EX-99.1 2 ex99-1.htm ex99-1.htm
Exhibit 99.1
 
UNFI REPORTS SECOND QUARTER FISCAL 2010 DILUTED EARNINGS PER SHARE OF $0.36
AN INCREASE OF 13.9% OVER THE PRIOR YEAR PERIOD

Second Quarter 2010 Highlights
 
·
Net sales increased 6.0% to $898 million over net sales for the second quarter of fiscal 2009
 
·
Net income increased 15% to $15.7 million versus prior year comparable quarter

First Half Fiscal 2010 Highlights
 
·
Diluted EPS increased 14.3% to $0.72 compared with $0.63 in comparable fiscal 2009 period
 
·
Net sales increased 4.2% to $1.78 billion
 
·
Net Income increased 16.1% versus prior year to $31.2 million

Providence, Rhode Island – March 2, 2010 -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported that net income for the second quarter of fiscal 2010 ended January 30, 2010 increased $2.1 million, or 15.0%, to $15.7 million, or $0.36 per diluted share, from $13.6 million, or $0.32 per diluted share, for the second quarter of fiscal 2009.  Net sales for the second quarter of fiscal 2010 were $898.2 million, an increase of 6.0%, or $50.6 million, from net sales of $847.6 million recorded in the second quarter of fiscal 2009.

“The second quarter of fiscal year 2010 marks another period of solid revenues and profitability for UNFI,” said Steven Spinner, President and Chief Executive Officer.  “Improving sales trends have provided us with a solid level of top-line growth as we continue to work to gain market share and incremental business.  UNFI has been awarded approximately $100 million in annual new business during the last six months, which is expected to phase in throughout fiscal 2010.  As we begin the second half of fiscal 2010, I look forward to continued revenue growth throughout our company.”

Gross margin was 18.5% for the second quarter of fiscal 2010, which represents a 0.6% decline from the gross margin of 19.1% for the second quarter of fiscal 2009. The lower gross margin compared to the prior year’s comparable period was largely due to a combination of lower fuel surcharge revenues, a shift in customer mix and moderated inflation.

Operating expenses as a percentage of net sales decreased by 0.6% during the second quarter of fiscal 2010 when compared to the second quarter of 2009 to 15.5% of net sales, or $139.0 million versus 16.1% in the prior year.  Operating expenses were positively impacted by lower fuel costs and the continued implementation of expense control programs across all UNFI divisions.  The Company recorded $0.7 million in expenses during the quarter related to severance for a previously announced separation agreement and start-up costs associated with on-boarding of new customers.
 
 

 
 

 


First Half 2010 Summary

Sales for the first half of 2010 were $1.78 billion, a 4.2% increase over the prior fiscal year comparable period.  Diluted EPS was $0.72 per share, a 14.3% increase over prior year.  At 15.5% of net sales, operating expenses were 78 basis points lower than prior year.  Gross margin was 68 basis points less than prior year, at 18.6% of net sales for the first six months of fiscal 2010.

“UNFI will continue to enhance its national leadership position in the natural, organic and specialty foods channel,” said Mr. Spinner.  “Our strategy to increase market share, drive operational excellence, operate as one company and further our sustainability and philanthropic causes will serve as the primary vehicle for success over the long term.”

2010 Second Quarter Conference Call Webcast

The Company’s second quarter fiscal 2010 conference call and audio webcast will be held at 10:00 a.m. EST on March 2, 2010. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the Internet at www.earnings.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," winner of the Supermarket News 2008 Sustainability Excellence Award, and recognized by the Nutrition Business Journal for its 2009 Environment and Sustainability 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 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 on September 30, 2009 and its quarterly report on Form 10-Q filed on December 10, 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
   
Six months ended
 
   
January 30,
2010
   
January 31,
2009
   
January 30,
2010
   
January 31,
2009
 
                         
Net sales
  $ 898,217     $ 847,635     $ 1,782,985     $ 1,711,871  
Cost of sales
    731,611       685,570       1,451,778       1,382,217  
                                 
                 Gross profit
    166,606       162,065       331,207       329,654  
                                 
Operating expenses
    139,001       136,212       276,411       278,755  
                Total operating expenses
    139,001       136,212       276,411       278,755  
                                 
                Operating income
    27,605       25,853       54,796       50,899  
                                 
Other expense (income):
                               
         Interest expense
    1,557       3,200       2,938       6,611  
         Interest income
    (41 )     (92 )     (110 )     (343 )
         Other, net
    (10 )     196       (19 )     147  
                 Total other expense
    1,506       3,304       2,809       6,415  
                                 
                 Income before income taxes
    26,099       22,549       51,987       44,484  
                                 
Provision for income taxes
    10,439       8,929       20,795       17,616  
                                 
                Net income
  $ 15,660     $ 13,620     $ 31,192     $ 26,868  
                                 
Basic per share data:
                               
