##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    quarterly report
pursuant to section 13
or15(d)of the securities exchange act of 1934
 For the quarterly period ended March 28, 2010
 or
 o
    
    transition report pursuant to section13or15(d)of the securities exchange act of 1934
 For the transition from  to
 Commission file number 001-13222
 STATER BROS. HOLDINGS INC.
  Delaware
    
    33-0350671(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)
 301 S. Tippecanoe Avenue 
San Bernardino, California
    
    92408(Address of principal executive offices)
    
    (Zip Code)
 (909) 733-5000
 
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



STATER BROS. HOLDINGS INC.  March 28, 2010
 INDEX
 PagePART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 27, 2009 and
March 28, 2010 (Unaudited)
    
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended
March 29, 2009 and March 28, 2010
    
    
    5Consolidated Statements of Income (Unaudited) for the 26 weeks ended
March 29, 2009 and March 28, 2010
    
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 26 weeks
ended March 29, 2009 and March 28, 2010
    
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    23Item 4.
    
    Controls and Procedures
    
    
    23PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3.
    
    Defaults Upon Senior Securities
    
    
    25Item 4.
    
    (Removed and
Reserved)
    
    
    25Item 5.
    
    Other Information
    
    
    25Item 6.
    
    Exhibits
    
    
    25SIGNATURES
    
    
    26EX-31.1EX-31.2EX-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. 27,
    
    
    Mar. 28,2009
    
    
    2010(Unaudited)Current assetsCash and cash equivalents
    
    $
    196,914
    
    
    $
    263,929Restricted cash
    
    
    3,121
    
    
    
    3,121Receivables, net of allowance of $759 and $738
    
    
    36,671
    
    
    
    37,817Income tax refund receivable
    
    
    4,049
    
    
    
    5,468Inventories
    
    
    212,856
    
    
    
    225,965Prepaid expenses
    
    
    9,330
    
    
    
    10,914Deferred income taxes
    
    
    20,479
    
    
    
    24,800Assets held for sale
    
    
    83,617
    
    
    
    Note receivable, current portion
    
    
    300
    
    
    
    493Long-term receivable, current portion
    
    
    
    
    
    
    17,741Total current assets
    
    
    567,337
    
    
    
    590,248Property and equipmentLand
    
    
    97,430
    
    
    
    97,430Buildings and improvements
    
    
    544,440
    
    
    
    554,864Store fixtures and equipment
    
    
    428,431
    
    
    
    435,506Property subject to capital leases
    
    
    9,983
    
    
    
    9,9831,080,284
    
    
    
    1,097,783Less accumulated depreciation and amortization
    
    
    408,791
    
    
    
    435,235671,493
    
    
    
    662,548Deferred income taxes, long-term
    
    
    36,014
    
    
    
    36,195Deferred debt issuance cost, net
    
    
    11,276
    
    
    
    9,662Note receivable, less current portion
    
    
    493
    
    
    
    Long-term receivable, less current portion
    
    
    18,867
    
    
    
    Other assets
    
    
    9,255
    
    
    
    8,86975,905
    
    
    
    54,726Total assets
    
    $
    1,314,735
    
    
    $
    1,307,522
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS EQUITY
 Sept. 27,
    
    
    Mar. 28,2009
    
    
    2010(Unaudited)Current liabilitiesAccounts payable
    
    $
    153,083
    
    
    $
    144,296Accrued payroll and related expenses
    
    
    53,313
    
    
    
    57,691Other accrued liabilities
    
    
    79,618
    
    
    
    78,358Liabilities held for sale
    
    
    5,634
    
    
    
    Current portion of capital lease obligations
    
    
    1,336
    
    
    
    1,444Total current liabilities
    
    
    292,984
    
    
    
    281,789Long-term debt
    
    
    810,000
    
    
    
    810,000Capital lease obligations, less current portion
    
    
    3,768
    
    
    
    3,018Long-term portion of self-insurance and other reserves
    
    
    36,227
    
    
    
    38,883Long-term deferred benefits
    
    
    77,396
    
    
    
    79,766Other long-term liabilities
    
    
    30,605
    
    
    
    30,633Total liabilities
    
    
    1,250,980
    
    
    
    1,244,089Commitment and contingenciesStockholders equityCommon Stock, $.01 par value:Authorized shares  100,000
Issued and outstanding shares  0
    
    
    
    
    
    
    Class A Common Stock, $.01 par value:Authorized shares  100,000
Issued and outstanding shares 
35,152 in 2009, 34,552 in 2010
    
    
    
    
    
    
    Additional paid-in capital
    
    
    8,939
    
    
    
    8,786Accumulated other comprehensive loss
    
    
    (16,720
    )
    
    
    (16,720
    )Retained earnings
    
    
    71,536
    
    
    
    71,367Total stockholders equity
    
    
    63,755
    
    
    
