Reports Record Sales of $534.3 Million in the Third Quarter of Fiscal 2005 Raises Fiscal 2005 Revenue GuidanceDAYVILLE, Conn., May 31, 2005 /PRNewswire-FirstCall via COMTEX/ -- United Natural Foods,
Inc. (Nasdaq: UNFI) today reported net income of $10.8 million for the third
quarter of fiscal 2005, ended April 30, 2005, or $0.26 per share on a diluted
basis, excluding special items. Net income for the third quarter of fiscal
2005, including special items, was $10.7 million, or $0.26 per share on a
diluted basis. The recent acquisition of Select Nutrition Distributors (SND)
had a minimal negative impact on diluted earnings per share in the current
quarter. Higher fuel costs continued to negatively impact diluted earnings
per share during the quarter by $0.014 when compared to actual costs in the
third quarter of fiscal 2004.
Net sales for the third quarter of fiscal 2005 were $534.3 million, an
increase of $85.4 million, or 19.0%, from the $448.9 million recorded in the
third quarter of fiscal 2004. On a comparable growth analysis, wholesale
revenue growth was 14.6% for the current quarter compared to last year.
Net income for the third quarter of fiscal 2005, excluding the effect of
special items, increased 16.7% to $10.8 million, or $0.26 per diluted share,
compared to $9.2 million, or $0.22 per diluted share, excluding special items,
for the quarter ended April 30, 2004. The special items for the third quarter
of fiscal 2005 included certain labor costs associated with the closing of the
Mounds View, Minnesota facility which was completed in the third quarter of
fiscal 2005. Special items in the third quarter of fiscal 2005 also included
certain labor costs associated with opening the Greenwood, Indiana facility
which is planned to be completed by the end of July 2005. In the third
quarter of fiscal 2004, special items consisted of certain equipment rental
and labor costs recorded in the third quarter of fiscal 2004 for start-up and
transition costs associated with implementing the Company's primary
distribution relationship with Wild Oats Market, Inc. Net income for the
third quarter of fiscal 2005, including the effect of special items, increased
24.2% to $10.7 million, or $0.26 per diluted share, compared to $8.6 million,
or $0.21 per diluted share, for the quarter ended April 30, 2004.
The following table details the amounts and effects of the special items
for the quarter ended April 30, 2005:
Quarter Ended April 30, 2005 Pretax Net of Tax Per diluted
(in thousands, except per share data) Income share
Income, excluding special items: $17,489 $10,756 $0.26
Special items - Income/(Expense)
Related to the closing of the
Mounds View, Minnesota facility
(included in operating expenses) (103) (63) (0.00)
Related to the opening of the
Greenwood, Indiana facility
(included in operating expenses) (11) (7) (0.00)
Income, including special items: $17,375 $10,686 $0.26
The following table details the amounts and effects of the special item
for quarter ended April 30, 2004:
Quarter Ended April 30, 2004 Pretax Net of Tax Per diluted
(in thousands, except per share data) Income share
Income, excluding special items: $15,115 $9,220 $0.22
Special item - Income/(Expense)
Wild Oats Markets, Inc. primary
distributorship transition
related costs (included in operating
expenses) (1,010) (616) (0.01)
Income, including special items: $14,105 $8,604 $0.21
All non-GAAP numbers have been adjusted to exclude special charges. A
reconciliation of specific adjustments to GAAP results for the quarters ended
April 30, 2005, and April 30, 2004, is included in the financial tables shown
above. A description of the Company's use of non-GAAP information is provided
under "Non-GAAP Results" below.
Comments from Management
Steven Townsend, Chief Executive Officer, said, "We are pleased with our
continued strong performance highlighted by our success in meeting the growing
consumer demand for natural and organic foods. During the quarter, we realized
solid increases in net sales, net income and earnings per share which
indicates that our sales, marketing and operating strategies are on target.
We remain focused on serving a broad customer base and are pleased that we
achieved strong year over year growth in all channels. In addition, we
continue to leverage our expenses as we saw a 35 basis point improvement in
our operating expenses."
"Looking ahead, we remain committed to meeting the needs of all our
customers while consistently providing high service levels across our entire
distribution network."
Raises Fiscal 2005 Revenue Guidance
The Company is raising its guidance for fiscal 2005, ending July 31, 2005,
with projected revenues increasing to $2.00 to $2.05 billion. Previously, the
Company had announced revenue guidance from $1.9 to $2.0 billion for the
fiscal year.
Conference Call
Management will conduct a conference call and audio webcast at 11:00 a.m.
EDT on May 31, 2005 to review the Company's quarterly results, market trends
and future outlook. The conference call dial-in number is (303) 262-2131.
The audio webcast will be available, on a listen only basis, via the Internet
at http://www.fulldisclosure.com or at the Investor Relations section of the
Company's website, http://www.unfi.com. Please allow extra time prior to the
webcast to visit the 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 more than 40,000
products to more than 20,000 customers nationwide. The Company serves a wide
variety of retail formats including conventional supermarket chains, natural
product superstores, independent retail operators and the food service
channel. For more information on United Natural Foods, Inc., visit the
Company's website at http://www.unfi.com.
For more information on United Natural Foods, Inc., visit the Company's
website at http://www.unfi.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: Statements in this press release regarding the Company's business
that 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 quarterly report on Form 10-Q
filed with the Commission on March 14, 2005, 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. The Company is not undertaking to
update any information in the foregoing reports until the effective date of
its future reports required by applicable laws. Any projections of future
results of operations should not be construed in any manner as a guarantee
that such results will in fact occur. These projections are subject to change
and could differ materially from final reported results. The Company may from
time to time update these publicly announced projections, but it is not
obligated to do so.