     Net income
  $ 0.36     $ 0.32     $ 0.73     $ 0.63  
                                 
     Weighted average basic shares
        of common stock
    43,024       42,821       43,003       42,803  
                                 
Diluted per share data:
                               
     Net income
  $ 0.36     $ 0.32     $ 0.72     $ 0.63  
                                 
Weighted average diluted shares
        of common stock
    43,315       42,910       43,266       42,931  



 
 

 

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

   
January 30,
2010
   
August 1,
2009
 
ASSETS
           
Current assets:
           
    Cash and cash equivalents
  $ 8,046     $ 10,269  
    Accounts receivable, net
    198,166       179,455  
    Notes receivable, trade, net
    3,066       1,799  
    Inventories
    393,596       366,611  
    Prepaid expenses and other current assets
    13,800       16,423  
    Deferred income taxes
    18,074       18,074  
        Total current assets
    634,748       592,631  
                 
Property and equipment, net
    245,800       242,051  
                 
Other assets:
               
    Goodwill
    164,333       164,333  
    Notes receivable, trade, net
    741       2,176  
    Intangible assets, net
    37,882       38,358  
    Other
    18,344       19,001  
Total assets
  $ 1,101,848     $ 1,058,550  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
    Notes payable
  $ 185,775     $ 200,000  
    Accounts payable
    172,323       155,211  
    Accrued expenses and other current liabilities
    69,119       63,347  
    Current portion of long-term debt
    5,026       5,020  
        Total current liabilities
    432,243       423,578  
                 
Long-term debt, excluding current portion
    51,344       53,858  
Deferred income taxes
    12,325       12,297  
Other long-term liabilities
    25,366       24,345  
        Total liabilities
    521,278       514,078  
                 
Stockholders’ equity:
               
Preferred stock, $0.01 par value, authorized 5,000 shares at January 30, 2010 and August 1, 2009; none issued and outstanding
    -       -  
Common stock, $0.01 par value, authorized 100,000 shares; 43,421 issued and 43,192 outstanding shares at January 30, 2010; 43,237 issued and 43,008 outstanding shares at August 1, 2009
    434       432  
  Additional paid-in capital
    179,979       175,182  
  Unallocated shares of Employee Stock Ownership Plan
    (795 )     (877 )
  Treasury stock
    (6,092 )     (6,092 )
  Accumulated other comprehensive loss
    (1,598 )     (1,623 )
  Retained earnings
    408,642       377,450  
      Total stockholders’ equity
    580,570       544,472  
                 
Total liabilities and stockholders’ equity
  $ 1,101,848     $ 1,058,550  

 
 

 

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

   
Six months ended
 
   
January 30,
2010
   
January 31,
2009
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
  $ 31,192     $ 26,868  
Adjustments to reconcile net income to net cash
               
  provided by operating activities:
               
    Depreciation and amortization
    13,356       13,288  
    Share-based compensation
    3,918       3,312  
    Provision for doubtful accounts
    515       1,776  
    Excess tax benefits from share-based payment arrangements
    (301 )     (133 )
    (Gain) loss on disposals of property and equipment
    (13 )     68  
Changes in assets and liabilities, net of acquired companies:
               
  Accounts receivable
    (19,496 )     (15,102 )
  Inventories
    (26,985 )     (9,666 )
  Prepaid expenses and other assets
    2,748       (3,392 )
  Notes receivable, trade
    438       113  
  Accounts payable
    13,621       (8,945 )
  Accrued expenses and other current liabilities
    7,147       8,370  
      Net cash provided by operating activities
    26,140       16,557  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (15,822 )     (17,012 )
Purchases of acquired businesses, net of cash acquired
    (194 )     (4,301 )
Proceeds from disposals of property and equipment
    21       -  
      Net cash used in investing activities
    (15,995 )     (21,313 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Net (repayments) borrowings under note payable
    (14,225 )     8,950  
Increase (decrease) in bank overdraft
    3,491       (27 )
Repayments of long-term debt
    (2,508 )     (2,075 )
Proceeds from exercise of stock options
    1,803       566  
Payment of employee restricted stock tax withholdings
    (1,223 )     (416 )
Excess tax benefits from share-based payment arrangements
    301       133  
Capitalized debt issuance costs
    (7 )     -  
Payments on life insurance policy loans
    -       (3,072 )
      Net cash (used in) provided by financing activities
    (12,368 )     4,059  
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS
    (2,223 )     (697 )
Cash and cash equivalents at beginning of period
    10,269       25,333  
Cash and cash equivalents at end of period
  $ 8,046     $ 24,636  
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the period for:
               
     Interest, net of amounts capitalized
  $ 2,437     $ 6,216  
     Federal and state income taxes, net of refunds
  $ 15,554     $ 17,621