    63,433Total liabilities and stockholders equity
    
    $
    1,314,735
    
    
    $
    1,307,522
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
 13 Weeks EndedMar. 29,
    
    
    Mar. 28,2009
    
    
    2010Sales
    
    $
    930,996
    
    
    $
    885,537Cost of goods sold
    
    
    675,170
    
    
    
    649,092Gross profit
    
    
    255,826
    
    
    
    236,445Operating expensesSelling, general and administrative expenses
    
    
    206,312
    
    
    
    198,018Gain on sale of dairy assets
    
    
    
    
    
    
    (1,446
    )Depreciation and amortization
    
    
    13,552
    
    
    
    12,788Total operating expenses
    
    
    219,864
    
    
    
    209,360Operating profit
    
    
    35,962
    
    
    
    27,085Interest income
    
    
    125
    
    
    
    26Interest expense
    
    
    (17,348
    )
    
    
    (17,374
    )Other income (expenses), net
    
    
    (43
    )
    
    
    16Income before income taxes
    
    
    18,696
    
    
    
    9,753Income taxes
    
    
    7,575
    
    
    
    3,786Net income
    
    $
    11,121
    
    
    $
    5,967Earnings per average common share outstanding
    
    $
    316.37
    
    
    $
    172.60Average common shares outstanding
    
    
    35,152
    
    
    
    34,572Shares outstanding at end of period
    
    
    35,152
    
    
    
    34,552
  5




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
 26 Weeks EndedMar. 29,
    
    
    Mar. 28,2009
    
    
    2010Sales
    
    $
    1,890,249
    
    
    $
    1,809,401Cost of goods sold
    
    
    1,387,561
    
    
    
    1,334,806Gross profit
    
    
    502,688
    
    
    
    474,595Operating expensesSelling, general and administrative expenses
    
    
    417,316
    
    
    
    403,306Gain on sale of dairy assets
    
    
    
    
    
    
    (9,396
    )Depreciation and amortization
    
    
    26,912
    
    
    
    25,454Total operating expenses
    
    
    444,228
    
    
    
    419,364Operating profit
    
    
    58,460
    
    
    
    55,231Interest income
    
    
    330
    
    
    
    85Interest expense
    
    
    (34,448
    )
    
    
    (34,563
    )Other income, net
    
    
    106
    
    
    
    5Income before income taxes
    
    
    24,448
    
    
    
    20,758Income taxes
    
    
    9,786
    
    
    
    8,080Net income
    
    $
    14,662
    
    
    $
    12,678Earnings per average common share outstanding
    
    $
    417.10
    
    
    $
    363.66Average common shares outstanding
    
    
    35,152
    
    
    
    34,862Shares outstanding at end of period
    
    
    35,152
    
    
    
    34,552
  6




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 26 Weeks EndedMarch 29,
    
    
    March 28,2009
    
    
    2010Operating activities:Net income
    
    $
    14,662
    
    
    $
    12,678Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    35,521
    
    
    
    31,163Amortization of debt issuance costs
    
    
    1,614
    
    
    
    1,614Increase in deferred income taxes
    
    
    (454
    )
    
    
    (4,502
    )Gain on sale of dairy assets
    
    
    
    
    
    
    (9,396
    )Gain on disposals of assets
    
    
    (17
    )
    
    
    (3
    )Changes in operating assets and liabilities:Decrease in restricted cash
    
    
    2,500
    
    
    
    Increase in receivables
    
    
    (4,097
    )
    
    
    (1,146
    )Increase in income tax receivables
    
    
    
    
    
    
    (1,419
    )(Increase) decrease in inventories
    
    
    5,578
    
    
    
    (13,109
    )Increase in prepaid expenses
    
    
    (243
    )
    
    
    (1,584
    )Decrease in assets held for sale
    
    
    160
    
    
    
    215Decrease in other assets
    
    
    140
    
    
    
    703Decrease in accounts payable
    
    
    (29,532
    )
    
    
    (8,787
    )Increase in income taxes payable
    
    
    5,140
    
    
    
    Increase (decrease) in liabilities held for sale
    
    
    (3,616
    )
    
    
    1,014Increase (decrease) in other accrued liabilities
    
    
    (6,749
    )
    
    
    3,118Increase in long-term reserves
    
    
    10,425
    
    
    
    5,054Net cash provided by operating activities
    
    
    31,032
    
    
    
    15,613Financing activities:Principal payments on capital lease obligations
    
    
    (553
    )
    
    
    (642
    )Stock redemption
    
    
    
    
    
    
    (8,000
    )Dividend paid
    
    
    
    
    
    
    (5,000
    )Net cash used in financing activities
    
    
    (553
    )
    
    
    (13,642
    )Investing activities:(Increase) decrease in note receivable
    
    
    (793
    )
    
