##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  X
      
 001-13222
   Delaware
    
    33-0350671(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)301 S. Tippecanoe AvenueSan Bernardino, California
    
    92408(Address of principal executive offices)
    
    (Zip Code)Registrants telephone number, including area code
    
    (909) 733-5000
 Not Applicable
 x o
  Large accelerated filer o   
    Accelerated filer
o
    Non-accelerated filer
x
    Smaller reporting company o(Do not check if a smaller reporting company)
 o x
 1




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##### 



STATER BROS. HOLDINGS INC.
March 30, 2008
 INDEX
 PART I
    
    FINANCIAL INFORMATION
    
    PageItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 30, 2007 and 
March 30, 2008 (Unaudited)
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended 
March 25, 2007 and March 30, 2008
    
    5Consolidated Statements of Income (Unaudited) for the 26 weeks ended 
March 25, 2007 and March 30, 2008
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 26 weeks ended 
March 25, 2007 and March 30, 2008
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial 
Condition and Results of Operations
    
    15Item 3.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    27Item 4T.
    
    Controls and Procedures
    
    27PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    28Item 1A.
    
    Risk Factors
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    29Item 3.
    
    Defaults Upon Senior Securities
    
    29Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    29Item 5.
    
    Other Information
    
    29Item 6.
    
    Exhibits
    
    29SIGNATURES
    
    
    
    30EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



PART I
- FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED BALANCE SHEETS
  ASSETS
 Sept. 30,
    
    Mar. 30,2007
    
    2008(Unaudited)Current assetsCash and cash equivalents
    
    $
    277,062
    
    
    $
    208,356Restricted cash
    
    
    8,121
    
    
    
    5,621Receivables, net of allowance of $1,006 in 2007 and $1,830 in 2008
    
    
    46,391
    
    
    
    57,162Inventories
    
    
    202,073
    
    
    
    209,558Prepaid expenses
    
    
    11,026
    
    
    
    11,616Deferred income taxes
    
    
    23,939
    
    
    
    25,842Total current assets
    
    
    568,612
    
    
    
    518,155Property and equipmentLand
    
    
    112,029
    
    
    
    111,539Buildings and improvements
    
    
    479,808
    
    
    
    558,316Store fixtures and equipment
    
    
    403,052
    
    
    
    421,155Property subject to capital leases
    
    
    24,747
    
    
    
    10,0611,019,636
    
    
    
    1,101,071Less accumulated depreciation and
amortization
    
    
    389,992
    
    
    
    399,972629,644
    
    
    
    701,099Deferred income taxes, long-term
    
    
    22,889
    
    
    
    27,040Deferred debt issuance cost, net
    
    
    17,671
    
    
    
    16,066Long-term receivable
    
    
    22,228
    
    
    
    22,228Goodwill
    
    
    2,894
    
    
    
    2,894Other assets
    
    
    6,340
    
    
    
    6,35372,022
    
    
    
    74,581Total assets
    
    $
    1,270,278
    
    
    $
    1,293,835
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS EQUITY
 Sept. 30,
    
    
    Mar. 30,2007

    
    2008(Unaudited)Current liabilitiesAccounts payable
    
    $
    187,978
    
    
    $
    186,788Accrued payroll and related expenses
    
    
    60,761
    
    
    
    58,544Other accrued liabilities
    
    
    77,109
    
    
    
    72,859Accrued income taxes
    
    
    4,727
    
    
    
    2,169Current portion of capital lease obligations
    
    
    1,008
    
    
    
    1,082Total current liabilities
    
    
    331,583
    
    
    
    321,442Long-term debt
    
    
    810,000
    
    
    
    810,000Capital lease obligations, less current portion
    
    
    6,285
    
    
    
    5,726Long-term portion of self-insurance and other reserves
    
    
    36,307
    
    
    
    38,894Long-term deferred benefits
    
    
    57,388
    
    
    
    65,107Other long-term liabilities
    
    
    19,436
    
    
    
    19,105Total liabilities
    
    
    1,260,999
    
    
    
    1,260,274Commitment and contingenciesStockholders equityCommon Stock, $.01 par value:Authorized shares - 100,000Issued and outstanding shares - 0
    
