Second Quarter Highlights
- Net sales increased 2.0% to $847.6 million compared to second quarter
2008
- Net sales increased 4.5%, excluding the impact of UNFI Specialty
- Net income totaled $13.6 million DAYVILLE, Conn., Feb. 24 /PRNewswire-FirstCall/ -- United Natural Foods,
Inc. (Nasdaq: UNFI) today reported net sales for the second quarter of fiscal
2009, ended January 31, 2009, of $847.6 million, an increase of $16.9 million,
or 2.0%, from net sales of $830.7 million recorded in the second quarter of
fiscal 2008. Excluding the impact in both periods of the UNFI Specialty
division, which the company acquired in the second quarter of fiscal 2008, net
sales increased by approximately $34.0 million, or 4.5%, to $792.2 million.
"Our results in the second quarter demonstrate that UNFI is well
positioned to navigate through a challenging environment. Lower fuel costs,
expense control and continuing integration of our Specialty business helped us
deliver an increase of over 50% in net earnings" said Steven Spinner,
President and Chief Executive Officer. "While our sales growth moderated in
comparison to the prior quarter, our growth excluding UNFI Specialty was 4.5%,
highlighting a continued demand for our products."
Net income was $13.6 million, or $0.32 per diluted share, for the second
quarter of fiscal 2009 compared with net income for the second quarter of
fiscal 2008 of $9.1 million, or $0.21 per diluted share. UNFI Specialty
negatively impacted operating income by approximately $0.5 million, or $0.01
per diluted share, during the second quarter of fiscal 2009. Excluding the
effect of UNFI Specialty, net income for the quarter ended January 31, 2009
would have been $14.2 million, or $0.33 per diluted share.
Gross margin was 19.1% for the second quarter of fiscal 2009, which
represents a 50 basis point improvement from gross margin of 18.6% for the
second quarter of fiscal 2008. This improvement was due primarily to the
higher gross margin associated with the UNFI Specialty division and higher
fuel surcharge revenues due to the higher average trailing diesel prices
compared to the comparable quarter ended January 26, 2008. The fuel surcharge
served to partially offset higher diesel fuel costs in operating expenses.
Operating expenses as a percentage of net sales decreased by 0.2% during
the second quarter of fiscal 2009 to 16.1% of net sales, or $136.2 million.
Operating expenses were positively impacted by expense control programs across
all UNFI divisions, which were partially offset by $2.6 million in labor,
severance and other nonrecurring expenses primarily related to the Company's
relocation from its New Oxford, Pennsylvania facility to a new facility in
York, Pennsylvania, and from its first quarter 2009 relocation from its
Fontana, California facility to its facility in Moreno Valley, California.
Operating expenses increased by $1.1 million, or 0.8% in the second quarter of
fiscal 2009, compared to the quarter ended January 26, 2008, in which the
Company incurred operating expenses of $135.1 million, or 16.3% of net sales.
In the quarter ended January 31, 2009, the Company recorded share-based
compensation expense of $1.6 million in accordance with Statement of Financial
Accounting Standard No. 123R, Share-Based Payment, which was $0.2 million
higher than the share-based compensation expense recorded in the same period
in fiscal 2008.
"We successfully completed the relocation of our distribution facility in
New Oxford, Pennsylvania to a new facility in York, Pennsylvania during the
second week of January 2009," said Mr. Spinner. "With our York facility up and
running, we are now positioned to blend our specialty business in this region
into the facility during our fiscal third quarter, which will result in our
first fully integrated facility, serving customers throughout the mid-Atlantic
region."
Mr. Spinner added, "During the quarter, UNFI's new facility in Ridgefield,
Washington became the first US refrigerated distribution center to receive
Gold LEED(R) certification. We are proud of this achievement, as part of our
ongoing commitment to the environment and our belief that UNFI can make
investments in sustainability while delivering returns for our shareholders."
Updates Fiscal 2009 Guidance
The Company is revising net sales guidance for fiscal year 2009, ending
August 1, 2009, to $3.45 billion to $3.50 billion, which represents a 2.5% to
4.0% increase in total net sales over fiscal 2008, or 4.5% to 6.0% after
adjusting for the 53rd week in fiscal 2008. Previously, the Company had
projected net sales in the range of $3.63 billion to $3.70 billion.
In addition, the Company is revising its guidance on earnings per share
for fiscal 2009 to a range of $1.28 to $1.36 per diluted share. The Company
had previously announced earnings per share guidance of $1.30 to $1.38 per
diluted share for fiscal 2009. The Company's updated guidance reflects the
impact of lower than projected sales growth, uncertainty surrounding the
impact of the recent peanut recall on sales for the remainder of fiscal 2009
and potential unreimbursed product losses associated with the peanut recall.
Finally, the Company is revising its anticipated fiscal 2009 capital
expenditures guidance to a range of approximately $40 to $45 million.
Previously, the Company had expected capital expenditures to be $57 to $62
million.
