,071 |
$ 12,811 |
$ - |
$ 60,882 |
|||||||||
|
Marketable securities |
20,984 |
- |
- |
20,984 |
|||||||||
|
Accounts receivable, net |
84,610 |
11,209 |
- |
95,819 |
|||||||||
|
Inventories |
105,787 |
57,292 |
- |
163,079 |
|||||||||
|
Prepaid expenses |
5,810 |
1,022 |
- |
6,832 |
|||||||||
|
Deferred income taxes |
5,716 |
2,205 |
- |
7,921 |
|||||||||
|
Total current assets |
270,978 |
84,539 |
- |
355,517 |
|||||||||
|
Other assets |
135,036 |
6,044 |
39,231 |
180,311 |
|||||||||
|
Property and equipment: |
|||||||||||||
|
Land and improvements |
32,598 |
7,900 |
- |
40,498 |
|||||||||
|
Buildings and improvements |
141,024 |
111,864 |
(73,344 |
) |
179,544 |
||||||||
|
Equipment |
182,288 |
115,961 |
(73,343 |
) |
224,906 |
||||||||
|
Total property and equipment |
355,910 |
235,725 |
(146,687 |
) |
444,948 |
||||||||
|
Less - accumulated depreciation |
(181,035 |
) |
(146,687 |
) |
146,687 |
(181,035 |
) |
||||||
|
Net property and equipment |
174,875 |
89,038 |
- |
263,913 |
|||||||||
|
TOTAL ASSETS |
$ 580,889 |
$ 179,621 |
$ 39,231 |
$ 799,741 |
|||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||
|
Current liabilities: |
|||||||||||||
|
Accounts payable |
$ 83,712 |
$ 48,036 |
$ - |
$ 131,748 |
|||||||||
|
Insurance reserves |
15,012 |
- |
15,012 |
||||||||||
|
Other accrued expenses |
52,058 |
16,569 |
- |
68,627 |
|||||||||
|
Current maturities of long-term debt |
23,588 |
876 |
(876 |
) |
23,588 |
||||||||
|
Total current liabilities |
174,370 |
65,481 |
(876 |
) |
238,975 |
||||||||
|
Long-term debt |
266,010 |
36,976 |
41,521 |
344,507 |
|||||||||
|
Deferred income taxes |
5,212 |
1,343 |
- |
6,555 |
|||||||||
|
Other long-term liabilities |
4,981 |
3,499 |
- |
8,480 |
|||||||||
|
Shareholders' equity: |
|||||||||||||
|
Common stock |
19,942 |
13,425 |
79,008 |
112,375 |
|||||||||
|
Additional paid-in capital |
14,825 |
917 |
(15,742 |
) |
- |
||||||||
|
Retained earnings |
95,549 |
57,980 |
(64,680 |
) |
88,849 |
||||||||
|
Total shareholders' equity |
130,316 |
72,322 |
(1,414 |
) |
201,224 |
||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' |
|
|
|
|
|||||||||
|
Spartan Stores, Inc. |
|||||||||||
|
|
Seaway |
|
|
||||||||
|
Net sales |
$ 725,560 |
$ 171,887 |
- |
$ 897,447 |
|||||||
|
Cost of sales |
630,797 |
125,772 |
|
756,569 |
|||||||
|
Gross margin |
94,763 |
46,115 |
- |
140,878 |
|||||||
|
Selling, general and |
|||||||||||
|
administrative expenses |
83,752 |
39,576 |
226 |
123,554 |
|||||||
|
Operating income |
11,011 |
6,539 |
(226 |
) |
17,324 |
||||||
|
Non-operating expense (income) |
|||||||||||
|
Interest expense |
6,659 |
772 |
962 |
8,393 |
|||||||
|
Interest income |
(1,446 |
) |
- |
(1,446 |
) |
||||||
|
Other (gains) and losses |
(6 |
) |
70 |
- |
64 |
||||||
|
Total non-operating expense, net |
5,207 |
842 |
962 |
7,011 |
|||||||
|
Earnings before income taxes |
5,804 |
5,697 |
(1,188 |
) |
10,313 |
||||||
|
Income taxes |
2,059 |
2,186 |
(416 |
) |
3,829 |
||||||
|
Net earnings |
$ 3,745 |
$ 3,511 |
$ (772 |
) |
$ 6,484 |
||||||
|
Net earnings per share |
$ 0.28 |
$ 0.56 |
$ 0.33 |
||||||||
|
Weighted average shares outstanding: |
|||||||||||
|
Basic |
13,304 |
6,264 |
19,568 |
||||||||
|
Diluted |
13,310 |
6,264 |
19,574 |
||||||||
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
|
1. |
Represents the historical balance sheet of Spartan Stores as of June 17, 2000. |
||
|
2. |
Represents the historical balance sheet of Seaway as of May 27, 2000. |
||
|
3. |
Represents the pro forma adjustments required to account for the merger as a purchase as of June 17, 2000, including the following: |
||
|
• |
To record goodwill in connection with the merger. |
||
|
• |
To capitalize legal and professional costs associated with the transaction. |
||
|
• |
To eliminate historical accumulated depreciation. The fair value of the property and equipment acquired in the merger has yet to be determined. As a result, a portion of the consideration paid in the merger will be allocated to property and equipment once determined. |
||
|
• |
To reflect the financing transactions related to the acquisition. Such financing was presented assuming borrowings under Spartan Stores' acquisition facility, which provides for interest at the applicable LIBOR rate plus 3% per annum. |
||
|
• |
To reflect the one-for-one conversion of the Seaway common stock, no par value, issued and outstanding immediately prior to the effective date of the merger, to Spartan Stores common stock, no par value, and a payment to Seaway shareholders of five dollars ($5.00) in cash per share of Seaway common stock held immediately before the merger. |
||
|
• |
To eliminate Seaway's historical shareholders equity. |
||
|
4. |
Represents the historical statements of earnings of Spartan Stores for the first quarter ended June 17, 2000. |
||
|
5. |
Represents the historical statements of earnings of Seaway for the quarter ended May 27, 2000. |
||
|
6. |
Represents the pro forma adjustments required to account for the merger as a purchase as of March 26, 2000, including the following: |
||
|
• |
To record amortization expense for goodwill acquired and transaction related costs incurred in connection with the merger over the estimated period benefited of 40 years. |
||
|
• |
To record additional interest expense associated with borrowings incurred in connection with the merger. |
||
|
• |
To record provision for federal income taxes. |
||
|
|