View all news

United Natural Foods Announces First Quarter 2009 Diluted EPS of $0.31

November 25, 2008
    First Quarter Highlights
    - Net Sales increased 17.4% to $864.2 million in the first quarter 2009
    - Comparable Net Sales increased 10.1% in the quarter
    - Net Income of $13.2 million

    DAYVILLE, Conn., Nov. 25 /PRNewswire-FirstCall/ --  United Natural Foods,
Inc. (Nasdaq: UNFI) today reported net sales for the first quarter of fiscal
2009, ended November 1, 2008, of $864.2 million, an increase of $127.8
million, or 17.4%, from the $736.4 million in net sales recorded in the first
quarter of fiscal 2008.  Excluding the effect of the Company's November 2007
acquisition of Millbrook Distribution Services, Inc. ("UNFI Specialty"), net
sales increased by approximately $74.7 million, or 10.1%, to $811.1 million.

"We're quite pleased with our performance in the first quarter, which included delivering comparable sales growth of over 10% in spite of these difficult and uncertain economic conditions" said Steven Spinner, President and Chief Executive Officer. "These results reflect our associates continuing commitment to growing our core businesses."

    Net income was $13.2 million, or $0.31 per diluted share, for the first
quarter of fiscal 2009.  Net income for the first quarter of fiscal 2008
totaled $13.6 million, or $0.32 per diluted share. UNFI Specialty, which the
Company acquired in the second quarter of fiscal 2008, negatively impacted
operating income by approximately $1.6 million, or $0.02 per diluted share,
during the first quarter of fiscal 2009.  Excluding the effect of UNFI
Specialty, net income for the quarter ended November 1, 2008 would have been
$14.7 million, or $0.34 per diluted share.

    Gross margin was 19.4% for the first quarter of fiscal 2009, which
represents a 99 basis point improvement from the gross margin of 18.4% for the
first quarter of fiscal 2008. The improvement in gross margin over the prior
year was due primarily to higher gross margin associated with the Company's
UNFI Specialty division and higher fuel surcharge revenues due to the higher
average diesel prices compared to the quarter ended October 27, 2007.  The
fuel surcharge serves to partially offset higher diesel fuel costs in
operating expenses.

    Operating expenses as a percentage of net sales increased by 1.4% during
the first quarter of fiscal 2009 to 16.5% of net sales, or $142.5 million.
Operating expenses were negatively impacted by $2.5 million in labor and other
non recurring expenses related to the Company's relocation from its Fontana,
California facility to a new distribution facility in Moreno Valley,
California and the planned relocation of the Company's current Oxford,
Pennsylvania facility to a new facility in York, Pennsylvania.  The Moreno
Valley, California facility commenced shipments in September 2008 and the
York, Pennsylvania facility is expected to commence operations in mid-January
2009.  Operating expenses increased by $31.3 million, or 28.1% compared to the
quarter ended October 27, 2007, which had operating expenses of $111.3
million, or 15.1% of net sales.

In the quarter ended November 1, 2008, the Company recorded share-based compensation expense of $1.7 million in accordance with Statement of Financial Accounting Standard No. 123R, Share-Based Payment, which was $0.7 million higher than the same period in fiscal 2008.

    "We relocated our distribution facility in Fontana, California to a new
facility in Moreno Valley, California, and we are on track to relocate our New
Oxford, Pennsylvania facility to York, Pennsylvania in January 2009," said Mr.
Spinner. "These facilities will allow us to achieve greater operational
efficiencies and provide us with capabilities to grow our market share in the
natural, organic, specialty and supplement channels."

    Mr. Spinner added, "We have seen measurable improvement at UNFI Specialty
that is in line with our expectations.  As we look to further integrate UNFI
Specialty into our existing business, we continue to believe that we are
poised to gain market share during 2009."

Conference Call & Webcast

    The Company's first quarter 2009 conference call and audio webcast will be
held at 11:00 a.m. EST on November 25, 2008. The conference call dial-in
number is (303) 262-2053. An audio webcast of the conference call will be
available to the public, on a listen-only basis, via the Internet at or at the Investor Relations section of the Company's
website at

About United Natural Foods

    United Natural Foods, Inc. ( carries and distributes more
than 60,000 products to more than 17,000 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 and
2007 as one of its "Most Admired Companies," ranked by Business Ethics as one
of its "100 Best Corporate Citizens for 2006" and winner of the Supermarket
News 2008 Sustainability Excellence Award.

    Financial Tables Follow

For more information on United Natural Foods, Inc., visit the Company's website at

    "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 annual report on Form 10-K
filed with the Commission on October 1, 2008, 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.

