Q2 Fiscal 2018 Net Sales Increase 10.6% Year-over-Year to Record
$2.53 Billion
Reports Q2 Fiscal 2018 Diluted EPS of $0.99 and Adjusted Diluted EPS
of $0.71
Raises Fiscal 2018 Guidance
PROVIDENCE, R.I.--(BUSINESS WIRE)--Mar. 8, 2018--
United Natural Foods, Inc. (Nasdaq: UNFI) (the “Company” or “UNFI”)
today reported financial results for the second quarter of fiscal 2018
ended January 27, 2018.
Second Quarter Fiscal 2018 Highlights
-
Net sales increased 10.6% to $2.53 billion compared to $2.29
billion for the same period last fiscal year
-
Earnings per diluted common share increased $0.49 to $0.99 from $0.50
for the same period last fiscal year; Adjusted earnings per diluted
common share was $0.71, excluding a provisional one-time benefit
related to U.S. tax reform and restructuring and impairment charges
-
Operating income decreased $6.1 million, or 13.1%, to $40.2 million
compared to $46.3 million for the same period last fiscal year;
Adjusted operating income, excluding restructuring and impairment
charges, increased $5.2 million, or 11.2%, to $51.4 million
-
Company raises fiscal 2018 guidance
“Our business performed well during the quarter, and I’m proud of both
our results and our people. While the retail landscape continues to
change, I believe UNFI is well positioned to win. Consumer interest in
better for you products has never been greater than it is today, and
UNFI is an important connector between manufacturers, brick and mortar
retailers and Ecommerce customers. Our outlook for the remainder of
fiscal 2018 remains strong,” said Steven L. Spinner, Chairman and Chief
Executive Officer.
Second Quarter Fiscal 2018 Summary
Net sales for the second quarter of fiscal 2018 increased 10.6%, or
$242.5 million, to $2.53 billion from $2.29 billion in the second
quarter of fiscal 2017.
Gross margin for the quarter was 14.70%, a 39 basis point decrease over
last fiscal year’s second quarter. The decrease was primarily due to a
shift in customer mix where sales growth with lower margin customers
outpaced growth with other customers coupled with an increase in inbound
freight costs.
Total operating expenses increased $32.6 million to $331.3 million, or
13.11% of net sales, for the second quarter of fiscal 2018 compared to
$298.7 million, or 13.07% of net sales, for the second quarter of fiscal
2017. Included in total operating expenses in the second quarter of
fiscal 2018 are restructuring and impairment expenses of approximately
$11.2 million, primarily due to charges taken related to the Company’s
Earth Origins Market retail business. Excluding these restructuring and
impairment charges, adjusted operating expenses were $320.1 million, or
12.66% of net sales, for the second quarter of fiscal 2018. The decrease
in adjusted operating expenses as a percentage of net sales was
primarily driven by leveraging of fixed costs on increased net sales,
partially offset by increased labor costs incurred to fulfill the
increased demand for the Company’s products.
Operating income decreased $6.1 million, or 13.1%, to $40.2 million for
the second quarter of fiscal 2018 compared to $46.3 million for the
second quarter of fiscal 2017. Excluding the restructuring and
impairment charges noted above, adjusted operating income was $51.4
million, an increase of $5.2 million, or 11.2%, compared to the same
period last fiscal year.
The Company expects the Tax Cuts and Jobs Act (the “Tax Act”), enacted
in December 2017, will have a favorable impact on both the Company’s
reported and adjusted effective rates in fiscal 2018. In the second
quarter of fiscal 2018, the Company recorded a provisional one-time
non-cash net tax benefit of $21.9 million, or $0.43 per diluted common
share, representing the estimated impact of the remeasurement of U.S.
net deferred tax liabilities based on the new lower corporate income tax
rate contemplated by the Tax Act. In addition, the Company realized a
cash and earnings benefit of $7.3 million resulting from the 21% federal
statutory rate reduction going into effect on January 1, 2018. As a
result, the Company’s effective tax rate for the second quarter of
fiscal 2018 decreased to a negative rate of 38.4% from a positive rate
of 39.4% in the same period last fiscal year. Excluding the provisional
one-time net tax benefit of $21.9 million resulting from passage of the
Tax Act, the Company’s adjusted effective tax rate decreased to 21.6%
for the second quarter of fiscal 2018.
