- Quarterly net sales increased 22% from the fourth quarter of fiscal 2004 to $543.0 million and quarterly net income per diluted share increased 21% to $0.28, excluding special items, and increased 22% to $0.28 per diluted share, including special items.
- Annual net sales increased 23% from the full fiscal year 2004 to $2.06 billion and annual net income per diluted share increased 27% from fiscal 2004 to $1.00, excluding special items, and increased 28% to $1.00 per diluted share, including special items.
- Comparable wholesale sales growth rates were 19.3% for the quarter and 15.3% for the full year.DAYVILLE, Conn., Aug 31, 2005 /PRNewswire-FirstCall via COMTEX/ -- United Natural Foods,
Inc. (Nasdaq: UNFI) today reported net income of $11.6 million for the fourth
quarter of fiscal 2005, ended July 31, 2005, or $0.28 per share on a diluted
basis, excluding special items. Net income for the fourth quarter of fiscal
2005, including special items, was $11.8 million, or $0.28 per share on a
diluted basis.
Net sales for the fourth quarter of fiscal 2005 were $543.0 million, an
increase of $96.6 million, or 21.6%, from the $446.4 million recorded in the
fourth quarter of fiscal 2004. On a comparable growth analysis, wholesale
revenue growth was 19.3% for the current quarter compared to last year.
Net income for the fourth quarter of fiscal 2005, excluding the effect of
special items, increased 21.6% to $11.6 million, or $0.28 per diluted share,
compared to $9.6 million, or $0.23 per diluted share, excluding special items,
for the quarter ended July 31, 2004. Net income for the fourth quarter of
fiscal 2005, including the effect of special items, increased 23.2% to $11.8
million, or $0.28 per diluted share, compared to $9.6 million, or $0.23 per
diluted share, for the quarter ended July 31, 2004. The special items for the
fourth quarter of fiscal 2005 included certain costs associated with the
opening of the Company's new Greenwood, Indiana facility and the closing of
its Hawaii facility. In addition, the fourth quarter included other income
related to the early termination of the interest rate swap agreement that was
originally entered into in May 2003. There were no special items related to
the fourth quarter of fiscal 2004.
During the fourth quarter of fiscal 2005, Select Nutrition Distributors,
which was acquired in December 2004, and higher fuel costs both had a negative
impact on diluted earnings per share. In addition, the Company has
experienced higher than expected external costs associated with its compliance
efforts under Section 404 of Sarbanes-Oxley.
The following table details the amounts and effect of these special items
and the reconciliation of net income, excluding special items (Non-GAAP
basis), to net income, including special items (GAAP basis) for the quarter
ended July 31 2005:
Quarter Ended July 31, 2005
Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
Income, excluding special items: $18,116 $11,633 $0.28
Special items - Income/(Expense):
Related to the closing of the Hawaii
facility (included in operating
expenses) (67) (42) (0.00)
Related to the opening of the
Greenwood, Indiana facility (included
in operating expenses) (254) (158) (0.00)
Termination of interest rate swap
agreement (included in other income,
net) 557 346 0.01
Income, including special items: $18,352 $11,779 $0.28*
* Total reflects rounding
All Non-GAAP numbers have been adjusted to exclude special charges. A
description of the Company's use of Non-GAAP information is provided under
"Non-GAAP Results" below.
Record Year End Results
Net income, excluding special items, for the year ended July 31, 2005
increased $9.2 million, or 28.3%, to $41.7 million, or $1.00 per diluted
share, from $32.5 million, or $0.79 per diluted share, for the year ended July
31, 2004. Net income, including special items, was $41.6 million, or $1.00
per diluted share, compared to $32.0 million, or $0.78 per diluted share, for
the year ended July 31, 2004.
Net sales for the year ended July 31, 2005 were $2.06 billion, an increase
of 23.3%, or $389.6 million, over the $1.67 billion recorded in the year ended
July 31, 2004. On a comparable growth analysis, wholesale division's revenue
growth was 15.3% compared to last year.
