Nash Finch Company (Nasdaq: NAFC), a Fortune 500 Minneapolis-based food retailer and distributor, today reported for the third quarter ended October 6, 2001, that net earnings rose 50 percent to $6.0 million, or 50 cents per diluted share, compared to net earnings of $4.0 million, or 35 cents per diluted share, reported for the third quarter of 2000. Total revenues for the third quarter of 2001 were $1.275 billion versus revenues of $1.205 billion for the third quarter of 2000, a 6 percent increase.

EBITDA (earnings from operations before interest, taxes, depreciation, amortization, LIFO and non-recurring items) totaled $36.8 million in the third quarter of 2001, or 2.9 percent of sales, an 18 percent increase over EBITDA in the third quarter of 2000 of $31.3 million, or 2.6 percent of sales.

Excluding goodwill amortization, which will no longer occur beginning in 2002 due to a new accounting pronouncement, net earnings would have been $7.5 million for the third quarter and $18.2 million year-to-date, resulting in diluted earnings per share of 62 cents and $1.53 for the third quarter and year-to-date, respectively.

"This is our eighth consecutive quarter of year-over-year improvement in comparable earnings and we are very pleased with our performance," said Ron Marshall, president and chief executive officer. "Our ongoing focus on outstanding execution, continual improvement and cost elimination continues to drive the company's results."

For the first 40 weeks of 2001, total revenues increased 5 percent to $3.129 billion compared to $2.988 billion in the prior year period. Net earnings rose 38 percent to $14.6 million, or $1.23 per diluted share, versus $10.6 million, or 93 cents per diluted share, in the first 40 weeks of 2000. EBITDA for the 40-week period in 2001 increased 17 percent to $90.2 million, or 2.9 percent of sales, from $76.8 million, or 2.6 percent of sales, in the first 40 weeks of 2000.

"Our first three quarters demonstrate strong growth in total revenues, as well as substantially increased net earnings and EBITDA," said Marshall. "Our earnings guidance for the fourth quarter is 52 to 54 cents per diluted share. This brings the earnings for the year to a range of $1.75 to $1.77 per diluted share, exceeding previously announced guidance of $1.70 to $1.75. For 2002, excluding acquisitions, we are pleased to announce an earnings range of $2.00 to $2.05 per diluted share, calculated on a comparable basis to 2001 earnings. Excluding the effect of goodwill amortization of 40 cents per share, 2002 earnings are expected to range between $2.40 and $2.45 per diluted share."

Business Segments

Revenues in Nash Finch's retail segment for the third quarter of 2001 were $314.9 million compared to revenues of $322.3 million in the third quarter of 2000, a 2 percent decrease. Retail segment EBITDA in the third quarter of 2001 was $17.3 million, or 5.5 percent of sales, versus $15.1 million, or 4.7 percent of sales, in the third quarter of 2000. Retail segment profit in the third quarter 2001 improved by 23 percent to $12.7 million, compared to $10.3 million in the third quarter of 2000.

Contributing to the decreased third quarter revenues was the company's complete exit of corporate-owned retail stores in the Southeast Region. However, in August, the company completed the acquisition of U Save Foods, Inc., a 14-store chain with annual sales of approximately $145 million, operating in Nebraska, Kansas and Colorado. As a result of this acquisition, Nash Finch became the largest supermarket chain in Nebraska with 31 stores. Following the acquisition, all U Save stores were re-bannered as Sun Mart® and were grand opened on October 3, 2001. Factoring in various integration related costs, we expect the U Save acquisition to be accretive to 2001 earnings per share by approximately 4 cents and by approximately 14 cents in 2002. If the chain had been part of the retail segment for the entire quarter, revenue growth of approximately 4 percent would have occurred.

Same-store sales were down 2.3 percent in the third quarter of 2001 and were down .9 percent for the first 40 weeks of 2001. In order to gain future marketing flexibility, Nash Finch reduced promotional activity in certain markets this summer, relative to last summer, which resulted in a significant margin increase. Going forward, Nash Finch intends to drive promotional activity in key marketing areas.

In July, the company announced that Rafael Hernandez and Stacey Mack had joined the management team of Nash Finch's retail operations. Hernandez, who joins Nash Finch from Fiesta Mart, a Texas-based chain of 40 supermarkets and leading retailer targeting the Hispanic market, is director of ethnic retail. He is responsible for development and expansion of the company's Hispanic retail format.