The Company's guidance is based on a number of assumptions, 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 second quarter 2009 conference call and audio webcast will
be held at 11:00 a.m. EST on February 24, 2009. 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 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.
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 quarterly report on Form 10-Q
filed with the Commission on December 10, 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 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 Six months ended
January 31, January 26, January 31, January 26,
2009 2008 2009 2008
Net sales $847,635 $830,656 $1,711,871 $1,567,045
Cost of sales 685,570 675,984 1,382,217 1,276,902
Gross profit 162,065 154,672 329,654 290,143
Operating expenses 136,212 135,100 278,755 246,366
Total operating
expenses 136,212 135,100 278,755 246,366
Operating income 25,853 19,572 50,899 43,777
Other expense (income):
Interest expense 3,200 5,059 6,611 7,950
Interest income (92) (153) (343) (332)
Other, net 196 6 147 75
Total other expense 3,304 4,912 6,415 7,693
Income before income
taxes 22,549 14,660 44,484 36,084
Provision for income taxes 8,929 5,561 17,616 13,423
Net income $13,620 $9,099 $26,868 $22,661
Basic per share data:
Net income $0.32 $0.21 $0.63 $0.53
Weighted average basic
shares of common
stock 42,821 42,676 42,803 42,645
Diluted per share data:
Net income $0.32 $0.21 $0.63 $0.53
Weighted average diluted
shares of common
stock 42,910 42,884 42,931 42,860
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
January 31, August 2,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $24,636 $25,333
Accounts receivable, net 193,128 179,063
Notes receivable, trade, net 1,260 1,412
Inventories 406,594 394,364
Prepaid expenses and other current
assets 17,042 13,307
Deferred income taxes 14,221 14,221
Total current assets 656,881 627,700
Property and equipment, net 239,334 234,115
Other assets:
Goodwill 166,471 170,609
Notes receivable, trade, net 2,388 2,349
Intangible assets, net 40,199 33,689
Other 18,655 16,021
Total assets $1,123,928 $1,084,483
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $297,000 $288,050
Accounts payable 151,457 160,418
Accrued expenses and other current
liabilities 69,627 63,308
Current portion of long-term debt 4,951 5,027
Total current liabilities 523,035 516,803
Long-term debt, excluding current portion 56,486 58,485
Deferred income taxes 10,437 9,058
Other long-term liabilities 24,513 20,087
Total liabilities 614,471 604,433
Stockholders' equity:
Preferred stock, $0.01 par value,
authorized 5,000 shares at January 31,
2009 and August 2, 2008; none issued
and outstanding - -
Common stock, $0.01 par value, authorized
100,000 shares; 43,168 issued and 42,939
outstanding shares at January 31, 2009;
43,100 issued and 42,871 outstanding shares
at August 2, 2008 432 431
Additional paid-in capital 172,832 169,238
Unallocated shares of Employee Stock
Ownership Plan (958) (1,040)
Treasury stock (6,092) (6,092)
Accumulated other comprehensive loss (1,891) (753)
Retained earnings 345,134 318,266
Total stockholders' equity 509,457 480,050
Total liabilities and stockholders'
equity $1,123,928 $1,084,483
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six months ended
January 31, January 26,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $26,868 $22,661
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 13,288 10,160
Share-based compensation 3,312 2,387
Provision for doubtful accounts 1,776 1,286
Loss on disposals of property and equipment 68 8
Gain on forgiveness of loan - (157)
Changes in assets and liabilities,
net of acquisitions:
Accounts receivable (15,102) (13,565)
Inventories (9,666) (57,392)
Prepaid expenses and other assets (3,392) (5,727)
Notes receivable, trade 113 (265)
Accounts payable (9,078) (2,729)
Accrued expenses and other current
liabilities 8,370 4,371
Net cash provided by (used in)
operating activities 16,557 (38,962)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (17,012) (21,466)
Purchases of acquired businesses, net
of cash acquired (4,301) (107,235)
Proceeds from disposals of property
and equipment - 165
Net cash used in investing activities (21,313) (128,536)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under note payable 8,950 177,009
Payments on life insurance policy loans (3,072) -
Repayments of long-term debt (2,075) (6,411)
Proceeds from exercise of stock options 150 810
Tax benefit from exercises of stock options 133 161
(Decrease) increase in bank overdraft (27) 4,102
Net cash provided by financing activities 4,059 175,671
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (697) 8,173
Cash and cash equivalents at beginning of
Period 25,333 17,010
Cash and cash equivalents at end of period $24,636 $25,183
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest, net of amounts capitalized $6,216 $7,146
Federal and state income taxes, net
of refunds $17,621 $15,862
SOURCE United Natural Foods, Inc.
CONTACT: Mark Shamber, United Natural Foods, Inc. ,
Chief Financial
Officer, +1-860-779-2800,
or
Joseph Calabrese, Financial Relations Board,
General Information, +1-212-827-3772
Web Site: http://www.unfi.com
(UNFI)