Leading Independent Proxy Advisory Firm Glass Lewis Recommends SpartanNash Shareholders Vote “FOR” SpartanNash’s Highly Qualified Director Nominees

Food solutions company SpartanNash today announced that leading independent proxy advisory firm Glass Lewis & Co (“Glass Lewis”) has recommended that shareholders vote “FOR” all of SpartanNash director nominees on the WHITE proxy card at the Company’s 2022 Annual Meeting of Shareholders scheduled for June 9, 2022.

In its May 31, 2022 report, Glass Lewis stated:

“Given the leadership changes that have already taken place at SpartanNash over the last two years, including the appointment of a new CEO in September 2020 and three new directors announced earlier this year, together with the Company’s recent encouraging financial results, we believe further deference to management and the incumbent board from shareholders is warranted at this time.”

“We find that the Company has delivered encouraging financial results under the current CEO, including generating total shareholder returns that compare favorably or satisfactorily with industry peers and benchmark indices, while meaningfully growing net sales and adjusted EBITDA from FY2019 to FY2021.”

“In our view, the incumbent board appears to be taking appropriate steps to oversee the Company and the board has been sufficiently refreshed and comprises individuals with an appropriate mix of skills and qualifications, including relevant industry experience.”

” nor do we believe the Dissidents have made a compelling case that their nominees are better suited or better qualified to serve on the board than the candidates nominated by the incumbent board or that the Dissident Nominees would provide necessary experience or qualifications that are currently lacking on the board.”

“We also question whether the Dissident Nominees are well suited to serve as shareholder representatives on the board given that the Dissidents are relatively new shareholders of the Company, with a holding period of approximately six months and appear to have a short-term agenda, focused on a corporate transaction or a significant sale-leaseback, that may not be aligned with the interests of other shareholders, in our view.”

Commenting on the Glass Lewis report, SpartanNash issued the following statement:

We are pleased that Glass Lewis supports voting on the WHITE proxy card to elect all nine of the Company’s highly qualified director nominees and clearly recognizes that SpartanNash has the right Board and the right strategy to continue to deliver enhanced value for shareholders.

Further, Glass Lewis recognizes that Macellum and Ancora (the “Investor Group”) have not offered a sufficiently compelling case to warrant supporting their nominees and that electing their nominees would deprive SpartanNash of skills and expertise that are essential to continuing the Company’s momentum.

The SpartanNash Board has a proven track record of taking decisive, meaningful actions to transform the Company, and our preliminary first quarter financial results and raised fiscal year 2022 guidance demonstrate that our strategy is working. Further, the Company’s new long-term financial targets show a clear path for growth and continued momentum for the next several years.

Importantly, the actions the Board and management have taken are delivering outsized shareholder returns. SpartanNash’s total shareholder return has been 251 percent since the Board transitioned the management team in the summer of 2019i and 88 percent since September 2020 when Tony Sarsam was announced as CEO. The Company has also significantly outperformed the S&P 500 over those same time periods.

Glass Lewis’s recommendation also reaffirms the Board’s conclusion that electing the Investor Group’s slate of nominees, who would bring a short-term agenda fixated on financial engineering or a sale of the Company, is not in the best interests of shareholders. The changes sought by the Investor Group are not only unwarranted but would risk the value of your investment in SpartanNash.

The Company strongly urge shareholders to follow Glass Lewis’s recommendation and vote “FOR” all of SpartanNash’s nominees on the WHITE proxy card.

SpartanNash also made the following statement in response to ISS’s May 27, 2022 report:

SpartanNash strongly believes ISS reached the wrong conclusion – ignoring or dismissing critical facts and, in some cases, misunderstanding actions taken by SpartanNash’s Board.

Importantly, ISS’s report makes only a passing mention of the Investor Group’s ill-considered and short-term agenda focused on a sale-leaseback of critical company assets or the exploration of a sale of the entire Company and seemingly ignores the risks of harm to the Company and potential to destroy shareholder value, despite this agenda being at the center of the Investor Group’s communications to the Company and to shareholders since the dissidents launched their campaign against SpartanNash.

ISS overlooks the fact that the three directors targeted by the Investor Group – Douglas Hacker, Shan Atkins and William Voss – bring expertise critical to advancing the Company’s strategy and have been key architects in developing and overseeing the execution of the Company’s transformation, recruiting new management and refreshing the Board. Hacker, Atkins and Voss are highly qualified and have proven track records of shareholder value creation and unseating these directors would derail SpartanNash’s momentum.

In its report, ISS inaccurately describes the Board’s recent refreshment process. The recruitment of new directors was in fact focused on bringing in skillsets and experience to support the Company’s continued growth and reflected shareholder input. The three new recently appointed directors bring industry, distribution, financial, technology and culture transformation expertise. SpartanNash also believes that when ISS notes that directors with grocery retail and food distribution experience are necessary to drive continued improvement in operational performance, it has overlooked the fact that Atkins and Voss bring such expertise.

In its report, ISS arbitrarily focused on adjusted EBITDA margins compared to SpartanNash’s peers as a key financial metric but failed to recognize that only one of those six peers is a food distribution company and five are food retailers. Food distribution and food retailers are very different businesses with distinctly different profit models and comparing adjusted EBITDA margins of a largely food distribution company like SpartanNash to a largely food retailer is not appropriate. Importantly, ISS’s report rightly noted that “the Company’s 2025 sales target is in line with analyst expectations for growth among SpartanNash’s peers over the same period” and that “the adjusted EBITDA growth implied by the 2025 targets would surpass median industry growth rates since 2015.”

While SpartanNash disagrees with ISS’s recommendation, the Company notes that ISS has recognized the proactive steps the Company has taken to improve its performance and complimented the Board’s refreshment.

In its report, ISS notes:

“To call the company’s board insular would be unfair. Earlier this year, [SpartanNash] underwent a good-faith refresh, recruiting qualified candidates such as a sitting CEO director to mentor the company’s CEO, a director with supply chain and distribution experience and a director with a retail and human resources background. The company’s TSR and valuation are broadly acceptable. The company has improved its safety record under the current CEO. These actions and attributes are not the product of accident but of concerted oversight.”