Press Release Details

United Natural Foods Reports Third Quarter 2002 Results

June 4, 2002

$0.29 Earnings Per Share Excluding Special Items

Net sales for the third quarter of fiscal 2002 ending April 30, 2002 totaled $300.4 million, a 16.2% increase compared to $258.5 million reported in the third quarter of fiscal 2001. This increase was primarily due to increased sales throughout all the Company's divisions and included growth percentages in the mid-twenties in both the super natural and mass market distribution channels. Sales growth for the quarter, excluding acquisitions, was 14.8%. Net sales for the nine months ended April 30, 2002 were $866.1 million, a 15.9% increase compared to $747.1 million in the prior year period. The nine-month sales growth, excluding acquisitions, was 14.9%.

Net income for the third quarter of fiscal 2002, excluding the effect of special items, was $5.6 million, or $0.29 per diluted share, compared to $4.1 million, or $0.22 per diluted share, for the quarter ended April 30, 2001. Including the effect of special items, net income for the third quarter of fiscal 2002 was $5.3 million, or $0.27 per diluted share, compared to $3.3 million, or $0.17 per diluted share. The special items for the quarter ended April 30, 2002 consisted of moving and other costs related primarily to the startup of the Company's southern California distribution facility and non-cash income related to the change in fair value of interest rate swaps and related option agreements. Special items for the quarter ended April 30, 2001 consisted of asset impairment, moving and other costs related to the expansion of the Company's New Oxford, PA distribution facility, a non-cash expense related to the change in fair value of interest rate swaps and related option agreements, and asset impairment charges, primarily goodwill, associated with closing an unprofitable retail store.

    The following table details the amounts and effects of these items:

    Quarter Ended April 30, 2002              Pretax              Per diluted
    ($ in thousands, except per share data)   Income   Net of Tax    share

    Income, excluding special items:         $9,284      $5,570     $0.29

    Less: Special Items-
      Relocation and startup costs (operating
       expenses)                                720         431      0.02
      Interest rate swap agreement income      (234)       (140)    (0.01)

    Income, including special items:         $8,798      $5,279     $0.27

    Quarter Ended April 30, 2001              Pretax              Per diluted
    ($ in thousands, except per share data)   Income   Net of Tax    share
    Income, excluding special items:         $6,824      $4,094     $0.22

    Less: Special Items-
      Interest rate swap agreement expense      394         236      0.01
      Restructuring and asset impairment        802         481      0.03
      Expansion expenses (operating expenses)   158          95      0.00
    Income, including special items:         $5,470      $3,282     $0.17

Comments from Management

Commenting on the third quarter results, Michael Funk, Chief Executive Officer, said, "We are pleased to report another quarter of strong operating results and continue to be on track with executing our business plan and growth objectives. Each of our operating units contributed to our growth with sales growth percentages in our supernatural and mass market distribution channels in the mid-twenties as a result of our focus on customer service, expanding our customer base and increasing our penetration with existing accounts."

"To meet the growing consumer demand for natural foods and related products we continue to expand and enhance our distribution network and, during the quarter, we completed the startup of our new distribution center in southern California. The Fontana facility will enable us to provide enhanced service levels to our southwestern customers, realize transportation savings and efficiencies and allow us to penetrate that market further." Mr. Funk added, "Looking forward, we believe our sales growth for the fourth quarter of fiscal 2002 will continue in the 12% - 14% range. We expect net income, excluding special items, for the fiscal 2002 fourth quarter to be approximately $0.28 - $0.30 per diluted share. Our guidance excludes special income or charges related to interest rate swaps."

Conference Call

Management will conduct a conference call and audio webcast at 11:00 a.m. ET on June 4, 2002 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is 703-871-3795. The audio webcast will be available, on a listen only basis, via the Internet at http://www.viavid.com and at the Investor Relations section of the Company's website at www.unfi.com . Please allow extra time prior to the webcast to visit the webcast site and download any software required to listen to the Internet broadcast. The online archive of the webcast will be available for 30 days.

