Press Release Details

United Natural Foods Reports Sales and Earnings for the Third Quarter of Fiscal 2008

May 20, 2008
    - Quarterly Net Sales of $887 Million Increased 21% From the Third Quarter
      of Fiscal 2007.

    - Reports Quarterly Net Income of $13 Million, or $0.30 Per Diluted Share.

DAYVILLE, Conn., May 20 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) (the "Company") today reported net sales of $887.0 million for the third quarter of fiscal 2008, ended April 26, 2008, an increase of approximately $154.4 million, or 21%, from net sales of $732.5 million recorded in the third quarter of fiscal 2007. Excluding the effect of the Company's November 2007 acquisition of Millbrook Distribution Services, Inc. ("Millbrook"), net sales increased by approximately $77.2 million, or 10.5%, to $809.7 million.

The Company reported net income of $13.0 million, or $0.30 per diluted share, for the third quarter of fiscal 2008. Millbrook, which the Company acquired in the second quarter of fiscal 2008, negatively impacted net income by approximately $2.4 million, or $0.06 per diluted share, for the third quarter of fiscal 2008. The Company previously announced that the Millbrook acquisition was expected to be dilutive to earnings by approximately $0.10 to $0.12 in the second half of fiscal 2008, and these results are in line with the Company's projections. Excluding the effect of Millbrook, net income for the quarter ended April 26, 2008 would have been $15.4 million, or $0.36 per diluted share, compared to $13.7 million, or $0.32 per diluted share for the comparable quarter ended April 28, 2007.

Operating expenses were $141.0 million, or 15.9% of net sales for the quarter ended April 26, 2008, compared to $104.8 million, or 14.3% of net sales, for the third quarter of fiscal 2007. The Company continues to experience start-up inefficiencies at its Sarasota, Florida and Portland, Oregon area distribution facilities, which negatively impacted operating margins in the quarter. These facilities opened in September, 2007 and December, 2007, respectively. The Company typically achieves optimum efficiencies from new facilities within six to nine months following their opening. The Company recorded share-based compensation expense of $1.1 million, in the third quarter of fiscal 2008, in accordance with SFAS No. 123R, Share-Based Payment, compared to $1.0 million of share-based compensation expense recorded for the third quarter of fiscal 2007.

"Despite operating in an environment of rising fuel and commodity prices, our growth was in line with our expectations, with solid growth across our sales channels," said Michael Funk, President and Chief Executive Officer. "During the quarter, we continued to make progress achieving efficiencies at our Millbrook specialty division, and we remain confident that we can achieve breakeven operating results in that division in the first quarter of fiscal 2009, as previously announced. Independent customers generated comparable sales growth of approximately 11%, reflecting the continued strength of the industry, while our sales to conventional supermarkets increased by approximately 78% driven largely by sales in our Millbrook specialty division. As we approach the end of fiscal 2008, and look forward to 2009, we continue to see significant opportunities to capitalize on profitable sales growth, including enhancing relationships with natural product retailers, expanding our specialty foods operations, and gaining new customers in all of our channels."

Updates Fiscal 2008 Earnings Guidance

The Company is narrowing its projected net sales guidance for fiscal year 2008, ending August 2, 2008, to $3.3 billion to $3.35 billion, which represents a 19% to 20% increase in net sales over fiscal 2007. Previously, the Company had projected net sales for fiscal 2008 to be in the range of $3.27 billion to $3.35 billion.

In addition, the Company is reaffirming its earnings per share guidance for fiscal 2008 with a range of $1.12 to $1.14 per diluted share. The Company's guidance reflects the expectation that the Millbrook acquisition will be dilutive to earnings by $0.18 to $0.19 per diluted share in fiscal 2008. Finally, the Company is reaffirming its anticipated fiscal 2008 capital expenditures guidance of approximately $50.0 to $55.0 million. The Company expects that its capital expenditures in the fourth quarter will be associated primarily with its previously announced plans to open distribution facilities in Moreno Valley, California and York, Pennsylvania, which are expected to begin operations in fiscal 2009.

The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside of the Company's control. If any of these assumptions vary, the Company's guidance may change. There can be no assurance that the Company will achieve these results.

Conference Call

Management will conduct a conference call and audio webcast at 11:00 a.m. ET on May 20, 2008 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is (303) 275-2170. 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 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 on the Company's website for 30 days.

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," 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

                           Financial Tables Follow

"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 March 6, 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.
                    (In thousands, except per share data)

                                    Three months ended     Nine months ended
                                   April 26, April 28,   April 26,  April 28,
                                     2008      2007        2008       2007

    Net sales                     $886,962  $732,516  $2,454,007  $2,047,494
    Cost of sales                  721,119   602,573   1,998,021   1,669,912

         Gross profit              165,843   129,943     455,986     377,582

    Operating expenses             141,018   104,818     387,384     307,126
    Impairment on assets held for
     sale                                -         -           -         756
         Total operating expenses  141,018   104,818     387,384     307,882

         Operating income           24,825    25,125      68,602      69,700

    Other expense (income):
      Interest expense               4,186     3,021      12,137       9,282
      Interest income                 (140)     (324)       (472)       (618)
      Other, net                        80       (39)        154         332
         Total other expense         4,126     2,658      11,819       8,996

