$0.36 DILUTED EPS FOR Q4 2009, a 20% Increase OVER DILUTED EPS fOR Q4 2008DAYVILLE, Conn., Sept. 9 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net income for fiscal 2009 increased $10.7 million, or 22.1%, to $59.2 million, or $1.38 per diluted share, from $48.5 million, or $1.13 per diluted share, for fiscal 2008.
Net sales for fiscal 2009 were a record $3.45 billion, an increase of 4.7%, or $154.2 million, over the sales for fiscal 2008 adjusted for the $65.1 million in net sales for the extra week in the fourth quarter of fiscal 2008. Net sales increased 2.6%, or $89.0 million, over the $3.37 billion of net sales recorded in fiscal 2008. Gross profit margin was 19.1% for fiscal 2009, which represents a 29 basis point improvement from the gross profit margin of 18.8% for fiscal 2008.
"Fiscal 2009 was a strong year for UNFI. With marginal sales growth, our associates demonstrated their resolve in delivering significant increases in operating income and EPS," said Steven Spinner, President and Chief Executive Officer.
Fiscal year 2009 operating expenses were 15.9% of net sales, or $550.6 million, an increase of $9.1 million, or 1.7%, over operating expenses of $541.4 million, or 16.1% of net sales, for fiscal 2008.
"During the year, we also increased the focus on our balance sheet. We created $76.0 million in free cash flow and reduced our debt by $92.7 million. In addition, we formally launched our 3-year strategy to grow our market share, expand our commitment to operational excellence, operate as one company with regional differences and continue our culture of sustainability," added Mr. Spinner.
Fiscal 2009 Q4 Results
Net income was $15.5 million, or $0.36 per diluted share, for the fourth quarter of fiscal 2009 compared with net income for the fourth quarter of fiscal 2008 of $12.8 million, or $0.30 per diluted share.
Net sales for the fourth quarter of fiscal 2009, ended August 1, 2009, were $853.5 million, an increase of approximately $6.8 million, or 0.8%, from net sales recorded in the fourth quarter of fiscal 2008 after adjusting for the extra week in the fourth quarter of fiscal 2008. Net sales for the fourth quarter of fiscal 2009 decreased 6.4%, or $58.4 million, from net sales of $911.9 million, including the extra week, recorded in the fourth quarter of fiscal 2008.
Gross profit margin was 19.0% for the fourth quarter of fiscal 2009, which represents a 52 basis point decline from gross profit margin of 19.5% for the fourth quarter of fiscal 2008, primarily due to significantly lower revenues from fuel surcharges in fiscal 2009 due to lower diesel fuel prices.
Operating expenses as a percentage of net sales decreased by 125 basis points during the fourth quarter of fiscal 2009 to 15.6% of net sales, or $133.5 million, from 16.9% of net sales, or $154.0 million, for the fourth quarter of fiscal 2008. Operating expenses were positively impacted by continued expense control programs across all of the Company's divisions, lower diesel fuel prices, and operational improvements in the Company's distribution centers.
Introduction of Fiscal 2010 Guidance
The Company also has provided its financial outlook for fiscal 2010, ending July 31, 2010.
For fiscal 2010, the Company expects earnings per diluted share in the range of approximately $1.48 to $1.58 per share, an increase of approximately 7.5% to 14.8% over fiscal 2009.
Capital expenditures are expected to be in the range of approximately 1% of revenues, or approximately $35 million to $39 million during fiscal 2010. Costs associated with an expected new facility in Texas are included in the Company's 2010 capital expenditures guidance. The Company expects to complete a new broadline distribution facility in Texas in the fourth quarter of fiscal 2010, with operations commencing in fiscal 2011.
The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside 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 & Webcast
The Company's fourth quarter 2009 conference call and audio webcast will be held at 10:00 a.m. EDT on September 9, 2009. The 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 Investors section of the Company's website at www.unfi.com. The online archive of the webcast will be available on the Company's website for 30 days.
