##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 27, 2010
 OR
 o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(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)
  (Former name, former
address and former fiscal year, if changed since last report.)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ.
 o þ




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##### 



STATER BROS. HOLDINGS INC.  June 27, 2010
 INDEX
 PagePART I FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of September 27, 2009 and
June 27, 2010 (Unaudited)
    
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended
June 28, 2009 and June 27, 2010
    
    
    5Consolidated Statements of Income (Unaudited) for the 39 weeks ended
June 28, 2009 and June 27, 2010
    
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 39 weeks
ended June 28, 2009 and June 27, 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,
    
    
    June. 27,2009
    
    
    2010(Unaudited)Current assetsCash and cash equivalents
    
    $
    196,914
    
    
    $
    267,830Restricted cash
    
    
    3,121
    
    
    
    3,121Receivables, net of allowance of $759 and $747
    
    
    36,671
    
    
    
    35,711Income tax receivable
    
    
    4,049
    
    
    
    626Inventories
    
    
    212,856
    
    
    
    222,104Prepaid expenses
    
    
    9,330
    
    
    
    11,045Deferred income taxes
    
    
    20,479
    
    
    
    25,941Assets held for sale
    
    
    83,617
    
    
    
    Note receivable, current portion
    
    
    300
    
    
    
    Long-term receivable, current portion
    
    
    
    
    
    
    16,001Total current assets
    
    
    567,337
    
    
    
    582,379Property and equipmentLand
    
    
    97,430
    
    
    
    97,430Buildings and improvements
    
    
    544,440
    
    
    
    557,619Store fixtures and equipment
    
    
    428,431
    
    
    
    435,424Property subject to capital leases
    
    
    9,983
    
    
    
    9,9831,080,284
    
    
    
    1,100,456Less accumulated depreciation and amortization
    
    
    408,791
    
    
    
    447,320671,493
    
    
    
    653,136Deferred income taxes, long-term
    
    
    36,014
    
    
    
    36,742Deferred debt issuance cost, net
    
    
    11,276
    
    
    
    8,868Note receivable, less current portion
    
    
    493
    
    
    
    Long-term receivable, less current portion
    
    
    18,867
    
    
    
    Other assets
    
    
    9,255
    
    
    
    8,82875,905
    
    
    
    54,438Total assets
    
    $
    1,314,735
    
    
    $
    1,289,953
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS EQUITY
 Sept. 27,
    
    
    June 27,2009
    
    
    2010(Unaudited)Current liabilitiesAccounts payable
    
    $
    153,083
    
    
    $
    139,026Accrued payroll and related expenses
    
    
    53,313
    
    
    
    59,574Other accrued liabilities
    
    
    79,618
    
    
    
    57,792Liabilities held for sale
    
    
    5,634
    
    
    
    Current portion of capital lease obligations
    
    
    1,336
    
    
    
    1,501Total current liabilities
    
    
    292,984
    
    
    
    257,893Long-term debt
    
    
    810,000
    
    
    
    810,000Capital lease obligations, less current portion
    
    
    3,768
    
    
    
    2,620Long-term portion of self-insurance and other reserves
    
    
    36,227
    
    
    
    39,834Long-term deferred benefits
    
    
    77,396
    
    
    
    79,106Other long-term liabilities
    
    
    30,605
    
    
    
    31,085Total liabilities
    
    
    1,250,980
    
    
    
    1,220,538Commitment 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
    
    
    
    77,349Total stockholders equity
    
    
    63,755
    
    
    
    69,415Total liabilities and stockholders equity
    
    $
    1,314,735
    
    
    $
    1,289,953
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
 13 Weeks EndedJune 28,
    
    
    June 27,2009
    
    
    2010Sales
    
    $
    928,641
    
    
    $
    900,044Cost of goods sold
    
    
    674,425
    
    
    
    654,387Gross profit
    
    
    254,216
    
    
    
    245,657Operating expensesSelling, general and
administrative expenses
    
    
    203,277
    
    
    
