Q1 Fiscal 2015 Net Sales Increased 24.4% Year-over-Year to $1.99
Billion
PROVIDENCE, R.I.--(BUSINESS WIRE)--Dec. 4, 2014--
United Natural Foods, Inc. (Nasdaq: UNFI) (the "Company" or "UNFI")
today reported financial results for the first quarter of fiscal 2015
ended November 1, 2014.
First Quarter Fiscal 2015 Highlights
-
Net sales increased 24.4% to $1.99 billion compared to $1.60
billion for the same period last fiscal year
-
Operating income increased 21.6% to $58.4 million for the first
quarter of fiscal 2015 compared to $48.0 million for the same period
last fiscal year
-
Diluted EPS increased 17.9% to $0.66 for the first quarter of fiscal
2015, compared to $0.56 for the same period last fiscal year
“UNFI achieved record sales of almost $2 billion during our first
quarter of fiscal 2015 and comparable sales growth recovered nicely
after experiencing a modest slowdown during the first few weeks of the
quarter,” said Steven Spinner, President and Chief Executive Officer.
Net sales for the first quarter of fiscal 2015 increased 24.4%, or
$390.5 million, to $1.99 billion from $1.60 billion in the first quarter
of fiscal 2014. The first quarter of fiscal 2015 included incremental
net sales of approximately $227.7 million, resulting from the Company's
acquisitions of Trudeau Foods in the first quarter of fiscal 2014 and
Tony's Fine Foods ("Tony's") in the fourth quarter of fiscal 2014.
Gross margin decreased 92 basis points to 16.0% for the first quarter of
fiscal 2015 compared to 16.9% for the same period last year. Gross
margin for the first quarter of fiscal 2015 was negatively impacted
primarily by the dilution from Tony's sales in the quarter, while
shifting customer mix, inbound freight costs and foreign exchange from
the declining value of the Canadian dollar on the Company's Canadian
business also contributed to the year-over-year decline.
Total operating expenses were 13.1% as a percentage of net sales for the
first quarter of fiscal 2015, a decrease of 85 basis points compared
with the same period last fiscal year. Total operating expenses
increased $37.5 million, or 16.8%, to $260.6 million for the first
quarter of fiscal 2015 as compared to $223.2 million in the first
quarter of fiscal 2014, primarily due to higher sales volume. Total
operating expenses for the first quarter of fiscal 2015 included
non-recurring costs of approximately $1.0 million related to the startup
of the Company's Hudson Valley, New York facility, $0.6 million
associated with the write-off of an intangible asset related to the
Company's Canadian division, which was acquired in June 2010, and
approximately $0.3 million in remaining costs related to the Company's
acquisition of Tony's.
Operating income increased 21.6%, or $10.4 million, to $58.4 million for
the first quarter of fiscal 2015 compared to $48.0 million for the first
quarter of fiscal 2014. As a percentage of net sales, operating income
for the first quarter of fiscal 2015 decreased 7 basis points to 2.9%
compared to the same period last fiscal year.
Net income for the first quarter of fiscal 2015 increased $5.3 million,
or 19.0%, to $33.0 million, or $0.66 per diluted share, from $27.8
million, or $0.56 per diluted share, for the first quarter of fiscal
2014.
“Tony’s Fine Foods performed extremely well during their first quarter
as part of UNFI, and we look forward to rolling this perishable platform
out across the US as we look to both existing and new customers,” added
Mr. Spinner. “As we discussed at our analyst day in October, our newest
distribution facilities, located in Racine, Wisconsin and Hudson Valley,
New York, were designed to handle the unique storage requirements of
these exciting products.”
Fiscal 2015 Guidance
Based on UNFI's performance to date and the current outlook for the
remainder of fiscal 2015, UNFI is reaffirming its previous guidance for
fiscal 2015 provided on September 17, 2014. For fiscal 2015, ending
August 1, 2015, the Company expects net sales in the range of
approximately $8.13 to $8.38 billion, an increase of approximately 19.7%
to 23.7% over fiscal 2014. The Company estimates GAAP earnings per
diluted share for fiscal 2015 in the range of approximately $2.88 to
$3.01 per share, an increase of approximately 14.3% to 19.4% over fiscal
2014 GAAP earnings per diluted share of $2.52.
Conference Call & Webcast
The Company's first quarter 2015 conference call and audio webcast will
be held today, Thursday, December 4, 2014 at 8:30 a.m. EST.