    
    
    
    
    
    Class A Common Stock, $.01 par value:Authorized shares - 100,000Issued and outstanding shares - 35,770
    
    
    
    
    
    
    Additional paid-in capital
    
    
    9,096
    
    
    
    9,096Accumulated other comprehensive loss
    
    
    (9,037
    )
    
    
    (9,037
    )Retained earnings
    
    
    9,220
    
    
    
    33,502Total stockholders equity
    
    
    9,279
    
    
    
    33,561Total liabilities and stockholders equity
    
    $
    1,270,278
    
    
    $
    1,293,835
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
   13 Weeks EndedMar. 25,
    
    
    Mar. 30,2007
    
    2008Sales
    
    $
    866,062
    
    
    $
    925,361Cost of goods sold
    
    
    616,618
    
    
    
    669,083Gross profit
    
    
    249,444
    
    
    
    256,278Operating expensesSelling, general and administrative expenses
    
    
    203,685
    
    
    
    208,532Depreciation and amortization
    
    
    12,085
    
    
    
    13,165Total operating expenses
    
    
    215,770
    
    
    
    221,697Operating profit
    
    
    33,674
    
    
    
    34,581Interest income
    
    
    2,719
    
    
    
    1,622Interest expense
    
    
    (13,749
    )
    
    
    (14,422
    )Other income, net
    
    
    3
    
    
    
    865Income before income taxes
    
    
    22,647
    
    
    
    22,646Income taxes
    
    
    9,187
    
    
    
    9,115Net income
    
    $
    13,460
    
    
    $
    13,531Earnings per average common share outstanding
    
    $
    364.82
    
    
    $
    378.28Average common shares outstanding
    
    
    36,895
    
    
    
    35,770Shares outstanding at end of period
    
    
    36,895
    
    
    
    35,770
  5




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED
STATEMENTS OF INCOME
 26 Weeks EndedMar. 25,
    
    Mar. 30,2007

    
    2008Sales
    
    $
    1,770,416
    
    
    $
    1,868,391Cost of goods sold
    
    
    1,279,082
    
    
    
    1,367,684Gross profit
    
    
    491,334
    
    
    
    500,707Operating expensesSelling, general and administrative expenses
    
    
    405,486
    
    
    
    412,850Depreciation and amortization
    
    
    23,969
    
    
    
    26,073Total operating expenses
    
    
    429,455
    
    
    
    438,923Operating profit
    
    
    61,879
    
    
    
    61,784Interest income
    
    
    5,545
    
    
    
    4,013Interest expense
    
    
    (28,034
    )
    
    
    (28,003
    )Other income (expenses), net
    
    
    (168
    )
    
    
    2,740Income before income taxes
    
    
    39,222
    
    
    
    40,534Income taxes
    
    
    15,860
    
    
    
    16,252Net income
    
    $
    23,362
    
    
    $
    24,282Earnings per average common share outstanding
    
    $
    633.20
    
    
    $
    678.84Average common shares outstanding
    
    
    36,895
    
    
    
    35,770Shares outstanding at end of period
    
    
    36,895
    
    
    
    35,770
  6




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 26 Weeks EndedMar. 25,

    
    Mar. 30,2007

    
    2008Operating activities:Net income
    
    $
    23,362
    
    
    $
    24,282Adjustments to reconcile net income to net cash 
provided by operating activities:Depreciation and amortization
    
    
    29,866
    
    
    
    32,662Amortization of debt issuance costs
    
    
    1,528
    
    
    
    1,605Increase in deferred income taxes
    
    
    (1,605
    )
    
    
    (6,054
    )(Gain) loss on disposals of assets
    
    
    258
    
    
    
    (2,497
    )Changes in operating assets and liabilities:Decrease in restricted cash
    
    
    16,000
    
    
    
    2,500Increase in receivables
    
    
    (1,729
    )
    
    
    (10,771
    )Decrease in income tax receivables
    
    
    3,863
    
    
    
    (Increase) decrease in inventories
    
    
    1,343
    
    
    