Net income for the second quarter of fiscal 2018 increased $25.0
million, or 98.1%, to $50.5 million, or $0.99 per diluted common share,
from $25.5 million, or $0.50 per diluted common share, for the second
quarter of fiscal 2017. The ongoing benefit of the 21% federal tax rate
resulting from the passage of the Tax Act contributed approximately
$0.14 per diluted common share in the second quarter of fiscal 2018.
Excluding the restructuring and impairment charges noted above and the
provisional one-time tax benefit resulting from passage of the Tax Act,
adjusted earnings per diluted common share was $0.71, an increase of
$0.21, or 42.0%, over the same period last fiscal year.
Adjusted EBITDA for the second quarter of fiscal 2018 was $73.3 million,
an increase of 8.5% from $67.5 million in the same period last fiscal
year.
Cash flow from operations was $36.9 million and capital expenditures
were $10.3 million, resulting in free cash flow of $26.6 million for
the second quarter of fiscal 2018. Cash flow from operations was $104.2
million and capital expenditures were $13.5 million, resulting in free
cash flow of $90.7 million for the second quarter of fiscal 2017.
Fiscal 2018 Year to Date Summary
Net sales for the 26-week period ended January 27, 2018 totaled $4.99
billion, a 9.2% increase over the comparable prior fiscal year period.
Gross margin for the 26-week period ended January 27, 2018 decreased 39
basis points to 14.82% compared to 15.21% for the 26-week period ended
January 28, 2017. The decrease was primarily due to a shift in customer
mix where sales growth with lower margin customers outpaced growth with
other customers coupled with an increase in inbound freight costs.
Total operating expenses for the 26-week period ended January 27, 2018
increased $49.1 million to $643.4 million from $594.4 million for the
26-week period ended January 28, 2017. At 12.91% of net sales, total
operating expenses for the 26-week period ended January 27, 2018, which
includes $11.2 million of restructuring and impairment expense, were 11
basis points lower than the comparable prior fiscal year period. The
year-over-year decrease in operating expenses as a percentage of net
sales was primarily driven by leveraging of fixed costs on increased net
sales. This was partially offset by restructuring and impairment charges
and increased costs incurred to fulfill the increased demand for the
Company’s products.
Operating income for the 26-week period ended January 27, 2018 decreased
$4.3 million, or 4.3%, to $95.3 million from $99.6 million for the
26-week period ended January 28, 2017. Excluding restructuring and
impairment charges noted above, adjusted operating income increased 7.0%
to $106.6 million for the 26-week period ended January 27, 2018, up from
$99.6 million for the same prior fiscal year period.
The Company’s effective tax rate decreased to 8.9% for the 26-week
period ended January 27, 2018 from 39.6% for the same period last fiscal
year. Excluding the provisional one-time net tax benefit of $21.9
million as a result of the Tax Act, the adjusted effective tax rate for
the 26-week period ended January 27, 2018 was 33.5%.
Net income for the 26-week period ended January 27, 2018 increased $26.3
million, or 48.1%, to $81.0 million, or $1.59 per diluted common share,
from $54.7 million, or $1.08 per diluted common share for the 26-week
period ended January 28, 2017. Excluding the restructuring and
impairment charges and the provisional one-time tax benefit resulting
from the passage of the Tax Act explained above, adjusted earnings per
diluted common share was $1.31 for the 26-week period ended January 27,
2018, an increase of $0.23, or 21.3%, over the 26-week period ended
January 28, 2017.
Adjusted EBITDA for the first 26 weeks of fiscal 2018 was $150.8
million, an increase of 6.1% from $142.1 million in the same period last
fiscal year.
Cash flow used in operations was $35.1 million and capital expenditures
were $15.5 million, resulting in negative free cash flow of $50.7
million for the 26-week period ended January 27, 2018. Cash flow from
operations was $96.9 million and capital expenditures were $22.7
million, resulting in free cash flow of $74.2 million for the 26-week
period ended January 28, 2017.