Special items for fiscal 2005 included certain costs associated with
closing the Mounds View, Minnesota and Hawaii facilities, and certain costs
associated with opening the new Greenwood, Indiana facility. In addition,
other income related to the early termination of the interest rate swap
agreement, which was originally entered into in May 2003, was recorded in the
fourth quarter. Special items for the fiscal year ended July 31, 2004 included
non-cash income related to the change in fair value of interest rate swaps and
related options agreements caused by favorable changes in yield curves as well
as start-up and transition costs of the Wild Oats Markets, Inc. primary
distributorship.
The following tables detail the amounts and effect of these special items
and the reconciliation of net income, excluding special items (Non-GAAP
basis), to net income, including special items (GAAP basis) for the years
ended July 31, 2005 and 2004:
Year Ended July 31, 2005
Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
Income, excluding special items: $67,284 $41,716 $1.00
Special items - Income (Expense):
Related to the closing of the
Mounds View, Minnesota facility
(included in operating expenses) (456) (283) (0.01)
Related to the closing of the
Hawaii facility (included in
operating expenses) (67) (42) (0.00)
Related to the opening of the
Greenwood, Indiana facility
(included in operating expenses) (266) (165) (0.00)
Termination of interest rate swap
agreement (included in other income,
net) 557 346 0.01
Income, including special items: $67,052 $41,572 $1.00
Year Ended July 31, 2004
Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
Income, excluding special items: $53,293 $32,509 $0.79
Special items - Income (Expense):
Wild Oats Markets, Inc. primary
distributorship transition related
costs (included in operating
expenses) (1,561) (952) (0.02)
Interest rate swap and related
option agreements (change in fair
value of financial instruments) 704 429 0.01
Income, including special items: $52,436 $31,986 $0.78
All non-GAAP numbers have been adjusted to exclude special charges. A
description of the Company's use of non-GAAP information is provided under
"Non-GAAP Results" below.
Comments from Management
"I am very pleased with our Company's financial and operating performance
in fiscal 2005," commented Steven Townsend, Chairman and Chief Executive
Officer. "These results reflect the success of our sales and marketing
strategies which enabled us to achieve solid growth across our three primary
distribution channels. We remain focused on serving a growing 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 57 basis point
improvement in our operating expenses, in spite of the higher fuel costs and
Sarbanes-Oxley compliance costs that have been experienced. Overall, we
realized solid increases in net sales, net income and earnings per share,
which further indicates that our operating strategies are on target. We were
also able to strengthen our financial position and solidify our balance sheet.
At the same time, we continued to strengthen our industry presence by entering
new channels of business and fostering several new business relationships."
Mr. Townsend added, "As we look ahead, we are excited about our Company's
prospects for fiscal 2006 and beyond. Our efforts remain focused on helping
our customers be more successful in their marketplace while maintaining our
position as America's premier certified organic distributor. To ensure that
United Natural Foods is well positioned to capitalize on favorable growth
opportunities in the natural and organic foods industry, we will continue to
invest in our people, facilities, equipment and new technologies."
Conference Call
Management will conduct a conference call and audio webcast at 11:00 a.m.