About United Natural Foods

United Natural Foods, Inc. carries and distributes over 30,000 products to more than 7,000 customers nationwide. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores and independent retail operators.

For more information on United Natural Foods, Inc., visit the Company's web site at www.unfi.com .

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding United Natural's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, including but not limited to general business conditions, the impact of competition and our dependence on principal customers, see "Risk Factors" in the Company's annual report on Form 10-K filed with the Commission on October 23, 2001, and its other filings under the Securities Exchange Act of 1934, as amended. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. United Natural Foods, Inc. is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws.

                 UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)

                                    QUARTER ENDED        NINE MONTHS ENDED
                                      APRIL 30,               APRIL 30,
    (In thousands, except per
     share data)                 2002         2001        2002        2001

    Net sales                  $300,362     $258,536    $866,139   $747,100
    Cost of sales               242,048      208,853     696,312    601,576
      Gross profit               58,314       49,683     169,827    145,524
    Operating expenses           47,535       41,182     139,816    123,337
    Restructuring and asset
     impairment charges               -          802         424        802
    Restructuring and merger
     expenses
    Amortization of intangibles      56          269         134        793
      Total operating expenses   47,591       42,253     140,374    124,932
      Operating income           10,723        7,430      29,453     20,592

    Other expense (income):
      Interest expense            1,934        1,692       5,323      5,292
      Change in value of financial
       instruments                 (234)         394       2,195        394
      Other, net                    225         (126)        110       (351)

        Total other expense       1,925        1,960       7,628      5,335

        Income before income
         taxes                    8,798        5,470      21,825     15,257

    Income taxes                  3,519        2,188       8,730      6,103
      Net income                 $5,279       $3,282     $13,095     $9,154

    Per share data (basic):
      Net income                  $0.28        $0.18       $0.69      $0.50

    Weighted average basic shares
     of common stock             19,049       18,580      18,874     18,436
    Per share data (diluted):
      Net income                  $0.27        $0.17       $0.68      $0.49
    Weighted average diluted
     shares of common stock      19,493       18,839      19,304     18,752


                 UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                (In thousands)
                                                    APRIL 30,      JULY 31,
                                                      2002            2001
                                                   (UNAUDITED)
    ASSETS
    Current assets:
      Cash                                            $6,498         $6,393
      Accounts receivable, net                        90,059         81,559
      Notes receivable, trade                            590            685
      Inventories                                    139,769        110,653
      Prepaid expenses                                 5,585          5,394
      Deferred income taxes                            4,434          3,513
      Refundable income taxes                              -            366
        Total current assets                         246,935        208,563

    Property & equipment, net                         80,793         62,186

    Other assets:
      Notes receivable, trade, net                     1,117          1,050
      Goodwill, net                                   31,401         27,500
      Covenants not to compete, net                      284            180
      Other, net                                       2,767            965

        Total assets                                $363,297       $300,444

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Notes payable - line of credit                $107,067        $68,056
      Current installments of long-term debt           1,255         19,625
      Current installment of obligations under
       capital leases                                    637          1,120
      Accounts payable                                65,018         53,169
      Accrued expenses                                23,357         13,242
      Income taxes payable                             1,726              -
        Total current liabilities                    199,060        155,212

    Long-term debt, excluding current installments     6,670          7,805
    Obligations under capital leases, excluding
     current Installments                              1,755          1,484
        Total liabilities                            207,485        164,501

    Stockholders' equity:
    Preferred stock, $.01 par value, authorized
     5,000 shares; none issued and outstanding
    Common stock, $.01 par value, authorized 50,000
     shares; issued and outstanding 19,105 at
     April 30 2002; issued and outstanding 18,653 at
     July 31, 2001                                       191            187
      Additional paid-in capital                      79,291         72,644
      Unallocated shares of ESOP                      (2,135)        (2,258)
      Retained earnings                               78,465         65,370
        Total stockholders' equity                   155,812        135,943

    Total liabilities and stockholders' equity      $363,297       $300,444


                 UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)