Fiscal 2018 Guidance
Based on UNFI’s performance to date, the impact of tax reform
contemplated by the Tax Act and the outlook for the remainder of fiscal
2018, the Company is raising its guidance previously provided on
December 7, 2017. For fiscal 2018, ending July 28, 2018, the Company now
estimates net sales in the range of approximately $10.01
billion to $10.16 billion, an increase of 8.0% to 9.5% over fiscal 2017
net sales, compared to the previous estimate of $9.84 billion to $10.00
billion. The Company now estimates earnings per diluted common share for
fiscal 2018 in the range of approximately $3.27 to $3.35, an increase of
approximately 27.7% to 30.9% over fiscal 2017 earnings per diluted
common share of $2.56, compared to the previous estimate of $2.72 to
$2.80. Adjusting for restructuring and impairment charges and the impact
of the one-time tax benefit related to the remeasurement of U.S. net
deferred tax liabilities resulting from U.S. tax reform, the Company
estimates adjusted earnings per diluted common share for fiscal 2018 in
the range of approximately $3.06 to $3.14, an increase of approximately
19.5% to 22.7% over fiscal 2017 earnings per diluted common share. The
estimated GAAP and adjusted earnings per diluted common share outlook
reflect the ongoing estimated benefits from the Tax Act. On a GAAP
basis, the Company estimates its effective tax rate to be in the range
of 23.8% to 24.3% and its adjusted effective tax rate to be in the range
of 33.0% to 33.3%, compared to previous guidance of 40.0% to 40.3%.
Capital expenditures for fiscal 2018 are expected to be 0.6% to 0.7% of
estimated fiscal 2018 net sales.
The Company’s guidance is based on current plans and expectations and is
subject to a number of known and unknown uncertainties and risks,
including those set forth under the Company’s safe harbor statement of
the Private Securities Litigation Reform Act of 1995 below.
Adjusted operating expenses, adjusted operating income, adjusted EBITDA,
adjusted earnings per diluted common share, adjusted effective tax rate,
and free cash flow are non-GAAP financial measures. Please refer to the
tables in this press release for a reconciliation of these non-GAAP
financial measures with the most directly comparable financial measure
calculated in accordance with GAAP.
Conference Call & Webcast
The Company’s second quarter fiscal 2018 conference call and audio
webcast will be held today, Thursday, March 8, 2018at 5:00
p.m. EST. The 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. carries and distributes more than 110,000
products to more than 43,000 customer locations throughout the United
States and Canada. United Natural Foods serves a wide variety of sales
channels including conventional supermarket chains, natural product
superstores, independent retailers, eCommerce and food service. In
2017, United Natural Foods, Inc. was named in the “Management Top 250”
list by the Wall Street Journal as one of the most effectively managed
U.S. companies. 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 (the “SEC”) on
September 26, 2017 and its quarterly report on Form 10-Q filed with the
SEC on December 7, 2017, 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 supermarket
chains 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; increased competition in the Company’s industry as a result of
increased distribution of natural, organic and specialty products by
conventional grocery distributors and direct distribution of those
products by large retailers and online distributors; 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; the addition or loss of
significant customers or material changes to the Company’s relationships
with these customers; volatility in fuel costs; volatility in foreign
exchange rates; 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; consumer demand for natural and
organic products outpacing suppliers’ ability to produce those products
and challenges the Company may experience in obtaining sufficient
amounts of products to meet the Company’s customers’ demands; moderated
supplier promotional activity, including decreased forward buying
opportunities; 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; the
Company’s ability to realize the anticipated benefits from its decision
to close certain of its Earth Origins Market (“Earth Origins”) stores
and for the restructuring costs related to Earth Origins to be within
the Company’s current estimates; the possibility that the Company may
recognize restructuring charges with respect to its Earth Origins
business in excess of those estimated for the second half of fiscal
2018; and changes in interpretations, assumptions, and expectations
regarding the Tax Cuts and Jobs Act, including additional guidance that
may be issued by federal and state taxing authorities. 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 estimates 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 estimates are
subject to change and could differ materially from final reported
results. The Company may from time to time update these publicly
announced estimates, but it is not obligated to do so.