    
    300Decrease in store construction reimbursement
    
    
    7,952
    
    
    
    Proceeds from sale of dairy assets, net of fees
    
    
    
    
    
    
    85,833Purchase of property and equipment
    
    
    (31,047
    )
    
    
    (21,132
    )Proceeds from sale of property and equipment
    
    
    203
    
    
    
    43Net cash provided by (used in) investing activities
    
    
    (23,685
    )
    
    
    65,044Net increase in cash and cash equivalents
    
    
    6,794
    
    
    
    67,015Cash and cash equivalents at beginning of period
    
    
    144,987
    
    
    
    196,914Cash and cash equivalents at end of period
    
    $
    151,781
    
    
    $
    263,929Interest paid
    
    $
    32,884
    
    
    $
    32,784Income taxes paid
    
    $
    5,100
    
    
    $
    14,000
  7




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 1  Basis of Presentation
    Note 2  Principles of Consolidation
  Note 3  Reclassifications
  Note 4  Subsequent Events
  Note 5  Use of Estimates
  Note 6  Income Taxes
  8




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 6  Income Taxes (contd)
    Note 7  Retirement Plans
   Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMar. 29,
    
    
    Mar. 28,
    
    
    Mar. 29,
    
    
    Mar. 28,2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)
    
    
    (in thousands)Expected return on assets
    
    $
    (801
    )
    
    $
    (878
    )
    
    $
    (1,601
    )
    
    $
    (1,755
    )Service cost
    
    
    573
    
    
    
    841
    
    
    
    1,147
    
    
    
    1,682Interest cost
    
    
    965
    
    
    
    1,028
    
    
    
    1,929
    
    
    
    2,057Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Amortization of recognized losses
    
    
    50
    
    
    
    359
    
    
    
    99
    
    
    
    718Net pension expense
    
    $
    787
    
    
    $
    1,350
    
    
    $
    1,573
    
    
    $
    2,701Actuarial assumptions used to determine
net pension expense were:Discount rate
    
    
    7.50
    %
    
    
    5.50
    %
    
    
    7.50
    %
    
    
    5.50
    %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
    %
  9




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 8  Asset Sale
    Note 9  Subsidiary Guarantee
   10




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 10  Credit Facility
        11




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 11  Litigation Matters
  Note 12  Dividend and Stock Redemption
    Note 13  Long-Term Receivable
  12




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 28, 2010
 Note 14  Fair Value of Financial Instruments
  Cash and Cash Equivalents
  Receivables
  Note Receivable
  Long-Term Receivable
  Long-Term Debt and Capital Lease Obligations
   As ofMarch 28, 2010(In thousands)Carrying
    
    FairAmount
    
    ValueCash and cash equivalents
    
    $
    263,929
    
    
    $
    263,929Receivables
    
    $
    43,285
    
    
    $
    43,285Note receivable
    
    $
    493
    
    
    $
    493Long-term receivable
    
    $
    17,741
    
    
    $
    17,741Long-term debt
    
    $
    810,000
    
    
    $
    816,188Capital lease obligations
    
    $
    4,462
    
    
    $
    4,462
 13




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS 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
   SIGNIFICANT ACCOUNTING POLICIES
  14




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STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OWNERSHIP OF THE COMPANY
  AVAILABLE INFORMATION
 http://www.sec.gov.
 EXECUTIVE OVERVIEW
     15




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 Thirteen Weeks Ended
    
    ChangeMar. 29,
    
    Mar. 28,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Sales
    
    $
    930,996
    
    
    $
    885,537
    
    
    $
    (45,459
    )
    
    
    (4.88
    )%Gross Profit
    
    $
    255,826
    
    
    $
    236,445
    
    
    $
    (19,381
    )
    
    
    (7.58
    )%as a % of sales
    
    
    27.48
    %
    
    
    26.70
    %
 Twenty-Six Weeks Ended
    
    ChangeMar. 29,
    
    Mar. 28,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Sales
    
    $
    1,890,249
    
    
    $
    1,809,401
    
    
    $
    (80,848
    )
    
    
    (4.28
    )%Gross Profit
    
    $
    502,688
    
    
    $
    474,595
    
    
    $
    (28,093
    )
    
    
    (5.59
    )%as a % of sales
    
    
    26.59
    %
    
    
    26.23
    %
 Sales
  Like Store Sales
     16




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Like Store Sales (contd.)
   Gross Profit
  Operating Expenses and Operating Profit
 Thirteen Weeks Ended
    
    ChangeMar. 29,
    
    Mar. 28,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    206,312
    
    
    $
    198,018
    
    
    $
    (8,294
    )
    
    
    (4.02
    )%as a % of sales
    
    
    22.16
    %
    
    
    22.36
    %Gain on sale of assets
    
    
    
    
    
    $
    (1,446
    )
    