         Income before income
          taxes                     20,699    22,467      56,783      60,704

    Provision for income taxes       7,700     8,762      21,123      23,675

         Net income                $12,999   $13,705     $35,660     $37,029

    Basic per share data:
      Net income                     $0.30     $0.32       $0.84       $0.87

      Weighted average basic
       shares of common stock       42,727    42,595      42,678      42,396

    Diluted per share data:
      Net income                     $0.30     $0.32       $0.83       $0.87

      Weighted average diluted
       shares of common stock       42,847    42,884      42,858      42,784

                          UNITED NATURAL FOODS, INC.
                   CONSOLIDATED BALANCE SHEETS (Unaudited)
                                (In thousands)

                                                    April 26,      July 28,
                                                      2008           2007
    Current assets:
     Cash and cash equivalents                       $19,481       $17,010
     Accounts receivable, net                        185,680       160,329
     Notes receivable, trade, net                      1,544         1,836
     Inventories                                     413,539       312,377
     Prepaid expenses and other current assets        12,296         8,199
     Assets held for sale                                  -         5,935
     Deferred income taxes                             9,474         9,474
      Total current assets                           642,014       515,160

    Property & equipment, net                        218,899       185,083

    Other assets:
     Goodwill                                        181,692        79,903
     Notes receivable, trade, net                      2,870         2,647
     Intangible assets, net                           28,877         8,552
     Other                                            10,258         9,553
      Total assets                                $1,084,610      $800,898

    Current liabilities:
     Notes payable                                  $295,000      $120,000
     Accounts payable                                182,097       134,576
     Accrued expenses and other current
      liabilities                                     64,880        37,132
     Current portion of long-term debt                 4,995         6,934
      Total current liabilities                      546,972       298,642

    Long-term debt, excluding current portion         60,231        65,067
    Deferred income taxes                              1,201         9,555
    Other long-term liabilities                       10,454           839
           Total liabilities                         618,858       374,103

    Stockholders' equity:
     Preferred stock, $0.01 par value, authorized
      5,000 shares at April 26, 2008 and July 28,
      2007; none issued and outstanding                    -             -
     Common stock, $0.01 par value, authorized
      100,000 shares; 43,103 issued and 42,874
      outstanding shares at April 26, 2008; 43,051
      issued and 42,822 outstanding shares at July
      28, 2007                                           431           431
     Additional paid-in capital                      168,088       163,473
     Unallocated shares of Employee Stock
      Ownership Plan                                  (1,081)       (1,203)
     Treasury stock                                   (6,092)       (6,092)
     Accumulated other comprehensive (loss)
      income                                          (1,041)          399
     Retained earnings                               305,447       269,787
      Total stockholders' equity                     465,752       426,795
    Total liabilities and stockholders' equity    $1,084,610      $800,898

                          UNITED NATURAL FOODS, INC.
                                (In thousands)

                                                        Nine months ended
                                                      April 26,      April 28,
                                                        2008           2007
    Net income                                         $35,660        $37,029
    Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:
      Depreciation and amortization                     15,694         13,793
      Share-based compensation                           3,503          2,956
      Provision for doubtful accounts                    1,665          1,008
      Gain on forgiveness of loan                         (157)             -
      Loss on disposals of property & equipment              8          1,999
      Impairment on assets held for sale                     -            756
    Changes in assets and liabilities, net of
     acquired companies:
      Accounts receivable                              (15,215)       (20,808)
      Inventory                                        (77,007)       (43,391)
      Prepaid expenses and other assets                 (1,080)        (5,688)
      Notes receivable, trade                               69            409
      Accounts payable                                   2,074         25,829
      Accrued expenses and other current
      liabilities                                       (1,663)        (2,029)
      Income taxes payable                                 923            636
      Net cash (used in) provided by operating
       activities                                      (35,526)        12,499

    Purchases of acquired business, net of cash
     acquired                                         (107,726)        (6,470)
    Capital expenditures                                32,024)       (20,684)
    Proceeds from disposals of property and
     equipment                                               -          5,448
    Other investing activities                               -         (1,042)
     Net cash used in investing activities            (139,750)       (22,748)

    Net borrowings (repayments) under note payable     175,000        (11,004)
    Increase in bank overdraft                           9,482          6,246
    Proceeds from exercise of stock options                848          7,086
    Repayments on long-term debt                        (7,754)        (4,438)
    Tax benefit from stock option exercises                171          2,853
    Principal payments of capital lease obligations          -             (4)
    Proceeds from borrowings of long-term debt               -         10,000
     Net cash provided by financing activities         177,747         10,739

    NET INCREASE IN CASH AND CASH EQUIVALENTS            2,471            490
    Cash and cash equivalents at beginning of period    17,010         20,054
    Cash and cash equivalents at end of period         $19,481        $20,544

    Supplemental disclosures of cash flow
    Cash paid during the period for:
     Interest, net of amounts capitalized              $11,431         $9,235
     Federal and state income taxes, net of refunds    $18,877        $19,771

SOURCE United Natural Foods, Inc.

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