Non-GAAP Financial Measures: To
supplement the financial information presented on a generally accepted
accounting principles (“GAAP”) basis, the Company has included in this
press release non-GAAP financial measures for adjusted operating
expenses, adjusted operating income, adjusted EBITDA, adjusted earnings
per diluted common share, adjusted effective tax rate, and free cash
flow. The Company has also included in this press release non-GAAP
financial measures for estimated adjusted earnings per diluted common
share and adjusted effective income tax rate for the fiscal year ended
July 28, 2018. The non-GAAP measures adjusted operating expenses,
adjusted operating income, adjusted earnings per diluted share and
estimated adjusted earnings per diluted share all exclude restructuring
and asset impairment expenses. Adjusted earnings per diluted common
share and estimated adjusted earnings per diluted common share also
exclude a net tax benefit related to tax reform. The non-GAAP measure
adjusted EBITDA excludes depreciation, amortization, other expense and
income, net, income taxes, and other non-operating items. The non-GAAP
measures adjusted effective tax rate and estimated adjusted effective
tax rate exclude a net tax benefit related to tax reform. Free cash flow
is cash flows from operating activities less capital expenditures. The
reconciliation of these non-GAAP financial measures to their comparable
GAAP financial measures are presented in the tables appearing below. The
presentation of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for any measure prepared in
accordance with GAAP. The Company believes that presenting non-GAAP
financial measures aids in making period-to-period comparisons and is a
meaningful indication of its actual and estimated operating performance.
The Company’s management utilizes and plans to utilize this non-GAAP
financial information to compare the Company’s operating performance
during the 2018 fiscal year to the comparable periods in the 2017 fiscal
year and to internally prepared projections.
|
|
| UNITED NATURAL FOODS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
|
(In thousands, except for per share data)
|
|
|
|
|
13-Week Period Ended |
|
26-Week Period Ended |
|
|
January 27,
2018 |
|
January 28,
2017 |
|
January 27,
2018 |
|
January 28,
2017 |
|
Net sales
|
|
$
|
2,528,011
|
|
|
$
|
2,285,518
|
|
|
$
|
4,985,556
|
|
|
$
|
4,563,882
|
|
|
Cost of sales
|
|
2,156,489
|
|
|
1,940,573
|
|
|
4,246,818
|
|
|
3,869,921
|
|
|
Gross profit
|
|
371,522
|
|
|
344,945
|
|
|
738,738
|
|
|
693,961
|
|
|
Operating expenses
|
|
320,076
|
|
|
298,674
|
|
|
632,185
|
|
|
594,351
|
|
|
Restructuring and asset impairment expenses
|
|
11,242
|
|
|
—
|
|
|
11,242
|
|
|
—
|
|
|
Total operating expenses
|
|
331,318
|
|
|
298,674
|
|
|
643,427
|
|
|
594,351
|
|
|
Operating income
|
|
40,204
|
|
|
46,271
|
|
|
95,311
|
|
|
99,610
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
4,233
|
|
|
4,441
|
|
|
7,900
|
|
|
8,963
|
|
|
Interest income
|
|
(96
|
)
|
|
(97
|
)
|
|
(187
|
)
|
|
(196
|
)
|
|
Other, net
|
|
(418
|
)
|
|
(101
|
)
|
|
(1,281
|
)
|
|
282
|
|
|
Total other expense, net
|
|
3,719
|
|
|
4,243
|
|
|
6,432
|
|
|
9,049
|
|
|
Income before income taxes
|
|
36,485
|
|
|
42,028
|
|
|
88,879
|
|
|
90,561
|
|
|
Provision for income taxes (benefit)
|
|
(14,001
|
)
|
|
16,546