    205,564Depreciation and amortization
    
    
    13,146
    
    
    
    12,619Total operating expenses
    
    
    216,423
    
    
    
    218,183Operating profit
    
    
    37,793
    
    
    
    27,474Interest income
    
    
    86
    
    
    
    27Interest expense
    
    
    (16,923
    )
    
    
    (16,983
    )Other income, net
    
    
    601
    
    
    
    17Income before income taxes
    
    
    21,557
    
    
    
    10,535Income taxes
    
    
    6,415
    
    
    
    4,553Net income
    
    $
    15,142
    
    
    $
    5,982Earnings per average common share outstanding
    
    $
    430.76
    
    
    $
    173.13Average common shares outstanding
    
    
    35,152
    
    
    
    34,552Shares 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
 39 Weeks EndedJune 28,
    
    
    June 27,2009
    
    
    2010Sales
    
    $
    2,818,890
    
    
    $
    2,709,445Cost of goods sold
    
    
    2,061,986
    
    
    
    1,989,193Gross profit
    
    
    756,904
    
    
    
    720,252Operating expensesSelling, general and
administrative expenses
    
    
    620,593
    
    
    
    608,870Gain on sale of dairy assets
    
    
    
    
    
    
    (9,396
    )Depreciation and amortization
    
    
    40,058
    
    
    
    38,073Total operating expenses
    
    
    660,651
    
    
    
    637,547Operating profit
    
    
    96,253
    
    
    
    82,705Interest income
    
    
    416
    
    
    
    112Interest expense
    
    
    (51,371
    )
    
    
    (51,546
    )Other income, net
    
    
    707
    
    
    
    22Income before income taxes
    
    
    46,005
    
    
    
    31,293Income taxes
    
    
    16,201
    
    
    
    12,633Net income
    
    $
    29,804
    
    
    $
    18,660Earnings per average common share outstanding
    
    $
    847.86
    
    
    $
    536.84Average common shares outstanding
    
    
    35,152
    
    
    
    34,759Shares 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
 39 Weeks EndedJune 28,
    
    
    June 27,2009
    
    
    2010Operating activities:Net income
    
    $
    29,804
    
    
    $
    18,660Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    51,591
    
    
    
    46,554Amortization of debt issuance costs
    
    
    2,408
    
    
    
    2,408Increase in deferred income taxes
    
    
    (2,697
    )
    
    
    (6,190
    )Gain on sale of dairy assets
    
    
    
    
    
    
    (9,396
    )Gain on disposals of assets
    
    
    (572
    )
    
    
    (21
    )Changes in operating assets and liabilities:Decrease in restricted cash
    
    
    2,500
    
    
    
    (Increase) decrease in receivables
    
    
    (5,852
    )
    
    
    960Decrease in income tax receivable
    
    
    
    
    
    
    3,423Increase in inventories
    
    
    (4,253
    )
    
    
    (9,248
    )Increase in prepaid expenses
    
    
    (1,113
    )
    
    
    (1,715
    )(Increase) decrease in assets held for sale
    
    
    (1,329
    )
    
    
    215(Increase) decrease in other assets
    
    
    (27
    )
    
    
    744Decrease in accounts payable
    
    
    (831
    )
    
    
    (14,057
    )Increase in accrued income taxes
    
    
    7,724
    
    
    
    Decrease in other accrued liabilities
    
    
    (25,859
    )
    
    
    (15,565
    )Increase (decrease) in liabilities held
for sale
    
    
    (4,999
    )
    
    
    1,014Increase in long-term reserves
    
    
    12,808
    
    
    
    5,797Net cash provided by operating activities
    
    
    59,303
    
    
    
    23,583Financing activities:Principal payments on capital lease obligations
    
    
    (846
    )
    
    
    (983
    )Stock redemption
    
    
    
    
    
    
    (8,000
    )Dividend paid
    
    
    
    
    
    
    (5,000
    )Net cash used in financing activities
    
    
    (846
    )
    
    
    (13,983
    )Investing activities:(Increase) decrease in note receivable
    
    
    (793
    )
    
