NAFC » Topics » Introduction to Pro Forma Combined Financial Statements

This excerpt taken from the NAFC 8-K filed Jun 16, 2005.

Introduction to Pro Forma Combined Financial Statements

 

The following unaudited pro forma combined financial statements are based on the historical financial statements of Nash-Finch Company (“Nash Finch”) and of the Lima, Ohio and Westville, Indiana Wholesale Distribution Divisions and the Van Wert, Ohio and Ironton, Ohio Retail Stores of Roundy’s Supermarkets, Inc. (“the Business”)  after giving effect to the acquisition by Nash Finch of substantially all of the assets of the Business, certain financing transactions described below, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined financial statements. On March 31, 2005, Nash Finch completed the purchase from Roundy’s of substantially all of the assets relating to the Business.  The cash purchase price for the transaction was $225.7 million, subject to adjustment based upon changes in the net assets of the Business acquired through the closing date.  A final determination of the allocation of the purchase price to the assets acquired and liabilities assumed based on their respective fair values is expected during the third quarter of fiscal 2005.  Nash Finch financed the acquisition by using cash on hand, borrowings under its senior secured credit facility, and proceeds from the private placement of senior subordinated convertible notes due 2035, the borrowings and sale of notes referred to as the “financing transactions.”

 

The unaudited pro forma combined financial statements should be read in conjunction with the audited historical financial statements of Nash Finch found in its Annual Report on Form 10-K for the fiscal year ended January 1, 2005, and the audited combined financial statements of the Business found in Item 9.01(a) and Exhibit 99.1 of this Current Report on Form 8-K/A.

 

The unaudited pro forma combined balance sheet as of January 1, 2005 combines the audited consolidated balance sheet of Nash Finch as of January 1, 2005 and the audited combined balance sheet of the Business as of the same date, with pro forma adjustments as if the acquisition and the financing transactions had occurred on January 1, 2005.  The unaudited combined statement of income for the year ended January 1, 2005 combines the audited consolidated statement of operations of Nash Finch for the fiscal year ended January 1, 2005 with the audited combined statement of income of the Business for the fiscal year ended January 1, 2005, with pro forma adjustments as if the acquisition and financing transactions had occurred on January 4, 2004.

 

The unaudited pro forma combined financial statements presented are for informational purposes only and do not purport to represent what Nash Finch’s financial position or results of operations would have been as of the date or for the period presented had the acquisition and the financing transactions in fact occurred on such date or at the beginning of the period indicated, or to project Nash Finch’s financial position or results of operations for any future date or period.  The unaudited pro forma financial statements do not reflect any operating efficiencies and cost savings that Nash Finch may achieve in combining the Business with Nash Finch’s operations

 



 

nor do they include the effect of any repayments of the borrowings under the senior secured credit facility that have already occurred or that are planned. For purposes of preparing Nash Finch’s consolidated financial statements subsequent to the acquisition, Nash Finch will establish a new basis for the assets and liabilities of the Business based upon the fair values thereof and Nash Finch’s purchase price, including the costs of the acquisition.  A final determination of the allocation of the purchase price to the assets acquired and liabilities assumed based on their respective fair values has not yet been completed.  Accordingly, the purchase accounting adjustments made in connection with the development of the unaudited pro forma combined financial statements are preliminary and have been made solely for purposes of developing such unaudited pro forma combined financial statements.  Nash Finch will perform an evaluation to determine the fair value of the assets and liabilities of the Business and will make appropriate purchase accounting adjustments upon completion of that evaluation.   In addition, the net tangible assets of the Business that Nash Finch acquired as of March 31, 2005 differed from the net tangible assets presented in the unaudited combined pro forma balance sheet as of January 1, 2005. As a result of these factors, the actual financial position and results of operations will differ, perhaps significantly, from the pro forma amounts reflected herein.

 



 

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