                             UNITED NATURAL FOODS, INC.
                    CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                       (In thousands, except per share data)

                                                      Quarters ended
                                               November 1,       October 27,
                                                  2008               2007

    Net sales                                   $864,236          $736,389
    Cost of sales                                696,648           600,918

              Gross profit                       167,588           135,471

    Operating expenses                           142,543           111,266
              Total operating expenses           142,543           111,266

              Operating income                    25,045            24,205

    Other expense (income):
        Interest expense                           3,410             2,891
        Interest income                             (252)             (179)
        Other, net                                   (48)               69
              Total other expense                  3,110             2,781

              Income before income taxes          21,935            21,424

    Provision for income taxes                     8,686             7,863

              Net income                         $13,249           $13,561

    Basic per share data:
              Net income                           $0.31             $0.32

    Weighted average basic shares of
     common stock                                 42,764            42,610

    Diluted per share data:
               Net income                          $0.31             $0.32

    Weighted average diluted shares of
     common stock                                 42,919            42,829

                             UNITED NATURAL FOODS, INC.
                      CONSOLIDATED BALANCE SHEETS (Unaudited)
                       (In thousands, except per share data)

                                                   November 1,  August 2,
                                                      2008        2008
    Current assets:
      Cash and cash equivalents                      $7,474      $25,333
      Accounts receivable, net                      191,522      179,063
      Notes receivable, trade, net                    1,354        1,412
      Inventories                                   468,547      394,364
      Prepaid expenses and other current assets      12,352       13,307
      Deferred income taxes                          14,221       14,221
        Total current assets                        695,470      627,700

    Property and equipment, net                     239,995      234,115

    Other assets:
      Goodwill                                      166,465      170,609
      Notes receivable, trade, net                    2,179        2,349
      Intangible assets, net                         38,669       33,689
      Other                                          18,771       16,021
    Total assets                                 $1,161,549   $1,084,483

    Current liabilities:
      Notes payable                                $299,198     $288,050
      Accounts payable                              197,498      160,418
      Accrued expenses and other current
       liabilities                                   75,119       63,308
      Current portion of long-term debt               4,989        5,027
        Total current liabilities                   576,804      516,803

    Long-term debt, excluding current portion        57,705       58,485
    Deferred income taxes                            11,002        9,058
    Other long-term liabilities                      20,588       20,087
        Total liabilities                           666,099      604,433

    Stockholders' equity:
    Preferred stock, $0.01 par value,
     authorized 5,000 shares at November
     1, 2008 and August 2, 2008; none
     issued and outstanding
                                                          -            -
    Common stock, $0.01 par value,
     authorized 100,000 shares; 43,128
     issued and 42,900 outstanding shares
     at November 1, 2008; 43,100 issued
     and 42,871 outstanding shares at
     August 2, 2008                                     431          431
    Additional paid-in capital                      171,624      169,238
    Unallocated shares of Employee Stock
     Ownership Plan                                    (999)      (1,040)
    Treasury stock                                   (6,092)      (6,092)
    Accumulated other comprehensive loss             (1,029)        (753)
    Retained earnings                               331,515      318,266
        Total stockholders' equity                  495,450      480,050

    Total liabilities and stockholders'
     equity                                      $1,161,549   $1,084,483

                             UNITED NATURAL FOODS, INC.
                                   (In thousands)

                                                      Three months ended
                                                    November 1,   October 27,
                                                       2008          2007

     Net income                                       $13,249      $13,561
     Adjustments to reconcile net income to net cash
       used in operating activities:
        Depreciation and amortization                   6,369        4,678
        Loss on disposals of property and equipment        53            8
        Deferred income taxes                               -         (101)
        Provision for doubtful accounts                   842          472
        Share-based compensation                        1,686        1,004
        Gain on forgiveness of loan                         -         (157)
     Changes in assets and liabilities, net of
        Accounts receivable                           (13,350)     (14,164)
        Inventories                                   (73,646)     (52,246)
        Prepaid expenses and other assets               3,536       (2,693)
        Notes receivable, trade                           228          389
        Accounts payable                               20,527       29,828
        Accrued expenses and other current
         liabilities                                    9,307          462
          Net cash used in operating activities       (31,199)     (18,959)

     Capital expenditures                             (11,415)     (12,623)
     Purchases of acquired businesses, net of cash
      acquired                                           (190)        (686)
     Payment for loans receivable                           -       (5,000)
          Net cash used in investing activities       (11,605)     (18,309)

     Net borrowings under note payable                 11,148       32,500
     Increase in bank overdraft                        16,989        8,714
     Payments on life insurance policy loans           (3,072)           -
     Repayments of long-term debt                        (818)      (1,684)
     Proceeds from exercise of stock options              565          134
     Tax benefit from exercises of stock options          133           40
          Net cash provided by financing activities    24,945       39,704

     EQUIVALENTS                                      (17,859)       2,436
    Cash and cash equivalents at beginning of period   25,333       17,010
    Cash and cash equivalents at end of period         $7,474      $19,446

Supplemental disclosures of cash flow information:

    Cash paid during the period for:
          Interest, net of amounts capitalized         $3,271       $2,779
          Federal and state income taxes, net of
           refunds                                     $1,169       $7,956

SOURCE United Natural Foods, Inc.

CONTACT: Mark Shamber, Chief Financial Officer, United Natural Foods,
Inc., +1-860-779-2800, or Joseph Calabrese, General Information, Financial
Relations Board, +1-212-827-3772
Web Site:

Categories: Press Releases
View all news