    (7,485
    )(Increase) decrease in prepaid expenses
    
    
    (319
    )
    
    
    4,136Increase in other assets
    
    
    (301
    )
    
    
    (13
    )Decrease in accounts payable
    
    
    (2,396
    )
    
    
    (1,190
    )Increase (decrease) in accrued income taxes
    
    
    5,752
    
    
    
    (2,558
    )Decrease in other accrued liabilities
    
    
    (5,207
    )
    
    
    (6,467
    )Increase in long-term reserves
    
    
    8,337
    
    
    
    9,975Net cash provided by operating activities
    
    
    78,752
    
    
    
    38,125Financing activities:Principal payments on capital lease obligations
    
    
    (601
    )
    
    
    (485
    )Net cash used in financing activities
    
    
    (601
    )
    
    
    (485
    )Investing activities:Decrease in short-term investments
    
    
    26,849
    
    
    
    Increase in store construction reimbursements
    
    
    (3,679
    )
    
    
    (4,734
    )Increase in long-term receivable
    
    
    (9,611
    )
    
    
    Purchase of property and equipment
    
    
    (62,121
    )
    
    
    (104,789
    )Proceeds from sale of property and equipment
    
    
    35
    
    
    
    3,177Net cash used in investing activities
    
    
    (48,527
    )
    
    
    (106,346
    )Net increase (decrease) in cash and cash equivalents
    
    
    29,624
    
    
    
    (68,706
    )Cash and cash equivalents at beginning of period
    
    
    198,545
    
    
    
    277,062Cash and cash equivalents at end of period
    
    $
    228,169
    
    
    $
    208,356Interest paid
    
    $
    29,796
    
    
    $
    32,782Income taxes paid
    
    $
    7,850
    
    
    $
    24,950
  7




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  MARCH 30, 2008
 Note 1
 Basis of Presentation
  Note 2
 Recent Accounting Pronouncements
  .
  8




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 30, 2008
 Note 3
 Use of Estimates
  Note 4
 Restricted Cash
  Note 5  Income Taxes
    9




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 30, 2008
 Note 6
 Retirement Plans
   Thirteen Weeks Ended

    
    Twenty-Six Weeks EndedMar. 25,

    
    Mar. 30,

    
    Mar. 25,

    
    Mar. 30,2007

    
    2008
    
    2007
    
    2008(in thousands)
    
    
    (in thousands)Expected return on assets
    
    $
    (663
    )
    
    $
    (785
    )
    
    $
    (1,326
    )
    
    $
    (1,569
    )Service cost
    
    
    665
    
    
    
    657
    
    
    
    1,330
    
    
    
    1,315Interest cost
    
    
    812
    
    
    
    900
    
    
    
    1,625
    
    
    
    1,800Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Amortization of recognized losses
    
    
    223
    
    
    
    151
    
    
    
    446
    
    
    
    302Net pension expense
    
    $
    1,037
    
    
    $
    923
    
    
    $
    2,074
    
    
    $
    1,847Actuarial assumptions used to determine net pension expense were:Discount rate
    
    
    5.80
    %
    
    
    6.25
    %
    
    
    5.80
    %
    
    
    6.25
    %Rate of increase in compensation levels
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %Expected long-term rate of return on
assets
    
    
    6.50
    %
    
    
    6.50
    %
    
    
    6.50
    %
    
    
    6.50
    %
  10




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  MARCH 30, 2008
 Note 7  Segment Information
   Thirteen Weeks
    
    Twenty-Six WeeksRetail
    
    
    All Other
    
    
    Total
    
    
    Retail
    
    
    All Other
    
    
    Total(in thousands)
    
    
    (in thousands)Sales to external customers
    
    $
    842,976
    
    
    $
    23,086
    
    
    $
    866,062
    
    
    $
    1,723,315
    
    
    $
    47,101
    
    
    $
    1,770,416Intersegment sales
    
    
    
    
    
    
    19,263
    
    
    
    19,263
    
    
    
    
    
    
    
    38,066
    
    
    
    38,066Operating profit
    
    
    34,365
    
    
    
    (691
    )
    
    
    33,674
    
    
    
    62,936
    
    
    