EDT on August 31, 2005 to review the Company's quarterly and annual 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.earnings.com or at the Investor Relations section
of the Company's website, http://www.unfi.com. Please allow extra time 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 June 9, 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
generally accepted accounting principles ("GAAP") basis, 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
generally accepted accounting principles in the United States of America. 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)
Quarters ended Years ended
July 31, July 31,
2005 2004 2005 2004
Net sales $542,981 $446,422 $2,059,568 $1,669,952
Cost of sales 437,652 358,500 1,664,523 1,339,496
Gross profit 105,329 87,922 395,045 330,456
Operating expenses 85,857 70,960 321,685 270,666
Restructuring charge - - 170 -
Amortization of
intangibles 169 164 660 1,306
Total operating
expenses 86,026 71,124 322,515 271,972
Operating income 19,303 16,798 72,530 58,484
Other expense (income):
Interest expense 1,682 1,275 6,568 7,265
Change in fair value of
financial instruments - - - (704)
Other income, net (731) (154) (1,090) (513)
Total other expense 951 1,121 5,478 6,048
Income before income
taxes 18,352 15,677 67,052 52,436
Income taxes 6,573 6,114 25,480 20,450
Net income $11,779 $9,563 $41,572 $31,986
Per share data (basic):
Net income $0.29 $0.24 $1.02 $0.81
Weighted average basic
shares of common stock 41,139 39,993 40,639 39,471
Per share data (diluted):
Net income $0.28 $0.23 $1.00 $0.78
Weighted average diluted
shares of common stock 41,951 41,623 41,607 41,025
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
July 31, July 31,
2005 2004
ASSETS
Current assets:
Cash $12,615 $13,633
Accounts receivable, net 136,472 106,178
Notes receivable, trade, net 877 772
Inventories 235,700 196,171
Prepaid expenses and other current assets 9,811 7,007
Deferred income taxes 7,419 7,610
Total current assets 402,894 331,371
Property & equipment, net 167,909 114,140
Other assets:
Goodwill 73,808 57,242
Notes receivable, trade, net 1,802 1,601
Intangible assets, net 307 154
Other 4,538 4,259
Total assets $651,258 $508,767
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - line of credit $123,574 $107,004
Accounts payable 119,177 80,875
Accrued expenses and other current liabilities 34,915 29,501
Current portion of long-term debt 5,843 4,766
Total current liabilities 283,509 222,146
Long-term debt, excluding current portion 64,852 43,978
Deferred income taxes 6,904 7,730
Other long-term liabilities 474 137
Total liabilities 355,739 273,991
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, authorized
5,000 shares; none issued and outstanding - -
Common stock, $0.01 par value, authorized
50,000 shares; issued and outstanding 41,287
and 40,118 at July 31, 2005 and 2004,
respectively 413 401
Additional paid-in capital 120,354 101,118
Unallocated shares of Employee Stock Ownership
Plan (1,605) (1,768)
Accumulated other comprehensive income - 240
Retained earnings 176,357 134,785
Total stockholders' equity 295,519 234,776
Total liabilities and stockholders' equity $651,258 $508,767
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Years ended
July 31,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $41,572 $31,986
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,573 11,660
Change in fair value of financial instruments - (704)
Gains on disposals of property & equipment (29) (95)
Deferred income taxes 1,763 3,724
Provision for doubtful accounts 2,471 3,586
Stock-based compensation 162 -
Changes in assets and liabilities, net of
acquired companies:
Accounts receivable (27,437) (19,653)
Inventory (34,645) (37,801)
Prepaid expenses and other assets (3,291) (913)
Notes receivable, trade (306) (527)
Accounts payable 32,219 13,688
Accrued expenses and other current liabilities 4,199 3,202
Financial instruments - (5,400)
Tax effect of stock options 8,095 6,213
Net cash provided by operating activities 38,346 8,966
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (65,951) (23,851)
Purchases of acquired businesses, net of cash
acquired (16,615) (6)
Proceeds from disposals of property and
equipment 242 244
Net cash used in investing activities (82,324) (23,613)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt, net 30,288 10,204
Proceeds from exercise of stock options 10,991 9,043
Net borrowings under note payable 10,850 10,834
Repayments on long-term debt (8,438) (4,522)
Principal payments of capital lease obligations (731) (924)
Net cash provided by financing activities 42,960 24,635
NET (DECREASE) INCREASE IN CASH (1,018) 9,988
Cash at beginning of period 13,633 3,645
Cash at end of period $12,615 $13,633
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $7,006 $7,074
Income taxes, net of refunds $16,609 $9,851
SOURCE United Natural Foods, Inc.
Rick Puckett, Chief Financial Officer for United Natural Foods, Inc.,
+1-860-779-2800; or General Information - Joseph Calabrese of Financial Relations
Board for United Natural Foods, Inc., +1-212-827-3772