"We are thrilled to announce the new banner for our Hispanic stores -- Avanzando(TM)," said Marshall. "Avanzando means 'to progress' or 'to advance.' And this is just what our new format represents. It will truly be a new, progressive shopping experience for the Hispanic supermarket customer with an appealing mix of merchandise, services and store environment. The first Avanzando stores will open early next year in Denver, Colorado with as many as ten stores opening per year."

Mack joins Nash Finch as director of extreme value retailing, overseeing the expansion of the Buy n Save® format, with experience at several companies, including director of retail operations for Aldi, Inc. Starting in 2002, the Buy n Save format will expand in the Upper Midwest at a rate of at least ten stores per year. Both Hernandez and Mack report directly to Michael Petersen, executive vice president and president of retail operations.

"One of our key strategies is to capitalize on growth opportunities for Nash Finch. After extensive research and development, we know these two store formats, Avanzando and Buy n Save, have significant potential," stated Marshall. "We are very pleased to have the kind of talent, drive and experience Rafael and Stacey offer, enabling us to begin rolling out these two exciting retail concepts. Their contributions are already having a powerful impact."

Nash Finch's food distribution segment revenues improved in the third quarter of 2001 by 13 percent to $655.9 million, compared to $582.4 million in the third quarter of 2000. Segment EBITDA increased to $22.2 million in the third quarter of 2001, or 3.4 percent of sales, from $16.4 million in the third quarter of 2000, or 2.8 percent of sales. Profit in the food distribution segment was $18.6 million in the third quarter of 2001, a 56 percent increase from profit in the third quarter of 2000 of $11.9 million.

In September, the company announced $70 million in additional annualized revenues from several new market-leading customers. This brings the annualized business gained in 2001 to more than $220 million including $20 million related to another recently captured account. These new business gains are a direct reflection of the confidence customers place in the high quality performance of Nash Finch's food distribution business metrics including on-time delivery, selector accuracy and fill-rate.

Nash Finch's store brands, including Our Family®, IGA and Fame®, continue to show consistent growth. Sales of private label products during the first 40 weeks of 2001 increased over 18% compared to the first 40 weeks of 2000. In addition, Nash Finch's Signature Program of branded products, introduced last year, is also demonstrating strong sales growth. The newest signature item, Our Signature(TM) Angus Premium Beef, expands the items exclusively available at Nash Finch's company-owned or supplied stores. In addition, several new vendors recently joined the Signature Partner Program such as Nash Finch's Country Classic Breads(TM) with Campbell's Prego Sauces and ConAgra's Homestyle Bakes partnered with Nash Finch's Kooky Cookie(TM) promotion. Finally, Nash Finch is also developing a Hispanic line of private label products under the Avanzando brand.

Nash Finch began the roll-out of NashNet(TM) in September. NashNet is a retail internet solution providing independent and company-owned retail stores affordable, internet-based technology to access Nash Finch merchandising programs and reports from anywhere. The current features of NashNet include new item introduction, promotional offerings, ordering capability, on-line catalogs, reports, invoices and e-News. This has reduced our new item cycle time and increased awareness of and response to Nash Finch promotional offerings.

"We continue to grow the top-line of our food distribution segment by earning the business of new customers and satisfying the needs of our existing customers. These retailers appreciate our relentless pursuit of the highest performance metrics in the industry," said Marshall. "In addition, we provide our customers a powerful set of tools including NashNet, innovative products, and outstanding merchandising programs and services. This translates into a winning formula for both our customers and for Nash Finch."

The military segment of Nash Finch, which operates distribution centers exclusively dedicated to serving military bases on the east coast of the United States and Europe, increased revenue in the third quarter of 2001 to $304.1 million, up 1 percent from revenues of $299.8 million in the third quarter of 2000. Military EBITDA increased to $7.7 million, compared to $7.5 million in the third quarter of 2000, both representing 2.5 percent of sales. Military segment profit was $7.2 million in the third quarter of 2001, up 3 percent from profits of $7.0 million in the third quarter of 2000.

