-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G7My9u1oBCvpnHFHrDpriYpOiBb2pcGMsWCCsljgpPs+Jmt/7bMvC8QF9t+XZ7xR ptk0lFuHXPra4NYNm9cTxw== 0001171520-03-000372.txt : 20031202 0001171520-03-000372.hdr.sgml : 20031202 20031202164540 ACCESSION NUMBER: 0001171520-03-000372 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031202 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED NATURAL FOODS INC CENTRAL INDEX KEY: 0001020859 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 050376157 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15723 FILM NUMBER: 031033096 BUSINESS ADDRESS: STREET 1: PO BOX 999 STREET 2: 260 LAKE RD CITY: DAYVILLE STATE: CT ZIP: 06241 BUSINESS PHONE: 8607792800 MAIL ADDRESS: STREET 1: PO BOX 999 STREET 2: 260 LAKE RD CITY: DAYVILLE STATE: CT ZIP: 06241 8-K 1 eps1315.txt UNITED NATURAL FOODS, INC. ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): December 2, 2003 UNITED NATURAL FOODS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 000-21531 05-0376157 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 260 Lake Road Dayville, CT 06241 (Address of Principal Executive Offices) (Zip Code) (860) 779-2800 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) ================================================================================ Item 7. Financial Statements and Exhibits (a) Financial Statements of Businesses Acquired: Not Applicable (b) Pro Forma Financial Information: Not Applicable (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press Release, dated December 2, 2003, announcing the Company's financial results for the fiscal quarter ended October 31, 2003. Item 12. Results of Operations and Financial Condition On December 2, 2003, the Company issued a press release announcing its financial results for the fiscal quarter ended October 31, 2003. A copy of this press release is attached as an exhibit to this Form 8-K. The information set forth this Form 8-K, including the exhibit attached hereto, is being furnished solely pursuant to Item 12 of this Form 8-K. Consequently, it shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. UNITED NATURAL FOODS, INC. By: /s/ Rick D. Puckett ----------------------------------- Rick D. Puckett Vice President, Treasurer and Chief Financial Officer Date: December 2, 2003 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release, dated December 2, 2003, announcing the Company's financial results for the fiscal quarter ended October 31, 2003. EX-99.1 3 ex99-1.txt Exhibit 99.1 [UNITED NATURAL FOODS, INC. LETTERHEAD] IMMEDIATE RELEASE December 2, 2003 United NATURAL FOODS ANNOUNCES 23% INCREASE IN NET REVENUE AND 19% INCREASE IN EARNINGS PER SHARE, EXCLUDING SPECIAL ITEMS, FOR THE FIRST QUARTER OF FISCAL 2004 Reports Record Sales of $381 Million in the First Quarter of Fiscal 2004 Dayville, Connecticut - December 2, 2003 -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net income of $6.8 million for the first quarter of fiscal 2004, ended October 31, 2003, or $0.34 per share on a diluted basis, including special items. Net income for the first quarter of fiscal 2004 was $6.6 million, or $0.33 per share on a diluted basis, excluding special items. Net sales for the first quarter of fiscal 2004 were $381.4 million, an increase of $70.4 million, or 22.6%, from the $311.0 million recorded in the first quarter of fiscal 2003. This increase included growth in the independent and the conventional mass market channels of 30% and 19%, respectively. The supernatural channel grew 9% and was impacted by the loss of Wild Oats Markets, Inc. (Wild Oats). These increases include a full quarter of sales in fiscal 2004 from Blooming Prairie, which was acquired on October 11, 2002, and Northeast Cooperative, which was acquired on December 31, 2002. Net income for the first quarter of fiscal 2004, excluding the effect of special items, increased 23.2% to $6.6 million, or $0.33 per diluted share, compared to $5.4 million, or $0.28 per diluted share, excluding special items, for the quarter ended October 31, 2002. The special items for the first quarter of fiscal 2004 consisted of a non-cash income item related to the change in fair value of interest rate swaps and the related option agreements. A special non-cash charge was recorded in the first quarter of fiscal 2003 related to the non cash change in fair value of interest rate swaps and the related option agreements and certain costs relating to the transition of Wild Oats to a new primary distributor. Net income for the first quarter of fiscal 2004, including the effect of special items, increased 70.1% to $6.8 million, or $0.34 per diluted share, for the first quarter of fiscal 2004 compared to $4.0 million, or $0.21 per diluted share, for the quarter ended October 31, 2002. The following table details the amounts and effects of these items: ------------------------------------------------------------------------- Quarter Ended October 31, 2003 Pretax Per diluted (in thousands, except per share data) Income Net of Tax share ------ ---------- ----------- Income, excluding special items: $10,806 $6,591 $0.33 Special items - Income/(Expense) Interest rate swap agreement (change in fair value of financial instruments) 304 186 0.01 ------------------------------------------------------------------------- Income, including special items: $11,110 $6,777 $0.34 ========================================================================= ------------------------------------------------------------------------- Quarter Ended October 31, 2002 Pretax Per diluted (in thousands, except per share data) Income Net of Tax share ------ ---------- ----------- Income, excluding special items: $ 8,921 $ 5,352 $0.28 Special items - Income/(Expense) Interest rate