EX-99.1 3 ex99-1.txt Exhibit 99.1 [LETTERHEAD OF UNITED NATURAL FOODS, INC.] FOR IMMEDIATE RELEASE March 4, 2003 UNITED NATURAL FOODS REPORTS RESULTS FOR THE SECOND QUARTER ENDED JANUARY 31, 2003 Earns $0.28 per diluted share Dayville, Connecticut - March 4, 2003 -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net income of $5.4 million, or $0.28 per share on a diluted basis, excluding the effect of special items, for the second quarter of fiscal 2003, ended January 31, 2003. Net income for the second quarter of fiscal 2003, including the effect of special items, was $5.5 million, or $0.28 per share on a diluted basis. Net sales, including acquisitions, for the second quarter of fiscal 2003 were $338.4 million, an increase of 18.6% from the $285.5 million recorded in the second quarter of fiscal 2002. This included growth in the mass market and independent distribution channels of approximately 30% and 28%, respectively. Sales in the supernatural distribution channel were unchanged compared to the same period last year due primarily to the previously announced transition of the Company's former second-largest customer to a new primary distributor. These results included a full quarter of net sales from the acquisition of Blooming Prairie and one month of net sales from Northeast Cooperatives acquired on December 31, 2002. Sales growth for the quarter, excluding the effect of acquisitions, was 2.3%. Sales growth excluding the effect of acquisitions and sales in each period to the Company's former second-largest customer was 17.4%. Net income for the second quarter of fiscal 2003, excluding the effect of special items, increased 4.1% to $5.4 million, or $0.28 per diluted share, compared to $5.2 million, or $0.27 per diluted share, excluding special items, for the second quarter of fiscal 2002. The special items for the second quarter of fiscal 2003, consisted of non-cash income related to the change in fair value of interest rate swaps and related option agreements caused by favorable changes in yield curves. In addition, special items included labor costs related to the expansion of the Company's Chesterfield, New Hampshire distribution facility. Special items recorded during the second quarter of fiscal 2002 included non-cash income related to the change in fair value of interest rate swaps and related option agreements caused by favorable changes in yield curves. In addition, special items included restructuring, asset impairment and other costs related to the relocation of the Company's Atlanta, Georgia facility. Net income including special items increased 5.6% to $5.5 million, or $0.28 per diluted share, for the second quarter of 2003 compared to $5.2 million, or $0.27 per diluted share, in the same period last year. The following table details the amounts and effect of these items: -------------------------------------------------------------------------------- Quarter Ended January 31, 2003 Pretax Net of Per diluted (in thousands, except per share data) Income Tax share ------ --- ----- Income, excluding special items: $ 9,023 $ 5,414 $0.28 Less: special items (income) / expense Interest rate swap agreements(change in value of financial instruments) (226) (136) (0.01) Costs related to the expansion of Chesterfield, New Hampshire (included in operating expenses) 69 42 0.00 -------------------------------------------------------------------------------- Income, including special items: $ 9,180 $ 5,508 $0.28* ================================================================================ *Total reflects rounding -------------------------------------------------------------------------------- Quarter Ended January 31, 2002 Pretax Net of Per diluted (in thousands, except per share data) Income Tax share ------ --- ----- Income, excluding special items: $ 8,667 $ 5,200 $0.27 Less: special items (income) / expense Interest rate swap agreement (change in value of financial instruments) (1,358) (815) (0.04) Costs related to relocating Atlanta, Georgia distribution center (included in operating expenses) 1,335 801 0.04 -------------------------------------------------------------------------------- Income, including special items: $ 8,690 $ 5,214 $0.27 ================================================================================ Comments from Management Steven Townsend, President and Chief Executive Officer of United Natural Foods, said, "Robust consumer demand for natural foods continues to drive the market and we believe that our continued success demonstrates that our operating strategies, designed to meet the long-term needs of customers while being their leading natural products resource, are working. Operationally, we continue to focus on the integration of our recent acquisitions, and have made significant progress on the expansion of our Chesterfield, New Hampshire distribution center to accommodate the Northeast Cooperatives business. Additionally, we are gaining efficiencies in our purchasing practices and operating expenses as we integrate Blooming Prairie into our Western region." The Company believes that sales growth for the third quarter of fiscal 2003 will be in the 18% - 22% range. The Company expects sales growth in the mid-teens during the third quarter of fiscal 2003 for the business excluding the impact of its recent acquisitions and sales to the Company's former second-largest customer. The earnings per diluted share outlook for the quarter ending April 30, 2003 and the fiscal year ending July 31, 2003 is $0.30 - $0.32 and $1.18 - $1.20, respectively, consistent with previous guidance. Conference Call Management will conduct a conference call and audio webcast at 11:00 a.m. ET on March 4, 2003 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is 703-871-3862. The audio webcast will be available, on a listen only basis, via the Internet at www.viavid.com or at the Investor Relations section of the Company's website, www.unfi.com. Please allow extra time to the webcast to visit the site and download any software required to listen to the Internet broadcast. The online archive of the webcast will be available for 30 days. About United Natural Foods United Natural Foods, Inc. carries and distributes over 30,500 products to more than 11,000 customers nationwide. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores and independent retail operators. Financial Tables Follow For more information on United Natural Foods, Inc., visit the Company's web-site at www.unfi.com. AT THE COMPANY: FRB | Weber Shandwick -------------------------------------------------------------------------------- Rick Puckett Joseph Calabrese Vanessa Schwartz Chief Financial Officer General Information Analyst Information (860) 779-2800 (212) 445-8434 (212) 445-8433 "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding United Natural's business which 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 13, 2002, 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. United Natural is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
