Announces New 237,000 Square Foot Distribution Facility
to be Located in Ridgefield, WA DAYVILLE, Conn., Feb. 20 /PRNewswire-FirstCall/ -- United Natural Foods,
Inc. (Nasdaq: UNFI) (the "Company") today reported net sales for the second
quarter of fiscal 2007, ended January 27, 2007, of $668.5 million, an increase
of approximately $67.5 million, or 11.2%, from the $601.1 million recorded in
the second quarter of fiscal 2006.
Operating expenses during the second quarter of fiscal 2007 were
negatively impacted by approximately $2.2 million of losses related to the
Company's two Auburn, California facilities. In January 2007, the Company
incurred a loss of $1.5 million associated with the sale of one of the
facilities. In addition, the Company recorded an impairment loss in accordance
with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, of $0.8 million on its second Auburn, California facility, as a result
of the Company's decision to sell the property. Accordingly, the assets
associated with the second facility have been reclassified on the balance
sheet from property and equipment to other current assets as of January 27,
2007. During the second quarter of fiscal 2007, the Company also incurred $0.4
million in fees related to the early termination of unused leased space at a
facility in Minnesota, and recorded a related write-off of $0.3 million in
abandoned leasehold improvements.
In the second quarter of fiscal 2007, the Company recorded share-based
compensation expense of $1.0 million in accordance with Statement of Financial
Accounting Standard ("SFAS") No. 123R, Share-Based Payment, compared to $0.9
million of share-based compensation expense for the second quarter of fiscal
2006, ended January 28, 2006.
The Company reported net income of $10.9 million, or $0.25 per diluted
share, for the second quarter of fiscal 2007. After adjusting for the impact
of losses attributable to the two Auburn, California facilities and the early
termination of the Minnesota facility and the related asset write-off
described above, net income for the quarter would have been $12.7 million or
$0.30 per diluted share. Net income for the second quarter of fiscal 2006,
excluding special items, was $10.8 million, or $0.26 per diluted share. Net
income for the second quarter of fiscal 2006, including special items, was
$10.6 million, or $0.25 per diluted share.
The following table details the amounts and effect of special items and a
reconciliation of net income and per share amounts, excluding special items
(non-GAAP basis), to net income and per share amounts, including special items
(GAAP basis), for the second quarter of fiscal 2006:
Quarter Ended January 28, 2006 Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
Income, excluding special items: $17,398 $10,787 $0.26
Special items - (Expense)
Rocklin, CA facility relocation costs
(included in operating expenses) (251) (156) (0.00)
Income, including special items: $17,147 $10,631 $0.25*
* Total reflects rounding.
All non-GAAP numbers have been adjusted to exclude special items. A
reconciliation of specific adjustments to GAAP results for the quarter ended
January 28, 2006 is included in the financial table shown above. A
description of the Company's use of non-GAAP information is provided under
"Non-GAAP Results" below.
"Fiscal 2007 continues to be a strong year and we are quite pleased with
our operating performance and financial results during the second quarter,"
said Michael Funk, President and Chief Executive Officer. "Sales growth in our
supermarket channel remained solid and we expect the super natural channel to
realize increased sales growth with the number of new stores expected to open
during 2007. I am also pleased to report that the transition during the
quarter related to our expanded Whole Foods relationship in the Southern
Pacific region of the United States has gone smoothly. We continue to develop
operational efficiencies while servicing our customers at a high service
level."
New Facility in Ridgefield, Washington
The Company also announced today that it is expanding its operations in
the Pacific Northwest of the United States with the construction of a new
237,000 square foot state-of-the-art distribution center in Ridgefield,
Washington. The new facility will create approximately 100 jobs upon opening.
The distribution center is scheduled to commence operations in the late
summer of 2007 and will serve as a regional distribution hub for customers in
Portland, Oregon and other Northwest states. The Company currently has 16
distribution facilities throughout the United States, consisting of an
aggregate of 3.3 million square feet of space. The Company has the largest
capacity of any distributor in the natural products industry.
Mr. Funk commented, "To accommodate anticipated industry growth and
accelerating consumer demand for natural and organic products we are pleased
to announce plans to open a new facility in the Pacific Northwest. Supporting
our commitment to our customers, the Ridgefield distribution center will
improve our distribution capabilities and provide customers with further
product diversity and enhanced customer service. The new distribution center
will also allow us the opportunity to create new sales opportunities in this
region and will provide lower transportation costs to our customers."
Mr. Funk added, "We are grateful for the partnership and support we have
received from the City of Ridgefield and look forward to building a long-
lasting relationship with the community."
Conference Call
Management will conduct a conference call and audio webcast at 11:00 a.m.
EST on February 20, 2007 to review the Company's quarterly results, market
trends and future outlook. The conference call dial-in number is (303) 205-
0033. An audio webcast of the conference call will be available to the public,
on a listen-only basis, via the Internet at www.earnings.com or at the
Investor Relations section of the Company's website at www.unfi.com. Please
allow extra time prior to the call to visit the site and download the
necessary software 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 18,000 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. United Natural Foods, Inc. was ranked by Forbes in 2005 as one of
the "Best Managed Companies in America," ranked by Fortune in 2006 as one of
its "Most Admired Companies," and ranked by Business Ethics as one of its "100
Best Corporate Citizens for 2006." For more information on United Natural
Foods, Inc., visit the Company's website at http://www.unfi.com.