|
|
|
7,888
|
|
|
35,862
|
|
|
Net income
|
|
$
|
50,486
|
|
|
$
|
25,482
|
|
|
$
|
80,991
|
|
|
$
|
54,699
|
|
|
Basic per share data:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.00
|
|
|
$
|
0.50
|
|
|
$
|
1.60
|
|
|
$
|
1.08
|
|
|
Weighted average basic shares of common stock outstanding
|
|
50,449
|
|
|
50,587
|
|
|
50,633
|
|
|
50,531
|
|
|
Diluted per share data:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
0.99
|
|
|
$
|
0.50
|
|
|
$
|
1.59
|
|
|
$
|
1.08
|
|
|
Weighted average diluted shares of common stock outstanding
|
|
50,741
|
|
|
50,755
|
|
|
50,849
|
|
|
50,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| UNITED NATURAL FOODS, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
|
(In thousands, except for per share data)
|
|
|
|
|
January 27,
2018 |
|
July 29,
2017 |
|
ASSETS
|
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
25,401
|
|
|
$
|
15,414
|
|
|
Accounts receivable, net
|
|
629,362
|
|
|
525,636
|
|
|
Inventories
|
|
1,140,928
|
|
|
1,031,690
|
|
|
Deferred income taxes
|
|
—
|
|
|
40,635
|
|
|
Prepaid expenses and other current assets
|
|
61,481
|
|
|
49,295
|
|
|
Total current assets
|
|
1,857,172
|
|
|
1,662,670
|
|
|
Property & equipment, net
|
|
578,053
|
|
|
602,090
|
|
|
Goodwill
|
|
363,841
|
|
|
371,259
|
|
|
Intangible assets, net
|
|
200,831
|
|
|
208,289
|
|
|
Other assets
|
|
49,783
|
|
|
42,255
|
|
|
Total assets
|
|
$
|
3,049,680
|
|
|
$
|
2,886,563
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable
|
|
$
|
627,085
|
|
|
$
|
534,616
|
|
|
Accrued expenses and other current liabilities
|
|
159,301
|
|
|
157,243
|
|
|
Current portion of long-term debt
|
|
12,322
|
|
|
12,128
|
|
|
Total current liabilities
|
|
798,708
|
|
|
703,987
|
|
|
Notes payable
|
|
287,039
|
|
|
223,612
|
|
|
Deferred income taxes
|
|
36,257
|
|
|
98,833
|
|
|
Other long-term liabilities
|
|
29,140
|
|
|
28,347
|
|
|
Long-term debt, excluding current portion
|
|
143,796
|
|
|
149,863
|
|
|
Total liabilities
|
|
1,294,940
|
|
|
1,204,642
|
|
| Stockholders’ equity: |
|
|
|
|
|
Preferred stock, $0.01 par value, authorized 5,000 shares; none
issued or outstanding
|
|
—
|
|
|
—
|
|
|
Common stock, par value $0.01 per share, authorized 100,000 shares;
50,972 shares issued and 50,408 shares outstanding at January 27,
2018, 50,622 shares issued and outstanding at July 29, 2017
|
|
510
|
|
|
506
|
|
|
Additional paid-in capital
|
|
471,118
|
|
|
460,011
|
|
|
Treasury stock at cost
|
|
(22,237
|
)
|
|
—
|
|
|
Accumulated other comprehensive loss
|
|
(10,204
|
)
|
|
(13,963
|
)
|
|
Retained earnings
|
|
1,315,553
|
|
|
1,235,367
|
|
|
Total stockholders’ equity
|
|
1,754,740
|
|
|
1,681,921
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
3,049,680
|
|
|
$
|
2,886,563
|
|
|
|
|
|
|
|
|
|
|
|
|
| UNITED NATURAL FOODS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
|
(In thousands)
|
|
|
|
|
26-Week Period Ended |
|
|
January 27,
2018 |
|
January 28,
2017 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
Net income
|
|
$
|
80,991
|
|
|
$
|
54,699
|
|
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
44,249
|
|
|
42,458
|
|
|
Share-based compensation
|
|
13,846
|
|
|
14,011
|
|
|
Loss on disposals of property and equipment
|
|
100
|
|
|
395
|
|
|
Gain associated with disposal of investments
|
|
(699
|
)
|
|
—
|
|
|
Excess tax deficit from share-based payment arrangements
