Third Quarter Highlights
- Net sales increased 0.3% to $889.5 million compared with the third
quarter of fiscal 2008
- Net sales increased 3.3%, excluding the impact of UNFI Specialty
- Net income totaled $16.8 million DAYVILLE, Conn., June 2 /PRNewswire-FirstCall/ -- United Natural Foods,
Inc. (Nasdaq: UNFI) today reported net sales for the third quarter of fiscal
2009, ended May 2, 2009, of $889.5 million, an increase of approximately $2.6
million, or 0.3%, from net sales of $887.0 million recorded in the third
quarter of fiscal 2008. Excluding the impact in both periods of the UNFI
Specialty Distribution Services division ("Specialty"), which the Company
acquired in the second quarter of fiscal 2008, net sales increased by
approximately $26.5 million, or 3.3%, to $836.2 million.
"Our record earnings in the third quarter reflect our continued focus on
cash flow, market share and the further expansion and integration of our
specialty business. We continued to benefit from lower diesel fuel costs,
while improved operational efficiencies and expense control by all of our
associates resulted in earnings that represented a 30% increase over the third
quarter of fiscal 2008," said Steven Spinner, President and Chief Executive
Officer.
Net income was $16.8 million, or $0.39 per diluted share, for the third
quarter of fiscal 2009 compared with net income for the third quarter of
fiscal 2008 of $13.0 million, or $0.30 per diluted share.
Gross margin was 19.0% for the third quarter of fiscal 2009, which
represents a 27 basis point improvement from gross margin of 18.7% for the
third quarter of fiscal 2008, primarily due to higher gross margin within the
Specialty division.
Operating expenses as a percentage of net sales decreased by 35 basis
points during the third quarter of fiscal 2009 to 15.6% of net sales, or
$138.3 million, from 15.9% of net sales, or $141.0 million, for the third
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.
"In April, we successfully completed the relocation and expansion of our
specialty distribution facility from East Brunswick, New Jersey to our new
675,000 square foot facility in York, Pennsylvania," said Mr. Spinner. "With
this move, we now have our first fully integrated facility, which allows us to
offer our mid-Atlantic customers a full assortment of natural, organic and
specialty foods from a single facility on a common system."
Updates to Fiscal 2009 Guidance
The Company is confirming 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.
In addition, the Company is raising its earnings per share guidance for
fiscal 2009 to a range of $1.34 to $1.38 per diluted share. The Company had
previously announced earnings per share guidance of $1.28 to $1.36 per diluted
share. The Company's revised guidance reflects the impact of improved
operating efficiencies and cost controls.
The Company is also lowering its anticipated fiscal 2009 capital
expenditures guidance to a range of approximately $30 to $35 million. The
Company had previously announced anticipated fiscal 2009 capital expenditures
guidance of approximately $40 to $45 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 third quarter 2009 conference call and audio webcast will be
held at 11:00 a.m. EDT on June 2, 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 the third quarter of
fiscal 2009 and 2008:
Quarter Ended: May 2, April 26,
2009 2008
(in thousands)
Net sales, excluding UNFI Specialty
Distribution Services: $836,243 $809,728
UNFI Specialty Distribution Services
net sales: 53,295 77,234
Net sales, including UNFI Specialty
Distribution Services: $889,538 $886,962
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.
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 March 11, 2009, 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 Nine months ended
May 2, April 26, May 2, April 26,
2009 2008 2009 2008
Net sales $889,538 $886,962 $2,601,409 $2,454,007
Cost of sales 720,787 721,119 2,103,004 1,998,021
Gross profit 168,751 165,843 498,405 455,986
Operating expenses 138,327 141,018 417,082 387,384
Total operating expenses 138,327 141,018 417,082 387,384
Operating income 30,424 24,825 81,323 68,602
Other expense (income):
Interest expense 1,723 4,186 8,333 12,137
Interest income 11 (140) (331) (472)
Other, net 134 80 281 154
Total other expense 1,868 4,126 8,283 11,819
Income before
income taxes 28,556 20,699 73,040 56,783
Provision for income taxes 11,777 7,700 29,393 21,123
Net income $16,779 $12,999 $43,647 $35,660
Basic per share data:
Net income $0.39 $0.30 $1.02 $0.84
Weighted average basic
shares of common stock 42,871 42,727 42,827 42,678
Diluted per share data:
Net income $0.39 $0.30 $1.02 $0.83
Weighted average diluted
shares of common stock 42,943 42,847 42,939 42,858
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
May 2, August 2,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $6,686 $25,333
Accounts receivable, net 197,580 179,063
Notes receivable, trade, net 606 1,412
Inventories 418,242 394,364
Prepaid expenses and other current assets 14,626 13,307
Deferred income taxes 14,221 14,221
Total current assets 651,961 627,700
Property and equipment, net 241,186 234,115
Other assets:
Goodwill 166,471 170,609
Notes receivable, trade, net 2,242 2,349
Intangible assets, net 39,821 33,689
Other 19,201 16,021
Total assets $1,120,882 $1,084,483
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $248,573 $288,050
Accounts payable 176,510 160,418
Accrued expenses and other current
liabilities 73,485 63,308
Current portion of long-term debt 4,911 5,027
Total current liabilities 503,479 516,803
Long-term debt, excluding current portion 54,875 58,485
Deferred income taxes 10,446 9,058
Other long-term liabilities 24,456 20,087
Total liabilities 593,256 604,433
Stockholders' equity:
Preferred stock, $0.01 par value,
authorized 5,000 shares at May 2, 2009
and August 2, 2008; none issued and
outstanding - -
Common stock, $0.01 par value, authorized
100,000 shares; 43,170 issued and 42,942
outstanding shares at May 2, 2009; 43,100
issued and 42,871 outstanding shares at
August 2, 2008 432 431
Additional paid-in capital 174,166 169,238
Unallocated shares of Employee Stock
Ownership Plan (917) (1,040)
Treasury stock (6,092) (6,092)
Accumulated other comprehensive loss (1,876) (753)
Retained earnings 361,913 318,266
Total stockholders' equity 527,626 480,050
Total liabilities and stockholders' equity $1,120,882 $1,084,483
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine months ended
May 2, April 26,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $43,647 $35,660
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 20,329 15,694
Share-based compensation 4,607 3,503
Provision for doubtful accounts 3,526 1,665
Loss on disposals of property
and equipment 290 8
Gain on forgiveness of loan - (157)
Changes in assets and liabilities,
net of acquisitions:
Accounts receivable (20,760) (15,215)
Inventories (21,314) (77,007)
Prepaid expenses and other assets (1,002) (1,080)
Notes receivable, trade 369 69
Accounts payable (1,195) 2,074
Accrued expenses and other
current liabilities 12,194 (1,663)
Income taxes payable - 923
Net cash provided by (used in)
operating activities 40,691 (35,526)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (25,421) (32,024)
Purchases of acquired businesses,
net of cash acquired (4,468) (107,726)
Net cash used in
investing activities (29,889) (139,750)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under
note payable (39,477) 175,000
Increase in bank overdraft 17,152 9,482
Repayments of long-term debt (3,726) (7,754)
Payments on life insurance policy loans (3,072) -
Capitalized debt issuance costs (647) -
Proceeds from exercise of stock options 188 848
Tax benefit from exercises of stock options 133 171
Net cash (used in) provided by
financing activities (29,449) 177,747
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (18,647) 2,471
Cash and cash equivalents at
beginning of period 25,333 17,010
Cash and cash equivalents at end of period $6,686 $19,481
Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $7,713 $11,431
Federal and state income taxes,
net of refunds $29,734 $18,877
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 UNFI)