    
    793Decrease in store construction reimbursements
    
    
    6,664
    
    
    
    Long term receivable
    
    
    
    
    
    
    1,740Proceeds from sale of dairy assets, net of fees
    
    
    
    
    
    
    85,833Purchase of property and equipment
    
    
    (51,826
    )
    
    
    (27,117
    )Proceeds from sale of property and equipment
    
    
    990
    
    
    
    67Net cash provided by (used in) investing activities
    
    
    (44,965
    )
    
    
    61,316Net increase in cash and cash equivalents
    
    
    13,492
    
    
    
    70,916Cash and cash equivalents at beginning of period
    
    
    144,939
    
    
    
    196,914Cash and cash equivalents at end of period
    
    $
    158,431
    
    
    $
    267,830Interest paid
    
    $
    65,581
    
    
    $
    65,340Income taxes paid
    
    $
    11,175
    
    
    $
    15,400
  7




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STATER BROS. HOLDINGS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE 27, 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   JUNE 27, 2010
 Note 6  Income Taxes (contd.)
    Note 7  Retirement Plans
   Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedJune 28,
    
    
    June 27,
    
    
    June 28,
    
    
    June 27,2009
    
    
    2010
    
    
    2009
    
    
    2010(in thousands)
    
    
    (in thousands)Expected return on assets
    
    $
    (800
    )
    
    $
    (877
    )
    
    $
    (2,401
    )
    
    $
    (2,632
    )Service cost
    
    
    574
    
    
    
    840
    
    
    
    1,721
    
    
    
    2,522Interest cost
    
    
    964
    
    
    
    1,029
    
    
    
    2,893
    
    
    
    3,086Amortization of prior service cost
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )Amortization of recognized losses
    
    
    49
    
    
    
    358
    
    
    
    148
    
    
    
    1,076Net pension expense
    
    $
    786
    
    
    $
    1,349
    
    
    $
    2,359
    
    
    $
    4,050Actuarial 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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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 27, 2010
 Note 8  Asset Sale
    Note 9  Subsidiary Guarantee
   10




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 27, 2010
 Note
10  Credit Facility
        11




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 27, 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   JUNE 27, 2010
 Note 14  Fair Value of Financial Instruments
  Cash and Cash Equivalents
  Receivables
  Long-Term Receivable, Current Portion
  Long-Term Debt and Capital Lease Obligations
   As ofJune 27, 2010(In thousands)Carrying
    
    FairAmount
    
    ValueCash and cash equivalents
    
    $
    267,830
    
    
    $
    267,830Receivables
    
    $
    36,337
    
    
    $
    36,337Long-term receivable, current portion
    
    $
    16,001
    
    
    $
    16,001Long-term debt
    
    $
    810,000
    
    
    $
    812,026Capitalized lease obligations
    
    $
    4,121
    
    
    $
    4,121
 13




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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
   SIGNIFICANT ACCOUNTING POLICIES
  14




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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
  AVAILABLE INFORMATION
 http://www.sec.gov.
 EXECUTIVE OVERVIEW
     15




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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
 Sales and Cost of Sales
 Thirteen Weeks Ended
    
    
    ChangeJune 28,
    
    
    June 27,
    
    
    2010 to 2009($ in thousands)
    
    2009
    
    
    2010
    
    
    Dollar
    
    
    %Sales
    
    $
    928,641
    
    
    $
    900,044
    
    
    $
    (28,597
    )
    
    
    (3.08
    )%Gross Profit
    
    $
    254,216
    
    
    $
    245,657
    
    
    $
    (8,559
    )
    
    
    (3.37
    )%as a % of sales
    
    
    27.38
    %
    
    
    27.29
    %Thirty-Nine Weeks Ended
    
    
    ChangeJune 28,
    
    
    June 27,
    
    
    2010 to 2009($ in thousands)
    
    2009
    
    
    2010
    
    
    Dollar
    
    
    %Sales
    
    $
    2,818,890
    
    
    $
    2,709,445
    
    
    $
    (109,445
    )
    
