##### 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 March 29, 2009
 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 AvenueSan Bernardino, California
    
    92408(Address of principal executive offices)
    
    (Zip Code)Registrants telephone number, including area code
    
    (909) 733-5000
  (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
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



STATER BROS. HOLDINGS INC.
March 29, 2009
 INDEX
 PagePART I FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of September 28, 2008 and
March 29, 2009 (Unaudited)
    
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended
March 30, 2008 and March 29, 2009
    
    
    5Consolidated Statements of Income (Unaudited) for the 26 weeks ended
March 30, 2008 and March 29, 2009
    
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 26 weeks
ended March 30, 2008 and March 29, 2009
    
    
    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
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    26Item 1A. Risk Factors
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    27SIGNATURES
    
    
    28EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED BALANCE SHEETS
  ASSETS
 Sept. 28,
    
    
    Mar. 29,2008
    
    
    2009(Unaudited)Current assetsCash and cash equivalents
    
    $
    144,942
    
    
    $
    151,783Restricted cash
    
    
    5,621
    
    
    
    3,121Receivables, net of allowance of $2,671 in
2008 and $2,701 in 2009
    
    
    52,357
    
    
    
    47,792Income tax refund receivable
    
    
    4,636
    
    
    
    Inventories
    
    
    233,719
    
    
    
    228,526Prepaid expenses
    
    
    9,311
    
    
    
    9,327Deferred income taxes
    
    
    26,863
    
    
    
    25,339Note receivable, current portion
    
    
    
    
    
    
    300Total current assets
    
    
    477,449
    
    
    
    466,188Property and equipmentLand
    
    
    111,899
    
    
    
    111,899Buildings and improvements
    
    
    572,496
    
    
    
    587,777Store fixtures and equipment
    
    
    448,178
    
    
    
    457,251Property subject to capital leases
    
    
    10,061
    
    
    
    10,0491,142,634
    
    
    
    1,166,976Less accumulated depreciation and amortization
    
    
    410,308
    
    
    
    438,966732,326
    
    
    
    728,010Deferred income taxes, long-term
    
    
    21,178
    
    
    
    23,156Deferred debt issuance cost, net
    
    
    14,478
    
    
    
    12,864Note receivable, less current portion
    
    
    
    
    
    
    493Long-term receivable
    
    
    22,228
    
    
    
    22,228Goodwill
    
    
    2,894
    
    
    
    2,894Other assets
    
    
    6,322
    
    
    
    6,23167,100
    
    
    
    67,866Total assets
    
    $
    1,276,875
    
    
    $
    1,262,064
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS EQUITY
 Sept. 28,
    
    
    Mar. 29,2008
    
    
    2009(Unaudited)Current liabilitiesAccounts payable
    
    $
    167,647
    
    
    $
    134,690Accrued payroll and related expenses
    
    
    62,223
    
    
    
    59,198Other accrued liabilities
    
    
    77,088
    
    
    
    73,342Accrued income taxes
    
    
    
    
    
    
    504Current portion of capital lease obligations
    
    
    1,162
    
    
    
    1,252Total current liabilities
    
    
    308,120
    
    
    
    268,986Long-term debt
    
    
    810,000
    
    
    
    810,000Capital lease obligations, less current portion
    
    
    5,124
    
    
    
    4,474Long-term portion of self-insurance and other reserves
    
    
    35,164
    
    
    
    40,402Long-term deferred benefits
    
    
    66,340
    
    
    
    70,736Other long-term liabilities
    
    
    11,621
    
    
    
    12,298Total liabilities
    
    
    1,236,369
    
    
    
    1,206,896Commitment 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  35,152
    
    
    
    
    
    
    Additional paid-in capital
    
    
    8,939
    
    
    
    8,939Accumulated other comprehensive loss
    
    
    (5,200
    )
    
    
    (5,200
    )Retained earnings
    
    
    36,767
    
    
    
    51,429Total stockholders equity
    
    
    40,506
    
    
    