The audio webcast of the conference call will be available to the
public, on a listen-only basis, via the Internet 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. (http://www.unfi.com)
carries and distributes more than 80,000 products to more than 40,000
customer locations throughout the United States and Canada. 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 Fortune in 2012 as one of its "Most Admired American
Companies," and chosen by Food Logistics Magazine as one of its 2012 Top
20 Green Providers.
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 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 annual report on Form
10-K filed with the Securities and Exchange Commission (SEC) on October
1, 2014 and other filings the Company makes with the SEC, 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; the Company's ability to reduce its expenses
in amounts sufficient to offset its increased focus on sales to
conventional supermarkets and the shift in the Company's product mix as
a result of its acquisition of Tony's and the resulting lower gross
margins on those sales; the Company's reliance on the continued growth
in sales of natural and organic foods and non-food products in
comparison to conventional products; the Company's ability to timely and
successfully deploy its warehouse management system throughout its
distribution centers and its transportation management system across
the Company; increased fuel costs; the Company's sensitivity to
inflationary and deflationary pressures; the relatively low margins and
economic sensitivity of the Company's business; the potential for
disruptions in the Company's supply chain by circumstances beyond its
control; the risk of interruption of supplies due to lack of long-term
contracts, severe weather, work stoppages or otherwise; union-organizing
activities that could cause labor relations difficulties and increased
costs; the ability to identify and successfully complete acquisitions of
other natural, organic and specialty food and non-food products
distributors; management's allocation of capital and the timing of
capital expenditures; and the Company's ability to successfully deploy
its operational initiatives to achieve synergies from the acquisition of
Tony’s. 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.
|
|
|
|
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UNITED NATURAL FOODS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In
thousands, except per share data amounts)
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
November 1,
2014
|
|
|
November 2,
2013
|
|
Net sales
|
|
|
$
|
1,992,476
|
|
|
|
$
|
1,602,011
|
|
|
Cost of sales
|
|
|
1,673,480
|
|
|
|
1,330,835
|
|
|
Gross profit
|
|
|
318,996
|
|
|
|
271,176
|
|
|
Operating expenses
|
|
|
260,048
|
|
|
|
223,150
|
|
|
Restructuring and asset impairment expenses
|
|
|
555
|
|
|
|
—
|
|
|
Total operating expenses
|
|
|
260,603
|
|
|
|
223,150
|
|
|
Operating income
|
|
|
58,393
|
|
|
|
48,026
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
3,255
|
|
|
|
1,854
|
|
|
Interest income
|
|
|
(93
|
)
|
|
|
(120
|
)
|
|
Other, net
|
|
|
616
|
|
|
|
19
|
|
|
Total other expense, net
|
|
|
3,778
|
|
|
|
1,753
|
|
|
Income before income taxes
|
|
|
54,615
|
|
|
|
46,273
|
|
|
Provision for income taxes
|
|
|
21,573
|
|
|
|
18,509
|
|
|
Net income
|
|
|
$
|
33,042
|
|
|
|
$
|
27,764
|
|
|
Basic per share data:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
0.66
|
|
|
|
$
|
0.56
|
|
|
Weighted average basic shares of common stock outstanding
|
|
|
49,889
|
|
|
|
49,439
|
|
|
Diluted per share data:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
0.66
|
|
|
|
$
|
0.56
|
|
|
Weighted average diluted shares of common stock outstanding
|
|
|
50,113
|
|
|
|
49,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED NATURAL FOODS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
November 1,
2014
|
|
|
August 2,
2014
|
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ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
17,564
|
|
|
|
$
|
16,116
|
|
|
Accounts receivable, net
|
|
|
489,758
|
|
|
|
449,870
|
|
|
Inventories
|
|
|
984,411
|
|
|
|
834,722
|
|
|
Prepaid expenses and other current assets
|
|
|
41,979
|
|
|
|
45,064
|
|
|
Deferred income taxes
|
|
|
38,570
|
|
|
|
32,518
|
|
|
Total current assets
|
|
|
1,572,282
|
|
|
|
1,378,290
|
|
|
Property & equipment, net
|
|
|
501,176
|
|
|
|
483,960
|
|
|
Goodwill
|
|
|
273,916
|
|
|
|
274,548
|
|
|
Intangible assets, net
|
|
|
132,737
|
|
|
|
134,989
|
|
|
Other assets