|
|
—
|
|
|
1,413
|
|
|
Restructuring and asset impairment
|
|
3,370
|
|
|
—
|
|
|
Goodwill impairment
|
|
7,872
|
|
|
—
|
|
|
Deferred income taxes
|
|
(22,733
|
)
|
|
—
|
|
|
Provision for doubtful accounts
|
|
5,569
|
|
|
3,217
|
|
|
Non-cash interest expense (income)
|
|
956
|
|
|
(24
|
)
|
|
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
|
|
Accounts receivable
|
|
(109,097
|
)
|
|
(26,140
|
)
|
|
Inventories
|
|
(108,979
|
)
|
|
30,759
|
|
|
Prepaid expenses and other assets
|
|
(13,508
|
)
|
|
(20,514
|
)
|
|
Accounts payable
|
|
60,636
|
|
|
9,363
|
|
|
Accrued expenses and other liabilities
|
|
2,308
|
|
|
(12,728
|
)
|
|
Net cash (used in) provided by operating activities
|
|
(35,119
|
)
|
|
96,909
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
Capital expenditures
|
|
(15,535
|
)
|
|
(22,674
|
)
|
|
Purchase of businesses, net of cash acquired
|
|
(19
|
)
|
|
(9,982
|
)
|
|
Proceeds from disposals of property and equipment
|
|
36
|
|
|
18
|
|
|
Proceeds from disposal of investments
|
|
756
|
|
|
—
|
|
|
Long-term investment
|
|
(3,010
|
)
|
|
(2,000
|
)
|
|
Net cash used in investing activities
|
|
(17,772
|
)
|
|
(34,638
|
)
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
Repayments of long-term debt
|
|
(6,054
|
)
|
|
(5,658
|
)
|
|
Repurchase of common stock
|
|
(22,237
|
)
|
|
—
|
|
|
Proceeds from borrowings under revolving credit line
|
|
311,061
|
|
|
136,787
|
|
|
Repayments of borrowings under revolving credit line
|
|
(247,632
|
)
|
|
(169,618
|
)
|
|
Increase (decrease) in bank overdraft
|
|
31,708
|
|
|
(9,076
|
)
|
|
Proceeds from exercise of stock options
|
|
268
|
|
|
165
|
|
|
Payment of employee restricted stock tax withholdings
|
|
(4,424
|
)
|
|
(1,191
|
)
|
|
Excess tax deficit from share-based payment arrangements
|
|
—
|
|
|
(1,413
|
)
|
|
Capitalized debt issuance costs
|
|
—
|
|
|
(180
|
)
|
|
Net cash provided by (used in) financing activities
|
|
62,690
|
|
|
(50,184
|
)
|
| EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
188
|
|
|
(22
|
)
|
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
9,987
|
|
|
12,065
|
|
|
Cash and cash equivalents at beginning of period
|
|
15,414
|
|
|
18,593
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
25,401
|
|
|
$
|
30,658
|
|
|
|
|
|
|
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
Cash paid for interest
|
|
$
|
7,900
|
|
|
$
|
8,963
|
|
|
Cash paid for federal and state income taxes, net of refunds
|
|
$
|
36,929
|
|
|
$
|
45,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED NATURAL FOODS, INC.
|
|
|
|
Reconciliation of GAAP Results to Non-GAAP Presentation
(unaudited)
|
|
(In thousands, except percentages)
|
|
|
|
|
13-Week Period Ended January 27, 2018 |
|
|
GAAP |
|
Adjustments (1) |
|
Adjusted |
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,528,011
|
|
|
$
|
—
|
|
|
$
|
2,528,011
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
371,522
|
|
|
|
—
|
|
|
$
|
371,522
|
|
|
Total operating expenses
|
|
|
331,318
|
|
|
|
(11,242
|
)
|
|
|
320,076
|
|
|
Operating income
|
|
$
|
40,204
|
|
|
|
11,242
|
|
|
$
|
51,446
|
|
|
|
|
|
|
|
|
|
Total operating expenses as a percentage of net sales
|
|
|
13.11
|
%
|
|
|
|
|
12.66
|
%
|
|
(1)
|
|
Represents restructuring and impairment charges recorded related to
the Company’s Earth Origins Market retail business.