    55,168Total liabilities and stockholders equity
    
    $
    1,276,875
    
    
    $
    1,262,064
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
   13 Weeks EndedMar. 30,
    
    
    Mar. 29,2008
    
    
    2009Sales
    
    $
    925,361
    
    
    $
    930,996Cost of goods sold
    
    
    669,083
    
    
    
    675,170Gross profit
    
    
    256,278
    
    
    
    255,826Operating expensesSelling, general and administrative expenses
    
    
    208,532
    
    
    
    206,312Depreciation and amortization
    
    
    13,165
    
    
    
    13,552Total operating expenses
    
    
    221,697
    
    
    
    219,864Operating profit
    
    
    34,581
    
    
    
    35,962Interest income
    
    
    1,622
    
    
    
    125Interest expense
    
    
    (14,422
    )
    
    
    (17,348
    )Other income (expenses), net
    
    
    865
    
    
    
    (43
    )Income before income taxes
    
    
    22,646
    
    
    
    18,696Income taxes
    
    
    9,115
    
    
    
    7,575Net income
    
    $
    13,531
    
    
    $
    11,121Earnings per average common share outstanding
    
    $
    378.28
    
    
    $
    316.37Average common shares outstanding
    
    
    35,770
    
    
    
    35,152Shares outstanding at end of period
    
    
    35,770
    
    
    
    35,152
  5




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
   26 Weeks EndedMar. 30,
    
    
    Mar. 29,2008
    
    
    2009Sales
    
    $
    1,868,391
    
    
    $
    1,890,249Cost of goods sold
    
    
    1,367,684
    
    
    
    1,387,561Gross profit
    
    
    500,707
    
    
    
    502,688Operating expensesSelling, general and administrative expenses
    
    
    412,850
    
    
    
    417,316Depreciation and amortization
    
    
    26,073
    
    
    
    26,912Total operating expenses
    
    
    438,923
    
    
    
    444,228Operating profit
    
    
    61,784
    
    
    
    58,460Interest income
    
    
    4,013
    
    
    
    330Interest expense
    
    
    (28,003
    )
    
    
    (34,448
    )Other income, net
    
    
    2,740
    
    
    
    106Income before income taxes
    
    
    40,534
    
    
    
    24,448Income taxes
    
    
    16,252
    
    
    
    9,786Net income
    
    $
    24,282
    
    
    $
    14,662Earnings per average common share outstanding
    
    $
    678.84
    
    
    $
    417.10Average common shares outstanding
    
    
    35,770
    
    
    
    35,152Shares outstanding at end of period
    
    
    35,770
    
    
    
    35,152
  6




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   26 Weeks EndedMar. 30,
    
    
    Mar. 29,2008
    
    
    2009Operating activities:Net income
    
    $
    24,282
    
    
    $
    14,662Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    32,662
    
    
    
    35,521Amortization of debt issuance costs
    
    
    1,605
    
    
    
    1,614Increase in deferred income taxes
    
    
    (6,054
    )
    
    
    (454
    )Gain on disposals of assets
    
    
    (2,497
    )
    
    
    (17
    )Changes in operating assets and liabilities:Decrease in restricted cash
    
    
    2,500
    
    
    
    2,500Increase in receivables
    
    
    (10,771
    )
    
    
    (3,387
    )(Increase) decrease in inventories
    
    
    (7,485
    )
    
    
    5,193(Increase) decrease in prepaid expenses
    
    
    4,136
    
    
    
    (16
    )(Increase) decrease in other assets
    
    
    (13
    )
    
    
    91Decrease in accounts payable
    
    
    (1,190
    )
    
    
    (32,957
    )Increase (decrease) in accrued income
taxes
    
    
    (2,558
    )
    
    
    5,140Decrease in other accrued liabilities
    
    
    (6,467
    )
    
    
    (6,771
    )Increase in long-term reserves
    
    
    9,975
    
    
    
    10,311Net cash provided by operating activities
    
    
    38,125
    
    
    
    31,430Investing activities:(Increase) decrease in store construction reimbursements
    
    
    (4,734
    )
    