"The tragic events of September 11 have affected all of us in varying ways," stated Marshall. "Our military business was certainly impacted during the quarter although not significantly. Based on information currently available, we expect overall sales to remain stable for the remainder of the year. It is important to note that the primary customers of the domestic military commissaries we supply include many civilian contract workers and retired military staff who are unaffected by any change in military troop deployment or movement."

Growth Strategy

"We continue to see the rewards of the strategic business plan we introduced three years ago," concluded Marshall. "Going forward, we will continue to remain focused on a four-pronged growth strategy. First, the wholesale segment will continue to successfully grow through new account capture. Second, our conventional retail store base will continue to expand through acquisition. Third, the roll-out of our Avanzando retail format will capitalize on the rapidly growing Hispanic market, and finally, through the expansion of our extreme value retailing format, Buy n Save, we will leverage the opportunity to serve the low income segment of the population."

Nash Finch Company is a Fortune 500 company and one of the leading food retail and distribution companies in the United States with over $4 billion in annual revenues. Nash Finch currently owns and operates 111 stores in the Upper Midwest, principally supermarkets under the Econofoods®, Sun Mart® and Family Thrift Center(TM) trade names. In addition to its retail operations, independent retailers and military commissaries in approximately 28 states and Europe are key customers of Nash Finch's food distribution business. Further information is available on the company's website at http://www.nashfinch.com

Forward-looking statements combined in this news release are made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors may include, but are not limited to: general business conditions, the impact of competition, and other risks detailed from time to time in the Company's periodic reports available from the Security and Exchange Commission.

    NASH FINCH COMPANY AND SUBSIDIARIES
    Condensed Consolidated Statements
     of Operations (unaudited)
     (In thousands, except per share
      amounts)


                                   Sixteen Weeks Ended    Forty Weeks Ended
                                  October 6, October 7, October 6, October 7,
                                     2001       2000       2001       2000

    Total sales and revenues      $1,274,843  1,204,533  3,129,341  2,987,702

    Cost and expenses:
      Cost of sales                1,136,018  1,071,528  2,780,338  2,656,039
      Selling, general and
       administrative                103,894    101,417    261,937    253,320
      Depreciation and
       amortization                   14,139     13,992     35,417     33,896
      Interest expense                10,472     10,628     26,759     26,001
        Total cost and expenses    1,264,523  1,197,565  3,104,451  2,969,256

        Earnings before income
         taxes                        10,320      6,968     24,890     18,446

    Income taxes                       4,272      2,954     10,304      7,821

        Net earnings                   6,048      4,014     14,586     10,625


    Basic earnings per share:          $0.52       0.35       1.26       0.93

    Diluted earnings per share:         0.50       0.35       1.23       0.93

    Weighted average number of
     common shares outstanding
     and common equivalent
     shares outstanding:
      Basic (a)                       11,684     11,471     11,599     11,433
      Diluted (b)                     12,065     11,476     11,889     11,438

      EBITDA (c)                     $36,774     31,321     90,207     76,790
      EBITDA as a percent of
       revenues                         2.88%      2.60%      2.88%      2.57%


    NOTES
    (a) Excluding goodwill amortization, basic EPS would have been $.64 for
        the quarter ended 10/06/2001, $.48 for the quarter ended
        10/07/2000, $1.57 for the year-to-date ended 10/06/2001 and $1.23 for
        the year-to-date ended 10/07/2000

    (b) Excluding goodwill amortization, diluted EPS would have been $.62 for
        the quarter ended 10/06/2001, $.48 for the quarter ended
        10/07/2000, $1.53 for the year-to-date ended 10/06/2001 and $1.23 for
        the year-to-date ended 10/07/2000

    (c) EBITDA (operating cash flow) represents earnings from operations
        before interest, income tax,
        depreciation, amortization, LIFO, gains from the sale of real estate,
        special charges and other
        non-recurring items.


