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
www.fulldisclosure.com or at the Investor Relations section of the Company's
website at www.unfi.com.
About United Natural Foods
United Natural Foods, Inc. (www.unfi.com) 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 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 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
ASSETS
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
LIABILITIES AND STOCKHOLDERS' EQUITY
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.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three months ended
November 1, October 27,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
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
acquisitions:
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)
CASH FLOWS FROM INVESTING ACTIVITIES:
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)
CASH FLOWS FROM FINANCING ACTIVITIES:
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
NET (DECREASE) INCREASE IN CASH AND CASH
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: http://www.unfi.com
(UNFI)