    
    7,952Note receivable
    
    
    
    
    
    
    (793
    )Purchase of property and equipment
    
    
    (104,789
    )
    
    
    (31,391
    )Proceeds from sale of property and equipment
    
    
    3,177
    
    
    
    203Net cash used in investing activities
    
    
    (106,346
    )
    
    
    (24,029
    )Financing activities:Principal payments on capital lease obligations
    
    
    (485
    )
    
    
    (560
    )Net cash used in financing activities
    
    
    (485
    )
    
    
    (560
    )Net increase (decrease) in cash and cash equivalents
    
    
    (68,706
    )
    
    
    6,841Cash and cash equivalents at beginning of period
    
    
    277,062
    
    
    
    144,942Cash and cash equivalents at end of period
    
    $
    208,356
    
    
    $
    151,783Interest paid
    
    $
    32,782
    
    
    $
    32,884Income taxes paid
    
    $
    24,950
    
    
    $
    5,100
  7




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 29, 2009
 Note 1  Basis of Presentation
    Note 2  Principles of Consolidation
  Note 3  Recent Accounting Pronouncements
   8




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 29, 2009
 Note 3  Recent Accounting Pronouncements (contd.)
  Note 4  Use of Estimates
  Note 5  Restricted Cash
  Note 6  Income Taxes
     9




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 29, 2009
 Note 7  Retirement Plans
   Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedMar. 30,
    
    
    Mar. 29,
    
    
    Mar. 30,
    
    
    Mar. 29,2008
    
    
    2009
    
    
    2008
    
    
    2009(in thousands)
    
    
    (in thousands)Expected return on assets
    
    $
    (769
    )
    
    $
    (806
    )
    
    $
    (1,538
    )
    
    $
    (1,612
    )Service cost
    
    
    658
    
    
    
    580
    
    
    
    1,316
    
    
    
    1,160Interest cost
    
    
    876
    
    
    
    973
    
    
    
    1,752
    
    
    
    1,945Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Amortization of recognized losses
    
    
    146
    
    
    
    50
    
    
    
    292
    
    
    
    100Net pension expense
    
    $
    911
    
    
    $
    797
    
    
    $
    1,821
    
    
    $
    1,592Actuarial assumptions used to determine net pension expense were:Discount rate
    
    
    6.25
    %
    
    
    7.50
    %
    
    
    6.25
    %
    
    
    7.50
    %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
    %
  10




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 29, 2009
 Note 8  Segment Information
   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
   Thirteen Weeks
    
    Twenty-Six WeeksRetail
    
    All Other
    
    Total
    
    Retail
    
    All Other
    
    Total(in thousands)
    
    (in thousands)Sales to external
customers
    
    $
    906,476
    
    
    $
    24,520
    
    
    $
    930,996
    
    
    $
    1,837,119
    
    
    $
    53,130
    
    
    $
    1,890,249Intersegment sales
    
    
    
    
    
    
    20,363
    
    
    
    20,363
    
    
    
    
    
    
    
    43,979
    
    
    
    43,979Operating profit
    
    
    35,375
    
    
    
    587
    
    
    
    35,962
    
    
    
    58,188
    
    
    
    272
    
    
    
    58,460Net income (loss)
    
    
    20,689
    
    
    
    (9,568
    )
    
    
    11,121
    
    
    
    34,116
    
    
    
    (19,454
    )
    
    
    14,662
  11




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   MARCH 29, 2009
 Note 9  Subsidiary Guarantee
   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 29, 2009
 Note 10  Credit Facilities (contd.)
 Santees Revolver
        Note 11  Litigation Matters
  Note 12  Asset Sale
  13




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##### Table of Contents



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
   14




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##### Table of Contents



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
  15




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##### Table of Contents



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
  16




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OWNERSHIP OF THE COMPANY
  EXECUTIVE OVERVIEW
       17




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 Thirteen Weeks Ended
    
    ChangeMar. 30,
    
    Mar. 29,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Sales
    
    $
    925,361
    
    
    $
    930,996
    
    
    $
    5,635
    
    
    