Financial Tables Follow
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 Securities and Exchange Commission on December 7, 2006, 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 U.S.
generally accepted accounting principles ("GAAP") basis, the Company uses non-
GAAP additional measures of operating results, net income 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 Six months ended
January January January January
27, 28, 27, 28,
2007 2006 2007 2006
Net sales $668,545 $601,082 $1,314,978 $1,176,722
Cost of sales 544,477 484,677 1,067,339 950,051
Gross profit 124,068 116,405 247,639 226,671
Operating expenses 101,739 96,057 202,018 191,570
Impairment on assets held for
sale 756 - 756 -
Amortization of intangibles 138 142 289 286
Total operating
expenses 102,633 96,199 203,063 191,856
Operating income 21,435 20,206 44,576 34,815
Other expense (income):
Interest expense 3,350 3,195 6,261 5,562
Interest income (180) (73) (294) (141)
Other, net 399 (63) 371 (123)
Total other
expense 3,569 3,059 6,338 5,298
Income before
income taxes 17,866 17,147 38,238 29,517
Provision for income taxes 6,968 6,516 14,913 11,216
Net income $10,898 $10,631 $23,325 $18,301
Per share data (basic):
Net income $0.26 $0.26 $0.55 $0.44
Weighted average basic shares of
common stock 42,438 41,406 42,299 41,395
Per share data (diluted):
Net income $0.25 $0.25 $0.55 $0.43
Weighted average diluted shares
of common stock 42,848 41,952 42,733 42,076
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
January 27, July 29,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $17,066 $20,054
Accounts receivable, net 162,954 147,686
Notes receivable, trade, net 1,290 1,254
Inventories 288,989 257,259
Prepaid expenses and other current assets 18,546 12,596
Deferred income taxes 10,911 10,911
Total current assets 499,756 449,760
Property & equipment, net 161,476 163,247
Other assets:
Goodwill 78,044 78,016
Notes receivable, trade, net 2,620 2,760
Intangible assets, net 187 251
Other 10,340 6,561
Total assets $752,423 $700,595
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $123,000 $125,005
Accounts payable 116,272 102,146
Accrued expenses and other current
liabilities 34,375 34,245
Current portion of long-term debt 5,552 5,433
Total current liabilities 279,199 266,829
Long-term debt, excluding current portion 66,666 59,716
Deferred income taxes 8,827 9,693
Other long-term liabilities 858 883
Total liabilities 355,550 337,121
Stockholders' equity:
Preferred stock, $0.01 par value, authorized
5,000 shares at January 27, 2007 and
July 29, 2006; none issued and outstanding - -
Common stock, $0.01 par value, authorized
100,000 shares; 43,013 issued and 42,785
outstanding shares at January 27, 2007;
42,477 issued and 42,248 outstanding shares
at July 29, 2006 430 425
Additional paid-in capital 161,212 149,840
Unallocated shares of Employee Stock
Ownership Plan (1,298) (1,380)
Treasury stock (6,092) (6,092)
Accumulated other comprehensive (loss) income (338) 1,047
Retained earnings 242,959 219,634
Total stockholders' equity 396,873 363,474
Total liabilities and stockholders' equity $752,423 $700,595
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six months ended
January 27, January 28,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $23,325 $18,301
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 9,378 7,988
Loss (gain) on disposals of property &
equipment 1,968 (30)
Impairment on assets held for sale 756 -
Provision for doubtful accounts 815 1,600
Share-based compensation 1,997 3,480
Changes in assets and liabilities, net of
acquired companies:
Accounts receivable (16,083) (28,333)
Inventory (31,730) (28,596)
Prepaid expenses and other assets (10,675) 1,970
Notes receivable, trade 104 (589)
Accounts payable 11,843 20,571
Accrued expenses and other current
liabilities (1,213) 6,510
Net cash (used in) provided by operating
activities (9,515) 2,872
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14,542) (11,774)
Proceeds from disposals of property and
equipment 5,441 43
Other investing activities (1,028) (575)
Net cash used in investing activities (10,129) (12,306)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of long-term debt 10,000 -
Net (repayments) borrowings under note payable (2,005) 37,428
Increase (decrease) in bank overdraft 2,283 (14,053)
Proceeds from exercise of stock options 6,663 7,713
Purchases of treasury stock - (6,092)
Repayments on long-term debt (2,999) (2,922)
Tax effect of stock options 2,718 1,626
Principal payments of capital lease obligations (4) (273)
Net cash provided by financing activities 16,656 23,427
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (2,988) 13,993
Cash and cash equivalents at beginning of period 20,054 12,615
Cash and cash equivalents at end of period $17,066 $26,608
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest, net of amounts capitalized $6,280 $5,167
Federal and state income taxes, net of
refunds $17,313 $8,749
SOURCE United Natural Foods, Inc.
CONTACT: Mark Shamber, Chief Financial Officer of United Natural Foods,
Inc., 1-860-779-2800; or General Information: Joseph Calabrese of Financial
Relations Board, 1-212-827-3772, for United Natural Foods, Inc.
Web site: http://www.unfi.com
(UNFI)