    
    (3.88
    )%Gross Profit
    
    $
    756,904
    
    
    $
    720,252
    
    
    $
    (36,652
    )
    
    
    (4.84
    )%as a % of sales
    
    
    26.85
    %
    
    
    26.58
    %
 Sales
     Like Store Sales
     16




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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.)
    Gross Profit
  Operating Expenses and Operating Profit
 Thirteen Weeks Ended
    
    ChangeJune 28,
    
    June 27,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    203,277
    
    
    $
    205,564
    
    
    $
    2,287
    
    
    
    1.13
    %as a % of sales
    
    
    21.89
    %
    
    
    22.84
    %Depreciation and amortization
    
    $
    13,146
    
    
    $
    12,619
    
    
    $
    (527
    )
    
    
    (4.01
    )%as a % of sales
    
    
    1.42
    %
    
    
    1.40
    %Operating profit
    
    $
    37,793
    
    
    $
    27,474
    
    
    $
    (10,319
    )
    
    
    (27.30
    )%as a % of sales
    
    
    4.07
    %
    
    
    3.05
    %
 17




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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.)
 Operating Expenses and Operating Profit (contd.)
 Thirty-Nine Weeks Ended
    
    ChangeJune 28,
    
    June 27,
    
    2010 to 2009($ in thousands)
    
    2009
    
    2010
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    620,593
    
    
    $
    608,870
    
    
    $
    (11,723
    )
    
    
    (1.89
    )%as a % of sales
    
    
    22.02
    %
    
    
    22.47
    %Gain on sale of assets
    
    $
    
    
    
    $
    (9,396
    )
    
    $
    (9,396
    )
    
    
    as a % of sales
    
    
    
    
    
    
    (0.35
    )%Depreciation and amortization
    
    $
    40,058
    
    
    $
    38,073
    
    
    $
    (1,985
    )
    
    
    (4.96
    )%as a % of sales
    
    
    1.42
    %
    
    
    1.41
    %Operating profit
    
    $
    96,253
    
    
    $
    82,705
    
    
    $
    (13,548
    )
    
    
    (14.08
    )%as a % of sales
    
    
    3.41
    %
    
    
    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.
MANAGEMENTS 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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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
    
    
    85,312
    
    
    
    42,656
    
    
    
    42,656
    
    
    
    
    
    
    
    610,312
    
    
    
    42,656
    
    
    
    567,656
    
    
    
    
    
    
    
    7.75% Senior Note due April 2015Principal
    
    
    285,000
    
    
    
    
    
    
    
    
    
    
    
    285,000
    
    
    
    Interest
    
    
    110,438
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    395,438
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    329,175
    
    
    
    Capital lease obligations (1)Principal
    
    
    4,121
    
    
    
    1,501
    
    
    
    2,106
    
    
    
    514
    
    
    
    Interest
    
    
    1,158
    
    
    
    593
    
    
    
    528
    
    
    
    37
    
    
    
    5,279
    
    
    
    2,094
    
    
    
    2,634
    
    
    
    551
    
    
    
    Operating leases (1)
    
    
    349,946
    
    
    
    37,337
    
    
    
    66,595
    
    
    
    50,779
    
    
    
    195,235Total contractual cash obligations
    
    $
    1,360,975
    
    
    $
    104,175
    
    
    $
    681,060
    
    
    $
    380,505
    
    
    $
    195,235Other 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 dry and refrigerated 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.
MANAGEMENTS 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.
MANAGEMENTS 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.
JUNE 27, 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.
JUNE 27, 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.
JUNE 27, 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.
 25




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
   Date: August 10, 2010
    
    /s/ Jack H. Brown

Jack H. BrownChairman of the Board, President,
and 
Chief Executive Officer(Principal Executive Officer)Date: August 10, 2010
    
    /s/ Phillip J. Smith

Phillip J. SmithExecutive Vice President
and 
Chief Financial Officer(Principal Financial Officer)
(Principal Accounting Officer)
 
 26