    0.61
    %Gross Profit
    
    $
    256,278
    
    
    $
    255,826
    
    
    $
    (452
    )
    
    
    (0.18
    )%as a % of sales
    
    
    27.69
    %
    
    
    27.48
    %
 Twenty-Six Weeks Ended
    
    ChangeMar. 30,
    
    Mar. 29,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Sales
    
    $
    1,868,391
    
    
    $
    1,890,249
    
    
    $
    21,858
    
    
    
    1.17
    %Gross Profit
    
    $
    500,707
    
    
    $
    502,688
    
    
    $
    1,981
    
    
    
    0.40
    %as a % of sales
    
    
    26.80
    %
    
    
    26.59
    %
 Sales
  Like Store Sales
     18




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##### Table of Contents



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
    
    ChangeMar. 30,
    
    Mar. 29,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    208,532
    
    
    $
    206,312
    
    
    $
    (2,220
    )
    
    
    (1.06
    )%as a % of sales
    
    
    22.53
    %
    
    
    22.16
    %Depreciation and amortization
    
    $
    13,165
    
    
    $
    13,552
    
    
    $
    387
    
    
    
    2.94
    %as a % of sales
    
    
    1.42
    %
    
    
    1.46
    %Operating profit
    
    $
    34,581
    
    
    $
    35,962
    
    
    $
    1,381
    
    
    
    3.99
    %as a % of sales
    
    
    3.74
    %
    
    
    3.86
    %
 Twenty-Six Weeks Ended
    
    ChangeMar. 30,
    
    Mar. 29,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    412,850
    
    
    $
    417,316
    
    
    $
    4,466
    
    
    
    1.08
    %as a % of sales
    
    
    22.09
    %
    
    
    22.08
    %Depreciation and amortization
    
    $
    26,073
    
    
    $
    26,912
    
    
    $
    839
    
    
    
    3.22
    %as a % of sales
    
    
    1.40
    %
    
    
    1.42
    %Operating profit
    
    $
    61,784
    
    
    $
    58,460
    
    
    $
    (3,324
    )
    
    
    (5.38
    )%as a % of sales
    
    
    3.31
    %
    
    
    3.09
    %
 19




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Selling, General and Administrative Expenses
   Depreciation and Amortization
  20




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##### Table of Contents



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
  21




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##### Table of Contents



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
    
    
    149,297
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    21,328
    
    
    
    674,297
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    546,328
    
    
    
    7.75 % Senior Note due April 2015
    
    $
    285,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    285,000Principal
    
    
    143,569
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    33,131Interest
    
    
    428,569
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    318,131Capital lease obligations (1)
    
    $
    5,726
    
    
    $
    1,252
    
    
    $
    3,025
    
    
    $
    1,433
    
    
    $
    16Principal
    
    
    2,201
    
    
    
    858
    
    
    
    1,057
    
    
    
    286
    
    
    
    Interest
    
    
    7,927
    
    
    
    2,110
    
    
    
    4,082
    
    
    
    1,719
    
    
    
    16Operating leases (1)
    
    
    365,289
    
    
    
    37,285
    
    
    
    65,945
    
    
    
    52,543
    
    
    
    209,516Total contractual cash obligations
    
    $
    1,476,082
    
    
    $
    104,139
    
    
    $
    199,515
    
    
    $
    644,765
    
    
    $
    527,663Other 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 perishable 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 2009 and February 2010. 22




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
      Labor Relations
  23




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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.
  24




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 29, 2009
 PART I  FINANCIAL INFORMATION (contd.)
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  25




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 29, 2009
 
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 1A. RISK FACTORS
    26




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MARCH 29, 2009
 
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  31.1
    
    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.
 27




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
   Date: May 13, 2009
    /s/ Jack H. BrownJack H. BrownChairman of the Board, President,
and Chief Executive Officer
(Principal Executive Officer)Date:  May 13, 2009

/s/ Phillip J. SmithPhillip J. SmithExecutive Vice President
and Chief Financial Officer
(Principal Financial Officer) 28