    $
    (1,446
    )
    
    
    as a % of sales
    
    
    
    
    
    
    (0.16
    )%Depreciation and amortization
    
    $
    13,552
    
    
    $
    12,788
    
    
    $
    (764
    )
    
    
    (5.64
    )%as a % of sales
    
    
    1.46
    %
    
    
    1.44
    %Operating profit
    
    $
    35,962
    
    
    $
    27,085
    
    
    $
    (8,877
    )
    
    
    (24.68
    )%as a % of sales
    
    
    3.86
    %
    
    
    3.06
    %
 17




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Operating Expenses and Operating Profit (contd.)
 Twenty-Six Weeks Ended
    
    ChangeMar. 29,
    
    Mar. 28,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    417,316
    
    
    $
    403,306
    
    
    $
    (14,010
    )
    
    
    (3.36
    )%as a % of sales
    
    
    22.08
    %
    
    
    22.29
    %Gain on sale of assets
    
    $
    
    
    
    $
    (9,396
    )
    
    $
    (9,396
    )
    
    
    as a % of sales
    
    
    
    
    
    
    (0.52
    )%Depreciation and amortization
    
    $
    26,912
    
    
    $
    25,454
    
    
    $
    (1,458
    )
    
    
    (5.42
    )%as a % of sales
    
    
    1.42
    %
    
    
    1.41
    %Operating profit
    
    $
    58,460
    
    
    $
    55,231
    
    
    $
    (3,229
    )
    
    
    (5.52
    )%as a % of sales
    
    
    3.09
    %
    
    
    3.05
    %
 Selling, General and Administrative Expenses
   Gain on Sale of Dairy Assets
  Depreciation and Amortization
  18




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Interest Income
  Interest Expense
  Income Before Income Taxes
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
    19




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS 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
    
    
    106,640
    
    
    
    42,656
    
    
    
    63,984
    
    
    
    
    
    
    
    631,640
    
    
    
    42,656
    
    
    
    588,984
    
    
    
    
    
    
    
    7.75% Senior Note due April 2015Principal
    
    $
    285,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    285,000Interest
    
    
    121,482
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    11,044406,482
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    296,044Capital lease obligations (1)Principal
    
    $
    4,462
    
    
    $
    1,444
    
    
    $
    2,299
    
    
    $
    719
    
    
    $
    Interest
    
    
    1,343
    
    
    
    651
    
    
    
    623
    
    
    
    69
    
    
    
    5,805
    
    
    
    2,095
    
    
    
    2,922
    
    
    
    788
    
    
    
    Operating leases (1)
    
    
    352,416
    
    
    
    36,966
    
    
    
    64,973
    
    
    
    49,953
    
    
    
    200,524Total contractual cash obligations
    
    $
    1,396,343
    
    
    $
    103,805
    
    
    $
    701,054
    
    
    $
    94,916
    
    
    $
    496,568Other Commercial Commitments(in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsStandby letters of credit (2)
    
    $
    49,762
    
    
    $
    49,762
    
    
    $
    
    
    
    $
    
    
    
    $
    Total other commercial commitments
    
    $
    49,762
    
    
    $
    49,762
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    We lease the majority of our retail stores. We have subleased our
old office and distribution warehouses located in Colton, California under an initial 15 year
term for an amount equal to our lease payments. For purposes of contractual cash obligations
shown here, minimum lease payments on this lease are shown without sub-lease offset. Certain
of our operating leases provide for minimum annual payments that change over the primary term
of the lease. For purposes of contractual cash obligations shown here, contractual step
increases or decreases are shown in the period they are due. Certain leases provide for
additional rents based on sales. Primary lease terms range from 3 to 55 years and
substantially all leases provide for renewal options.(2)
    
    Standby letters of credit are committed as security for workers
compensation obligations. Outstanding letters of credit expire between September 2010 and
February 2011. 20




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
      Labor Relations
  21




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT FOR PURPOSES OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
  22




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 28, 2010
 PART I  FINANCIAL INFORMATION (contd.)
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  23




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 28, 2010
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 1A. RISK FACTORS
    24




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 28, 2010
 
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. (REMOVED AND
RESERVED)
 
 Item 5. OTHER INFORMATION
  
 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 2002.10.17
    
    Third Amended and Restated Credit Agreement, dated as of May 4, 2010,
by and among Stater Bros. Markets, Stater Bros. Holdings Inc. and Bank of
America, N.A., previously filed as an exhibit to the Current Report on Form
8-K dated May 10, 2010.
 25




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
   Date: May 11, 2010
    /s/ Jack H. BrownJack H. BrownChairman of the Board, President,
and Chief Executive Officer
(Principal Executive Officer)Date:  May 11, 2010
    /s/ Phillip J. SmithPhillip J. SmithExecutive Vice President
and Chief Financial Officer
(Principal Financial Officer) 26