    (1,057
    )
    
    
    61,879Net income (loss)
    
    
    22,126
    
    
    
    (8,666
    )
    
    
    13,460
    
    
    
    40,782
    
    
    
    (17,420
    )
    
    
    23,362
   Thirteen Weeks
    
    Twenty-Six WeeksRetail
    
    
    All Other
    
    
    Total
    
    
    Retail
    
    
    All Other
    
    
    Total(in thousands)
    
    
    (in thousands)Sales to external customers
    
    $
    898,686
    
    
    $
    26,675
    
    
    $
    925,361
    
    
    $
    1,811,658
    
    
    $
    56,733
    
    
    $
    1,868,391Intersegment sales
    
    
    
    
    
    
    25,262
    
    
    
    25,262
    
    
    
    
    
    
    
    52,213
    
    
    
    52,213Operating profit
    
    
    34,856
    
    
    
    (275
    )
    
    
    34,581
    
    
    
    61,419
    
    
    
    365
    
    
    
    61,784Net income (loss)
    
    
    20,964
    
    
    
    (7,433
    )
    
    
    13,531
    
    
    
    38,423
    
    
    
    (14,141
    )
    
    
    24,282
  11




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 30, 2008
 Note 8  Subsidiary Guarantee
   Note 9  New Corporate Office and Distribution Center
   Note 10  Credit Facilities
 Markets Credit Facility
   12




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 30, 2008
 Note 10  Credit Facilities (contd.)
    Santees Revolver
       13




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 30, 2008
 Note 11 Litigation Matters
   14




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 PART I  FINANCIAL INFORMATION (contd.)
 
 Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION 
AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES
  Self-Insurance Reserves
  Employee Benefit Plans
   15




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES (contd.)
 Employee Benefit Plans (contd.)
  Long-Lived Assets
   Income Taxes
  Goodwill
  16




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES (contd.)
 Facility Closing Costs
  Advertising Allowances
   Gift Cards and Certificates
  Significant Accounting Policies
  17




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OWNERSHIP OF THE COMPANY
  EXECUTIVE OVERVIEW
      18




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 Thirteen Weeks Ended
    
    ChangeMar. 25,
    
    Mar. 30,
    
    2008 to 2007($ in thousands)
    
    2007
    
    2008
    
    Dollar
    
    %Sales
    
    $
    866,062
    
    
    $
    925,361
    
    
    $
    59,299
    
    
    
    6.85%Gross Profit
    
    $
    249,444
    
    
    $
    256,278
    
    
    $
    6,834
    
    
    
    2.74%as a % of sales
    
    
    28.80%
    
    
    
    27.69%
 Twenty-Six Weeks Ended
    
    ChangeMar. 25,
    
    Mar. 30,
    
    2008 to 2007($ in thousands)
    
    2007
    
    2008
    
    Dollar
    
    %Sales
    
    $
    1,770,416
    
    
    $
    1,868,391
    
    
    $
    97,975
    
    
    
    5.53
    %Gross Profit
    
    $
    491,334
    
    
    $
    500,707
    
    
    $
    9,373
    
    
    
    1.91
    %as a % of sales
    
    
    27.75%
    
    
    
    26.80%
 Sales
  Like Store Sales
    19




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Like Store Sales (contd.)
  Santee Sales
  Gross Profit
  Operating Expenses and Income
 Thirteen Weeks Ended
    
    ChangeMar. 25,
    
    Mar. 30,
    
    2008 to 2007($ in thousands)
    
    2007
    
    2008
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    203,685
    
    
    $
    208,532
    
    
    $
    4,847
    
    
    
    2.38
    %as a % of sales
    
    
    23.51%
    
    
    
    22.53%Depreciation and amortization
    
    $
    12,085
    
    
    $
    13,165
    
    
    $
    1,080
    
    
    
    8.94
    %as a % of sales
    
    
    1.40%
    
    
    
    1.42%Operating profit
    
    $
    33,674
    
    
    $
    34,581
    
    
    $
    907
    
    
    
    2.69
    %as a % of sales
    
    
    3.89%
    
    
    