Non-GAAP Reconciliation
The following table details the non-GAAP measures for fiscal 2009:
Year Ended: August 1,
(in thousands) 2009
---------
Free cash flow:
Net cash provided by operating activities $108,323
Capital expenditures (32,353)
Free cash flow: $75,970
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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, 2007 and 2009 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 and are based on current expectations and management's estimates; actual results may differ materially. The risks and uncertainties which could impact these statements are described in the Company's filings under the Securities Exchange Act of 1934, as amended, including its quarterly report on Form 10-Q filed with the Securities and Exchange Commission on June 11, 2009, and include, but are not limited to, the Company's dependence on principal customers; the Company's sensitivity to general economic conditions, including the current economic environment, changes in disposable income levels and consumer spending trends; increased fuel costs; the Company's sensitivity to inflationary pressures; the relatively low margins and economic sensitivity of the Company's business; the ability to identify and successfully complete acquisitions of other foodservice distributors; and management's allocation of capital and the timing of capital expenditures. 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 are based on a number of assumptions, many of which are outside the Company's control and 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)
Three months ended Fiscal year ended
------------------ -----------------
August 1, August 2, August 1, August 2,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $853,491 $911,850 $3,454,900 $3,365,857
Cost of sales 691,415 733,944 2,794,419 2,731,965
-------- -------- --------- ---------
Gross profit 162,076 177,906 660,481 633,892
-------- -------- --------- ---------
Operating expenses 133,478 154,028 550,560 541,413
-------- -------- --------- ---------
Total operating
expenses 133,478 154,028 550,560 541,413
-------- -------- --------- ---------
Operating income 28,598 23,878 109,921 92,479
-------- -------- --------- ---------
Other expense (income):
Interest expense 1,580 3,996 9,914 16,133
Interest income (118) (296) (450) (768)
Other, net (6) (235) 275 (82)
-------- -------- --------- ---------
Total other expense 1,456 3,465 9,739 15,283
-------- -------- --------- ---------
Income before
income taxes 27,142 20,413 100,182 77,196
Provision for income
taxes 11,605 7,593 40,998 28,717
------ ----- ------ ------
Net income $15,537 $12,820 $59,184 $48,479
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Basic per share data:
Net income $0.36 $0.30 $1.38 $1.14
======== ======== ========= =========
Weighted average
basic shares of
common stock 42,915 42,737 42,849 42,690
======== ======== ========= =========
Diluted per share data:
Net income $0.36 $0.30 $1.38 $1.13
======== ======== ========= =========
Weighted average diluted
shares of common stock 43,154 42,860 42,993 42,855
======== ========= ========= =========
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
August 1, August 2,
2009 2008
--------- ---------
ASSETS
------
Current assets:
Cash and cash equivalents $10,269 $25,333
Accounts receivable, net 179,455 179,063
Notes receivable, trade, net 1,799 1,412
Inventories 366,611 394,364
Prepaid expenses and other current assets 16,423 13,307
Deferred income taxes 18,074 14,221
-------- --------
Total current assets 592,631 627,700
Property and equipment, net 242,051 234,115
Other assets:
Goodwill 164,333 170,609
Intangible assets, net 38,358 33,689
Notes receivable, trade, net 2,176 2,349
Other 19,001 16,021
-------- --------
Total assets $1,058,550 $1,084,483
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable $200,000 $288,050
Accounts payable 155,211 160,418
Accrued expenses and other current liabilities 63,347 63,308
Current portion of long-term debt 5,020 5,027
-------- --------
Total current liabilities 423,578 516,803
Long-term debt, excluding current portion 53,858 58,485
Deferred income taxes 12,297 9,058
Other long-term liabilities 24,345 20,087
-------- --------
Total liabilities 514,078 604,433
-------- --------
Stockholders' equity:
Preferred stock, $0.01 par value, authorized
5,000 shares at August 1, 2009 and August 2, 2008;
none issued and outstanding - -
Common stock, $0.01 par value, authorized 100,000
shares; 43,237 issued and 43,008 outstanding
shares at August 1, 2009; 43,100 issued and 42,871
outstanding shares at August 2, 2008 432 431
Additional paid-in capital 175,182 169,238
Treasury stock (6,092) (6,092)
Unallocated shares of Employee Stock Ownership Plan (877) (1,040)
Accumulated other comprehensive loss (1,623) (753)
Retained earnings 377,450 318,266
-------- --------
Total stockholders' equity 544,472 480,050
-------- --------
Total liabilities and stockholders' equity $1,058,550 $1,084,483
========== ==========
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Fiscal year ended
-----------------
August 1, August 2,
2009 2008
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $59,184 $48,479
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 27,029 22,544
Share-based compensation 5,504 4,674
Provision for doubtful accounts 4,759 2,707
Deferred income tax expense 349 2,257
Loss on disposals of property and equipment 262 158
Gain on forgiveness of loan - (157)
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable (3,950) (8,339)
Inventories 30,398 (58,112)
Prepaid expenses and other assets (2,729) (6,434)
Notes receivable, trade (652) 713
Accounts payable (13,836) (8,319)
Accrued expenses and other current liabilities 2,005 8,958
----------------------
Net cash provided by operating activities 108,323 9,129
----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (32,353) (51,083)
Purchases of acquired businesses, net of cash
acquired (4,495) (107,812)
Proceeds from disposals of property and
equipment 98 -
----------------------
Net cash used in investing activities (36,750) (158,895)
----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under note payable (88,050) 168,050
Increase (decrease) in bank overdraft 8,494 (1,435)
Repayments of long-term debt (4,634) (8,332)
Payments on life insurance policy loans (3,072) -
Proceeds from exercise of stock options 1,038 920
Capitalized debt issuance costs (647) (1,285)
Tax benefit from equity awards 234 171
----------------------
Net cash (used in) provided by financing
activities (86,637) 158,089
----------------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (15,064) 8,323
Cash and cash equivalents at beginning of period 25,333 17,010
----------------------
Cash and cash equivalents at end of period $10,269 $25,333
======================
Supplemental disclosures of cash flow information:
--------------------------------------------------
Cash paid during the period for:
Interest, net of amounts capitalized $9,094 $16,469
======================
Federal and state income taxes, net of refunds $43,978 $27,618
======================
SOURCE United Natural Foods
Mark Shamber, Chief Financial Officer of United Natural Foods, Inc., +1-860-779-2800; or Joseph Calabrese, General Information of Financial Relations Board, +1-212-827-3772