|
|
|
|
|
|
|
|
26-Week Period Ended January 27, 2018 |
|
|
GAAP |
|
Adjustments (1) |
|
Adjusted |
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
738,738
|
|
|
—
|
|
|
$
|
738,738
|
|
Total operating expenses
|
|
|
643,427
|
|
|
(11,242
|
)
|
|
|
632,185
|
|
Operating income
|
|
$
|
95,311
|
|
$
|
11,242
|
|
|
$
|
106,553
|
|
(1)
|
|
Represents restructuring and impairment charges recorded related to
the Company’s Earth Origins Market retail business.
|
|
|
|
|
|
| Reconciliation of Net Income to Adjusted EBITDA (unaudited) |
| (in thousands, except percentages) |
|
|
|
|
13-Week Period Ended |
|
|
|
26-Week Period Ended |
|
|
|
|
January 27,
2018 |
|
January 28,
2017 |
|
Change |
|
January 27,
2018 |
|
January 28,
2017 |
|
Change |
|
Net income
|
|
$
|
50,486
|
|
|
$
|
25,482
|
|
98.1
|
%
|
|
$
|
80,991
|
|
$
|
54,699
|
|
48.1
|
%
|
|
Depreciation and amortization
|
|
|
21,807
|
|
|
|
21,243
|
|
|
|
|
44,249
|
|
|
42,458
|
|
|
|
Total other expense, net
|
|
|
3,719
|
|
|
|
4,243
|
|
|
|
|
6,432
|
|
|
9,049
|
|
|
|
Provision for income taxes
|
|
|
(14,001
|
)
|
|
|
16,546
|
|
|
|
|
7,888
|
|
|
35,862
|
|
|
|
Restructuring and asset impairment expenses
|
|
|
11,242
|
|
|
|
—
|
|
|
|
|
11,242
|
|
|
—
|
|
|
|
Adjusted EBITDA
|
|
$
|
73,253
|
|
|
$
|
67,514
|
|
8.5
|
%
|
|
$
|
150,802
|
|
$
|
142,068
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED NATURAL FOODS, INC.
|
|
|
| Reconciliation of GAAP Earnings per Diluted Common Share to
Adjusted Earnings per Diluted Common Share (unaudited) |
|
|
|
|
January 27, 2018 |
|
|
13-Week
Period Ended
|
|
26-Week
Period Ended
|
|
GAAP earnings per diluted common share
|
|
$
|
0.99
|
|
|
$
|
1.59
|
|
|
Restructuring and asset impairment expenses (1)
|
|
|
0.22
|
|
|
|
0.22
|
|
|
Tax impact of adjustments (2)
|
|
|
(0.07
|
)
|
|
|
(0.07
|
)
|
|
Net tax benefit related to U.S. Tax Reform (3)
|
|
|
(0.43
|
)
|
|
|
(0.43
|
)
|
|
Adjusted earnings per diluted common share
|
|
$
|
0.71
|
|
|
$
|
1.31
|
|
|
(1)
|
|
Represents restructuring and impairment charges recorded related to
the Company’s Earth Origins Market retail business.
|
|
(2)
|
|
Represents the tax effect of the restructuring and impairment
adjustments recorded related to the Company’s Earth Origins Market
retail business using the blended rate for the reporting period.
|
|
(3)
|
|
Represents the earnings per share impact of a $21.9 million benefit
related to the remeasurement of net deferred tax liabilities as a
result of U.S. tax reform enacted in December 2017.