    3.74%
 Twenty-Six Weeks Ended
    
    ChangeMar. 25,
    
    Mar. 30,
    
    2008 to 2007($ in thousands)
    
    2007
    
    2008
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    405,486
    
    
    $
    412,850
    
    
    $
    7,364
    
    
    
    1.82
    %as a % of sales
    
    
    22.90%
    
    
    
    22.09%Depreciation and amortization
    
    $
    23,969
    
    
    $
    26,073
    
    
    $
    2,104
    
    
    
    8.78
    %as a % of sales
    
    
    1.35%
    
    
    
    1.40%Operating profit
    
    $
    61,879
    
    
    $
    61,784
    
    
    $
    (95
    )
    
    
    (0.15
    )%as a % of sales
    
    
    3.50%
    
    
    
    3.31%
 20




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Selling, General and Administrative Expenses
    Depreciation and Amortization
  21




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Interest Income
  Interest Expense
  Other Income/Expenses, net
  Income Before Income Taxes
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
  22




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
   Contractual Cash Obligations(in thousands)Less than
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    1 Year
    
    1-3 Years
    
    4-5 Years
    
    5 Years8.125% Senior Notes due June 2012Principal
    
    $
    525,000
    
    
    $
    
    
    
    $
    
    
    
    $
    525,000
    
    
    $
    Interest
    
    
    191,953
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    63,984
    
    
    
    716,953
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    588,984
    
    
    
    7.75 % Senior Note due April 2015Principal
    
    $
    285,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    285,000Interest
    
    
    165,657
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    55,219450,657
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    340,219Capital lease obligations (1)Principal
    
    $
    6,808
    
    
    $
    1,082
    
    
    $
    2,708
    
    
    $
    2,299
    
    
    $
    719Interest
    
    
    3,231
    
    
    
    1,030
    
    
    
    1,509
    
    
    
    623
    
    
    
    6910,039
    
    
    
    2,112
    
    
    
    4,217
    
    
    
    2,922
    
    
    
    788Operating leases (1)
    
    
    337,602
    
    
    
    38,543
    
    
    
    63,180
    
    
    
    50,256
    
    
    
    185,623Total contractual cash obligations
    
    $
    1,515,251
    
    
    $
    105,399
    
    
    $
    196,885
    
    
    $
    686,337
    
    
    $
    526,630Other Commercial Commitments(in thousands)Less than
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    1 Year
    
    1-3 Years
    
    4-5 Years
    
    5 YearsStandby letters of credit (2)
    
    $
    51,024
    
    
    $
    51,024
    
    
    $
    
    
    
    $
    
    
    
    $
    Total other commercial commitments
    
    $
    51,024
    
    
    $
    51,024
    
    
    $
    
    
    
    $
    
    
    
    $
    
 (1)
 (2)
 23




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
      24




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Labor Relations
  25




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RECENT ACCOUNTING PRONOUNCEMENTS
  .
  CAUTIONARY STATEMENT FOR PURPOSES OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
  26




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 30, 2008
 PART I - FINANCIAL INFORMATION (contd.)
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 Item 4T. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
 Changes in Internal control Over Financial Reporting
 Limitations on Effectiveness of Controls
 27




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 30, 2008
 
 PART II - OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
    
 Item 1A. RISK FACTORS
 
  28




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 30, 2008
 PART II - OTHER INFORMATION (contd.)
 Item 1A. RISK FACTORS (contd.)
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 None
 
 Item 3. DEFAULTS UPON SENIOR SECURITIES
 None
 
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 None
 
 Item 5. OTHER INFORMATION
 None
 
 Item 6. EXHIBITS
 (a)
    
    Exhibits31.1
    
    Certification of Principal Executive Officer pursuant to Section 302 (a) of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to Section 302 (a) of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Principal Executive Officer and Principal Financial Officer pursuant
to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 29




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
   Date: May 13, 2008

/s/
Jack H. BrownJack H. BrownChairman of the Board, President,
and Chief Executive Officer (Principal Executive Officer)Date: May 13, 2008

/s/Phillip
J. SmithPhillip J. SmithExecutive Vice President and Chief Financial Officer (Principal Financial
Officer) 30