QUARTER ENDED SIX MONTHS ENDED JANUARY 31, JANUARY 31, (In thousands, except per share data) 2003 2002 2003 2002 Net sales $ 338,447 $ 285,461 $ 649,440 $ 565,776 Cost of sales 272,360 228,949 522,518 454,263 --------- --------- --------- --------- Gross profit 66,087 56,512 126,922 111,513 --------- --------- --------- --------- Operating expenses 55,178 47,258 106,020 92,282 Restructuring and asset impairment charges -- 424 -- 424 Amortization of intangibles 66 13 104 77 --------- --------- --------- --------- Total operating expenses 55,244 47,695 106,124 92,783 --------- --------- --------- --------- Operating income 10,843 8,817 20,798 18,730 --------- --------- --------- --------- Other expense (income): Interest expense 2,072 1,643 3,919 3,389 Change in value of financial instruments (226) (1,358) 1,479 2,429 Other, net (183) (158) (420) (114) --------- --------- --------- --------- Total other expense 1,663 127 4,978 5,704 --------- --------- --------- --------- Income before income taxes 9,180 8,690 15,821 13,026 Income taxes 3,672 3,476 6,328 5,210 --------- --------- --------- --------- Net income $ 5,508 $ 5,214 $ 9,492 $ 7,816 ========= ========= ========= ========= Per share data (basic): Net income $0 .29 $ 0.28 $ 0.50 $ 0.42 ========= ========= ========= ========= Weighted average basic shares of common stock 19,119 18,915 19,113 18,790 ========= ========= ========= ========= Per share data (diluted): Net income $ 0.28 $ 0.27 $ 0.49 $ 0.41 ========= ========= ========= ========= Weighted average diluted shares of common stock 19,526 19,371 19,471 19,217 ========= ========= ========= =========
UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED
JANUARY 31, JULY, 31 (In thousands) 2003 2002 --------- --------- ASSETS Current assets: Cash $ 11,827 $ 11,184 Accounts receivable, net 84,785 84,303 Notes receivable, trade 448 513 Inventories 151,696 131,932 Prepaid expenses 7,790 4,493 Deferred income taxes 4,612 4,612 Refundable income taxes 303 58 --------- --------- Total current assets 261,461 237,095 Property & equipment, net 97,956 82,702 Other assets: Notes receivable, trade, net 2,954 956 Goodwill 60,564 31,399 Intangibles, net 1,286 248 Other, net 2,184 2,057 --------- --------- Total assets $ 426,405 $ 354,457 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable - line of credit $ 137,501 $ 106,109 Current installments of long-term debt 1,595 1,658 Current installment of obligations under capital leases 923 1,037 Accounts payable 70,342 52,789 Accrued expenses 26,715 18,185 Financial instruments 7,099 5,620 --------- --------- Total current liabilities 244,175 185,398 Long-term debt, excluding current installments 10,481 7,677 Obligations under capital leases, excluding current Installments 1,365 995 --------- --------- Total liabilities 256,021 194,070 --------- --------- Stockholders' equity: Preferred stock, $.01 par value, authorized 5,000 shares; none issued and outstanding Common stock, $.01 par value, authorized 50,000 shares; issued and outstanding 19,135 at January 31, 2003; issued and outstanding 19,106 at July 31, 2002 191 191 Additional paid-in capital 80,135 79,711 Unallocated shares of ESOP (2,013) (2,094) Retained earnings 92,071 82,579 --------- --------- Total stockholders' equity 170,384 160,387 --------- --------- Total liabilities and stockholders' equity $ 426,405 $ 354,457 ========= =========
UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JANUARY 31, 2003 2002 (In thousands) ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,492 $ 7,816 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,051 3,783 Change in fair value of financial instruments 1,479 2,429 (Gain) Loss on disposals of property & equipment (6) 296 Deferred income tax benefit -- (605) Provision for doubtful accounts 1,699 1,045 Changes in assets and liabilities, net of acquired companies: Accounts receivable 5,242 (10,280) Inventory 2,934 (15,864) Prepaid expenses (1,328) (307) Refundable income taxes (246) (426) Other assets (1,603) (1,348) Notes receivable, trade (1,467) (182) Accounts payable 2,658 14,083 Accrued expenses 1,331 5,842 ---------------------- Net cash provided by operating activities 25,236 6,282 ---------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of acquired businesses, net of cash acquired (43,724) 65 Proceeds from disposals of property and equipment 47 21 Capital expenditures (11,221) (20,437) ---------------------- Net cash used in investing activities (54,898) (20,351) ---------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under note payable 31,392 31,961 Repayments on long-term debt (854) (20,411) Principal payments of capital lease obligations (657) (543) Proceeds from exercise of stock options 424 1,448 ---------------------- Net cash provided by financing activities 30,305 12,455 ---------------------- NET INCREASE (DECREASE) IN CASH 643 (1,614) Cash at beginning of period 11,184 6,393 ---------------------- Cash at end of period $ 11,827 $ 4,779 ====================== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 3,798 $ 3,299 ====================== Income taxes, net of refunds $ 3,911 $ 7,095 ======================
In the six months ended January 31, 2003 and 2002, the Company incurred $0 and $628, respectively, of capital lease obligations. In the six months ended January 31, 2002 the fair value of common stock issued for the acquisition of subsidiary was $4,250.