swap agreements (change in fair value of financial instruments) (1,706) (1,023) (0.05) Costs related to loss of Wild Oats (included in operating expenses) (574) (345) (0.02) ------------------------------------------------------------------------- Income, including special items: $ 6,641 $ 3,984 $0.20* ========================================================================= * Total reflects rounding The non-cash items from the change in fair value on interest rate swap agreements were caused by favorable and unfavorable changes in interest rate yield curves during the quarters ended October 31, 2003 and 2002, respectively. The costs related to the transition of Wild Oats to a new primary distributor consisted primarily of severance and expenses related to the transfer of their private label inventory. The Company entered into interest rate swap agreements in October 1998, August 2001 and April 2003. The October 1998 and August 2001 agreements are "ineffective" hedges. Applicable accounting treatment requires that the Company record the changes in fair value of the October 1998 and August 2001 agreements in its consolidated statement of income, rather than within "other comprehensive income" in its statement of stockholders' equity. The changes in fair value are dependent upon the forward looking yield curves for each swap. The April 2003 agreement is an "effective" hedge and therefore does not require this treatment. The Company's believes that its October 1998 and August 2001 agreements are special items that are excludable as non-recurring items. First, the Company only intends to enter into "effective" hedges going forward. This stated intention began with the April 2003 agreement. Second, the Company believes that the October 1998 and August 2001 agreements may distort and confuse investors if the change in fair value cannot be treated as a special charge because their inclusion directly impacts the Company's reported earnings per share. A change in fair value, whether positive or negative, can significantly increase or decrease the Company's reported earnings per share. For example, the Company recorded a positive change in fair value for the first quarter of fiscal 2004 that increased its earnings per share by $0.01. If the Company were prohibited from excluding this item as a special charge, it would artificially inflate its reported earnings per share and thereby mislead investors as to its financial condition. Comments from Management Commenting on the first quarter results, Steven Townsend, Chief Executive Officer, said, "This is an excellent start to our new fiscal year as we continue executing on our business plan and growth objectives. During the quarter, we achieved a 22.6% year over year growth in sales and a 23.2% increase in net income, excluding special items. This strong growth continues across all sales channels where our growth rates to independents, conventional mass market and supernaturals were 30%, 19% and 9% respectively. With our focus on Natural and Organic Products, we intend to be the leading source for these products over the long term." Mr. Townsend added, "Operationally, we continue to work at building efficiencies that, over time, will serve to lower operating expenses and improve our operating margins. Concurrently, we are focused on maintaining and improving our service levels to all of our customers across all of our distribution centers." The Company had previously announced guidance for fiscal 2004, ending July 31, 2004, with net revenues in the $1.55 to $1.57 billion range and net income, excluding potential special items, in the range of $1.42 - $1.46 per diluted share. Subsequent to this guidance, as previously announced by Wild Oats, Wild Oats and its primary distributor have mutually agreed to terminate their primary distribution relationship and Wild Oats plans to transition its primary distribution business to the Company. If this transition occurs, the Company would anticipate incurring start up costs in the second quarter of fiscal 2004 related to the Wild Oats transition and, achieving revenue consistent with a primary distribution relationship during the fourth quarter of fiscal 2004. The Company will provide revised guidance for fiscal 2004 after the primary distribution agreement with Wild Oats has been executed. Historically, interest rate swaps, distribution facility expansions and asset impairment charges (including goodwill) have been classified as special items. However, at this time we do not know the extent or significance of these items or whether the Company will in fact incur any of these items in fiscal 2004. The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. 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 Management will conduct a conference call and audio webcast at 11:00 a.m. ET on December 2, 2003 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is (877) 423-3894. The audio webcast will be available, on a listen only basis, via the Internet at www.viavid.net 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 32,000 products to more than 14,000 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. For more information on United Natural Foods, Inc., visit the Company's website at www.unfi.com. Financial Tables Follow For more information on United Natural Foods, Inc., visit the Company's website at www.unfi.com. AT THE COMPANY: FINANCIAL RELATIONS BOARD - -------------------------------------------------------------------------------- Rick Puckett Joseph Calabrese Susan Garland Chief Financial Officer General Information Analyst Information (860) 779-2800 (212) 445-8434 (212) 445-8458 "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 annual report on Form 10-K filed with the Commission on October 22, 2003, 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 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. Non-GAAP Results: To supplement its financial statements presented on a GAAP basis, the Company uses non-GAAP additional measures of operating results, net earnings and earnings per share adjusted to exclude special charges. The Company believes that the use of these additional measures is appropriate to enhance an overall understanding of its past financial performance and also its prospects for the future as these special charges are not expected to be part of the Company's ongoing business. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors with a more complete understanding of the underlying operational results and trends and its marketplace performance. For example, these adjusted non-GAAP results are among the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with generally accepted accounting principles in the United States. A comparison and reconciliation from non-GAAP to GAAP results is included in the tables within this release. UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) QUARTER ENDED OCTOBER 31, ----------------------- (In thousands, except per share data) 2003 2002 --------- --------- Net sales $ 381,382 $ 310,993 Cost of sales 305,209 247,568 --------- --------- Gross profit 76,173 63,425 --------- --------- Operating expenses 62,932 53,432 Amortization of intangibles 232 38 --------- --------- Total operating expenses 63,164 53,470 --------- --------- Operating income 13,009 9,955 --------- --------- Other expense (income): Interest expense 2,320 1,847 Change in fair value of financial instruments (304) 1,706 Other, net (117) (238) --------- --------- Total other expense 1,899 3,315 --------- --------- Income before income taxes 11,110 6,640 Income taxes 4,333 2,656 --------- --------- Net income $ 6,777 $ 3,984 ========= ========= Per share data (basic): Net income $ 0.35 $ 0.21 ========= ========= Weighted average basic shares of common stock 19,526 19,106 ========= ========= Per share data (diluted): Net income $ 0.34 $ 0.20 ========= ========= Weighted average diluted shares of common stock 20,182 19,434 ========= ========= UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS OCTOBER 31, JULY 31, 2003 2003 ----------- --------- (In thousands) (UNAUDITED) (AUDITED) ASSETS Current assets: Cash $ 10,149 $ 3,645 Accounts receivable, net 93,891 90,111 Notes receivable, trade 594 585 Inventories 175,869 158,263 Prepaid expenses 5,593 5,706 Deferred income taxes 6,004 6,455 Refundable income taxes -- 704 --------- --------- Total current assets 292,100 265,469 Property & equipment, net 100,900 101,238 Other assets: Notes receivable, trade, net 1,609 1,261 Goodwill 57,744 57,400 Intangible assets, net 878 1,014 Other, net 3,232 3,717 --------- --------- Total assets $ 456,463 $ 430,099 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable - line of credit $ 95,587 $ 96,170 Current installments of long-term debt 4,136 4,459 Current installment of obligations under capital leases 889 903 Accounts payable 89,761 67,187 Accrued expenses 22,207 26,347 Financial instruments 5,800 6,104 Income taxes payable 3,230 -- --------- --------- Total current liabilities 221,610 201,170 Long-term debt, excluding current installments 37,816 38,507 Obligations under capital leases, excluding current installments 338 612 Deferred income taxes 2,247 2,247 --------- --------- Total liabilities 262,011 242,536 --------- --------- Commitments and contingencies 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 19,545 at October 31, 2003; issued and outstanding 19,510 at July 31, 2003 195 195 Additional paid-in capital 86,531 86,068 Unallocated shares of ESOP (1,890) (1,931) Accumulated other comprehensive income 40 432 Retained earnings 109,576 102,799 --------- --------- Total stockholders' equity 194,452 187,563 --------- --------- Total liabilities and stockholders' equity $ 456,463 $ 430,099 ========= ========= UNITED NATURAL FOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED OCTOBER 31, (In thousands) 2003 2002 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,777 $ 3,984 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,744 2,370 Change in fair value of financial instruments (304) 1,706 Gain on disposals of property & equipment 2 9 Deferred income tax benefit 451 -- Provision for doubtful accounts 570 1,060 Changes in assets and liabilities, net of acquired companies: Accounts receivable (4,350) (227) Inventory (17,606) (4,111) Prepaid expenses and other assets 951 (588) Notes receivable, trade (357) 95 Accounts payable 22,574 9,303 Accrued expenses (4,140) 750 Tax effect of stock option exercises 97 -- -------- -------- Net cash provided by operating activities 10,639 16,156 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of acquired businesses, net of cash acquired (344) (29,960) Proceeds from disposals of property and equipment 57 33 Capital expenditures (2,329) (4,313) -------- -------- Net cash used in investing activities (2,616) (34,240) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under note payable (583) 12,077 Repayments on long-term debt (1,014) (470) Principal payments of capital lease obligations (288) (312) Proceeds from exercise of stock options 366 4 -------- -------- Net cash (used in) provided by financing activities (1,519) 11,299 -------- -------- NET INCREASE (DECREASE) IN CASH 6,504 (6,785) Cash at beginning of period 3,645 11,184 -------- -------- Cash at end of period $ 10,149 $ 4,399 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 2,220 $ 1,823 ======== ======== Income taxes, net of refunds $ 388 $ 819 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----