    NASH FINCH COMPANY AND SUBSIDIARIES
    Condensed Consolidated Balance Sheets
    (In thousands)

                                            October 6, December 30, October 7,
                                               2001       2000       2000
                                           (unaudited)            (unaudited)
    Assets

    Current assets:
      Cash                                    $22,844      1,534      9,771
      Accounts and notes receivable, net      134,717    132,992    126,069
      Inventories                             290,565    270,481    287,457
      Other current assets                     24,185     28,532     28,396
        Total current assets                  472,311    433,539    451,693

    Investments and noncurrent receivables     36,661     32,454     33,979

    Property, plant and equipment, net        273,076    256,516    254,776

    Goodwill, net                             138,103    113,584    111,953
    Other assets                               49,802     44,735     43,128

        Total assets                         $969,953    880,828    895,529

    Liabilities and Stockholders' Equity
    Current liabilities:
      Current maturities of long-term
       debt and capitalized lease
       obligations                             $5,666      4,646      3,209
      Accounts payable                        289,088    240,724    262,808
      Accrued and other liabilities           105,778     79,416     75,311
        Total current liabilities             400,532    324,786    341,328

    Long-term debt                            308,445    308,618    315,295
    Capitalized lease obligations              47,588     45,046     42,870
    Deferred credits and other liabilities     13,926     17,838     15,334

    Stockholders' equity                      199,462    184,540    180,702

        Total liabilities and
         stockholders' equity                $969,953    880,828    895,529

    NASH FINCH COMPANY AND SUBSIDIARIES
    Condensed Consolidated Statements
     of Cash Flows (unaudited)
     (In thousands)

                                                       Forty Weeks Ended
                                                  October 6,        October 7,
                                                      2001              2000
    Operating activities:
      Net earnings                                  $14,586            10,625
      Adjustments to reconcile net income
       to net cash provided by operating
       activities:
        Depreciation and amortization                35,417            33,896
        Provision for bad debts                       3,763             5,702
        Deferred income taxes                         6,052             2,415
        Other                                           564              (757)
      Changes in operating assets and
       liabilities                                   85,656            17,540
          Net cash provided by operating
           activities                               146,038            69,421

    Investing activities:
      Net increase in property, plant and
       equipment                                    (26,355)          (29,526)
      Business acquired, net of cash
       acquired                                     (46,904)          (19,890)
      Loans to customers                             (4,837)          (16,148)
      Sale (repurchase) of receivables                  675            (7,245)
      Other                                          (8,043)           (1,054)
        Net cash used for investing
         activities                                 (85,464)          (73,863)

    Financing activities:
      (Payments) proceeds from long-term
       debt                                          (3,593)            1,208
      Dividends paid                                 (3,146)           (3,089)
      Decrease in outstanding checks                (34,402)             (334)
      Other                                           1,877                39

        Net cash used for financing
         activities                                 (39,264)           (2,176)
          Net increase (decrease) in
           cash                                     $21,310            (6,618)


    Supplemental disclosure of cash flow
     information:
      Non cash investing and financing
       activities
        Purchase of real estate under
         capital leases                              $3,866            13,249
        Acquisition of minority
         interests                                   $4,294                --


                                       Sixteen Weeks Ended Forty Weeks Ended
                                          October  October  October  October
                                             6,       7,       6,       7,
                                           2001     2000      2001     2000
    EBITDA Reconciliation
     (In thousands)

    Pre-tax earnings (a)                  10,320    6,968    24,890   18,446

    Add/(deduct)
           LIFO                            1,799     (242)    2,661   (1,055)
           Depreciation and
            amortization                  14,139   13,992    35,417   33,896
           Interest expense               10,472   10,628    26,759   26,001
           Closed store lease
            costs                             --      242       282    1,196
           (Gains)/losses on sales
            of real estate                    44     (267)      198   (1,694)
    Total EBITDA                          36,774   31,321    90,207   76,790

    Other Data (In thousands)

           Cash from operations -
            3rd qtr.                     $44,238    5,205  $146,038   69,421
           Debt to EBITDA - trailing
            4 qtrs. EBITDA                   3.0      3.6       3.0      3.6
           Interest coverage -
            trailing 4 qtrs.                 3.4      3.0       3.4      3.0
           Debt to total
            capitalization                    64%      67%       64%      67%
           Total debt                   $361,699  361,374  $361,699  361,374
           Capital spending -
            3rd qtr.                     $10,103   16,467   $30,516   40,466
           Capitalization               $561,161  542,076  $561,161  542,076
           Stockholders' Equity         $199,462  180,702  $199,462  180,702


    (a) Pre-tax earnings reflect continuing operations only