Non-GAAP Results: To supplement its financial statements presented on a
basis of generally accepted accounting principles in the United States of
America (GAAP), the Company uses non-GAAP additional measures of operating
results, net earnings and earnings per share adjusted to exclude special
charges. The Company believes that the use of these additional measures is
appropriate to enhance an overall understanding of its past financial
performance and also its prospects for the future as these special charges are
not expected to be part of the Company's ongoing business. The adjustments to
the Company's GAAP results are made with the intent of providing both
management and investors with a more complete understanding of the underlying
operational results and trends and its marketplace performance. For example,
these adjusted non-GAAP results are among the primary indicators management
uses as a basis for its planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered in
isolation or as a substitute for net earnings or diluted earnings per share
prepared in accordance with GAAP. A comparison and reconciliation from non-
GAAP to GAAP results is included in the tables within this release.
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three months ended Nine months ended
April 30, April 30,
2005 2004 2005 2004
Net sales $534,335 $448,900 $1,516,587 $1,223,530
Cost of sales 432,387 361,323 1,226,872 980,995
Gross profit 101,948 87,577 289,715 242,535
Operating expenses 82,655 71,388 235,828 199,706
Restructuring charge - - 170 -
Amortization of
intangibles 177 676 490 1,142
Total operating
expenses 82,832 72,064 236,488 200,848
Operating income 19,116 15,513 53,227 41,687
Other expense (income):
Interest expense 1,877 1,536 4,887 5,990
Change in fair value of
financial instruments - - - (704)
Other, net (136) (128) (359) (358)
Total other expense 1,741 1,408 4,528 4,928
Income before income
taxes 17,375 14,105 48,699 36,759
Income taxes 6,689 5,501 18,906 14,336
Net income $10,686 $8,604 $29,793 $22,423
Per share data (basic):
Net income $0.26 $0.22 $0.74 $0.57
Weighted average basic
shares of common stock 40,900 39,648 40,470 39,296
Per share data (diluted):
Net income $0.26 $0.21 $0.72 $0.55
Weighted average diluted
shares of common stock 41,774 41,344 41,494 40,813
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
April 30, July 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $8,197 $13,633
Accounts receivable, net 143,088 106,178
Notes receivable, trade, net 592 772
Inventories 228,746 196,171
Prepaid expenses 10,853 7,007
Deferred income taxes 8,117 7,610
Total current assets 399,593 331,371
Property & equipment, net 146,460 114,140
Other assets:
Goodwill 64,744 57,242
Notes receivable, trade, net 2,181 1,601
Intangible assets, net 338 154
Other 5,770 4,259
Total assets $619,086 $508,767
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - line of credit $150,505 $107,004
Accounts payable 111,691 80,875
Accrued expenses and other current liabilities 26,399 29,501
Current portion of long-term debt 5,834 4,766
Total current liabilities 294,429 222,146
Long-term debt, excluding current portion 37,319 43,978
Deferred income taxes 6,469 7,730
Other long-term liabilities 551 137
Total liabilities 338,768 273,991
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, authorized
5,000 shares at April 30, 2005 and July 31, 2004,
respectively; none issued and outstanding - -
Common stock, $0.01 par value, authorized 50,000
shares; issued and outstanding 41,029 and 40,118
at April 30, 2005 and July 31, 2004, respectively 410 401
Additional paid-in capital 116,680 101,118
Unallocated shares of ESOP (1,646) (1,768)
Accumulated other comprehensive income 296 240
Retained earnings 164,578 134,785
Total stockholders' equity 280,318 234,776
Total liabilities and stockholders' equity $619,086 $508,767
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine months ended
April 30,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $29,793 $22,423
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 9,944 8,807
Change in fair value of financial instruments - (704)
Gains on disposals of property & equipment (26) (61)
Provision for doubtful accounts 1,378 2,521
Changes in assets and liabilities, net of
acquired companies:
Accounts receivable (34,541) (22,504)
Inventory (28,322) (45,345)
Prepaid expenses and other assets (5,157) 1,050
Notes receivable, trade (400) (1,108)
Accounts payable 25,947 29,344
Accrued expenses and other current liabilities (4,131) (907)
Financial instruments - (5,400)
Tax benefit of stock options 7,167 3,870
Net cash provided by (used in) operating
activities 1,652 (8,014)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (41,197) (18,989)
Purchases of acquired businesses, net of
cash acquired (6,219) (6)
Proceeds from disposals of property and equipment 248 202
Net cash used in investing activities (47,168) (18,793)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under note payable 37,781 18,344
Proceeds from exercise of stock options 8,403 7,477
Repayments on long-term debt (5,591) (3,302)
Principal payments of capital lease obligations (513) (759)
Proceeds from issuance of long-term debt - 10,204
Net cash provided by financing activities 40,080 31,964
NET (DECREASE) INCREASE IN CASH (5,436) 5,157
Cash and cash equivalents at beginning of period 13,633 3,645
Cash and cash equivalents at end of period $8,197 $8,802
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $4,903 $5,788
Income taxes, net of refunds $14,107 $9,686
SOURCE United Natural Foods, Inc.
Rick Puckett, Chief Financial Officer of United Natural Foods, Inc., +1-860 779-2800
or General Information - Joseph Calabrese, Financial Relations Board,
+1-212-445-8434, for United Natural Foods, Inc.