                                                  NINE MONTHS ENDED APRIL 30,
                                                       2002           2001
    (In thousands)
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                       $13,095         $9,154
      Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation and amortization                  5,899          5,830
        Change in fair value of financial instruments  2,195            394
        Loss on impairment of intangible assets            -            255
        Loss on disposals of property & equipment        295            582
        Deferred income tax benefit                     (921)          (316)
        Provision for doubtful accounts                1,379          2,198
        Changes in assets and liabilities, net of
         acquired companies:
      Accounts receivable                             (9,197)       (20,227)
      Inventory                                      (28,928)        (8,265)
      Prepaid expenses                                  (172)           828
      Refundable income taxes                            366          3,308
      Other assets                                    (1,679)           237
      Notes receivable, trade                             29           (224)
      Accounts payable                                11,537         27,348
      Accrued expenses                                 7,033          2,327
      Income taxes payable                             1,727              -
        Net cash provided by operating activities      2,658         23,429

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of acquired businesses, net of
       cash acquired                                     (19)        (2,393)
      Proceeds from disposals of property and
       equipment                                          31             43
      Capital expenditures                           (23,633)       (14,166)
      Net cash used in investing activities          (23,621)       (16,516)

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Net borrowings (repayments) under note
       payable                                        39,011           (954)
      Repayments on long-term debt                   (20,739)        (2,032)
      Proceeds from long-term debt                     1,234             39
      Principal payments of capital lease
       obligations                                      (840)          (849)
      Proceeds from exercise of stock options          2,402          2,769
        Net cash provided by (used in)
         financing activities                         21,068         (1,027)

    NET INCREASE IN CASH                                 105          5,886
    Cash at beginning of period                        6,393          1,943
    Cash at end of period                             $6,498         $7,829

    Supplemental disclosures of cash flow information:
      Cash paid during the period for:
        Interest                                      $5,240         $5,171
        Income taxes, net of refunds                  $8,980         $3,100

The fair value of common stock issued for the acquisition of a subsidiary was $4,250.

                 UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
                         SPECIAL ITEMS RECONCILIATION


    (In thousands, except per
     share data)
                               QUARTER ENDED          NINE MONTHS ENDED
                             APRIL 30, 2002           APRIL 30, 2002
                       Pre-tax     Net     Per   Pre-tax      Net      Per
                                    of   diluted               of    diluted
                                   tax    share               tax     share
    Income            $8,798     $5,279   $0.27  $21,825   $13,095    $0.68

    Interest rate swap
     agreement income   (234)      (140)  (0.01)   2,195     1,317     0.07

    Restructuring and
     asset impairment      -          -       -      424       254     0.01

     Relocation and
       startup costs
      (operating
       expenses)         720        431    0.02    1,687     1,013     0.05

    Income excluding
     special items    $9,284     $5,570   $0.29  $26,131   $15,679    $0.81



    (In thousands, except per
      share data)             QUARTER ENDED           NINE MONTHS ENDED
                             APRIL 30, 2001             APRIL 30, 2001
                      Pre-tax      Net     Per    Pre-tax      Net    Per
                                    of   diluted               of   diluted
                                   tax    share               tax    share
    Income including
     special items    $5,470     $3,282   $0.17  $15,257   $ 9,154    $0.49

    Interest rate swap
     agreement expense   394        236    0.01      394       236     0.01

    Restructuring and
     asset impairment    802        481    0.03      802       481     0.03

    Expansion expenses
     (operating
      expenses)          158         95    0.00      390       234     0.01

    Income excluding
     special items    $6,824     $4,094   $0.22  $16,843   $10,105    $0.54


                    

CONTACT: Todd Weintraub, Chief Financial Officer, of United Natural Foods, +1-860-779-2800; or General Information, Joseph Calabrese, +1-212-445-8434, Analyst Information, Vanessa Schwartz, +1-212-445-8433, or Media Information, Judith Sylk-Siegel, +1-212-445-8431, all of FRB Weber Shandwick