EX-99.1 2 ex99-1.htm ex99-1.htm
Exhibit 99.1
 
 
IMMEDIATE RELEASE
June 2, 2009

UNITED NATURAL FOODS ANNOUNCES THIRD QUARTER 2009
DILUTED EPS OF $0.39, A 30% INCREASE
OVER DILUTED EPS FOR THIRD QUARTER 2008

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, Connecticut – June 2, 2009 -- 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:
(in thousands)
 
May 2,
2009
   
April 26,
2008
 
             
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.


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
Mark Shamber
Joseph Calabrese
Chief Financial Officer
General Information
(860) 779-2800
(212) 827-3772

 “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,
2009
   
April 26,
2008
   
May 2,
2009
   
April 26,
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,
2009
   
August 2,
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,
2009
   
April 26,
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