EX-99.1 2 ex99-1.htm EARNINGS RELEASE ex99-1.htm
Exhibit 99.1
 

 
IMMEDIATE RELEASE
December 10, 2009

UNITED NATURAL FOODS ANNOUNCES
FIRST QUARTER FISCAL 2010 RESULTS

$0.36 DILUTED EPS FOR Q1 2010, A 16% INCREASE OVER DILUTED EPS FOR Q1 2009

Highlights
 
·
Achieved net income of $15.5 million for the first quarter of fiscal 2010
 
·
Net sales increased by 2.4% to $884.8 million

Providence, Rhode Island – December 10, 2009 -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported that net income for the first quarter of fiscal 2010 ended October 31, 2009 increased $2.3 million, or 17.2%, to $15.5 million, or $0.36 per diluted share, from $13.2 million, or $0.31 per diluted share, for the first quarter of fiscal 2009.  Net sales for the first quarter of fiscal 2010 totaled $884.8 million, an increase of 2.4%, or $20.5 million, over the net sales recorded in first quarter of fiscal 2009 of $864.2 million.  

“Fiscal 2010 began with another quarter of strong year over year improvement.  During the quarter, we began to see some signs of improvement, with reduced weekly sales volatility, supplier price increases returning to historical levels and improving trends in sales growth towards the end of the quarter,” said Steven Spinner, President and Chief Executive Officer.

Gross margin was 18.6% for the first quarter of fiscal 2010, which represents an 80 basis point decline from the gross margin of 19.4% for the first quarter of fiscal 2009. The lower gross margin compared to the prior year was largely due to a combination of lower fuel surcharge revenues resulting from the lower average diesel prices compared to the quarter ended November 1, 2008, and a change in the mix of sales by channel.

Operating expenses as a percentage of net sales decreased to 15.5% for the first quarter of fiscal 2010, a decrease of approximately 1.0% compared to the quarter ended November 1, 2008.  Operating expenses decreased by $5.1 million, or 3.6%, to $137.4 million, compared to the quarter ended November 1, 2008, which had operating expenses of $142.5 million.  Operating income as a percentage of net sales increased to 3.1% for the first quarter of fiscal 2010 from 2.9% for the first quarter of fiscal 2009.

“During the first quarter, we successfully secured new conventional supermarket business as a direct result of our strategic expansion into specialty foods and products.  We expect that this business will begin to ship during the first calendar quarter of 2010. Additionally, we continue to gain momentum with our combined natural, organic and specialty product offerings, and are poised to open our newly announced Lancaster, Texas distribution facility in August,” added Mr. Spinner.
 


 
 
 

Today, the Company also provided revenue guidance for fiscal 2010, ending July 31, 2010.  For fiscal 2010, the Company expects revenues to increase by approximately 2.5% to 5.0% over fiscal 2009 levels, to a range of $3.54 billion to $3.63 billion.  

The Company’s guidance is based on a number of assumptions, which are subject to change and 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 first quarter 2010 conference call and audio webcast will be held at 10:00 a.m. EDT on December 10, 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.
 
 
About United Natural Foods
 
United Natural Foods, Inc. (www.unfi.com) carries and distributes more than 60,000 products to more than 17,000 customer locations 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, 2007 and 2009 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
(401) 528-8634
(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 uncertaintiesand are based on current expectations and management’s 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 on September 30, 2009, 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; increased fuel costs; the Company’s sensitivity to inflationary pressures; the relatively low margins and economic sensitivity of the Company’s business; the ability to identify and successfully complete acquisitions of other foodservice distributors; and management’s allocation of capital and the timing of capital expenditures. 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
  
   
October 31,
2009
    
November 1,
2008
  
             
Net sales
   $ 884,768     $ 864,236  
Cost of sales
     720,167       696,648  
                 
                 Gross profit
     164,601       167,588  
                 
Operating expenses
     137,409       142,543  
                Total operating expenses
     137,409       142,543  
                 
                Operating income
     27,192       25,045  
                 
Other expense (income):
                
         Interest expense
     1,381       3,410  
         Interest income
     (69 )     (252 )
         Other, net
     (8 )     (48 )
                 Total other expense
     1,304       3,110  
                 
                 Income before income taxes
     25,888       21,935  
                 
Provision for income taxes
     10,355       8,686  
                 
                Net income
  $ 15,533     $ 13,249  
                 
Basic per share data:
                