|
|
|
29,955
|
|
|
|
25,446
|
|
|
Total assets
|
|
|
$
|
2,510,066
|
|
|
|
$
|
2,297,233
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
469,375
|
|
|
|
$
|
385,890
|
|
|
Accrued expenses and other current liabilities
|
|
|
131,073
|
|
|
|
136,959
|
|
|
Current portion of long-term debt
|
|
|
10,967
|
|
|
|
990
|
|
|
Total current liabilities
|
|
|
611,415
|
|
|
|
523,839
|
|
|
Notes payable
|
|
|
366,752
|
|
|
|
415,660
|
|
|
Long-term debt, excluding current portion
|
|
|
169,766
|
|
|
|
32,510
|
|
|
Deferred income taxes
|
|
|
50,995
|
|
|
|
50,995
|
|
|
Other long-term liabilities
|
|
|
31,237
|
|
|
|
30,865
|
|
|
Total liabilities
|
|
|
1,230,165
|
|
|
|
1,053,869
|
|
|
Commitments and contingencies
|
|
|
—
|
|
|
|
—
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, authorized 5,000 shares; none
issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.01 par value, authorized 100,000 shares; 49,998
issued and outstanding shares at November 1, 2014; 49,771 issued and
outstanding shares at August 2, 2014
|
|
|
500
|
|
|
|
498
|
|
|
Additional paid-in capital
|
|
|
408,928
|
|
|
|
402,875
|
|
|
Unallocated shares of Employee Stock Ownership Plan
|
|
|
(12
|
)
|
|
|
(14
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(7,714
|
)
|
|
|
(5,152
|
)
|
|
Retained earnings
|
|
|
878,199
|
|
|
|
845,157
|
|
|
Total stockholders’ equity
|
|
|
1,279,901
|
|
|
|
1,243,364
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
2,510,066
|
|
|
|
$
|
2,297,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED NATURAL FOODS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
November 1,
2014
|
|
|
November 2,
2013
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
33,042
|
|
|
|
$
|
27,764
|
|
|
Adjustments to reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
14,158
|
|
|
|
11,238
|
|
|
Share-based compensation
|
|
|
5,962
|
|
|
|
5,478
|
|
|
Loss (gain) on disposals of property and equipment
|
|
|
32
|
|
|
|
(67
|
)
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
(1,659
|
)
|
|
|
(2,332
|
)
|
|
Impairment of intangible asset
|
|
|
555
|
|
|
|
—
|
|
|
Deferred income taxes
|
|
|
(6,052
|
)
|
|
|
—
|
|
|
Provision for doubtful accounts
|
|
|
1,196
|
|
|
|
933
|
|
|
Non-cash interest expense
|
|
|
134
|
|
|
|
616
|
|
|
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(42,079
|
)
|
|
|
(55,678
|
)
|
|
Inventories
|
|
|
(150,761
|
)
|
|
|
(131,765
|
)
|
|
Prepaid expenses and other assets
|
|
|
4,586
|
|
|
|
2,367
|
|
|
Accounts payable
|
|
|
50,878
|
|
|
|
100,198
|
|
|
Accrued expenses and other liabilities
|
|
|
(8,735
|
)
|
|
|
(8,416
|
)
|
|
Net cash used in operating activities
|
|
|
(98,743
|
)
|
|
|
(49,664
|
)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(27,372
|
)
|
|
|
(33,247
|
)
|
|
Purchases of acquired businesses, net of cash acquired
|
|
|
(7,734
|
)
|
|
|
(22,973
|
)
|
|
Proceeds from disposals of property and equipment
|
|
|
—
|
|
|
|
99
|
|
|
Long-term investment
|
|
|
(3,000
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
(38,106
|
)
|
|
|
(56,121
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Repayments of long-term debt
|
|
|
(2,902
|
)
|
|
|
(86
|
)
|
|
Proceeds from borrowings from long-term debt
|
|
|
150,000
|
|
|
|
—
|
|
|
Proceeds from borrowings under revolving credit line
|
|
|
127,962
|
|
|
|
192,715
|
|
|
Repayments of borrowings under revolving credit line
|
|
|
(176,614
|
)
|
|
|
(95,210
|
)
|
|
Increase in bank overdraft
|
|
|
40,674
|
|
|
|
6,347
|
|
|
Proceeds from exercise of stock options
|
|
|
523
|
|
|
|
1,551
|
|
|
Payment of employee restricted stock tax withholdings
|
|
|
(2,089
|
)
|
|
|
(3,422
|
)
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
1,659
|
|
|
|
2,332
|
|
|
Capitalized debt issuance costs
|
|
|
(954
|
)
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
|
138,259
|
|
|
|
104,227
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
|
|
38
|
|
|
|
(196
|
)
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
1,448
|
|
|
|
(1,754
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
16,116
|
|
|
|
11,111
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
17,564
|
|
|
|
$
|
9,357
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
$
|
3,190
|
|
|
|
$
|
1,074
|
|
|
Cash paid for federal and state income taxes, net of refunds
|
|
|
$
|
11,032
|
|
|
|
$
|
5,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: United Natural Foods, Inc.
United Natural Foods, Inc.
Mark Shamber, 401-528-8634
Chief
Financial Officer
or
ICR
Katie Turner, 646-277-1228
General
Information