Press Release Details

Announcement of FY2000 Q2 Estimates

January 24, 2000

The Company reported that, excluding the impact of certain non-recurring and special charges described below, it expects to report a net loss per share in the range of ($0.03) to ($0.07) for the second quarter of fiscal 2000. Including the one-time and special charges the Company expects to report a net loss per share in the range of $(0.21) to $(0.26). The results will be impacted by approximately $1.3 million, net of tax, of restructuring and asset impairment charges and approximately $2.2 million, net of tax, of severance costs and the writedown of current assets in the Eastern Region and Chicago.

The Company expects to announce actual results for the second quarter the week of March 6, 2000.

Management attributes these expected results to the previously discussed issues related to the consolidation of its Eastern Region systems and operations which have resulted in lower sales, lower gross margins and higher operating expenses than in prior quarters in the Eastern Region.

As part of its turnaround strategy, management announced today plans to service the mid-west region from its Denver, CO and New Oxford, PA facilities. Consequently, and as referenced above, the Company expects that its Chicago facility, which has generated pre-tax losses of $4.0 million over the past 29 months, will be closed. The Company expects the transfer of sales to begin in early February and the facility to be vacated in April 2000. The approximately 30 employees affected by this closure are being offered a transition assistance program or relocation package. A Chicago-based domicile driver system will be created to service the region and the Company hopes to retain the majority of its drivers with this program.

Commenting on the Company’s performance for the remainder of fiscal 2000 and beyond, Chief Financial Officer Kevin Michel said, “Our Central and Western regions continue to turn in excellent performances and the recovery strategy for the Eastern region has turned the tide. We are confident that overall business conditions are positive and believe the Company will return to profitability in the third quarter of fiscal 2000. Based on preliminary forecasts, which are subject to change, we anticipate that net income per share for the third and fourth quarter of fiscal 2000 could range from $0.09 to $0.13 and $0.14 to $0.18, respectively. Looking forward, although we have not completed our budget, we expect profitability to approach historical levels in fiscal 2001.” The Company noted that it reported earnings per share, excluding restructuring costs, of $0.85 for the fiscal year ended July 31, 1999 and $0.97 for the fiscal year ended July 31, 1998.

Commenting on the Company’s Eastern Region operations, Chief Executive Officer Michael Funk said, “We continue to be highly focused on operational priorities and remain optimistic about the long-term strength of our business. The Company is on target to return to historical fill rates by the end of February 2000 and service levels are running at approximately 90% in the Eastern Region, up from 78% since the first week of December. The team continues to focus on restoring customer confidence and nurturing long-term relationships with our customer base.”

Conference Call
United Natural Foods management will host a conference call to discuss its second quarter and fiscal 2000 outlook at 11:00 a.m. (Eastern Standard Time) on January 24, 2000. The conference may be accessed by dialing 703-871-3086 just prior to the scheduled start time. The call may also be accessed on the Internet at

For more information on United Natural Foods, Inc., via fax at no charge, please dial 1-800-PRO-INFO and enter the Company’s ticker symbol, UNFI.


Thomas Simone Joseph Calabrese Vanessa Schwartz
Chairman of the Board General Information Analyst Information
(707) 537-9872 (212) 445-8434 (212) 445-8433

This press release contains forward-looking statements relating to the timing and expected costs associated with executive severance, the closing of our Chicago, Illinois facility and the writedown of certain assets, and such statements involve a number of risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company’s SEC filings, including its periodic reports filed under the Securities Exchange Act of 1934, as amended (copies of which are available upon request from the Company’s investor relations department).