     Net income
  $ 0.36     $ 0.31  
                 
     Weighted average basic shares
        of common stock
     42,982       42,764  
                 
Diluted per share data:
                
     Net income
  $ 0.36     $ 0.31  
                 
     Weighted average diluted shares
        of common stock
     43,211       42,919  


 
 
 

UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)

   
October 31,
2009
    
August 1,
2009
  
ASSETS
            
Current assets:
            
    Cash and cash equivalents
   $ 14,854     $ 10,269  
    Accounts receivable, net
     198,052       179,455  
    Notes receivable, trade, net
     1,872       1,799  
    Inventories
     412,600       366,611  
    Prepaid expenses and other current assets
     11,647       16,423  
    Deferred income taxes
     18,074       18,074  
       Total current assets
     657,099       592,631  
                 
Property and equipment, net
     245,797       242,051  
                 
Other assets:
                
    Goodwill
     164,333       164,333  
    Intangible assets, net
     37,825       38,358  
    Notes receivable, trade, net
     2,377       2,176  
    Other
     18,510       19,001  
Total assets
   $ 1,125,941     $ 1,058,550  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
    Accounts payable
   $ 205,756     $ 155,211  
    Notes payable
     185,000       200,000  
    Accrued expenses and other current liabilities
     78,886       63,347  
    Current portion of long-term debt
     5,023       5,020  
       Total current liabilities
     474,665       423,578  
                 
Long-term debt, excluding current portion
     52,601       53,858  
Deferred income taxes
     12,261       12,297  
Other long-term liabilities
     24,792       24,345  
       Total liabilities
     564,319       514,078  
                 
Stockholders’ equity:
                
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued and outstanding
     -       -  
Common stock, $0.01 par value, authorized 100,000 shares; 43,303 issued and 43,074 outstanding shares at October 31, 2009; 43,237 issued and 43,008 outstanding shares at August 1, 2009
     433       432  
  Additional paid-in capital
     176,760       175,182  
  Treasury stock
     (6,092 )     (6,092 )
  Unallocated shares of Employee Stock Ownership Plan
     (836 )     (877 )
  Accumulated other comprehensive loss
     (1,626 )     (1,623 )
  Retained earnings
     392,983       377,450  
     Total stockholders’ equity
     561,622       544,472  
                 
Total liabilities and stockholders’ equity
   $ 1,125,941     $ 1,058,550  

 
 
 

UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

   
Three months ended
  
   
October 31,
2009
    
November 1,
2008
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income
  $ 15,533     $ 13,249  
Adjustments to reconcile net income to net cash provided by
               
  (used in) operating activities:
                
    Depreciation and amortization
     6,650       6,369  
    Share-based compensation
     2,120       1,686  
    Provision for doubtful accounts
     496       842  
    (Gain) loss on disposals of property and equipment
     (13 )     53  
Changes in assets and liabilities, net of acquisitions:
                
    Accounts receivable
     (19,066 )     (13,350 )
    Inventories
     (45,989 )     (73,646 )
    Prepaid expenses and other assets
     5,144       3,536  
    Notes receivable, trade
    (301 )     228  
    Accounts payable
     36,962       20,527  
    Accrued expenses and other current liabilities
     15,947       9,307  
      Net cash provided by (used in) operating activities
     17,483       (31,199 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Capital expenditures
     (9,700 )     (11,415 )
Proceeds from disposals of property and equipment
     21       -  
Purchases of acquired businesses, net of cash acquired
     -       (190 )
      Net cash used in investing activities
     (9,679 )     (11,605 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Net (repayments) borrowings under note payable
     (15,000 )     11,148  
Increase in bank overdraft
     13,583       16,989  
Repayments of long-term debt
     (1,254 )     (818 )
Capitalized debt issuance costs
     (7 )     -  
Proceeds from exercise of stock options
     14       565  
Payment of employee restricted stock tax withholdings
     (558 )     -  
Tax benefits from equity awards
     3       133  
Payments on life insurance policy loans
     -       (3,072 )
      Net cash (used in) provided by financing activities
     (3,219 )     24,945  
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
     4,585       (17,859 )
Cash and cash equivalents at beginning of period
     10,269       25,333  
Cash and cash equivalents at end of period
  $ 14,854     $ 7,474  
                 
Supplemental disclosures of cash flow information:
                
Cash paid during the period for:
                
     Interest, net of amounts capitalized
   $ 1,200     $ 3,271  
     Federal and state income taxes, net of refunds
   $ 1,525     $ 1,169