|
|
|
|
|
|
| Reconciliation of GAAP Operating Cash Flow to Non-GAAP Free Cash
Flow (unaudited) |
| (in thousands) |
|
|
|
|
13-Week Period Ended |
|
26-Week Period Ended |
|
|
January 27,
2018
|
|
January 28,
2017
|
|
January 27,
2018
|
|
January 28,
2017
|
|
Net cash provided by (used in) operating activities
|
|
$
|
36,911
|
|
$
|
104,164
|
|
$
|
(35,119
|
)
|
|
$
|
96,909
|
|
Capital expenditures
|
|
|
10,278
|
|
|
13,476
|
|
|
15,535
|
|
|
|
22,674
|
|
Free cash flow
|
|
$
|
26,633
|
|
$
|
90,688
|
|
$
|
(50,654
|
)
|
|
$
|
74,235
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of GAAP Effective Tax Rate to Non-GAAP Effective
Tax Rate (unaudited) |
| (in thousands,except for percentages) |
|
|
|
|
January 27, 2018 |
|
|
13-Week Period
Ended
|
|
26-Week Period
Ended
|
|
Income before income taxes
|
|
$
|
36,485
|
|
|
|
|
$
|
88,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes (benefit)
|
|
|
(14,001
|
)
|
|
(38.4
|
)%
|
|
|
7,888
|
|
8.9
|
%
|
|
Net tax benefit related to U.S. Tax Reform (1)
|
|
|
21,891
|
|
|
60.0
|
%
|
|
|
21,891
|
|
24.6
|
%
|
|
Adjusted provision for income taxes
|
|
$
|
7,890
|
|
|
21.6
|
%
|
|
$
|
29,779
|
|
33.5
|
%
|
|
(1)
|
|
Represents the impact of a $21.9 million benefit related to the
remeasurement of net deferred tax liabilities as a result of U.S.
tax reform enacted in December 2017.
|
|
|
|
|
|
| UNITED NATURAL FOODS, INC. |
|
|
| Reconciliation of 2018 Guidance for Estimated GAAP Diluted
Earnings per Common Share to |
| Estimated Non-GAAP Adjusted Diluted Earnings per Common Share
(unaudited) |
|
|
|
|
Fiscal Year Ending July 28, 2018 |
|
|
|
Low Range |
|
High Range |
|
|
GAAP diluted earnings per common share
|
|
$
|
3.27
|
|
|
$
|
3.35
|
|
|
|
Restructuring and asset impairment expenses (1)
|
|
|
0.27
|
|
|
|
0.27
|
|
|
|
Tax impact of adjustments (2)
|
|
|
(0.09
|
)
|
|
|
(0.09
|
)
|
|
|
Net tax benefit related to U.S. Tax Reform (3)
|
|
|
(0.40
|
)
|
|
|
(0.40
|
)
|
|
|
Non-GAAP adjusted diluted earnings per common share
|
|
$
|
3.06
|
|
*
|
$
|
3.14
|
|
*
|
| * Includes rounding |
|
|
|
|
|
|
(1)
|
|
Represents total estimated fiscal 2018 restructuring and impairment
charges related to the Company’s Earth Origins Market retail
business which includes additional restructuring charges primarily
related to future exit costs of approximately $2.6 million expected
to be incurred during the second half of fiscal 2018.
|
|
(2)
|
|
Represents the tax effect of the total estimated fiscal 2018
restructuring and impairment charges related to the Company’s Earth
Origins Market retail business using the estimated rate for the
reporting period.
|
|
(3)
|
|
Represents the impact of the estimated benefit related to the
remeasurement of net deferred tax liabilities as a result of U.S.
tax reform enacted in December 2017.
|
|
|
|
|
|
| Reconciliation of 2018 Guidance for Estimated GAAP Effective Tax
Rate to Estimated Non-GAAP Effective Tax Rate (unaudited) |
|
|
|
|
|
Fiscal Year Ending July 28, 2018 |
|
|
Low Range |
|
High Range |
|
Estimated GAAP Effective Tax Rate
|
|
23.8
|
%
|
|
24.3
|
%
|
|
Net tax benefit related to U.S. Tax Reform (1)
|
|
9.2
|
%
|
|
9.0
|
%
|
|
Adjusted Estimated GAAP Effective Tax Rate
|
|
33.0
|
%
|
|
33.3
|
%
|
|
(1)
|
|
Represents the impact of the estimated benefit related to the
remeasurement of net deferred tax liabilities as a result of U.S.
tax reform enacted in December 2017.
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180308006296/en/
Source: United Natural Foods, Inc.
INVESTOR CONTACT:
United Natural Foods, Inc.
Mike
Zechmeister
Chief Financial Officer
401-528-8634